Last few weeks Rob I have seen the same thing. I advertise my prices on my website and stick to them; I give them approximate room sizes and prices over the telephone.

Mr. Customer in this economy we are all looking for a great deal. We at xyz carpet cleaning pride ourselves in delivering excellent service at a phenomial value. We've never lost a customer to price. And if price is your only objection, we will definately do business. When can I schedule a visit for your free in home inspection? I have availability at _____ and _____. Which is more convenient for you?

I can't say that I've never lost a customer to price.

Here's a couple of recent examples. A lady called last week to get a price on a small LR-move furniture, BR-get under bed, hall. I offer to stop by and take a look that afternoon when I'm working in town.
She says "It's not going to be $250-$300 is it?"
"I'll give you an exact price when I see it but it sounds like it might be less."
"I'm thinking $35-$45. It shouldn't cost any more than that." (I kid you not)
"Thank you for calling Ma'am."

2nd example. Customer has close to 1600 sqft residential carpet in 2 stories and basement. While I'm calculating prices. He says that the last time he got it cleaned the guy charged him over $350 and there's no way he's going to pay that much again. Didn't do that job either but it was fun watching his face when I handed him the price quotes.

When I price a job I figure two prices. One if they move the furniture and one if I do (considerably higher). I'm not talking about a couch, chair, and coffee table. Its the TIME CONSUMING moving around that pays the price. So if somebody wants a deal I believe I'd just say, "Well if you're looking for a deal, you can save a bunch of money if you want to move the furniture and stuff yourself".

Originally Posted by Kenny Wright

I can't say that I've never lost a customer to price.

Here's a couple of recent examples. A lady called last week to get a price on a small LR-move furniture, BR-get under bed, hall. I offer to stop by and take a look that afternoon when I'm working in town.
She says "It's not going to be $250-$300 is it?"
"I'll give you an exact price when I see it but it sounds like it might be less."
"I'm thinking $35-$45. It shouldn't cost any more than that." (I kid you not)
"Thank you for calling Ma'am."

2nd example. Customer has close to 1600 sqft residential carpet in 2 stories and basement. While I'm calculating prices. He says that the last time he got it cleaned the guy charged him over $350 and there's no way he's going to pay that much again. Didn't do that job either but it was fun watching his face when I handed him the price quotes.

When I price a job I figure two prices. One if they move the furniture and one if I do (considerably higher). I'm not talking about a couch, chair, and coffee table. Its the TIME CONSUMING moving around that pays the price. So if somebody wants a deal I believe I'd just say, "Well if you're looking for a deal, you can save a bunch of money if you want to move the furniture and stuff yourself".

I don't know about you, but I have never ever lost a customer to price. I've lost plenty of customers because I couldn't help them convince themselves of the value that I was providing given the price I was quoting.

It's not about the price. If you can convince your customers that your big stack of benifets justifies their big stack of money, you'll close - that's value. If their big stack of money can not be justified by your little stack of benefits, you've lost because of value not price.

Once you convince yourself of this reality, you can say, "I've never lost a customer to price" to a client without lying. Remember that I'm only trying to get my foot in the door here. Sorry for any attempts at sounding like a motivational speaker.

I'm with Lance....We do deals all the time, we estimate over the phone and when we get to the job many times we hear "well I really wanted to do the couch too, but.....". Within reason, we will try to get it done at a price that is good for them and us, afterall our cost is in getting there and why leave any money on the table.

Business is not bad, but not great either and with this economy I feel like we are going to see more and more of this. It seems like pricing is more and more an issue compared to quality and I'll do anything I can to keep moving forward.

We took over an office last year for a huge property owner about 25K sq. ft. from another cleaner, our price was slightly higher, when finished we were paid within 10 days and got a glowing note rambling on about how the carpets have never been cleaned better, thanking us for our great service, the other company never did this, or that and did not spend anywhere near as much time as you did, etc, etc, etc. Well time to schedule the service and I can't reach the property manager, while on the road Wed. I see my competitor (the one we took the job from) set up and cleaning the building. Want to bet he under-cut me by about 20% and they feel they can tolerate a crappy service for less money?

That's why I hate the commercial market, there is no brand loyalty at all. In most cases, price prevails.

