Are You Getting What You're Worth?
by Dennis Klager
I see this a lot… “reasonable rates”.
Reasonable to whom? The village cheapskate or the discriminating customer?
To me, when I see a carpet cleaner, or any service, advertising price, it’s a red flag. This company hasn’t learned how to really make money out there. They’ve let “price” become the focus of their company. This can be the TOUGHEST and possibly THE LEAST PROFITABLE way to grow a small service business.
20% – 30% of customers purchase services strictly by price. The rest, the 70% - 80%, are willing to pay within a range of prices.
When you focus on price, chances are really good you’re dealing with the 20% - 30% who only care about price. Many of these people are picky; they often want the same outcome as they would get for a higher price. Some don’t care.
Giving “reasonable rates” means you must have “reasonable” overhead. You must do everything as cheap as possible. So… you keep the old equipment or buy something “reasonable”. We’re probably talking about cheaper cleaning products, which may or may not work that well, and paying lower wages, if employees are involved. People who work for low wages aren’t usually championship caliber.
- The busiest companies are NOT the cheapest. In fact, often the busiest companies are among the most expensive. I see this all over the country.
- The busiest companies aren’t only concerned with the technical aspects of business, they are also very involved in the business end of things.
- Many of the busiest companies are not the best technically but they put on a great show, for their customers. Cough…cough… gasp… gasp… WHAT DID HE JUST SAY?
I’m not saying you can be terrible and get a high price or as they say in Texas, “All hat and no cattle”.
In many surveys of what’s most important to customers, PRICE comes in number 4 or 5 on the list. So why do so many companies compete, based on price? Often it’s because they don’t know what else to do. THEY make price the most important thing, not the customer.
Here’s a few ideas to get out of the price rut:
1. Don’t talk about price. Huh? When people call, divert the conversation to other reasons this customer should hire you. Once you give the price, usually the conversation is over.
2. Get educated. If all you know how to do is measure chemical, start a machine and push a wand, you have very limited prospects for making money out there. Cleaning carpet, all by itself, is not that profitable! We’ll get back to this.
3. Make your vehicles look great! Get the dents fixed. Wash them every few days. Look like a company that should get paid more than the sorry looking wrecks we often see staggering down the road.
4. Look good. A “professional” man has nice looking hair, shaves every day, wears clean, good looking clothes, smells good and smiles at the door. Successful women have nice looking hair, wear clean, good looking clothes, smell good and smile.
5. Sound good. Jury research has shown that the most believable people look and sound good. Even with college degrees etc., a witness who doesn’t look and sound good, is not believed. Your jury is your customer.
6. Know what you’re going to say. Work out a good presentation for the front door and other situations that will sound good. Make sure everyone is saying the same things to common questions.
7. Sweat the small stuff! Don’t put your tech box on peoples’ furniture, Wear white gloves to move furniture. Put on shoe covers when you walk over already clean carpet. I could go on and on and on…
8. Don’t go too fast. No matter how good you do, it takes a certain amount of time to make someone feel that they got what they paid for.
9. LEARN TO SELL… you are in sales. Sell! Protector, upholstery cleaning, stone polishing, wood re coating, and more. Protector can make the difference between a company that barely makes money and one that’s profitable at the end of the year. Most people don’t ask for everything they need. You must sell them.
PS selling is not getting people to buy things they don’t need. Only sell what they should be asking for, but don’t know to ask!
Selling is a skill that must be learned. Go to classes. Listen to tapes… whatever it takes.
10. Have other services to sell. Most homes have 5 or 6 different items you could be working on… if you know how. Park the truck and stay for a while!
11. Get over the fear of asking the price you need! People will pay for a good job and a good show. You must ask for it.
There are many levels of price. I can’t tell you where you should be. You and your accountant must decide that. Don’t feel guilty about charging what you are worth. Don’t feel bad if someone complains about the cost. People complained about our prices, at my company, all the time….then told us how great we were.
So, ask yourself. Do I offer something that people will pay more for or do I have to sell price?
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