Frankly, business basics don’t change.  The bottom line is simply you cannot try to be the cheapest “Deal” just like being the cheapest in a ValPak would lead you to bankruptcy. Running a deal that is different than everyone else is the answer.  (I think Steve’s favorite word is “differentiation”.)  Plus limiting the offer to your most profitable demographic is ideal.

Remember that you don’t have to pay Groupon what they request.  Like almost everything else today in business- their fees are “negotiable”.  (Heck, you get beat up by “price haggling” consumers.  Might as well return the favor!)  BUT before you pull the Groupon trigger reflect on these issues …

• Groupon has at least 5 to 6 competitors in every major city.
• In the August 30, 2010 issue of Forbes Magazine, Groupon was called the fastest growing company ever. Today? Less than a year later Fortune magazine detailed a study from Rice University that found 80% of Groupon users are first timers and only 20% become repeat customers.
• Additionally 95% of all merchants who use Groupon never repeat the Deal.  Hmmm…

Groupon may be the fastest growing business ever AND the fastest to disappear!  In a recent blog business forecaster
Dan Pink predicted:  ”A year from today, two out of these three entities will no longer exist: Groupon, Kodak, Newsweek.”  Kodak is gone and who will be next?

So does all this really sound like a business model you want to be involved in?  Or would you be better served by getting back to timeless business marketing basics?

He thought this need to be always “doing something” was so ingrained it even worked its way into our everyday language as in: “What are you DOING for lunch?” “What are you DOING this weekend?” “What do you going to DO about this?”

Some people even judge their self worth based on how “busy” they feel. The things they DO don’t even have to be effective as long as they’re just DOING something!

I’m certainly no expert on Pakistani culture (or any culture for that matter including my own!) but I can vouch for the fact that many North American business people are predisposed to always be “DOING stuff”. And that’s not all bad. Sometimes we’re required to take action immediately. Equipment needs to be repaired. Customers have emergencies.

But there are times when “doing something” isn’t necessarily the best course of action. When you think about it, doing something means we’re replacing one activity with another and sometimes with little or no thought as to whether the new activity will be any better than the activity we’re replacing!  But we’re so accustomed to doings things, to feeling busy, that when we aren’t doing something, we feel we’re being unproductive.

Add to this the fact that sometimes we business owners can act like real knuckleheads in our companies. We say and do things without a lot of thought to the impact they may have on our people. Then, when we realize the error of our ways, we fall all over ourselves playing the “nice guy” trying to undo the stupid things we did. Too often, this just messes things up even more.

Sometimes the best strategy to fix a business problem is just to STOP! No, really- STOP! Don’t do anything. JUST BE!  Rather than immediately trying to leap tall buildings in a single bound with your cape flying in the wind behind you just stop. Think the situation through. Give the events that may be obscured by the fog of the moment time to come into full view.

Ask yourself whether the situation really requires your immediate action. Will your intervention really solve the problem and/or improve the situation? Or, would taking time to stop and think the situation through provide other people in your organization—people you’re trying to develop—the incentive and the time they need to solve the problem on their own? Would your refusal to intervene give your people a better opportunity for professional growth within your organization?

One business owner I know refers to this strategy as “Inspired Neutrality.”  My SFS co-instructor, Steve Toburen, calls it “Creative Procrastination”.   Either way, it is the intentional decision NOT to jump into action and sometimes this strategy just makes a lot of sense. It can be exactly the management strategy that’s called for in a given situation.

NOTE:  If you’ve ever attended one of my Business Planning Retreats (or Jon-Don’s five day Strategies for Success seminar) you can attest that an invaluable part of these programs is they provide business owners time to get off the daily merry-go-round of business so they can STOP AND THINK!

So, the next time you find yourself itching to “do something” ask yourself whether your “doing” will actually just “undo” things that may have already been done!

Chuck Violand (more about Chuck)
SFS Instructor
CEO Violand Management Associates

WARNING:  I feel a “Steve’s Rant” coming on…
I LOVE the cleaning and restoration industry!  So I am honored to have this website platform to help my fellow cleaners and restorers.  But I HATE it when cleaners and restorers don’t IMPLEMENT the help we offer free of charge!

