Am I too high on residential

[RChris57 14]

Hey,

I am south of Atlanta. We maintain several pharmacy type stores as far as pressure washing, and have so for almost 3 years. Have decided to dabble in residential. Gave our first quote, using 1.00 linear foot as price. We were told we were too high.

Did a second house estimate, using .75 linear foot, and have not heard back on this estimate, so I guess we did not get it either.

Are we pricing too high for this area?

Thanks!

[Doug Dahlke 114]

I am in your area and charge slightly higher. Do us both a favor and do not drop your pricing. You are not going to get every job you bid. There are already too many "I'll wash any house up to 2500 square feet for $125 guys around."

[Doug Dahlke 114]

Please don't take my previous post the wrong way. Your pricing at the higher level is good. Do good work and build a good customer base and you can get more. People who underprice their service are already out of business, they just don't know it yet. You will find work at $1.00 per linear foot per story.

[PressurePros 248]

a) to a consumer.. your price is always too high

b) you have to work on closing your sales calls. You can't just leave an estimate in the door and hope for the best. At the very least, follow up.

That simple drop of 25% could cost you your business (ie bankruptcy). Wanna know a secret many are starting to realize? Raise your price and you will be more in demand. If I could make a suggestion.. Use the search function on this forum and/or run through the entire marketing section. Residential is a different beast than commercial. You have to have a bit more business savy to keep it growing. Its not about price with consumers, trust me though a hundred guys will tell you otherwise. One in five people buy based on price. That leaves 80% of the market willing to pay for quality and a good experience. That's what you are selling.. not pressure washing.

[Jarrod 22]

Hey,

I am south of Atlanta. We maintain several pharmacy type stores as far as pressure washing, and have so for almost 3 years. Have decided to dabble in residential. Gave our first quote, using 1.00 linear foot as price. We were told we were too high.

Did a second house estimate, using .75 linear foot, and have not heard back on this estimate, so I guess we did not get it either.

Are we pricing too high for this area?

Thanks!

You are about to make the same toxic mistake that many in the pw biz make all the time. It's not you, it's them. Who is "them?" "Them" are the cheap people you should not be marketing to.

Whatever you do, don't drop your prices b/c 2 "thems" wont hire you. Learn how to market your biz better.

Hint - demagraphics

[MMI Enterprises 289]

1 in 5..really Ken?..I'd a sworn it was closer to 2-3..

Hey maybe it some places it be 2-3 in 5 and someplaces 1 or less in 5..haha

Rchirs, don't lower price, that is bare bones already and them potential clients tellin ya otherwise are cheapskates that perhaps know no better. Just got to get more bids out and forget them loosers.

[Lightning Gene 66]

I am in your area and charge slightly higher. Do us both a favor and do not drop your pricing. You are not going to get every job you bid. There are already too many "I'll wash any house up to 2500 square feet for $125 guys around."

Funny you said the lowballers would wash any house for $125......Just did a bid on a 2600 sq ft house one guy quoted (on the phone) $125....told the home owner she could buy the guys beer and take her chances or hire me at $300 and get the job done right......I start tomorrow.....

[Apple Roof Cleaning 202]

a) to a consumer.. your price is always too high

b) you have to work on closing your sales calls. You can't just leave an estimate in the door and hope for the best. At the very least, follow up.

That simple drop of 25% could cost you your business (ie bankruptcy). Wanna know a secret many are starting to realize? Raise your price and you will be more in demand. If I could make a suggestion.. Use the search function on this forum and/or run through the entire marketing section. Residential is a different beast than commercial. You have to have a bit more business savy to keep it growing. Its not about price with consumers, trust me though a hundred guys will tell you otherwise. One in five people buy based on price. That leaves 80% of the market willing to pay for quality and a good experience. That's what you are selling.. not pressure washing.

My friend has a high end stereo store.

He sells stuff that is expensive and NEVER discounted.

I have been with him on deliverys of 25,000 stereo systems.

I have seen many not even hooked up by the customers request !

Imagine, spending 25,000 on a stereo system that was not even hooked up ?

The reason some people bought these super expensive systems is to announce to their friends "I have arrived"

Many people use us BECAUSE we are "expensive".

It has become a status thing in several high end communities that "We use Apple"

They want their neighbors to know they can "afford me" too.

People living in million dollar homes seldom want the cheapest thing.

If they did, they would not drive BMW and live in Million dollar homes.

