Pricing Of Services
The price of anything is important. The business needs to price high enough to cover over-head yet be low enough to get the customer. The consumer wants a price they can afford. Everyone says "You get what you pay for", but how do you know the price is fair?
My intent is not to tell other companies how to price or what to charge nor do I intend on telling consumers how to choose a company to hire. This post is strictly meant to be informational based on my personal experiences.
Many companies use set prices. These prices are usually determined by square footage or an hourly rate. This method is seen by many to work primarily due to the fact it gives the consumer an immediate price. But is it a fair way to price the work? In some cases it may be, but not in all cases. I'll explain why in a minute.
Some companies that state set prices by square footage also state a disclaimer that final prices may vary upon an estimate. Where I feel this is a bit better way to price, it still has hidden flaws.
Many companies also use the price method mentioned above for deals. For example, they may say 3-bedroom deal for X-amount. This is a good way to run promotional sales, but at as a fixed-deal it still contains the hidden flaws of the square footage and hourly methods.
So what are the flaws?
Square Footage Method:
The square footage method is better, in my opinion, than the hourly method. However, there are flaws. Whether it's a office/home weekly clean, floor or carpet, or exterior, the same flaws exist. Both for the business and the consumer.
The business may get the raw end of the deal using this method for the simple reason it does not know how bad the situation is. The job may take longer than expected, in which case now the business is losing money. A price of a job needs to cover over-head (including payroll) and still provide a profit for the business owner to draw his/her salary. You're in business to make money, right?
Similarly, for the consumer there are flaws in this method. It's usually a good method for floor cleaning or carpet cleaning. However, if you're seeking a weekly cleaning you need to be careful. If this method is utilized by the company, in some cases it may be a fair price. In most cases you will end up paying more than the job requires.
I'm not suggesting each and every company who asks for the square-footage uses this method. Many companies use the square-footage as a factor in the price for certain jobs (such as floor or carpet cleaning).
Hourly Method:
This method is used more by maid services than janitorial services. Nonetheless, it is a method used and has major flaws.
Businesses who utilize this method run into similar problems as with the square footage method. Even though it's hourly, if the job is larger than expected you can still end up shorting yourself of over-head costs and your own salary.
Consumers need to be extra-cautious with companies who charge by the hour. The company promises they'll be in and out in X-hrs, and notifies you the initial clean is always the longest. May even say that as time goes on, less time will be needed due to routine. Many respectable companies may be sincere upon stating such and live by it. In which case, as time goes on you pay less for the same amount of work. However, there are companies and individuals out there that will take advantage of this. Do you really want to be stuck paying 5hrs for a job that has been taking only 2hrs?
I'm not suggesting every company out there that utilize these methods are looking to over-charge. The more respectable and honorable companies that use these methods to price account for the flaws. What I'm saying is to be careful. Nationwide companies or decades in existance locally does not always equate respectable or honorable either. Many national companies are franchises. This means that they share a name but have different owners. When hiring a franchise, look into the reputation of the local franchise you intend to hire, not the nationally known name. Same applies to local companies. Companies are bought and sold everyday. Ownership may be passed down from the founder to another in the company. Don't be afraid to ask questions and get to know the company as it exists today, not as it was 100yrs ago.
You now know the flaws. So how do you determine if the price given is a fair price?
Alot goes into cleaning professionally. Much more than regular home or office cleaning. If there wasn't you wouldn't need to hire professionals, right? When determining if a price is fair you must take into consideration what goes into a price.
So what does go into a price?
- How long the job will take
- What equipment and supplies are required
- Size of the crew
- Size of the area(s) to be worked
- Frequency (for weekly/monthly cleaning)
- What the area to be worked looks like (furniture need moving?, how much furniture is in the area?, etc)
- And additional parts that won't be listed as it differs depending on the service you're looking for.
Irregardless how a company prices, always see if the company does in-person estimates. Most companies that do offer estimates at no cost to you. If they do not offer in-person estimates or charge for the estimate, look for another company. It is extremely important that an estimate is performed.
