Feedback on response to client needed...

[PrimaDonna]

We have been servicing a country club and their sister site since 2013. They asked us to provide an estimate for cleaning multiple times a year in some areas (restaurant) and semi annually in others (banquet room) and annually in others (a pro shop at each location). It included various services (carpet, tile and grout, concrete). After submitting the estimates, I received the following email from the GM.

Last time you did the Encapsulation it was done for .20 per SF. With the contract I pay more? Why would I commit to a schedule with that?
Prices are higher for both types of cleaning then the other quotes I got.

This was my response:

Thanks for the opportunity to clarify and answer your questions.
The last time we cleaned for you using the encapsulation process was December 2013 and the cost was $0.20 cents per square foot. We increase our prices each year and the cost went up $.0.03 cents to $0.23 cents per square foot. There will be another increase for 2014, however if there is a service agreement in place, we will honor the price of $0.23 cents per square foot for the duration of the agreement. Also, with the service agreement you receive the spot and spill program that I outlined in a previous email to you. Please let me know if you need the details benefits of the program provided again.
(FYI for my MB friends, spot and spill details I sent her previously:
As part of our service agreement, if you have the carpeted areas cleaned at least twice per year, you will get our spot cleaning warranty. If you find there are spots and spills you need addressed, if you call us during a month that we are not scheduled to be there for cleaning (one of the semi annually or quarterly months) and we provide a once per month spot/spill service call. Our commercial clients find this very advantageous to not have to pay our minimum service charge ($150.00) to take care of something that may happen in between scheduled cleanings. We understand the importance of maintaining your reception and banquet areas for your clientele).

We do not base our pricing structure on our competitors, nor do we engage in price matching or bidding wars. We are confident in our pricing structure and the value we offer for the services we provide. You have used us for multiple services at both locations and we feel our work and customer service speak for itself or you wouldn’t have used us again. If this is strictly a budgetary decision, then we are probably not the best fit for you at this time. If you have concerns regarding the quality of work we have done for you in the past or our customer service, I hope you will address that with me and give us the opportunity to make it right so we have your trust and confidence.

Please let me know if you have any additional questions. If it’s easier for us to chat about it, please give me a call 215-343-6450. Or my personal cell 215-xxx-xxxx.

I haven't received a response yet, and will update you all when I do. But I was looking for your input and feed back as to how we handled her question/objection to our price.

Thanks for your input...even though I might regret asking for it!

Meg

 

[Desk Jockey]

a 3 cent jump is always going to rattle cages. I think your response was good and you explained yourself well.

However as you know with commercial, at some point you will price yourself out of the job. You just may be to that point???

They want clean but since it soils continually, their budget is often what dictates whom they choose to clean it.

We have a casino that we've tried and tried to get into for years now. The management uses us in their homes but not at the casino.
Even with what we consider a very competitive bid, they still choose to clean in house. We could offer them a better overall appearance and take a task off the maintenance crew. It is just more than they want to spend.

 

[Mike Draper]

to me it sounded a little to forward, maybe a little bit of your pride is involved in the message? I dont disagree with you as it sounds to me like you and I operate the same when it comes to pricing and quality. But, its almost got a little bit of a challenge as to either use me or not. I dont feel like that tone should be part of the message. I think only her concerns should be addressed, and to me that is price. Im the highest priced cleaner in my valley, but price is still part of every business operation. Maybe you should have started out the message saying I'm sorry for the miscommunication on that. The price is higher because each year we have a very small price increase. If you dont want our service warranty or whatever you included in the service I would be more than happy to give you the great cleaning we did last time at such and such price without the spot spill cleanup. then go from there. telling her she is not the best fit for you is what I tell folks when I dont want to work for them. Maybe this was what you were trying to do?

 

[Desk Jockey]

I would agree with your post completely Mike.

However I thought it was too late to change Meg's response. I took "This was my response:" as Meg had already sent it back. ????

 

[Shane Deubell]

I didnt like the 2nd part too much. The price increase every year probably scared him off anyway.

Sounds professional but he is not going to like the message.

 

[Al_Paulsen]

How about: Mrs Jones what I would like to do is meet you at the property and see if we can come up with a scope of work and frequency that would meet your budget and you could still get our high quality work and stay within your budget. Arrrggh matie. ( it's Talk Like a Pirate Day)

 

[Jim Pemberton]

Meg, if you think its not too late to spare your relationship with this person, there are some things I'd look at differently in your response, but I don't know if you can now that you have submitted this reply.

