Carpet Cleaning Business Management

Cutting the “C.R.A.P.” Business Model: Part II

July 2, 2012
Trans

“The journey of a thousand miles begins with a single step.”

Far too many of my ICS readers (you know who you are) attract customers who choose a carpet cleaner the same way they buy gas - the lowest advertised price! So sad because you hard working folks are trapped in a vicious downward cycle of competing only on low price. Even worse, you are shelling out big money to advertise these absurdly low, “non-profit” cut-rate prices! 

So do you want to break out of this dead-end “cut rate advertised price” (C.R.A.P.) business model?  In Part I, which appeared in the ICS June issue, we covered the first seven steps to “cutting the C.R.A.P.”:

  • Carefully determine what your actual true monthly cost of doing business is.
  • Muster up the courage to actually raise your prices!
  • Ask yourself: “Would it be smarter to increase my up-sells instead of raising my base prices?”  (Or even better - you could do both!)
  • Increase your pricing by a substantial, but uneven, percentage point. (For example, 18.3% is a much more credible number than 15%)
  • Prepare yourself emotionally and financially to lose some (usually around 10%) of your “bottom-feeding” clients.
  • Re-brand your company’s chosen image.
  • Just do it! Quit setting your prices based on your fear of the other guy. (Don’t fall into the “paralysis by analysis” trap.)

These seven steps do work. However, you must not only raise your prices. You must also move away from the “A” (as in “advertised”) in the C.R.A.P. business model. The problem with most mass-market cut-rate advertising is not just that it sucks precious profit out of your pockets. The real killer is by advertising low prices you are reducing yourself to a commodity and lumping yourself in with all the other C.R.A.P. cleaners. So now you are driving away clients who have been burned by C.R.A.P. cleaners before. (There are many out there!)

To cut the C.R.A.P. model you must both justify your higher pricing and motivate your clients to become unpaid salespeople for your company. We called these precious customers “cheerleaders.” I can’t tell you how many times I heard these oh-so-sweet-to-my-ears words, “Wow, Steve, your company is quite a bit more than all the other carpet cleaners I’ve tried. But you guys are worth it! I’ll tell everyone I know about you!”

You will both justify your higher prices and create “customer cheerleaders” by using our Strategies for Success (SFS) “positive shock and awe” philosophy. Now here is some great news for you! The average carpet cleaning company in our industry is so badly run that it is easy to pleasantly surprise your customers with your service. However, leaving a home owner just pleasantly surprised will never produce the positive shock and awe you need for a high cheerleader conversion rate.

Instead, you must consistently dramatically exceed your customer’s expectations. When your clients are just blown away by your service they will happily pay more than the going rate. Even better, your delighted customers will enthusiastically promote your services to everyone they know. (Including becoming “cheerleaders on steroids” by posting glowing online reviews!) This positive shock and awe is achieved with the “Two E’s”:

  • Emotions: No surprise here. Remember that the home owner’s perception of value on the work you do is greatly influenced by the emotional dynamics of the transaction. Simply put, your client will happily pay a premium if they like the individual providing the service. How to consistently achieve this customer feel-good state? Look at yourself, your employees and your actions through the eyes of your customers. But notice how the word “consistently” keeps cropping up in the paragraph above? This leads to our second “E”…
  • Execution: Many carpet cleaning companies simply can’t consistently deliver the goods.  Sure, these long suffering entrepreneurs stagger through the week and (usually) make payroll.  However, every day is a crisis and their so-called success is achieved at an incredible personal emotional sacrifice. (And let’s not even talk about what they put their family through!) So no matter what size of company you own now (or plan to run in the future), I have a new goal for you: Be consistently perfect - every time.

Back when I did on-site consulting, I was amazed at how casually the average cleaner accepted business break downs/complaints and daily problems. Instead, promote a zero tolerance policy for this stuff by developing a finely tuned business infrastructure and insist that your employees (and you) follow it. 

