Negotiating prices - Cleaning Talk - Professional Cleaning and Restoration Forum

**t.peterson** · 01-04-2007, 03:40 AM

The holidays are over, so let's get some discussion going again.

The topic is negotiations -Let me pose a couple of questions to each of you for your thoughts.

1) How do you handle customers who ask you to lower your prices once you have submitted your estimate/ bid?

2) Under what circumstances would you consider giving an additional discount from the price that you have already quoted?

3) Do you think that lowering your price significantly from your orginial bid/estimate makes you appear less professional in the eyes of your client?

4) Have you considered that the client may think that you were gouging them on costs if you all of a sudden could lower your prices?

FCPWLLC · 01-04-2007, 09:01 AM

Quote:

Originally Posted by t.peterson

The holidays are over, so let's get some discussion going again.

The topic is negotiations -Let me pose a couple of questions to each of you for your thoughts.

1) How do you handle customers who ask you to lower your prices once you have submitted your estimate/ bid?

2) Under what circumstances would you consider giving an additional discount from the price that you have already quoted?

3) Do you think that lowering your price significantly from your orginial bid/estimate makes you appear less professional in the eyes of your client?

4) Have you considered that the client may think that you were gouging them on costs if you all of a sudden could lower your prices?

Sometime we will get a potential customer that will ask if the quoted price is the best we can do. Example.... Vinyl siding Cleaning quote is $300 and they want to negotiate price. I'll say something like " I'll do it for $280 if you move all the plants off the deck and the porch etc." I always try to show that that extra $20 was paying for something. I try to create a give-take situation. Just like coupons..... We ask for Name Address, Number, email etc in turn for a coupon. Always get something when you give something.

PressurePros · 01-04-2007, 09:24 AM

Hi T, Happy New Year.

I look them in the eye and say, "Mr Frugal, I understand wanting to get the best price, I am the same way, but my original quote is the best price I can offer you." Next topic.

There are some guys that talk about raising their estimates to give themselves negotiation room. I think thats a very questionable tactic contrived from a weak presentation. (I know, tell me how you really feel, Ken) My feeling is this.. If the customer is asking you about your price, he/she is interested. If they were not, they would have told you to get lost in one of ten different ways. This is the primary time to start closing.

If I start dropping my price, the customer is in the driver's seat. Who knows what may be going through his or her mind?

• If he went down in price that quickly, it means there is probably more room for negotiating (now when you don't lower any more all the good feelings are history)
• Am I ever going to get the best price from this guy?
• I better get more estimates to make sure this company is on the up and up

I think this about sums up the way I feel on price dropping.

Karvonen's Pro Clean · 01-04-2007, 01:52 PM

I'm with Ken,I don't move on price,but if they will do a complete cleaning package(house,roof,concrete)I will offer a small discount.
I don't use it so much as a hook to land the sale.I just see it as what I would have saved in fuel cost running around to 3 or 4 lower paying small jobs.

PressurePros · 01-04-2007, 05:32 PM

Scott's post actually brings to mind a recent quote where I dropped on price. I gave a quote on a housewash. I noticed across the street was a school that had been recently built/renovated. The street was still filled with dirt and most of the house across the street were dirty from that construction. I went back to the office, typed up a quick note of introduction. Wrote that a neighbor had asked for an estimate and that we could offer a group discount. I went back and put it on 12 houses I thought might be interested. Then I went to the homeonwer (a very outspoken person) and told her if she would sell her neighbors on a service I would discount her.

We did 11 of the twelve in two days and she got hers for free.

**t.peterson** · 01-04-2007, 08:43 PM

Quote:

Originally Posted by FCPWLLC

I'll say something like " I'll do it for $280 if you move all the plants off the deck and the porch etc." I always try to show that that extra $20 was paying for something. I try to create a give-take situation.

You are a man after my own heart

**t.peterson** · 01-04-2007, 08:46 PM

Quote:

Originally Posted by PressurePros

There are some guys that talk about raising their estimates to give themselves negotiation room. I think thats a very questionable tactic contrived from a weak presentation...................................... ..

If I start dropping my price, the customer is in the driver's seat. Who knows what may be going through his or her mind?

Hi Ken, Happy New year to you as well

I think you made some great points

By Weak presentation do you mean not showing the customer the "value" of your services?

Joey D · 01-05-2007, 02:23 AM

I rarely negotiate on price unless it's a big potential customer which will help my business such as future major reference then i'll try to do somthing like FCPWLLC does. Give and take.
I'm in a little different situation though I contract for one year minimum.
I have some room to work.

PressurePros · 01-05-2007, 02:41 PM

Quote:

Originally Posted by t.peterson

Hi Ken, Happy New year to you as well

I think you made some great points

By Weak presentation do you mean not showing the customer the "value" of your services?

Ultimately, yes. I guess I would lean more towards meaning a person that sells numbers instead of service. That person may (not always, but often) not have a good presentation and uses the price negotiation as the closer. There are effective ways to use price as a closer (ie car salesman whom may say to you, "if I can get your price for you, can I earn your business tonight?" ) What I am referring to is a guy/gal that intenionally marks up their price 20% over FMV and then gives back 15% to close the sale. Does it work? Sure it does but it will also backfire often and kill your customer perceived integrity. I find that type of business practice seedy.

**t.peterson** · 01-05-2007, 07:45 PM

Ok............ playing Devil's advocate for sake of further discussion ~ how many of you are complete softies when it comes to the elderly and giving them discounts? Or how about someone that you know could really use a hand such as a handicapped person? Do you have a standardized plan of action of discounts for these people?

ShariLynn · 01-09-2007, 07:37 PM

I too, would ask for something in return, like moving thigns that are in the way and such - unless it's an elderly or disabled person - Then there's the people that are obviously just lazy and still want something for nothing. No budge there.

