- THE MAGAZINE
We might as well face up to it. Thanks to what the media has dubbed the Great Recession, Americans have become more frugal and “value conscious” than ever before.
Sales of supposedly “recession-proof” high-end luxury goods and services have plummeted. You may be thinking, “Who cares? I’m selling carpet cleaning? You don’t get much more ‘anti-luxury’ than carpet cleaning!”
Well…yes and no. First of all, no matter what market you are targeting, your customer views the cleaning of their carpet as “optional.” When your client has less money (or, even worse, “feels poor” thanks to countless media stories on the recession) they cut back on their discretionary spending and, yep, carpet cleaning will be one of the first things to go!
In recent years many carpet cleaners have targeted the high-end, prestige carpet cleaning market and turned their noses up at the mass market, dollar-oriented “price-by-the-room” sector. I, too, focused on the “snob market,” and why not? Bigger homes with more carpet, more frequent cleanings, more money per square foot and a bigger job ticket! This approach worked great for me for twenty years!
But that was then and now is now. Simply put, “value” is in. Bragging about or conspicuously showing off your extravagances has become a bit tacky and in poor taste. Even among the wealthy it is now fashionable to “shop for the good deal” and look for value.
So what does this new “chic frugality” mean for you and your carefully cultivated flock of high-end big spenders? In the beginning, maybe not much. My guess is you will keep most of your long-time loyal clients through this period of “economic abstinence.”
However, I’m hearing reports of eroding profits due to clients stretching their cleaning frequency or, instead of cleaning all the carpets, only doing the “open areas” or just a few rooms.
Hint: When you aren’t going to move the furniture, never refer to the job as a “traffic lane cleaning.” You will have a much higher Perception of Value with the phrase “open area cleaning!”
However, even the most stable company needs to keep growing due to customer attrition. Homeowners drift away, move out of your market area or even die on you! In the commercial sector, businesses close, are taken over or go through a management change where the new broom of change sweeps away all the previous service providers- even when you were doing a superb job. (Don’t ask me how I know this.)
So how can you attract this new breed of value conscious “price shopper” and yet still keep your pricing credibility – i.e. no advertised discounting – with your previous clients that you have spent years “training” to accept your prestige pricing levels? And let’s not forget the most important question: how can you achieve all of the above and still make a nice profit?
1. Don't Take It PersonallyRemember that customers who want to negotiate (yes, even your long-time clients) are not putting down your cleaning abilities/worth/ethics as a person. Instead, they are probably subliminally responding to the relentless drumbeat of economic bad news. Or else they too actually may have been adversely affected by the recession.
Either way, all sales experts will tell you that any price objection is just a buying signal. What you don’t want is the customer “fading away” from you with the old, “Well, let me check with my husband and I’ll get back to you,” smoke-screen objection. I actually welcomed reasonable price questions and even objections.
2. Tap the Power of the Customer Cheerleader Above All ElseYes, I know that “word of mouth” advertising has always been with us. Simply put, friends telling friends will always be your cheapest and most powerful marketing method. However, today there are other factors afoot in the marketplace. For example, there are oh-so-many painful stories circulating about “nightmare carpet cleanings” which serve to only increase customer’s understandable fear of allowing strangers into their home.
Additionally, homeowners just don’t have the time or the skill to do their own research on which method/company to clean their carpets. So now more than ever vocal Cheerleaders delighted with their experience are gaining an inordinate influence in the marketplace.
Remember, too, that the power of a Customer Cheerleader is compounded by the Internet. Before cyberspace came along a homeowner might have told five or 10 friends about their experience with your company. However, now your wired-in customer can preach about you (good or bad) to the world. Those of you who have been praised or damned on Angie’s List, Yelp, Kudzu or other consumer networking site have learned first hand about the power of the Internet!
Cheerleaders are not only fanatically loyal and great “unpaid salespeople,” they also give you pre-sold pricing credibility on the Value Decision. Invariably, as part of a Cheerleader’s recommendation, the subject of price will come up, as in, “It’s true, Steve’s Carpet Cleaning was a bit more than their competition, but…”
In fact, there is a subtle psychological current where people want their friends to know that they are willing to pay more as long as they are getting “good value” for their investment. So the logical question is, “How can I (and my employees) make these all-important Cheerleaders”? By focusing on one key Home Front concept: The 80% principle.
3. The 80% PrincipleEighty percent (!) of how the customer decides if it is a “good job” or a “bad job” is based on her relationship with the person doing the work. To survive the current “value era” you must focus your company on this relationship building philosophy.
Why? Because your new goal is to consistently create delighted Cheerleaders out of what appear to be suspicious price-shoppers but who actually are part of this new value-focused generation of customers.
Since you are selling a service instead of a commodity, you must add value by creating a fun and easy buying experience, which isn’t easy to do in a typical carpet cleaning job!
Now, I realize that, as the owner of the company, you have always instinctively focused on building caring and professional relationships with your customers. However, this carefully crafted customer/owner relationship often falls apart when you hire employees.
It isn’t that your employee doesn’t care (even though many don’t). Instead, the typical entry-level technician doesn’t have a clue on how to build a relationship with someone twice their age, three times their education level and who makes 10 times as much money as they do! Your people need some help …
4. Make It EasyWe are all creatures of routine. Your employees are no different. The problem is your technician’s self-created routine very likely completely ignores the Emotional Dynamics of Points 1 and 2 above!
Share with your employees the negative feelings of having a stranger working in the home. Once your tech has been oriented to the “emotional landscape” he or she is performing in, they need a script built around yet another key concept of the Home Front…
5. Answer Unspoken Questions with Unspoken AnswersThis deceptively simple statement recognizes one key fact. While you love cleaning carpets, your customer dislikes and dreads the entire process!
One of my first epiphanies in this business occurred over 30 years ago when my client blurted out, “Steve, I would rather go to the dentist than have my carpets cleaned!” She was right.
Your job is to create a script where you and your employees silently answer, through action, all the negative but confrontational questions silently screaming away in the homeowner’s mind.
6. Get Efficient/Get FrugalUntil recently, as a country we’ve had a long run of unparalleled prosperity. The two-edged sword of this economic good life? A tendency among some to have become a bit complacent or even – dare I say – fat and lazy?
Before you scornfully put down the company that dramatically under-bid you on a big commercial account, look carefully at who they are. If this business has a successful long-term track record, maybe they just run a leaner and meaner operation than you do. So it could be you just plain priced the job too darn high! Of course, the converse may be true and they bid the work too low…
Either way, learn from it and move on. That being said, keep in mind that…
7. Not Everyone is Your CustomerDespite my “lean and mean” comment, there are some customers/accounts that simply are not a good fit for your company. How do you decide? Simple:
- Know your numbers (most carpet cleaners don’t)
- Decide what type of company you want to own and run
Recessions will come and go and (hopefully) you and your business will survive and prosper all of them. But always remember that the purpose of you being in business is to fulfill your own personal goals. For me I wanted to make lots of money (both in immediate cash and net worth) in as little time as possible, with the least amount invested financially and a minimum of headaches along the way! How about you?
No matter what business/personal goals you have, isn’t it great that you are part of an industry that, in the words of Frank Sinatra, let’s you do it “your way”? Even better, you are one of the few that continue to prosper in the middle of a Great Recession!