What to Think About $25 a Room?

[rhino1]

Just picked up the local coupon book, one local co. is advertising for $25 a room.
That is not such a big deal, there are some advertising even cheaper, but this is a long time established business that used to have a sterling rep. I know they have at least 3 or 4 trucks, new vans and equipment, and they do TV spots pretty often. I was told by a friend that they are changing things and it seems to be going downhill. I was also told they did a job for someone I know and they were not happy, it took a long time to dry, etc. Anyone seen this happen before, or is the economy that bad?

 

[SRI Cleaning]

I guess it depends on your personal business model. I know alot of people on here do one or the other. (High end/Low end) I personally do both. I love doing good work when the customer wants to pay for it, but we also do vacants for what amounts to sometimes less than $25 a room. You have to be able to adjust. Some of our property managers run nice places and want to pay for good work. Some dont. We have learned to make money both ways. Ultimately I'd love to have one truck dedicated to the "hack" production work.

As fars as $25 a room for residential work, I would find that tough. However, if you are a o/o and are efficient at the way you work, you could still make a living. We are $49 a room which some still find cheap but it works for us.

 

[Chris A]

I think you'd have to be very efficient. Although a pre-spray, suck and groomer could probably do pretty well with those numbers.

 

[hogjowl]

With a one man crew, you can make good money at $25 per room if you cut out the prevacuuming, (thus run a standard wand, or slot glide), and just prespray and rinse. (No grooming). With a two man crew, you can make it work at $20 a room, but you have to learn how to efficiently use that 2nd man to have better production times.

If you clean the ICS way, there is no way you can make any money at those prices.

There is a market for both price levels in most markets, but the hard part is managing both with one business.

 

[Scott Rogers]

Do what it takes to survive. The last 2 weeks I have gone from a average of 10-15 calls a day to 1 call a day. Luckily i had jobs on the books, but those are running out fast.

This has caused me to start to evaluate things for the coming future. Am I going to do the whole dog and pony show for 25 a room no. but if I can do what the people need for that and still keep the bills paid and family fed I will do what i have too. I havent lowered my prices yet, but if need be I will.

Today was a good day, booked 5 jobs. so I see

 

[Rex Tyus]

We often forget it is not the per ROOM price that matters. It is the per DAY intake. Actually it is a per month or per year but you get the idea.

It is a numbers game. You have to know how they work best for your individual situation. In other words I agree with Marty.

 

[Royal Man]

I guess if you had at least a 3 room minimum. Traffic areas only, no prevac, no deo, no special spotting.
A guy could do OK and likely have a $200 or more house average.

I remember when I was seeing $8.99 per room last year.

 

[Rex Tyus]

I guess if you had at least a 3 room minimum. Traffic areas only, no prevac, no deo, no special spotting.
A guy could do OK and likely have a $200 or more house average.

I remember when I was seeing $8.99 per room last year.

Dave don't confuse the $9 a room bait and switch with the value cleaner. It is not the same thing and you know it.

 

[XTREME1]

Thank You rex.

I make a very good living at just over $25 a room people forget stairs, halls etc. No suck aand run either take a look at my website 25dollarsaroom.com Rhino and scott

 

[rhino1]

Personally, with 1 truck and my low cost of living I could do fine at $25 a room, and I do offer that for customers that don't need furniture moved and don't have trashed carpets. I would do alot more upselling, but I do see how that would work for someone. But a multi-truck company with employees?

I was more wondering why a company that used to get top dollar would go to that kind of pricing, it seems to me more like a desperation move than a marketing strategy. Wouldn't that change your image to past customers who pay .30+sf and you go thru the whole "you get what you pay for" thing and really polish your image to justify the best price, and they see your ad a few months later @$25 a room?

 

[Jim Martin]

Have a minimum call out ( xxx.xx amount will cover for example 2 areas ) and then $25 per every room added on...........

 

[hogjowl]

The biggest companies in our industry clean at those prices and offer benifits and pay their employees well. Look at Hagopian.

 

[Jeff Madsen]

We have not lowered our price and, knock on wood, we've stayed busy the last six months despite all the excitement. I think rhino1's last post is right on the money. If you are currently a high end residential cleaner and you start to compromise on price you run the risk of compromising your "postition" in the market place. Once sacrificed you may not be able to get it back when times improve, as they surely will.

 

[Chris A]

I don't think there's a thing wrong with being either type of cleaner, but you can't be both. Look at Scott Rendalls post a few weeks back about Starbucks. If your a "high end" guy, keep pushing your benefits. If your a value guy, keep on truckin.

 

[Ron K]

Average House Price in Detroit is $18,000. $8.99 seems about right.
We're at 90 for the first two 40 per after.

 

[hogjowl]

You're certainly right. I am on the upper end of my market, and I am not suggesting that anyone clean at $25 per room. However, I'm not so sure that electing to clean at those prices is the death sentence that you suggest.

I have thought about this off and on for a few years now, and have concluded that my business has actually suffered from my exposure to these bulletin boards and the cleaning and pricing strategies suggested here. You see, I have been thoroughly brain washed into cleaning the ICS way over the years. So much so, in fact, that it is almost impossible for me to reduce my standards and clean in the normal ways that 90% of all carpet cleaners around the world clean.

