It’s really important that pricing your service is carefully thought through,
it says how you, as the business owner, value your own service.
If you price your service high, you will be perceived as a luxury cleaning service. If you price too low, you are probably not valuing your own service, so why should your customers?
Pricing may be the most important marketing decision you make. It is easy to get pricing wrong and getting pricing wrong may be a mistake that keeps on giving.
Pricing your grill cleaning service inconsistently with your business model (how you want someone to view your business) creates confusion. Confused buyers NEVER buy. Selling a premium service with ultra-low pricing is inconsistent, confusing and doesn’t work. Developing an effective pricing strategy that works in your particular area and to your target market can be tricky at first but with work, can be dialed in so you are making a profit and your customers feel they are getting a good value.
Tip #1 - As business owners, we fall in the bad habit of pricing our services based on what we would be willing to pay. We are not our customers! Don't fall into the trap of pricing your grill cleaning services because of what you "think" someone would be willing to pay or you yourself would be willing to pay.
It is not uncommon for a new business owner to interject their personal opinion or feeling into their pricing structure. In order to be successful a new business owner cannot base their pricing on opinions like “I would never pay this much to get my grill cleaned” or “Some grills cost as much as I’m charging” or whatever other excuse you can come up with.
It’s important to remember you are not trying to sell your service to everyone, just to the customers who are willing to pay for your service. These customers will pay for your service based on the value they perceive they will get by paying your fee.
To develop your pricing, you will need to decide what profit you want to achieve (How much $$ do you want to bring home at the end of the day/month/year). Why do you want to start a grill cleaning business? To build a family legacy? To work for yourself? To do something you love?
You can’t do any of that if you are not making a profit.
If you are not making enough money to pay your bills, feed your family and have money at the end of the month for savings, why start a business at all? You might as well continue to work for someone else.
Also, if you think about it, by not making a profit you are actually doing your customers a disservice. How? You won’t have money to upgrade equipment, to pay good employees, you won’t be able to afford to come back to fix problems, etc.
I’ll get off my soap box now. I’ve just seen too many grill cleaners around the country charge way too little for their services over the years and wondered how they were making any money. Some are no longer in business and some have adjusted their pricing. It’s just a shame to see someone get into this business and get out simply because they didn’t price their service correctly.
Pricing isn’t just about making a profit and covering your operating expenses, it’s also about how you want to position yourself in the marketplace. Where do you want your brand to be in the grand scheme of things?
Perhaps you want to be the high-end grill cleaner to someone who’s at the low-end of the market, or vice-verse?
If you’re in an area where other grill cleaning companies are currently established, begin by researching what your they charge. Determine if your competitor is positioning themselves as a high end service provider or a low end service provider. Take a look at their online reviews to see what their customers are saying about the service they provide. Does it sound like a high end service? Or, low end? Does their website look professional? Do their before and after pics look amazing or not much better than the average homeowner could do?
If you’re not sure how to price your service in the beginning, researching what your competitors are doing can help you determine how to price your cleaning service. Does your competitor look and feel like a high end service provider so you price your service lower to attract new business? Or, do they feel like a low-end service provider and you want to set your prices higher?
Tip #2: What if you don’t have a competitor in your area? No problem! You can look on the web and see what other grill cleaners are charging in similar demographic areas. Say you live in South Dakota. You might want to compare cleaning prices with someone in Iowa or Missouri; it may not make sense to compare pricing from a cleaner in Los Angeles or NJ where the cost of living is much higher.
Every business has different service costs. Many small business owners fail to analyze their services’ total cost and thus fail to price them profitably. By analyzing the cost of each service, prices can be set to maximize profits and eliminate unprofitable services.
You don’t want to be asking yourself where all the money went at the end of month because you don’t understand what it truly costs you to clean a grill!
Components to account for when pricing are:
The real test to know if your pricing is right is if customers are buying. For example, if you’re selling only one out of 10 customers at your current price point than maybe that’s a sign you’re pricing is too high. Customers are “feeling” like the value of what they are getting in return doesn’t justify the cost of the service.
On the flip side, if you are selling like crazy and booked out a month than your pricing might be priced just right, but, you also could be priced too low if cleanings are taking you longer than you expected.
“But, I’m booked out a month! How can I be priced too low?”
For example:
You price a cleaning at $150 because you “feel” that is a high number for your area or, you are putting yourself you yourself wouldn’t spend more than that to hire someone to clean your grill for you. You go do the cleaning and it takes you 3hrs to clean. You just made $50 per hour. Does that cover your wage, gas, overhead etc?
What if you priced the cleaning at $300 because that is what it truly costs with your overhead and profit? It still takes you 3hrs to clean? You would now be making $100 per hour but you would know you are profitable.
“$100 per hour! There’s doctors and lawyers who don’t make that much per hour!”
I get it! $100 per hour “seems” like a lot per hour. Frankly, some business owners will struggle to price their service correctly because of they can’t justify in their mind that they can make $100 per hour on a grill cleaning – A GRILL CLEANING!
What you need to remember is – Yes, you are charging $100 per hour, BUT you are not making $100 per hour.
After running your numbers, you might realize out of that $300, you are only truly making $100 – roughly 70% of what you charge goes to paying employees, paying yourself, paying to keep your lights on, paying taxes, insurance, etc.
$100 is what you’re left with as profit. Now, if you want to look at the hourly rate, you only made $33 per hour. Maybe that makes you feel a little better about charging $100 per hour?
I don’t recommend this option but if you decide you want to adopt a low-end pricing strategy, remember that your profit margin per sale is going to be less so you’ll need to focus on reducing your costs and increasing the quantity of cleanings to make the same amount you would if you priced higher.
My personal preference is to charge a premium fee for your service based on the fact that you may be the only company who provides this service in your area.
As a rule, specialized services are sold at a higher price than comparable generic services.
A cabinet shop that specialize in high end custom trim and cabinetry for luxury homes and resorts will command top dollar for their product and services compared to a shop that provides trim and cabinets for a tract home builder.
A custom home builder who specializes in homes that sell for $1 mil will command top dollar compared to a semi-custom home builder.
You might be wondering how these examples relate to grill cleaning? Grill cleaning is like the custom home builder specializing in and only targeting high end customers who can pay for the service and are willing to pay for the service because they know and appreciate the value you are bringing them.
Fact is, your grill cleaning business is unique. Remember, most people will say they never knew this service existed. It’s not something just anyone can do or, is doing.
