Cleaning Business Pricing – The Importance of Getting it Right
If you ask cleaning business owners what they find to be the most difficult aspect of their business, many will tell you that setting prices has had them stumped on more than a few occasions. Pricing is really an art that takes time and patience to master. Your pricing strategy has to develop over time as everything changes, from your costs through to the level of competition in your market.
There are many pricing methods and strategies and you will find a lot of information on these topics on this website. However, in this article I want to focus on the importance of pricing and the dangers of pricing at levels that are either too high or too low.
Hitting the Right Price
So what is the right price to charge for your cleaning services? When I approach pricing I always think of the card game Blackjack. You want to go high enough to win, but not so far that you go bust.
As a cleaning business owner you know that there is an ideal price for your services. The only problem is that this price can be difficult to pin point. You need to be pricing at levels that maximize the overall level of profitability in your business. To really maximize profits you need to regularly be taking your prospects as high as they are prepared to go without reaching the point that the other company’s offer suddenly seems better. The right price will differ with every cleaning job and this complicated things even further.
Unfortunately, in this article I’m going to leave you on your own to find this magical price point for your services. But I am going to tell you the importance of finding the right so that you will be motivated to keep looking.
Don’t Price Too Low
Many industries have players that try to compete on price and the cleaning business is no exception. These ‘low ballers’ tend to ruin it for everyone else as they degrade the services on offer by pricing them way to cheaply. The good thing is that these businesses are usually not around for long.
It is a common misconception that you can enter a market and grab a piece of the pie for yourself by offering lower prices than everyone else. This approach usually doesn’t work out for several reasons. Firstly, a large part of the market will perceive the service to be unreliable and of low quality. People realize that you usually do get what you pay for. Secondly, businesses that slash prices often pick up the worst kinds of clients. They will have to raise prices at some point if they hope to stay in business and their ‘budget conscious’ clients will usually jump ship when they do.
Don’t be an amateur and price too low.
Try to compete in other ways rather than just being the cheapest cleaning service in town.
Unless you are doing a job for a friend or a loyal customer that refers a lot of business too you there is absolutely no reason to price low, sell yourself short and leave a stack of money on the table when it could have been in your pocket.
Be Careful When Pricing Cleaning Services too High
Pricing at levels that are too high is also bad for business. It costs money to generate leads and inquiries for your business and you need to make the most of them.
Don’t underestimate your prospective clients. For the most part they are not stupid and they will be shopping around and getting quotes from a few different cleaning companies. Ideally you want to be in the middle of the range of price quotes that they receive.
There are times when you can get away with pricing that is considerably higher than market rates but you do have to know when. You may be operating in an exclusive niche with no real competition for example.
You may get away with higher prices due to people in your market having favorable perceptions of your business. If people feel that you offer more value, if your brand is trusted and familiar or your sales team are extremely good at what they do then you may reach some juicy price level that is ‘well above the norm’.
Pricing can also come down to how well you or your salesperson understands the customer. If you really understand them and offer them exactly what they want then high prices can be justified. If you get a feel for a prospect and identify them as a ‘budget conscious’ bargain seeker or someone with money to spend who is looking for premium quality, then you will be in a better position to come up with the right price.
You can always price confidently when it comes to referrals. These people have probably been told great things about you or maybe they have been in a building that your team services. They have been ‘warmed up’ to some extent and already have a positive impression of you so you can price confidently to reflect that.
There are many factors that will determine if your company wins a cleaning job or not. Pricing is one of the main factors. You should therefore take note of how successful you are when it comes to providing price quotes to prospects. If you win every job then your pricing could be too low. If you hardly every win cleaning jobs then you do have to ask yourself if your pricing is to blame.
There are some good ideas here to help grow an established business-
Pricing is one of the key factors that will influence the level of profitability of your cleaning operation. It is important that you take the time to refine your methods.