Throughout this course, we have put a big focus on profitability. After all, your efforts will be wasted if you are not getting a good return from your marketing investments and not making enough to pay yourself and your staff well.
A key element to running a profitable business is pricing. Often an afterthought to most business owners, pricing is actually considered among marketers as a crucial element to selling a product or service.
The reason for this is that the price of a product or service sends a message to your customer about who your business is and what your values are.
What is Premium Pricing Strategy?
A Premium Pricing Strategy is when you choose a higher than average price for your service in order to signify to your customers that your service is a premium offering.
In this lesson, we’ll look at how Premium Pricing Strategies work for cleaning businesses. This strategy is not the right move for everyone. Consider how the following steps would work for your business before deciding to implement premium pricing.
How to Implement a Premium Pricing Strategy in your Cleaning Business
1. Differentiate your Business
Refer to the competitor research we completed at the start of the course to identify what would make your service appear premium in comparison to your competitors.
There are lots of ways a cleaning business can demonstrate they are a premium service. Here are some of them:
- DBS checked
- Accredited by trade bodies, such as the NCCA
- Which? Approved
- 5* reviews
Customers will see these on your website or in your ads as a sign that you are trustworthy and worth of your higher prices.
2. Educate your Customers
Explaining your value to customers is going to be key in justifying your price point. Not every prospect that calls you will have read your website thoroughly, or have spoken to enough competitors to be able to compare your service.
Some may push back when you quote your price. It is key, then, to educate them as to why your service costs what it does, as we covered in the Sales module of the course.
3. Evidence your Value
Once the customer has selected you as a premium service, you need to prove that you are when servicing them. This is where you need to go the extra mile. Most premium services (in any industry) do this by providing what is called ‘physical evidence’ in the marketing world. Physical evidence is anything tangible that goes alongside a service.
As an example, let’s look beyond cleaning and at airlines. Ryanair, a budget airline, requires that you pay extra for lunch, you have to print your own boarding pass and you can not bring a case on board. British Airways, a premium service, offers free lunch, gives you a printed card boarding pass and allows you to take your case on board.
It might seem obvious, but all these little extras are how British Airways are justifying their prices to customers.
Let’s bring this back to cleaning. There are several ways you can evidence your premium service to your customer. These include:
- Being punctual and well presented – you are the physical evidence too!
- Wearing disposable shoe covers to show you are protecting their floors
- Offering a free, branded spot cleaner
- Arriving in a van and uniform with your logo printed on
- Offering a free audit of their house to recommend additional services that might be needed.
Is a Premium Pricing Strategy right for me?
It’s not appropriate for every cleaning business to present itself as a premium service. Here are some key considerations before deciding to use a Premium Pricing Strategy:
- Cost – do you have the resources to spend on getting your van sign wrapped, uniforms or other costs associated with your branding?
- Competition – are your USPs strong enough to compete with low-cost competitors? Are you confident selling yourself and your value? Is it viable if there are only low-cost competitors in your area?
- Sales volume – Are there enough customers in the top tier of your local area to meet your targets?
Carefully consider what the right pricing strategy is for your business, then get out there and start getting that diary booked up!