NOTE:  This may be one of the greatest money-making ideas for apartment move-out cleaning I have ever encountered.  I’m going to be really irritated if some of you don’t at least give it a try and report back here with your results!  So read carefully here!  (By the way I feel much better now!) 

Steve

Industry discussion forums are full of  the love-hate relationship carpet cleaners have with apartment complexes! You all LOVE the steady work apartment complex move-outs bring in. (After all, that’s where the dirt is!)  BUT you HATE (and constantly whine about!) the cutthroat, low bid mentality of the average property manager! So how can you get the regular cash flow of apartments without this irritating lower-your-price pressure?

Simple!  Transfer the “down-the-road cleaning cost” to the departing tenants!  (After all, they will be the ones who got the carpet dirty!)  PLEASE try out this easy 3-step system …

1. Visit property managers and challenge them to give you their dirtiest, nastiest rat hole of a carpet and you’ll clean it FREE!  Then do a fantastic “restoration cleaning”.  (After all, you will need to prove yourself.)

2.  After the Property Manager has marveled over your awe-inspiring work submit your proposal for all of his or her move-outs.  (Be prepared to administer CPR to the PM as they gasp for air over your prices that are “double what we pay now!”) Then make managers an offer they can’t refuse by saying…

3.  “Tell you what I’ll do.  I’ll do this same ‘restoration cleaning’ for in all your upcoming move-outs one-time-only at the same low price you have been paying IF you will add this clause to all your NEW tenant leases:

The carpets have been professionally cleaned by (name of your company).  Upon vacating the unit Renter agrees to have (your company w/ phone number and web site inserted) clean the unit at Renter’s expense.  If this is not done management will contract with (your company) for the carpet cleaning at cost plus a $25.00 administrative fee.”

Bingo!  Now everyone in the “Rental Triangle” is happy!  For example …

A) Tenant: The incoming tenant enjoys beautifully cleaned carpets and knows up-front the amount they will pay upon leaving.

B) Property Manager: The PM gets an initial restoration cleaning at a low price AND avoids the endless bickering with departing tenants on whether the carpets were cleaned well enough. (Plus thanks to you the carpets will be “really clean” for each new tenant!)

C) Carpet Cleaner: Sure, you invest some extra work initially with a lower return.  (View it as a “marketing expense”!) BUT you will now have a long term stream of guaranteed FULL PRICE future work as tenants move out and contractually are obligated to call YOU. (If they don’t then the apartment complex will call you and can legally subtract your full price from the renter’s deposit!)

This marketing strategy depends on a clear and honest relationship with the property management company.  But isn’t that true in any successful business arrangement?

By the way, I just rented out a house and put this “to be cleaned by” provision in the lease and the tenant signed it without even questioning the clause!

So puhleeeease, don’t tell me it won’t work for you.  Please at least test the idea.  As we remind our SFS attendees: “If you keep on doing what you have always done you will get what you have always got”!

Steve Toburen

PS:  Remember to have this concept and the legal wording approved by your local attorney.

Now I’ve had my say!  (And a “Steve’s rant” too!)  So now what about all of you? Comment below on carpet cleaning marketing strategies that you use for apartment complexes.

#1- Five bucks to get started off right with your carpet cleaning client

This is the perfect marketing combo- powerful AND cheap! Soothing your customer’s fear of letting a unknown tech into their home is smart marketing and the “right thing to do”.   Don’t over complicate this.  A simple photo ID badge not only give your customers confidence.  ID badges also send a message to your employees that they will be held accountable for their actions.  Wonderful!

#2- Burning out with janitorial in New Zealand!

Cleaners world wide are fighting with burn-out.How can a New Zealand owner-operator provide for his family short term while also building “something of value” to support his retirement? Good question!  Steve says you must not only work IN your business you must also work ON your business!  Sounds like a plan for 2012 don’t ya think?

#3- A carpet cleaning industry break through?

