The value market..Inspired by Curtis' chem savings thread

[Rex Tyus]

Like it or not this year will perhaps be a bit different than we are familiar. Some may be very secure in a truly high end market and be rushing full throttle. I fear many however (myself included) are concerned about what is to come.

I predict this year people will loosen their wallets a little more than they were able to last year BUT, it will be a VALUE DRIVEN decision. Not particularly PRICE but value. This will be the year of the "package price".

What are your thoughts?

 

[TimP]

I've been seeing in our market where this has become a concern. And after having such a bad December I find myself whoring myself out for less than I'm used to at times. I have been guilty of matching a stanley steamer price to at least get in the door and make a few bucks rather than loose it. And another time coming close. However I made stipulations to the price, like I'm moving nothing and not vacuuming. I've been discounting price more and more. But I have a hard time devaluing my services as in quality in cleaning and spot cleaning. I still try to give them the best possible cleaning but with just less time in the home. The way I've been seeing it, is I'll get what I can when I can and turn nothing down unless I just can't help it. And if I have to work cheap I'll let them know that next time it will be higher, because I'm hoping they will see the value in what I do. I don't know how it will work but the way things are going I have no choice but to make ends meet. But I can only hope for the light at the end of the tunnel.


Although what do you mean by package price Rex? Charge by room, or by home? Or offer different levels of clean, like a basic....good and superior. And strip down your regular service to get more jobs at a the basic rate to fill in your schedule?

Like I said before I have a hard time stripping mine down more than, having my customers vacuum and not moving furniture at all. Because I feel the quality of clean is my reputation.

 

[Rex Tyus]

Thanks Steven. I am really not asking if I should do it or not. I am more refering to the fact that as was illustrated in Curtis' thread MANY people from all walks of life are going to be more value concsious than ever before. A penny saved is a penny earned... You don't remember the 70's. I do and I REALLY hope it don't get that bad again. Generation Xer's and older are looking much differently than your generation I would imagine. I am no doom and gloom guy. I truly think it will be a better year. I do however think people will be much more aware of "how much it cost".

 

[Rex Tyus]

Although what do you mean by package price Rex? Charge by room, or by home? Or offer different levels of clean, like a basic....good and superior. And strip down your regular service to get more jobs at a the basic rate to fill in your schedule?
Like I said before I have a hard time stripping mine down more than, having my customers vacuum and not moving furniture at all. Because I feel the quality of clean is my reputation.

What ever it takes Tim. SS will not be in my hood much this year unless people just don't like me personally. The truth is you can vac, spray, scrub and acid rinse or you can break out the slot glide, emulsify and be done with little to no "visable" difference. REAL HEAT and dry slurry can make you lazy.

 

[Bill Soukoreff]

People are going remember the trades that price gouged them when times were good.

 

[TimP]

Although what do you mean by package price Rex? Charge by room, or by home? Or offer different levels of clean, like a basic....good and superior. And strip down your regular service to get more jobs at a the basic rate to fill in your schedule?
Like I said before I have a hard time stripping mine down more than, having my customers vacuum and not moving furniture at all. Because I feel the quality of clean is my reputation.

What ever it takes Tim. SS will not be in my hood much this year unless people just don't like me personally. The truth is you can vac, spray, scrub and acid rinse or you can break out the slot glide, emulsify and be done with little to no "visable" difference. REAL HEAT and dry slurry can make you lazy.

I hope you stay REAL busy up there doin that.

I have a hard time just emulsifier cleaning. I just can't let go.....I've done it a couple times with decent looking results. But I know better. I may just have to get a slot for my greenhorn....I have one for the hydrahoe but damn it makes a ton of steam.

Just depends on how it goes. So far I don't mind fending off a few SS customers and doing it right cause I've got the time for it right now. Especially since their minimum charge down here is 100 bucks.

 

[Rex Tyus]

People are going remember the trades that price gouged them when times were good.

That is what I am afraid of. I had gotten pretty arrogant by the end of 06.

Things started to cool in 07. Damn right sucked in 08. The crazy thing is the value cleaner in my area is a good friend of mine and he is not as busy as I am. Around here the owner occupied market just freaking died here last year.

No worries TimP. When it comes to your market, unless they are repeat customers I pretty much send them to you now. Not that I get many calls from down there.

 

[Wayne Miller]

Good or bad economy, isn't good value a given and a constant of any successful business?

Forgive my generalization, and granted, I live in a fairly insulated economy, but the folks who enjoyed clean carpet in the past will continue to indulge themselves. We're not talking about a ton of money.

