Latest / Cleaning Business Life / CBL Episode #74 - Stop Undercharging for Luxury Homes: Master Pricing Strategies for Your Cleaning Business

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CBL Episode #74 - Stop Undercharging for Luxury Homes: Master Pricing Strategies for Your Cleaning Business · Cleaning Business Life

• 1:01
  Speaker 1: Hey, hello everyone.
• 1:03
  Speaker 1: This is Shannon Miller with Cleaning Business Life.
• 1:05
  Speaker 1: I am flying solo today.
• 1:07
  Speaker 1: Miss Kimberly Gonzalez is still out in puppy land.
• 1:12
  Speaker 1: For those of you who don't know, kimberly's dog had babies, and it wasn't one, two or three babies, it was 14 babies.
• 1:20
  Speaker 1: So it was like two or three babies, it was 14 babies.
• 1:26
  Speaker 1: So it was like who's they call it Octomom right, she had eight babies all at once.
• 1:29
  Speaker 1: So it was very overwhelming for all parties involved and hopefully Kim will be back at the end of the month, but for now you're just stuck with me.
• 1:36
  Speaker 1: And today I want to talk about the 3,000 square foot home.
• 1:42
  Speaker 1: I'm having the conversation with a lot of you who are cleaning 3,000 square foot homes for $1.50.
• 1:49
  Speaker 1: And when I say $1.50, I'm not talking about $1.50.
• 1:52
  Speaker 1: I'm talking about $1.50.
• 1:55
  Speaker 1: $1.50 is $150.
• 1:57
  Speaker 1: And it really isn't your problem that the client decided to purchase a large home.
• 2:03
  Speaker 1: It really isn't your problem that the clients are housed for and that's code for overextended.
• 2:09
  Speaker 1: It really isn't your problem that they don't value us as a trade.
• 2:13
  Speaker 1: There are 3,000 square foot homes that will pay, I know because I have them for the price, the current market value price.
• 2:20
  Speaker 1: So there's a different dynamic and mentality there and it's a different dynamic and clients.
• 2:26
  Speaker 1: When I first got into this game I was like, oh, I just want the large houses, I just want the large houses, I just want the large houses.
• 2:33
  Speaker 1: I figured the large houses have more money to pay for my services than someone with a smaller home.
• 2:40
  Speaker 1: In actuality, they don't have any money to pay because they are they are always house poor.
• 2:44
  Speaker 1: They've overextended themselves and they have no desire to give you a leg up so that you can be their neighbor, right?
• 2:52
  Speaker 1: So make sure that you understand that dynamic.
• 2:58
  Speaker 1: Usually the 3,000 plus homes I am finding are in gated communities or HOA communities.
• 3:05
  Speaker 1: Typically, if it's a solo cleaner and she doesn't know what she's doing, we'll call her Maria after my cousin.
• 3:12
  Speaker 1: They typically will share Maria in the neighborhood but they will never refer Maria.
• 3:18
  Speaker 1: Maria will never get any extra business because they don't want to give Maria too much business because then she won't have time to actually clean for them, right?
• 3:26
  Speaker 1: So they'll never refer her because they want to make sure that there always is room on Maria's schedule to keep them clean and they'll always try to renegotiate the lower price.
• 3:39
  Speaker 1: So they'll always say something offhanded like so-and-so bid it for 90 bucks.
• 3:46
  Speaker 1: I'm at the point now.
• 3:47
  Speaker 1: In my very beginning days I never said anything to that, I just politely ignored it.
• 3:51
  Speaker 1: I now say show me the bid when you ask for the proof in the pudding, and they cannot produce the proof in the pudding, they're lying to you and they're just doing it to see if you'll give them a lesser price.
• 4:03
  Speaker 1: Don't give them a lesser price.
• 4:04
  Speaker 1: The cleaning is the price.
• 4:06
  Speaker 1: Right, the price is the price is the price.
• 4:08
  Speaker 1: They tend to have the same characteristics and this is a certain style client that I want you to try to avoid.
• 4:18
  Speaker 1: I'm not here to pick on anybody, but I've noticed that there are some similar tendencies with this type of client.
• 4:26
  Speaker 1: They're eager to hear what you have to say.
• 4:27
  Speaker 1: Until you give them the price, they will always insist on the in-person bid because, god forbid, you don't know what you're talking about.
• 4:38
  Speaker 1: And remember the days of the old car salesmen.
• 4:40
  Speaker 1: Some of you guys are not old enough to remember the days of hard sales.
• 4:45
  Speaker 1: If you wanted to learn how to sell, you could go onto any car light and watch yourself being fed to a bunch of wolves.