Many carpet cleaners are searching for a “partnering relationship” with their local flooring stores.  BUT remember, it must be a win-win situation for all involved. Steve is very impressed with John Mapes’ ready-to-go My Flooring Warranty (MFW) concept and encourages everyone to check it out.

#4- How to get plumber water damage referrals- FREE!

No surprise- how to get plumber’s fighting to refer their water loss calls to you was hugely popular in 2011.  Even better, Ivan Turner (who is actually DOING this stuff) shares a program that is FREE!  (Ivan says giving “kickbacks” is a slippery slope that you don’t want to start down.)  Reach out to local plumbers NOW with Ivan’s concepts!

#5- Winning Over the “Price Shopper” (Without losing your shirt!)

This one is a classic. Thanks to our recent (some say “ongoing”!) Great Recession it is now fashionable for even your well-heeled customers to “haggle” on price.  Don’t blow these people off by dismissing them as “dirty, rotten Price Shoppers”!  Instead, play their game AND still make money!  Stop the insanity. Read this information.

#6- A simple card to warn (and soothe) your carpet cleaning customer

This one surprised us on how popular it was. But hey- the simplest ideas are the most effective. Those sweet little interactions we call Moments of Truth in SFS add up to create a Customer Cheerleader. Remember that a Customer Cheerleader is your ticket to a fulfilling, profitable business now AND eventually a fabulous retirement!

So what did our most popular 2011 posts tell us about business in the year to come? Simple!  Humans will always be human.  So focus on the Emotional Dynamics of why people buy from (and refer) you and 2012 will be a great year!

This is EXACTLY the stuff that Jon-Don’s Strategies for Success focuses on!  So check out the schedule for our 2012 Strategies for Success seminars HERE. The first class of 2012 will be in balmy Tampa Bay in just a few weeks.  There is still time to make your reservation and we still have a few seats left.  Hope to see you there!

A warm and wonderful (and tax deductible!) tropical vacation where you just might transform your business.  (And just maybe your life!)  That’s right- we’re gearing up for our annual “Winter Getaway” Strategies for Success seminar in beautiful St. Petersburg, Florida.

Sioux and I love St. Petersburg for its eclectic but quiet downtown and the 1920′s ambiance of the area.  The wildlife is always impressive (Sioux is a semi-obsessed bird watcher) and do I need to mention the beaches?  Plus St. Pete is always warm and sunny in late January!

Now don’t think that we are going to goof off starting on Monday, January 30th!  Far from it!  For the next five days you’ll be put through an intensive (some say “brutal”) college level management and marketing class designed specifically for the carpet cleaning, restoration and commercial/janitorial industry.

Even better, the Three Musketeers of SFS (Chuck Violand, “Big Billy” Yeadon and yours truly) are going through our every-few-years task of totally redoing our respective parts of the SFS seminar.  So even if you have attended SFS before- starting in St. Pete you’ll be treated to an entirely new (and we hope better) course format.

So why not treat yourself (and your spouse) to a great tax-deductible week in Florida and at the same time soak up the transformational concepts (and Business Infrastructure) of our newly renovated Strategies for Success seminar?

Steve Toburen

PS  Thanks to lots of “snowbird cleaners” we tend to fill our Florida SFS seminar early.  So give our Tampa Bay area manager, Brian Ohle, a call today at 800-201-6313.  Local number: (727) 570-8700  Or email Brian at briano@jondon.com

After attending Strategies for Success you were probably pumped up and ready to turn your company into a fine tuned Cheerleader making machine! In fact, after five grueling days of soul searching, note taking and hands-on exercises you left with over 1,200 pages of systems and procedures along with free, unlimited, lifetime support from the SFS team. My guess is you couldn’t wait to get started!

Honestly, now that weeks/months/years have passed can you honestly say your company is running better than ever? Or has your initial excitement sputtered a little bit? Frightening as it is to think about – remember that your success depends on your employees! As Steve Toburen always says, “Your employees are where the rubber hits the road!”

VAST- On Location

So your SFS team designed our VAST (Value Added Service for Technicians) seminar all around your employees. You can leave SFS to scream and yell and pound your desk and talk until you’re blue in the face about the “new Value Added Service concepts” your employees must follow … OR you can let Jon-Don help. (More about VAST here.)

