As our unemployment rate continues to hover around 10% and the uncertainty of our national and global economy is still in question, many companies are taking drastic measures to make a buck. Carpet and tile cleaning companies are certainly not immune to such practices. I recently found a local Southern California carpet cleaning company advertising that they will clean an eight room, two story house for just $65. Wow! I wave the white flag right now! I can't beat this price or even come close to it! (I'm an honest man and well, a spade is a spade). It would take me about 4-5 hours to clean a carpeted 2-story house with at least 8 areas (I'm talking cleaning it RIGHT, not some "splash & dash" job). That leaves me with a revenue of about $14/hr. Then I have my variable costs of cleaning products, fuel for my machine, fuel for my van to arrive on the scene. Then there are the fixed costs of my million dollar liability insurance policy, commercial vehicle insurance, business licenses, annual certification costs, advertising costs, equipment and vehicle upkeep and maintainacne costs. This doesn't leave much money left over for profit (if any at all) if I'm cleaning a two story house for just $65.
I can only come up with three theories/opinions with what's taking place with this equation. My initial theory was that the owner of this company was an idiot and didn't think this price through. I thought, "wow, he might as well pay the customers himself to clean their carpets." Then I read that he had over 25 years of experience. Unless he is a VERY slow learner, I'm sure he's well aware of his profit margins and the prices he's charging. That leaves me with only two theories of whats happening here. First of which, perhaps this is not the price he intends to charge. Perhaps he sparks their interest with a low ball offer, then when he arrives he will tell the client "looks like you have some stains on these carpets. We'll need some stronger pre-conditioner. That's gonna cost you $10/room extra." It's called "bait and swap" and it's wrong, unethical, and illegal. Remember, I'm just speculating here, not accusing. That leaves my final theory on the table. Perhaps his is charging just $65 to clean this two story house. In order to make a profit at this price, he will most likely have to work in volume and get the job done in much less than 4 hours. That means "rushing the job." Hurrying up to make your next appointment. This can be harmful to carpets. On every job I do, I can always account for a time I have to stop what I'm doing to go out to my truck and get a different product to clean some type of trouble spot or spend more time agitating a trouble spot. The fact is, I take the time to do it right and the carpet ends up looking much better as a result.
I think this is a good example that a good price is not a good value unless your dealing with a good product. Anyone can offer a good price. Not everyone can offer a good value. I strive to offer the good value. That may mean that my prices are slightly higher than my competitors but I'm not willing to sacrifice quality control for an advertised super cheap price. Again, I'm just speculating and this blog is just my opinion. Perhaps this company really is doing a good job at $65 for an eight room two story house. If you can tell me how the owner is supporting a family and paying a mortgage in Southern California on less than $10/hour, I would love to hear your thoughts.