• 4:52
  Speaker 1: It was awful.
• 4:53
  Speaker 1: I am not a fan of the hardcore sales tastic for cars and they're crazy expensive.
• 5:00
  Speaker 1: You use cars for like 50 grand, so it's a whole dynamic.
• 5:05
  Speaker 1: Now People who have the 3000 square foot home and who are getting it cleaned for a buck 50 will always say they've never been able to find anyone who knows how to clean.
• 5:16
  Speaker 1: That is code, for I'm exceptionally difficult and I'm very picky and I'm never happy.
• 5:22
  Speaker 1: So make sure you understand that.
• 5:24
  Speaker 1: And then there will always be a renegotiation process to add in extra things.
• 5:30
  Speaker 1: I'll say let's not penny pinch this, but they're penny pinching your price because they only want to pay $1.50.
• 5:35
  Speaker 1: So make sure that you are charging for those add-on charges.
• 5:40
  Speaker 1: And what I'm talking about add-on charges are some of them are baseboards, some of them are changing the sheets.
• 5:45
  Speaker 1: Some of them are doing the laundry.
• 5:47
  Speaker 1: Some of them are wall washing, pantry organization, patio cleaning the patio.
• 5:53
  Speaker 1: In the fall, some of us out here in the South have a pretty mild fall until about November, if not December, depending on when we get that first snow.
• 6:03
  Speaker 1: It's beautiful outside.
• 6:05
  Speaker 1: Lots of people want to spend time.
• 6:06
  Speaker 1: The mosquitoes have died.
• 6:07
  Speaker 1: It's just a nice time to spend on your patio.
• 6:10
  Speaker 1: So make sure that you understand what your regular pricing is and your a la carte pricing and then these types of customers will always have sticker shock when they get the current real price.
• 6:24
  Speaker 1: And you just have to have a poker face when you say you know I'm a legitimate business and there are business costs that I have to incur.
• 6:31
  Speaker 1: Right To have a legitimate business, there's payroll, payroll taxes, there's workman's comp, general liability, there's Internet, there's security if you need it, there's parking, depending on your location, there's advertisement, there's marketing, there's training.
• 6:45
  Speaker 1: I mean there's a lot of money that goes out to have a legitimate cleaning business.
• 6:49
  Speaker 1: And then we always try to school you into compliance.
• 6:53
  Speaker 1: And what I mean by that is I and I hear this a lot and I still hear it every once in a while.
• 6:58
  Speaker 1: I was a nurse and I never made that per hour.
• 7:00
  Speaker 1: That's not my problem.
• 7:02
  Speaker 1: I mean that in the nicest manner.
• 7:04
  Speaker 1: But it's not my problem that you only have made this much money so far.
• 7:09
  Speaker 1: My problem is making enough money for me to make profit and to carry on my legacy that I am creating.
• 7:16
  Speaker 1: The whole point of doing all the crazy things in the cleaning business is something that you can gift to your family and I will preach this off my box or something to sell on a later date.
• 7:27
  Speaker 1: That is the whole point of creating this dynamic.
• 7:29
  Speaker 1: Most people don't want to do it forever.
• 7:30
  Speaker 1: I'm one of those cleaning nerds.
• 7:32
  Speaker 1: I like this stuff, so maybe I'll be in it forever, maybe I won't, maybe I'll sell my empire, but I certainly want to make money while I'm doing it.
• 7:40
  Speaker 1: So then people will just try to say you know, you should be ashamed of yourself for charging, that there's no shame in getting paid your worth.
• 7:50
  Speaker 1: It's just business practice.
• 7:53
  Speaker 1: And we are still kind of as an ick factor because we're women and we're people pleasers, most of us.
• 7:58
  Speaker 1: So we're like uncomfortable with the negotiation process, especially if you come from another country where negotiation is the process.
• 8:05
  Speaker 1: So it just depends on your background and your and your.
• 8:09
  Speaker 1: You know where you are socially and all that other stuff.
• 8:12
  Speaker 1: And then, sadly, this year alone, the day of this broadcast you know we're in 2024, august is I legitimately have had this conversation with at least 100 cleaning business owners this year and it's the pain for the privilege of cleaning their home.
• 8:29
  Speaker 1: So you took them on their legacy client.
• 8:41
  Speaker 1: A legacy client is someone that you took on in the beginning, who's kind of stuck it with you as you've grown and changed.
• 8:44
  Speaker 1: And now you want to take the big leap and you've realized that I'm getting $90 off of this 3000 square foot home.
• 8:46
  Speaker 1: That takes the cleaner four and a half hours of pay.
