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Most carpet cleaning business owners are engaged in a psychological battle, and they don’t even know it.
There is a battle waging for the hearts and minds of your customers. Even as you read this article, millions of advertising dollars are being spent as business owners try to tip the outcome of this battle in their favor.
The battle is kaleidoscopic in nature and is waged in an effort to influence the hearts and minds of an uninformed clientele.
Once upon a time, the consumer believed that superior cleaning services of higher quality cost more. All parties understood, “You get what you pay for.” But, this is no longer the case as prices for cleaning services have plummeted in recent years.
A shift in perception
When you consider the raw marketing data collected from most cities in the United States, there has been a shift in the client’s perception regarding the prices charged by cleaning companies.
The change in perception is due — in part — to the shifting away from “value-based marketing,” to “loss leader marketing.” The core belief that price is the true indicator of value has been diminished. These two dueling psychologies have set the stage for the epic battle we see surfacing today.
Most loss leader marketing is based on cheaper labor costs and entry level cleaning. One way cleaning contractors can usurp the system is by lowering the commissions paid to their technicians who provide cleaning services.
The price war has been going on for decades in the retail industry, where companies like Wal-Mart have become the undisputed retail king as they deliver quality goods at low prices. The market causation has impacted the service sectors as well.
New business owners today can quickly get the attention of customers by using loss leader marketing advertising. What effect has this had on the cleaning sector?
A littered battlefield
The battlefield is littered with clients who are fed propaganda that they can get cheap cleaning with quality results. Loss leader marketing has become the only dominant combatant emerging after the dust has settled.
Let’s explore in detail the combatants trying to win the hearts and minds of customers today, breaking it all down into two distinguished camps fighting over the same clientele.
Value-based marketing companies
Cleaning companies who use value-based marketing value training and certification. They carry business licenses, bonds, insurance and have an A+ rating with the Better Business Bureau (BBB). These companies obey labor laws and don’t pay “under the table” to avoid taxes. Lastly, these companies who use value-based marketing are unwilling to compromise prices to get new business. According to the other camp, these companies are over-charging for cleaning services.
Loss leader-based marketing companies
Cleaning companies who use loss leader marketing as a way to get new business rely on low-priced room rates. The technicians are expected to upsell additional services to obtain higher commissions. These companies may use training and certification as a tool to leverage higher prices. They often have negative reports lodged with the BBB, and struggle to maintain a “B” rating due to the flood of complaints. Technicians may be required to operate as subcontractors, use their own vehicles and may be required to purchase their cleaning products from the company. These companies may engage in “bait-and-switch” tactics, which means that technicians aggressively upsell services once in the home and do not honor printed coupon prices. According to the other camp, these companies are under-charging for cleaning services.
Before I continue, I need to stress here that there is nothing wrong with using “loss leader marketing” as a way to get new business, when it is done in concert with a complete marketing strategy. But the trend for many companies today is to put all their marketing efforts into the loss leader model.
Battle of perceptions
Some carpet cleaning business owners notice a trend of losing the “battle of perceptions” as clients call for cleaning services and expect cheaper prices.
More companies find themselves fielding questions about price, instead of quality. Just take a peek at what is coming in your mailbox and through online coupons, and you see a disturbing trend. Low price marketing has captured the attention of many of your customers. It is becoming more difficult to maintain your desired price point.
Some companies, as they attempt to raise their prices as the cost of doing business naturally increases, see an exodus of clientele as they defect to another company advertising cheaper prices.
The trending model is that price points have dropped precipitously to where it is difficult to cover overhead without upselling additional services. Relying on upsells to gain a profit is dangerous.
The marketing war
One eight-truck carpet cleaning company that engages in loss leader marketing spends nearly 40 percent of their overall budget on advertising.
Another 10-truck operation, with the same loss leader marketing model, recently spent a staggering $97,000 on cheap coupon ads in one year.
When you finally get a snapshot into the bleak marketing landscape, you see that the price on entry carpet cleaning is low and it is not going to change any time soon.
How do you tilt the scale in your favor? It is obvious that you cannot win back territory by outspending your opponent in the marketing battlefield. Winning the ultimate battle revolves around navigating the booby traps of lowering your prices and changing the perceptions of your clients.
In my next article, I will provide you several methods to change the perceptions of your customers — in your favor, of course.
Michael Morrow is a weekend consultant for Goldmarc, speaker and an IICRC approved instructor. Morrow lives in Scottsdale, AZ, with his wife Leslie. He can be reached at (480) 388-4742 or MichaelDMorrow1@Gmail.com.