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The Executive’s Guide to Carpet Cleaning

All too often, we hear from owner-operators that work all the time but never see that hard work reflected on their bottom line. Or companies who offer great services but don’t know how to market them. We wanted to help, so we decided to introduce a new tool–one that we’re making available to carpet-cleaners everywhere, for free. We’re calling it “The Executive’s Guide to Carpet Cleaning,” or the ServiceMonster Journal. It’s a collection of how-to articles that you can get at your distributor’s or through us, and they’re going to address topics that we know are vital to your business, because we talk to you about them every day.

We’re freely distributing this information on every channel we have available–from podcasts to our blog here to our FaceBook page to emails that we’ll be sending out directly to you. We want to make sure you get the information you need to grow your business, so we’re putting it in every form we can think of!

For our first installment, we’re talking about the “f” word–finances! Our CEO, Joe Kowalski, has put together some notes on personal and business accounting, called “Stealing from the Business.” You can listen to Joe talking about “Stealing from the Business” on the ServiceMonster podcast or view the full text article.

Text Article: Stealing from the Business

PodCast: 04 The ServiceMonster Show

The Science Behind Your Real Repeat Rate

The Correct Calculation

A fair number of our clients calculate their repeat rate incorrectly. Part of our training process includes an in-depth look at your marketing efforts. One of the items we focus in is your repeat rate. Here is how ServiceMonster does it; Take the number of customers you have serviced in the last two years (C). Then find how many of them used you more than once (R).

(R/C) x 100 = Repeat Rate %

The Incorrect Calculation

Most of our clients will calculate their repeat rate like this; Take the number of customers you serviced this month (c). Then find how many of them used you more than once (r).

(r/c) x 100 = repeat rate %

The main problem here is the length of time sampled. The rate can vary widely depending on how successful or unsuccessful your prospecting efforts are. Additionally, the two year time line represents your true number of active clients. ServiceMonster research shows that getting a client to return after 2 years (specifically when they used carpet cleaning services) is more expensive than obtaining a new client.

Why you care
There are only 3 ways to increase your revenue:

1. Increase your prices
2. Offer more products and services
3. Service more customers

For most companies, Servicing More Customers is the quickest and least risky way to increase your revenue. The most successful cleaners have several things in common. In terms of financial stability, ServiceMonster shows us Customer Retention is the most important aspect of your business. If your repeat rate is under 50% you are losing more customers than you are keeping and need to make up the loss through additional new sales.

Take this example: Let’s say both Company A and Company B start a cleaning company. They both pull in 20 new customers a month and have an average invoice of $250.00. Company A has a repeat rate of 25% and company B has a repeat rate of 60%.

Company A

Company B

New Customers / Month

20

20

Average Invoice

$250.00

$250.00

Repeat Rate

25%

60%

After 36 Months
Customer Base

640

1,200

Annual New Revenue

$60,000

$60,000

Annual Recurring Revenue

$20,000

$90,000

Annual Total Revenue

$80,000

$150,000

In addition to the increase in base revenue, you will also reduce your expenses. Keeping your name in front of your client is far less expensive than trying to get a new customer. Not to mention that your cross sale potential increases radically if your current clients are aware of ALL the products and services you offer.r.

How to increase your repeat business
First, it’s time for a change. Rest assured, you will produce the same results if you make the same mistakes. There are many ways to do a better job of staying in front of your customers. Here are the common numbers we see everyday.

Repeat Rate Based on Direct Mail

0 – 15% No customer retention campaigns
16 – 30% Inconsistent customer retention campaigns such as the occasional seasonal mailer, random newsletters, and random reminders (2 to 3 mailings each year per customer)
31 – 50% Consistent generic mailings such as newsletters and/or some basic reminders. (4-12 mailings each year per customer)
51 – 80% Consistent targeted mailings such as ServiceMonster’s FillMySchedule. (4 mailings each year per customer)
Over 80% Repeat rates of over 80% are usually urban legends or the result of an improper calculation. A few of our customers have repeat rates this high as a result of consistent client campaigns from all channels (email, mail, and phone) and the correct alignment of the planets.

If you fall into the first two ranges above, you seriously need to reevaluate what you doing for your current clients. If you are in the 30% – 50% range, doing just a little better will have significant results. Sending targeted direct mail pieces on an ongoing basis will improve your repeat rate rapidly. A simple card stating “Dear [FirstName], it’s been 9 months since your last cleaning” is all it takes.

The hard part is actually doing it. Gathering the list of clients you serviced between 9 and 10 months ago, performing a mail merge to personalized the messages, and printing on the media are just a few of the problems you need to overcome. Then there’s the stuffing, sealing, stamping, and delivery to the post office.

ServiceMonster can help you with this in two ways. The marketing engine will make list gathering and mail merge simple. Then you can print and mail your reminders with a few clicks. Most of our clients use FillMySchedule and completely automate the process. We can gather the list, print, stuff, stamp, seal, and deliver your cards directly to the post office. Your Thank You cards and Reminder cards will never be late again. Consistent campaigns for consistent results. Our customers are averaging an 8 to 1 return with the campaigns we automate for them.

One simple way ServiceMonster can increase your repeat rate with just a few clicks.

More Leads: More Sales: Higher Profits

September 15, 2008 Leave a comment

In this tip, we would like to address the issue of business improvement. Increasing your sales, improving your marketing effectiveness, and advancing your bottom line may be easier than you think. There is a well-known saying that states, “Everything measured, improves”. If you can’t measure it, you can’t manage it. Only by measuring the results of your efforts, can you clearly identify what’s working, and (more importantly) what’s not. This is as important for your employees as it is for your customers. And while this is necessary for cleaning companies which have employees, single owner/operators can actually see a greater benefit than their larger counterparts.

Here is a great example presented by one of our members;

“Before I started tracking the actual dollar amount per month we receive from certain ads and marketing campaigns, I had no idea we were actually LOOSING money on some ads. Now that we track our income against our ads, I know what ads to pull and where to put that cash, thanks to ServiceMonster.”

Tracking your business doesn’t have to be limited to marketing. You can also track order types (commercial vs. residential for example) and service types (drapery vs. upholstery). This will help you identify effective profit centers and train you and or your employees how to make the best use of up-sells. You can also test and track a new service before investing the money to make it part of your overall business.

All of these methods will help you identify one thing; ROI (Return on Investment). Items, ads, marketing campaigns, and even equipment that have a high ROI are worth investing in. Those that fall short should be pulled so that you can focus your money, time, and resources on those that are successful. ServiceMonster was built with tracking in mind. ServiceMonster helps you track your customer and order lead sources (which can include your marketing campaigns), your order types and your service types. It’s all there, at your fingertips. Just another way ServiceMonster can help you increase leads, convert more leads into sales, and improve the cost effectiveness of your business.

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