How Consumers Buy

99% of all transactions in the modern world are built off an itemised fixed priced model. 

Just take a moment to think about the transactions you’ve made recently… chances are you’ve known the final price before purchasing. Think of the items you pick off the shelf at the grocery store, the clothes you buy to keep your drip on point, the coffee you order everyday from the same local cafe. Before you decide to buy, the final price is already well known to you. 

Now let’s take a look at how the majority of trades and service based business, out there charging hourly rate + materials, and giving deliberately vague pricing estimates. This is asking the client to buy in a very uncommon way, this dilutes the consumer confidence that modern day capitalism is built on. 

There are a number of reasons why trades are hesitant to move to an itemised pricing model, but one of the main ones is - FEAR. Fear that the job will go pear shaped and they will be left making a loss on a job, and this is a fair and valid hesitation. However, if a job goes pear-shaped and you’ve given an “HR estimate” there is still a conversation with the client that needs to happen around the job exceeding the estimate.  

In my opinion around 5% of jobs go pear shaped, so for me I like to play the percentages. Why not give 95% of clients increased confidence and allow yourself to make greater profit by utilising an itemised pricing model, and back yourself to have that difficult conversation around re-negotiation of a price point with 5% of clients 

Don’t FEAR the 5% at the detriment of the 95%

Now is the second best time to shift to itemised pricing and start making the money that you are worth.