Originally Posted by SW*

Once you convince yourself of this reality, you can say, "I've never lost a customer to price" to a client without lying. Remember that I'm only trying to get my foot in the door here. Sorry for any attempts at sounding like a motivational speaker.

I like your catch line about never losing a customer. I have however lost a customer due to both price and others that I could not convince them of the value of my services. Fact is that some people just don't care what you are doing, they just want there carpets cleaned for as cheap as possible. I tell them that we pride ourselves as being the company you call after the discount companies dissapoint you.

My discount story: Store chain needed estimate for store...came to $400 (explained everything we will do). She said they are trying to save money what is the lowest I can go...they are thinking $130-140 I respectfully declined.

Scott[/QUOTE]


Thinking about having a set of business cards made up for these situations that says

We fix other other cleaners' "Specials"

Originally Posted by rtorres122

Mr. Customer in this economy we are all looking for a great deal. We at xyz carpet cleaning pride ourselves in delivering excellent service at a phenomial value. We've never lost a customer to price. And if price is your only objection, we will definately do business. When can I schedule a visit for your free in home inspection? I have availability at _____ and _____. Which is more convenient for you?

The question that begs to be answered is, "How do you convince a customer that your service is worth your price?" I have some answers that I give and I would like to hear some of yours. As for me I will mention that by the time I figure all of my business expenses including taxes, payments , supplies, advertising, etc., that I have to charge what I do in order to keep my business going. I don't know about you all, but I think it cost me at least 50 % of every dollar I make so on a $200.00 job for example I will only be keeping about 100.00 or less for personal use to pay my bills, feed my family, etc. What are your expenses and how much do you really make? I also mention that I have a truck mount that cost X amount of dollars, a van payment, I buy the best chemicals for cleaning I can find which are quite expensive and have around $50,000.00 invested in my equipment. They usually shut up around this time.

Originally Posted by wandwizard

The question that begs to be answered is, "How do you convince a customer that your service is worth your price?" I have some answers that I give and I would like to hear some of yours. As for me I will mention that by the time I figure all of my business expenses including taxes, payments , supplies, advertising, etc., that I have to charge what I do in order to keep my business going. I don't know about you all, but I think it cost me at least 50 % of every dollar I make so on a $200.00 job for example I will only be keeping about 100.00 or less for personal use to pay my bills, feed my family, etc. What are your expenses and how much do you really make? I also mention that I have a truck mount that cost X amount of dollars, a van payment, I buy the best chemicals for cleaning I can find which are quite expensive and have around $50,000.00 invested in my equipment. They usually shut up around this time.

Customers are not interested in my overhead nor are they interested in me running a profitable business. They are only interested in what I can do for them. Example - I sell pens and a customer tells me that they would like to purchase the pen for 10 cents. If I show them a receipt for 15 cents (my cost), for many of my customers, that is not a acceptable rebuttal. Instead I sell the sizzle.

Robert - (After Presentation) That just about covers everything Mr. Customer. You total is $250. Which bedroom would you like us to start in?
Customer - price is too high?
Robert - No problem Mr. Customer. Just to satisfy my own curiosity, why do you say that?
Customer - I got a quote of $150 from XYZ carpet cleaners.
Robert - I understand how you feel. Many of my best customers felt the same way prior to experiencing our fantastic services. What they found after hiring Steam Pro is that it is at times it's better to pay a little bit more than they expected, than a little bit less than they should. You see Mr. Customer, if you pay a little bit more than you had expected, but your expectations are exceeded, you're a winner. If you pay less than you should and the cleaning service that you had hired doesn't deliver to your standards, you've lost your total investment of time, money, and trust in our great industry. I feel strongly in that belief; don't you agree Mr. Customer?
Customer - Yes but can you do a little better? You quoted me $250. I like you. I'll do for $175. Not a dime more.
Robert - So what you're saying is that we're really talking about $75 dollars aren't we? ($250-$175)
Customer - Yes
Robert - Outside of the $75 dollar investment, is there anything else keeping you from doing business with us today?
Customer - No that's it. Go to $175 and the business is yours.
Robert - Let me ask you this Mr. Customer. How often do you clean or plan to clean your carpets?
Customer - About once a year (lying)
Robert - Do me a favor Mr. Customer. Take my calculator and do something for me. (Hand over calculator). Now there are 12 months in a year. Please divide $75 by 12 (6.25). Now divide that number by 30 (.20). Mr. Customer, 6 dollars per month or only 20 cents per day, in my belief, is an incredible bargain for p eace of mind when making such an important decision for your beautiful home. I know you'd agree with that. Now which bedroom would you like us to start in, yours or your son's?

