The Hidden Cost of Competing on Price: How to Use AI for Pricing Profitably in Trades Businesses
About the Author: Ashley Thomson
In the trades sector, pricing is often the battleground where businesses fight to win work. But as outlined in my previous article, The Hidden Cost of Competing on Price, chasing the lowest quote can lead to shrinking margins, increased stress, and a race to the bottom. Instead of undercutting competitors, smart tradie business owners should focus on value, efficiency, and reputation to build sustainable growth.
I’m Ashley Thomson, a tradie business coach at Tenfold Business Coaching. With over 20 years of experience coaching established construction and trades businesses across Australia, I’ve helped owner-operators grow from $500K operations to multi-million-dollar enterprises. My background in engineering and corporate consulting means I approach business growth from first principles – clear strategies, no fluff. I’ve run my own business, managed payrolls, led teams, and navigated the ups and downs of the trades industry. I know what works, and I want to help you apply smart strategies that protect your margins and grow your business. That includes using tools like ChatGPT to turn strategy into action, without needing to be a tech expert.
This article builds on the original advice and shows how you can use the free version of ChatGPT to implement each strategy in your day-to-day operations. Whether you’re an electrician, plumber, landscaper or builder, this guide will help you use AI to make smarter pricing decisions and grow your business with confidence.
Know Your Numbers
Understanding your financials is the foundation of profitable pricing. The original article explains how even a small discount can drastically reduce your profit. Knowing your cost of goods sold, overheads, and chargeable rates helps you quote with confidence and protect your margins.
How ChatGPT can help:
ChatGPT can help you break down your numbers, clarify your pricing structure, and run simple profit scenarios. You don’t need accounting software or spreadsheets – just ask the right questions and get clear answers.
Example prompts to use:
- “Help me calculate the gross profit on a $12,000 job with $9,000 in labour and materials.”
- “Explain the difference between gross profit and net profit for a trades business.”
- “What’s the impact on profit if I discount a $10,000 quote by 10 percent?”
- “How do I work out my charge-out rate if I want to earn $150K a year and cover $80K in overheads?”
How this helps:
Using ChatGPT to clarify your numbers helps you quote smarter and avoid underpricing. You’ll make decisions based on facts, not guesswork, and keep your business financially healthy.
Positioning Over Pricing
Rather than being the cheapest, position your business as the best value. The original article highlights how qualities like reliability, professionalism, and quality workmanship are what clients really want. Your value proposition should reflect that.
How ChatGPT can help:
ChatGPT can help you craft messaging that communicates your strengths. Whether it’s writing website copy, refining your quote descriptions, or preparing talking points for client conversations, you can use AI to position your business as the trusted choice.
Example prompts to use:
- “Write a short paragraph for my website explaining why clients should choose my electrical business even if we’re not the cheapest.”
- “Help me list five reasons why my plumbing business offers better value than budget competitors.”
- “Create a quote description that highlights our reliability and quality workmanship.”
- “Write a response to a client who asks why our quote is higher than another tradie’s.”
How this helps:
By using ChatGPT to sharpen your messaging, you’ll attract clients who value quality over price. That means fewer price-sensitive jobs and more opportunities to build long-term relationships.
Tiered Pricing
Offering tiered pricing (such as basic, standard, and premium) gives clients options and helps you upsell without pressure. The original article explains how this approach shifts the conversation from “How cheap?” to “Which option suits me best?”
How ChatGPT can help:
ChatGPT can help you design tiered packages for your services. You can describe your offerings and ask for help structuring them into clear, compelling options that clients can easily understand.
Example prompts to use:
- “Help me create three pricing tiers for my landscaping services: basic, standard, and premium.”
- “Write descriptions for tiered packages for my HVAC business, including what’s included in each.”
- “Suggest ways to present tiered pricing in a quote so clients see the value of the premium option.”
- “How can I explain the benefits of tiered pricing to a client who’s only focused on cost?”
How this helps:
Tiered pricing helps you increase your average job value and gives clients a sense of control. With ChatGPT, you can structure your offerings clearly and confidently, making it easier to upsell and improve profitability.
Build a Reputation, Not a Discount Habit
Your reputation is your most valuable asset. The original article warns against becoming known as the “cheap” tradie, which leads to corner-cutting and burnout. Instead, focus on building a brand that reflects quality and professionalism.
How ChatGPT can help:
ChatGPT can help you write testimonials, showcase your work, and create content that builds trust. You can use it to draft social media posts, website updates, and referral messages that reinforce your reputation.
Example prompts to use:
- “Write a social media post showing off a recent electrical job and highlighting our attention to detail.”
- “Help me write a testimonial request email to a happy client.”
- “Create a short bio for my website that positions me as a reliable and professional tradie.”
- “Write a referral message I can send to clients asking them to recommend us to friends.”
How this helps:
Using ChatGPT to build your reputation helps you attract better clients and charge fair prices. You’ll be known for quality, not discounts, and that reputation will drive long-term growth.
Invest in Efficiency
Efficiency is the key to staying competitive without cutting prices. The original article explains how improving scheduling, reducing wastage, and training your team can boost productivity and protect margins.
How ChatGPT can help:
ChatGPT can help you identify inefficiencies and suggest practical improvements. You can use it to plan better workflows, write training guides, and troubleshoot common issues in your operations.
Example prompts to use:
- “Suggest ways to improve scheduling for a small plumbing team with three vans.”
- “Write a checklist for preparing a job site to reduce delays and wastage.”
- “Help me create a training guide for new apprentices on how to work efficiently and safely.”
- “What are common causes of profit loss in a trade business and how can I fix them?”
How this helps:
Using ChatGPT to streamline your operations helps you deliver more value without increasing costs. You’ll work smarter, not harder, and keep your business competitive and profitable.
Final Thoughts from a Tradie Business Coach
Competing on price might win you work today, but it won’t build a sustainable business. As a tradie business coach, I’ve seen how smart strategies (like knowing your numbers, positioning for value, offering tiered pricing, building a reputation, and investing in efficiency) can transform a business from surviving to thriving.
With ChatGPT, you’ve got a free tool that can help you turn these strategies into daily actions. No tech complexity and no fancy systems, just clear advice tailored to your business. Whether you’re quoting jobs, refining your messaging, or training your team, ChatGPT can help you make smarter decisions and grow your business with confidence.
If you’re ready to take the next step, Tenfold tradie business coaching offers expert coaching for tradies. We work with owner-operators across Australia to build profitable, resilient businesses. Because you didn’t start your business to be the cheapest – you started it to be the best.