Think about this- for about the cost of a medium sized water job or commercial carpet cleaning job you can send all of your employees through the most specialized one day customer service training available. We’ll even bring the 7 hour VAST course to you!

Here are 4 reasons to sponsor your own customized VAST seminar.

1. We’ll convince your employees “what’s in it for them.”
As an owner or manager you are easily convinced on the value of Value Added Service. But the challenge is when you try to convince your employees! After all you’re just the boss! It’s so much more convincing having an “outside expert” come in and show your people how they’ll benefit from getting on board. And that is exactly what I will do for your employees. (I have spent a lot of years as a carpet cleaning tech!)

2. Get everyone on board at the same time. Sure you can send your employees a few at a time to a VAST class at one of our Jon-Don facilities. But getting everyone focused on Value Added Service at the same time gives you an exciting Critical Mass in your company.

3. You can have a “customized VAST program”. – Every company is different and has unique challenges. So we have 2 VAST manuals. One manual is primarily for carpet cleaning companies and the other for restoration companies. (We can also do a combination class for those that perform both services or even include others services.) I always arrive early enough the day before your onsite VAST class so we can adapt the concepts to fit your company. We can even do the VAST class on a Saturday if you’d prefer.

4. Classroom instruction plus fun hands-on training. We first discuss Value Added Service concepts and then with the help of a step by step Cheerleader script we play act our way through a typical job. (Your employees will love the skits!) At the end of the day your people will have a new daily routine focused on creating Cheerleaders!

Jon-Don has priced the VAST class so that virtually anyone can easily sponsor a custom class for their company. Your complete class price is $1,400 plus traveling expenses and manual costs. (To share costs some companies have teamed up with other local friendly competitors.)

Simply put, when all your employees understand the vision for your company and are convinced they’ll personally benefit your business will be transformed. The day will run smoother, everyone makes more money and ultimately you’ll own a company that runs without your constant presence. And my guess is that sounds pretty good!

Jeff Cutshall

PS: Questions on VAST? Call me at 816-223-6659 or email me at jeff_cut@sbcglobal.net

In case you missed it, here’s an overview video about the program:

However, in my opinion this “Mercedes Benz Syndrome” applies to all businesses, no matter what product or service they offer, and no matter how big or small. I thought this concept was especially pertinent at this time of year, since you might be looking for ways to shrink your tax liabilities before the end of the year.

The heart of the article goes like this: “A colleague had an acquaintance who was looking for funding for his business. My colleague introduced him to a potential investor at lunch. The next day the investor called my colleague and told him that the person was nice but he would never invest in his business. My colleague asked why.  The investor said that he had the ‘Mercedes Benz syndrome’.

The investor explained that at lunch he found out during casual conversation that this person was funding a $2,200 per month Porsche lease through the business. The business owner appeared interested in having the business pay for his personal lifestyle. So therefore investment that is supposed to go toward the business needs goes towards the owner’s personal needs.”

The article went on to say, “These are the contractors who don’t understand that cash does not mean profits and that having cash does not mean that you have to spend it.”

Can I get an “Amen!” here?

Maybe you’re not looking for investors in your business, or even a line of credit from your bank. But, if you expand the definition of “investor” to include all the people who have a vested interest in your company (such as your employees, suppliers and customers), then a lot of eyes are watching where your company’s money goes.

You can check whether your purchases are being influenced by the “Mercedes Benz syndrome” by using a principle from aviation. An airfoil on an airplane’s wing moving through the air creates “lift” causing the plane to climb. At the same time, a force called “gravity” is working against lift. This force holds the plane down and restricts how fast it climbs.

It’s the same way in a business, where cash is substituted for air. Investing your company’s money in needed equipment, employee training, and items that increase productivity and acts the same way as air passing over an airfoil—it causes your company to soar.  Conversely, spending the company’s money on non-essential items is the gravity that holds down your company’s cash flow and restricts its growth.

