Free Offer vs. Discount

[mbRichard]

This may be a subjective question to you all, but I'm thinking of testing both if worse comes to worse lol.

But I am doing the marketing for my Dad's business, and I have read that offering something for FREE is extremely enticing due to the fact that, well, it's free.

I also have another promotion which is a discount which runs over 3 service appointments - this allows us to build more rapport with the client as we have 3 chances to interact with them.

When it comes to cleaning it's a little bit weird trying to offer something for 'free'. And there's also a fear that people will take advantage of this 'free' offer just because.

I guess my question does anyone have a unique strategy to get people through the door? Was it a discount, incentive or using the 'free' psychology?

Any recommendations/input is highly appreciated


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[lowtek]

I sure as hell am not letting a cleaner through my doors, for free. What are they going to take a 5 finger discount on?

Opt for the discount, OR better yet go for regular price but toss something else in. Something else the customer would like that you could cross sell them on later.

Is this commercial or residential cleaning?

 

[sparechange]

how about offering a free cleaning when the client purchases 3 cleanings or something like that.

right now im a customer at a thai take out place where they give me a free meal after i buy 10, every $100 i spend i get a $10 meal for free.

i think something along the lines of that would be a good approach.

i used to do door to door lawn cutting and found an industry like that is basically a numbers game, for example every 10 people i try to agree to my services ill get 2 or 3 to go for it.

your aim should be to mass spam out advertisements and get a small % of customers from that.

make sure to have fair prices.

marketing you could do an advertisement saying FREE CLEANING GIVE US A CALL!! kind of a call/click bait title and when you talk to the potential client mention something like........

hi im calling about the free cleaning! ah thats awesome, we are running a promotion where you can get a free cleaning for becoming one of our customers!

ill let you take it from here....tailor your pitch however you want.. remember to be friendly and enthusiastic on the phone. if you are crap at phone sales get a job doing sales for a bit and learn it well (quit after a couple days who cares)

 

[sparechange]

also if you get alot of rejection which i imagine you will, always remember people are calling YOU because they NEED a dam cleaning. your #1 concern is to close them..low ball em if u have to. be a TELEPHONE TERRORIST

 

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[Denim Chicken]

I remember reading (if I'm not mistaken) a guy on reddit who started a cleaning business said he would offer the first room for free and basic cleaning like carpet and more often than not people would opt to clean the entire house. But might want to test this with the area you're in.

 

[sparechange]

discounts can be a good strategy for recurring customers

 

[wade1mil]

You could offer a FREE room cleaning for every five or ten rooms you clean...like a punch card for haircuts.

Apple seems to not discount their products, instead offering a $150 Best Buy or Target gift card when you buy an iPhone or iMac. That way the product isn't being cheapened by always being on sale (like cars are).

 

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[mbRichard]

Thank you for the replies!

@lowtek Firstly, there was a Post of an individual in this forum who grew a carpet cleaning biz to 6 figures - his main bait was "free carpet cleaning for 1 room" that's where I got the initial idea from.

@sparechange Also having a free cleaning after 3 appointments is actually a really good incentive, I will plan an attack for that! I know a lot of cafes and drink places use that!

@Denim Chicken And yes that was the person I was talking about, need to look for the post and give them a shout out as that's a gold thread!


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[Denim Chicken]

The thing is, if you offer the most basic level service with none of the premium stuff like stain removal, polishing etc. then I just find it hard to believe someone would call a cleaning company just for a free 1 room cleaning.

If I were to call a cleaning company and take them up on the free room cleaning, I'd most likely just want to see who shows up, do they look trust worthy, are they on time, how's their quality of work, etc. before say, I commit to regular cleaning of the entire house or floor. It's a sample in hopes of reoccurring revenue. But, if you live in a bad area you never know what happens.

 

[lowtek]

Thank you for the replies!

@lowtek Firstly, there was a Post of an individual in this forum who grew a carpet cleaning biz to 6 figures - his main bait was "free carpet cleaning for 1 room" that's where I got the initial idea from.

@sparechange Also having a free cleaning after 3 appointments is actually a really good incentive, I will plan an attack for that! I know a lot of cafes and drink places use that!

@Denim Chicken And yes that was the person I was talking about, need to look for the post and give them a shout out as that's a gold thread!


