Actually, it's not all that bad of an idea. You're talking about giving bids at a 20% higher than you currently do. And some companies get away with that. I know a handful around my area who charge 20-30% more than the rest of us do - more than they need to. And they make good money doing it.
The thing is there are several things you need to have in place in order to ask that kind of extra $ and there are also certain disadvantages do doing it. So it's a calculated risk you need to understand.
First, let's discuss the things you need to have in place in order to get away with that high of a price. Most important, there should be a reason why the client would want to pay more for your service. Most of the time, in my area, that reason is name recognition. Usually, only the bigger companies get away with this. People know they're big companies and associate their success with a higher standard of quality - which is probably true. They didn't usually get big by having poor service. If you aren't as well known, then you're going to have to go the extra mile in trying to convince the client (who probably hasn't heard of you) why you're service is top notch and better than the rest. You'll want to have a presentation material than anyone else. You'll want to have extras that others don't include in their service. You can get that higher price, but there has to be a reason.
Second, you need to understant that your not going to land as many bids. The % of bids you land will likely decrease fairly significantly because of the higher price. Now I know you said you'd negotiate down but when you give a bid at $50 and the potential customer says, "Well. Ok. Thanks. I'll think about it and call you if we're interested", which is basically them telling you they are NOT interested in that price. Then what are you going to do? Say, "Oh, well. Um...I could actually do it for $40. Would that be better?" You can't do that. You'll look like a Schmuck and lose all credibility. Now it appears you were just trying to rip them off. So you have no choice but to wait to see if they try to haggle. And if they don't try to haggle with you, they'll probably just keep looking until they find the $40 guy.
Some will say yes right off the bat. Just not as many as you get now. Some will try to haggle. And that's okay too. You can negotiate down like you said and make it seem as if they're really getting a good deal. But a decent percentage of people are just going to say, "Ok. Thanks. We'll discusss it. Bye!" and never call you back. You gotta know that going into this.
So you can counter all this by increasing your advertising. Here's how that works;
* Advertise more
* Increase the amount of bids you give
* % of bids you land goes down (as discussed above)
* End up with more profitable accounts accross the board.
* More profitable accounts helps pay for the increase in advertising.
One last tid bit. After a while, people begin to realize that the service they're getting from these higher priced companies isn't ALL THAT much better than the service they'd get from a smaller, less expensive company. I've given plenty of bids at say, $125 per month and then the customer told me, "Wow! I have been paying $160 per month for the last 2 years!" And I just say, "Wow. That's way too much. You're getting ripped off. And look at those weeds! Listen, I guarantee you will do a better job then they have been doing and it's just $125 per month." They switch every time. So I expect these companies that charge these higher rates also have a higher turnover. Be prepared for that as well.