RAISE your prices, be BOLD.

I tell shoppers I am MORE Expensive right off the bat, then I SHOW them why.

[JohnW 14]

Hey,

I am south of Atlanta. We maintain several pharmacy type stores as far as pressure washing, and have so for almost 3 years. Have decided to dabble in residential. Gave our first quote, using 1.00 linear foot as price. We were told we were too high.

Did a second house estimate, using .75 linear foot, and have not heard back on this estimate, so I guess we did not get it either.

Are we pricing too high for this area?

Thanks!

RChris57,

I agree with Doug, I'm near you as well, don't drop your prices. This area can handle the prices that you are charging, people are cheap sometimes. Those aren't the customers you want anyways. If you drop your prices, you may think it's a one time thing, but what happens when the neighbor(s) wants a quote? Now you have to go and give the same cheap price you just gave to the original home. Go and read some of Ken's backposts on how to sell on quality and not price, he's got some really good articles. Also, Chris is right, not everyone is looking for the cheapest deal, although it sometimes feels like it. Stand firm on your pricing.

[plainpainter 217]

Once you drop your pricing - then you are working for 'them', and trust me, it sucks being in the trenches. You will never have any money left over if you meet their requirements - it takes alot of overhead to run a pressure washing business well. Once you start working for 'them' you'll notice that you start putting off that 'brake' job on the truck - because cash is low. You'll start noticing you run 'negative' balances and get a $25 charge. Lots of things start going wrong - and then it starts draining you mentally and physically. You may cancel that health policy that start thinking is highway robbery - or that stupid yellow pages ad that is only getting you 15k a year in business. Don't lower your pricing - keep your pricing high - it also has the lovely effect whereby the hacks get all the 'cheapies' and they end up putting themselves out of business.

[PressurePros 248]

1 in 5..really Ken?..I'd a sworn it was closer to 2-3..

Hey maybe it some places it be 2-3 in 5 and someplaces 1 or less in 5..haha

Rchirs, don't lower price, that is bare bones already and them potential clients tellin ya otherwise are cheapskates that perhaps know no better. Just got to get more bids out and forget them loosers.

Was based on a university business study of national statistics. Its out there somewhere. Forget where I read it. To those that will not learn to sell or market (no disrespect intended) it would seem like a fabicated number. Kevin perhaps you are in the area that it is one in five.. Statistically, that is unlikely but I don't want to doubt you as I am 3500 miles away. Post your zip so I can run a demographic on your surrounding areas.

[Proclean 14]

I'll thow in my .02 since you are in Atlanta. I'll also agree with what has already been said.

"Are we pricing too high for this area?" No. you are pricing to low. Forget about linear feet, stories or etc.

The company has to make money everyday. What is your customer base? 100k condos or multi million dollar homes.

It is your job to educate the customer what you are going to do and what materials you are going to use.

I could post many examples of this, but the customer is so confused about pricing and not understanding the work to be performed other than "pressure wash the house." I've been hired and home owners have told me that they wouldn't let the other contractor sweep the driveway. "If you are looking for the cheapest price, then I am not the contractor for you."

I'll also throw in a very powerful sales/marketing tool.

Always include in your quote "100% satisfaction quaranteed"

Those words alone will seperate you from your $125's.

Read the board. Ken has posted a lot of info on this subject.

In my market, I wouldn't touch a house for less than $325. I'm running a business, not extra money on the weekends.

[Yolanda 64]

Hey,

I am south of Atlanta. We maintain several pharmacy type stores as far as pressure washing, and have so for almost 3 years. Have decided to dabble in residential. Gave our first quote, using 1.00 linear foot as price. We were told we were too high.

Did a second house estimate, using .75 linear foot, and have not heard back on this estimate, so I guess we did not get it either.

Are we pricing too high for this area?

Thanks!

RChris57

I also agree with what has been said. We will not be happy with washing a house, stripping and staining a deck, cleaning flatwork or cleaning a roof that we resent because we allowed customers to set our prices—our worth. Now that’s what you call “hardwork”. Fair pricing, 100% satisfaction guaranteed, and outstanding work should seal the deal. If not, hit the road. Remember, what one won’t do another one will. Keep the faith.