Now, I’m certainly not suggesting that you run every purchase you make past your people for their approval. Or that you shouldn’t enjoy the fruits of your hard work.  But if you run your business purchases past the scrutiny of this “Airfoil Principle” you might be able to avoid the “Mercedes Benz syndrome” and achieve your definition of success much sooner.

Chuck Violand (more about Chuck)
SFS Instructor
CEO Violand Management Associates

However, I recently read about an airline experience (the airline industry is known for horribly poor customer service!) that took customer service to an even “lower low”!

On the last layover before reaching their international destination the air crew informed the 180 weary passengers that the company’s credit had been cut off and they didn’t have enough cash to buy fuel for takeoff! So the airline demanded that the passengers take up a collection of approximately $200 each to pay for the flight’s expenses!

So after a 6 hour ordeal (and many of the passengers making a trip to the airport’s ATM) they finally loaded and took off. Now that’s one BIG dumb glaring example of poor customer service!

However, most customer service mishaps don’t win the “stupid act of the year” award and yet the results are ultimately the same. For example, you (hopefully) will never have such a major public relations disaster in your company. BUT remember that delivering superb customer service isn’t about doing just one thing really bad or even super better than your competitor.

Instead, superb service is created by the little things that add up or are subtracted from your customer’s “emotional bank account”.  (These “little things” are either positive or negative Moments of Truths.) Sounds good, huh?  HOWEVER, if you don’t take proactive steps to constantly improve your customer service over time it will slowly degrade and ultimately breakdown. Guaranteed!

So how do you teach your frontline technicians the importance of excellent customer service? Easy … you delegate it to third-party professionals that know how to train today’s workforce. In the following video I give an overview about a program that does just this, Jon-Don’s VAST program.

Jeff Cutshall

PS: Questions on VAST?  Call me at 816-223-6659 or email me at jeff_cut@sbcglobal.net

Scenario #2: Moderate but Consistent Sales Growth
In this example, moderate growth is defined as 15% to 30% per year. (Not bad in today’s economy!) This growth strategy is ideal for companies that want to maintain market position while focusing their resources on organizational, service quality, or profitability issues.

Sure, it may be sexier and more exciting to hit that 50%-100% sales increase for next year that we examined last week in my “Aggressive Growth Strategy” post. But remember, by shifting your focus away from big increases in sales you can invest your resources—both money and people programs for staff training, customer-retention and cost reduction.  And all these consistent efforts will absolutely translate into higher profits!

For example, did you know that increasing your sales just 20% per year will double your sales in less than four years?  Work the numbers:  Current Year: $400,000; Year 1: $480,000; Year 2: $576,000; Year 3: $691,000; Year 4: $829,440.  WOW!

The advantages to this moderate growth scenario are that you can be more selective with the people you hire plus have more time to carefully train them and you can usually finance this growth without taking on a lot of debt.  Not to mention your blood pressure will go down too!

Scenario #3: Focus on Profit Rather than Sales Growth
Focusing on profits instead of gross sales it actually makes sense for a lot of cleaning and restoration companies.

Consider this situation. Let’s say your company’s sales have increased year after year, but your profits haven’t. So now you are struggling to be profitable. So instead of throwing away more advertising dollars at to attract new unprofitable customers why not focus on extracting the profits from the book of business you already have?

Start by weeding out your unprofitable customers. This will give you more time to invest in your loyal and profitable ones. You should also work on shrinking  your expenses.  Focus especially your direct costs such as labor and vehicle and machine expenses.  (Remember that you are going to have fewer but more profitable places to visit.) And naturally, your advertising expenses will be reduced dramatically.

Here’s how the numbers work. If your company currently does $300,000.00 per year in sales, and you earn a 15% net profit including your salary, you’ve earned $45,000.00. A pretty skinny income for anyone!

So let’s say you chose (from last week) Scenario #1: Aggressive Sales Growth and increased your sales 50% to 450,000.00.  If your your net profit percentage stays the same you will have earned $67,500.00 net profit. Better, but still not where you want it and especially given the stress and the “collateral damage” your family will likely endure!

