Granted if all or some of the customers stayed with you and agreed to paying 4 times more than the first time - Then it would be a good deal. I understand and read most people very well. I would view most of these customers as price seekers and not the type I want anyways. Again, I could be wrong and maybe they would be fine paying $50 first time and $200 the next. I just don’t see it.
I know one thing this Groupon may be helping me with though, weeding out any existing customers that use it
All the nay sayers could be wrong though Don. If you are using it, keep good records and throw some numbers at us next year. For me to do Groupon or not is both going to cause problems for me. I don’t care for or support Groupon.
No, I’m looking for an average of what it costs if he wants to get some new customers. i.e. He runs a $500 ad and gets two customers.
$500/2 = $250 is what it costs to acquire a new customer.
Using historical data through tracking/collecting data you figure out what your Client attrition rate is(what your talking about above but leaving out some valuable things), how many referrals you get per year per customer, what’s your avg. upsell/ad on services that they didn’t do before. That all goes into creating the LTV.(life time value. But for this I just wanted to know what does it cost for Justin to get a new customer on a consistent basis to say I want to hire you.
I know the next response is going to be but I get the majority through my website or from networking or whatever so it’s free. So I get my leads for free. Well somebody spent time putting that together your site and doing the seo or out bumping and grinding and shaking hands. Because you can either spend time, energy or money. So every customer costs something whether you like to think it or not. A lot of people myself included didn’t fully understand the true value of a good client(yearly service, add ons/upsells, referrals) times that by 20 years and they can be pretty valuable.
I think it’s the right time for a story I heard a while back. These two carpet cleaners really wanted to hire Jay Abraham(#1 business strategist in the world in my opinion)
Jay charges $3000 an hour.
The two carpet cleaning buddies were just dieing to get Jay’s wisdom.
But
They could only scrape together $2000 dollars.
Jay said “Fine, I’ll meet with you guys for 45 Minutes”
I’m sure you’re curious what the heck could he teach them in 45 minutes to be worth $2,000.
Jay taught them what Life Time Value of a client truly meant.
Giving your clients such a good experience that they wouldn’t think of having anyone else. NOT being ****ed off because you’re working for peanuts(i’ve done this)
But truly understanding how valuable it they are. So they went out and started offering free carpet cleaning services all over. I know you’re probably thinking, these two are a couple of knuckleheads and this is a feel good story. But they ended up experiencing 400% growth that year. Because after they did a free carpet cleaning they did such a good job and such good systems on how to up sell and ad on services and get referrals. They knew that some sleeze bags would roach a free service, but that’s life. IN there was some really good clients that year after year paid the bills. They also realized that this was a relationship business and thinking about making all your money off 1 time sales was a suckers game. So they developed unbelieveable relationships with all of their clients and grew a thriving business.
I know there will be critics to this story that won’t believe it and think it’s foolish(I know this because I’m a recovering knucklehead). The only thing I’m trying to get across is how valuable they your clients are. How can you continuously add value and DEEPEN the relationship.
This scenerio wasn’t directed towards myself though, more towards the average person. I consider myself a master when it comes to marketing face to face and since you’re asking for my numbers - I’ll give them to you.
Spending the first two days marketing, I personally would chose two saturdays - 5-6 hours per day. I would average 3 to 4 new “Correctly bid Customers” 3-4 is a low end number really but we’ll use it. Again we will average each customer at $200 per house. I could schedule these jobs, use one guy and it would take me appx 5.5 hours. 5.5 + the two days of marketing (11) = 16.5
minus what I pay the employee ($66) = $734 divided by the 16.5 hours I have in = $44.48 and hour.
So to dance around your question, finding these 4 Prime New Customers didn’t cost me anything. I actually made $44.48 an hour finding them. I haven’t ran the numbers but to be fair I’ll say 2.6 out of the total 4 customers are mine for years to come.
Where as Groupon how much do you make an hour? Also out of these 4 customers what is your thought on a good number for retention? I haven’t used Groupon so I can’t give a concrete number, but my guess (basing it on price seeking customers I’ve dealt with) would be .2 or
.3 - I know - an overnight instant customer base would be sweet. But think about it, short of winning the lottery, does anything come overnight or so easily. Most things I’ve seen other people achieve, and everything I value so much in life, has taken a lot of hard work to get too. Also it’s not like I’m just being skeptical, I know this industry.
