Are you killing Angies List?

[TomKing]

Are you killing Angie's List?

We have had several companies enter the AL this last year.
They are running coupons and deals that are severely discounted.

I had a competitor call me Saturday. They are 2 young brothers with a good reputation that run one truck. They had a break down Thursday and then again Saturday. I feel the pain when you do not have a back up.

The guy calls me up and tells me he wants to pass on a client. He says "its a $300 job"

I started to ask some questions

How many rooms? 5 plus a hall and Stairs. " this is our Angie's list special $189"

I ask how do you get to $300? " 4 rooms upstairs hall stairs and one room in basement"

I ask so what gets you the other $111? " The rest of the basement"

I ask so how big is a room? "250sf"

I ask how big is the house? " We do not know"

I ask did you Google it? " we haven't gotten to that yet"

I did some quick math $189 by 7 areas = $27 per area.

250sf per room =$10.8 cents per square foot.

I looked out side it was snowing 2" on the ground and more coming.
Holiday traffic all over town.

I told him we could not do it. I felt bad because I always like to help out someone who is trying to do a good job. I had a tech out I could have called him and he could have done it.

I just could not bring myself to help someone who was killing a high end referral source with poor pricing.

I also did not think $300 dollars for a lot of cleaning was worth the risk to my employee and equipment in bad weather.

I will be calling my competitor to have a beverage and see how we might be able to help in the future. I never want to see some one hanging but when you do it to yourself I can't help you.

We have several companies here in the city posting these sort of deals.
Yet our number one company in the city sits at 1100 A reviews and we are at 525A reviews in second.
They are considered to be the highest priced in the city and we are right behind them. I just want to be Pepsi to Coke.

You do not have to give away the farm to get business.

 

[hogjowl]

Of course you don't! However, cleaners always have, always will, and it's something I have dealt with since the 80's when I first started. Sane cleaners have been advising against price point positioning forever. Nothing ever changes. Same song; different choir.

 

[knoxclean]

tom I am so fed up with Angies List. They are pushing us into these deals and it make me sick. They are straying farther away from their business model of helping Clients find good contractors. Instead all they care about is making more money from the contractors.

 

[Jim Nelson]

So what is #1and #2s price per square foot?

 

[dealtimeman]

No I am not killing anyone's pricing. any chance I get to educate a fellow cleaner on the need to raise prices and the need to compete on high level is usually a waste of time. Most think no one will ever pay a high cost for an excellent service.

 

[Jim Nelson]

No I am not killing anyone's pricing. any chance I get to educate a fellow cleaner on the need to raise prices and the need to compete on high level is usually a waste of time. Most think no one will ever pay a high cost for an excellent service.

After 35 years in this scraping the bottom with the rest of the bottom feeders for the first 20-25 years. When my 2 boys go out on there own there now 11 and 14 and they are working with me now. They will charge $0.60 sqft. There is plenty of people who have the money and will spend it if they get what they pay for. I turn down people all the time who do not have the money or who do not want Quality Workmanship. Quality Workmanship is all I have I will not discount my work, or my Boys.

 

[floorguy]

No I am not killing anyone's pricing. any chance I get to educate a fellow cleaner on the need to raise prices and the need to compete on high level is usually a waste of time. Most think no one will ever pay a high cost for an excellent service.

Loved the conversation and i get it.... and there is no issue with trying to get people to raise price, expectations etc....

However...not every location is the same PERIOD..... shanty houses here that go for 50-70k, would go for 350k in LA.

Also, as been stated before about pricing.... when everyone says ok come do the job.....well then time to raise the prices... We/I are not there yet, I raised most residential 2 yrs ago...left commercial (but that is going up this year i think) left a few of my commercial/res custys the same price for the last 2 years....but I think they are going up as well....

The thing is.....my ass would have never made it through the door, if i went with the higher price.. NOW they know my work, and how I work with them (and they with me, on having them ready) and it is time.....Also I do not nickel and dime them for "not readys" Picked up houses....instead, they are in my debt....some 80-90 houses done about twice a year....some more often, some less... but steady work, and pays with in 10 days....

ok next

After 35 years in this scraping the bottom with the rest of the bottom feeders for the first 20-25 years. When my 2 boys go out on there own there now 11 and 14 and they are working with me now. They will charge $0.60 sqft. There is plenty of people who have the money and will spend it if they get what they pay for. I turn down people all the time who do not have the money or who do not want Quality Workmanship. Quality Workmanship is all I have I will not discount my work, or my Boys.

Maybe, but 2 things....I hate trying to track them down....AND I hate how they act....most people around here with money they want to throw around, generally have a holier then thou attitude.....Thanks but no.....

Basicly I am happy in my middle of the road pricing, as well as level of service....(no i dont wipe every base board, and no I dont groom) and for my custys....THEY DONT CARE... they are happy with that apple bees $20 for 2 deal, instead of the ruth crists steak....

