So, as I wipe the sleep out of the corners of my eyes this morning (it is allergy season) I get my first home services category offer from Amazon and Living Social-and I don’t think I like it. Couple things;
1. As the provider of this service (I removed his name) he is now providing his service for At LEAST %60 less, depending on his deal with Living Social
2. He has commoditized his service even more. In other words, I have a friend who won’t buy a Big Mac unless they run it on a dollar deal. His thought…if they can make money on me at a buck, why would I pay more. Fair question.
3. Scale-Contracting businesses don’t scale well. In other words, you have to build your business slowly. Too fast and quality suffers, margins dip and your reputation takes a hit.
Overall, I appreciate the guy trying to do something to drum up business, but I think he is going to get his ass handed to him, and if you ask him 3 months from now, he will tell you he would have chosen something else. Or maybe I am dead wrong. Tell me, ever run an offer on a daily deals site and get good results? Or better yet, profitable results? Let me know down in the comments!
1 Comment
Yikes. Just looking at this gives me the willies on many levels.
My question to contractors that are looking to put out an offer is, “What’s a deal you can make that provides a good value to a client, AND that you can deliver on; fast, repeatedly and with quality?” A tough nut to crack, but you want to drum up business, not give it away. Sometimes it’s better to set up an offer for a “scalable” service that will get your foot in the door with a good client. I doubt that you would get more business (or even want to) from a homeowner looking to refinish a hardwood floor for 200 bucks.
Great post.