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How a Simple Change Earned This Contract Cleaner Thousands

Guest post by: James Yuille

Article Overview: Here's a profound statement about price...

How a Simple Change Earned This Contract Cleaner Thousands

Here's a profound statement about price...

Too many business owners don't charge enough for what they do.

Let me give you a few examples to back this up. See, my position is that price is only an issue when there's nothing else to talk about.

One of my coaching group members has a contract cleaning business. For some time, they thought they had to compete on price but when we examined what they provide against what the market, their value proposition stacked up. Their staff are covered by public liability and workers compensation; they get Superannuation and a bunch of other benefits as stipulated under local legislation. This means that in the event of accident, everyone's covered. Backyard operators who only sell on price don't have this protection.

Their clients are provided with a business invoices, meaning that their service is fully deductible as a business expense. Again, someone doing cleaning for cash in between jobs or moonlighting doesn't give invoices.

There are a whole lot of other reasons but the fact is that this client has increased their fees by almost 30% and secured some higher-level clients along the way. What matters is that the 30% fee increase is pure profit as the fixed costs of delivery don't increase. Say the fee increase was $10 per hour and you were billing 1,000 hours per month, that's $10,000 per month or $120,000 per year incremental NET profit. Not bad...

Another member is a travel agent. They provide a passport photo service for which they have been charging a whopping $11. We canvassed the group and asked what they would happily pay for a passport photo if their travel agent offered. The lowest price was $20 and the highest $30. Imagine we increased the price from $11 to $20. That's $9 and at one per day, 6 days each week, that's $2808 in incremental net profits per annum.

Another (no names to protect his highly unique identity) was offering free membership to his program. Conversions were running at 5 - 10%. Now at $1,500, conversions are running at 70%. How much did he leave on the table?

Your ability to increase prices comes as a result of the way you package what you sell; by illustrating the value differential you provide. It also comes with confidence - confidence in the way you sell.

The best clients are those who understand value and are willing to pay for it. Confident people deliver value. Confidence in sales comes from understanding and applying a process that works.

My final thought before I go grab another beer and relax for the evening? On Monday, go put your prices up. You can afford it.

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Re: Spellcheck? - [quote="TheAnonymousMan":2f894q6j]When discussing the majority of people I would definitely say that most people hit the "Change" or "Ignore" button without thinking too much about the correct spelling of a word. All bosses are concerned about is getting the report to the Directors meeting on time.[/quote:2f894q6j] That probably depends on what the "majority" are trying to accomplish. I have word set to alert me about misspellings and grammatical problems, so I fix most as I go. But I also add names etc to the dictionary because I get tired of seeing the red and green squiggles when I know the info is right. If you're only going to click "Change" or "Ignore" then why bother to take the time to use spell check????? Business people that I work for want the info compiled in a timely manner and they want it right - which is fine because that's the way I strive to do any project. Sending out a memo, letter, report etc with obvious spelling and grammatical mistakes makes the person and the company look bad as far as I'm concerned. Shri
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