- THE MAGAZINE
“How do you know that the sky is falling, Chicken Little?” asked Henny Penny.
“I saw it with my eyes, I heard it with my ears, and a bit of it fell on my head,” said Chicken Little. - From an African folk tale
Fear and intimidation are such ugly, paralyzing emotions. And yet in the dog-eat-dog, kill-or-be-killed capitalistic system we live in, everybody runs scared at times.
For example, I often receive pleas for help from owner-operators and other small carpet cleaners that sound something like this:
“Steve, a major player has just opened up in my city and they are saturating the TV and newspaper with slick marketing. Even my best customers are mentioning that they have seen the ads. What should I look out for? What’s the best way to handle them? I’m freaking out here. Help!” The very first thing I help them do is…
Calm DownWhen I receive a phone call from a panicked carpet cleaner, I immediately say, “The first thing I want you to do is take a deep breath and hold it. Go on, keep holding it until you are dizzy! Now blow it out and take another one.
“See? You are still breathing! This new competition hasn’t changed your ability to inhale oxygen and exhale carbon dioxide and it probably isn’t going to affect anything else in your life either!”
My guess is no matter how big and successful your business is now you at some point you have felt exactly like this poor fellow. Plus, who knows? Even if you now run a large company, this economy, and the brutal competition it engenders, has a way of humbling even the biggest and best of us!
Here are some thoughts to reflect on before you square off against the “big boys”:
Don't Do ItThat’s right. As a small company you should almost always avoid going head to head with the big boys. It is virtually impossible to successfully to compete directly with a large company.
Due to amortizing basic running and marketing costs over many different crews, a big player’s overhead per job will probably be much lower than yours. Plus, due to volume purchasing they are buying virtually everything (including their advertising) at a lower price than you can.
So it is the kiss of death to try and emulate the typical low-price-high-volume business model of a big company. Instead, you need to…
Search for the NichesThe very best “niche”? The personalized Value Added Service I refer to below. But why not also look for the little specialty services that others may not be addressing?
Carpet cleaners remind me of starving dogs – all fighting over the scraps of the low-end, price-oriented residential market. Just like Broadway Joe Namath replied when asked how he avoided being intercepted, “I throw where there ain’t anybody from the other team.”
Depending on the size of your market area, you may decide to focus on tile and grout cleaning; regular contract commercial work; awning cleaning or other pressure washing jobs; high-end service for interior decorators; deck cleaning and restoration; chimney and fireplace cleaning; leather dyeing and cleaning or other residential repairs.
These finicky services are much more difficult for a large company to consistently deliver, and so are much more profitable for you!
Once you have identified and are serving these niches you won’t obsess so much over each and every job you see go to the competition. In fact, you may realize…
There is Enough to Go Around...and Then SomeSure, it can be depressing to see your competition’s trucks whizzing around town. (At least they aren’t parked in front of your customers’ homes!) But focus on just how much flooring there is out there in your market area:
You’ll never remotely clean all of it. So instead of sharing your market with some low-ball hack cleaners, why not…
Look on the Bright SideThe positive side of these big “marketing blitzes” is your well-funded competition will spend big money building awareness of the need for carpet cleaning that, in turn, will rebound to your benefit if you’re running a tight ship.
You said your customers were “mentioning” the competition’s new advertising, not jumping ship because of it. There is always room for a local company that has deep roots in the community and that also obsesses over…
Run a Tight ShipThe smaller the boat, the less margin for error. A big company can afford to make some boneheaded marketing mistakes and still recover. But if you impulsively commit to a disastrous marketing campaign, it may destroy your business.
The same goes for failing to analyze/control your costs or falling down on collecting on your receivables. Above all else you must know exactly where your business is financially at all times.
Once again, a financial shortfall that the big boys could easily weather just might put your company down for the count. Therefore, you absolutely must…
Be Sure Your Customers Don't Forget YouRemember, your big competitors are subjecting your customers to a constant barrage of mass media advertising. And due to your smaller size each and every single one of your clients should be precious to you.
However, please don’t throw away your advertising dollars in a futile attempt to match your big competition’s marketing muscle. Instead, you should market directly to your growing customer base to both reinforce your ‘brand awareness” in your customer’s mind and to remind them of all the other services you offer.
A customized newsletter and regular postcard offers will efficiently achieve both of these goals at a low price. But this doesn’t mean that you should stop your new business marketing efforts.
No matter how good your customer service is, attrition is a fact of life. Customers forget, they move away and yes, they even die.
Now the absolute best way to make sure they never forget you has nothing to do with the mail service. Instead, you must…
Dramatically Exceed Their ExpectationsIn other words, your company must blow the homeowner away by developing a “sense of urgency” – creating a team of employees (or just yourself, if you are an owner-operator) that is obsessed with making a Cheerleader out of each and every customer.
Inevitably, a big company (and its large number of employees) will not be able to give the personal touch that you and your people can, which will allow you to set yourself apart from the big boys.
Easy? No way, especially if you are afflicted with the typical, down-at-the-mouth, sad-sack technician so common out there.
Conquer this problem by looking for the best and the brightest people and give them an easy-to-follow Value Added Service script that guides and controls the Moments of Truth on the job.
Instead of freaking out and panicking, why not use a “business invasion” by a large competitor as a call to arms to take the steps you should have followed through on years ago?
Complacency and the business arrogance it engenders is a very dangerous drug. I’d say, “Thank you, Mr. Competitor, for waking me up!”