90% retention Rate is not a good thing Per Yoakum

[XTREME1]

Dave Yoakum

Having 90% repeat and referral is not necessarily anything to brag about.

I am very proud of the fact my company is very busy and grows base on repeat and referals. Dave the Guru thinks this is a bad thing. I would like to hear how you guys think the best cheapest way to grow a business.

For the record I do have about 90 of all business is refer or repeat and am not looking to market more to accelerate growth. I have heard (and know) that the way I have done it isn't the fastest way to grow but the cheapest. For the record Dave boasts a 35% repeat client retention rate which I think is horrendous and i have a 90%. Tell me what you think. Do you agree with Dave low client retention or me concentrate on client refers and retention?

 

[Cameron1]

I think both of ya are full of chit

 

[XTREME1]

Go search Steve I haven't advertised in over 2 years and am looking to get started again. Search anywhere for an ad from me, non existant, call directory assistance I have an unlisted number. I want smart growth and keeping my customers is priority.

Right now I am looking into what avenues work best for advertising because I am growing but also want to control the product

I fell into the trap of over advertising and wasted 10's of thousands and now don't want that. I have diversified the product for the consumer and since most of my business is high end I get my commercial through my customers. My largest account is hapco and brings me atleast $100 a year

 

[Brian R]

Percentages are all relative Greg.

If you do a drive and bring in 1000 new customers one week then your repeat % is going to go down.

If you don't bring in 1 new customer then your repeat rate is 100%

I'm usually right around 65% for repeat customers....that doesn't include referrals.

The bigger the company gets...the percentages will stay the same....as long as I stay consistent.




If someone has a very low repeat % it very well could mean they are just bringing in a ton of new customers.



Now if we are talking the % of people who you have cleaned for that do or do not come back....well, that's different.

You should be at least around 50% and that's with people moving out of town etc. (attrition)
If you can stay at 90%, then you're doing something very very right...but at a higher level of business it would be pretty tough to keep those numbers.
It's the law of averages.

As you aquire more customer you HAVE to lose a higher amount of them and that will probably be a higher % of them.



This has been a moment with Brian. :|






EDIT for Crowley: I just checked...I'm at 62% repeat.

 

[KevinL]

Greg, you have a typo on your home page.

 

[XTREME1]

Brian you made my point

If someone has a very low repeat % it very well could mean they are just bringing in a ton of new customers.

I am looking to lower that number now by growth but if my growth was so high that I was retaining 90% of my base and it only reflected 35% of my business that would be growth of about 270% per year.

I will hopefully retain 90% of my current customers but have it represent 70% of my business.

The question is how to do that. I asked steve in a thread before but he went under a rock.

Kev:I have alot of typos I am working on it Kevin. Could you point it out for me to make it easier before I go look

 

[joey895]

It depends on a couple of things. Like if we are talking "repeat " rate or if referrals are included in that number. Secondly it depends on how you are defining repeat rate.

For example before I knew any better I defined repeat rate by dividing jobs that were done that were repeat customers into total jobs. In other words say I did 40 jobs for the month and 35 of those were repeat customers I would be at 87.5% repeat rate. (35÷40=87.5)
I honestly thought that meant I was doing great but in reality all it meant was I was not bringing in enough NEW customers.

In my opinion the better way to define repeat rarefied the way service monster does it it doesn't penalize you for getting new customers like the other way does ands gives you a truer number but its not as great a number for bragging about.

Sent from my ADR6300 using Tapatalk

 

[Brian R]

So that should be the question to Yoakum...what the % of your retained customers?.

 

[XTREME1]

refers and repeats Joey

 

[Brian R]

So Greg, are you asking how to get more new customers?

If so...welcome to the club. !gotcha!

 

[Dolly Llama]

If someone has a very low repeat % it very well could mean they are just bringing in a ton of new customers.

I'll guarantee I'm the worst biz man on this thread..(one of the worst on this board)
I'm retard too and can barely add 2+2 with a calculator

however, I DO understand what you said, but the numbers Dave posted jumped out at ME before Crowely jumped in.
Unless he's "firing" custys left and right, he wouldn't be able to keep up with what he "says" he's doing

if Dave wants to throw out numbers touting his system, more power to him...but he ought to at least make them so that any retard (me) can see they don't add up.... :roll:



..L.T.A.