There were 3 close attempts there. I absolutely WILL NOT under any circumstances make any price concessions until I attempt to close at least 6 times. Sometimes customers agree to my price just out of exhaustion. Now I'm not saying that I'm the best salesman in the world. Almost every word that comes from my mouth is stolen from different sales books. But I know that some of you walk into homes spitting specs and logic at customers, instead of charisma and personality. This is why I strongly believe that every sale that is not made is MY FAULT and not price related. If I do not sell a job it's because I could not justify my tiny stack of benefits with his or her huge stack of money.

When someone asks over the phone, "can you guys clean carpet for 9 dollars per room?", which is the rational, logical, wrong response and which is the correct response.
A - Mr. Customer you live about 20 miles away. I get 8 miles to the gallon, which means I need 2.5 gallons of gas to get to you. Gas alone will cost me $6.00! A gallon of prespray runs $30 and gets me 6400 square feet. Prespray would run me another $2.50 for 500 square feet. I'm at $8.50 and I haven't even made a single dime! HOW DARE YOU!
B - Great question. Mr. Customer, we specialize in custom tailoring our many carpet cleaning programs to best fit your needs and budget. What I'd like to do a schedule a time with you to give you a free, no obligation carpet inspection. And please don't worry about price. I've never lost a customer to price. Will tomorrow at 10 AM work for you or is 12 better?

When you get to that home, let's hope that a salesman walks through the door and not an just another order taker that sells price price price. I used to sell cars. When I'd run to my manager complaining about how difficult my customer was and asking for advice, he'd tell me "be a salesman".

Wandwizard, so you know, my overhead is irrelevant. It doesn't matter if it's 100 dollars per month or 100,000 dollars per month. Whether you're running a $100,000 Vortex or a $1500 Ninja (Me), my answer to what to do when a customer asks you these questions is "BE A SALESMAN"!

The way I have it set up now, everyone gets a deal depending on how much work they give me and the type of job involved! All discounts are marked accordingly on the estimate as well as the invoice so they can see just how much discount they are getting.

For example, there is a big price drop for empty rooms. So, I price up the room at FULL price, then calculate the discounted difference and show them how much of a "discount" they received because the room was empty!
Other discounts apply to amount of square footage, large commercial accounts, excellent customer relationships also have an effect and so on!

Here is an example:

1000sqft x .40 = $400

Discount (empty) - $150 wow!

Net Price = $250



Regarding the "thats too expensive" response you may sometimes get:

"I wish to work within your budget Mrs Jones! If this is too high we can start taking things off until it is within your budget.
(usually they dont want to take anything off and realize the price is not coming down)
Most consumers do not want to admit they have a "budget", at least not in my area.



So with this system nobody can ask for a "deal" because they just got one.


Lets say the same customer did not have an empty house. There was stuff
to move, regular furnishings and such:


1000 sq ft x .40 = $400

Discount (over 1000 sq ft) = $100 wow!

Net Price for job = $300

You say the customer doesn't care about my operating expenses. You said, "Wandwizard, so you know, my overhead is irrelevant. It doesn't matter if it's 100 dollars per month or 100,000 dollars per month. " I'm here to tell you that it does sometimes help to let the customer know how much it cost you to perform your business.They think your expenses are a few dollars at most, not maybe 50% of your incomes. In their mind all they see is you maybe using a little cleaning chemicals and taking the time to drive to their home. They have no idea what it really cost you to do what you do. I've won over many customers who were not going to use me with this tactic so don't tell me it doesn't work. Just last week I was on the phone with a lady from a nearby town who was actually not going to use me because I quoted a price on the phone that was a .03 cents per sq. ft. higher than last year which totaled a whopping 15.00 more for an entire house of a living room, hall, and 3 bedrooms. They almost decided not to clean the carpet at all. By explaining my cost breifly in just a minute or so she changed her mind and I did the job. I am not knocking your sales techniques and I am actually considering using some of the stuff you said. Thanks for your input.