It's still cheaper to clean than it is to replace. The folks who make good cleaning customers aren't going to live in filth over a couple hundred bucks a year. They value clean stuff. And, most Americans who want to work still have jobs. Times are tougher but these tough times haven't effected everyone equally. The Malls are packed, the theater is overflowing with kids every Friday and Saturday night, the roads are just as jammed with commuters, and I have yet to hear a single customer express more than a passing, idle comment about the economy.

It's January, things are slow, and I was feeling a little gun shy this morning when a fellow called for an estimate. Pretty much a whole house, 800 - 1000 or so square feet and couple of sets of steps. It was a little difficult spitting out the number. When HE suggested HE might need to adjust the scope of what HE wanted done and said, "When can you fit me in," it reminded me there are still people with wants and needs and the cash to fufill them.

Just a suggestion for what it's worth, instead of anticipating the worst, expect good things and go make it happen.

 

[hogjowl]

I understand just what you are saying Rex. I feel just the way you do about this issue.

I laugh at myself for this, but over the past few years I allowed myself to buy into the ICS (and now this board is becoming this way too) pricing and production BS. In the back of my mind it always nagged at me, and intuitively I knew better, but non-the-less, I let it happen. Times were good, and I was getting 35 cents a sf to clean. In Alabama that's an amazing price; however, at that price my market was severly limited. Who cares? It was just me, and if I only did one job a day, and none on a day or so a week, it was no big deal. When people asked me why I was so high I just smugly said because I'm worth it. Arrogant as hell and didn't care. Advertising? Who needs to advertise? Hell, if I advertised I might not be able to take a nap in the middle of the day ... funny, funny, laugh, laugh.

Well, I'm paying for that now. I'm working my customer list like never before and offering special deals. The thing I have already noticed is my customers really APPRECIATE me doing something special for them. Have I had to adjust things so that I can still make my hourly target rate at my special prices? YOU BET! Nothing is free. You have to adjust in one way or another. I suspect that my adjustments are the same one's you have made, and I don't have one bit of a problem with them, as I suspect neither do you.

High end cleaners are going to be hurting in this economy. "Serve the masses; live with the classes" is something I have always heard, but it is finally making some sense to me.

 

[Walrus Gumboot]

I predict you will see less people ripping up carpet and replacing it with hardwood floors, which is a good thing.
People will be cleaning instead of replacing.

 

[Rex Tyus]

Wayne I agree with much of what you say. Especially the part about you living in an insulated economy... .

Value is subjective. When people are doing well the BEST POSSIBLE service is the best value not really dependant on price. If they sell real estate or cars for a living, last year they were looking at value in a whole new light. The "cheaper to clean than replace" is accurate yet incomplete. When things are tight things are tight. They will look at options. I actually had a customer tell me that one of her friends that is also a customer of mine told her she had to call someone else because she couldn't afford me this year. The lady was disappointed and said next time if she couldn't afford me she would rent a rug doctor and do it herself. That was a wake up call that had been ringing and I was taking to long to answer. She will be back but I lost her this year. If the other cleaner had known that tap water don't clean he would have kept her forever. I am not a pesimist. I do expect great things this year. WHATEVER IT TAKES. As long as it is legal. I was unprepared for a real value concsious market last year. That will not happen this year. In the past when thewy said "how much do you charge..." I would have the attitude if ou have to ask you can't afford me. Now my response is more like ..what is your budget?

 

[TimP]

I do think the high end cleaner will have problems. But the low bottom feeders are going to be hurt the most I think. It's the ones that price reasonably and will adjust to market changes and actively pursue changes in their market.

The reason I think the high end cleaner wont be hurt as much is cause they will still make a profit when they do work, and have room to go down with their pricing. The bottom feeders absolutely depend on volume to make it, and they have no room to go...thus going out of business. I don't think they have the sense to go up to make a profit on less clients. Where the high end cleaner knows they can go down.

 

[hogjowl]

There's a couple of $9.95 a room and $39.95 whole house guys that I could stand to lose in my market. I sure hope you're right.

 

[TimP]

I was cleaning in tallahassee the other day. And I had 2 walk ups, and they were looking for that pricing....40 bucks a whole house for one of them.

Funny thing is he couldn't get in touch with his previous cleaner......I was about to go and do 1 room for him for 40 bucks but when he wanted 1 room done for less I said call someone else. 40 bucks is a deal as far as I'm concerned to set up, tear down, and clean 1 room of carpet.

 

[Chris A]

Funny thing is he couldn't get in touch with his previous cleaner......I was about to go and do 1 room for him for 40 bucks but when he wanted 1 room done for less I said call someone else. 40 bucks is a deal as far as I'm concerned to set up, tear down, and clean 1 room of carpet.

I would agree with that, almost crosses the line of not being worth it.

 

[TimP]

Only reason I would of done it for 40 was cause it was right accross the street and it was traffic lanes only.