 

[XTREME1]

The best practices on getting them. I also am very concerned about controlling the flow and product, so it is a fine line

I have such a loyal following I was going to send them a letter asking them to refer me to friends and family. My customers honestly become my friends in the community and most would want to help out(I think).

 

[NobleCarpetCleaners]

Jaaaasus of course a 90% retention/repeat rate is good, no great. But maybe just maybe a better way of looking at a business is profitability. Say you have 300-500 clients in your rolodex and 90% repeat you regularly, what is your net profit? What's your hassle factor? Are enjoying yourself? Jeez, are you having any actual fun?

I describe a first time client or an extremely infrequent client as a "one time". It's just my personal way of describing something. Large franchise cleaners do a bunch of one-times. Perhaps many here as well. But as long as they are profitable, low hassle and the work doesn't suck then cash the checks and move on.

There's a lot of claims, philosophies and methodologies in this nutty cleaning industry and there's a ton of bullshit out there. The industry seems to me like a spastic child that somehow manages to survive inspite of itself. It's true we have some unique dynamics about what we do, the history of the industry and the ever changing market place. However we tend to over complicate things.

Retention can be important especially if those repeats are profitable and the work isn't a drag. Build your business to be profitable. Find out what works best for YOU. A whole bunch of profitable one-times or a rolodex full of profitable repeats or a mixture of both. Tax time paints a picture ever year of your progress.

 

[jkowalski]

RE: Calculating Repeat Rate

We did an article on repeat rate for Cleanfax a while back that echoes what Joey and Brian are talking about. We will also have a quote in Jeff Cross’s article next month where we share some numbers with him.

http://www.cleanfax.com/enewsarticle.asp?ArticleID=617

 

[Desk Jockey]

Man 90% is awesome!!!

Here is something to consider before you drop some big coins on advertising to the masses. Why not market all the various services you offer to your existing clients? They already know you and like you...well at least they like your work. That way you're not spending a ton of coin trying to attract "New" customers that are not familiar with you and may be satisfied with their current cleaner.

Mining your own data base may just be more cost effective for you. That's what all the the big marketers do, anytime you buy anything you make the date base list. I get emails from Clothing retailers, pizzza, outback, Target, Valley Vet, Outdoor Outfitters, you name it.

Does it work? Sure it does, I took the kids to Dave & Busters, just because I received a special offer. Hadn't even thought about them but they sent an email and brought to top of the mind.

 

[Brian R]

What Rich said.

That's why I spend more money with Service Monster than any other venue. Marketing to my present clients.

 

[XTREME1]

Just got back for lunch and I have been thinking and I have let my customers now about my other service and commercial work and we have had significant growth from that, I was thinking about going back to the well and asking then to tell their friends and family as well as another commercial push

 

[Becker]

Phone rings,
Then the music starts, the birds start to chirp, the smell of spring flowers as the client leads off with.....................


Hi, this is Mrs. Smith, Jane Doe gave me your number. She says you are the best, and I need my carpets cleaned.

You can build a huge business on the same basic principles of Amway, Avon etc... Pyramid.

Friends telling friends.

Your past client base is a gold mine, it just needs to be worked.

Not working your client base for referrals, repeats, and other services is a mistake.

Find ways to make it easy for your client to refer you to friends and family. And of course reward in some way. Big or small.

I've had past clients say... I can give your name out, Are you looking for more work?

Duh! I think to myself. In other words I failed to make it easy, or convey I want referrals.

Aside from that, if you are expanding into new markets.. Areas where you right now don't have a lot of work. I mean after all it is not a priority of our clients to spread the word about your company. Then marketing is the way to go.

Internet seems to be the best resource right now. The demo most of us target are of an age they no longer look to the book to find services. It is all online.

News papers are not subscribed to in the rate they use to be, even more so in our target age range.

Radio and TV is still a option, however the Ipod and DVR are killing ad time. And the cost.

Direct mail has always been great.
But you need to target the right client, and get your piece look at.

You have already nicely lettered your van. You might not get a ton of call off the van directly but it builds your brand. And if a shopper has seen your van a few times when they do look for a cleaner and spark in the brain will go off when they see your ad or brand in the media they are looking.

