How come no one has a marketing program for price point marketing? All the gurus are high price marketers and their are no price point marketers? Ken snow or that dude that runs Dalworth should write a how to run a price point run company. I no everyone claims they charge 50 cents or so a foot. I have no desire to run a high priced company. I just like working for normal people, not peoples live that are influenced by a stock market swing one way or the other.
Price marketing
- Thread starter brocksdad
- Start date
C
C. Copplepot
Guest
Yeah a lot of those people that charge the .50 sq ft also offer a nice discount to their clients as well.
Ken Snow would be rich if he did do something like that.
Ken Snow would be rich if he did do something like that.
You can do price point, but you damn well better know your numbers, or you'll lose your shirt and not even know it. Most CC'ers I've met are just that CC'ers, not business people. You will hopefully become one over time, but if you do PP marketing you probably won't have time to learn to be a businessman before your lack of knowledge on business principles chews you up & spits you out. But that certainly doesn't mean you can't do it , their are exceptions to every rule, I hope your the exception if you intend to do PP.
G
Guest
Guest
Is like stabbing yourself in the back. Good only for the short run. The companies that do that are huge, and you would have to be huge as well to make a profit. I'd suggest adding some value to your service, like offering something unique and keep your prices up. Here is an article I wrote that shows that price is not the most important thing. Read it and you will be surprised what the customer really wants. http://www.cleanfax.com/article.asp?indexid=6635967
G
Guest
Guest
Don't listen to everything you read on these board, not just this board, but the others too! There's very few in this industry that are truly getting .50 cents plus per foot consistently! Mikey is probably one that consistently gets his 50+ cents psf, but he lives in an area of CA where you can't buy a home for under $1 million dollars! Howard Partridge and his guys probably get it consistently, and a few others, but that's about it!
If your cost of doing business exceeds $100 per hour than something is wrong. You can surely earn $100 per hour charging multi truck prices, still do an excellent job and earn a nice living for yourself! Even at multi truck prices there will be days where you earn much more than the "rule of thumb" $100 per hour!
I'll add this...it's easy to increase your hourly by adding additional services or selling protection! It's money that most leave on the table by not asking!
If your cost of doing business exceeds $100 per hour than something is wrong. You can surely earn $100 per hour charging multi truck prices, still do an excellent job and earn a nice living for yourself! Even at multi truck prices there will be days where you earn much more than the "rule of thumb" $100 per hour!
I'll add this...it's easy to increase your hourly by adding additional services or selling protection! It's money that most leave on the table by not asking!
G
Guest
Guest
If you are going to be a lower priced company, you better have enough capitol to invest in marketing and have a plan to grow to multiple trucks fairly quickly. I don't believe a single truck operator can be lower priced and really make money. Too many of us work for big companies and charge what they did and expect to make money.
I believe if you have the right plan you can be a success whatever you charge.
Dave
I believe if you have the right plan you can be a success whatever you charge.
Dave
adamh
Supportive Member
I just like working for normal people, not peoples live that are influenced by a stock market swing one way or the other[/size
said Brocksdad
People that have money keep getting their carpet cleaned when times get a little tight. People that don't have tons extra will not spend it on things that are not completely necessary. That is what carpet cleaning is to most people a luxury. After 9/11 all the local guys that were cheap lost their butts, I kept on going stronger than ever. Plus I need 2 custys for $650 you 6 or more and mine will always call me back. Most coupon shoppers just look for the next deal. That is why I don't advertise at all and the cheap cleaners spend thousands a month. They always have to get new custys to make for the price shoppers. Sorry man but high end is the only way to make any real money.
said Brocksdad
People that have money keep getting their carpet cleaned when times get a little tight. People that don't have tons extra will not spend it on things that are not completely necessary. That is what carpet cleaning is to most people a luxury. After 9/11 all the local guys that were cheap lost their butts, I kept on going stronger than ever. Plus I need 2 custys for $650 you 6 or more and mine will always call me back. Most coupon shoppers just look for the next deal. That is why I don't advertise at all and the cheap cleaners spend thousands a month. They always have to get new custys to make for the price shoppers. Sorry man but high end is the only way to make any real money.
You're free to do whatever you want to do.
Attract whatever price point you want to attract.
Clean for whomever you want to clean for.
There's nothing wrong with a price point company, just as there's nothing wrong with a higher priced niche-based company. Whatever floats your boat is what you should do.
A couple people in the thread nailed it, though. If you see yourself as an owner/op, chances are you're probably better at doing the work alone, and thus need to charge higher prices.
