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I’ll start off with some good news. I’ve completed the transition from my old truck mount carpet cleaning machine to a portable one. It’s been a few weeks so far, and I’m loving every minute of it. This move at least doubles my gas mileage, possibly triple, since the truck mount used gas too. I’m very happy with the new machine, and have been pleasantly surprised to find out that my client base doesn’t care, as long as I still get the job done right.
With this transition completed, it opens up many more opportunities for my business, while requiring me to change my business philosophy. Before, the philosophy was to target high-end residential homes as new prospects or via referrals. While this nets a higher average ticket, I’ve found two problems with it now:
1) Most high end homes now have wood floors, which I’m extremely unwilling to expand my business in that direction.
I would rather go out of business and get a real job, because wood floors are a nightmare business. I know, because we used to do them. In theory, if they have no wall-to-wall carpets, they should have oriental rugs, but that fact has not helped my business at all.
2) Just because they make a higher gross income, doesn’t mean that they have more disposable income.
All that really matters is how much the prospect values my service. If they don’t value having clean carpets, then it doesn’t matter how much money they have, or how big their home is. I’ve had clients in 1-bedroom condos who spend more on me than clients who live in mansions. Furthermore, I analyzed the average home value per town vs. money spent on me, and there appears to be zero correlation.
Thus, it appears to make sense for me to target lower-middle class homes. They tend to have more carpets, so at least I would have a shot of getting my foot in the door, as opposed to a high-end home with all wood floors.
Given the state of the economy, it appears that the most logical solution is to adopt the Walmart philosophy of business: offer my services for a price that even the poor can afford, just to get more business rolling. Granted, I’m not going to get rich that way. However, the theory is that if I can attract clients on a massive scale with a lower introductory price, I should at least break even on the initial job, and make my profit on upselling, repeat business, or referrals. So how do I do that?
In the past, I’ve mostly useful discount coupons (ie: $50 off) or percentage off coupons. These have had almost zero impact on my business. What the average person has told me is that people want a fixed price on my services. Regularly, I charge by the square foot, which causes the prices to be variable, depending on the size of the room. However, if I charge by the room, I can fix the price, regardless of size. For example, Sears usually has a price of 3 rooms for $99.
My dad (the previous owner) didn’t like charging by the room, because it made it too easy to compare my price to someone else. They would just look for the lowest price and go with them. Even if they used me, they would only be loyal to my price, not to me, personally. Still, I’d rather be spending my free time delivering doorhangers for a lower price, than sitting at home crying in my beer.
On a separate note, I also notice my existing client base seems to be cleaning far less often. The first effect I noticed is a decline in my ROI on my monthly newsletter, regardless of how good my sale is or not. Secondly, less and less clients are continuing with my maintenance “VIP†program, despite offering 60% off my regular price. With that, I suppose that leaves me with two questions:
1) Do you agree with the proposed change in my business philosophy? If not, what other options do I have?
2) Is there anything more I can do to encourage my existing client base to clean regularly again?
Unfortunately, my business is heavily dependent on economic conditions and more homes are moving towards wood floors. It was definitely a bad decision on my part. If I had to do it over again, I would not have bought the business. I’d rather have gotten a real job. But, I’m stuck here now, and there’s only one way out: success. Maybe that’s a good thing.
Thanks for the discussion.
With this transition completed, it opens up many more opportunities for my business, while requiring me to change my business philosophy. Before, the philosophy was to target high-end residential homes as new prospects or via referrals. While this nets a higher average ticket, I’ve found two problems with it now:
1) Most high end homes now have wood floors, which I’m extremely unwilling to expand my business in that direction.
I would rather go out of business and get a real job, because wood floors are a nightmare business. I know, because we used to do them. In theory, if they have no wall-to-wall carpets, they should have oriental rugs, but that fact has not helped my business at all.
2) Just because they make a higher gross income, doesn’t mean that they have more disposable income.
All that really matters is how much the prospect values my service. If they don’t value having clean carpets, then it doesn’t matter how much money they have, or how big their home is. I’ve had clients in 1-bedroom condos who spend more on me than clients who live in mansions. Furthermore, I analyzed the average home value per town vs. money spent on me, and there appears to be zero correlation.
Thus, it appears to make sense for me to target lower-middle class homes. They tend to have more carpets, so at least I would have a shot of getting my foot in the door, as opposed to a high-end home with all wood floors.
Given the state of the economy, it appears that the most logical solution is to adopt the Walmart philosophy of business: offer my services for a price that even the poor can afford, just to get more business rolling. Granted, I’m not going to get rich that way. However, the theory is that if I can attract clients on a massive scale with a lower introductory price, I should at least break even on the initial job, and make my profit on upselling, repeat business, or referrals. So how do I do that?
In the past, I’ve mostly useful discount coupons (ie: $50 off) or percentage off coupons. These have had almost zero impact on my business. What the average person has told me is that people want a fixed price on my services. Regularly, I charge by the square foot, which causes the prices to be variable, depending on the size of the room. However, if I charge by the room, I can fix the price, regardless of size. For example, Sears usually has a price of 3 rooms for $99.
My dad (the previous owner) didn’t like charging by the room, because it made it too easy to compare my price to someone else. They would just look for the lowest price and go with them. Even if they used me, they would only be loyal to my price, not to me, personally. Still, I’d rather be spending my free time delivering doorhangers for a lower price, than sitting at home crying in my beer.
On a separate note, I also notice my existing client base seems to be cleaning far less often. The first effect I noticed is a decline in my ROI on my monthly newsletter, regardless of how good my sale is or not. Secondly, less and less clients are continuing with my maintenance “VIP†program, despite offering 60% off my regular price. With that, I suppose that leaves me with two questions:
1) Do you agree with the proposed change in my business philosophy? If not, what other options do I have?
2) Is there anything more I can do to encourage my existing client base to clean regularly again?
Unfortunately, my business is heavily dependent on economic conditions and more homes are moving towards wood floors. It was definitely a bad decision on my part. If I had to do it over again, I would not have bought the business. I’d rather have gotten a real job. But, I’m stuck here now, and there’s only one way out: success. Maybe that’s a good thing.
Thanks for the discussion.
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