 

[dealtimeman]

Good Doug. But a Ruth Chris steak a couple times a year can be a good thing.

 

[Hoody]

Loved the conversation and i get it.... and there is no issue with trying to get people to raise price, expectations etc....

However...not every location is the same PERIOD..... shanty houses here that go for 50-70k, would go for 350k in LA.

Also, as been stated before about pricing.... when everyone says ok come do the job.....well then time to raise the prices... We/I are not there yet, I raised most residential 2 yrs ago...left commercial (but that is going up this year i think) left a few of my commercial/res custys the same price for the last 2 years....but I think they are going up as well....

The thing is.....my ass would have never made it through the door, if i went with the higher price.. NOW they know my work, and how I work with them (and they with me, on having them ready) and it is time.....Also I do not nickel and dime them for "not readys" Picked up houses....instead, they are in my debt....some 80-90 houses done about twice a year....some more often, some less... but steady work, and pays with in 10 days....

ok next


Maybe, but 2 things....I hate trying to track them down....AND I hate how they act....most people around here with money they want to throw around, generally have a holier then thou attitude.....Thanks but no.....

Basicly I am happy in my middle of the road pricing, as well as level of service....(no i dont wipe every base board, and no I dont groom) and for my custys....THEY DONT CARE... they are happy with that apple bees $20 for 2 deal, instead of the ruth crists steak....

You can get high end prices in Utah without all the fluff....

 

[ruff]

Doug,
I agree with some (most) of what you say and certainly you know your market and what works for you.
However:

....I hate trying to track them down....AND I hate how they act....most people around here with money they want to throw around, generally have a holier then thou attitude.....Thanks but no.....

The above statement may have more to do with your attitude than theirs. I'd recommend that you give it a second thought.
I have clients from all walks of life and beside the very 'filthy' rich, you know the type that have a manager to manage their other personal assistants, I can't detect any difference between clients. I have very rich clients that are just as friendly, appreciative down to earth people, as my other clients that like me, sweat for their living.

Do yourself a favor and don't rule them out.
Yes, you may have to fine package (as in a nice wrapping) your company a little. However, I am willing to bet that it will actually work well and be appreciated by your other clients too.


P.S. As per Angie's list.
Like all other places that do the same, they will try to maximize their earnings. The fact that they are now a publicly traded company, puts a lot more pressure on them to increase earnings. Otherwise stock goes down. As time goes, I suspect that their credibility with their subscribers will substantially diminish, though that may take some time. There's a company here in the Bat Area- Diamond Certified that started strong and rated companies for customer satisfaction etc (Kind of like Angie's, though they limit the recommended companies to about three per territory) that could not fill up their local slot, Stanley Steemer is now their recommended company in San Francisco. Be curious to see long term, how well that would work with Diamond Certified local credibility.

If Angie is a major source of one's income, I guess one is stuck. Be interesting to see though, if some of you guys can distinguish yourselves within Angie's list and be able to justify,charge and get better prices. Otherwise, you'd be stuck in price competition land, as there will always be those competitors that compete on price alone. And if not profitable, when they go under there will be the new ones soon to follow.

Which brings us all the way back to packaging, Doug.

 

[Chris A]

I say as long as you are delivering more "percieved value" than what you are charging than who gives a shat how much that is. I charge substantially less than many bb superstars but still more than average in my market, and my business is plenty profitable. Theres a buyer for every seller, just decide who you wanna be and stick to it.

 

[Shane Deubell]

Nothing you can do about it, Angie is only answering to the quarterly earnings call now.

That and this industry has a constant stream of new wannabe cleaners. Its a machine!
20% go out of business every year and 20% new ones take their place.

 

[The Great Oz]

Low-ball pricing has always been a problem and not just for the cleaning industry. There are hack plumbers and electricians that will work for gas money and customers that don't know any better. AL is to blame for pressuring their contractor advertisers to become discounters for AL's benefit though. (You discount your prices, AL gets to tell their subscribers that THEY are the hero that got the customer a deal.) Exactly like Groupon, Angie's List is killing Angie's List, and has been in the process of doing so long before being publicly traded.

Yelp on the other hand seems to be finding their way to becoming a believable rating system. They've gone from a mostly hipster way to disparage bad restaurants to a more mature system that rewards those that use their real names and write well-reasoned reviews. Today they even act like they care about complaints from business owners.

 

[floorguy]

Doug,
I agree with some (most) of what you say and certainly you know your market and what works for you.
However:

The above statement may have more to do with your attitude than theirs. I'd recommend that you give it a second thought.
I have clients from all walks of life and beside the very 'filthy' rich, you know the type that have a manager to manage their other personal assistants, I can't detect any difference between clients. I have very rich clients that are just as friendly, appreciative down to earth people, as my other clients that like me, sweat for their living.