But what if you decide to implement Strategy #3: Focus on Profit rather than just sales growth?  Likely your net profit on the same $300,000.00 in sales would double which means you will now earn $90,000.00 net profit!  Now you are getting somewhere!  Plus you will put less wear and tear on your vehicles, equipment, and people! And you might even get to spend a stress-free night or two at home with your family!

At the end of the day your business planning up to you. The important thing to remember is that growing sales just for the sake of bragging rights is meaningless, dangerous and just possibly may be fatal to your company!

Always focus first on profits and then decide which sales strategy is best for you. (And that is exactly what we will be doing in my SFS Business Planning Seminar December 12th and 13th and Jon-Don’s headquarters in Chicago.  You really need to be there!)

Chuck Violand (more about Chuck)
SFS Instructor
CEO Violand Management Associates

Shameless plug here:  Planning is what my upcoming once-a-year SFS Business Planning Seminar is all about.  Duh!  Check it out HERE.

I’ve found that a lot of business owners measure their success by how much they plan (and succeed) in growing their sales for the coming year. The higher their sales forecast- the more successful they feel.

In fact, some owners set incredibly high sales goals and then invest all their time and money in hitting them just so they can thump their chests and tell their friends, “Yep, I just had my best sales year ever!”  Or they brag to others about how many trucks they run or how many people they have working for them.

It’s a good thing no one bothers to ask them whether they’re making any money since most of these braggarts don’t have a clue!  Of course, that’s not all bad since they might not sleep very well at night if they did know.  Ignorance really can be “costly bliss”!

As one of my clients once observed, “Running at more sales without controlling your expenses is like a baseball team that has a lot of power hitting but no pitching.” You may love your team’s adrenaline rush of high-scoring games but the constant push for more and more runs (sales) just to stay marginally ahead makes no sense.

My point is obvious.  Chasing unprofitable sales in an attempt to hit a sales target can prove fatal to your company. You don’t have to be a baseball fan to understand that running at aggressive sales goals year after year can eventually take its toll and may not be the best strategy for your company.

In an effort to put sales forecasting in perspective I’ m going to offer three different sales forecasting scenarios to prove that higher and higher sales don’t have to be your only choice. In fact, you might find another strategy that’s more suitable to your company. (To avoid drowning our readers with too much information I’m going to share Scenario #1 here and then next week finish up with the last two and my summary of the subject.)

Scenario #1: Aggressive Sales Growth
All right, let’s get this one out of the way first. If you’re caught up in the “bigger has got to be better” mind set then Scenario #1 is for you. In this example, I’m defining aggressive growth as any sales growth greater than 50% per year.

This “business growth on steroids” is usually an unsustainable strategy.  However, there are several situations in which growth of this size is a good way to go.  For example …

If you’re a start up or young company and you’re looking to build sales volume to offset the expense of equipment purchases or additional staffing then you need explosive growth.  Or you want to “get off the truck,” hire technicians to produce the work AND maintain your current salary then aggressive sales growth is necessary. Or if you’re diversifying into a new service that you’re confident will dramatically increase sales then a super charged sales forecast might be reasonable.

BUT remember that saying you want to increase sales by 50% is totally different from actually doing it.  For example, if your company generated $150,000 last year in sales and you want to increase by 50% this year, you would need to add $75,000 in sales. Adding $75,000 in sales for this size company is relatively easy, can be financed through cash flow and would require the addition of only one new production person at most.

But if your company produced $1,000,000 in sales last year and you want to increase your gross volume by 50% you will need to add $500,000 in sales. Unless you’re sitting on a bucket of money trying to finance this much growth through cash flow will put a serious strain on your company’s finances. Plus don’t forget …

Growing a million dollar company by 50% would also require adding several vehicles and cleaning units as well as several new employees. And you will need to dramatically over haul your company’s “Business Infrastructure” by adding many new systems and procedures.  Plus you may want to place some new photos of your family on your desk since you’re not going to be home much!

So if you’re planning on aggressive sales growth for this year, be sure to consider all of the costs that go along with it—both financial and human.  More next week with some better (in my opinion) growth strategies.

Chuck Violand (more about Chuck)
SFS Instructor
CEO Violand Management Associates