Why Most Home Services Businesses Struggle with Pricing

If you’re a home service business owner looking to scale to $10M per year, there’s one mistake that might be keeping you stuck: your pricing strategy.

Too many home service companies—roofers, HVAC pros, plumbers—are focused on what their competitors charge. They’re afraid to raise prices, so they end up competing in a race to the bottom. This obsession with being the cheapest is killing profits and preventing real growth.

Let’s break down why this happens and how to fix it, so you can scale your revenue and increase profitability.

Competing on Price: Why It’s a Losing Game

Pricing based on your competition might seem logical, but it’s a losing strategy for home services. Here’s why:

• You Devalue Your Service: By focusing on being the cheapest, you’re telling customers that you’re nothing special. You’re saying, “Shop around and choose whoever’s cheapest.” That’s not how you build trust or loyalty.
• Your Margins Shrink: Lower prices mean lower profit margins. And without solid margins, it’s nearly impossible to reinvest in your business or scale effectively.
• You’re Stuck Fighting for Scraps: Once you start dropping prices, your competitors do the same. Now everyone is grinding for pennies instead of profits.

The Right Way to Price Your Home Services

Customers don’t want the cheapest service—they want the best VALUE for their money. It’s not about what YOU think your service is worth. It’s about what THEY think it’s worth.

Here’s how to present value and justify higher prices in the home services industry:

• Roofing: Instead of just quoting a price per square, explain why your materials last longer, why your warranty offers better protection, and how your team delivers cleaner, safer installations. A homeowner will pay more for a roof they don’t have to think about for 25 years.
• HVAC: Don’t just sell the cheapest furnace. Highlight how your installations improve energy efficiency and save customers money on utility bills over the next decade.
• Plumbing: Charge more for repipe jobs by demonstrating that your work is faster, cleaner, and more durable. Customers value peace of mind knowing they won’t have to worry about leaks anytime soon.

The Real Cost of Low Pricing

Let’s talk numbers. The average home services job has a ticket size of about $7,500. If your team closes 30% of leads, that’s 3 deals out of every 10, totaling $22,500 in revenue.

But here’s the kicker: Studies show that 70% of customers are willing to pay more for a service if they perceive added value (Harvard Business Review). If you could increase your prices by 10-20% while maintaining the same closing rate, you’d add thousands of dollars to your bottom line with every 10 leads.

And yet, many business owners are afraid to raise prices because they think their team can’t handle pricing objections.

Why Owners Are Afraid to Raise Prices

Most home service business owners KNOW their services are worth more. They KNOW their team delivers better quality than the lowest bidder. So what’s holding them back?

• Fear of Objections: Owners don’t trust their sales teams to explain higher prices or handle pushback.
• No Sales Training: Without training, teams default to offering discounts or cheaper options to close deals.
• “Shopping with Their Own Wallets”: Reps who don’t believe in premium pricing sell based on their own financial comfort zones, not the customer’s needs.

This mindset keeps businesses stuck in the same cycle of low prices and low profits.

A Real-Life Example: Raising Prices to Increase Profitability

Here’s a story that proves the power of pricing on value:

I worked with a roofing company in Indiana doing $48M/year. Their price per square was $600, and one of their sales reps couldn’t understand how they could charge more. I asked him:

• “Is your company better than others?” Yes.
• “Does your team deliver better installations?” Yes.
• “Are you the best salesperson to buy a roof from?” Yes.

That conversation helped the team realize they could charge more simply by emphasizing the value they provide. Raising their price per square increased profitability and positioned their services as premium.

How to Train Your Team to Sell on Value

Raising prices isn’t enough—you need to give your team the tools and confidence to sell at those higher prices. Here’s how:

1. Daily Sales Training: Rehearse high-level conversations and objections every day. Make sure your team knows how to justify pricing based on value, not cost.
2. Role-Playing Scenarios: Practice common objections like “It’s too expensive” or “I need to think about it” until your reps can handle them without hesitation.
3. Lead by Example: If you’re not confident in your pricing strategy, your team won’t be either. Show them that you believe in your service and its value.

Your Experience Has Value—Charge for It

Think about it this way: Would you pay the same for a brain surgeon with 30 years of experience as you would for someone fresh out of med school? Of course not.

So why are you—an experienced electrician, roofer, or HVAC tech—charging like someone with only 2 years of experience? Your skills, expertise, and reputation have VALUE. Charge for them.

The Data Behind Value-Based Pricing

Still not convinced? Let’s look at the stats:

• Companies that focus on value-based pricing see 25%-30% higher profits compared to those that compete on price alone (McKinsey).
• 70% of customers will pay more for services they perceive as valuable (Harvard Business Review).

The takeaway? Customers will pay more when they understand the value you provide.

What You Can Do Today to Fix Your Pricing

Ready to level up your home services pricing? Here’s your action plan:

1. Evaluate Your Prices: Are you charging based on value, or are you underpricing out of fear?
2. Train Your Team: Teach your sales reps how to sell on value and handle objections.
3. Role-Play Daily: Practice conversations about pricing until your team is confident and consistent.
4. Focus on the Customer’s Perception: Show them why your service is worth the price, not just what it costs.

Ultimately: Your Path to $10M Starts Here

Stop competing on price. Start competing on value.

Your pricing strategy can make or break your home services business. By focusing on value, training your team, and confidently raising your prices, you can scale your revenue, increase profitability, and dominate your market.

Need help getting started? Click here to learn more about our Sales Academy and how we’ve helped countless home service businesses transform their pricing strategies and hit $10M/year.

Let’s make it happen.