Do yourself a favor and don't rule them out.
Yes, you may have to fine package (as in a nice wrapping) your company a little. However, I am willing to bet that it will actually work well and be appreciated by your other clients too.



Which brings us all the way back to packaging, Doug.

oh I know this for a fact.....BUT every so often i get fed up with the blah blah blah you gotta be the highest or your shit...attitudes....

I am fully aware of my weaknesses, some I choose to live with and I dont want to change, while others I am fighting ALL the time....

And I have a few "high priced" type custys in my bag as well, that I charge to.....and most of them are very nice people (hell I only like cleaning for nice people)

I just have a very different attitude towards things, then most people do...and as such they give me the "WTF" face or comment.....

I say as long as you are delivering more "percieved value" than what you are charging than who gives a shat how much that is. I charge substantially less than many bb superstars but still more than average in my market, and my business is plenty profitable. Theres a buyer for every seller, just decide who you wanna be and stick to it.

EGGGSSSACTLY!!!!!!

 

[Jimmy L]

Now I am totally confused.

 

[Shane Deubell]

Now I am totally confused.

Second anyone mentions pricing on a forum....

 

[Newman]

I guess some contractors as well as subscribers fall for the Angie's List Groupon style deals. A subscriber buys the coupon for $XXX.99 to get X amount of work and Angie's List profits XX% for their efforts. Just because they push the "Big Deal" does not make me buy into it. They also push the print advertising in the Angie's List magazine, which I also choose not to purchase. They also push buying keywords, more zip codes, more services ect.; which I choose not to buy. I stick to my little online golden box online advertising in my little service area, have the best ROI of any advertising dollar spent, and do just fine.

Tom, worry not my friend. You service the epicenter of Angie Land. As Angie's World grows it's consumer base diversifies. It will support the guy working so he can make the payments on his rotovac porty package as well as those of us who consider themselves Professionals. Nearly all of my jobs booked from Angie's List are presold before they even call. Rare is the Angie's List job I actually have to physically show up on site and quote. Typically they are the educated consumer. They have reviewed some of my 60 some odd reviews on Angie's List, seen the sights at my web site, bought into my program and made the buying decision before even placing the call. They desire excellent service and know that a great service can not be performed at a 50% discount... I like these clients!

 

[Jimmy L]

Chris I bet you like to stare at yourself in the mirror for hours at a time too.

 

[rwcarpet]

I don't like Angie......she even looks "smug" in her commercials.

 

[jcooper]

I'd say, Angie is killing herself.

Just got an email from them telling me I can be their cleaner of the month for $$$... It's a site based on consumer reviews. Yet, I can pay to be #1..... It's all about the money for Angie now.

 

[tmdry]

I agree and disagree.

Residential pricing is no different than commercial pricing. It's all about production rates.

Put it into perspective like this:

1 tech/1 truck that brings in $800-$1000/day charges $.50-.65 a sqft ($1k/day will be max on average that 1 guy can handle on his own).

2 guys/1 truck (single wanding) that brings in $1200-$1400/day charges $.50-$.60 sqft (1 cleans the other helps/setup/etc).

2 guys/1 truck (dual wanding) that brings in $1200-$1900/day charges half of the 2 above. (the lower price will have them be done half the time of the 2 above or bring in double of the guy that raised his prices did).

*With higher production rates, clients will want more things done, than waiting 4-6 hours for the single guy doing a 3 level SFH.

An example would be Mr. Harper who has 3 guys on 1 truck, dual wanding, they can do 3-4 jobs and be done by 2pm, or any AT's guys going that route.

Not every special will be $189, as the competitor mentioned it would be around $300, some can be more some less. If they completed a $300 in 1-2 hours, it is still $150-300/hour.

It's the same as the guys on the boards say they won't work for $.10 for commercial, yet the companies that known their production rates, will go in @ $.08 and still average $100-$300/hour.

 

[Chris A]

Great post Bill

 

[Art Kelley]

Great post Bill

Absolutely. I think Tom was trying to justify not doing a very legitimate job because of the snowy weather. He is new to the business and now feels guilty for wimping out on a colleague. Once when I was 20 I wimped out because it was raining out and I just wanted to be with my girlfriend. I called and post postponed a job. The custy was pissed. I later felt bad.

 

[tmdry]

Thanks,

I forgot to mention my prices are in the $.40-.80 cents range for package pricing, but I do similar deals but don't give that much square footage per room (furniture moving n protector r extra). According to my SM my average invoices are mid $300's with the specials. It takes us on average 45-60 mins to do a $189 special if that's all the client wants and or it falls within the max of the square foot limits.

The key is all on the setup and having a game plan of each guy is going to do "prior" to getting to the job.

