Price-Point Pricing

[diamond brian]

Considering changing to price-point pricing ($129/5 rooms or the like) in the near future. I know some of you guys are doing it this way now. I talked to one of the regulars here about it a couple of years ago. My goal is to increase volume.

My question. How do you deal with 4000+ sq ft homes with whole-house or 5 rm package pricing?

 

[Sticky]

"My question. How do you deal with 4000+ sq ft homes with whole-house or 5 rm package pricing?

I used to work for a company that charged by the area. It stated on its advertising rooms over 250 sq ft, L shapped hallways and walk-in closets are considered 2 areas.
I've seen some other companies say that rooms over 200 sq ft are considered 2 areas.

 

[bensurdi]

yikes, seems like a way to work yourself out of business real quick. Why are you wanting to compete with other low prices cleaners?

 

[Chris A]

I'm working on directing my pricing more towards that as well. Not lower, just a better deal for a higher volume of rooms. I just have a really hard time with the L-shaped hallways and walk in closets thing. Probably will not include that.

 

[handdi]

I would like to really hear some feed back on this also
i have been debating this also.
seems like we have been loosing some large sq footage jobs
resi that is.

 

[Ed]

We have tried every form of pricing. Although we use carpet cleaning as a filler mostly now, 4-5 years ago, we had 2 trucks booked out 2-3 weeks and we were using this type of pricing. We were charging 5 area $149.00, 3 and a hall were $129, and $129 was our minimum. No furniture moving, no pre-vac.

Most people don't want to guess at their square footage. They want to know how much it's going to cost. Room, area, package pricing closed more sales for us.

S.F. limits must be stipulated
How you charge out stairs must be stipulated. We considered stairs an area or room.
Your phone person needs to be good at communicating the limits of the offer over the phone. Such as making sure the customer understands that no furniture moving means having anything they want moved, moved BEFORE you arrive, not move it when you get there or move it while you clean and to make clear what is considered an area or room.

You have to be or become a very good manager when working on lower margins, higher volume. For us the difficult part was our large service area. It's harder to make it work when your service area is spread out as opposed to being in a large population area where there is a larger target market in a smaller radius. It helps to pay your employees on commission too, so you have a fixed labor %, especially when you have a larger service area.

Ken, being the Macdaddy of this type of business would be the man to learn from.

 

[harryhides]

Look at this way, 2 different 5 rm jobs @ say $149 ea, in 2 different homes is going to take more time and gas than one 10 room job and so should not cost as much and will still be more profitable. So instead of charging $298 for the 10 roomer, we'd discount the room rate on jobs over 7 rooms or whatever we chose.

 

[hurricane]

I thought per room pricing would save time on travel, but per sq ft seems more profitable which meens less jobs for more $$$$

 

[renegade_cowboy]

yikes, seems like a way to work yourself out of business real quick. Why are you wanting to compete with other low prices cleaners?

I disagree with your statement. The 5 areas $129 is low here but it may not be low there. My prices are average for this area, I am per room company. My goal is to keep my company as simple as possible, customer friendly. My customer base is more vast then yours Ben. Way more vast. Truthfully...With that being said my company is under a year old and already have a good database so far. I make around $100 an hour usually more, with very little overhead. I have a new van and a powerful TM that is paid off.

I get alot of referral business because of the quality and my prices are average. Next spring my prices are going up slightly, but still be about average. With the more houses i am in the more referrals I get not to mention getting more access to uph, protector, deo, extra areas. (around 90% of my jobs do more than what they were sceduled for) I just educate and communicate to the customers and they want to buy, I am very ethical. Not to mention maintenance programs I offer along with other things. I use SS business model because I think its successful. They are doing pretty good. Keep it simple.

My goal is a multi truck operation and with my business plan there really is nothing stopping me. What you talked about on Don's boat last month or so is going to be very very difficult to do since you have a smaller market. And if the economy does what i think its going to do next year that market will get even smaller.

Anyways I am headed over to Beckers house early next week, you should join us. I will bring some brew and hopefully talk Becker into buying steaks again. PM or call me when you get some time. DevilThomas and other local cleaners can join us, Sure Don wont mind a few extra people.

