There’s a real dichotomy in our industry right now: On the one hand, the market is very competitive. On the other hand, there aren’t enough of us to do the work.
How these two problems co-exist, I can’t say for sure. My suspicion is that it’s primarily due to two factors.
First, handymen are still out there undercutting the pros, and they always will be.
Second, too many of us are afraid to raise our prices. I can say that because I was in the same place a decade ago. Maybe you’re operating the company your father started, doing great work and trying to hire the best people but using prices from the early 2000s, adjusted for material cost increases, of course. That won’t work, not long-term anyway, and it makes running a profitable business harder for the companies that are charging what they’re really worth.
Trying to out-discount the competition rarely leads to sustainability. In fact, it can lead to burnout and poor workmanship. It also makes hiring harder. You can’t offer premium wages and benefits to professional technicians while charging less than those techs are worth.
Smart contractors understand that pricing for profit, not just survival, is the only path to long-term growth.
THE RACE TO THE BOTTOM
The race to the bottom is a vicious cycle. Ask me how I know…
It starts small. A customer says, “The other guy quoted $1500 less.” So, you cut your price to win the job. Then it happens again. And again. Eventually, you’re working for pennies on the dollar, barely covering overhead and too busy to take a breath, let alone grow, organize, market, and show appreciation to your team.
That’s when the wheels come off the wagon. You rush jobs to stay on schedule. You skimp on tools, training and vehicle maintenance. You stop investing in yourself and your people. You don’t have time, money or energy to market properly (more on that later). You lose the personal contact you used to have with your customers.
Your reputations slip — not because your people aren’t good, but because you’re pushing them too hard. Eventually, you lose the passion for what you do. It’s a vicious cycle, but fear keeps you in it.
PERCEIVED VALUE
A Jeep Grand Cherokee costs far less than a Range Rover. They’re both mid- sized SUVs with four-wheel drive, AC, storage space, moderate fuel economy, etc. Still, people pay the extra $60,000 for the British car because of perceived value.
The price tag is higher so it must be worth more, right? That’s how the American brain works. Lower pricing might seem like a way to stay competitive, but it often sends the wrong message. If you’re underpricing your work, customers assume that’s all you’re worth. Who could blame them? Even you think that’s all you’re worth.
The low bidder is also perceived as inexperienced, desperate, low quality, and willing to cut corners.
That’s not the image I want to build, and I don’t want customers that appreciate cheap things. I want customers who appreciate quality and value. If you can communicate the value you provide — whether it’s superior craftsmanship, fast response, longer warranties, or better components — the right customer will pay for it.
So, if you’re willing to admit that you’ve been undercharging, how do you determine what you should be charging?
KNOW THE NUMBERS
The first step in pricing for profit is understanding what it actually costs to run your business. Many contractors estimate pricing or base it on what their competitors charge. But every business is different. If you’re not tracking costs and margins, you’re flying blind. I like to break it down as follows.
What’s my overhead? This includes rent or facility payment, insurance, trucks, phones, software, uniforms, tools, etc. Calculate for depreciation where relevant.
How about the labor burden? This isn’t limited to wages. Include payroll taxes, workers’ comp, PTO, benefits, training and an emergency fund. Accounting for your labor burden
will make you become the employer everyone in town wants to work for.
Material and equipment costs are next. This includes delivery, returns, and handling time. The rapid cost fluctuations we’re currently experiencing make this line item hard to tally, so plan for the worst-case scenario.
Finally, profit. Yes, profit is a line item. It isn’t what’s “left over.” It’s what your business earns for taking on risk.
When you know your true cost per hour or cost per job, you can price in a way that ensures every job is contributing to your growth — not just keeping the lights on. If it’s not growth you’re chasing, then it’s quality of life and employee satisfaction.
Some contractors feel guilty about charging more. Profit isn’t greed. It’s stability, and it allows you to pay yourself and your people what they’re worth. Profit also allows you to deliver a better customer experience.
THE RIGHT MARKETING APPROACH
If you want to avoid price shoppers, don’t market like a discount brand. Your website, truck wraps, uniforms, and messaging should all reinforce professionalism, reliability, and quality. Because you’re reading this magazine, I’ll assume you’re already professional and reliable. Hacks don’t bother educating themselves or keeping up with the industry.
Your marketing should, at all costs, avoid language like, “Lowest price in town,” “Budget pools,” “We beat any estimate,” etc. These phrases are a death knell to profitability. You’re just begging for someone to work you over on price.
Instead, say “Trusted by homeowners in your metro for 20-plus years,” “Upfront pricing, no surprises,” “Licensed, insured, and code compliant.”
This language builds buyer confidence before you even meet your customer. Use customer testimonials, photos of your work, guarantees and warranties to reinforce your value.
The right customers will notice. The customers that want a cheap deal will still call, but they’ll end up hiring the guy whose truck says, “Affordable Pools Systems.”
FIRE THE WRONG CUSTOMERS
Not every job is worth taking. My grandfather used to say, “The best job you never got was the one you walked away from.”
Some customers are hyper-focused on price and will always choose the lowest bid, no matter what. These people want to negotiate everything. They don’t respect your time, or they complain about the price after the work is done.
Be polite, but firm. Say something along the lines of, “I understand budget is important. We’re not the cheapest, but we’re committed to doing the job right, safely, and to code.”
Every time you say “no” to the wrong customer, you make time for the right ones. Turning away work might be scary at first, but it’ll grow on you.
TRAIN YOUR TEAM
Even if you believe in your pricing, your techs and salespeople might hesitate when customers question it. That hesitation can sabotage profits.
Invest time in training your team to understand your pricing philosophy. Each member of your team should be able to speak confidently about the value your company delivers. They should be proud of the work they do, and proud of the company they work for.
Empowering your team to sell value makes it easier to defend your margins. If you have a team member that struggles in sales, put them in a truck with your best salesperson for
a month. Quiz them once a week on what he’s learned. If he or she balks, remind them that it’s an investment in their future.
Avoiding the race to the bottom isn’t just a pricing strategy, it’s a mindset. It means believing in your work, understanding your costs, training your team, and walking away from jobs that don’t make sense. It’s about building a business that’s profitable, professional, and proud of the service it delivers.
Price with confidence. Deliver with integrity. That’s how you break free
of the vicious low-price cycle — not by being the cheapest, but by being the best you can be, and humbly letting the world know you’re true professionals.
This article first appeared in the October 2025 issue of AQUA Magazine — the top resource for retailers, builders and service pros in the pool and spa industry. Subscriptions to the print magazine are free to all industry professionals. Click here to subscribe.
