ICS Magazine

Creatively Pricing Your Cleaning Services

September 11, 2000
As a cleaning specialist, when you calculate every job using the same pricing method, you are undervaluing your services. The price of the job at hand should be determined, at least in part, by the carpet, the soiling conditions, the customer’s expectations and their reason for cleaning...

The first question asked by potential clients inquiring about cleaning services is usually “How much does it cost?” What they really want to know is what is it worth, or what is the value? How you figure and present your charges often has a great deal to do with how the customer perceives the value. There are many different types of carpet with many different soiling conditions owned by many different types of customers with various expectations of a cleaning company. It is always amazing to me when cleaning specialists price every cleaning job the same way. The way the job is priced should be determined, at least in part, by the carpet, the soiling conditions, and the customer’s expectations and reason for cleaning. The “packaging” of the service is known as merchandising and how the price is presented is a major part of the merchandising package.

One of the most common methods used by cleaning services is unit pricing. This is where a specific price is determined for a definable unit. The unit price is multiplied by the number of units and the total is the final price. For example; $.30 per square foot X 1,000 square ft. on the job = $300. Or $30 per room X 10 rooms = $300. One advantage of unit pricing is that it’s easily understood by consumers and they think they see exactly what they are paying for. It’s easily calculated and seldom open for negotiation. On the negative side, it’s easily compared to competitor’s bids and limits any flexibility in the package.

Some cleaners choose to supplement unit pricing with optional “additional services” to build in some flexibility. An example would be selling Teflon® protector or seam repair. Be sure that these extra services are truly extra and are not generally considered part of the normal cleaning procedure as described in the IICRC S001 Carpet Cleaning Standard. Charging “add-on” prices for services that should be included, such as putting detergent in the water or vacuuming before cleaning is like selling a hamburger and charging extra for the bun. This is what is known as bait-and-switch and is not ethical.

In order to offer the consumer options, yet not give the appearance of bait-and-switch tactics, some service companies use package pricing. Package pricing is where various groups of services are put together in a “package” and a single unit price is promoted for the package. The customer is generally given the choice of three or four different packages at various prices. As an example only, let’s say Package “A” is just the basic cleaning service with vacuuming, pre-conditioning, soil extraction, grooming and drying, all for $.25/sq. ft. Package “B” is the same as “A”, but includes furniture moving and protector, all for $.35/sq. ft. Package “C” is similar to Package “B”, but also includes specialized spotting, certain deodorizing procedures, and minor repairs, all for $.45/sq. ft. The customer then chooses the package that best suits their needs and/or budget. Experience shows that they generally pick the middle package.

Another method to pricing carpet cleaning services is by adding Time & Materials. The cleaning specialist charges a rate per hour (or 1/2 hour) for labor, plus a charge for materials (like cleaning agents). This type of pricing can “include” extra services such as furniture placement, protector, deodorizing etc., and they are not viewed as “add-ons” but as part of the job. The down side is that it is almost impossible to give an accurate detailed quote prior to doing the job.

Yet another type of pricing is Results Oriented Pricing. With this type of pricing, the customer is paying for the results and not for the specific effort. For example: Some cleaning specialists charge a percentage of the value to clean Oriental rugs.

Another example would be the company that charges $40 per month to maintain 1,000 sq. ft. of residential carpet. This maintenance program includes cleaning and/or spotting “as needed.” The $480 per year (12 x $40) is for results (clean carpet) not a process (carpet cleaning). Let’s say that in order to provide 1,000 sq. ft. of clean carpet for one year, the cleaner had to clean the 250 sq. ft. of high traffic area three times per year, the 250 sq. ft. of medium traffic area twice a year, and the 500 sq. ft. of low traffic carpet annually. That’s a total of 1,750 sq. ft. of carpet cleaning for $480 (at $.27/sq. ft.). However, the client’s perception is that they are getting 1,000 sq. ft. of carpet maintained (clean carpet) for 12 months (12,000 sq. ft.) for $480. That’s $.04/ sq. ft.

My point is that there are many ways to package and price a service. Creative pricing can mean the difference in providing the customer what she wants and losing the bid to a competitor. Don’t get stuck pricing every job in every situation the same way. Try to determine what the customer is looking for and merchandise your services to fit their needs. Creative pricing—another tool to effective merchandising.