 

[duckster]

Brent, do you pre-vac? Do you move furniture? Do you charge for steps?

Just wondering. It sounds like things are working well for you in WA.

 

[Able 1]

I am a per room pricer... and alway will be. It's is really simple can give an estimate over the phone in a couple mins. and be on with my day. If I feel I want to make more it just bump up my prices. I have a 200sq. ft room limit but have let up to 250 slide quite a bit. If you charge by cleanable carpet I really think it evens out.

 

[renegade_cowboy]

Brent, do you pre-vac? Do you move furniture? Do you charge for steps?

Just wondering. It sounds like things are working well for you in WA.

Here is my procedures:

*Free consultation with the customer, communicate any issue they have and let them tell me what they are most comcerned with and pay extra attention to that.

*Pre vacuum all the carpets. My favorite part of the job.

*Set up corner guards, wet floor signs, furniture sliders if I move uph. I move whatever they want, except TV, Some beds, electronics. They dont have me move alot of stuff though.

*Pretreat all carpets and stains using hydraforce

*Agitate bad traffic areas when needed

*HWE 23 hp B&S, 3HT heater, 290 cat pump, 4005 blower, in a 99 ford van.

*Spray protector (optional)

*Groom all carpets

*I use air movers to dry carpets

* Final walk through with the customer.

*Free shoe covers

*Courtesy call 2-3 days later

Customer service and communication is very big with my customers. I just count steps as an area, I can clean them pretty quickly. With Uph I towel dry them and use an air mover. Protector is half the cleaning cost, deo is 40% of the cleaning cost. I have a website, hoping to get the online store going in the spring. A mall kiosk by summer. My personal life is getting in the way of some business stuff but its all working out. I think next year is the break out year. i just want to brand my name and logo. I have 2 different graphic designers working on all my marketing designs and image. Just got lucky with them, they are friends. I have a hook up at BD&A for personlized pens, stickers for the kids (my logo and name with a smiley face), notepads, reusable grocery bags, pretty much anything I can get my name and logo on. I got a great hook up.

Things are ok now. I really through out my back doing a large sectional last Sat and when mon came along I could barley move. Thank god my customers were cool and let me do it later. I had to bring a helper the last few days cause my back still hurts like hell. I have a hugh empty house tomorrow i have to do by myself and just not looking forward to it. Then repeat next week. Filling up ok, still have some time slots open.

So thats me and my company in a nutshell. My business cards are one of a kind too. :wink:

NwGoGreenServices.com

 

[Ken Snow]

5 for 129 would not be low in detroit. We are 4 for 99.99 (remember always take the .99 for yourself, don't leave it on the table ), stairs are not rooms, but 2.50 per step and halls are 12.50 each. Rooms over 250 sq additional charge (avg room size is only about 130 sq ft.)

Our price points advertised are 2 rooms for 59.99, 4 rooms 99.99 and additional rooms and other items work from those points. anyone who wants a copy of our price list email me at kensnow@originalhagopian.com with price list in subject line.

Brian if you want to talk a few minutes sometime, give me a call at 248 291-2121 or email me and we can schedule a day/time.

Ken

 

[Brian R]

Price the house NOT the rooms.

The more they clean, the less cost per area (or per square foot)

Lately I just get the square footage of the house...if they have it...if they don't I look it up on Zillow and tell them the square footage.

A bigger house will have more clean areas....it's the law of averages so why charge full price for that...unless you are anal like Ron Werner and vac the hell out of it. :wink:

A 1500 single story will will be about $180.00 to $225.00 depending (empty etc.)
a 3000 single story will be $300.00 to $350.00 depending (empty etc)
Add $3.00 per stair for 2 stories.

Double the house is not double the cost...bigger houses will have more Tile, or windows and the owner will usually not want to clean the toilets themselves so there is a better chance of add on services.
My add ons are almost always the biggers houses and I like it that way.


Why charge them a room price and then trick them with the small print of square footage limits? Your higher end clients appreciate the honesty.

