Pricing Series Part 3 - Cost Versus Value

 I was talking with Robert Pierce from my Solo Cleaning School Elite Membership. He's doing amazing. Robert works as a manager at Target and it's been in retail for 25 years. He found me on the Side Hustle Nation Podcast and decided to start a solo cleaning business. Robert understood the value of investing into his new business as he wanted to shortcut years of trying to figure it out himself. He joined the Elite Membership and has subsequently built his solo cleaning business in 6 months to a lean, professional, and profitable company. I was so impressed talking to him as he shared how close he is to achieving his goal and dream of getting out of retail! I was so excited to hear this. We talked about his plan and how many clients and profit he needs to hit this goal.

​The main reason for the call was for strategic coaching. He was taking on 1-time and recurring house cleaning clients, but like me, he wanted to get into commercial more. He had a recent opportunity with a tool & die shop. It was set up like any industrial building. Picture a large steel box with offices in the front and huge warehouse and/or manufacturing space in the back. There's a filthy bathroom in the warehouse area and the office space isn't the most pristine either. These are blue-collar workers, running a useful service to the community. Robert did an estimate for cleaning the offices and warehouse restroom 3 weeks ago with no feedback. He wondered if his prices were too high. Our conversation was excellent and I knew it would help others as well.

Robert gave a very realistic price of $200 per visit. He estimated the job would take 4 hours per visit and he wanted to charge an hourly rate of $50. Thus, he gave a flat rate price of $200 per visit. I agreed with Robert on his method and the price was reasonable for the work he was proposing to do. However, I knew it was overpriced! Listen to what Robert shared next. "Ken, I found out that this facility had a janitor that cleaned prior. I figure he was there for 8 hours to clean the place and made $12 per hour. I'm guessing the tool & die shop paid $100 per day to have their facility cleaned. I'm asking $200. I figured it would be fine since I'm an outside contractor and would be fully insured." Robert already knew why they weren't calling him back. This was all the opening I needed. He is absolutely right at his $200 price is completely reasonable. I taught him that in the Elite Membership. But... there are two angles to come in on a price. One is COST PRICING and the other is VALUE PRICING.


Read the rest of this article at the Smart Cleaning School website