Thinking of trying a new pricing structure, need help.

I moved from a busy suburban location to a more rural location in 2007. My pricing structure has always been by the s.f. ( now between $.45-$.55 per s.f.) with up front estimates. I still do quite a bit of traveling ( 40 miles) back to my old local to service longtime established clients. I would love to get more business locally. Thinking of offering an incentive to new local clients. Maybe an introductory offer that I don't have to measure up 1st. Maybe a discounted rate for not moving furniture. Just to kind of get my foot in the door. Really do not want to price by the room as I offer a quality service and am afraid I will lose money, but will try it if need be. Direct mail, coupons. any ideas?

Bomb it with EDDM. Get the neighbors familiar with your company.

Make your pieces educational, not all flashy like everything else.
I offer 20 bucks off "for a limited time" on my eddm piece. No specials really.

When I left the metropolis to my new location, which is very rural, I found that the customers priced differntly as well. I used to be sf guy, but this new area likes flat pricing by room.

I was worried about losing money at first too, but rural areas often have older homes which were built with far smaller rooms. Most homes around me have bedrooms as small as 8x8 with house footprints of 24x24. They are just a bunch of old 4-corner homes that are 2.5 stories high.

I set my pricing based on square footage for a 10x10 bedroom and living rooms of around 12x15. If anything, I end up making more per ticket on the whole.

Getting to know the neighborhood is a little tougher. Try and clean a church in the area, that gets the most exposure in the smaller markets than anything else.

Rob, brings up some nice points. Although the pricing may just be in the presentation. we had the same feel with many in out area pricing by the room. we just explained that we didnt beleive that they should pay the same price as their neighbor if they have less sq ft. worked for us, just took some extra work on the phone.

Mostly seems you just need a little exposure to the area. discount it down about 20 percent to the first 5 to 10 clients and work them for referrals and testimonials. that should help some. or sponsor a local minor league team or something like that .

Direct mails can cost an arm and a leg, usually the success also depends on the market, different area responds differently, and in my experience they attract lower market, with the rate you are charging, I wouldn't gamble on that.
I would do google adwords / pay per click and make sure to put in one of the line "we're not the cheapest but the best" or something similar, that way you're not wasting your clicks to price shoppers, adwords can also be expensive depending on your market, if the competition is steep, the price goes up, if the total customers searching is low compare to the advertisers, the price also goes up. Hope this helps.

check out the valpak in your area not all of them are full of bait and switch cleaners you may find out that an area you want to advertise does not have a carpet cleaner. worth a look

That's a good idea Terry however it can be very expensive, I think it's about 5 cents per home, 100,000 homes already cost $ 5,000, with his charging rate, he has to clean 10,000 sq ft just to get even with advertisement cost, probably close to 20,000 sq ft to get even with all the costs of running, I'm not saying it's impossible, just saying it may not be that easy, usually they recommend to keep doing that for a few months to really get the exposures, it's almost like fishing customers with those direct mails.
With google adwords, you get people that actually looking to get their carpets cleaned, so it's like they're fishing for you instead.
I've done Valpak, Advo missing child cards, Adwords, Magazines, Newspapers, and I have to say in all areas I've done business in, Adwords gives the most return on investment.

wow I would think just do a test of 10k homes and see what kind of response you get.

Pricing by room might make You more money than by sqft. Are u having a problem with phone ringing or closing the deal over the phone?
As for Valpak u can talk them all the way down to 1 cent per flyer. I would suggest showing up at the office unannounced to get a better deal.

Sq.ft. pricing is a hassle from my experience. I switched to per room ($40) and saved myself a lot of headaches. I can walk a house and give a price instantly.

REALCLEAN wrote:Sq.ft. pricing is a hassle from my experience.  I switched to per room ($40) and saved myself a lot of headaches.  I can walk a house and give a price instantly.

What defines "a room"

Mostly common sense. I don't get out a measuring tape, but usually max out at 400 sq.ft.

My buffer is stairs. If I feel I'm a bit low (ex. several rooms between 350-400 sq.ft.), I'll bump up my price for stairs to make up for it.

ODIN wrote:wow I would think just do a test of 10k homes and see what kind of response you get.

When I did Pasadena area a few years ago through advo postcards, it was a little over 100k homes and I got a whopping 3 customers, lol, almost got my advertisement $$ back but that was it. I still tried it a few more times at different seasons and got a few more customers but at the end it was more like just break even with all the costs ( ads, gas, solutions, etc ) and I worked those homes for free, lol.
Like I said different areas may generate result, if there is option for 10,000 homes, it's worth a try, however I've never seen 1 cent rate for valpak, I think it cost them a little more than that to print your coupon, let alone the postage and all their overheads, I can see they drop it to 5 cents, which will make it a $ 500 investment for 10,000 homes and if you get 2 customers, you may break even with your expenses.

