Common Complaint: “Customers don’t want to pay top dollar for a good product”. My Answer: It’s not true and it never was!

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by Tom Watson on August 2, 2015

I get a lot of mail from people complaining that customers just don’t want to pay them what their service is worth. While I understand that position, I don’t agree with it.

The main reason I don’t agree is that I’ve had tons of high profit accounts in my career. And let me tell you, there is nothing special about me. I’m just a regular guy, not some cleaning business genius.

And I certainly don’t have some “secret” that none of my competitors knows about. So if I can find these accounts, and keep them for years, and there is nothing particularly special about me (other than I put in the time), then it must just be because they actually exist.

They exist in my part of the country and they exist in your part of the country. They are everywhere, and THERE ARE LOTS OF THEM. This post will share just a few of my experiences dealing with companies that CHARGE A TON, but are busier than you can imagine.

Now none of these examples are going to be other cleaning companies, but don’t let that be an excuse to not believe. People AND corporations PAY TOP DOLLAR IN ALL INDUSTRIES. The fact is people will always value something that’s “best in class”, no matter the industry.

Examples of companies that GET TOP DOLLAR

Pizzeria uno – This is a pizza place with locations all over the country. A “large” deep dish pizza runs about $22.00 and yet it SERVES ONLY THREE. The point here is “it’s not all that big”. The first time I ordered I was “briefly disappointed”. It was so small looking compared to what I was used to!

Competitors that charge MUCH LESS for MUCH MORE PIZZA sit empty while Pizzeria uno is packed regularly. This doesn’t make any sense on the surface, but once you’ve had a taste of their pie you will know why. It’s easily the best pizza I’ve ever tasted, and people pay top dollar to eat it. If I had to guess, they charge about 25% more for 25% LESS PIZZA.

Jon-Don – I know I mention this company a lot (and trust me, they DON’T PAY ME A DIME for doing so). The reason I sing their praises so often is NOT because they have the lowest price. In fact, they are rather expensive, especially for an industry that is very price sensitive (they sell janitorial and restoration supplies).

They have to compete against companies that REALLY LOW BALL PRICES. Yet Jon-Don thrives and has become a dominant player in the industry. How? Because nobody can beat their CUSTOMER SERVICE. You call them, you get a real person. Better yet, you get someone who ACTUALLY KNOWS THE PRODUCT THEY SELL.

I was told by an agent of theirs that they have a policy in place that allows any customer service rep to solve a problem on their own for up to $100.00. This means when you have a problem (let’s say you ordered a $99.00 item and they said it shipped and was delivered and yet you know you DIDN’T GET IT).

When this happens they don’t hide behind arcane company policies that only protect them or hand you off to department after department in an attempt to frustrate you into giving up. Instead they FIX IT ON THE SPOT. WOW! Now that is CUSTOMER SERVICE that focuses “on the customer”.

PJ Fitzpatrick – This is a regional home improvement company located in Delaware. Basically they install windows, roofs and many other items related to your home. Once again this is a company that I freely recommend to everyone despite the fact they are probably going to be the most expensive vendor for just about any service.

The story behind my allegiance is due to having them come out to price putting windows in our home. We needed 24 windows of various sizes and we wanted only Anderson Windows installed. So we called four companies to get a feel for who would be the best option. They were the most expensive by about $4,000.00 YET WE CHOOSE THEM.

Why? One reason was they had the most knowledgeable rep of the group explain everything, plus they could do the work the fastest (least amount of inconvenience for us) and the final reason (and most remarkable one) was the fact that after our small down payment, the final lump sum payment wasn’t due until we were COMPLETELY SATISFIED.

They believed in their product and installation so much that they made that guarantee. You simply don’t find that many companies that will stand behind their product THAT MUCH (none of the others did). So needless to say, we GLADLY PAID more for something we could have had for less. Yet another example of price NOT BEING the most important thing in the world.

The moral of this post is that there are many people who will pay one company more than they will pay another. The KEY to making that happen is HAVING A CLEAR REASON WHY THEY SHOULD. People are not just going to pay you more “because you want more”. They need to see VALUE (“what’s in it for them”). Once they see that, the rest is history.

{ 6 comments… read them below or add one }

1 Wayne garcia August 2, 2015 at 11:09 am

Excellent read as usual!
Most of my business here in Norway is end of tenancy clean ups when people move (what’s the name for that in USA?)
My prices are top end compared to others ( a lot of Immigrants here will do it cheaper using cheap products you by in a discount store with a cheap vacuum and mops!). People recommend me after as I use professional products and equipment, turn up with a polo shirt with my logo, have a website with company email and not a yahoo/gmail one. Turn up on time and sound like I know what I’m talking about!

The moral is play the part well, look well presentable, clean, clean equipment, smile, friendly small talk and do a good job! You will win customers

2 Tom Watson August 2, 2015 at 11:26 am

Hi Wayne! THANKS… and the term I always heard is “turnovers” for when people move out. And you NAILED IT at the end! If you look the part of a pro, people will pay you like one.

3 Lonzo August 2, 2015 at 11:46 am

I am fairly new to this industry. I bought your kit and it provided great insight. However I do have a couple of follow up questions. How much of a mark up would you charge a commercial client for providing can liners, toilet tissue and c folds? Is there a separate % for each one?

My first commercial contract is a dentist office. The owner is enjoying our service and wants us to provide some of their essential items.

4 Tom Watson August 2, 2015 at 12:20 pm

Hi Lonzo! Ok… that’s good, I’m happy my start-up guide is helping you out. To your questions… You have two options.

1 – There is no special percentage for one item versus another. Simply mark up the toilet paper, c-folds or whatever by maybe 15% or 20% (over what you pay) to cover the hassle of stocking and delivering it. You can make this whatever you want, you just can’t be outrageous about it. You have to fall into an acceptable range.

2 – This is what I did. I worked hard to get the lowest prices on each item, THEN I would look up what someone like Staples or WB Mason would charge (their retail prices you can find online or in a catalog). Then I would charge “just under that”. This way if people compared the prices I provided, I was both lower in price (and still inline with industry averages) PLUS I MAXIMIZED my profit margin.

5 Binda Kebohula August 2, 2015 at 12:57 pm

Yes Tom this is indeed a good suggestion regarding quality and price. However, for small start-up cleaning businesses it is a challenge since if you price high you are likely viewed as inexperienced and out of tune with industry practice. Small start-up cleaning operations are at the mercy of the well resourced experienced players indeed.

6 Tom Watson August 2, 2015 at 1:31 pm

Hi Binda! It doesn’t matter if you are new or not. When I started my business… I don’t think anyone asked me “how experienced are you?” Also… there is no need to “advertise the fact” you are new to the business. How could anyone know you “just started” the business (unless you are telling them).

I will defer to what Wayne said a few minutes ago in the comments above… “The moral is play the part well, look well presentable, clean, clean equipment, smile, friendly small talk and do a good job! You will win customers”. That sums up what you need to do.

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