Changing My Business Premise

[HCBailly]

Question: Is it possible to change the basic premise of a pre-existing business? If so, how?

I was re-reading the sticky topic on having a successful business premise and thinking about how my carpet cleaning business provides value for people.

1) My business makes people feel better about having a cleaner home.
2) I help solve the problem of having a dirty carpet, such as an unsightly spot or dust mites.
3) I educate clients on the value of a clean carpet.
4) Clients feel better about having their home showroom perfect for a party.
5) Most clients feel thrilled and relieved when I’ve solved their carpet problems.

The problem is that although I provide incredible value for what I do, it is based on something that people don’t want to buy. People will avoid cleaning their carpets for as long as is physically possible. So in reality, I’m providing something that is of little value. Thus, I would conclude that I need to change my business premise.

So what values do I change my business premise to target? What do people value today? Some people value what I provide, but they are far and few between, though enough to keep me afloat for now. The obvious, generic answer would be “saving moneyâ€, though if you can think of anything else, please let me know.

How does what I do save people money? Very little, really. They have to pay money to get their carpets cleaned by anyone. The only way I would be saving people money is if they were already losing money and calling me would help them lose less. To my knowledge, this means one of two things:

1) They are price shopping and I can offer a lower price than the next guy.
2) They are selling their home and I can clean for less than the cost of replacing the carpet.

The first scenario is a losing battle. Someone will always always always be willing to undercut my price, no matter how low I go, because I actually have ethics. I’m unwilling to use bait-and-switch tactics, because I actually like to be able to sleep at night. Maybe that’s a weakness on my part. I care too much. Not to mention, I don’t currently have the ability to replace 80% of my client base per year, which is the standard for my industry. I currently lose 6% of my client base per year, mostly due to natural attrition.

The second scenario is where I’m currently generating what few new clients I am getting. However, given the slow real estate market, I don’t see how I can count on that being a reliable source of clients.

I think I’m in a business that is based on a bad business premise. It simply does not provide enough value to enough people, even with addon services like oriental rug cleaning or leather furniture cleaning. I think the same goes for my entire industry, really. How can I change that?

Thanks for the discussion.

 

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[GlobalWealth]

Clean carpets make the air quality in the home better. Better air quality leads to less allergies and better health.

Clean carpets also last much longer because the excess dirt causes wear and tear. In the long run you may actually be saving them money on not replacing the carpet as often.

Clean carpets hold less dust and therefore keep the overall home environmnet cleaners.

So are you cleaning carpets, or improving someones quality of life and lowering their carpet replacement costs?

It's all perspective.

 

[Rem]

Excellent reply. Make them know they are SAVING money by spending it. :urock2:

Also, just like changing the oil, if you decide to start cleaning carpets for them make sure that you reschedule for another carpet clean. Instead of placing a sticker on a car saying 3,000 more miles you can tell them once ever 10 months. Reschedule about that time period on the day you are cleaning. :coffee:

I think the first reply nailed it...

 

[GlobalWealth]

Excellent reply. Make them know they are SAVING money by spending it. :urock2:

Also, just like changing the oil, if you decide to start cleaning carpets for them make sure that you reschedule for another carpet clean. Instead of placing a sticker on a car saying 3,000 more miles you can tell them once ever 10 months. Reschedule about that time period on the day you are cleaning. :coffee:

I think the first reply nailed it...

this post also struck a thought. how about selling a cleaning contract? maybe every 6 months, but do it for much less money per visit. the longer the contract, the lower the cost per visit. get a credit card and charge the card so you don't have to deal with billing.

 

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[HCBailly]

My 6-month maintenance program is all that is keeping my business afloat right now. 90% of my client base that is on that is sticking to it, even in this economy, so I’ve got loyalty on my side.

The problem is that most people don’t think logically like you do. They only think that I am saving them money when they have an impending greater loss on their hands. If it’s not in front of them, they don’t see it, and it’s not valuable to them.

In my experience, when people are making a decision based on price, they are almost always looking at the up front cost. Now more than ever, people are loyal to price, not service. The latter is a bonus to most people.

The best I can do is 3 rooms for $99, and only for a new client. Any lower than that, and I might as well go out and get a real job. The problem is two-fold. First, my competition is willing to undercut me (ie: 4 rooms for $69) and use hard sales tactics to make up for it. Of course, I try to upsell a new client, as ethically as possible. Second, my competition is willing to use legal bait-and-switch tactics. They offer 1 room for $4.95, but if they want the cleaner to actually use soap, that’s $0.25 per sqft (in fine print). How can I compete with that?

 

[yveskleinsky]

I know for me I'm all about convience--get my email and my phone number. Offer to put me on a regular schedule--every 4 months or so. I'd do it in a heartbeat. Call as a reminder for day you are coming and send an email. Send me emails of your promos. If you do a good job, I'd use you again. Get assertive and ask for their business on a reoccuring schedule. Do this with property managers of vacation rentals if you have any in your area. This would be huge for you.

 

[MJ DeMarco]

The problem I see, is you can't change your business premise because you are already in the business. The right business premise would have steered you clear of the industry citing the lack of a real need.

When hundreds of people get into a business solely because they know how, or want to, and not based on need, you get put into the position you are in: Price wars haggling over a few dollars. There is limited need (limited demand) and too many providers (supply).

The point of having the a need-based premise is to avoid the industry entirely, not to change it after the fact.

That said, is it possible to start a marketing campaign that exploits the seedy nature of your competitors? Like "Our Prices Are Our Prices! NO FINE PRINT!" Carpet cleaners can be a seedy bunch and maybe that is your differentiation -- you are different, an honest family man, no hidden charges, and no fine print.

