One of the best decisions I made was to raise our prices to the high end of our local markets. I was a little nervous at first. I was concerned that we would lose a ton of business, and we did lose some. But I didn’t care! Do you know why?
We were making more money with fewer moves! What matters is the profit, the bottom line, not the quantity but the quality. Not only quality for the customer but quality for your company. What’s a quality move for your company? A highly profitable move!
Here are 5 steps to charge more money for your moving services:
- Don’t compete with low-cost movers
- Raise your prices
- Make more money with fewer moves
- SELL your service
- Provide 5-star service
Don’t forget that you have to SELL your service. You cannot expect prospective customers to know how great you are, you have to tell them. They need to understand why you are not the cheapest and the benefits of moving with your company. Your customer will need to understand why you charge more money for your moving services.
The best way to be able to sell your customers on why you’re worth more money than the competition is to get clear on the value you provide and then build it into your sales script. Having a strong sales script that has been well crafted and is followed by you and all of your staff is a key step in building what I call the Moving Sales Machine.
Rule #8 of a Profitable Moving Company is Sell Value and Service, Not Price. So Sell value… Sell service… Provide a 5-star moving experience… And watch your profits and customer satisfaction go up! Start with a 5% increase in your price. Once you’re comfortable you can go higher.
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[The following is the full transcript of this episode.]
Hey my friend, it’s Louis Massaro, author of 10 Rules of a Profitable Moving Company and founder of Moving Mastery. Today, we’re gonna talk about rule number eight of the 10 Rules of a Profitable Moving Company which is: Sell value and service, not price. So this is something that as an industry, we all need to really look at. It’s enough is enough of these companies that are just charging way too… There’s no way they’re making any money charging as low as they’re charging for the moves and yet, we all think that we need to compete with them and that we need to lower our prices to compete with these companies.
Well, we have to understand that it’s very easy for people to get in the business and it’s a competitive business. And if you’ve been in the business long enough, you know that companies open up, the companies shut down, they don’t make it. The problem is they’re not… It’s not the only problem, but part of the problem is they’re not charging enough for their moves, they’re trying to get the low-hanging fruit with low prices and I’m challenging you to not compete with them. So we’re gonna go over a few things that are gonna help you sell value and service and not price.
And the first one is; don’t compete with low cost movers. It’s just something that you have to realize that yes, they’re gonna get some of the moves that are just looking for the low, low price and you may not book as many moves, your volume may not be as high if you’re not competing with the low price movers, but you wanna be profitable. We’re talking about the 10 Rules of a Profitable Moving Company, we’re not talking about the 10 rules of getting the most jobs. Getting the most jobs doesn’t equate into being the most profitable, you want to be the most profitable business you can be for you. So you have to stop worrying about these low price movers and you have to stop competing with them.
And the second thing you’re gonna need to do is raise your price. I challenge you, raise it by 5%. You’ll be surprised that you’ll still be able to book a good amount of business. One of the best decisions I ever made was to raise our prices in all of our local markets to the high end of the market. We were always kind of in the middle, there was always the low price movers that were lower than us, there was always the companies that were charging a ton of money, hourly rates for local moves, and we were always kind of in the middle. And finally, I did the calculations and you should do them too, sit and take a pen and paper, an Excel spreadsheet, however you figure out your numbers and look at it and say, “You know what? If we lost 20% or 30% of our business by raising our price to this, what would that do?” And what I found was I actually made more money with fewer moves.
So listen, it’s a scary thought to think about less moves. But if you really look at it and you say, “You know what? What do I need to be profitable? What do I need to be able to have every move be worth it?” Not just get the move, it’s not a matter of just getting the move and competing to get the move, it’s a matter of for it to be worth it. And you might do less moves, but you know what? Less moves is less trucks. Less equipment, more of your A team movers going on the job. So look at that, look what it would be if you raised your prices. And for me, it became more profitable. It wasn’t a drastic cut in business, but there was definitely less volume, but we were making more money, there was more profit.
What’s it all about? Why do more work and make less when you could do less work and make more? And I know everybody thinks about it and I know this is a big struggle. That’s why it’s one of the rules because it’s tough. It’s like, “What do I do?” You lose a job, you’re on the phone and you call somebody back and follow up on a quote and they’re like, “No, we went with this company ’cause they had this price of whatever,” some ridiculous low price. And you feel tempted that your price is too high, you’re gonna lose business. But you know what? By having a higher price, you actually gain business, you actually get higher quality moves that don’t wanna go with the low price companies. You’ll get better moves because you’re a higher price. There’s a reason people pay more for a Mercedes than they do for a Ford. No offense if you drive a Ford, I’m just saying. There’s a reason people pay more for first class than they do for coach. You have to make that… You have to basically… That leads us into the next one, you have to sell your service.