Are you saying an avg room for your area is 350-400 sq ft and that's @ $40 each?

No. It's not the average. I used it as a worse case scenario.

I charge $40 per room and stairs are flexible. $3 per stair is minimum. $5 per stair is typical.

I actually use hallways as the equalizer. If the rooms ran larger than average, I charge for halls. Smaller rooms, no charge for halls.

Like was noted, flat pricing makes it easy to estimate and for the customer to relate the size to cost variables. It might not work for neighborhoods where homes variy greatly in floor plans, but in my area, they are all pretty much the same.

I remember hearing a marketing guru say one time to determine what the other cleaners are doing in your area, and do the opposite. So if the local folks are used to room pricing, it might be a good idea to stick with SF pricing and use it as an advertising hook. "We only charge for what we actually clean"

I think with the prices you're used to getting, charging by the SF is ideal. It seems like you're after high end customers.

I had to look it up and your right it wasn't 1 cent it is 3 cents.. carry on

CleanImage wrote:I remember hearing a marketing guru say one time to determine what the other cleaners are doing in your area, and do the opposite. So if the local folks are used to room pricing, it might be a good idea to stick with SF pricing and use it as an advertising hook. "We only charge for what we actually clean"

I think with the prices you're used to getting, charging by the SF is ideal. It seems like you're after high end customers.

You may be right, but I think that if you advertise sf pricing you open the door for issues. For example, you tell them that you only charge for what you actually clean, that is why you charge by the sf. Makes sense, but do you then subtract all the lost sf covered up by furniture? Sure, you could take off 10-15% as an estimate, but are you any more accurrate than a flat price at that point?

To me, sf pricing on residential invites a "cost conscious" customer. I don't want to start off a job with the customer feeling that they need to monitor me close in order to get their money's worth. If you say it is by sf, then they may start to doubt you measurements as well....that can lead to disaster if they measure differently and make you look like a dishonest cleaner.

By flat pricing, the cost issue is over and done quickly allowing you to get past the hardest hurdle on any cleaning job IMHO.

Interesting conversation on pricing. I do a combination of both. The first 3 rooms is 139.00 works out to a little over 46.00 per room and sq ft pricing after that.

If we should do the opposite of what all the rest do, we should probably not advertise price at all.

Got me thinking......

REALCLEAN wrote:If we should do the opposite of what all the rest do, we should probably not advertise price at all.

Got me thinking......

I would agree with that 100%

By stating the advertised price, we only attract the price conscious shopper. Think about it, how many Ferrari commercials do you see on tv? Ferrari doesn't advertise on tv, because their customers seek them out instead. Those customers aren't walking into the showroom focused on price, they are focused on quality, performance, etc., with price being last on the list. Why is it different for cleaners?

What we should be doing is adjust our marketting to encourage people to comparison shop based on results, value, and customer service.

milspec6 wrote:

REALCLEAN wrote:If we should do the opposite of what all the rest do, we should probably not advertise price at all.

Got me thinking......

I would agree with that 100%

By stating the advertised price, we only attract the price conscious shopper.  Think about it, how many Ferrari commercials do you see on tv?  Ferrari doesn't advertise on tv, because their customers seek them out instead.  Those customers aren't walking into the showroom focused on price, they are focused on quality, performance, etc., with price being last on the list.  Why is it different for cleaners?

What we should be doing is adjust our marketting to encourage people to comparison shop based on results, value, and customer service.  

problem with that is the avg consumer has their carpet cleaned every 7 years. would be nice to think that the consumer knew the difference in quality before scheduling. Fact is they only find that truth out by painful trial and error.

Who is to blame for that? The average consumer cleans every 7 years and don't know the difference in quality?

This industry and organizations like the iicrc and cri should be educating the public better. The carpet mills of america should be educating the public better and we cleaners should be educating better. The crappy polyester carpets that are being sold in box stores keeps increasing in popularity due to a lack of real education and let's face it, that same carpet will not last 7 years before becoming lifeless and ugly.

If all parts of this industry (mills, iicrc, cri, cleaners, etc.) decided to make it a point to educate the public on these matters, we wouldn't see cut-throat pricing nor would we have to work around the clock trying to make a living.

In the end, I guess it is our fault.

Beats being a golf course superintendent! Where the consumer blames ya for the conditions Mother Nature gives ya. Like we control that.

Back to topic. Loo