What % of should you lose because you are too expensive?

[ACE]

If you double your prices and lose up to 50% of your jobs, you are way ahead. Every market is deferent so, I think the % you loss based on price is a better measure of profitability then per sq ft price. I know there are the SFS techniques to retain more jobs but they have their limitations. I am talking about new prospects who know nothing about your business, not repeat customers. I lose about 15-20% because I’m “too expensive” or more likely they found someone cheaper. This optimal too expensive % will differ depending where you see yourself in the market and how hungry for growth you are.

 

[bob vawter]

0

 

[Mikey P]

20%?

 

[Desk Jockey]

With the turn overs in Lawrence we are losing 98% of them!

Normally 30-40% ???

 

[Brian R]

I refuse to lose a job anymore....kinda

If I get a price shopper, I have been just giving them to one of my techs who will do the work and they keep 100%.
I would rather see them get the money than my competition who is low balling everyone.

So a $100.00 small house price shopper would be like a $200.00 job on my % deal.

Plus, if the tech can upsale while there, that's a bonus too.

It's been working out.

The difference in this is...I just give my tech the phone number and they take care of everything. Once I hand it off...it's out of my hands.
If they need to run a credit card, I will do that for them. But other than that, I can't waste time on it.

 

[renegade_cowboy]

Jay Conrad Levinson says high prices help during a rough economy, the last thing you want to do is make mistakes with any money you put out. Your assured by our prices that your not making a mistake, such as if you went with a lower price service.

I think if the customer feels and understands the value of your services, I think more will continue to go with you if you raise your prices.

 

[Brian R]

That about sums it up, Brent.


But some people are just morons and want the lowest price no matter what.
Apt move outs
Ghetto
foreigners
Some Rental move outs
Some property managers
etc.

If they want it done "right' they will pay a little more.
If that's the case, I will usually land the job.

Same secret as usual

Just answer your phone.
People who want quality don't want to leave a message.

 

[Supersucker]

I always thought 20%, any less and you are too cheap.

You should loose less, practically none, of your referrals.

 

[ACE]

I think 20% is a good number if you are still trying to grow a company.

 

[TimP]

I don't know the % but I rarely let one get away it seems. And if they don't book with me I can't help it. I don't turn anyone away that wants me to clean because I'll work with them on price if that's the problem. If they get a price quote elsewhere on the phone I'll match it but they have to tell me who they got it from so I can change my service level so that it's fair for me, and I make it clear that I'm doing the same quality job as they were quoted and that I do more work for my regular price. I can work as cheap as the next guy.

 

[frankiechocolate]

Brian, so you are teaching your customer they only have to complain and you'll get them someone who will do it for cheaper? How does this grow your biz?

sure you want to help your tech but dude, our price is always going to be too high for someone.

I'm learning this. I'm asking more questions and trying to screen out lookie-lous.

sometimes they still slip in but I'm telling new callers. "is finding the lowest price your chief goal?"
when they say yes I politely suggest they call someone else. they know what their work is worth.

I have half a mind to send them to that guy who advertizes $4.95 a room any entire house cleaned for $29.95.

I love those guys. they are the best. people who only look at price deserve him. you couldn't rent the rug doctor for $4.95

If I get a sniffer, and I sense price is # 1 I pitch hard and then tell em, I have a $200.00 minium. that gets rid of them.

if they're forigen and cheap I tell them there is a $50.00 trip charge I need to get as soon as I get to their door.

more later.

din din is calling

read my blog, "the carpet cleaner's crocodile." full of great carpet cleaning stories.

best,

frankie

 

[Brian R]

I'm not teaching "MY" customer that.

Face it, You (I do) know a price shopper almost right away when you get them on the phone.

I don't want their business either...headache not worth the little bit of money..yada yada.


My techs know what to expect when I send them the custy.
If they want to do the job, I say let them.

I also let the customer know that I am refering them so I won't have that liability.

I build my company on quality work the best that I have control of. Local? Not a problem.
Outside of this area? Not usually a problem...no big problems yet.


My techs know they need to do quality work for me...that's why I use them.

What they do on their time is their deal.

 

[Mike Draper]

It's 20%ish for me. I track all phone calls, bids and real jobs. If they want cheaper work they can pick one of our less expensive packages. Once you start negotiating, people jump all over that and want more and more. "can you throw these rugs in for me, how about this one extra room, oh, you know....I guess I do want all the furniture moved, etc"..... Time is money and we need to make X amount per hour to reach our daily goal, so the more they ask for the more I have to charge.

 

[TimP]

It's 20%ish for me. I track all phone calls, bids and real jobs. If they want cheaper work they can pick one of our less expensive packages. Once you start negotiating, people jump all over that and want more and more. "can you throw these rugs in for me, how about this one extra room, oh, you know....I guess I do want all the furniture moved, etc"..... Time is money and we need to make X amount per hour to reach our daily goal, so the more they ask for the more I have to charge.

