Darren
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!
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.