Yolanda

[weaselcossey 14]

I bid on a house today, for a guy that some of family knows/knows of. Anyway, I know for a fact.he's well off. The peak of the gable ends on his house were 32 feet from ther ground, and he only wanted 12-14 from the ground cleaned (to pinch pennies). I told him I would do the whole thing, and priced him at $330. You should have seen the guy, studdering and just shocked apparently. I explaIned to him that if he really waNted a clean house, that was the price. If not, i'm not the guy. We talked for a while, then he started second guessing himself, mumbling about how it really needed done and such. I don't know if he'll call back, but he's in a nice subdivision with all types f requirements on color schemes, square footage, etc. Did he reaLly think I would do my first job there, and only wash the bottm half? I'm sure that would draw all kinds of attention. I'm just getting started, but i've learned from another trade that bidding low to get the job only digs an early grave (for your business, and considering the stress later on, probably yourself too)

[Doug Dahlke 114]

As a point of reference this is a house I did earlier this year. Price was nearly $400 for just the house. I did the driveway and front walkway also. The back and sides were pretty straightforward. The three sides were vinyl. I did have to break out a ladder to hit everything on the front.

I also reclaimed when I did the driveway.

[MMI Enterprises 289]

Ken, run these..

95864, 95608, or95630

..don't run 95673 unless ya want to realize the location of El Rushbaugh's affections on his radio show. :)

The zip just under 95838 would likely be one of the worst in country if not for part of it being newer homes.http://www.norcalhomes.com/Zip_Map_Sac.pdf

[Doug Dahlke 114]

One other thing. While I was doing the house pictured I was asked by two other homeowners for quotes. One of them used me and another homeowner asked for a quote on that day and went with me. That was three out of four houses quoted in that neighborhood using the same pricing structure. I also did a house in the same sub last year. Thats four out of five quoted in that subdivision. Some people won't pay for your service, many will.

[Beth n Rod 1,279]

Don't be on the defensive where your costs are concerned. If a customer tells you that someone else gave them a lower price, my next question would be to them "Why did you call us here for?" The tactic many homeowners use is the "unverifiable claim" that you can give validity to and believe it or strip line and take away your services in the form of a statement "Then I guess you have already made your decision". Customers are pretty smart in learning how to play contractors in some ways and mostly it is focused on price.

You must focus on the quality of your work, the features and benefits vs the cons of it being done incorrectly, but do not try to put down the other guy. You have no idea of the conversation that may have transpired if one did at all.

Rod!~

[MMI Enterprises 289]

I like that Rod where it just becomes a conversation like "well geez sir what is it about them that made you keep looking for other options".. Bound to at some point cause a clash to the relationship though if they were BSing.. I wouldn't care though as I can't stand working for lowlife liars like that. What I seeing alot of currently is just a lack of call returning after prices are discussed. Honestly some ya can likely sell such jobs but I feel they just bound to be a problem to work for. Guess I in wrong line of work if I don't like educating customer on prices they consider high to be high.... customer never likes to be wrong on what they firmly believe.

Doug that looks like alot of work for $400. How long did ya say it took counting the walks?

[Doug Dahlke 114]

Doug that looks like alot of work for $400. How long did ya say it took counting the walks?

Just the house was about $400. With the driveway and sidewalk it was closer to $550. I was there around 5 hours including set up.

[PressurePros 248]

Ken, run these..

95864, 95608, or95630

..don't run 95673 unless ya want to realize the location of El Rushbaugh's affections on his radio show. :)

The zip just under 95838 would likely be one of the worst in country if not for part of it being newer homes.http://www.norcalhomes.com/Zip_Map_Sac.pdf

Kevin, I ran the zip range 95630-95864 using the following criteria:

Income: $100,000-$250,000 (discludes poor and rich)

Age: 35-60 (lowers chance of DIY'ers and people on fixed income)

Household status: Homeowners, single family dwellings, owned home at least 3 years, home was built after 1975, one contact per dwelling

Omit: Rural areas, post office boxes

This is a prime list. I came back with just over 20,000 mailing addresses.

Let's say you get five exposures per household including postcards, newspaper ads, lawn signs, letters, magnets, and door hangers. That might cost you $27,000.

Your overall response on the campaign is 2%. (it would be higher)

That means you will get 400 calls. If you are a mediocre salesman and you price a little high (average job $600.. half $400 house washes, half $800 decks) you will close 185 jobs. Trust me, people are not cheaper in your area, you are just targeting the wrong audience.

185 jobs * $600 = $111,000

Your advertising expense represents 24% of your gross sales. Not a great number but okay for a first year of true target marketing.

