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Introduction
Coming up next on the Filthy Rich Cleaners podcast: “Oh, how much that would bother me anytime you are resentful about a price that you agreed to with the client, honey, that’s your fault.”
From your first dollar to your first million, welcome to the Filthy Rich Cleaners podcast presented by ZenMaid. Join your host, Stephanie Pipkin, founder of Serene Clean, as she shares proven tips, tricks, and hard-earned lessons. Whether you’re just starting out or ready to scale, get ready to discover how to build your own cleaning empire. Let’s roll up our sleeves and dive in.
Table of contents
- Introduction
- Standing Your Ground in Business
- The Second Cleaning Discount Policy
- Recent Client Negotiation Example
- Professional Response to Price Challenges
- Understanding Value and Pricing
- The Importance of Professional Pricing
- Setting Appropriate Rates
- Understanding Opportunity Cost
- Recent Commercial Contract Success
- Contract Terms and Non-Solicitation
- The Cost of Training
- Standing Firm on Business Policies
- The COVID-Era Manufacturing Account
- The Perils of Expanding Too Far
- The High Cost of Saying Yes
- Learning from Mistakes
- Final Thoughts on Standing Your Ground
Standing Your Ground in Business
Stephanie: Hello my friends, welcome or welcome back to the Filthy Rich Cleaners podcast. I’m your host Stephanie Pipkin, owner of Serene Clean, and in today’s solo episode, I want to talk about standing your ground as business owners. And I want to talk about this because in the past 24 hours, or maybe 48 I don’t even know, we’ve had a couple instances of clients trying to press the boundaries and push us to do things in the business that we are not comfortable doing and we do not want to do.
The Second Cleaning Discount Policy
Stephanie: For us, our ongoing offer is that your second cleaning is going to be 50% off as long as it is done within one month of the first cleaning. That is our long-term “no brainer” offer. If you go to Serene Clean’s website, you’ll see it plastered all over the place. We don’t do sales or anything like that. This is what we have going on all the time.
And the reason we don’t like to discount the first one – it’s too expensive. And then you’re gonna get people who just want one off cheap free cleans or cheap first time cleans. The reason we do it the second time, and the reason it has that one month stipulation of a timeline is we want to reward them for the habit of house cleaning, because we want them to make it a habit and get used to it. Because by the time you’ve had two cleanings and your house is like up to snuff, now you’re really more inclined to continue on and get booked at a regular pace.
Recent Client Negotiation Example
Stephanie: So this man had gotten his second cleaning, and he had emailed the office and said something along the lines of, “I have been happy thus far with your services. However, if my calculations are correct, my maintenance cleans will be around $250 a month, and the value isn’t there for me. What I would like to propose is that you give me 30% off of my cleanings, and I will guarantee you nine months of business.”
And the answer, sir, if you are listening, is F No. I don’t want to say the F word because I don’t know if you’ve got little ears around you guys, but typically I would say the F word and then no. We don’t do that. And for him to think that that would be an enticing offer for nine months of cleaning, what I wanted to respond and say was, “Well, sir, that 30% would be all of the profit from your cleaning and then some. So would you go to work for free for nine months, for a guaranteed that you get to go to work for nine months? I bet you wouldn’t.”
Professional Response to Price Challenges
Stephanie: Katie, the sweet angel that she is, handled this beautifully, and she responded back and said, “I’m so happy to hear that you are satisfied with the cleaning. Is there anything else that you can tell us? We’d love to hear how if you’re not feeling that it is a value. Our prices reflect the level of service that we provide.”
Additionally, she handled this very well. Since we charge hourly instead of flat rate, we can offer limited hour cleans, where they can just buy a certain number of hours and we work off of a priority list so that they are on a budget. So she said, “If you’d like to stick to a certain budget, we can book a certain number of hours and work off of the priority list. Typically that means kitchens and bathrooms, but you can make that decision of what is going to work for you.”
