EP15: Is Your Competition Distracting You From Growing Your Business?

OPERATIONS

Nov 2

What to Do When a Competitor Undercuts Your Prices

Imagine one of your best customers coming home and finding a bright yellow door hanger on her front door. It's from another cleaning company, and in big bold letters it says: your first cleaning, just $79.

Be honest, what's the first thing that goes through your mind when you hear that?

What Actually Happened With That Door Hanger?

Picture our cleaning technician pulling into the driveway of a customer we'd cleaned for three years.

She knows the garage code, the dog, exactly which bathroom this customer is particular about, exactly how she likes her counters arranged.

The technician sees the door hanger, brings it inside, leaves it on the counter. Later that day the customer gets home, looks at the $79 offer, and throws it away.

Not every customer will do that, some really are shopping on price alone, but a customer who trusts you and knows what to expect has a reason to stay that goes well beyond a promotional offer.

That other company is trying to get in the front door. Your team already has the garage code.

Why Is It So Easy to Overreact to a Competitor's Offer?

We see the ad or the door hanger and start spiraling: should we run a special, are we charging too much, are they going to take my customers, my team, my whole company?

We start comparing ourselves to them without even looking at our own numbers, and start considering matching their price.

There's nothing wrong with being competitive, and your pricing deserves a look quarterly, but don't make a pricing decision because a door hanger made you nervous.

You've got payroll, supplies, insurance, and a team to take care of. Knock $20 off every clean without knowing what it does to your margin, and somebody absorbs that, usually you.

What Happened When a Big Competitor Moved Into Your Market?

A few years ago a very polished cleaning franchise came into our service area, beautiful branding, eco-friendly, a flawless website. Everyone in local Facebook groups was tagging them.

I remember sitting back feeling like we weren't quite good enough, catching myself comparing our business to theirs, wondering if we'd lose customers or grow slower.

At some point I asked myself what I was actually doing. I can't run their company or decide what they charge or spend on advertising.

What I can decide is how we take care of our customers, how we build our team, how our business actually looks.

So I stopped giving them so much attention and got back to work.

About a year later I drove past their old office and noticed their sign was gone. They'd closed entirely, struggling to find cleaning technicians at $16 to $17 an hour, $5 to $10 less than the market was paying.

All that energy I could have spent worrying about them wouldn't have changed a thing over there. It would have only distracted me from my own business.

Are Customers Really Just Buying the Lowest Price?

Not all of them.

Yes, they're paying to get their home clean, but some are paying for consistency, the same cleaner who knows their home, or the reassurance that if something goes wrong, someone will actually answer the phone and fix it.

Some people will never shop at Walmart even though it has the lowest prices on almost everything, because price isn't the only thing they're buying.

Saying "we provide quality service" means nothing if you can't point to what you actually do differently and do it consistently.

Should You Touch Your Prices at All?

Before you do, look at your actual numbers.

What does it really cost to clean a home? What margin do you need to pay your people well and keep the business healthy? Are you attracting customers who value what you're actually offering?

You don't need to win every quote. You need to win the right customers at a price that works for your business.

How Do You Figure Out What Actually Makes You Different?

Ask the people who already choose you.

Call five longtime customers this week, not as a sales call, just: you've been with us a while, what makes you keep choosing us?

Let them answer without feeding them anything.

Write down their actual words. If you hear the same thing more than once, that's worth protecting, and worth putting into your marketing.

How Do You Keep Delivering on What Makes You Different?

Use the customer notes field most cleaning software already has, and build a standard for it: how many bedrooms and bathrooms, pets and their names, anything particular about how the customer likes things done.

Reward your team for adding to it, even a $5 gift card for telling the office about a new puppy named Spot.

A card and a small chew toy in the mail that says "welcome to the family, Spot" costs almost nothing and earns a customer for a long time.

Have your customer service team listen for life events too, a family visit, a hospital stay, and send a note.

Your team is already hearing this information, you're just not collecting it yet.

And when one cleaner's or office person's head is the only place that information lives, a sick day or a vacation means your customer has to start over with someone new.

That shouldn't happen.

So Should You Ignore Your Competitors Completely?

No. It's smart to watch what's happening in your market, just not every day.

Once a quarter, spend 30 to 60 minutes looking at how competitors are positioning themselves and what customers are saying about them, purely for ideas on how to get better, not to feel behind.

I was intimidated for a long time by a competitor a few minutes down the road with gorgeous branding and a strong social presence.

I eventually met them at a business event and they turned out to be some of the kindest, most generous people I know, we're friends now.

Your competitors are not you, and you're not them.

Your vibe attracts your tribe, and the customers who align with what you stand for will find you.

This week, pick five customers, call them, ask why they stayed, write down their answers.

Then pick one thing, better customer notes, a follow-up text after every cleaning, a clear process for fixing mistakes, a small gift in the mail, and put it into practice.

The next time you see a cheap door hanger, remember: a lower price might get someone's attention, but the experience your team delivers is what gives customers a reason to stay.

If you want a simple way to create and organize your SOPs, check out Sophie at sophiehq.com