I always follow my price with "and for that price we get it completely clean. We don't charge extra for pre spotting or pre spraying and we don't have different levels of clean. The only extra charge would be for pet urine removal or carpet repair..which inlcudes permanent stains.

 

[Brian R]

I should say that the above is true unless you want to be a "volume" cleaner like Ken.
That works for what it is but I would imagine there is a lot more hassle.


And it's not going to work really well for the O/O.
You can make some money, but you won't make the money you can doing it the above way.
And in the long run if you are an O/O, you had better put some money away for when you are older or if something happens to you.

 

[Warren Wallace]

I must say I am fortunate to work on the northshore were people do not like the ss or service masters.
They want and expect quality and service, perfect for o/o like myself. We as cleaners work hard for our money,
but I learned early on to work smarter not harder and I will not try and compete with the low bidders.

 

[daniel@procarpet]

Your goal as a cleaner should be to make as much money as possible and the customer feel they got good value for their money and would gladly call you back. However you get there is up to you. If you charge a customer 500 dollars and they feel like they can get just as good a job for 300 from a company they heard about from a friend or family member, they will not be calling you back regardless to how many steps are in your cleaning and presentation. For me the only practical way to price residential cleaning is by the area.

For me to clean 5 rooms and hallway I would get 184 assuming it is just a regular cleaning.. I don't know why cleaners want to give away free hallways etc. Charge for everything and you will make good money. 129 is really too low to clean 5 rooms imo. 50 dollars doesn't sound like much, but at 10 jobs a week that is 500 dollars more profit you would have in your pocket.

 

[renegade_cowboy]

Brian thanks for your words of wisdom.

It really all depends on what kind of company you want to be. Multi truck or O/O. With the per room pricing and average prices it opens you up to a large customer base vs the high end niche market, which is more selective.

For me I want to work smarter not harder. I want someone else to do the work while I build the brand and work on marketing. I have been cleaning carpets for 11 years cleaned close to 10,000 homes and business, It was fun but its time for me to move into the next phase of this business. That interests me more than actually doing the cleaning. That is why I charge per room, to grow something and get off the trucks becuase lets be honest this is a great industry folks.

Brian I have a 300 sq ft limit per room, its a loose rule. To be honest I am in some of the nicest homes in the area and room are rarely over 300 sq ft. I dont try and trick them it says it in all my marketing and website. I really dont care if it 330 sq ft, I just get it done. Cleaning carpets is a very simple job, great customer service is where things can get tricky.

 

[Ken Snow]

Hey guys, no right or wrong just diferent ways to do things. All methods of pricing can work, the key is knowing your numbers and goal for your business and making them work for your situation. Because something may work for me and another work for you does not make either of us wrong~ it makes us both right which is very cool. And if what your doing doesn't work for you, good for you for looking at other ways of doing things.

Ken
Ps We were sq ft pricing for decades and have been room priced since around 1982-83

 

[Able 1]

Price the house NOT the rooms.

The more they clean, the less cost per area (or per square foot)

Lately I just get the square footage of the house...if they have it...if they don't I look it up on Zillow and tell them the square footage.

A bigger house will have more clean areas....it's the law of averages so why charge full price for that...unless you are anal like Ron Werner and vac the hell out of it. :wink:

A 1500 single story will will be about $180.00 to $225.00 depending (empty etc.)
a 3000 single story will be $300.00 to $350.00 depending (empty etc)
Add $3.00 per stair for 2 stories.

Double the house is not double the cost...bigger houses will have more Tile, or windows and the owner will usually not want to clean the toilets themselves so there is a better chance of add on services.
My add ons are almost always the biggers houses and I like it that way.


Why charge them a room price and then trick them with the small print of square footage limits? Your higher end clients appreciate the honesty.

I always follow my price with "and for that price we get it completely clean. We don't charge extra for pre spotting or pre spraying and we don't have different levels of clean. The only extra charge would be for pet urine removal or carpet repair..which inlcudes permanent stains.