 

[hogjowl]

These advertising and pricing threads always end up the same. Price and position yourselves however you want.

But the point of this thread was to call attention to the fact that AL is forcing, or trying to force, it's members to price point themselves into a low priced hole.

We need to be aware of this in our decision process.

 

[floorguy]

These advertising and pricing threads always end up the same. Price and position yourselves however you want.

But the point of this thread was to call attention to the fact that AL is forcing, or trying to force, it's members to price point themselves into a low priced hole.

We need to be aware of this in our decision process.

You are exactly right....and what's funny is.....they all end up going that way..

What was that last one? Service magic or something?

I realize they help if you get in there at the right time.. or are in the right area for it...but in the end its always a money grab....

Oh don't forget about groupon type companies to

 

[Hoody]

These advertising and pricing threads always end up the same. Price and position yourselves however you want.

But the point of this thread was to call attention to the fact that AL is forcing, or trying to force, it's members to price point themselves into a low priced hole.

We need to be aware of this in our decision process.

Has a groupon-esk ring to it all as if theyre trying to piggy back(pun intended) off of that model.

 

[TomKing]

Thanks Bill,

Art you are mistaken a competitor is not my colleague. My team members are my colleague's. A competitor is just that my competitor. I know a few of my local owners but they are not my colleague's, my team members are.

Websters
col·league /ˈkɑ:ˌli:g/ noun
plural col·leagues

[count] somewhat formal : a person who works with you : a fellow worker

I can assure you one thing none of the big boys here in town have wandered over to say" hey Tom good to know you are well educated, experienced in business and running top level business systems what can I do to help you take more of my market share". Nope it has never happened.

$300 that is not on my pricing structure is not enough money to get my truck for 4 hours production and travel time in the snow. I have this little thing called overhead and scratching up vans cost me the first $2500 and a nice monthly raise in my premiums.

When you operate out of your garage and do all the work yourself it is easy to throw out low prices. $400 a day gets you $100k per year and after expenses you should net about $60k lots of people out there that are happy with that. Some guys net more. Add in some juicy one time commercial and a couple nice water jobs and your living, all out of your garage. Wish I was younger and started earlier.

My point to this whole thread is to try to help. Angie's list customers are not coupon customers. You do not have to treat them like that.

 

[mirf]

Pricing is different for every company. But I would never call a competitor and ask him to handle the job for me. No matter what I do the client is probably lost anyway. If they ask I might gave a name of someone.
I do not know phone numbers.

 

[tmdry]

Thanks Bill

$300 that is not on my pricing structure is not enough money to get my truck for 4 hours production and travel time in the snow. I have this little thing called overhead and scratching up vans cost me the first $2500 and a nice monthly raise in my premiums.

My example of $300 bucks was for the average invoice according to Servicemonster for the specials only. That is not every job; in a 4 hours production that should be in the $400-800 range for the day (for 4 hours worth of work). We average 2-4 jobs per day in that average, not $400/day everyday.

You give 15% off, so it's no different than someone giving a coupon/special, our Specials are between $30-50 off the regular price of .40-.80 a sqft. If say a job is $400 @ 15% that's $340.

When you operate out of your garage and do all the work yourself it is easy to throw out low prices. $400 a day gets you $100k per year and after expenses you should net about $60k lots of people out there that are happy with that. Some guys net more. Add in some juicy one time commercial and a couple nice water jobs and your living, all out of your garage. Wish I was younger and started earlier.

I wish I was that guy you're describing, unfortunately (or fortunately) I have a 1500 sqft office plus all the overhead. The lovely $15k I shed out to Angie's List per year is my biggest marketing expense.

Again, the $300-$400 per job was an example, it was not per day. We average 2-4 jobs/day. I am sure someone w/ 2 trucks is not doing $400 bucks per day just because they're running a special.

I believe we did a little over $100k in our 3rd year when we were a VLM company only, Angie's list expenses weren't as high, no office expense, etc. Now even though the vans, truckmounts, and wdr equipment are all paid for and now in our 5th year we are far above double that. My min for a wdr job is $2500, my "expenses" do not allow me to do smaller jobs, no profit.



My point to this whole thread is to try to help. Angie's list customers are not coupon customers. You do not have to treat them like that.

I do have a buddy of mine operating out of his 2 car garage/basement, does not pay the kind of money we pay for AL's, and averages $1400-$1900/day 5 days a week w/ a helper and his Aerotech (the example I made above about production in dual wanding). He also runs specials that have a limit per sqft (not all his pricing are all specials). I'm not saying it is the right or wrong thing to do. Just my opinion.

I agree that "some" Angie's List are not price shoppers, but like David mentioned in his post above, AL is pushing the specials on companies and marketing to consumers the deals. While I wish we could just not do the specials, I do feel it would lower our calls.

Thanks for the tips the other day btw, they're working.