How to Set Competitive Prices for Your Carpet Cleaning Business
Pricing your services is a precise business. On one hand, you want to maximise your profits, but on the other hand, you don't want to price out potential customers. The benefits of competitive pricing include increased sales, customer loyalty and brand awareness. Read on to find out how to get your prices just right.
Know your competition
Market research is crucial to competitive pricing. Take a look at other carpet cleaning businesses and what they charge for similar services:
- When you evaluate the pricing of other carpet cleaning businesses, consider how their quality, thoroughness and added extras compare to yours.
- Make sure you look at businesses that target a similar audience – there is likely to be a price difference between cleaners that specialise in city houses and those that deal with rural mansions.
- Take into account any discounts or promotions they have too.
It is not just about undercutting their prices to be the cheapest option. Sometimes, slightly higher pricing can indicate better quality or more expertise, while lower pricing can attract a wider audience.
Understand your own costs
Breaking down the running costs of your business is an important part of calculating your prices. There is no point setting your prices so low that you lose money, as you would go out of business quite quickly! Tally up how much you spend on fuel, wages, chemicals, and anything else you use.
Also, consider any investments you have made into your business – owning your own equipment means you don't have to pay for it every trip, but it is still a relevant cost.
Training courses in Business Management can help you understand the different costs involved. They’re often offered by banks or local chambers of commerce.
Choose your strategy
Race to the bottom
If you are working in a highly competitive area, you may want to match or beat your competitors’ prices. So long as your prices cover your costs, you may choose to sacrifice some profits in order to attract customers – which may make you more profits in the long run.
Premium pricing
However, if you have a unique selling point or specialist service, your pricing can reflect this. While this may put off some customers who are looking for a budget-friendly clean, you’ll typically make up for this with a higher profit margin per job.
Different tiers
Another option is to use a mixture of the two methods – essentially having two tiers of services.
A value tier may even contain some loss leaders (services that don't cover your costs) if you are certain that customers will purchase other services alongside it that have higher profits. Your premium tier can then contain added extras at a higher cost.
Always monitor the market
Remember to monitor the market – prices change all the time, so it is important to keep up with trends. You might find that you need to tweak your prices now and then as costs rise or demand increases.
Make sure the price is right with the NCCA
For expert advice on pricing and so much more, join the National Carpet Cleaning Association (NCCA). Our members gain access to courses, along with consulting and mediation services. Through networking events, you can also meet other carpet cleaners and form business relationships. Become an NCCA member today and start reaping the rewards.