Understanding Value and Pricing
Stephanie: He got all huffy and said it’s not a money issue. And it’s like, if it wasn’t a money issue, then why are you saying this? Because clearly it is, clearly it’s about the number, and obviously you think we’re too expensive. In the same day we got two emails of people giving glowing remarks and specifically calling out how much of a value it is.
What people think is affordable or of good value is so wildly not consistent because it is based on that person’s interpretation of things. That man saying that it’s not value to him, I don’t give a shit, honestly, if it’s a value to him, because it is a value to the majority of people, or they wouldn’t work with us. If they reach out to us and they agree and they keep working with us, clearly they think it’s a good value because they won’t be paying it. So the market dictates that.
The Importance of Professional Pricing
Stephanie: One person saying it’s not value to him – you shouldn’t care. That’s what we didn’t care. Do you go into a restaurant and order the best steak and say that was a great steak, but I want to pay less next time I come in, can I get this at 30% off? No, you freaking wouldn’t do that.
If you are a professional cleaner, meaning you have expenses, especially if you have cleaners and you have to pay them, that skyrockets your expenses. You got insurance, you got workers comp, you got all of your supplies and tools, and at the end of the day, you need to make money.
People get their panties in a wad about cleaning company owners making money, or really small business owners in general, making money. It’s psychotic. Why would we leave the stability of a normal workplace where we don’t have to deal with employees, we don’t have to deal with everything being on our shoulders, and then we also don’t make money ever?
Setting Appropriate Rates
Stephanie: At least minimum, I would be shooting for $45 an hour. And that’s not necessarily even if it doesn’t mean you’re charging hourly, but that’s what the market dictates right now. That is across our country what you can get for that at least. We’re higher than that in rural Wisconsin. Yes, that has a lot to do with branding and marketing.
How are you gonna pay a cleaner and pay all the taxes and pay all the insurance and deal with all of the liability and marketing and all of this stuff and softwares and all of the expenses? How are you going to pay for all of that if you have no money left over after you pay the staff member?
Understanding Opportunity Cost
Stephanie: Opportunity cost is if you have a cleaning time slot, say you have four hours of cleaning available. If you give that to one client and book them, that means you can’t give that same time slot to another client. So if we were to cave and give that guy his guaranteed slot for the next nine months for a 30% off discount, the opportunity cost is that I cannot book that same time slot with a higher paying client.
Recent Commercial Contract Success
Stephanie: So between the three accounts we recently bid, that would equal over $8,000 in recurring monthly revenue. This account that I’m about to talk about is the middle one in size. It’s a five day a week account, about two hours a night, and it was going to be about two grand a month in revenue.
They said yes pretty much immediately, which was great. We were on this high of being invincible, getting all of these commercial accounts. In the past week, there’s been a lot of back and forth on the contract, and that’s really unusual for us.
Contract Terms and Non-Solicitation
Stephanie: We have a very standard contract that our commercial accounts sign. They can cancel at any time, just like we can cancel on them at any time. We don’t have any year-long contracts. If somebody wants to leave because you’re doing a bad job or it’s a bad relationship, you should be able to walk away without penalty, as long as you give proper notice.
The only thing they changed was our non-solicitation clause. In our commercial and residential contracts, we have a non-solicitation clause which means that the client cannot go to our cleaner and try to basically take them from us. If they do that and it actually happens, we can’t stop our cleaner from quitting, but the client would have never had access to that cleaner if not for us.
For us, ours says that if you do that, you will pay Serene Clean a $1,500 training fee, because we’re the ones who invested in this employee and trained them how to clean. Have we ever in six years actually had to do that? Nope, but it’s in there for a reason, to protect our business.
The Cost of Training
Stephanie: It costs thousands of dollars to train a new staff member, both from their hourly wage and the trainer’s wage. Additionally, the administrative labor of setting that person up – my HR manager Crystal does a lot of work getting a new staff member from start to finish. It’s a ton of administrative legwork that costs money too.
Their contract came back with a $500 solicitation fee. That’s pretty suspicious. Why would you adjust the amount if you had no intentions of trying to solicit our employee? When we asked them to change it back to $1,500, they said their management team wouldn’t agree to it at all and claimed they didn’t want our employees, just wanted us to clean.
