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Stesso

Implement Value-Based Pricing

10:15
14:52
19.1K views

At 10:15 in

His MISTAKES cost his Construction company BIG $$$$ pt1

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What happens here

A critical component of this business transformation is re-evaluating and significantly adjusting pricing strategies. Prices should not only cover the cost of labor and materials but also reflect the specialized skills, efficiency, and the scarcity of certain services within the market (e.g., "law of scarcity" for roofers in Hawaii). Gabe dramatically raised his prices for his niche services. This strategic adjustment allowed him to command premium rates, ultimately leading to a substantial increase in his net profit margin (from 7.5% to over 12%) even while undertaking "half the work." This step emphasizes understanding that a higher, value-based price can attract more serious and appreciative clients, simultaneously compensating the business for its specialized expertise and reduced workload.

Goal: Set prices that reflect the true value and scarcity of specialized services, ensuring robust profit margins.

Tools and materials

  • Pricing Calculator/Software N/A — To determine optimal pricing based on costs, market rates, and desired profit margins

What they say

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did seven hundred seventy six thousands which you've got written down there's two you left from 1.4 million down to seven hundred and seventy six thousand but your net went from seven percent over to over twelve percent yeah so in reality you're handling half the work and in the actual hard core numbers your profits are according to this you literally made five thousand five hundred dollars less yeah and and you've done half the work you did you did over seven hundred thousand dollars less work and you only lost five thousand five hundred dollars by doing seven and some thousand dollars less work that's insane and it goes even further

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