You mentioned that you do a variety of services for them; was the encapsulation the only price that was questioned?

Sometimes the manager feels compelled (or by their superiors' directives ARE compelled) to question price increases. If the client was very important to you, that single issue might have been better to discuss face to face. Sometimes the "cold words on the screen" come across as accusatory or cheap....and we respond defensively.
Nothing good usually comes from that.

My guess is that you won't be hearing back from them, though I hope you do.

 

[hogjowl]

I have had EXACTLY the same situation with a local country club for over 10 years. I lost it to ... oh, crap ... I forget their name ... they are a national company that supplies paper products and cleaning. They priced it so low that no one other than them would want it. I know I don't. It was a good ride.

Sounds like you may be facing about the same thing.

At 23 cents a foot, you are priced way out of the commercial market here in Alabama. I was high and I was only at 20 cents. The national guys came in at 8 cents. What they did though, was price the carpet way low and then gouged them on their tile cleaning in the kitchens and bathrooms.

When I went out and talked to them, they asked me for an "updated estimate". I priced everything just like normal, which made me super high on the carpet, but when I factored in their tile and grout (which they had never had done before), I was only a little higher, over all, than the other company.

The golf pro/manager told me that they had already had this company (I wish I could think of the name) clean once and he said he wasn't happy. I didn't burn any bridges. So, hopefully, if they continue to not impress, may be they will call me again.

This particular golf pro had sent word a couple of times to me over the years, through the lady who was my contact, that they had offers from other cleaners to trade off cleaning for a golf membership. I don't know why he felt compelled to tell me that because nothing ever changed. The previous lady kept calling me and I kept cleaning. So, I am thinking that he may have had a problem with me, or my pricing, all along but was not able to do anything about it until my contact left.

So, the spiel about that other company could have been a ruse and he may have actually gone with one of the local guys for a free membership.

If that is the case, I will have the account back in no time. As long as I stay in touch.

If the national company actually has it ... it may take awhile.

Either way, I'm going to stay in touch because I have learned that things like this have a way of coming back around given time.

 

[Jim Pemberton]

Excellent advice Marty.

One of the most difficult things to do when you lose a customer is to not feel negative or bitter, or at least not to show it.

A customer should always feel welcome to come back, and not to feel embarrassed, or worse yet to feel that you are the enemy and the last person they would come back to.

Meg, I'm not saying you are exhibiting any of these negative feelings, to be clear. I am mentioning this regarding the subject matter overall.

 

[mirf]

If you want to keep the account you might consider replying that you have thought about thier objection and found it valid. Offer to maintain your valued relationship
at the 2012 pricing. No contract needed. Thank them for being your customer!

 

[Dolly Llama]

Draper said it better than I

it was pretty much what i was thinking before i got to his post...

the "vibe" I got from that the response was bad


and if i was a manager making budget decisions, not sure I'd be all that jazzed knowing I'll be paying 30% more in such a short time ....20 cents pr ft to 29 cent-o-ft in four years wouldn't fly with me....and for encRap no less???
puh-leese


.L.T.A.

 

[PrimaDonna]

However as you know with commercial, at some point you will price yourself out of the job. You just may be to that point???

Yep. While we'd like the job, we need to stay profitable. It really is not the right fit for us if they don't want to pay our prices. We are fortunate to be in a position that we can walk from this job of if doesn't work for both sides.

 

[PrimaDonna]

I didnt like the 2nd part too much. The price increase every year probably scared him off anyway.

Sounds professional but he is not going to like the message.

And I'm ok with that. Do you think they increase their prices each year per head for a wedding? I bet they do. So why can't I do the same as a cleaner/service provider? Do some brides choose a different venue because it's less expensive then this place? I'm sure they do. Do some brides choose this venue because they feel it's a better value over other venues for what they get? Probably.

A bit of subjective decision and a bit of economic decision. There are plenty of others that are paying our price. If no one was then we would have to do some soul searching and re-evaluate our pricing structure.

 

[Shane Deubell]

And I'm ok with that. Do you think they increase their prices each year per head for a wedding? I bet they do. So why can't I do the same as a cleaner/service provider? Do some brides choose a different venue because it's less expensive then this place? I'm sure they do. Do some brides choose this venue because they feel it's a better value over other venues for what they get? Probably.