Once again - consistently perfect-every time! Your business infrastructure should create a company that runs like a solid, well-oiled machine. You’ll achieve this state of business bliss by developing a company operations manual that documents, step-by-step, every single procedure in your company and how they link together. What should your operations manual include? Here is a partial business infrastructure checklist from Jon-Don’s Strategies for Success seminar:

 

  • Management Structure
  • Organization Chart
  • Management Job Descriptions
  • Office Staff Job Descriptions            
  • Secretary                    
  • Dispatcher                  
  • Office Assistant         
  • Marketing Assistant   
  • Management Guidelines-
  •             Code of conduct
  •             Benefits
  • Administration
  • Starting up a new division
  •             Forms of business      
  •             Planning                     
  •             Setting Business Goals
  • Paperwork Flow in the office-
  •             Production Reports    
  •             Work Orders              
  •             Technician Reporting
  • Accounting
  • Reports to be generated-        
  •             Listing /time deadlines
  •             Computer operation
  • Taxes and Requirements
  • Sales
  • Marketing Guidelines
  • Advertising Procedures
  • Newspaper Ads         
  • Special Campaigns
  • TV Advertising
  • Radio Advertising     
  • Scripts
  • Internet Marketing
  • SEO Procedures
  • Public Relations
  • A calendar to follow
  • Home Show Procedures
  • Pre-show Checklist
  • Employee Requirements        
  • Newsletter Procedures
  • Direct Mail
  • Bulk Mailing Procedures       
  • Maintaining Lists
  • Existing Clients Procedures
  • Comment cards
  • Thank You Letters
  • Six Month Letter
  • “It’s that time again” letter
  • Forward Scheduling
  • New Client Mailing Program 
  • Frequency of mailing
  • Addressing and Cross Dir.
  • Commercial Sales
  • Advertising and Direct Mail
  • Targeted Special Offers         
  • Follow-up Phone Script
  • Free Sample Cleaning
  • Maintenance Sales     
  • Direct Call Selling      
  • Salesperson Job Description
  • Sample Selling Script Pricing
  • Diversifications
  • Package Selling
  • Insurance Guidelines
  • Purchasing
  • Sales Aids Checklist

This list could go on and on and on. For example, here are some employee procedures to include in your manual if you ever want to get off the truck!

  • Employee Standards
  • Position Advertising
  • Screening /Interviewing
  • Initial Orientation
  • Office Personnel Training
  • Technician Training
  • Evaluations, Compensation
  • Company Manual
  • Staff Meetings
  • Setting Company Policy
  • Employee Terminations
  • Exit Interviews

So are you getting the idea there is a lot to this infrastructure building? And we haven’t even touched on sections such as:

  • Telephone Scripts and Procedures
  • “On the Job” Procedures
  • Reporting Complaints and Callbacks
  • Equipment Procedures
  • Equipment Maintenance and Repairs
  • “Stay Beautiful” Program
  • OSHA and EPA Procedures
  • Technical Procedures

So how do you get started on your very own operations manual? It’s not easy but it is simple. Just imagine that you are going away on a very long journey and you are leaving your company in the care of a well-meaning, but clueless, friend. What written instructions would you leave for him? My guess is you would detail out a step-by-step routine to follow throughout the day/week/month. Now you have the start of your manual! (Remember that every time you add/change something in your company to just write it down and include it in your three-ring manual binder.)

So why go through the agony of developing (and implementing) a business infrastructure? Because without written procedures collected into an operations manual to follow on a daily basis, you just own a job - not a routine, drama-free business. More importantly, this infrastructure helps your employees follow an assembly line that consistently (there’s that word again!) cranks out customer cheerleaders! And once you can consistently create cheerleaders you will be able to “cut the C.R.A.P.” out of your business!

One of the best ways to “Cut the C.R.A.P.” out of your business is to build regular contract commercial cleaning routes. Next month, this column will focus on commercial work, plus I’ll share more hints on building commercial “toll booths” at the ICS Presents Connections to the Cleaning & Restoration Industry panel in Las Vegas on September 5, 2012. 

Did you enjoy this article? Click here to subscribe to i Cleaning Specialist Magazine.

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