That's why you explain before you do the job what you'll do. Tell them the price includes or doesn't include furniture moving and what rooms etc. It's quite simple.

 

[Mike Draper]

It's 20%ish for me. I track all phone calls, bids and real jobs. If they want cheaper work they can pick one of our less expensive packages. Once you start negotiating, people jump all over that and want more and more. "can you throw these rugs in for me, how about this one extra room, oh, you know....I guess I do want all the furniture moved, etc"..... Time is money and we need to make X amount per hour to reach our daily goal, so the more they ask for the more I have to charge.

That's why you explain before you do the job what you'll do. Tell them the price includes or doesn't include furniture moving and what rooms etc. It's quite simple.

that's what i was trying to get at.

 

[Bjorn]

this thread is pretty much based on old bull shit SFS stories of a one time hit home run in jr high co ed soft ball

Any complete moron can believe the stories but the facts in front of you are still going to be there
any one can offer the advice raise your prices and you will only loose X amount of customers?

That person has no risk what so ever for this great advice.

What is does when you try to fook up a perfectly running business is make you work much harder to keep your current customer base that has to adjust or shop for a new cleaner.

Trust me there are guys in your market that can clean just as good at a little less money than you charge.

Since this crash it's a whole new ball game the rich my still be rich but they don't feel that rich right now

With Obama going after every thing you have and will ever have makes it challenging

In this current economy to raise prices to the point of loosing 20% of your current customer base is suicidal

Now you have to remember that none of those teachers Toburin and most of all Yeadon have not been trying to make money in this current market with a cleaning or restoration business.

Heck what happened to Tourbien business months after he sold it?
what about all his great systems and forever clean programs and shit?

Now this whole thesis is on that old business sold before 1995 things have changed

look at your own numbers risk what you want to risk


you may think your service is just a valuable as a hearth surgeon but your still a carpet janitor

truth hurts don't it

 

[frankiechocolate]

bjorn,

you make a lot of sense but hey dude, take a deep breath and a chill pill.

you are right. steve sold his biz years ago.

and billy, who is a personal friend of mine has not had to compete in this market.

got a bargan shopper the other day.

they stick in my craw.

they said they were shopping so I told em to try my biggest competitor too.
and asked em for the sq. feet.

then I called my competitor on a seperate phone and asked how much to clean this much s.f.

they told me.

i emailed the bargain shopper and told her $2.00 less than the other guy cuz I was hot.

I got the job, then upsold them an extra $179.00 in scotchgard at .25 cents a s.f.

I would not have gotten that price if steve at sfs hadn't urged us to push it to .20 cent a s. in Jan.


He ain't perfect but steve and billy are good men and they've helped me just like you guys do, even when I ask stupid questions on the board,


best day ever and please visit my blog, "the carpet cleaner's crocodile." full of great carpet cleaning stories.

 

[Bjorn]

they may be fine people but the don jon crew to me is like a bunch of old rockers who cant retire and the only booking they can get is at Indian casinos around the country

See country joe and the fish at the tee pee room wednesday nite at the Res

 

[renegade_cowboy]

they may be fine people but the don jon crew to me is like a bunch of old rockers who cant retire and the only booking they can get is at Indian casinos around the country

See country joe and the fish at the tee pee room wednesday nite at the Res

Hey peaches, what part of washington you from?

 

[frankiechocolate]

There's a lot of good advice here.

My take on What % is this.

I want them all.

It burns me when they go with someone else


I am higher than most so I sell value. multi step process. email me private for my current list.

I don't know if you can really say 3% or 12 % or what ever is acceptable.

you have to know your own needs. if you're hungry you'll do what ever it takes to put food on the table.

someone told me, "your price is always going to be too high for someone.

the bargain shopper, the person who knows no value but thinks by beating someone up they are getting value.

the person with not enough money. there are all kinds

If you're losing too many you'll have to change something but I suggest pitching to a better client.

people with money value their homes and know it takes money to keep them nice.

Pitch to them. most of the good guys like steve T. and steve Marsh and Esp. Joe Polish will tell you to fire your worst customer. they whine the most and appreciate the least.

best sat night ever. read my blog, "the carpet cleaner's crocodile." full of great carpet cleaning stories.

 

[ACE]

I’m not thinking of rising prices on my current customers and seeing how many stick around. For the level of service I provide, my prices are very low. When I quote a price to a new prospect I would much rather hear them say no thanks. than, “that’s all?”

 

[Brian R]

Your ARE or ARE NOT thinking of raising your prices? Did you write that wrong?

 

[frankiechocolate]

Ace, I'm gonna have to agree with brian on this one.

You need to raise your prices.

your costs, gas, chemicals, eq. repair, insurance, everything has gone up.

why do cleaners think there is virtue in having low prices?

because we are lowly scum and don't deserve a living wage?


ask the boys on this board what they are charging per. sq


do you do good work?

do you do better than others and take pride in your work?


fear holds us back.

faith can set us free, or at least free-er.


ask the boys what they are charging.


and if you're good you should be right up there or higher.


is there any virtue in being poor?


best monday ever!


f.c.


