30 Nov Strategies for Success: Keeping an Eye on the Future
Wednesday, November 30, 2005 Posted by BillYeadon
I think it was that great American bard, Yogi Berra that said,… “The future ain’t what it used to be.” Yogi was certainly prophetic in his statement. With that being said, where is the cleaning industry headed? Less than a decade ago our industry was under siege from a variety of companies. Vertical integration in the carpet industry had many small carpet cleaners taking a doomsday approach. Fortune 500 companies such as Dupont and Shaw Industries would roll across our industry like the blitzkrieg through Europe.
Giant carpet retailers including Carpet One, Carpet Max, Abbey Carpets and Sears projected a quick dominance in the fragmented cleaning industry. I sat in a meeting in which the CEO of Carpet Max proclaimed they would have 500 cleaning trucks on the road in 24 months. Actually, in 24 months Carpet Max was bankrupt and all those little “mom and pop” companies were just rolling along.
A decade later as Yogi would exclaim “déjà vu all over again”, we had a new and much larger threat, Home Depot partnering with ServiceMaster. While on paper and in the boardrooms in Atlanta and Chicago it was a marriage made in heaven, the marriage was dissolved quicker than a rust spot treated with Erusticator! :o)
When will all these conglomerates learn this is not a business for mergers and acquisitions? One truck or 500 trucks, we still clean one room at a time. Owner-operator companies will always dominate this industry. Each customer gets our individual attention. If there is a problem, we hear about it and handle it.
So, why is it that I think smaller companies will continue to be successful in a service market?
In a world of ATM’s, voice mail, and the Internet, we have become a “faceless society”. If you want to talk to a bank teller or an airline ticket agent in person, it will cost extra. Our business is dependent upon and prospers when we understand the need for personal relationships.
The average consumer is overwhelmed by demands on their time. In 1999 a married couple with children worked a combined 3,918 hours. This is about seven weeks more than a decade earlier! Do you really think they want to run down to the store and pick up a Rug Doctor to clean their carpets on Saturday? Do you think they want to call every ad in the phone book before they talk to a live knowledgeable person?
Consumers are actually looking for less.
Our clients want less hassle, less work, less time out of their frantic schedules, and less
anxiety about who is coming into their homes to clean for them. This means that we can
charge more by giving less (in a manner of speaking). Demographics are in our favor over the next few decades.
The age group from which we draw many of our employees, 20-29 will finally increase dramatically by 2010. In that same year, over 1/3 of the population will have passed the
magic age of 50. This age group is pushing the last of their children out of the nest.
Once the kids are gone, the first thing this group does is remodel. This means any item
that is not replaced will be cleaned. As these people remodel, the carpet may be
replaced with alternative flooring such as wood, ceramic, linoleum or laminate.
This also means that if you have not yet expanded your service beyond carpet cleaning,
you are in trouble. Remember you are not in the carpet cleaning business; you are in
the service business. What you are offering to your customer is a chance for them to
buy back their leisure time. And, as the MasterCard commercials state, “that is
priceless”. Sounds like our future looks pretty good. If that is the case, why do so many companies in our industry fail each year? This does not happen because they cannot clean carpet.
Furthermore (regardless of the continual banter we all read on the industry bulletin
boards), it has nothing to do with a company’s cleaning method, either.
In most cases, the primary reason that a carpet cleaning companies fail is because they
lack good management principles and a basic understanding of cash flow. They do know
how to clean, but not how to get the phone to ring!
How do you prevent this situation?
While this may be a blatant commercial for my employer, I would highly recommend Strategies For Success. SFS is a five-day program that has nothing to do with pH or saponification. In fact, urine removal isn’t even brought up until dinnertime! :o)
Chuck Violand focuses on Management and Hiring as well as Employee Retention. Steve
Toburen spends three days on developing Customer Cheerleaders. Home Depot, Sears, Dupont, and anyone else who cares to try, will never bring us down!
The future looks great as long as we know where our real problems lie.
The cartoon character Pogo summed it up best when he said: “We have met the enemy and he is us!”
Bill Yeadon