• 8:48
  Speaker 1: I'm paying.
• 8:49
  Speaker 1: I'm anteing up 50 bucks to the pot every time my cleaner goes there.
• 8:53
  Speaker 1: Or if you send in two cleaners, you just bleed out money everywhere time my cleaner goes there.
• 8:57
  Speaker 1: Or if you send in two cleaners, you just bleed out money everywhere and so it actually costs you 175 bucks just in labor and everything else just to clean the house, depending on if you have one or two.
• 9:09
  Speaker 1: So you're paying for the privilege of cleaning someone's home.
• 9:11
  Speaker 1: Why would you do that?
• 9:11
  Speaker 1: If you want to give out a charity clean, by all means do it.
• 9:12
  Speaker 1: I do a lot of things with elderly and people who are in treatment for cancer.
• 9:18
  Speaker 1: You can go that route, but it has to be your choice.
• 9:20
  Speaker 1: It shouldn't be that you owe me and you're going to do this for me and you know those cleaning business owners.
• 9:26
  Speaker 1: Snaps to you guys for growing and scaling and hiring and adjusting, but your legacy clients will never be at current market value.
• 9:34
  Speaker 1: It's just the way it works.
• 9:35
  Speaker 1: They'll always be under, but they still deserve to have regular price increases.
• 9:39
  Speaker 1: So if you give an annual price increase which I highly recommend that you do at the end of the year at least one time a year in our paperwork sites, we reserve the right to raise prices at any given time.
• 9:50
  Speaker 1: You will be given 30 days notice.
• 9:52
  Speaker 1: Blah, blah, blah, because things go up in price.
• 9:57
  Speaker 1: We've watched crazy things go up in price I mean groceries is just outrageous right now.
• 10:02
  Speaker 1: And you have the right to raise rates.
• 10:04
  Speaker 1: You're not tied in anything.
• 10:05
  Speaker 1: They refuse to sign a contract with you.
• 10:06
  Speaker 1: Why wouldn't you raise your rates?
• 10:07
  Speaker 1: So raise everybody's rates.
• 10:11
  Speaker 1: I talk all about this in the Price Increase Bootcamp.
• 10:13
  Speaker 1: I talk about it in the Price and Blueprint Masterclass.
• 10:15
  Speaker 1: I talk about it all the time.
• 10:17
  Speaker 1: But you're not going to make any money cleaning someone's home.
• 10:21
  Speaker 1: It will never be scalable if you're paying for the privilege of cleaning their home.
• 10:27
  Speaker 1: You should be able to make more than your hourly wage if you're charging by the hour, and I highly suggest that you learn at some point not to charge by the hour, to learn how to charge at a flat rate price.
• 10:38
  Speaker 1: Hence the reason for the pricing blueprint masterclass.
• 10:41
  Speaker 1: It shows you all of the finagling and the sales that have to happen to get it.
• 10:46
  Speaker 1: Yes, it's easier to charge by the hour.
• 10:48
  Speaker 1: There's very little negotiation.
• 10:50
  Speaker 1: The control is entirely given to the client.
• 10:53
  Speaker 1: It's never given to you and you're going to have to work like 80 or 90 hours a week to make a hundred grand.
• 10:58
  Speaker 1: Not worth it.
• 10:59
  Speaker 1: So make sure you understand the dynamics of that.
• 11:03
  Speaker 1: So make sure that you also, when you're giving price increases, your legacy clients get it as well.
• 11:08
  Speaker 1: So instead of getting a $15 bump or a $25 bump, maybe they only get a five or a $10 bump, and eventually what will happen is they'll just fall off your schedule because they can't afford it anymore, and everyone's like that's mean and cruel.
• 11:20
  Speaker 1: I'm like this is business.
• 11:21
  Speaker 1: If we were giving charity, then it would be up to us to decide, not for them to decide if they're going to hang on or not.
• 11:28
  Speaker 1: Everything has gone up in price, so your costs have gone up.
• 11:33
  Speaker 1: You need to retain that profit margin that you've held onto.
• 11:37
  Speaker 1: If you don't maintain the profit margin, you'll bankrupt yourself and you'll be out of business before you know it.
• 11:42
  Speaker 1: And so stop giving low pricing, especially for 3,000 square feet, and you're conditioning the client to expect that everyone is going to clean a 3,000 square foot home for 150 bucks, expect that everyone is going to clean a 3,000 square foot home for $150.
• 12:01
  Speaker 1: And it really is.
• 12:01
  Speaker 1: If you have a legitimate business expensive to run Like, for example, I spent $24,000 in Google advertisement last year alone I can't afford to clean a 3,000 square foot home for $150.