An estimate allows companies to adjust their pricing accordingly. No two jobs are the same. Similar as they may appear, there are always differences. Through the estimate process, not only do you get to meet the company before hiring them, the company can give you an accurate price for the job you are seeking to have done. Not all companies use the same formula or base rate, so you may want to contact atleast three companies to find a price you can afford.
Answering what I said earlier about many people saying "You get what you pay for", in some cases that is true. You may run into a situation where a company gave a price a bit higher than two or more companies you looked into. The question now becomes "Why?".
Remember what goes into a price? Good. If the higher-priced company uses "Green Products" and sounds professional, chances are you will get your moneys worth hiring that company. However, if the company does not focus on "Green Products" and uses chemicals, and is higher-priced than a "Green" company, chances are you are being over-priced.
Another consideration is the quality of the products the company uses. Low-quality products cost the company less than higher-quality products, allowing the company to give relatively low prices. Where this may be appealing at first sight, low-quality products provide low-quality work. It may look nice upon completion, but won't last as long as high-quality products would provide. An example of the different end results will be in a following post discussing floors. Not that all low-prices equate low-quality, but most of the time it does. Higher prices usually equate high-quality products.
Conclusion:
To be sure the price you pay is a fair price, you must be cautious. Stay away from companies that do not offer estimates (in-person) or charge for estimates. Be sure that the company is reputable, especially if they use the square-footage or hourly method of pricing. Take into consideration whether or not the company use "Green Products". Ask questions, don't be afraid to be sure the company is a professional company.
If you are a business owner of a janitorial company, which pricing method do you use? How do you safeguard against over and under-pricing?
If you are a business owner/manager or home owner, which method do you prefer? Do you have any experiences you would like to share (please do NOT mention any company names)?
Any questions or comments, post in the comment section below. Please no profanity, no attacking other posters or any businesses/companies. Any derogatory or disrespectful posts will be deleted.
The price of anything is important. The business needs to price high enough to cover over-head yet be low enough to get the customer. The consumer wants a price they can afford. Everyone says "You get what you pay for", but how do you know the price is fair?
My intent is not to tell other companies how to price or what to charge nor do I intend on telling consumers how to choose a company to hire. This post is strictly meant to be informational based on my personal experiences.
Many companies use set prices. These prices are usually determined by square footage or an hourly rate. This method is seen by many to work primarily due to the fact it gives the consumer an immediate price. But is it a fair way to price the work? In some cases it may be, but not in all cases. I'll explain why in a minute.
Some companies that state set prices by square footage also state a disclaimer that final prices may vary upon an estimate. Where I feel this is a bit better way to price, it still has hidden flaws.
Many companies also use the price method mentioned above for deals. For example, they may say 3-bedroom deal for X-amount. This is a good way to run promotional sales, but at as a fixed-deal it still contains the hidden flaws of the square footage and hourly methods.
So what are the flaws?
Square Footage Method:
The square footage method is better, in my opinion, than the hourly method. However, there are flaws. Whether it's a office/home weekly clean, floor or carpet, or exterior, the same flaws exist. Both for the business and the consumer.
The business may get the raw end of the deal using this method for the simple reason it does not know how bad the situation is. The job may take longer than expected, in which case now the business is losing money. A price of a job needs to cover over-head (including payroll) and still provide a profit for the business owner to draw his/her salary. You're in business to make money, right?
Similarly, for the consumer there are flaws in this method. It's usually a good method for floor cleaning or carpet cleaning. However, if you're seeking a weekly cleaning you need to be careful. If this method is utilized by the company, in some cases it may be a fair price. In most cases you will end up paying more than the job requires.
I'm not suggesting each and every company who asks for the square-footage uses this method. Many companies use the square-footage as a factor in the price for certain jobs (such as floor or carpet cleaning).
Hourly Method:
This method is used more by maid services than janitorial services. Nonetheless, it is a method used and has major flaws.
