Marketing question make more money

[Ron Lippold]

wipe the mac and cheese off your face

 

[Guest]

Wipe the shit off your shoulders, ron...

 

[WISE]

If you raise your price by 10 % you can lose 40% of your volume and make the same profit.

By contrast, if you lower your price by 10% you will have to do almost exactly double the volume to make the same profit.

That is from one of the best books I've read on business...
How to sell at margins higher than your competition.


WISE

 

[billyeadon]

If you raise your price by 10 % you can lose 40% of your volume and make the same profit.

By contrast, if you lower your price by 10% you will have to do almost exactly double the volume to make the same profit.

That is from one of the best books I've read on business...
How to sell at margins higher than your competition.



Saw Larry Steimetz give a presentation several years ago. Bought his book right after the presentation. He is one smart old country boy. He simplifies economics.

 

[Rex Tyus]

If you raise your price by 10 % you can lose 40% of your volume and make the same profit.

So if you are ave $150 per ticket and ave 3 tickets a day =$450 x 5 days = 15 tickets at $2250
10% increase = $165 ave ticket x 3 = $495 x5 = $2475 -40% = $1485

I am raising the bullshit flag.

 

[Jim Williams]

Don't you have a loyal customer base built up by now? If those people like your work and trust you looks like they would be willing to pay a little more instead of finding a new cleaner.

Nice website BTW! :shock:

 

[XTREME1]

I am going to raise my prices from my current 20cents a sq ft to $10,000 a sq ft with just one call I will make more money on 1 room than I do in a whole year now...Wish me luck guys. T I will fly to any location for this price if you need a cleaning.

I tried to charge Evan Kessler the 20cents a sq ft and the final bill was $375 but he stiffed me a $100 and only paid $275 then claimed he tipped me a $100

 

[The Preacher]

Greg, you'll never git an ICS t-shirt with that attitude!!!

 

[Royal Man]

If your average ticket is $150.00 you better raise them 20% or learn how to up sell.

 

[FB7777]

Danny , when are you gonna start selling those T-shirts with the iron-on picture of Evan on the crapper reading Clean-Fax?

 

[Rex Tyus]

If your average ticket is $150.00 you better raise them 20% or learn how to up sell.
_________________

Use any figure you like it doesn't change the math discrepancies smart ass.

 

[XTREME1]

My average ticket is between $150 and $170 and that is because I do alot of 2 room jobs. I love them though they are filled in throughout the day. If you included my commercial the average would spike up the $150-170 is residential. I pried myself on discounted quality. Just a couple months ago I was begging Fred to send some my way if he could (feel free to Fred) but right now I am cruising along.
Fred did you get banned yet, I have you in the death pool.

 

[Royal Man]

Why is everyone so concerned about price?

Price should not be the main reason a customer chooses your company to do business with.

I only have around 1 out of 5 customers even ask about price.

Even new customers.

There are ways to have prospective customers feel like they know you and trust you before they even do business with you.

 

[XTREME1]

almost none of my calls ask about price, because they already know. The main reason people choose me is quality work with a discounted price. If my plan isn't a great strategy I don't know what is. I don't want to rip my customers off, I feel I earn a great days pay for what I do and I know I am appreciated by my customers. Everyone tels me raise your prices, I like being balls to the wall busy and I like the reputation I have in my community. 2 trucks starting next spring

I want every carpet cleaner in my area to raise their prices..I will be happy to take their business

 

[Greg Loe]

I've raised my prices to $1.50 a sq ft. Great profit!!!




































I haven't had a job sense then, but that's what I charge.

Can I get an ICS t-shirt? :wink:

 

[The Preacher]

now thatme and Evan are pals again, i bet i can git a #100 tip outta him!!!


PS Pfred, why do you have to make Evan go throught that dark period in his life again? its over, move on!!!

 

[B&BGaryC]

The only question I ever get over the phone is, "How much do you guys charge for carpet cleaning?"

My response is, "I can guarantee you won't be charged less than $65, and my prices are lower than the national average." (I heard around 32cents/foot) "Not to be rude or anything, but in an industry that is not regulated by the federal government, do you really want to shop on price alone? There will always be somebody having some sort of sale... I tell you what ma'am, I just had a cancellation later on today, the Smith kid got the flu...I would be happy to come out and take a look at your carpets and give you an exact price and we can work from there...."

 

[WISE]

Rex--

The math is just a bit more complex than your ave. ticket, etc.


The example I posted assumes a 35% Gross Margin. You must also know your break even volume.

Break even volume= Fixed GS&A (dollars)/Gross Margin (%) - Variable expenses.

So you need to know your General, Sales & Admin costs. You need your Gross Margin (Sales - COGS [Cost of Goods Sold])...

just buy the book! This will take forever to explain on here!

Best

WISE

 

[Rex Tyus]

The math is just a bit more complex than your ave. ticket, etc.

That was my point.

No one should make a blanket statement about a 10% price increase yielding a higher profit at a 40% volume reduction without explaining it.

Most know better but there are too many newbies here that might actually try it.

 

[Rex Tyus]

Further more any mathematical scenario that would allow those results to come to fruition would have to factor in an extremely high variable expense ratio. Most owner operators do not have that kind of variable expense. I do agree a 10% increase would yield significantly more profit than most would suspect.

40% reduction in volume is just plain ridiculous. I still say bullshit!

Please keep in mind I have been playing with sale % and profit % since the age of 16. I know bullshit when I see it. I have donated more used books to charity than most people ever buy.

 

[WISE]

Maybe you should have kept a few of those books...

Just pickin at ya buddy.

If I remember correctly the example used of a sample company adjusting price and analyzing the effect on profit--had a variable of .15...
COGS was .65 (which would be high for an owner/op). Nevertheless, the math is right, call BS if you want. The idea of making "a blanket statement" was to draw discussion, constructive discussion, and it is working. Anyway, I am not here to get in a pissing match over who has read the most books...most all books I have are stock market related, technical analysis primarily...not overly exciting material!!! But I find it interesting. One book I like is The Nature of Risk by Justin Mamis. Pretty cool perspective on why people make the decisions they do with regards to risk exposure.

Best--

WISE

 

[Rex Tyus]

Sorry Wise
didn't mean to sound pissy. I just have little faith in authors that make outrages claims that may hold true under certain circumstances yet they herald them as the norm. For practically every industry there is a point where an increase in price will allow for some lose of transactions and still allow more profit. We do agree on that. A 40% loss in revenue made up by a mere 10% increase in price is pie in the sky. Anyone with a .65 COGS better focus on efficiency first. While a loss of transactions will lower variables as a percent it will increase fixed expenses as a percent to sales so the numbers are off again, and it goes on and on. As you said it is too complicated to explain here.

Again sorry for sounding pissy.