The Price Is Wrong (And It's Costing You)
If you're like most plumbing business owners I've talked with during our coaching sessions, you've probably asked yourself these questions more than once: "Am I charging enough?" "How do my competitors set their prices?" "Why do customers always push back on my quotes?"
Let me be straight with you—most plumbers are leaving serious money on the table while working harder than they should. The typical pattern I see is good-hearted tradesmen charging what they think is "fair," only to find themselves burned out, underpaid, and wondering why they can't seem to get ahead.
Here's the truth: pricing isn't just about covering costs and making a little profit. It's about recognizing and communicating the true value you deliver. As Proverbs 22:29 reminds us, "Do you see a man skilled in his work? He will stand before kings; he will not stand before obscure men."
Your skill has value. Your time has value. Your expertise has value. And it's time your pricing reflected that.
The Mindset Shift: From Hourly Worker to Value Provider
Before we dive into frameworks and strategies, we need to address what's happening between your ears. The biggest pricing problem isn't mathematical—it's psychological.
Many of the plumbers in our weekly Zoom coaching calls confess they feel guilty charging "too much." They worry about being seen as greedy or taking advantage of customers. But here's the perspective shift that changes everything:
"When you solve a serious plumbing issue quickly because of your 20 years of experience, you're not selling time—you're selling peace of mind, protection of property, and prevention of disaster."
Three Pricing Mindset Truths:
- Your expertise is valuable beyond the time it takes—just as a surgeon who removes a tumor in 30 minutes isn't "overpaid"
- Fair pricing ensures sustainable service—you can't help anyone if you're out of business
- Customers ultimately pay for outcomes, not hours—they want their problem solved, not to buy your time
The Three Common Pricing Approaches (And Why Only One Truly Works)
1. Cost-Based Pricing: The Tradesman's Trap
This is where most plumbers start. You calculate your costs for labor, materials, and overhead, then add a markup percentage. It's straightforward but deeply flawed.
The Problem: This approach completely ignores what the market will bear and the true value you deliver to customers. It often leads to underpricing premium services or overpricing simple ones.
Real Example: One of our coaching clients, Mike from Texas, was barely staying afloat using cost-plus pricing. His flat rate for a water heater installation was $800 because his calculations showed $600 in costs plus a $200 markup. Meanwhile, his competitors charged $1,200-$1,500 for the same job—and they weren't even offering his level of expertise or warranty.
2. Competitor-Based Pricing: The Following Game
With this approach, you survey what others in your area charge and set similar prices. It seems logical but creates several problems.
The Problem: You have no idea if your competitors know what they're doing! Many are using flawed models themselves. Plus, this approach assumes your service is identical to theirs—which undermines your unique value proposition.
Real Example: Sarah's plumbing company in Florida matched competitors' drain clearing price of $99. But her team was using premium equipment, providing a camera inspection, and offering a 6-month guarantee. She was delivering $250 of value while charging $99 because she was fixated on competitor pricing.
3. Value-Based Pricing: The Prosperity Path
This approach sets prices based on the perceived value to your customers, not just your costs or what competitors charge.
Why It Works: Value-based pricing recognizes that different customers value different aspects of your service. Some prioritize speed, others quality guarantees, and others the peace of mind that comes from working with an established company.
Real Example: After our intensive pricing workshop, James in California shifted to value-based pricing for sewer line replacements. Instead of a one-price-fits-all approach, he created three tiers: Basic (just the replacement), Premium (with a 10-year warranty and yearly inspections), and Ultimate (adding water line replacement at a discount while the yard was already excavated). His average ticket increased by 37% while customer satisfaction improved because clients could choose their preferred value level.
The Four Pillars of Value-Based Pricing
To implement value-based pricing effectively, you need to understand and balance these four key elements:
1. Company Costs (The Floor)
Your costs establish the minimum price below which you should never go. This includes:
- Direct materials and supplies
- Labor (including benefits and taxes)
- Vehicle expenses and travel time
- Equipment depreciation
- Overhead allocation
Action Step: Calculate your true hourly cost to run your business, including all overhead. Many plumbers discover they need $125-$175 per hour just to break even, far higher than they realized.
2. Customer's Monetary Valuation (The Ceiling)
This represents how much your service is actually worth to the customer. Consider:
- What problems does your service solve?
- What would be the cost of inaction?
- What alternatives do they have?
Action Step: For each of your core services, list the consequences a customer would face without your help. For example, a leaking pipe might lead to structural damage, mold, and temporary relocation—easily costing thousands.
3. Reference Prices (The Context)
These are the prices customers have in mind as comparisons, including:
- What competitors charge
- What they paid last time
- What they expected to pay
Action Step: Mystery shop your competitors for their pricing on key services, but don't stop there. Also research what premium providers in adjacent trades (electrical, HVAC) charge to understand the broader context of home service pricing.