Businesses who utilize this method run into similar problems as with the square footage method. Even though it's hourly, if the job is larger than expected you can still end up shorting yourself of over-head costs and your own salary.
Consumers need to be extra-cautious with companies who charge by the hour. The company promises they'll be in and out in X-hrs, and notifies you the initial clean is always the longest. May even say that as time goes on, less time will be needed due to routine. Many respectable companies may be sincere upon stating such and live by it. In which case, as time goes on you pay less for the same amount of work. However, there are companies and individuals out there that will take advantage of this. Do you really want to be stuck paying 5hrs for a job that has been taking only 2hrs?
I'm not suggesting every company out there that utilize these methods are looking to over-charge. The more respectable and honorable companies that use these methods to price account for the flaws. What I'm saying is to be careful. Nationwide companies or decades in existance locally does not always equate respectable or honorable either. Many national companies are franchises. This means that they share a name but have different owners. When hiring a franchise, look into the reputation of the local franchise you intend to hire, not the nationally known name. Same applies to local companies. Companies are bought and sold everyday. Ownership may be passed down from the founder to another in the company. Don't be afraid to ask questions and get to know the company as it exists today, not as it was 100yrs ago.
You now know the flaws. So how do you determine if the price given is a fair price?
Alot goes into cleaning professionally. Much more than regular home or office cleaning. If there wasn't you wouldn't need to hire professionals, right? When determining if a price is fair you must take into consideration what goes into a price.
So what does go into a price?
- How long the job will take
- What equipment and supplies are required
- Size of the crew
- Size of the area(s) to be worked
- Frequency (for weekly/monthly cleaning)
- What the area to be worked looks like (furniture need moving?, how much furniture is in the area?, etc)
- And additional parts that won't be listed as it differs depending on the service you're looking for.
Irregardless how a company prices, always see if the company does in-person estimates. Most companies that do offer estimates at no cost to you. If they do not offer in-person estimates or charge for the estimate, look for another company. It is extremely important that an estimate is performed.
An estimate allows companies to adjust their pricing accordingly. No two jobs are the same. Similar as they may appear, there are always differences. Through the estimate process, not only do you get to meet the company before hiring them, the company can give you an accurate price for the job you are seeking to have done. Not all companies use the same formula or base rate, so you may want to contact atleast three companies to find a price you can afford.
Answering what I said earlier about many people saying "You get what you pay for", in some cases that is true. You may run into a situation where a company gave a price a bit higher than two or more companies you looked into. The question now becomes "Why?".
Remember what goes into a price? Good. If the higher-priced company uses "Green Products" and sounds professional, chances are you will get your moneys worth hiring that company. However, if the company does not focus on "Green Products" and uses chemicals, and is higher-priced than a "Green" company, chances are you are being over-priced.
Another consideration is the quality of the products the company uses. Low-quality products cost the company less than higher-quality products, allowing the company to give relatively low prices. Where this may be appealing at first sight, low-quality products provide low-quality work. It may look nice upon completion, but won't last as long as high-quality products would provide. An example of the different end results will be in a following post discussing floors. Not that all low-prices equate low-quality, but most of the time it does. Higher prices usually equate high-quality products.
Conclusion:
To be sure the price you pay is a fair price, you must be cautious. Stay away from companies that do not offer estimates (in-person) or charge for estimates. Be sure that the company is reputable, especially if they use the square-footage or hourly method of pricing. Take into consideration whether or not the company use "Green Products". Ask questions, don't be afraid to be sure the company is a professional company.
If you are a business owner of a janitorial company, which pricing method do you use? How do you safeguard against over and under-pricing?
If you are a business owner/manager or home owner, which method do you prefer? Do you have any experiences you would like to share (please do NOT mention any company names)?
Any questions or comments, post in the comment section below. Please no profanity, no attacking other posters or any businesses/companies. Any derogatory or disrespectful posts will be deleted.