Standing Firm on Business Policies
Stephanie: As management, we would never work with a client that won’t sign that because what would the benefit be? We are increasing risk on a non-ideal client because of time of day. The money’s great, but from a scheduling perspective, it was kind of a relief thinking we wouldn’t have to accommodate their schedule.
This is also the client who wanted net 30 terms when we always do net 15 for commercial. We had already conceded for this client so we could get that two grand a month to do something we’re not necessarily comfortable with. We’d already made one exception to Serene Clean’s rules – we weren’t about to make two and increase our risk with no reward.
The COVID-Era Manufacturing Account
Stephanie: Let’s go back to COVID time. Picture this – it’s 2020, we’re getting hit left and right from commercial accounts asking us to do more disinfecting services. We had a regular client, a manufacturing facility – to this day, they are one of my longest commercial accounts. They’re a big pipe bending facility, and we’ve had a great relationship for almost six years.
This facility has sister facilities in other towns – one about 45 minutes away in one direction, the other an hour and a half away. Both called and said, “We heard you did Black River Falls disinfecting. Will you please come do this? We’re freaking out. It’s COVID. It would make our employees feel so much better, and we will pay you a lot of money.”
The Perils of Expanding Too Far
Stephanie: I went and did the disinfecting on a Sunday with my fertilizer sprayer. Both facilities then wanted us to do their regular janitorial services. The one 45 minutes away was pushing our service range comfort zone, but we started cleaning there right away. It was another five-day-a-week account, very difficult to staff, and we don’t clean there anymore because it was so hard to staff.
The one that was an hour and a half away in Veroca – that’s very far one way, especially during winter storms in Wisconsin. We’re talking about hours of travel time. They kept begging us to bid it. I said no initially because it made no sense – it’s so far away and I knew it would be difficult to staff. But they kept pleading, and I gave in.
The High Cost of Saying Yes
Stephanie: You want to know how much money it was a month? It was $5,000 a month. That’s a lot of money, especially during the very uncertain times of COVID. So I was even more prone to bend my rules about service range when I knew it would be difficult to staff.
We added travel charges into their bid, but finding staff in that small area was extremely challenging. We got a guy in there who turned out to be a nightmare – he wouldn’t listen, was obsessed with using vinegar when the client specifically said not to, and constantly called in. Every time he called in, myself or my managers would have to drive an hour and a half one way to clean it last minute.
Learning from Mistakes
Stephanie: After all the expenses of paying this guy, the administrative headache, doing all the fill-ins, and the stress, that five grand was not worth it. I sent the email and canceled services on them – that was the biggest account I’ve ever dropped. The headache was not worth the four months of revenue, that $20,000, because we had to lose them anyway and had upset them.
Now all of those people, which is in our service range for residential, saw us disappoint. What is the social impact of that from a branding perspective, as well as the failure of it all? I think about that no less than once a week – don’t do that, don’t do things you know you shouldn’t be doing just because all you can see is the dollar signs.
Final Thoughts on Standing Your Ground
Stephanie: You need to do what you know is right for your business, for your finances, for your situation. You have to listen to your gut and remember that you’re in charge here. You don’t have to do anything you don’t want to do. So don’t let other people convince you otherwise.
This is stuff that’s still happening every single week in Serene Clean. That’s the beautiful thing of me still being in my business – it allows me to share these lessons and helps me reflect and grow and maintain who I want to be as a business owner.
Please hit that Subscribe, hit that Like, let me know what you think in the comments. This has been so fun starting this podcast and creating our little community. Hit us up in the ZenMaid Facebook Mastermind – you don’t have to be a ZenMaid customer to be in there. You can join and we can connect there as well.
If you enjoyed this episode of The Filthy Rich Cleaners podcast, please be sure to leave us a five star review so we can reach more cleaners like you. Until next time, keep your work clean and your business filthy rich.
Note: This transcript has been edited for clarity and readability.
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