 

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[HCBailly]

PhxMJ, that was the point I was alluding to, but I didn’t want to risk sounding negative. Part of the problem with the industry is that it is extremely easy to get into. Anyone can just buy a carpet cleaning machine for less than $1000 starup cost, and call themselves a carpet cleaner. Granted, I have professional training that makes me better than most of them, but that doesn’t get my foot in the door.

That said, this is the least bad option that I think I have. I don’t have the desire to start another wealth-building venture from scratch, so the other major viable alternative would be to give up, go bankrupt, and find a real job with my college degree. At that rate, I’m earning the same amount of money for working more hours, so I might as well stay where I am, and do the best I can.

I like the idea of attacking my competition’s prices directly like that. The best ad (which isn’t saying much) that I ever used was ironically the simplest. It used a fixed price offer to avoid confusion. Then, it listed six reasons why I can provide more benefits to them, instead of my competition. I used to focus those benefits based on my experience, quality service, and cleaning ability. Perhaps, I should focus more on attacking the bait-and-switch tactics of other companies. That sounds like an idea that might work.

Yveskleinsky, I actually just did a maintenance cleaning for an office, which is ideal for such programs. Apartment buildings get trashed and have terrible access for my equipment. In the past, I’ve gotten into offices through my existing clients. While I’m pretty sure that I’ve tapped them out for residential referrals, perhaps I could ask them about their office or where they work.

I’ll put those ideas to work right away. Thanks a lot. If you have any suggestions for getting into offices, I would like to do that too. I’m not sure how I would advertise for something like that. I think referrals would be the way to go.

 

[HCBailly]

Perhaps this post should be in a separate topic, but I figured just keep it in my own related topic.

Obviously, I’m going to be keeping my business going, because it generates the most income for the least time invested for me, right now. However, it also seems highly unlikely that I will be able to build fantastic wealth with that vehicle.

Purely as a mental exercise, let’s look at the big picture here. What do I do with my long-term future? Let’s start back at the beginning with PhxMJ’s business premise topic.

“Offer the world something of value and money will be close behind.â€

What do I have that is of any value? Nothing in material goods, so I have to rely on my talents. I’m very skilled at project management, engineering, and communication. However, those skills are most valuable as an employee. Nor are those skills anything that I’m truly passionate about. I simply acquired them because they came naturally to me. To quote my grandfather: “If you can’t do what you love for a living, do something everyone else hates to do, but you’re good at.†Perhaps a better question would be,

How do I manufacture something or determine what I have that is of value to the world?

It doesn’t even have to be something that makes money (though that would be nice, of course). The goal is to create something that I am building towards with my life. Since I do not believe I can do that with my business, I need to figure out what path to take.

Thanks for your help.

 

[MJ DeMarco]

What do I have that is of any value?

Most likely, nothing. But don't worry, I didn't have anything of value either. It isn't about "what you have" but what you have to get. If what you haved worked, you wouldn't be in a position of question and/or disgruntlement.

For me, I had nothing too and I knew it. I had to go out and learn how to create it, from nothing, to something. Writing a book is the same thing. I'm taking nothing and creating a product from thin air. Having something of value is not an event, its a process. It took me weeks to build a website, and years to develop it. This book is two years in the works. If you want to own something of value, you have to commit to the process of creating it because sadly, it isn't an event of overnight occurrence.

 

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[HCBailly]

I think I understand what you mean. Perhaps I should rephrased my own question. What is the process of learning how to create something of value to the world?

If I had to guess, I suppose it would be just to go out there and try different things. Is that really all there is to it? Somehow, trying things randomly and haphazardly doesn’t like much of a plan to me. I have no idea where to begin.

 

[slim_jim]

<snip>
....how to create something of value to the world?

Somehow, trying things randomly and haphazardly doesn’t like much of a plan to me. I have no idea where to begin.
</snip>

Scratch an itch.

Have you built or manufactured or programmed or solved a problem for yourself that someone else might buy or pay money for? Many programs/games or solutions started out as a problem someone solved for themselves, then other people saw it, wanted it and were willing to pay money for it.

HTH
James

 

[mtnman]

carpetcleanersurvey.com dropped today. Just a thought...

 

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[TaxGuy]

The problem I see, is you can't change your business premise because you are already in the business. The right business premise would have steered you clear of the industry citing the lack of a real need.

When hundreds of people get into a business solely because they know how, or want to, and not based on need, you get put into the position you are in: Price wars haggling over a few dollars. There is limited need (limited demand) and too many providers (supply).

Business 101 my friend :coolgleamA:

One of the reasons I've been MIA is trying to master the techniques taught by the 30 day challenge and very first lesson is looking for the high demand, low supply market, much like the ecommerce guys on here i.e. Kenric, lol, I thought he was joking when he wore the ghillie suit to B&P only to realize it's a great example of good market research and instead of thinking you know what the people want, let the market tell you and go after it!

In fact, one of the ideas my dad and I came up with while we try to expand/re-invent his business is a creative way to market referral business and making it a fun activity for existing customers to do the marketing for you in the form of a referral/incentive program.

I also like GlobalWealth's idea of the value of clean carpets and the health benefits, i.e. a similar method is the vent cleaning business, something I was going to pay for since I have allergies and believe that it will lead to better air quality so I see the value in such a service. I really hope that this is one of the aims of your business because clean carpets aren't that important to most people, however, if you have the shock value of what health risks there are from dirty carpets then you can grab your market's attention.