Cleanfax - January 2012
COVER STORY The Voice of the IAQ Industry A Training com IAQ Training Institute LLC 26 CM Cleanfax JANUARY 2012 CLEANFAX COM paper rep Or the Groupon rep Or the Yellow Pages rep Or all the above and he says I need to book some jobs help me And of course the rep or reps are happy to oblige They tell David rightly so that if he wants to book jobs his advertising needs to have a hook to prompt people to call To be successful David needs to do what Goliath does and run a special The payoff At this point one of two things happens Either Davids special is a flop and he doesnt book enough work to pay for the advertising a bad thing to be sure or it is successful in the sense that David books and completes enough work to pay for the ads and perhaps even make a few dollars This second scenario is in my view even worse than the first for it lends support to the view that David can borrow Goliaths means to build a successful high touch business In fact it retards and undermines it Davids business is structurally different than Goliaths A large gross margin is required for it to be successful When David adopts Goliaths marketing methods the result is significantly reduced margins thus trapping David in a working for wages business that compensates him as a technician rather than as an owner operator The economic impact My fellow Cleanfax contributor Steve Marsh has documented the potentially tragic economic impact of this strategy Marsh estimates that gross margins for owner operators are reduced by 50 to 70 percent on jobs obtained using a discount marketing strategy Equally important these special customers are much less likely to become regular customers the bread and butter of David type businesses than are those acquired by referral Another factor is the impact it will have on Davids existing customers Likely some will feel cheated if they had cleaning done at the regular price only to find that others are paying less The result will be lost trust which is likely a foundation of Davids business success Others upon seeing the special will sort of special offer or hook He thinks of the calls he gets from shoppers as opposed to repeat or referral customers Always it seems they ask Do you have any specials Since hes not busy David puts on his marketing hat He needs to fill the schedule so he calls the Val Pac rep Or the SEO rep Or the radio station rep Or the news Davids undoing Sometimes David looks at Goliath with envy Usually this is when business is slow and he thinks of all the jobs that Goliaths company is doing He notices that Goliath does a lot of advertising and that his ads always include some Circle 252 Continued from prior page
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