If I had not been so influenced by these boards, I would probably have a multi-truck business (after doing this for 20 years) with a much larger following than what I have today. You see, my cleaning and pricing approach has alienated me from most of my market area. The ones I have are willing to pay high prices, but the money left on the table by excluding the middle section of my market has a very high opportunity cost.

So, I am not so sure that if I elected to reduce my cleaning standards to a Stanley Steemer, or Hagopian approach, and was forced to stick with that because of customer reaction to the change that I would be worse off than I am now.

 

[SRI Cleaning]

You can be at two different price points for two different markets. We are $49 a room for home owners. But we will also crank out the no frills rentals. It doesnt hurt our percived image because a regular home owner will never see the low prices and quick work we do for rentals. In fact we get a huge amount of work from people seeing our trucks repeatedly going to or coming from apartments.

IF the work is there and you can make both work, then why not?

 

[rhino1]

Greg, I see how that would work, do you just put an ad that says $25 a room?

What do you respond to this question:

"Your ad says $25 a room, I have 3 rooms so that would be $75 then, right?"

How do you market a budget service without seeming to mislead people or coming across as a hack? How do you beat the $19 a room guy who has an ad on the next page?

I am trying to get a higher residential volume this year and upsell like crazy, but I also don't want to mislead people or be perceived as a hack. (Not saying you are)

I agree with Marty that following a business model like SS could be pretty lucrative, especially with my low cost of living right now, and I actually could provide a better level of service.

But lowering prices without increasing volume would be a death sentence.

 

[Ken Snow]

We are at basically 25 per room (actually 59.99 first 2, 4 rooms for 99.99) and I can tell you to be in that model does require systems, people who will work hard and efficiently, add on sales i.e. protectant, furniture etc., and the volume of work to make it profitable. Fortunately we have those things and feel we provide a phenominal service at a great value. Our Specialists make 50-70k+ per year and Assistants 25-40k, and all our people have medical, dental, vision, life & Disability, plus flexible spending accounts, medical & dependant care reimbursement accounts and a 401k. We get hundreds of questionaire cards back every week with cheerleader comments, and on the occsssion we get one back that is not so complimentary we call them to rectify the concern.

Please don't imply that cleaners that charge less than X are hacks and I won't say you're overpriced. To each his/her own.

Ken

 

[BradFenstermaker]

Well I needed this thread tonite, things have been dismal lately. $25 a rm is what we charged 5 yrs ago on start up and slowly worked up the price to sqft.

Now that things have died down the 25 would be great if the work was here. Hangin flyers today and rest of the week to hopefully generate cash flow.

Marty and I had this very conversation today. I agree with what he posted, sure it is nicer to get the high end side but the other market can be good to.

We cater to both and I have questioned my business model for awhile now. My thinking is more volume with lower price has its advantages. Certain preparations have to be met by consumer to recieve the lower price. One can make money if the efficiencey is there.

The economy here is gonna test my survival skills. Just keeping positive right now is a challenge.

Keep our heads up and try to be active in someway to generate work.

Later

 

[hogjowl]

I think it safe to say that there is no way a one man crew could make Ken's cleaning system work?

So, how long can I survive at those prices until my volume is enough to allow me to hire a helper?

Actually, that is not a serious question, since there is no one but me who has the information to answer it.

I'm just thinking out loud.

 

[steve g]

man ken snow must run a real tight ship to make it at those numbers, according to him, for one truck on the road I come up with these numbers just in gross expenses

labor 2 techs with benefits,payroll taxes etcs $120k( kens numbers)

5k for fuel

2k for chemicals

repairs, wear and tear on van equipment etc, figure it has a life of 7 years, and cost 50k new $7142+ 1k repairs and maintenance

that is at least $135,142 a year to keep one of kens trucks on the road, does not include paying for the building, receptionist, insurance of any kind, or much less profit for the owner. that works out to something like $530 a day if you are working your guys 5 days a week and taking 5 holidays off a year.

dude, how do you make it I don't care how much you are charging, that is alot of expenses, if you can poke holes in what I came up with do it, I haven't even began to figure out your office and building expense, admin expenses and lastly any measure of profit for the owner.

 

[Jimmy L]

YOU ARE A FREAKIN GENIUS MARTY!



:shock:

 

[Ernie G]

Well guys, 25.00 a rm. can work really well if do alot of volume and add on sales and if you are efficient. But also you have to figure what the particular market we'll bare, having said that, you also have to add alot of precived value to your service if you want to get the higher prices.

 

[Rex Tyus]

I am sure Ken will reply but I do remember him saying he runs 7 days a week. I am sure he has multiple crews running the same vans. Plus if his total expenses are $500 per day and he averges $650 sales per van that would be 30% profit.

 

[Ernie G]

Steve, its the volume and the added services.

 

[Ernie G]

Steve, its the volume and the added services.

 

[Ernie G]

You can say that again, Oh i did!!

 

[steve g]

volume whatever, the fact is IMO ken needs to be over 7 bills a day just to break even, this is all day every day, yeah I guess its doable conceivably but the guys need to be humping and running, and a $500 day just means you gotta do $900 the next

 

[Ernie G]

It must be a fine tuned engine-not my comfort level.