Visit my blog, "the carpet cleaner's crocodile, it's chock full of carpet cleaning stories to make you glad you're you and not me.

 

[frankiechocolate]

Bjorn wrote: they may be fine people but the don jon crew to

are like county joe and the fish at the rez.

Hey Bjorn. great analogy. there's nothing as sad as someone who doesn't realize the fame train has left the station without them.

You have some strong opinions about Jon don and their crew so I'm curious why so vehement.

did billy slip you a micky at a trade show and steal your wallet

did that lousy steve T. try to set you up with his sister and it turned out to be a guy?

those lousy creeps. I hate when they do those things to us poor unsuspecting rug suckers.


maybe that wasn't what happened.

I've know these two desperadoes for years and slippery as they are, I've never been able to catch them in a lie.

they are there for me when I have a tech problem. I have Billy's cell and often call him.


sometimes at odd hours too.

he's always been polite and helpful

yeah, their not in the trenches like us but they do know their stuff.

but tell us how Jon don and these two snakes in particular have ripped you off, given you bad advice, or in general, said bad things about your dog, your mule or your truck mount and I'll pick up the next stone right after you.

those lousy creeps.


Just give us a little more info on why we should put them and Jon-don on the rez. k?

best monday ever!

f.c.

visit my blog, "the carpet cleaner's crocodile" it's full of carpet cleaning stories to make you glad you're you and not me

 

[XTREME1]

0%

and never skimp on quality

 

[ACE]

I am at $35.00 a room that might go to $40.00 but not this year. That’s not top dollar but there is always someone cheaper. I know my market. It’s obvious to me that the top dollar guys here have a low customer retention rate because they have been doing it for 20 +years and struggle to keep two trucks busy. They spend tons of money on advertising and do all the cheesy one-up salesmanship, then when it’s slow cus they burnt their customers by trying to squeeze them for every dime they come and try to undercut me on low dollar commercial work.

 

[Wayne Miller]

Too expensive is a relative concept. Just like water seeks its own level, carpet cleaners settle into a pricing structure and clientele that doesn't scare them. Been there, done that. Ten years with a 3 cent PSF increase.

Then, in 2000 we had no choice but to raise out price. It was scarey, we lost more jobs over the phone. Everytime we raised it, though, we got reltively little resistance and it wasn't so scarey the next time. Between mid 2000 and the first quarter of 2003, give or take, we raised our PSF rate 85%.

The final results?

In 2004 we did 11.6% fewer jobs, increased our gross 40.75% and raised our average job 59.1%.

Maybe it's just my imagination but I've noticed a whole bunch of folks still working the same jobs they were five years ago, still driving $40K cars, still taking family vacations, still paying $135/month for Internet and all the good cable channels, still waiting in line for a table at Carrabbas, yada, yada, yada. Lousy economy aside, is there ever a "good" time to raise your prices? Even in this economy there are plenty of cleaners who could benefit from raising their prices.

 

[Desk Jockey]

Hey peaches, what part of washington you from?

The brutal viking part!

 

[Mike Draper]

I am at $35.00 a room that might go to $40.00 but not this year. That’s not top dollar but there is always someone cheaper. I know my market. It’s obvious to me that the top dollar guys here have a low customer retention rate because they have been doing it for 20 +years and struggle to keep two trucks busy. They spend tons of money on advertising and do all the cheesy one-up salesmanship, then when it’s slow cus they burnt their customers by trying to squeeze them for every dime they come and try to undercut me on low dollar commercial work.

I certainly agree with you! I guess that's why we see so few people go back and buy Lexus, BMW's, Toyota's, Honda's over the years. They have a terrible retention rate because they try to cram quality and high price down everyone's throat. People aren't stupid, they know that there is another car lot down road that sells kia or Daewoo, or even chevy's that are much cheaper. I mean, "seriously" why would anyone want to go back to those other car companies when they can buy a cheaper car made by another manufacturer.

It’s obvious to me that the top dollar guys here have a low customer retention

People call you because you are cheap and offer value at a cheap price. People call higher price cleaners because they want highest service possible and the most quality cleaning out there. "You can't provide the highest quality cleaning on the market and be the cheapest at the same time". "People will always remember a shitty cleaning over a cheap price".

 

[ACE]

I think pricing depends on how much you want to grow a company and what kind of company you want it to grow into. It boils down to value. Every marketing program is built around value. If your customer retention rate is low you’re not delivering on value. The marketing gurus won’t tell you this because it’s not to their advantage: You actually have to deliverer on the promise of value they show you how to present if you want to make the big money. At this point, I want to grow. When the company is as big as I want, I’ll slow it down. I could do this by rising prices or by cutting the advertising / marketing overhead. There are allot of broke dick “high dollar” guys out there. Pricing is only part of the profitability equation.