If you see yourself growing to a several truck operation, you will have to be a fantastic businessperson because the margins are much tighter at lower prices.
I think people like HP are the exception because they live in an area where there are many rich people who would never dream of cleaning carpets themselves. If memory serves, Houston has more millionaires per capita than any other city in the US. If it's not number one, it's at least in the top 5.
It's all about percentages and market share. Nobody talks about market share on the boards. NOBODY.
If you want to grow a business, you could do it via value or niche; but there's a thing called market share that needs to come into the equation - but never does. Let me give you 2 examples.
If I lived in an area where the population was 50k and the avg. household income of homeowners was $50k, there's only a small percentage who could afford to pay .50 per square foot - at best 10%.
If we assume that of the 50k population, approx. half own their own homes, that means that 25k would be our POTENTIAL. Out of that potential, only 30% ever get their carpet cleaned professionally - so 30% of 25k is 7,500. (btw, that's a very conservative number)
If I'm a high-priced cleaner, MAYBE 10% of this Potential would ever pay my fee. That brings the number down to 750. Out of the 750, if there are others in my area that are charging similar to me, or who are attracting my clients, I need to put them into the equation. If there's only one company that comes close to servicing my demographic/psychographic niche, at best I could, potentially, capture 50-60% of that niche. Now my Potential is around 375 - 450.
Let's guess high. 450 clients x avg job ticket of $300 = $135K / year gross revenues. Decent, but not a lot of room for growth.
If I take the same service area and charge $99 for whole house Shotgun-style, now my market size is much bigger. It's at least ALL of the homeowners who might consider getting their carpets professionally cleaned. So lets go back to Market Share. Are there others in your area that charge $99 for a whole house? Probably. There's probably a lot more that charge that price point in your area than charge niche prices.
Let's assume there are 10 cleaners that charge $99/whole house in your area.
Your market share is 1/10, so 7,500 divided by 10 is 750. You have 750 clients @ let's say $150 (being generous here) job ticket. That equals gross revenues of $112,500. You'll have had to do 2x the # of jobs to equal $22,500 LESS in revenue.
So.....it all comes back to what YOU want to do. If you are a price point cleaner, you'd better think about dominating your market share via multiple trucks. If you're a niche based cleaner, it's usually easier and with less work to dominate your niche by charging significantly higher and delivering unparalleled quality.
Scott
Attract whatever price point you want to attract.
Clean for whomever you want to clean for.
There's nothing wrong with a price point company, just as there's nothing wrong with a higher priced niche-based company. Whatever floats your boat is what you should do.
A couple people in the thread nailed it, though. If you see yourself as an owner/op, chances are you're probably better at doing the work alone, and thus need to charge higher prices.
If you see yourself growing to a several truck operation, you will have to be a fantastic businessperson because the margins are much tighter at lower prices.
I think people like HP are the exception because they live in an area where there are many rich people who would never dream of cleaning carpets themselves. If memory serves, Houston has more millionaires per capita than any other city in the US. If it's not number one, it's at least in the top 5.
It's all about percentages and market share. Nobody talks about market share on the boards. NOBODY.
If you want to grow a business, you could do it via value or niche; but there's a thing called market share that needs to come into the equation - but never does. Let me give you 2 examples.
If I lived in an area where the population was 50k and the avg. household income of homeowners was $50k, there's only a small percentage who could afford to pay .50 per square foot - at best 10%.
If we assume that of the 50k population, approx. half own their own homes, that means that 25k would be our POTENTIAL. Out of that potential, only 30% ever get their carpet cleaned professionally - so 30% of 25k is 7,500. (btw, that's a very conservative number)
If I'm a high-priced cleaner, MAYBE 10% of this Potential would ever pay my fee. That brings the number down to 750. Out of the 750, if there are others in my area that are charging similar to me, or who are attracting my clients, I need to put them into the equation. If there's only one company that comes close to servicing my demographic/psychographic niche, at best I could, potentially, capture 50-60% of that niche. Now my Potential is around 375 - 450.
Let's guess high. 450 clients x avg job ticket of $300 = $135K / year gross revenues. Decent, but not a lot of room for growth.
If I take the same service area and charge $99 for whole house Shotgun-style, now my market size is much bigger. It's at least ALL of the homeowners who might consider getting their carpets professionally cleaned. So lets go back to Market Share. Are there others in your area that charge $99 for a whole house? Probably. There's probably a lot more that charge that price point in your area than charge niche prices.