• 12:13
  Speaker 1: That would be a hard no for Shannon.
• 12:19
  Speaker 1: And then realize too that thanks to number 45, we are actually considered essential and I was so excited when that was announced and I felt like I had been validated on so many levels and the dynamics of cleaning has changed.
• 12:31
  Speaker 1: For a long time, cleaning was considered a luxury add-on item to help you maintain your home.
• 12:36
  Speaker 1: It is now considered essential for mental health, for emotional health, for prosperity.
• 12:42
  Speaker 1: There's a lot of things that go on with having a clean and tidy home that affects you personally.
• 12:50
  Speaker 1: It affects your family, your home environment, your sanity, and so cleaning is essential now.
• 12:58
  Speaker 1: Having a clean and organized home affects your mental health.
• 13:01
  Speaker 1: I love when I come back after the cleaners have been here and everything is just put back Not that I didn't tidy it before, but they straighten it up and make it look pretty.
• 13:09
  Speaker 1: Having a clean home gives you space to gather your thoughts and focus on what you want to do next.
• 13:15
  Speaker 1: You can't focus on what to do next if you have all of this chaos all over the house.
• 13:19
  Speaker 1: Like where did the laundry fairy go?
• 13:22
  Speaker 1: Right, she never shows up at my house.
• 13:24
  Speaker 1: Always.
• 13:25
  Speaker 1: There's always laundry.
• 13:26
  Speaker 1: I'm like where the hell is this person?
• 13:28
  Speaker 1: So it just gives you space to really relish your home.
• 13:33
  Speaker 1: Your home is an investment, but it's your environment that affects your prosperity, your emotional, your mental well-health.
• 13:39
  Speaker 1: Having a clean home affects your energy in your space and, most importantly, having a clean and organized home makes you a prosperity magnet.
• 13:48
  Speaker 1: Yes, I just said that, and what I mean by that?
• 13:51
  Speaker 1: When you have a clean and organized feng shui home, you're loosening up the energy fields in your home.
• 13:57
  Speaker 1: I don't want to go too deep with this to help bring in more abundance.
• 14:02
  Speaker 1: You can't bring in more abundance if you have too much scrap in your house.
• 14:06
  Speaker 1: There, I said it.
• 14:07
  Speaker 1: If you have a very spacious space and not a lot of stuff, prosperity comes to you faster because it doesn't have to flow over all these other things.
• 14:17
  Speaker 1: Because it doesn't have to flow over all these other things.
• 14:20
  Speaker 1: I think I believe that I have got all of that.
• 14:24
  Speaker 1: So, yes, if you have any questions over pricing, I highly recommend that you take the price increase bootcamp.
• 14:30
  Speaker 1: There's a template in there.
• 14:32
  Speaker 1: If you want to give it out by hand, if you're still doing the old school method, the old school low tech method, you could give it digitally.
• 14:39
  Speaker 1: When you get your clients used to having a price increase at least annually, you just shoot out an email.
• 14:44
  Speaker 1: If you're not gathering emails, I'm concerned because you're missing marketing opportunities.
• 14:49
  Speaker 1: We can talk about that in another video.
• 14:52
  Speaker 1: But those are some of the key elements to help get you going Right.
• 14:57
  Speaker 1: After the price increase bootcamp, I would consider taking the pricing blueprint masterclass.
• 15:02
  Speaker 1: I legitimately have kept the price low.
• 15:05
  Speaker 1: I've lowered it from over $100 down to $999.
• 15:09
  Speaker 1: And then after that, I highly recommend the cleaning contract bundle.
• 15:14
  Speaker 1: It has eight key contracts that you need to help with compliance right.
• 15:20
  Speaker 1: So there is, you know, canceling at the last minute.
• 15:24
  Speaker 1: We've all had that right.
• 15:25
  Speaker 1: I can't make it today.
• 15:26
  Speaker 1: Blah, blah, blah.
• 15:26
  Speaker 1: And, yes, things happen, life happens.
• 15:29
  Speaker 1: But your cleaning tech still deserve to be paid and when you have a lot of cancellations, you're not pulling any income in.
• 15:33
  Speaker 1: They don't care, right.
• 15:34
  Speaker 1: So, having a contract and then your legacy clients will never sign that contract, but they will always have the information, so you can still hold them to it.
• 15:43
  Speaker 1: You just won't be able to legally hold them to it.
• 15:45
  Speaker 1: I hope that makes sense.
• 15:46
  Speaker 1: Anyhow, um, I look forward to your questions.
• 15:50
  Speaker 1: If you have any reach out, you guys take care.