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Ah. Perhaps I misunderstood your question. There's a difference between free carpet cleaning for 1 room, and free carpet cleaning on the whole house.

If you're going to give a free room, I'd say go for it - it's not as sketchy as a free cleaning of the whole house.

 

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[mbRichard]

Ah. Perhaps I misunderstood your question. There's a difference between free carpet cleaning for 1 room, and free carpet cleaning on the whole house.

If you're going to give a free room, I'd say go for it - it's not as sketchy as a free cleaning of the whole house.

Oh yes sorry haha, I should've mentioned just a portion of the house of some sort. The dilemma is which part and is it enough to show off the quality?

With the carpet cleaning biz - you can literally get results in a 30 minute job - so getting the customers to say "WOW" is easy


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[mbRichard]

You could offer a FREE room cleaning for every five or ten rooms you clean...like a punch card for haircuts.

Apple seems to not discount their products, instead offering a $150 Best Buy or Target gift card when you buy an iPhone or iMac. That way the product isn't being cheapened by always being on sale (like cars are).

I guess it would come down to how many services can we do before giving them a FREE incentive and still be profiting -

We still have existing clients, but some of their accounts are cheap, and we want to increase all our accounts overtime.

Maybe we can offer free Extras!!


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[mbRichard]

The thing is, if you offer the most basic level service with none of the premium stuff like stain removal, polishing etc. then I just find it hard to believe someone would call a cleaning company just for a free 1 room cleaning.

If I were to call a cleaning company and take them up on the free room cleaning, I'd most likely just want to see who shows up, do they look trust worthy, are they on time, how's their quality of work, etc. before say, I commit to regular cleaning of the entire house or floor. It's a sample in hopes of reoccurring revenue. But, if you live in a bad area you never know what happens.

My target market is focused on the good areas, as I ensured that our quality of services are top-notch

Maybe we could offer a more premium service for free? There's a deep clean which focuses on getting the spots which usually aren't cleaned - takes an extra 1-2 hours depending on what's needed


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[sparechange]

imagine yourself as the customer, try it. how do you want to feel?

word of mouth is important to

holy shit this guy cleaned the shit stain behind the toilet thats 3 years old, you should call this guy and get your place cleaned up.

he even went around the house free of charge putting candles around leaving us with an awesome scent!

^ hint ^

or

this moron was so crap at cleaning, he missed that stain, i had to keep asking him to get this or get that **** this guy

 

[mbRichard]

imagine yourself as the customer, try it. how do you want to feel?

word of mouth is important to

holy shit this guy cleaned the shit stain behind the toilet thats 3 years old, you should call this guy and get your place cleaned up.

he even went around the house free of charge putting candles around leaving us with an awesome scent!

^ hint ^

or

this moron was so crap at cleaning, he missed that stain, i had to keep asking him to get this or get that **** this guy

So maybe the way we can get them is to put so much value during the free clean that it'll make them say "holy shiet"

Thank you! Definitely have a couple ideas I'm going to test out!


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[ChrisM]

.he would offer the first room for free

This strategy was 'originally' employed by Joe Polish for carpet cleaning. He offered a free room of carpet cleaning (up to a certain size) to get in the door and build trust with the client.

The psychology behind it is that everyone fears getting ripped off or losing their money. You know, that anxious feeling you get when you're looking for a product or service.

And when your looking your mind spews out loads of questions you need them to cover off.

So to offer something for free eliminates this worry, because they can't get ripped off or lose money if it is free. And you as the service provider demonstrate to them that you can do what you claim to.

You get in, clean the carpet, show them the result, and quote to do the rest of the house. How could they say no?

It also engages the psychological principle of 'reciprocation'.

We are brought up to reciprocate. Its a social pressure. If someone helps us / does something good for us, we need to give back.

If you give a free room of cleaning, the prospects mind will urge them to reciprocate and accept your proposal.

The '1 clean free with 10 cleans' and similar offers are decent, but again it is asking for the customer to take the 'risk'. They have to pay for 10 to get 1. Running the rick/concern of being ripped off (will these guys be around by the time the 10th one comes around, or will they be done?).

Sadly, you will get some that freeload. But I suspect, overall it will pay off.

And it depends where you advertise the offer. If the offer is exposed to those more likely to freeload (poorer areas - if I'm generalising) then it'll happen more often. But, again generalising, the more affluent are less likely to take advantage.

Definitely worth testing.

