Do What Works, But Do Make A Profit – Pricing Strategies

by Diane Calabrese – Published April 2026

 

 

Ever wonder why so many prices include the pair 99? Think of a $2.99 box of cereal or a $299,000 house. The use of odd digits constitutes a pricing strategy. Some business researchers have found odd numbers in the context of rounded ones, such as $3 or $300,000, suggest a bargain.

The psychology of odd pricing is one of many strategic approaches that business thinkers identify (more about categories in the last section).

But we start with the doers and get some straight-up advice about how to price from practitioners in our industry. After all, they have been-there-and-done-that.

Bruce Tassone is president of HydraMotion Cleaning Systems in Pottstown, PA. His company makes the SideWinder. Determining optimal price for an item begins with understanding who the prospective buyer is, explains Tassone. The assessment includes whether the individual is new to the industry or a veteran.

“Contractors who have been in business for many years will analyze warranties and reliability in their buying decision,” says Tassone. “Newer entrants to the field may not have experienced the issue of purchase price versus cost of use.”

And there will be purchasers who buy on price alone. “In some cases, contractors believe it is best to go with the lowest price,” explains Tassone.

Is the lowest price a workable option? “If cash flow is a concern, that is understandable; but if your intent is to stay in business for the long haul, dependable equipment with the best warranty you can buy makes good economic sense,” says Tassone.

“It is absolutely the responsibility of the seller to educate the customer on the quality features of equipment and ancillaries that add to the purchase price,” says Tassone. “If you are not educating your customers, you are failing them,” he adds.

Looking at the big picture of what a sale means to the success of the contractor and the industry, Tassone emphasizes that pricing done right fuels good outcomes for both. “Most owners know how to pressure wash or how to run a business, but not always both,” he explains.

An acute understanding of methods and tools must be tightly linked. And if they are not? “This is a major contributor to why the failure rate has always been high in our market,” says Tassone.

“Becoming a pressure washer contractor is a relatively inexpensive career to enter in comparison to other businesses,” says Tassone. Yet many who try to fledge businesses need more help with the logistics and financials than they realize initially.

“Newcomers see the relatively low cost to start a business, and they think, ‘I can be successful too,’ but they do not realize the knowledge base you must have to make it successful and the contacts in the industry as well,” says Tassone.

 

Quality

It’s worth re-emphasizing the factor of quality that we introduced in the last section. Customers seeking equipment, services, or expertise will pay for quality. A well-versed buyer knows that buying on price alone can lead to problems.

Whether a manufacturer, distributor, or contractor, a basic tenet of setting prices should be to make certain each prospective buyer knows what a quality purchase means to the strength of their business. That’s quality in every dimension (e.g., longevity, durability, performance, ease of maintenance, and ready answers to customers).

Commit to providing a quality product or service. Then, charge accordingly.

“We at Delco know that customers don’t buy equipment, but they buy uptime, simplicity, and confidence,” says Gus Alexander, CEO of FNA Group in Pleasant Prairie, WI. “It is absolutely true that buyers will pay more for reliability, which provides revenue protection after taking into consideration that downtime costs more than the difference in purchase price based on the premise that equipment is built to start, run, and finish the job every day.”

Experienced buyers know the many positives that flow from choosing based on quality. “The upside of this is quality lowers total cost of ownership, which is perceived by the buyer’s fewer breakdowns and service calls, longer useful life of the equipment, and a stronger resale value with the outcome of lower long-term cost than ‘cheaper’ alternatives,” says Alexander.

“Four key factors in the buying decision are as follows: who I am buying the equipment from, equipment reliability, durability, and ease of use,” explains Alexander. “We have to keep in mind that the equipment we sell is built for professionals who can’t afford failure.”

Again, when customers succeed, so do their vendors. And so does the entire industry.

 

Profit, Pricing, and Professors

Established businesses got to where they are today because they never lost sight of profit. A business must make a profit, or it’s not really a business.

To be eligible for a traditional Small Business Administration (SBA) loan, a business must be profitable. But there are many types of SBA loan and grant programs. The programs track heavily with the interests of the party in control of the White House, and in many cases, it is possible to get a loan without showing a profit.

Yet even the SBA has enough concern about pricing for profit to include a tool for break-even analysis at its website (SBA.gov). A business breaks even when its fixed and variable costs are equal to the price it receives for its product (service).

At the break-even point, a business is not making a profit. But at that point, a business can better develop pricing strategies that will result in a profit.

A pricing strategy can change as necessary. In fact, it must change when necessary.

How many ways are there to price goods and services? A great many business theoreticians dissect and analyze approaches in much more detail than most individual business owners require.

Even so, we found an excellent article titled “Various Pricing Strategies: A Review” by Dr. Satyajeet S. Deshpande that is worth a look. Published in October 2018 in the Journal of Business and Management, Deshpande’s review has open access. (See https://www.iosrjournals.org/iosr-jbm/papers/Vol20-issue2/Version-8/K2002087579.pdf.)

Deshpande lists 13 types of pricing strategies and provides a short explanation of each. Probably the one most of us are immediately familiar with is loss leader pricing. Frequently used by grocery stores, loss leader offers some items below cost to lure customers to the store.

Once lured, the customers not only buy the below-cost items but purchase other items too. At a sufficient sales volume, there’s little risk to the seller. But for labor-intensive work, such as power washing, where upselling can be difficult in uncertain economic times, it can be risky.

The loss leader method sometimes folds into predatory pricing, such as selling products or services below cost when trying to monopolize a market. To make this method work (all ethical considerations aside), a business must have significant financial reserves.

The most straightforward method of pricing is to establish a break-even point, decide what the price should be of a product to realize a profit, and add that amount to the break-even point. Called cost-plus pricing, it’s a widely used and viable approach.

Incremental cost pricing refers to adjustments that must be made when the variable costs of making a product or providing a service (e.g. components, electricity) change. Any business that aims to sustain itself will eventually have occasion to use it. No business can persist if it simply “eats the cost” of the price increases that it experiences.

The names applied to the categories of pricing strategies may differ a bit, but we have all seen most of the strategies being used. For example, limit pricing is commonly used by cell and internet plan providers, which promise no increase in price for a certain period.

Limit pricing works best for companies with deep pockets. Promising to wash a deck annually for three years at the same price can be a money loser.

Promotional pricing can be a viable option for contractors, but it must be rigidly time limited. Similarly, cyclical pricing tied to seasons or holidays or recessionary intervals may generate more business if the gain exceeds the cost.

Before getting carried away with any novel pricing strategy, a business owner should be certain it’s necessary. Lowering prices to capture more customers will result in a loss if the market share stays the same.

And before putting an odd number in every advertised price, be certain buyers do respond to odd numbers—see the discussion about “99” at the beginning of this article. So commonplace are odd digit prices in some commercial sectors that they have almost become a punchline.

Moreover, a better strategy than advertising price may be providing a price after a consultation with a would-be customer. Call it customized pricing. It’s not on the professor’s list, but it’s somewhat akin to prestige pricing, which is.

In prestige pricing, the price heralds a product or service of exceptionally high quality and with a brand image. It might be the valid promise of a sparkling home exterior, washing that includes a pot of annual flowers on completion, or a pressure washer delivered to a contractor with a modest supply of chemicals.

Do what works, but do make a profit.