If You Own a Service Business, Forget Advertising

Strangely enough, almost every business out there at some point in time will turn away potential customers, despite the fact they’ve paid thousands of dollars in advertising to get that customer to call. The reasons why businesses do this varies, but in the service industry, most of the time they’re just too busy, or their service is too expensive.

This true fact creates an amazing opportunity to quickly, cheaply and effectively increase sales by simply taking the business your competitor doesn’t want or need or can’t cope with.

There are two ways to do it.

ONE: When your competitor has so much demand they literally cannot keep up, you could offer to do the jobs they can’t do (for lack of resources or labor) and pay them a referral fee. For example, a panel beater might be fully booked up for the month but a customer needs a job done urgently. Rather than kissing the sale good bye, your competitor might as well give you the job and take a cut.

In my experience, many owners don’t like this idea for the simple reason that their name is on the line. After all, if a customer comes to THEM and they point them in the direction of a competitor who botches the job up, it’s THEIR name that suffers.

So, it’s important when you approach a competitor that you are confident in the quality of your service and you have a track record to prove it.

TWO: Almost ALL service businesses will refuse jobs from time to time because a customer is haggling them on price. In my experience, I have NEVER come across a business that doesn’t deal with the dreaded price shopper.

If you do offer a lower-cost service than your competitor, and you’re willing to deal with these types of customers if only to get the sale, you could offer to have them refer their price shoppers to you.

A word of warning though. I would only use this method in slow periods when you really need the money. Or if you are able to offer a lower-cost service and still make good margins. The only one fatal flaw in this technique is that you’ll often attract the annoying customers who complain and never pay on time. But if you need the money – it’s worth it. — Marcus Maclean