Ever had one of your customers cut back on the cleaning to save money?
My guess is a big YES, you have – us too.
In fact, we probably all have at one time or another.
Anyway, it may have sounded something like this:
‘We need to cut our cleaning expense in half, so we need you to reduce our commercial cleaning service from 6 days a week to 3 days.’
Well, BE CAREFUL, because -all things aren’t equal.
You see, like I said, our janitorial business customers had gone through ups and downs too, like anyone, and had to cut back on services including cleaning.
So, we’re all too familiar with this situation.
And when they called, they often had it – in their mind – that the price of cleaning was exactly proportionate to the number of days cleaned, you know, frequency.
For example, if they pay $300/ month for 2 times per week cleaning, they are convinced they should only have to pay only 1/2, basically $150 for that 1 time per week service.
The problem is – that is not
always true, in fact, generally it’s NOT.
Without getting too detailed, if you cut the price in half when they reduce the frequency in half – YOU may be left barely making a profit or maybe only covering your costs.
Well, several reasons.
First, when you only have 1 visit per week, the building is generally dirtier and takes the cleaning staff a little longer to clean than when you had 2 visits/week.
So, if we go from needing 4 hrs. per visit to needing 5 hrs. per visit to complete the cleaning -you can quickly see how cutting the price in half, can leave you ‘holding the bag’ profit-wise!
Second, larger monthly bills often have smaller profit margins.
So, if you cut the price in half for half the number of days, you may THINK you’re OK, but what you’re likely left with is an janitorial account where the a profit percentage is TOO LOW.
When a customer of your janitorial business or residential maid service has to go through cut-backs on services, like cleaning, always work up a reasonable new price, for the new, reduced program – rather than automatically agreeing to a proportionate price reduction.
Estimate the number of hours of cleaning you might need given the reduced schedule.
And THEN, and only THEN, calculate a fair price to cover your expenses and necessary profit.
That way you can help reduce THEIR costs – without losing YOUR profitability.
You Can Do This, You Really Can!