 

[Rex Tyus]

In this discussion let us not confuse VALUE with CHEAP. Cheap is reflection of low price and poor quality. Value is a reflection of reasonable price with good quality. Just to make sure we are all on the same page.



Marty,

Thanks. We actually agree more often than I let on. :mrgreen:

 

[Rex Tyus]

I was cleaning in tallahassee the other day. And I had 2 walk ups, and they were looking for that pricing....40 bucks a whole house for one of them.

Funny thing is he couldn't get in touch with his previous cleaner......I was about to go and do 1 room for him for 40 bucks but when he wanted 1 room done for less I said call someone else. 40 bucks is a deal as far as I'm concerned to set up, tear down, and clean 1 room of carpet.

I don't know first hand but I have always heard that is a VERY competitive market. Maybe Danny could shed some light.

ps my "while I am across the street for one room" price would have been $60. Even in this "value" minded place I am in.

 

[hogjowl]

I understand, Rex. You have your reputation to protect.

jImMy is the only one around here who will publically claim to be my friend.

 

[TimP]

It sure seemed like it.....everyone wanted to know how much per room.

Sure sign of a competitive market.

 

[FB7777]

I'm getting shelled on the janitorial side of my business, but my carpet cleaning is up and looking very bright for 2009

Several new referral sources and commercial sources are on board.

The referral sources are here because they have heard outstanding things about my company.

The commercial sources are here because we are good and very reasonably priced.


I'm not pleased with our present economic situation and our short term future looks bleak, but my ridiculously low overhead and value pricing over the last 20 years has positioned me well for this perfect storm.

 

[Desk Jockey]

I'm really concerned, last year was like a roller coaster ride, incredible highs and scary lows.

We fought and scratched our way through 2008 and yet barely archived 2007's numbers.

January has been record setting, but it's got little to do with anything we are doing. We get some Artic air for several days and pipes break here. Plus one month does not make a year, as evident by last year.

Fire work hasn't been as steady in the last two months, we had a dozen jobs we looked at that would have kept us very busy, but the homeowners decided to take the money and run.

A disturbing trend, one we saw years ago when the economy was tight.

Who can blame them, Christmas and some people were cautious, others were out of work or had a high deductible.

Our carpet cleaning wasn't affected much, but since it's only makes up %15 of sales, it didn't help that much either.

On the bright side, I billed for 3-country clubs this week.

One was a new account, another was one we picked up just this fall and the other was one we had not cleaned for in 5-years.

I think it's going to be a challenging year, at least we are planning on it being that way and if it turns out better, then we will be ahead of the game. I'm not taking anything for granted or passing up anything we can make a buck on! :wink:

 

[TimP]

You can't complain if you have no growth. Especially in a recession cause that's what it means. When you start loosing dollars coming in that's called a depression.

So far I'd say recession here.....same numbers in 07 as 08 in residential. Only increase was a huge job I got in cgd.

If you stay the same you can't complain. Just don't expand in employees and equipment unless you have to.

 

[Doug Cox]

People are going remember the trades that price gouged them when times were good.

I gouge in GOOD and BAD times.

 

[Jimmy L]

Loosing.

 

[Desk Jockey]

The problem I have with status quo sales is that cost of goods sold continues to rise, erroding profit margins.

You can only cut costs so much, at some point you need more sales, increased sales, should mean more profit.

 

[cu]

i like the middle of the road stuff. im not in to doing the "high end " the people for the most part get on my tits so i dont do it
and i feel much the same way about low end stuff too
for houses
i dont move the furniture , i tell them to do a good vac before i get there, pre and rinse 35 bucks a room and a thank you as i go out the door, most times i get a 15 or 20 tip
custy is happy and will call me back ,im happy cause i did,nt spend all day selling her stuff she did,nt want and working on my sales person skills .. the custy is happy , the carpet looks great etc. and the custy got good value for there money
.as a min for a apt i get 125 for a 1 bed apt when booked by the renter (not the complex)

the 40 or 50 cent a sq and 21 step process works for some im sure and good luck to them , its just not for me

if you want to know how your custy thinks ...look at the way you shop for your chems and equipment....you want the best value in your chems and best equipment you can use on your work without breaking the bank

 

[Dolly Llama]

I also have a marketing plan for very high end customers, and targeting them for rug cleaning in our rug plant..

"our" rug plant??

'Dink, is this "future" tense ?
or did you land a new job?


..L.T.A.

 

[Desk Jockey]

He's moving out of state, to start up a restoration division for an existing company down south.

 

[Curtis Pennington]

He's moving out of state, to start up a restoration division for an existing company down south.

God helps us please dont come lower than Alabama...lol