Originally Posted by wandwizard

You say the customer doesn't care about my operating expenses. You said, "Wandwizard, so you know, my overhead is irrelevant. It doesn't matter if it's 100 dollars per month or 100,000 dollars per month. " I'm here to tell you that it does sometimes help to let the customer know how much it cost you to perform your business.They think your expenses are a few dollars at most, not maybe 50% of you incomes. In their mind all they see is you maybe using a little cleaning chemicals and taking the time to drive to their home. They have no idea what it really cost you to do what you do. I've won over many customers who were not going to use me with this tactic so don't tell me it doesn't work. Just last week I was on the phone with a lady from a nearby town who was actually not going to use me because I quoted a price on the phone that was a .03 cents per sq. ft. higher than last year which totaled a whopping 15.00 more for an entire house of a living room, hall, and 3 bedrooms. They almost decided not to clean the carpet at all. By explaining my cost breifly in just a minute or so she changed her mind and I did the job. I am not knocking your sales techniques and I am actually considering using some of the stuff you said. Thanks for your input.

So you earned the business of an apprehensive, remorseful, client. Wandwizard, a good deal is nothing more than perception.

How many times have you given your services away for nothing. You kill yourself for 3 hours on your hands and knees and make like 50 bucks. The customer is a pain in the butt the whole time and obviously doesn't appreciate the hard work you put in. They think that they got ripped off even though the carpet looks like new and you charged 15 cents psf!

And how many times have you charged an extraordinary price, say 65 cents psf x 1000 sf. It's an easy job and the customer is in love with you. They refer you to all their friends and put you on THEIR holiday card list.

Who got the better deal? The second guy got the better deal because they believe they got a deal.

Your job with your real life customer wasn't to justify you price, but to articulate your value. First of all, I always give prices in person if I can. If it's a previous customer and I have to make a slight price increase, it's definitely going to be in person. What if instead of explaining how your prices have gone up because of nonsense and it's going to cost her another 15 dollars you said something like this...?

(In person) Ms. Customer, I have great news for you. We at xyz carpet cleaners have recently crossed a major chasm in our industry. With extensive education, a wonderful network, and from continuous loyalty from clients like yourself; we've been able to position ourselves as the leading carpet cleaning specialist in (location). It hasn't been easy or cheap (Ha Ha). So to balance our additional expenses with our recent upgrades and success we've increased prices by 20%. But don't worry, not for you. Your loyalty to our company deserves you a preferred rate of only a 5% premium. Just say it's our thank you for your patronage (smile). Just OK the invoice here and... thank you very much.

This says the same thing as the previous paragraph but compliments the customer so much more. It shows value. The customer is getting a deal...even though it's just a sugar coated price increase.

A great topic for a thread with some good posts on it. By coincidence I just wrote an article on ICS with exactly this topic. Here is an excerpt ...

Above all else don’t take it personally- This is of course much easier to write than to do. Customers who in the past have practically viewed you as a member of their family are now boldly and shamelessly mentioning “You know, Steve, I can get my carpets cleaned cheaper elsewhere”. But before you emotionally suggest they do just that let’s look at the current situation through their eyes.

For many months now the American public has been subjected to a steady stream of economic doom and gloom. On top of this your clients have been fed endless stories on how the new chic is to ask for discounts everywhere. Even Paris Hilton is stating that conspicuous consumption is out and frugal is in!

So when a previously loyal client starts “negotiating” with you they have not logically decided you are worth 20% less as a person to them than you were a year ago! Instead, your customer is just responding to the negative media blitz and the social, emotional AND financial pressures of the last couple years.

Above all else you need to be on an even emotional keel before you respond to a customer trying to “low-ball” you. Remember that if you emotionally turn this negotiation into an emotional “win-lose” confrontation it will help no one.

Steve Toburen
Director of Training
Jon-Don's Strategies for Success
www.StrategiesForSuccess.com

PS Instead of getting mad with the low-ballers get rid of the big chip on your shoulder and focus on this essential “tough economy” phrase …

"Commiserate, negotiate but never capitulate." How to do it? Ya gotta wait till the August ICS. Evan wouldn't be happy if I spilled the beans a month early.