A bit of subjective decision and a bit of economic decision. There are plenty of others that are paying our price. If no one was then we would have to do some soul searching and re-evaluate our pricing structure.

Is your husband still cleaning 40 hours a week? Are you still answering phone and doing back office work 40 hours?
Thats 80 hours....

Not for me to judge what you charge but i would think about the big picture.
Often people make pricing very personal, too personal IMO.

Money coming in, money going out.

 

[PrimaDonna]

Draper said it better than I

it was pretty much what i was thinking before i got to his post...

the "vibe" I got from that the response was bad


and if i was a manager making budget decisions, not sure I'd be all that jazzed knowing I'll be paying 30% more in such a short time ....20 cents pr ft to 29 cent-o-ft in four years wouldn't fly with me....and for encRap no less???
puh-leese


.L.T.A.

.

20-23. Where are you getting 29 sq ft? This is a discounted rate. Our typical encap prices are .25-.27 sq ft. Haters gonna hate...

It may sound high for your region, but as we all know pricing shouldn't be based on others or by region.

At 3,000 sq foot that would only be a $90.00 increase over last year. Less than $100 and we will lock in that rate as long as they continue to use us. That isn't excessive for a facility that makes tens of thousands per wedding.

 

[PrimaDonna]

Draper said it better than I

it was pretty much what i was thinking before i got to his post...

the "vibe" I got from that the response was bad


and if i was a manager making budget decisions, not sure I'd be all that jazzed knowing I'll be paying 30% more in such a short time ....20 cents pr ft to 29 cent-o-ft in four years wouldn't fly with me....and for encRap no less???
puh-leese


.L.T.A.

.

20-23. Where are you getting 29 sq ft? This is a discounted rate. Our typical encap prices are .25-.27 sq ft. Haters gonna hate...

It may sound high for your region, but as we all know pricing shouldn't be based on others or by region.

At 3,000 sq foot that would only be a $90.00 increase over last year. Less than $100 and we will lock in that rate as long as they continue to use us. That isn't excessive for a facility that makes tens of thousands per wedding.

 

[PrimaDonna]

Is your husband still cleaning 40 hours a week? Are you still answering phone and doing back office work 40 hours?
Thats 80 hours....

Not near those hours. And wouldn't want to. No point in running around for 80 hours a week to barely scrape by. Rather
turn work down and have a work life balance then be forced to take it and bust our asses for little profit.

I'm not sure what you were getting at and if you feel we should be working that much or not. Some feel if you aren't working to max capacity then it's a loss. Is that what your getting at?

I'd rather hang in the sweet spot. But that's me.

 

[Able 1]

I wouldn't hold your breath for a response.. The conversation was kind of negative and defensive.

For encapsulation cleaning to be paying 23cents is crazy(not saying you can't get it ,and good for you)! What does it take you to clean 100SF maybe 5mins, so $240 an hour with a machine as cheap as a cimex? Yes, people will under bid you and do a sufficient job..

Maybe it's time to add another van? Of course your husband's time is valuable, but losing jobs like this by being stubborn about price is just foolish IMHO..

PS A wedding is a bad example.. It's a once in a life time(sorry Bawb) thing that women dream about their whole life, and from what I have seen money isn't on the top of their list of concerns..

 

[Dolly Llama]

.

20-23. Where are you getting 29 sq ft? This is a discounted rate. Our typical encap prices are .25-.27 sq ft. Haters gonna hate...

g.

"HATTERS"???
Don't be stupid



I'll break it down for you where i got that 30% from ;
you told the prospect you raise your prices every year...3 cents sf was the increase in one year.
so if looking four years out, that's OVER 30%
What else would that prospect think?


You don't have to justify your prices to me or anyone else.
I don't care what you charge.
Don't care if you choose to cherry pick all your jobs...not a thing wrong with that if you;re as busy as you want to be

But don't get defensive and whinny when YOU START A THREAD asking our thoughts and don't get the answers you want to hear


..L.T.A.

 

[PrimaDonna]

"HATTERS"???
Don't be stupid



I'll break it down for you where i got that 30% from ;
you told the prospect you raise your prices every year...3 cents sf was the increase in one year.
so if looking four years out, that's OVER 30%
What else would that prospect think?


You don't have to justify your prices to me or anyone else.
I don't care what you charge.
But don't get defensive and whinny when YOU START A THREAD asking our thoughts and don't get the answers you want to hear


..L.T.A.

