Sometimes we under-price our services. How does this happen? First and foremost, it comes from guessing what is most important to our customers versus taking the time to know their priorities.

Let me give a real-life example.

I regularly hire handymen for work on buildings that I own. After working with one handyman for a few jobs, and being impressed by his work, I asked him why he charges so little for his work. How did he arrive at the price for his services? He answered that he looked around at what other handyman services in the area were charging. He didn’t want to charge above what they were charging for fear of being too expensive. He thought price was the only important thing to his customers. Does this sound like you?

Then I told him how I value a handyman who I am hiring, in order of importance to me. I value someone who:

• Does good quality work

• Thinks well about how to solve a problem/ approach a job

• Is someone who I like and trust

• I don’t have to check their work to be sure it’s done

• Returns my calls

• Shows up on time

• Doesn’t swear

• Cleans up after themselves

• Treats my tenants with politeness and respect

• Is priced within reason

Can you see the disconnect between what this handyman thought I value versus what I actually value? Can you see where the price is on my priority list?

I went on to tell him that I will pay more for each of the things I value. So if other handyman services in the area were priced at $40 per hour, I would add a minimum of $1 for each item on my list. I would easily pay $50 for a person of his caliber. I asked that he please raise his prices.

That extra $10 per hour could be a real “win” for him. But what about me? How do I benefit from paying more? First, I’m spending less time arranging, monitoring, and managing. Second, I get the benefit of working with people I like and respect. Third, the work gets done right the first time. Fourth, I don’t have to check the work to see that it got done, or clean up afterward. Sounds like a “win-win” to me!

One valid objection my handyman gave is this: Ok, but if I price my service that high, I might never get hired in the first place and never get to show someone that I am all those things on the list. Objection noted. Let them know that you are a $50 handyman who will do the first job for you for $40. This establishes your worth at $50, but you are willing to prove yourself first.

Ask questions. Don’t just guess. Learn what your customers value. It can really pay off for you, and for them!

Paul Krecke, a volunteer business mentor with SCORE’s Tip of the Mitt chapter, has a business background in clothing retailing and commercial real estate. To request an appointment for the free, confidential mentoring services which SCORE offers to small businesses, call the Petoskey Regional Chamber of Commerce at (231) 347-4150.

This article originally appeared on The Petoskey News-Review: Pricing your services properly