Hopefully you are busy, after all this is the “busy season” for most, so it’s time to really dig in and reap the profits of your business.
Even someone who knows little to nothing about marketing their business the right way is often pretty busy during the spring and summer.
So what I want to talk about today is profitability. You work hard for your money, But, are you working long days just to scrape by? Or are you a running a profitable operation? Can you can pay off any debts you might have accumulated during the slow time? Have enough left over to float you through any future slow seasons? Can you afford to hire the help you need? To maintain your equipment, uniforms, and other aspects of “the face” of your company, so you’re running a quality operation? If that’s your aim then let’s talk about how to increase profitability.
Basically you have two components influencing your profitability, your sales and your profit margins. If you are busy, then let’s assume you’re making sales. But how can you turn your current sales into more profits?
Sell Value Not Price
This is a great place to start this discussion, how to sell value, not price. I’ve had this conversation with hundreds of cleaners over the years, and hopefully you are not your own worst price resistant client, insisting that your services aren’t worth more.
As a side note I have to tell you that if you are attracting your clients with the right kind of marketing, like the EDDM postcard system we offer for free, then you will be getting prospects calling you that are not price resistant, in fact, they often are ready to book you without even bringing up the subject of price.
But when you make that paradigm shift in your own mind, from just selling your service to providing VALUE and HELPING people, then you will see the value in your own service and give it the credit it deserves. It really doesn’t matter what your competition is charging, if you can set yourself apart with incredible value, then you will attract those clients who are used to paying a premium for real value.
Think about it, aren’t there plenty of people willing to pay a much higher price point for a car like a Mercedes, who would not consider paying a lesser price to get a Hyundi? Both vehicles offer safe and attractive transportation, but there is a higher perceived value to the client getting the $90,000 Mercedes, and therefore Mercedes gets that profit.
How can you raise the bar on your perceived value?
Here’s a few ways…
- Make sure your van and equipment is in pristine shape and always clean.
- Make sure you and your cleaning technicians well groomed and in clean, neat uniforms.
- Offer courtesy calls if you’re running behind schedule.
- Make sure you phone is always answered or that missed calls are promptly returned.
- Have a website with a very modern look and feel.
- Offer your clients/prospects price packages to choose from.
- Offer “green”, low chemical options.
- Educate your prospects and clients about all the wonderful services your provide and why they can trust you.
- Everyone in your company should wear shoe covers in a client/prospect’s home.
- Offer furniture protectors and door covers.
- Leave behind professional looking “after care” instructions and a “thank you.”
- Do reminder calls and quality control follow up calls.
- Send a thank you in the mail a few days after a cleaning.
- Wow your clients with your bend-over-backwards for them high quality service.
- Educate your clients and prospects about what constitutes a great cleaning service, what not to allow in their home and what they should watch for to protect themselves and their carpets from getting a shoddy cleaning.
- Offer a no-questions-asked, money-back guarantee.
- Send “thank you’s” and gifts to clients who send you referrals.
All of the above will help to set you apart from the “cheap”, blow in and out of their house, companies. Joe Polish calls quantifies this kind of quality experience into a Before, During, and After model with marketing your business. Ask yourself how you treat your clients and prospects Before, During and After a sale.
Creating a company that is helpful and builds value will solidify your business so you are in the “relationship” business, so that you’re someone that is looking out for your client’s best interests, and not just in a fly-by-night transaction business.
When you focus on creating THIS kind of exceptional value, then guess what? You DESERVE to charge more, and your clients will be happy to pay more, knowing that they are getting the best.
And how much should you be charging? That depends on a lot of factors, but the simplest formula is to look at your cost of doing business, the cost it would be to run a high quality business, and your profitability should be somewhere in the 30-40% margin.
And one of the quickest things you can do to make more money starting today is to do a 10% price increase. That is an increase that will raise your profitability without scaring away your clients. However, if you have built your whole business on being cheap, cheap, cheap, then you might need to bump it up a bit more. In that case, you need to step things up with your marketing so you can attract the right kinds of clients and stay profitable so you can benefit from your busy season as much as possible.
But there is another super way to boost your profits on every job that is a HUGE benefit to your clients.
Your Clients Will Never Get The Benefit If You Don’t Offer THIS To Them…
I’m talking about upsells. You’re already in their home, they know they need some carpet cleaning. But, what else can you offer to help them?
Do they need a sofa cleaned? Air ducts? Tile and grout? Area rugs? What about re-applying carpet protection? All of this can be done in a way that isn’t “salesy”, if you just present BENEFITS and VALUE as you offer to help them out with these other things.
You can even offer discounts for the convenience of the add-ons while you’re already in the house cleaning the carpets. One Piranha Member makes it a point to offer $50 worth of carpet protection for $30 while he’s on every job, and most people accept it, especially after he educates them on the BENEFITS of re-applying it. (Idea: Create a one page benefit laden hand-out educating clients about the importance of re-applying carpet protection that you can give out to clients.)
Guess what, it you make this offer to every job and sold 3 jobs per day that’s an extra $90 per day, and if you do the math that averages out to be about an extra $20,000 per year. And $20K on jobs you’re already cleaning, now that’s profitability! What would you do with an extra $20K this year? Even an extra $10K?
Another key way to create value and appeal to your clients is to offer these other services to them into package deals that reflect a discount for buying a bundle. But really none of these ideas will work for you unless you…
Know Your Numbers
I touched on this already when I talked about setting your prices, but it’s not just knowing how much you need to be charging to be profitable. This also applies to knowing what is working for you in your marketing so you can focus on that and step it up. Also, when you know what doesn’t work then you can either throw it out, or tweak it until it does work. After all, being in business is a numbers game so you even if you need to hire someone to help you figure this out, you need to know your numbers.
I wish you the best in your busy season, if you go out there with the mindset of HELPING people, and educating them on the VALUE of what you are doing for them, you will be able to increase your profitability through your pricing and add on sales. Remember, this is about relationships, not transactions. I hope you have a great season!