Ha ha. Relax. I also said in my original post that I might regret asking. I'm not changing our position. Just seeking to know who would do the same or different. For thoses that may jump to conclusions, I'm providing our rational and why we took this position. Not defensive. Happy weekend.

 

[PrimaDonna]

"HATTERS"???
Don't be stupid

And who's the stupid one? I said haters. Not hatters. Oh SNAP!!!

 

[Dolly Llama]

Ha ha. Relax. I
.

I'm relaxed, Meg

nothing wrong with being a cherry picker..if you;re as busy as you want to be
and we all NEED to be profitable

I have to ask though..... if you're not profitable slinging sCampoo under a Cimex @ 20 cents sf...what the hell's going on???


..L.T.A.

 

[Shane Deubell]

Meg, all i can say is if you are talking about pricing then its personal.

Salespeople and owners dont take pricing stuff so personal, its just a number.
Like everything else, just another problem to solve.

Its a mistake and will hold you back, IMO.

 

[Dolly Llama]

.

and we will lock in that rate as long as they continue to use us. .

i didn't see that.
was it in the quote you sent them?
if so, some of what I said looking through the prospects eyes wouldn't apply


..L.T.A.

 

[PrimaDonna]

I have to ask though..... if you're not profitable slinging sCampoo under a Cimex @ 20 cents sf...what the hell's going on???


..L.T.A.

We most certainly are. But based on a certain profit margin. Just being "profitable" isn't enough. If you're profit is $1.00 then do you take the job just because it is technically "profitable"?

We have a formal business plan and target profit margin. If it doesn't fit the formula, we move on.

Our prices may seem obscene to many but the standard of living in this area is obscene too. I live I the area I service. So, it's all relative.

I get that some people think we are throwing away business and shooting ourselves in the foot by taking this stance. But it has afforded us the work life balance we seek. You can't put a price on that.

 

[Dolly Llama]

We most certainly are. But based on a certain profit margin. Just being "profitable" isn't enough. If you're profit is $1.00 then do you take the job just because it is technically "profitable"?

We have a formal business plan and target profit margin. If it doesn't fit the formula, we move on.

Our prices may seem obscene to many but the standard of living in this area is obscene too. I live I the area I service. So, it's all relative.

I get that some people think we are throwing away business and shooting ourselves in the foot by taking this stance. But it has afforded us the work life balance we seek. You can't put a price on that.

It's all good, Meg
I don't know what your cost of doing biz is
But that would be at least $200+ an hour gross for me slingin' suds ...with one man doing it...and no TM running
I' personally would make "a bit" more than a dollar profit on $200+ an hour gross

but like i said, it's all good..and we all get to run our own rail road the way we want


..L.T.A.

 

[dealtimeman]

A good learning thread for many here.

 

[bob vawter]

fires customers AND likes to party....
oh Meg we're gonna get along well............

 

[Desk Jockey]

We also have a target margin and have to make decisions on whether we raise the price or lower it beyond our target. However unlike you we don’t have the luxury of not needing the work. We have a monster to feed here and he is always hungry so we are constantly on the lookout for food for him.

One of the things we constantly look at is how can we deliver the same quality of work but faster. Is there a product, a tool, a machine, a process or system that will increase production yet still deliver a high quality product that we can buy or change to? This will allow us to be competitive and yet still hit out target margin or exceed it.

So if you added a second Cimex how much more competitive could you be? Not just for this account but for others?

I wholeheartedly agree with you about naming your price and not being influenced by what someone says here. You run your company and you make those decisions based on factors that only you know about your business.

Good luck to you!

 

[hogjowl]

We also have a target margin and have to make decisions on whether we raise the price or lower it beyond our target. However unlike you we don’t have the luxury of not needing the work. We have a monster to feed here and he is always hungry so we are constantly on the lookout for food for him.

One of the things we constantly look at is how can we deliver the same quality of work but faster. Is there a product, a tool, a machine, a process or system that will increase production yet still deliver a high quality product that we can buy or change to? This will allow us to be competitive and yet still hit out target margin or exceed it.

So if you added a second Cimex how much more competitive could you be? Not just for this account but for others?

I wholeheartedly agree with you about naming your price and not being influenced by what someone says here. You run your company and you make those decisions based on factors that only you know about your business.

Good luck to you!

In other words ....

They don't prevacuum!

Hacks in Cornville.