Don’t let me rain on your parade though, this is just my opinion (after a long long day may I add) - I hope it works for you and please let us know how it went for you. 2 years from now if you report how wrong I was, I’ll take it like man
Sorry, I didn’t read the rest of thread before the above post. Everyones different and yes the guys that spend $500 on an add for 2 new customers may need to look into Groupon or have their head examined if they do it more than once
I built my business the exact way I described above. I would guess 70% of my customer base (not counting referals) were from Beating the pavement. Doesn’t mean there aren’t easier or more effective ways. It’s just what I did. There are dozens of proven ways people have built their business. Short of buying another business out, I just don’t see a valuable customer base happening overnight.
Please don’t take offense to my posts, it’s nothing against you or anyone who uses Groupon - It’s just my honest opinion on Groupon as a whole.
The more you give the more you get!..In refering to above story.
I did groupon, but cancelled it! I was not going to work for 10 bucks an hour no matter the LTV…If I had a good upsell, and referal system in place and then give some free window cleanings to my target clients…I know the initial would be free but it would be on my terms and no middle man making a killing(groupon)…
If groupon was truely there to help the business and consumer, they wouldn’t need such a huge cut of the pie!
None taken at all. I enjoy hearing different perspectives and it sharpens my saw when being contested(I enjoy that also)
I also agree with you that there are more ways than 1 to skin a cat.
On the door knocking part I get burnt out after an hour of getting doors slammed in my face. I’m always looking at ways to make myself as Dan Kennedy says “the invited guest and not the annoying pest”
But when I was a business broker I met a guy that was making 600K a year selling businesses. I was like how the heck are you doing this? What’s your secret? He did this all by door knocking late afternoons and weekends. He would find businesses where there was nice cars out front (BMW’s, Mercedes, etc.) and go in cold. And this made him lots of money.
So I know it works too. It’s finding ways to grow that we can do week in and week out.
I think Groupon is looking at it’s profits before ours. But still I think it’s a great way at getting a bunch of customers at once to give your service a whirl.
Just got an email from a buddy of mine very excited about a new Network marketing company he signed up with. Another coupon company similiar to Groupon.
Groupon is going to cause a slight headache with some of our existing customers that see this great window cleaning price - Now there are other company’s that are copying Groupon but with representives (network marketing) recruiting. This isn’t going to hurt established window cleaning company’s too bad, but I guarantee it will cause some un-needed headache.
Kind of reminds me of the oil spill on the coast. A big mess to clean up later. Just Groupon by itself is a little annoying, but now how many more are going to pop up?
There was a commercial on the tv here in Dallas last week, was a groupon style offer, it ran two days in a row. I just was listening to it while I was painting a house, but the offer was like $25-$35 offer for $300.00 worth of service for some local spa/salon. Crazy stuff!
Sorry but Groupon is a joke for everyone but Groupon, they make more money than you do and your company has to put forth all the effort. I completely understand the upsell though. I would tell the customer that the 49.00 covers four walk up windows and here is the price for everything beyond that. Ten dollars per hour is crack head money, even day laborers work for more than that!
I would highly suggest all window cleaning companies boycott that trash, it will stink up the industry!
At the end of the day - Groupon will have Millions and the service company’s that did buy into it, will have big dreams of their overnight customer base in which most of them next year will be looking for another Groupon deal… //SIGH//
Wait I forgot to mention the small % of customers, company’s as myself (have worked hard to get) will lose. I’m not worried though. The customers I do lose, I didn’t need or want anyways. A good way to weed the weak from the herd.
Remember its only a deal a day per city so that is the good news, groupon is good for restaurants with a huge mark up on the product they sell and reality is people will have a drink or two, order appetizers and bring five people along etc etc, so for them it makes sense. For us it is plain silly
Definately good for restuarants - and giving this some closer thought I may have to take my foot out of my mouth. This could benefit a window cleaning business if done the right way. I’m not willing to share my idea public (competition in my area) but feel free to send me a private message and I’ll explain.
I think Groupon should do a Groupon so we can try it for less than their 50% commission. I’ll keep my eye open for that one. Although, they would NEVER forfeit their own profits. According to the Dayton Business Journal they are barely making it ha
