Service businesses can significantly increase their average ticket size by implementing a three-tier pricing structure (Package A, B, and C) with strategic discounts (20%, 10%, and 5-0% respectively), where Package A offers the complete service with everything included, Package B represents the recommended middle option that most clients (50-60%) will choose, and Package C contains only the bare necessities; businesses should always quote all applicable services to every client and can safely raise prices by 15-20% if their close rate exceeds 60%, as this represents the easiest way to increase revenue without additional work.
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How We Took Our Average Pressure Cleaning Ticket From $600 to $1,800 (Easier Than You Think)Added:
You probably have some room to be raising prices.
>> [music] [music] [music] >> Yes, I'm the problems guy. I just talk about all the problems. Last week we were surviving. It was like I mean this Don't get me started on this week yet, but uh you might not want to get me doing this with the water thing.
Yeah, we were we were surviving last week. It was like cancellations left and right. It was it was probably the most amount of cancellations we had in a week. But we made it. This week we have to do crazy in sales. Justin already clean closed a clean club today, which is crazy. It's not even 10:00 today. 255 a month clean club with an initial of 2,500 bucks.
Bro.
Can't get better than that.
>> Are you ready or what?
>> Always quote everything. People will buy more. One thing that we implemented here recently, I shouldn't say recently, a few months ago, is our good, better, and best pricing structure for one-time services. Let me show you on the whiteboard. The uh the magical names of these packages are package A, B, and C, okay? So, the way that I present this to the client is when I first get to the home, I ask them what they're looking to get done, and then I tell them I'm going to quote everything for you. And then I'm going to break it up into three separate packages. The first one is going to be literally everything we offer that you're applicable for.
Just so you know what it'd be like if you wanted to do a top-to-bottom refresh on the house. About 5% of your clients will fall here. Usually the larger homes or the homes that people just moved into, they want to kind of get the other people's grime out of it and then reset it for their family. So, that's kind of where those those players fall. Package B is what I would do if I wasn't going to do everything. This is where a lot of your clients are going to fall. I would like to say about 50 to 60% okay? The reason for that being it's because I'm the expert in these people's eyes and this is what I suggest so they're going to take my advice cuz we have great branding and they trust us as individuals even before we get to the door. Uh and in package C, the way that I present it, it's the bare necessities I believe that you need to get done while we're out here. Okay? Um so, package A you have everything.
Do not get confused don't get scared, okay? When you show up to their house, I don't care if they just got a roof put on 2 hours ago. You quote it, okay? Cuz you might not realize that they want it because they saw a little small spot on the back and they want to get it cleaned up. You never know what's going on in the client's head so you always quote everything every single time. If you kind of feel uncomfortable about quoting because they specifically said that they wouldn't they don't want it done, you could just kind of say that we have to quote while we're out here just so we have those numbers on file but we won't even go over it. This is the chef's special, okay? This is what I think everybody's going to like. Usually I make this package our fastest services and it obviously have honesty in it and I tell them what I truly think is dirty and should be cleaned. Um but then I add on a couple more things that I think that they could definitely use that's efficient on our end. So, that's kind of what that typically consists of. Your package C, why did you say bare bones you might be asking? I don't know how to spell necessities. So, >> [laughter] >> this is like the the bare bones I think that you should get done while we're out here. Like if you don't get this done while I'm out here, I don't think you should get anything done. That's package C, okay? These [snorts] all have their respective percentage discounts, okay?
So, for package A, we have this at a fixed 20% discount.
For package B, 10% and then package C varies anywhere from 5 to 0% because if really you're just kind of giving them one service for their bare bones package, you can't discount it cuz there's no Why would you discount one service? You're not bundling anything. 5 2 0% discount. Just because we have these numbers doesn't mean that you have This is just what we found that works for us.
Test it out. See which one works best for you in your area.
>> [music] >> I thought I messed this thing up.
>> [music] >> You want some Advil?
Put it down my pants.
Just had a little bit of a situation here with this ladder.
>> [music] >> It's supposed to sit in between these tiles here, these little shingles, but no. So, this should just slip and almost just fall off the roof. Another scenario, I feel like death is out to get me, dog. Yeah, and even right now, this is not sturdy here. So, if I stand on here, I'm a little bit scared. I might just get down and come back to it later.
Cuz I'm soft.
I'm actually old and I'm not trying to break any bones. Maybe I'll leave this one for Rob. You see that from down there? You see this ladder?
Those those These are supposed to land in the middle and they're not. Over there they did, so I was able to do that one perfectly, but I got an idea. You know what my idea is?
Well, let somebody else do that one. How about that idea?
Good?
>> [music] >> No? Not a good idea? All right, camera guy, can you catch this or not? All right.
>> [music] [music] [music] >> All right. So, here's what I think. If you're closing more than 60% of your estimates, it's very, very, very likely that you're probably undercharging and that you can squeeze more in terms of pricing. And when you consider raising your prices, I promise you you're going to hit a few limiting beliefs. Wow, this camera is heavy. You're going to think that you are overpriced already or that like you're one of the higher priced companies. I promise you you're likely not. Actually get some pricing from like five different companies and see where you land because odds are you're not the highest price. And then secondly like you're going to think that it's going to ruin your business and that you will stop closing deals. It's just not true.
So what I would recommend doing is raise your prices. It's it's not irreversible.
You can easily go back to your old pricing. So raise it by 15 20% and see what happens and don't change anything after a day or two. Wait two weeks if you can. Obviously if you're not closing anything then change it back. Uh but wait as long as you can to actually get like good data on how it affected your close rates and then go from there because honestly the amount of money that we've left on the table by just not charging enough is unreal.
>> How much revenue do you have on your schedule today and how much did you used to have?
>> On my schedule today in total I have about $1,300 worth of revenue. But back then we used to do one-man jobs. They would average around $600 worth of revenue and now we're averaging about $1,800 for a one-man job. Back then that would be considered a two-man job. So yeah, we're making bank.
Anything else?
Anything else, buddy?
>> And honestly like the reason why I stress this so much is this is like the easiest way to make more money. It's the easiest way. It's literally free money because you already have to do the job.
If you just charged more that's like straight to your bottom line. Well actually not straight to your bottom line because you do if you do performance pay you pay like a portion of revenue but you get the point, right?
Pretty close to it. So it's basically money that doesn't require more work or energy. And then also like your technicians essentially get a raise immediately because if they're on performance pay and you find a way to raise prices in a healthy way, everyone in the company is going to appreciate it. We suggest raising prices for about 2 weeks before you touch anything or about 20 estimates. And then see how it goes. See what's changed, if anything's changed. Because even if your close rate goes down a [music] bit, I would say that you have yourself a healthier business with better margins.
>> Uh you guys don't don't forget to like and subscribe.
Um post notifications, you know what I mean?
>> Uh-huh.
Okay. Well, I'll make sure to make sure to let them know.
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