How I dealt with “low ball” competition who were always cheaper

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by Tom Watson on August 13, 2017

Someone wrote in recently asking me how I dealt with my local competition who specialized in CHEAP PRICES.

I get asked that question quite a bit, in fact I probably get asked that every week or so. I know it can seem frustrating to lose out on some deals.

The reality is it can be tough to compete with some of the other cleaning companies who seem to clean for practically nothing. But unless YOU ARE ONE OF THEM, you really have nothing to worry about. The fact is THEY ARE NOT YOUR COMPETITION and those hire them ARE NOT YOUR CUSTOMERS!

The bottom line is this… you ONLY WANT customers who VALUE YOUR SERVICE and are willing to pay you a fair price for a job WELL DONE. You DO NOT WANT customers who are just “price shopping”. It’s really that simple.

The fact is you CAN NOT make money at those bottom of the barrel prices those low ballers are quoting. Those folks ARE NOT RUNNING A COMPANY, they are just living “hand to mouth” on a day-to-day basis.

And beside, even if you join them in cutting your prices, they will JUST GO LOWER. You’ll still lose! So my answer to dealing with low ballers is always the same… FORGET about the low ball competition and the customers they get. You don’t want them! There is NO MONEY THERE!

You only want jobs that have MEAT ON THE BONE. These type jobs allow you to have staff, maintain an office, advertise regularly PLUS provide you with money that is left over (PROFIT). So just focus on pricing your jobs “for profit”, and not for your low ball competition.

{ 8 comments… read them below or add one }

1 James August 13, 2017 at 11:28 am

This is true in every service type business. There will always be those that have absolutely nothing to offer except “lowest prices in town”. Newsflash, ANY idiot can be the cheapest. Those that hire them are the worst customers who always complain and pay slow. Why? Because they know they are paying for garbage work and that’s what they are expecting. They are made for each other. Have respectable pricing and people who are respectable will hire us. With minimal headaches

2 Howie August 13, 2017 at 11:35 am

Part 2:
We hit a homerun.
Combined with the value statement, we provide each client with a detailed proposal explaining the entire scope of work and attaching an “Acceptance” with terms, conditions, length of contract, etc.

Last Thursday, we had an excellent experience, when we went to measure a retail store carpet in dire need of cleaning. The store manager asked me the price which I reluctantly gave him. (I prefer a detailed proposal.) The manager called the owner with the price. Owner said he’d hire us on the spot if we could lower the price, stating,”another company was less expensive who I hired for next week.” I said yes, I can lower the price by $75 if we dont extract the 15 pieces of gum fom the carpet. I can also reduce $50 and not extract grease stains. He said he’d give us the job at the original “high price” on the spot if we agreed to clean a small storage area of appx 40 square feet. Our price includuded (vacuuming, grooming, 3M Scotchgarding and drying). The additional 40 square feet took us about 10 minutes of work, but the customer felt like he ‘won’. We take a smilar approach with our ofice cleaning clients. (We may offer to squeegee wash the exterior front entrance and side windows at no cost, or deep clean their break room which we would have to do anyway).

Lowering my price = Devaluing my quality of work and service.
It takes practice and discipline to overcome “your price is too high” objection.

3 Tom Watson August 13, 2017 at 11:47 am

Thanks James! You are SPOT ON. Anybody can offer low price!

4 Tom Watson August 13, 2017 at 11:48 am

Awesome Howie! Thanks for sharing! Incredible advice to follow!

5 Martha Ivery August 13, 2017 at 8:20 pm

Amen to that statement, thank you so much. A lot of people in my area of redneck country, are looking for something, for nothing. I had a woman call me last week and complain her housekeeper was charging her 25% more. She wanted someone cheaper.
I told her I’m not unterested. Keep your housekeeper. Work something out with her. I don’t want a client who will drop me like a hot potato, because she wants a cheaper price.
I’ve cleaned residential homes and commercial businesses for 25 plus years. I have excellent references from people and companies who know I am worth the extra 25%.
When times are slow, know that something worth your wait, is always the best.

6 Tom Watson August 13, 2017 at 8:23 pm

THANKS Martha!

7 Joy October 5, 2017 at 7:36 pm

Very well said, I couldn’t agree with you more. This advice gives me a spirit to continue what I love to do because I know that’s even there’s a lot of cheapskates that wants to bargain, there are still people looking for a quality of work that I’m able to offer. Thanks so much Tom I will print this advice and read it everyday for motivation

8 Tom Watson October 12, 2017 at 12:40 pm

THANKS Joy!

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