Not being listed in ever printed and online directory is a huge mistake. After all it is completely free.


But for you Greg, I suggest getting a booth at the next Home and Yard show.. Sit there for a week passing out information and collecting names and number for a free house of carpet cleaning... !gotcha!

 

[Lee Stockwell]

I agree with Steve.

 

[Royal Man]

For the record I still don't think that having 90% of your business from repeat clients is necessary a good thing.

I could just mean that the business in not driving very many new clients.

You can look at it this way.
What would you rather have a 100% repeat rate and service 500 clients a year or service the same repeat clients and add another 500 new clients for a 50% repeat rate.

If you really have a 90% repeat rate. It is something extraordinary.

I have many client that are one time cleanings, some that get new carpet, some that clean every 5 years, some that were great client when their kid were young .But when they grew up the cleaning became more infrequent,some that may even try an other company.

It's called attrition and it is a normal course of business.

I use to brag about how my company was almost all repeat clients for many years.

In hindsight. I was being naive. Because, I found that if I didn't constantly drive in new clients my company was whithering on the vine and not growing.

If you can grow your company without advertising or even client reminders. More power to you. You are the exception and not the rule.

Most find that it takes much more that simple doing an extraordinary job. Most client just take it for granted that the carpet will look great after paying for a service.

We all think we are great. But, to most client you are just an other service provider, just one part of the hundreds of other things they did that day and they will forget your name once you leave, if you don't remind them on a regular basis.

 

[XTREME1]

Hold on Dave you so now your growing?

Who said no growth? I said 90% referal and repeats. You said that isn't a good thing.

You also said you don't want to grow larger and if the numbers you present are even 1/2 way true you would be forced to grow.

With that I have been able to grow. I have even cut off the nonperforming customers. I get there they aren't home more than once we no longer do business with them. Late pays, no longer do business with them, complete PIA no more service.

I think if you pulled out the 175 on EVERY job and wow'd the hell out of them and were reasonably priced and had a personality like me you would understand.

Same with the people I have hired great guys who look for the dollar last and want to do the best job.

 

[LisaWagnerCRS]

90% repeat and referral IS including new business - what else does "referred" business mean except "new" clients?

Ideally, working to be fully a repeat/referral based business is ideal because it pulls you out of the places where everyone else is battling to grab new clients. And as we all know, getting a good referral is gold - no price shoppers through that route.

You do need to add new clients to cover attrition of the existing house list. We do a mix of repeat, referral, and some qualified new business through educational channels.

That said - even though I've strategically built our business to be repeat/referral based - the best we've ever hit has been 81% and that was several years ago before Facebook... which with online and social media today and review sites and word of mouth sharing - it's really hard to keep those numbers super high if others are talking you up to new "strangers" who are their friends on-line, and not truly be getting in new business who cannot name a direct client who referred them - but will say Angie's list or Yelp or Google Local or Facebook or YouTube or CFI or etc.

I would be interested in seeing how the 90% was achieved - because I'm a pretty smart marketing cookie, and unless I had no web presence and truly only controlled commerce through my house list and their referrals, I would have a really hard time hitting that 90% threshold.

And... I get worried if I drop below 60% - because a strong business is built on strong repeat client relationships and referrals - but that's me. I like to have clients who only trust us to do their rugs and send their friends.

Lisa

 

[Art Kelley]

Dave Yoakum

Having 90% repeat and referral is not necessarily anything to brag about.

I thought it was an odd statement also. But within the context of your total customer volume it makes sense if you are activly seking new customers through different channels. Sure you should retain all of your previous clients based on the strength of the work you perform, but if you really want to grow your business you will need new blood beyond those referrals from your groupies.

 

[XTREME1]

I have done no marketing whatsoever Lisa and am looking at ways to improve that now. I have had healthy steady growth through word of mouth referals because I project that I am the best and I go above and beyond at a reasonable price.

Every customer is asked where did you hear about us and if they say I am not sure we dig a little deeper. As I said we currently have an unlisted number, no advertising to speak of and FCC will tell you the website wasn't get much action(besides carpet cleaners).