4. Value Proposition (Your Difference)
This is what makes your company special and worth a premium:
- Superior guarantees or warranties
- Enhanced service delivery
- Unique capabilities or technologies
- Trust factors (longevity, reviews, certifications)
Action Step: Define at least 5 specific reasons why your service delivers more value than competitors. These become your talking points when presenting prices.
Building Your Pricing System: The Framework in Action
Merely understanding pricing theory isn't enough—you need a systematic approach to implement it in your business. Here's the framework we teach in our Field Journal program:
1. Pricing Roles and Responsibilities
Determine who in your organization has authority to:
- Set standard prices
- Approve discounts or adjustments
- Create special offers or promotions
- Evaluate pricing performance
For solo operators or small teams, you might wear all these hats—but being intentional about each role helps maintain consistency.
2. Service Tiering Strategy
Value-based pricing works best when you offer options. Create at least three tiers for your core services:
Basic Tier: Meets the essential need at a competitive price point Premium Tier: Adds valuable enhancements (warranty extensions, priority service, preventative measures) Ultimate Tier: Provides comprehensive solutions with maximum peace of mind
Pro Tip: Always present the premium option first, then move to ultimate or basic based on customer feedback. 60-70% of customers choose the middle option when properly presented.
3. Price Communication Protocol
Develop standard language for how prices are presented:
- Focus on outcomes first, price second
- Emphasize value rather than apologizing for cost
- Use "investment" language instead of "cost" terminology
- Present options rather than single prices
Script Example: "Based on what we've found, you have three options to address your sewer line issues. Our Ultimate Protection Plan includes full replacement with our 20-year warranty and annual inspections at $8,500. Our Premium Solution provides the replacement with a 10-year warranty at $6,700. And our Basic Service gives you the replacement you need with our standard 2-year warranty at $5,300. Which approach feels right for your situation?"
4. Objection Management System
Prepare your team to handle common pricing objections:
- "That's more than I expected to pay"
- "I can get it cheaper from another plumber"
- "Can you do better on the price?"
The key is addressing the underlying concern rather than immediately discounting. Often, customers aren't objecting to the price itself but expressing uncertainty about value.
Action Step: Create a simple objection response guide for your team with specific language for each common objection. Train weekly using role-play exercises.
Implementing Fair and Winning Prices: Your Next Steps
"The laborer deserves his wages" (Luke 10:7). This scripture reminds us that fair compensation is not just a business principle—it's a biblical one. By charging appropriately for your services, you're not being greedy; you're establishing a sustainable business that can serve more people with excellence.
Here's your roadmap to transform your pricing approach:
Week 1: Price Audit
- Review your current pricing structure against the four pillars
- Identify your five most profitable and five least profitable services
- Calculate your true hourly operational cost
Week 2: Competitor Analysis
- Mystery shop top competitors for core services
- Identify where you're significantly under or overpriced
- Document premium features that justify higher prices
Week 3: Value Definition
- Create a comprehensive list of your unique value propositions
- Develop three-tier pricing options for your top five services
- Draft price presentation scripts that emphasize value
Week 4: Implementation and Training
- Update price books and proposal templates
- Train your team on the new pricing approach
- Practice handling common objections
Week 5: Evaluation and Adjustment
- Track closing rates on the new pricing structure
- Gather customer feedback on the options approach
- Make refinements based on field experience
The Transformation Story
When Randy first joined our coaching program, his drainage company was doing $780,000 in annual revenue with a 6% profit margin. After implementing this value-based pricing framework, within 12 months his revenue grew to $1.2 million while his profit margin expanded to 22%—without adding a single truck or technician.
The difference wasn't working harder; it was pricing smarter.
As Randy put it: "I was actually nervous about raising prices—I thought we'd lose customers. Instead, we attracted better customers who appreciated quality and were willing to pay for it. And my team is happier because they're fairly compensated for their expertise."
Your Invitation to Transformation
Pricing isn't just about numbers—it's about confidence, value communication, and building a sustainable business that honors your expertise and serves your community well.
If you're ready to transform your approach to pricing but want personalized guidance, consider joining our weekly Zoom coaching sessions where we work through these exact challenges with plumbing professionals like yourself. We combine technical business strategy with faith-based principles to help you build not just a profitable business, but a purposeful one.
Remember: You provide an essential service that protects homes, health, and safety. Your pricing should reflect that value—because fair pricing is winning pricing.
"For we are His workmanship, created in Christ Jesus for good works, which God prepared beforehand so that we would walk in them." — Ephesians 2:10