Now Kevin I made that list very tight. Income you could probably drop to $75 K. Maybe include newer homeowners. You may also elect to systematically spread your geographic coverage rate.

If you have your sh** together, you will follow up and stay in constant contact with your customer d-base, in 2009 your budget for advertising will either stay the same (for fast growth) or drop as you feed from referrals and repeat bsiness. Your gross dollars will rise. As you know of course, that means your marketing/advertising budget falls (when expressed as a percentage of gross)

I could enter your market and be doing $250K in three years. Its very systematic and very predictable. To make the marketing nut affordable you break down your campaigns into smaller geographic chunks. The nicest part is that the growth is exponential. You can jump from $250K to $500K in a couple of years. Any questions or comments are welcome.

[MMI Enterprises 289]

Geez thanx fer runnin that Ken!..now can I get the list? :) ..thought ya were just gonna tell me the ratio of price shoppers to quality shoppers for those zips.

When it comes down to it all those 400 calls I could expect would have to be spread out over a season due to my capacity to service only so many which is problem when people want it now rather than later. Yes we too sorta have a season here due to weather, vacationing, and holidays. Hardware/garden stores are packed with people right now on weekends where as a few week back people were hibernating.

Far as the figuring goes I see the constant of 2% response as likely...if presented when they buying that is. Surely the expected response changes in off season compared to busy season. You'de be better able to answer than I the question of whether it all ends up comeing out in the wash at 2-3% in considering delayed responses a season later or the reocurring jobs.

Ratios of what services they want may be off but in a good way. Much prefure deck or concrete coating work at higher average for instance.

[Don M. 14]

Kevin, I ran the zip range 95630-95864 using the following criteria:

Income: $100,000-$250,000 (discludes poor and rich)

Age: 35-60 (lowers chance of DIY'ers and people on fixed income)

Household status: Homeowners, single family dwellings, owned home at least 3 years, home was built after 1975, one contact per dwelling

Omit: Rural areas, post office boxes

This is a prime list. I came back with just over 20,000 mailing addresses.

Let's say you get five exposures per household including postcards, newspaper ads, lawn signs, letters, magnets, and door hangers. That might cost you $27,000.

Your overall response on the campaign is 2%. (it would be higher)

That means you will get 400 calls. If you are a mediocre salesman and you price a little high (average job $600.. half $400 house washes, half $800 decks) you will close 185 jobs. Trust me, people are not cheaper in your area, you are just targeting the wrong audience.

185 jobs * $600 = $111,000

Your advertising expense represents 24% of your gross sales. Not a great number but okay for a first year of true target marketing.

Now Kevin I made that list very tight. Income you could probably drop to $75 K. Maybe include newer homeowners. You may also elect to systematically spread your geographic coverage rate.

If you have your sh** together, you will follow up and stay in constant contact with your customer d-base, in 2009 your budget for advertising will either stay the same (for fast growth) or drop as you feed from referrals and repeat bsiness. Your gross dollars will rise. As you know of course, that means your marketing/advertising budget falls (when expressed as a percentage of gross)

I could enter your market and be doing $250K in three years. Its very systematic and very predictable. To make the marketing nut affordable you break down your campaigns into smaller geographic chunks. The nicest part is that the growth is exponential. You can jump from $250K to $500K in a couple of years. Any questions or comments are welcome.

Ken, I might be missing something here...

Your saying 5 time exposure rate to a list of 20,000. So that is 100,000 pieces total. Correct?

I am assuming you based your 2% number off of 100,000. If that is correct then wouldnt it be 200 calls instead of 400 calls?

[PressurePros 248]

Don, the 2% is from the 20,000 name mailing list total (400). That's why I said the overall return would be higher.

Two percent of 100,000 would be 2000.

Kevin, I ran that through infousa.com. Use the same criteria I listed.

[Don M. 14]

Don, the 2% is from the 20,000 name mailing list total (400). That's why I said the overall return would be higher.

Two percent of 100,000 would be 2000.

Kevin, I ran that through infousa.com. Use the same criteria I listed.

I knew I wasnt doing something right.

[MMI Enterprises 289]

If we look at the 'optional/voter information' section we can see obvious error. They either forgot to attach the results of ticking 'liberal' onto the 'democrat' selection or the 'shopping habits' section...

Ken, I only show 159 liberal dem leads...lol :)