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Finding the “Burn Zone”: The KEY to Pricing Cleaning Jobs

Cleaning Guy #1
“I WANT to make $30 an hour, so that’s how I bid…period!  Sure, lots of places turn us down, but I don’t care. If they’re not willing to pay my price, I’ll just find someone who will; there’s plenty more fish in the sea!”

Cleaning Guy #2
“We always try to come in a little LOWER than the next guy – you know, beat their price.  Everyone knows price is all that matters; and if that’s what it takes to land the job, so be it; we’ll figure out a way to make money once we get started.”

Sound familiar? Ever heard someone, or yourself, say something similar?  Let’s take a closer look:

On one hand, we’ve got cleaning guy #1 who simply wants what he wants.  He’s made up his mind that he’s worth so much per hour and that’s that.  No amount of explaining to the contrary, we’ll likely change his mind.

The heck with what the broader market wants.  Misguided ego and immovable stubbornness may be his downfall if he’s not careful. He demands what he WANTS and cares little for what the market may WANT.

And to be fair, this strategy may work at first, or even for a while, especially if the cleaning business is small and wants to stay that way.  By the way, there’s nothing wrong with having a handful of loyal customers willing to pay a premium for your cleaning services…simply because it’s you!

But, if you’re looking to grow much beyond a one-person operation, then this kind of narrow-minded thinking can quickly put a stop to any plans for real growth.

Before long, you’re likely to be confronted, or worse yet completely ignored by, a marketplace that dismisses your “My way… or the highway’ approach to pricing janitorial jobs as ‘out of touch’ and therefore unacceptable.

Now, on the other hand, we have cleaning guy #2, whose pricing strategy is based in FEAR and made worse by a total lack of any real ideas how to pick up new business short of dropping his price; what we use to refer to as basically “buying the business”.

What’s that?

Well, it’s having to cut  your price as often, and as far as necessary, in the desperate hope of attracting someone, anyone, to ‘bite’ on your smelly, low-priced ‘bait’.

You see, this fellow just can’t seem to come up with any reason to choose his services beyond the fact that he’ll do it for less than the next guy.

Not very inspiring, is it?

So, what advice can we give to these two cleaning guys to help turn things around for them?  Here’s our suggestions:

To Cleaning Guy #1:

Start thinking of it this way: Premium pricing? Yes! – Excessive pricing? No!

If you want to grow, you need to find the pricing “burn zone”.  And what that means is developing a pricing method that has you regularly quoting jobs at prices high enough to make you a healthy profit, but not so high as to remove you from consideration.  You want to be in the ‘game’.  Not the lowest, but in the game.

By the way, this “burn zone” strategy doesn’t mean you can’t charge more premium service.  You can and should create a cleaning company that can provide superior value to your customers.  But, it’s one thing to be premium priced and it’s quite another to be excessively priced!  Excessively priced leaves you vulnerable even if you do land the account.

To Cleaning Guy #2:

Plain and simple: Create a reason why people should buy from you besides low price… or get out of the business.

Really! For your sake, your customers’ sake and for the sake of the cleaning industry in general… “Get in…or get out!”

You do yourself, nor your customers any favor by offering cleaning services without a clear commitment to quality.  Simply offering and then delivering substandard cleaning at cheap prices does nothing but tarnish the value of all those who proudly have proudly chosen professional cleaning as their vocation.

Quality is the result of many things; and at the top of the list is having a clear connection between the work to be done and a monthly price and daily hours that can support the people and plan needed to successfully and regularly carry it out.

So, where does this leave us? How does a cleaning business create a reliable and repeatable way to find this desirable ‘burn zone” for pricing cleaning jobs?

Well, here are a few tips:

  1. Know the type, frequency and difficulty of the cleaning required
  2. Estimate how long the cleaning should take
  3. Know your expenses and profit requirements
  4. Calculate a price to properly support # 1- 3 above

Sure, but how?

Well, there are a number of janitorial bidding software programs available today to help make the process easier.  Check out which meets your needs best; then begin to use it consistently to find the “burn zone” for your specific cleaning company in your particular city.

 

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