Apples to Apples: The Price Wars
Written by Administrator

In the fight to locate high quality and reliable vendors, many businesses find themselves entrenched in a war: the war of price comparisons. The comparison consists of lump sums of service with no true direction of line items and no clear picture of what vendors have to offer for effective cost-savings solutions. A general rule of thumb for cleaning services is to charge based off the square footage of the facility. The larger the city, the higher the cost per square foot. This pricing stays standard. However, adding additional services such a facility amenities, facility maintenance or green cleaning services and increased workers or sourced cleaning supplies begins to obscure the standard pricing making the pricing comparison more tedious. As the difficulty in comparing prices grows, the room for error in evaluation of cost, services and quality grows as well.

Apples to Apples: The Price Wars

Problem. EBS was approached by a organization that had recently switched from one janitorial company to another in an attempt to reduce cost for services it felt were overpriced. However, the organization soon discovered that along with the reduced cleaning bill, there was a reduction in quality as well. They had transitioned from one pricing issue to another - moving from overpricing to underpricing. In an effort to win the bid, the new janitorial company had underpriced services and provided a lower quality of service.

Resolution. The happy medium between overpricing and underpricing without succumbing to the perils of pricing wars does exist. EBS looks to focus on finding this happy medium and delivering high quality in all aspects of service while maintaining a reasonable pricing structure with a clear and easy-to-understand system to pricing. EBS did a full site evaluation of the organization to understand the scope of needs involved with the organization. Through understanding their market, location type, the detail of cleaning needs and manpower needed to execute the highest quality service in the most efficient manner, and the regularity of service needs, EBS developed an itemized pricing of needs on a "good-better-best" scale. The offer to deliver service on the "good" level of the scale included a standard pricing of all foundational services typically served by competitor cleaning companies. The "better" level included on-demand solutions designed to provide instantaneous customer needs for a variety of services in a standardized pricing rate for each type of service needed. The "best" level included facility maintenance needs such as changing lights and after-construction clean-up. The organization was able to evaluate their needs and choose the service and prices best suited for their company.

*Note: The "good-better-best" scale solutions given in the case study were designed for this specific organization. These solutions differ for each organization based on their needs.

 

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Case Studies

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