So if you’re gonna raise your price, don’t just raise it and keep things the same, you have to sell. You have to basically explain to your customers why you’re more money, why your service is better, why it’s not comparing apples to apples by comparing our company to that company. “Here’s what you’re gonna get with us. Here’s what we provide for that extra money.” So if you provide a great service, you deserve to be paid for that service and there are people out there that will pay you, and there are people out there that look for the… Not just more expensive, but if they see the value in something that’s more expensive, they’re gonna pay for it. And I’m not saying, go raise your price to a ridiculous amount. You need to do this at a rate that you feel comfortable. Take your rate now, increase it by 5%. Whatever your rate is, get the calculator out, put your rate times 1.05, that’s your new rate. It’s not that much higher. Try that. Get comfortable there. Then raise it 10%. You have to test it out for yourself.
And when we talk about selling your service, you need to make sure that when you do raise the price, that you’re not coming off timid about it. Your sales people aren’t gonna say, “Oh, we can’t sell now ’cause our price is too much.” No, they need to understand that you’re valuable, your company deserves to be paid more, so you’re raising the price and they could still book the same amount of moves. I’m telling you, I’ve gone through it. I’ve been there. It’s so worth it. If you’re struggling to be profitable or you wanna be more profitable, charge more money. When you charge more money, you could also pay your staff more, you could pay your movers more, your helpers more. You don’t necessarily have to, depending on where you pay them now, but maybe you struggled to get that good quality of help that you really want. But you’re like, “I can only spend this for my helpers and I can only spend this for my movers. I need to keep my labor percentage at this.” Whatever that number is for you.
Well, if you raise your hourly rate, your labor percentage could stay the same, but you could actually be paying more in labor. And again, you don’t have to, but if you’re struggling to get good help and it’s because you can’t afford to pay them, raise your price. Your operation starts to change. Early on, I did a lot of volume. We weren’t the low price movers, but we were right in there and always making sure we were competing with price. And as we started to charge more and change things around, we had bigger moves, better moves. And you know what? The people that are looking for the bargains, it just so happens they turn into the problem moves. Not all the time, but when you start dealing with people that are willing to pay more money, if you do a good job, they don’t really have a problem because they were happy to pay the money.
And that brings us to the last part which is provide five-star service. You have to provide the service that you’re selling. Again, you’re gonna sell hard. You need to have, first of all, if you don’t have a sales script, you need to have a sales script. You need to make sure that you’re touching on all key points that are gonna essentially lead that customer into doing business with your company. And if you have a strong sales script, raising your price by 5% or 10% isn’t gonna affect much. You wanna build a moving sales machine. That’s what I called mine, it was a moving sales machine. It just was set up with systems processes. Everyone was saying this because I knew that what I had them saying was able to sell moves. You wanna be able to sell, you wanna be able to tell them why you’re more money than the next guy. But then you wanna make sure that you go out and provide that five-star service. If want five-star prices, you need to provide five-star service. And five-star service doesn’t mean you literally have to show up in a tuxedo with white gloves on it. It means you have to do some of the things we talked about in the other 10 rules.
If you haven’t watched the other videos on the 10 Rules of a Profitable Moving Company or you haven’t downloaded the free ebook that I’m giving away on the website, do that. There’s things that you can do without spending more money to provide a five-star service. So sell value, sell service, don’t compete on price and make more money. You work hard, I know that. If you’re watching this, if you’re in the moving business, it’s a hard business. I know it’s hard work, you need to make money. And you can’t make money if you’re chasing around low price movers. And you know what? It might look like some of these guys are getting all the business, but they probably don’t know their numbers. They probably are cutting some corners somewhere. They’re doing something that eventually is gonna catch up and it’s not gonna last. If you want a business that’s gonna last, you have to do profitable moves. I mean, it’s pretty simple when you look at it. You just have to avoid the temptation and the pressure to feel like you need to compete with the low price movers. Sell value, sell service, not price. Profit in business, thrive in life. I’ll see you next time.