Friday, January 18, 2013

Pricing our services

Many people in our business have no idea how to establish profitable prices. Most new people in the industry survey the market area and simply try to beat the competitions’ prices. This is the wrong approach! More than fifty years in the cleaning business has given us proven methods for pricing our services. But when our price structure is discussed at Bane-Clene Institute, someone invariably says that their market just wouldn’t support such high prices. If we listened to the naysayers we'd believe that a dime a square foot or $10 a room was tops.

The first requisite for setting profitable prices is to justify that price to ourselves. If we look at our truck, will we be proud of it? Has it been washed lately? Are there remnants of last week’s lunch and empty pop cans on the floor? Is our truck well stocked with supplies and "plus sale" items? Is our cleaning equipment clean for presentation in a customer’s home? Is our uniform clean? Would the person we see in the mirror in our locker room instill confidence?

Have we kept up with technical changes? Can we explain the different fibers to our customers? If asked, can we define why our price is higher than $5.95 a room? Can we design a maintenance program for a large commercial account? When giving an estimate, do we write it on a scrap of paper or use a proposal form and professionally designed brochures and business cards to help explain the benefits of our services to our prospects?

A large part of our market selects a service provider because of what they offer and how they offer it, not on how much they charge. That part of the market is most desirable and profitable. It can be ours if we answer all of the above questions in a positive way. Then we can justify our price, not just to ourselves, but to our customers and our prospects, too.

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