 

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[Kung Fu Steve]

Sorry I've been meaning to respond it's just been crazy the last couple of days.

Firstly, there was a Post of an individual in this forum who grew a carpet cleaning biz to 6 figures - his main bait was "free carpet cleaning for 1 room" that's where I got the initial idea from.

First, please pick up the book "The Ultimate Sales Machine" to start your marketing career

The "1 Free Room" or similar offers are what we call "Loss Leaders" -- we're willing to take a loss to acquire a new customers because we hope (read: know) that customer will spend X amount of dollars over the course of a year(s)... therefore we end up with a profit.

In very simple terms, by offering the 1 free room you are hoping that:

1.) They don't just need 1 room cleaned
2.) You do such a great job they ask you to do all of the others

And you are also hoping:

1.) they don't just take the free room cleaning and never call you again

If you are advertising "Johnson's Carpet Cleaning: 1 FREE ROOM!" you may get some freebie takers but more than likely you'll attract people that say "well, we've needed a couple rooms cleaned, why don't we grab this guy and get one of them free."

That's the basics of it... the advanced level is:

Tto know whether you can run a FREE offer instead of a DISCOUNTED offer, you must understand your customer lifetime value.

Here's the formula:

1 (customer) X (avg. transaction amount) X (avg. visits per year) X (avg. # of years client stays) = Customer Lifetime Value (in a very simplistic sense).

So say something like:

1 customer X $315 average purchase x 2 times per year x 1.5 years = $945 customer lifetime value

In other words, if your average customers buys ~$300 worth of cleaning twice per year, and they are normally a client of yours for a year and a half, you can realistically expect them to bring you $950 worth of business.

If it costs you anything below $950 to acquire the customer -- you're profitable and that's something you should repeat...

... however, in the real world the numbers don't always work that way.

Nor can a small business normally afford to get by on such a small profit margin... does that make sense? (some mega businesses will take a loss for years in order to acquire a customer as part of their overall strategy.... but that's a conversation for another day)

So how can you tell if you are able to run a free offer?

Ideally you would figure out approximately how much profit you must earn for it to make sense and then figure out what you can spend to acquire a new customer.

So let's say it costs you approximately $100 (in labor and materials) to send a guy out and clean a single room. Normally you would charge $100 for that service but you're going to give it away for free in the hopes (Read again: KNOW) that a certain percentage of those people who take you up on the free offer will purchase multiple rooms in that first visit.

NOTE: This is where numbers can get a little overwhelming so we'll try to keep it as basic as possible.

Let's also say labor and materials are the same whether it's 1 room or 5 (just for simplicity).

And let's say on average:

25% of the people who take the free offer don't get anything else (a net loss of $100)
25% of the people who take the free offer get 1 more room (a net gain of $0)
25% of the people who take the free offer get 2 more rooms (a net gain of $100)
25% of the people who take the free offer get 3 more rooms (a net gain of $200)

Are you starting to see how the numbers might work in your favor? Especially if you can get the sales process down to consistently get people to do multiple rooms every time they got a free room.

If you're really looking to help your dad's business, grow it, and become valuable to the organization -- learn the numbers. They tell you EVERYTHING.

Figure out what it costs to send a guy out to do a cleaning. How much does gas cost to get him there? What kind of mileage are they putting on? What materials do they need for cleaning, how much do they cost on an average job? How long does a job take?

So here's my suggestion:

1. Come up with a "Free room" ad
2. Place the ad in a local magazine/flyer/newspaper/etc for the next run (usually a couple weeks)
3. Track the response (ALWAYS ask on the phone "Where did you get our number?" -- not "where did you hear about us?")
4. Do whatever you can to prep them for an upsell on previous to the appointment
5. Do the math after the "offer" is done and see what kind of results were there. How much profit did you earn on that offer? Does it makes sense to run it again? Were there any sticking points?

 

[johnp]

^^ Wow I was about to respond but Kung Fu Steve Steve just said it... and way better than I could have.

Now, I'm not in the service industry. I'm in SaaS and Physical Products. But I can say that offering something for free upfront tends to work best for me.

The key is in not giving away the farm with your free offer. For example, I'm running an offer where I give away a free product. But it's only a one month supply. My true goal is to get them hooked into an auto-ship plan.

Which is why the second key is to get immediate upsells, cross-sells, and down-sells in place.