There are 42 jobs this week and about 18 rugs all with the exception of 1 $145 job was repeat or referal. That one has no clue where her husband got my company name and he wasn't around(she turned out to be a girl I went to High School with).

Currently we are looking at expanding our area because I do not want to battle the cash flow issues that we faced with the blizzards around here. I like to pay all my yearly fixed costs up front at end of the calendar year for the next year and couple with 2 break jobs and taxes I took a big hit when we had next to no business for a week and a ton of commercial work we are waiting on being paid for. We had enough to keep 1 truck running but with all the money going out I thought I was going to have to dip into the reserve. I actually just today went ahead from that and am still waiting on the commercial so it will put us in a strong position to really finish the winter and hod onto the reserve funds.

It did concern me enough to start looking at growth and I don't want ot be foolish about it. I want to keep the company reputation intact. I was searching for way to do it but Yoakum keeps chiming in with BS and it annoyed me. It is great to hear from guys/gal like snow, chavez, yourself, becker and many many others who have been around the block.

I am very proud of my retention & refers and each year my core adds appointments because they know what they will get and if someone is coming over they won't wait.

I have bought a few marketing programs and am going back to the drawing board and putting together a proper plan for expansion this year. Like I have said in the past this was going to be a fleeting business until my kids got into school but now have changed my mind and want to take it more seriously.

 

[Royal Man]

Maybe not having an unlisted number for your business might be a start.

That is quite an unique approach if you ask me.

I think that business phone numbers should be easy for clients to find.


If other cleaners tried your advice, No marketing, No Internet presence, No client contact, No business phone number, it would be the kiss of death for their business.

But, what do I know?

PS: Is this no advertising or unlistefd number?:

http://content.seekandfind.com/bulletin ... 101128.pdf

http://www.superpages.com/bp/Marshfield ... rue&bpp=22

 

[XTREME1]

I didn't place that ad Dave and if you look I haven't been Crowley Xtreme Carpet Cleaning for over 4 or 5 years when I went from Crowley Carpet Cleaning to Xtreme when I bought the big box truck. I have never paid or asked for that ad some salesman placed that trying to get my business and I never did business with them. You never get people doing that?

Now that you have done a search besides a parish of 150 people what else do you have Dave.

I did start posting on Yelp and others from the list that Steve Toburen posted.

I repeat ZERO ADVERTISING to get through that fat skull of yours

I did do significant advertising when I started out Val-Pak, TV radio etc etc but once I got a healthy base that stopped instead of being into the wind with my money

 

[Royal Man]

Whatever Greg, those were current advertisements for your business. No, in my town I don't get free advertisements from salesmen.


I did notice that your local business directory only list one other cleaner(Anchor Cleaning) which could help to explain why your low key approach which works for you.( Google maps list a handful of competitors)

In my area I have 70 or more other cleaners competing for business.
It takes a different approach in my much more competitive area.

In even larger areas it takes even other multible approaches.

That is what is so good about this business there is not just one way and what works in one area will not work in an other.

For me and my business have to always develop new clients and regularly contact my existing clients and I have found very effective low cost methods to achieve it.

 

[XTREME1]

we have servicemaster, stanley steemer, chem dry, Kennedy Carpet, servpro, J.Brian Day, JH Cleaning, Furtados and many many others and the people like the quality and honest priced option I provide plus I am a leader in local charities who sits on many boards. You also have a much larger population so I would look at your 35% retention/refer and ask why.

You think more competition costs you customers? I always thought it helped because it made people more aware. Kennedy Carpet Cleaning is a force in my area and when all these people advertise I get a bump in sales. I am actually moving some of area closer to the competition because I know I will blow them away escpecially with the denser population

 

[Royal Man]

As I said before my retention/ refer rate is closer to 65% (previous clients and my referral system.)

It is 65% because I am doing so well with the internet. Getting 35% of my clients that way.( Top placement, Most cleaning terms, Most towns up to 30 miles away and tons of positive client reviews.

See my listing "carpet cleaning lincoln ne": and you can easily see why it is performing so well out of all the other 70 cleaners in my town.

I don't know why you can't see this as a positive?

With a little work you too can see your numbers shift as you work on you web presence and recieve more clients that way.

 

[XTREME1]

35% from the internet, 35% repeat and referral and 30% from my marketing system