Our last post talked about competing against low-ballers. This week we have a similar topic. A member recently submitted the following:
"I have a customer that we clean weekly. I charge her $105.00 -- she has a 4500 sq ft house with 3 dogs that come and go as they please. We drive 45 minutes to get to her house. It takes us about 2 hours with two people to clean, sometimes more. She had a discussion with me last week before we left that she had received a couple of business cards from some cleaning services and that she called them to find out her rates. Turns out that they are not a legitimate cleaning service, just an individual that cleans, they have no insurance or bonding. I'm sure they don't pay taxes. One of the ladies told her $15 an hour and the other $18 an hour.
I explained to her the difference in hiring someone that doesn't carry insurance. Also explained to her that I had to pay employees for drive time and the increase costs in gas. I just recently increase on her $10 a week. When I originally priced her about a year ago I priced it at $125 and she talked me down to $95. When gas went up I was regreting giving her that deal. She says that she bases everything by the hour and she doesn't see paying someone that much an hour to clean her house. I believe she was telling me this so that I would go down on the price again. I stood my ground and tried to be professional about it. I was really proud of myself.
Today she calls me to tell me that she will be trying out one of the ladies on Thrusday and she doesn't see the point in me coming to clean on Wednesday! I told her that I understood and that I hope everything works out for her. Has this happened to anyone else? How did you handle the situation?
A wise business owner offered the following advice:
In the future, I would avoid the "defending the price" position and not get into a long explanation about how much it costs you to clean her house (the travel time, the employee taxes, the insurance, the bonding). All of that information is peripheral.
What is important is what she gets with your service: "I provide my clients with professionally trained and thoroughly screened workers, my clients want a service that is insured and bonded; they aren't looking for the cheapest deal--they want quality and security, so they are willing to pay a little extra for that benefit. We are probably just not a good fit for you as you really need a lower priced service".
Do you see the difference? Make it her fault, not yours, that she doesn't value quality and security over price. This is never done overtly, just quietly implied, of course. In your scenario you are on the defense explaining your costs and she is equating your problem ("high costs") with her rate. Instead, she needs to be reminded that SHE gets the benefit of using a service like yours and you're not that much more and you are so worth it. The firm but polite reminder will help those that really do value quality and security to rethink a change.
For those who are just looking for cheap deals--good riddance. Keep it professional and non emotional. She struck a nerve with you and it showed in your defense. Let them know that the perfect client fit for you is one that truly values quality and security. Also, when they pull that stunt, let them know you have actually had another rate increase and will honor her rate only as long as she continues with uninterrupted service for "x" amount of time (maybe through the end of the year or whatever). But, if she cancels you will fit her back into your already booked schedule at the “new rate”, not the old rate.
Also, depending on however much time lapses, let her know you will have to charge a new service “initiation fee” because you usually have to take up the slack for those “cheaper” services. I would go get your stuff on Wednesday and let her know you've already filled that spot (don't be cheeky, be professional). When she calls back, make sure that the “new rate” reflects that 45 min. travel time and make her wait for an opening! You're the boss.