Maybe this is why it works for me... I stick to my 4 room for 130.00 that would be 32.50 per room for anything extra. That is how I do over the phone est. and make ok money doing it, and not measuring everthing I clean... what a PITA that would be. :roll: As far as the room size limits.... Brian some of my custy's would consider there 1,500 sq ft. basement one room :shock: I'm fair and honest with all my custy's and they do appreciate my honesty, and quick quotes over the phone...

 

[Brian R]

I get approximates for square footage...I don't measure every little area...I just get the average.
You know if a 1500 sqft house has 4 bedrooms that they are going to be in the 100sqft range anyway.

Whatever works for you but I think it's one of three ways really

room pricing for high volume companies...which I think the O/O falls into and shouldn't

Square foot pricing for quality (customer service etc.)...which the volume companies only have so much control over.

Although what I do I think is unique....Square footage pricing for high volume but....It's really only a high volume of O/Os who do their own quality work therefore making it a quality clean on each job.
They will do quality so they can keep the work coming and get paid more instead of just a paycheck. And they don't have to work as hard to make up for only making a commission or hourly wage.
There are exceptions to that last part but you get the idea.

Did that make sense?

I think the O/O who does room pricing better plan on adding vans and doing the high volume...but the kicker is, it's harder to make more money like that without a bait-n-switch approach...in order to get to the level of having more vans.

ok, I gotta read over that again.

 

[XTREME1]

I have been Xtreme-ly busy for a long time. I got help from Ken on setting up my pricing and a few other things and I did well. I chose to move away from the 99cent thing $59.99 or $99.99 I chose to go to $25 a room with the first room being $45. I have been crushed with business. That is up to 200 sq ft per room. Most rooms seem to be 120-150.

The easy number my customers love and I get a ton of upholstery on jobs. I am pretty low to moderate on upholstery as well

 

[daniel@procarpet]

I have been Xtreme-ly busy for a long time. I got help from Ken on setting up my pricing and a few other things and I did well. I chose to move away from the 99cent thing $59.99 or $99.99 I chose to go to $25 a room with the first room being $45. I have been crushed with business. That is up to 200 sq ft per room. Most rooms seem to be 120-150.

The easy number my customers love and I get a ton of upholstery on jobs. I am pretty low to moderate on upholstery as well

How many 45 dollar jobs do you do?

 

[XTREME1]

I also have a minimum charge

 

[daniel@procarpet]

Why not just advertise your minimum for so many areas and each additional area as 25 dollars? How do you advertise your pricing?

 

[XTREME1]

I don't advertise at all anymore. why don't you worry about your business and not mine?

I have 6 jobs weds and it is my day off
7 jobs thurs-----day off
8 jobs friday
4 saturday .
rugs sunday
30 jobs next week and I will be in chicago

 

[hogjowl]

Since I have set my profile set to have almost every one-horse operater that posts here on my foe list, when they post on pricing threads, I could only see one post (Ken Snows) on this whole thread.

Let me guess ... all the one-horse guys are saying s.f. pricing only and they don't get out of the bed unless they get $185?

 

[daniel@procarpet]

I am not criticizing your business Gregg. I have a minimum of 109 for 3 areas and 30 for each additional area. I am just confused and intrigued with your pricing. If a customer calls needing one room cleaned they pay 109. You are saying you charge 45 for the first room but you have a minimum. Your pricing is obviously working for you. Please elaborate.

 

[XTREME1]

I am not going to script the wholke thing here but it is pretty basic.
I get a call and they want one room depending on where they are I suggest they get more because the minimum is $75 (up to $200 most of the time it is $75) I tell them if you have more done you will save money because right now you will pay $75 for that one room, if you have 2 rooms done it will be $70 but you will be paying $75 leaving $5 but if you have 2 room and protector that will get you beyond the minimum.
I very rarely have to give this talk because people are either repeat customers or came from the website where all the info is.

Most of my jobs are 3 rooms, hall and a flight of stairs with a piece of upholstery

 

[Heathrow]

Quite the opposite Mardy - and if you can read this I'm very flattered

Excellent thread though, I've been struggling with pricing for a while now. Greg I like your pricing concept in general - how many custys do you actually get using that pricing from the website? (as a percentage of NEW customers).