How Quality Can Dictate Price in the Service Industry

In the service industry, one business basically provides the same service as another business. Take the valet business for example, they all take your vehicle and move it to a central location until you return, when the valet retrieves your vehicle and brings it back for you. This is the basic process for all valet services. So what can set one company apart from another? Simply stated, it is quality. It is the extras that they put into the service that separates one company from their competition.

Every service industry must understand what they can do for their customer that is above and beyond the basic service. This becomes even more important when you want to sell your service not simply based on the service you offer but also by the extras. These extras give you the opportunity to sell your service at a higher price. These extras to the service truly cost nothing on a day to day basis but add value to your customer. Yes, there is the potential for extra expenses in training the staff to complete these added touches to the service but generally they are limited and more than pay for themselves over time. However, these extras cannot be something that is simply talked about, they must be present everyday in the service. Not only will your current customers be looking for this higher level of service, your service can and will act as a form of advertising your service. This is truly how you dictate your price in the service industry. Offer added value to the basic service, provide those added values and let potential customers see the service in action.

In order to get to a point where you have control over pricing there are a few things you need to do. First, understand what your basic service is. This may seem like a simple thing but it is essential in determining what your extras are and what you can sell as extras. Second, what does your competition offer in terms of added value to their services? This is true in a business whether it be service, manufacturing or retail, you must know your competition. Third, really spend time determining what value added aspects you can provide in order to differentiate your company. Keep in mind that with the ever changing world of technology, this may be every changing as well.

In the global market of today and with competition being at such high levels, you have to find ways to take your service business to a level that sets it apart. As stated in the beginning, anyone can offer the basics, it is the extras that will help your business thrive and grow.