Let's assume there are 10 cleaners that charge $99/whole house in your area.
Your market share is 1/10, so 7,500 divided by 10 is 750. You have 750 clients @ let's say $150 (being generous here) job ticket. That equals gross revenues of $112,500. You'll have had to do 2x the # of jobs to equal $22,500 LESS in revenue.
So.....it all comes back to what YOU want to do. If you are a price point cleaner, you'd better think about dominating your market share via multiple trucks. If you're a niche based cleaner, it's usually easier and with less work to dominate your niche by charging significantly higher and delivering unparalleled quality.
Scott
The Preacher
Member
- Joined
- Oct 13, 2006
- Messages
- 3,401
and that my friends is why Scott is, "DA MAN"!!!
The Great Oz
Member
It is possible to run a multi-truck high end operation, and to run a single truck discount operation profitably. It requires more skill than usual to be able to do either though, which is why cleaner's companies usually fall into "high-end-boutique" or "large scale discount" if they want to make a reasonable profit.
If you were to try to run a small cleaning business charging low prices, you'll just have to be a shark about controlling your costs. Limit the amount of spotting you do, and reduce the number of chemicals you carry, buy used equipment in the winter, offer your customer no choice of day or time since you have to schedule tight to reduce travel time and costs, offer your price only if you move no furniture, work out of your house, answer the phone yourself... If you don't do these things and more, you'll be very busy burning up your equipment and your health to end up with less than good company wages.
But, everything is possible, given the right combination of available work, costs and your abilities.
The flippant answer is that the guys that know how to do it are either too busy keeping their heads above water or don't want to share their methods with anyone else. Or more likely, it's what Scott said about market share. Why bother writing a book that will have few buyers that have both the interest in the subject and enough money to buy it before it hits the discount bin.
If you were to try to run a small cleaning business charging low prices, you'll just have to be a shark about controlling your costs. Limit the amount of spotting you do, and reduce the number of chemicals you carry, buy used equipment in the winter, offer your customer no choice of day or time since you have to schedule tight to reduce travel time and costs, offer your price only if you move no furniture, work out of your house, answer the phone yourself... If you don't do these things and more, you'll be very busy burning up your equipment and your health to end up with less than good company wages.
But, everything is possible, given the right combination of available work, costs and your abilities.
The flippant answer is that the guys that know how to do it are either too busy keeping their heads above water or don't want to share their methods with anyone else. Or more likely, it's what Scott said about market share. Why bother writing a book that will have few buyers that have both the interest in the subject and enough money to buy it before it hits the discount bin.
Ken Snow
RIP
I agree with Shawn, Scott and Bryan. Be careful when listening to people who have not been there/done that esp if they have something to sell you. Unless I was going to go full tilt into consulting and education to earn a living, I would not spend the effort on publishing the "manual" The ROI would not likely be worth it.
Ken
Ken
Steve Toburen
Supportive Member
- Joined
- Oct 23, 2006
- Messages
- 1,912
- Name
- Steve Toburen
Scott makes some excellent points above. (Even though I am afraid my attention span is "going south" like the Porkmeister since I found it a bit long!)
Cut to the chase time. It is all about "supply and demand". Since there is a limited amount of "you" then if you insist/ want to do all the work then you deserve premium pricing. Customers WILL pay more IF you a)give "Value Added Service" and b)ask for more.
Most owner/operator carpet cleaners never learn this and condemn themselves to a "blue collar" existence and income. So sad. They endure the "worst of both worlds" by working alone and trying to compete with the big boys on price. Sure, you can do it but why?
Steve Toburen CR
Director of Training
Jon-Don's Strategies for Success
PS to Brent: He hasn't shared his financials with me but my guess is by any definition of the word Ken Snow already is "rich". And he is a great guy to share a Thai dinner with! He even picks up the check!
Cut to the chase time. It is all about "supply and demand". Since there is a limited amount of "you" then if you insist/ want to do all the work then you deserve premium pricing. Customers WILL pay more IF you a)give "Value Added Service" and b)ask for more.
Most owner/operator carpet cleaners never learn this and condemn themselves to a "blue collar" existence and income. So sad. They endure the "worst of both worlds" by working alone and trying to compete with the big boys on price. Sure, you can do it but why?
Steve Toburen CR
Director of Training
Jon-Don's Strategies for Success
PS to Brent: He hasn't shared his financials with me but my guess is by any definition of the word Ken Snow already is "rich". And he is a great guy to share a Thai dinner with! He even picks up the check!
