Service Magic effectively turns every new house cleaning lead into an auction type situation, and that is bad for an industry already rife with idiotic pricing. By idiotic pricing, I refer to prices which are below the full cost of legally providing house cleaning services on an economically sustainable basis.
For proponents of free enterprise, auctions have positive connotations, because they can cause service providers to become more competitive in terms of marketing, quality of service, and price thereby benefiting both consumers and service providers. For example, auctions can spoil monopolies, and so for any industry troubled by monopoly characteristics, the effect is undeniably positive. But for an industry as splintered as house cleaning, which by virtue of its low barriers to entry is afflicted with a steady stream of not-so-smart drop-ins, no such benefits accrue to consumers—quite the contrary. The auctions put pressure on prices, and lower prices favor the industry’s rule breakers. So, it would really be great if Service Magic were to give us a break with the auctions at least until the industry improves. What the industry needs instead is improved compliance, combined with a significant upgrade in terms of quality and dependability of service. And Service Magic with its auctions is making no contribution to improving those aspects of our industry.
That’s why, if you hope to become a market leader within the house cleaning industry, it would be traitorous for you to participate in Service Magic’s auctions. And it’s not just bad for the industry, it’s bad for you too. For you, the auctions are a trap, because the money you pay Service Magic is subtracted from funds which could have otherwise been invested to develop your own marketing capabilities. Secondly, the new customers you win through Service Magic are price sensitive. You don’t have to be Albert E. to understand that those two factors combine to represent a losing hand.
And it’s not like you don’t have options. Why wouldn’t you instead invest in your own marketing, and then compete on the basis of providing dependable, thorough house cleaning services, on a level which significantly exceeds the expectations of your customers, and for such services charge premium prices? Have you ever stopped and asked yourself where Service Magic is getting all those leads? If you are intending to be a real house cleaning company and are still using Service Magic, then it’s time for you to wake up!
And for the rule breakers, we know how your story ends, because within our industry, we see sad endings everyday. You can’t comply and survive if you don’t raise your prices. You can’t successfully scale in the long-run, if you don’t comply. And if you don’t scale, you have no business, just a job without retirement benefits. Good luck with that.
For those of you who post messages on industry message boards, I’ve given up on reading those. Please forgive me if I continue to ignore your invitations. It’s nothing personal. It’s just that I found the message boards to be . . . just not worth my time. So, if you want to reply with your own viewpoint, you can always contact me at email@example.com. I’m presently a bit too preoccupied to be there a lot anymore, but Angela still passes along all my fan mail, and my hate mail too.
Denver Concierge, Inc