I also make jewelry and have been known to barter at times for finished goods. (don't tell anyone.

)

Good questions and points brought up.

**t.peterson** · 01-09-2007, 07:50 PM

We won't tell........ promise

I find that even after all of these years in business I still have a huge soft spot in my heart for the Elderly and handicapped, that is why I asked about others

Dirty Talk · 01-09-2007, 09:30 PM

This is from a B2B standpoint. I think if you agree with or follow these simple rules you won’t encounter pricing issues or pricing negotiations.

Very Important Rules
1) First know who you are. What is your level of services you deliver, the customers you target should match your services and company ideology. Don’t try and be something for everyone, find your nitch and exploit it.

2) SELL-relationships and peace-of-mind, never service. DELIVER- unparallel services.
When you sell services like cleaning they are considered commodities, stay away from marketing efforts that identify your company as; consistent, interchangeable, abundant, low price, homogenous these are all signs of commoditization relegating you only to Compete Based on Price.

3) Do your research: target accounts that view good sub-contractors from a scarcity and not abundant mentality.

Our post construction business is broken down into two segments, custom residential and commercial accounts.

Residential- We have set prices based on square foot and degree of detail a house or builder has. If a builder were to try and negotiate pricing per sf, we would ask them what they would like to take out of the work scope to meet their price. They generally say “Oh…nothing we like the way you clean, we wouldn’t want to take out anything”. End of discussion.

For example: from .23 to .25 is a .02 per square foot difference. At 4,000 total square feet that’s only $80 difference.
I ask the builder, For this $800,000 house, isn’t $80 worth peace-of-mind for you and your customer? To know that its done right the first time, no problems or call backs.

Also a residential builder may tell you that they paid their old cleaning company only .17 per square foot, why is your pricing higher?

Quickly remind them that the optimal word here is OLD, and why they are looking for a new cleaning company. If they were all that and a bag of chips, we would not be having this conversation.
Because the old company couldn’t deliver great quality work, that they were probably force to cut back, thus impacting their quality level. In order to deliver unparallel service, and employ great people at all levels you need to price at X amount.
Again-Know who you are and don’t negotiate. Be the right company, at the right time for that client.

Commercial- When bidding on a job, We always ask first. "What is your budget"? They might not tell you but always ask. See if your number can meet theirs first.

That’s just a few points. I hope it helps.

Joey D · 01-09-2007, 11:37 PM

Dirty Talk,
I like the way you think. Very good advice.

**t.peterson** · 01-10-2007, 12:13 AM

He is one of the good guys isnt he

Joey D · 01-10-2007, 12:40 AM

That's what I like.

FCPWLLC · 01-10-2007, 07:43 AM

Quote:

Originally Posted by Dirty Talk

This is from a B2B standpoint. I think if you agree with or follow these simple rules you won’t encounter pricing issues or pricing negotiations.

Very Important Rules
1) First know who you are. What is your level of services you deliver, the customers you target should match your services and company ideology. Don’t try and be something for everyone, find your nitch and exploit it.

2) SELL-relationships and peace-of-mind, never service. DELIVER- unparallel services.
When you sell services like cleaning they are considered commodities, stay away from marketing efforts that identify your company as; consistent, interchangeable, abundant, low price, homogenous these are all signs of commoditization relegating you only to Compete Based on Price.

3) Do your research: target accounts that view good sub-contractors from a scarcity and not abundant mentality.

Our post construction business is broken down into two segments, custom residential and commercial accounts.

Residential- We have set prices based on square foot and degree of detail a house or builder has. If a builder were to try and negotiate pricing per sf, we would ask them what they would like to take out of the work scope to meet their price. They generally say “Oh…nothing we like the way you clean, we wouldn’t want to take out anything”. End of discussion.

For example: from .23 to .25 is a .02 per square foot difference. At 4,000 total square feet that’s only $80 difference.
I ask the builder, For this $800,000 house, isn’t $80 worth peace-of-mind for you and your customer? To know that its done right the first time, no problems or call backs.

Also a residential builder may tell you that they paid their old cleaning company only .17 per square foot, why is your pricing higher?

Quickly remind them that the optimal word here is OLD, and why they are looking for a new cleaning company. If they were all that and a bag of chips, we would not be having this conversation.
Because the old company couldn’t deliver great quality work, that they were probably force to cut back, thus impacting their quality level. In order to deliver unparallel service, and employ great people at all levels you need to price at X amount.
Again-Know who you are and don’t negotiate. Be the right company, at the right time for that client.

Commercial- When bidding on a job, We always ask first. "What is your budget"? They might not tell you but always ask. See if your number can meet theirs first.

That’s just a few points. I hope it helps.

Exactly.... Once one realizes that they are selling something more that an item, they can begin to know who is buying that service. Marketing to those that want the higher level of service.

PressurePros · 01-10-2007, 11:34 AM

There are so many people that think all they sell is cleaning and all the rest is fluff and hype. Starbucks sells coffee. In my opinion, bitter coffee, I prefer Dunkin Donuts blends. Yet I still patronage Starbucks and they open five stores per day!!!! People pay for the experience.

Happyeater · 01-21-2007, 03:09 PM

Hi everyone.

Remember you can always reduce the schedule to reduce their price. For example, "If you get your staff to wash their own cups and mugs, I can take $xx a month off the price?"

Move fridge and microwave cleaning back to fortnightly / monthly etc, sanitise phones every other week.... there's always you can change which simply means you do less for less money. Most people can understand this concept.

Paul

**t.peterson** · 01-21-2007, 03:23 PM

PAUL!!!!! Fancy meeting you here! How are you doing buddy? How's Hazel and the kids?

BTW welcome to cleaningtalk.com