Dealing with Price Undercutting in your Electrical Business
Dealing with price undercutting in your electrical business
You work hard in your electrical business, and it can be very upsetting when you find out that a customer has chosen one of your competitors because they have quoted a lower price. To be honest, this can be a problem in any business, not just for trades, but there are lots of things you can do to prevent being pulled into a price war. It is not a good idea to respond by immediately cutting your prices because you are reducing your margin and the value of the service you provide. Instead, you should try to move the perception of your customers away from a pricing perspective and more towards a value perspective. Below are a few steps you can take when dealing with price undercutting in your electrical business.
Pay attention to customer service in your electrical business
The first step is to ensure you have a seamless process for handling customer enquiries, so they can see that you appreciate their business, and they feel they can trust you. When enquiries come into your electrical business, acknowledge the customer. Let them know that you have received their enquiry and that you are on it! This can be via email, text, messenger, chat box, phone call, just make sure that whatever method you choose, you have a process set up and use it consistently.
Next, you have to ensure that you follow up any enquiries quickly. People don’t like thinking that their enquiry is just sitting in an inbox somewhere, waiting for someone to ‘get around to it’. Don’t put it off because this can give you a competitive advantage over other businesses who are slow to follow up. You are also already building up a relationship with the customer from your acknowledgement and follow-up, and they are starting to trust that you will do what you say because you are communicating with them. Having a system in place to make sure you can send out quotes quickly can also give you a competitive advantage.
Look at it from a customer perspective! Most people just want to get whatever the job is done, finished and out of the way. Whether they are looking for a quote or an actual job, remember that they are impatient and that their problem is a pain point for them. Therefore, the quicker you get back to them, the more work you will win from your competitors, even if they quote a lower price. Offering good customer service in your electrical business will ensure you are not judged on price alone.
I talked about systemising administration and implementing electrical business software at length in my last blog, so you can read more about it here. If you would like more tips on this subject, you can send for the free FLOWING Guide which has lots of practical advice to save time in your electrical business. If you feel too much of your time is spent on administration and not enough being an electrician, sign up for your free 30 day trial of Business Transformer membership for just £1!
Go above and beyond!
The second step you can take when dealing with price undercutting in your electrical business is to concentrate on customer service and outshine your competitors by doing things they don’t. Researching what customers complain about can give you a lot of ideas for going that extra mile, so read reviews and make note of what customers complain about. It may be something straight forward like cleaning up when the job is finished, leaving the area in the same condition you found it. Or, in a domestic situation, it could be a simple courtesy like putting on overshoes, so your outdoor shoes don’t mark the carpet. Maybe offer them free gifts, like notepads and pens. Also if you pay them a little extra care and attention, they will remember you above your competitors the next time and recommend you to friends and family.
Make sure you stand out
If you are on a par with your competitors, the only thing prospective customers can use to tell you apart is the price. However, even when you are more expensive, if people like the way you do business and the attention you have given to them, they may choose your electrical business rather than a cheaper firm. Bring your experience into play, people recognise that they have to pay that little bit more for an experienced electrician and they will trust you to do a better job.
Bundle your services into a bronze, silver or gold package, just like you see on car insurance sites, where most things are not included in the cheapest deals, but more things are included for a higher price.
Under promise and over deliver
Earlier in this blog, I talked about going above and beyond for your customers. But the key thing here is not to tell them in advance you are going to give them these little extras. Keep them as little surprises at the end. Walk them through what you have done to make sure they understand how to use it. This is adding value to the service you give, something more than was set out in the quote, and hopefully, something that your competitors don’t do! This is an excellent way of dealing with price undercutting in your electrical business because people respond to these gestures and feel they are getting extra value for the price.
Build trust
There are lots of ways you can build a relationship with customers. For example, you can have a ‘meet the team’ page on your website, or social media. Remember that people deal with people, so if they feel they know and trust you, they are less likely to compare on price. Make sure you ask clients for reviews and put case studies on your website. Use accreditations, awards and recognition on your stationery, website, social media pages. Make good use of them to help you to stand out but only use those relevant to your electrical business and only select ones that will resonate the most with your customer base. Give your customers plenty of reasons to trust you!
All the tips mentioned above are really positive ways of dealing with price undercutting in your electrical business, rather than the negative response of immediately cutting your prices, hence devaluing your service. Business Transformer membership can show you more ways of ensuring you stand out from the competition and how to implement them step-by-step.
Sign up for a 30 day trial membership for just £1 to learn how to differentiate your electrical business on more than just price.









