Unveiling the mystery behind residential maintenance agreements.

Posted by Nick Bredhauer on

Triple Your Income and Halve Your Advertising Costs

Assuming that your repeat customers get their carpet cleaned every three years, you would expect to earn the income from the initial clean plus the income from the subsequent clean three years later. That is – if the customer remembers your name, if a competitor has not lured the customer away, and if you have generated enough income to stay in business for the three years. This income would look like this, assuming that you were able to raise your prices by 5% per year.

XYZ’s 5 Step Carpet Clean

3 years income from the average residential home (no protector)

Year 0 - 60 sq mtrs @ $3.00 Per sq mtr = $180.00
Year 1 - @ $3.15 Per sq mtr = $0
Year 2 - @ $3.30 Per sq mtr = -$0
Year 3 - 60 sq mtrs @ $3.50 Per sq mtr = $210.00
Total = $390.00

You are at the front door after you have completed your “5 step 110% money-back guaranteed best job you have ever done” carpet clean and your customer says “I wish it could look this great all year round”. Why can’t it look that good all year round? Offer your customer a residential maintenance agreement. Your agreement could offer any service you wish. Your basic agreement would cover:

  • Spot and spill insurance – As specified in the contract you return within a reasonable time to remove accidental spots and spills.
  • Six month traffic lane cleaning – 6 months after the first clean you go back and redo the entrances, hallways, and other major traffic areas.
  • Annual re-cleaning – redo your “110% money-back guaranteed best job you have ever done” type clean.

The charge to you customer would be 10% of the initial clean paid monthly in advance. The income resulting from the Carefree Carpet Cleaning agreement would be:

XYZ’s 5 Step Carpet Clean

3 years income from the average residential home (with protector)

Year 0 - 60 sq mtrs @ $3.00 Per sq mtr = $180.00
Year 1 - 12 months x $18 Per sq mtr = $216.00
Year 2 - 12 months x $18 Per sq mtr = $216.00
Year 3 - 12 months x $18 Per sq mtr = $216.00
Total = $828.00

Instead of earning $390.00 over the three-year period you can earn more than twice as much. This does not include the extra sales that you can generate by developing the ongoing relationship with your customer.

“But this would cost me a fortune” you would say. The additional income generated from the agreement is far greater than the extra expenditure. You actually have an opportunity to reduce some of your costs and generate additional income on top of the agreement.

You can make additional sales by cross selling your other services. Whilst you are there doing your maintenance clean you notice that the upholstered furniture is starting to look like it’s in need of some attention. You can on-sell to your customer your “110% money-back guaranteed best job you have ever done” upholstery cleaning and protection service.

Your customers forget about the spotting service. Generally, it works out that about one in nine customers calls you in once a year for spot removal. It does not take long and “gee that upholstery looks like it needs a good clean”.

You have taken your customer off the market. Your competitor can try in vain to take the customer from you but that customer is locked in. That means one less customer you have to spend expensive advertising dollars on trying to attract. Plus your customer feels that they have their own personal carpet cleaner that is giving them great service. Try and stop them telling their friends about it next time the topic of carpet cleaning comes up around the dinner party table.

You are going back to a job in which you are familiar with. You know where to park your truck, you know where the fresh water tap is, you know how much hose you need, best of all you are cleaning carpet that is regularly maintained. All of these points add up to saving time. Time is money. You are improving your cash flow. 10% of the initial cleaning costs times 12 monthly payments gives you two additional payments of $18.00 each year to cover the cost of the traffic lane clean. Plus you make interest on the money paid to you in advance. 5% interest on $18.00 paid monthly in advance works out to $10.37 by the time the annual clean comes around again.

You can better utilize your time and equipment. Over the period of the contract, you can adjust the schedule bit by bit. In a few years time as you have adjusted the cleaning schedule a week here and a week there, the annual clean ends up being due in the middle of winter when things are quiet.

Parts of this article were adapted from “Marketing and Management”, a manual written by Jeff Bishop of Clean Care Seminars.