Don’t get stuck selling only your lowest-profit services; here are three ways to make more money without gaining any new clients.
There are three simple ways to increase your revenue without adding any additional clients: upselling, cross selling, and bundling your services. Other industries have done this for years, and we can learn a lot from them. Most burger places would barely break even if all they sold is hamburgers. Burgers normally carry a gross margin of only 40 – 50%. It turns out all of the profit is made in the add-ons with fries having margins closer to 70%; soft drink margins are as high as 95%.
Cleaning is not so different with most cleaning services only generating a 40 – 50% gross margin on their services. However, if we could learn how to use these three strategies, we could be far more successful. We have a great deal of expense tied up in just getting to the client’s location. All of that overhead of time, fuel, insurance, and vehicle wear and tear has to be covered in the cost of your base service. So if you can increase the revenue from a visit, you will generate much more profit than if you sold the same dollar amount to an additional client.
1. Up Selling
Going back to my example of a hamburger chain, up selling is when the person working the register tells you the large soda is only $0.25 cents more and you get 50% more soda. We can use the same strategy when it comes to cleaning services. This works best when you have multiple levels of services you can offer, like American Maid in Olympia, WA does. By offering 3-star, 4-star, and 5-star levels of service, they have made it very easy to explain to a client that for just a little bit more they can have the surfaces wet washed every time instead of just dry dusted. Experience has shown that the vast majority of clients will select the middle tier of service. Yet most cleaning services only offer a single maintenance cleaning package, allowing no opportunities to upsell on a regular basis.
2. Cross Selling
“Would you like fries with that?” is the class example of a burger chain using cross selling, offering you an additional good or service that compliments what you have already ordered. Some examples in residential cleaning of cross selling would be to offer window cleaning, carpet cleaning, cleaning out the garage, sweeping off the porch and patios, disinfecting the children’s toys, and other nearly limitless options. For example, some residential cleaning companies that use dry vapor steam machines get paid $15 to steam a mattress, a process that only takes 10 minutes, and $100 to steam clean the grout lines in a shower, generating over $100 an hour in revenue.
Cross selling is also a great chance to get your staff involved. Your cleaners should be empowered and trained to offer your clients easy add-on services when they see a need.
The value meal at your local burger chain is the classic example of bundling. Now that you understand how profitable these add-on services can be, you can put together a bundle for your clients offering a discount against the list price, but still bringing in way above average margins. If a new client calls in looking for a cleaning service because they just had a baby, it is a great time to tell them about your “safe baby bundle” where you package your maintenance cleaning with your toy disinfection service on every visit. Another client who is moving into a new home may need your Spring Cleaning service, but you could also offer them a bundle that includes other deep cleaning services such as steam cleaning the grout on every floor and cleaning out the garage as well.
My brother who owns My Maid Service Dallas has created a bundle he calls the Elite Cleaning Program. Those that sign up for this program pay a little bit more on every cleaning but every 6 months they automatically get a full Spring Cleaning. Clients love the idea of breaking up those big expensive cleanings into smaller payments, and Shawn has been able to get as high as 40% of his clients on this program.
Not only has this generated more revenue for his company, it has also increased client retention because it has reduced complaints from those things that really only need to be done a few times a year. Get creative, and you will discover you can come up with several bundles that are easy for you and your staff to implement and sell.
Learning how to use these three strategies is a guaranteed way to generate more revenue and a better margin for your company, all without having to add a single client more. I do not know about you, but I really like the idea of taking home more money without the frustration and work of adding any additional clients to my schedule.
Derek Christian is the owner of My Maid Service with locations in Cincinnati, OH and Dallas, TX, as well as a business coach through Cleaning Business Builders and publisher of CleaningBusinessToday.com. Derek is now an investor in several cleaning companies including My Maid Service Dayton and Real World Services Columbus.