[peter maybury]

Advertising is relative to turnover but I cannot understand how you are all the time looking for new customers, if you are constantly marketing in a select area but not retaining customers then there has to be something wrong. If you cannot retain customers in a small select area it is only going to be a matter of time before you cannot find enough customers to sustain your business. I am not being critical but it is a matter of fact, if every other job that I did was not family, neighbours or friends of existing customers then I would be really concerned about what people were saying about me.
I have over the last 5/6 years see the traditional wats of advertising such as yell.com /yellow pages/ newspaper advertising and leaflet dropping become so ineffective as to make them non economically viable. I still drop leaflets but the response is in constant decline as there are so many other people after the same pound.  You do not have the problem with loyal customers unless you are charging a lot more for a service that other people offer for a lot less.
I do not spend anywhere near £800 per month on advertising but what I do spend puts me over the v.a.t. threshhold by several times and my business could not sustain the % - turnover cost of your advertising.
As I said in my previous post I think that next year is going to be a hard year and I take great comfort in the loyalty of my customers, it is however something that I have worked very hard to get.

Peter
www.carpetcleanercardiff.com

[Mike Halliday]

so let me get this straight....... at the moment I'm taking 2 grand a week  but i should stop what I doing becuase its not the right way to run a Business

bloody hell!!!!!  just think how much money I would be making if I did know what I was doing

[Steve Barnett (Carpet Care Plus)]

I you're taking 2 grand a week Mike then surely you would be vat registered ?

[Simon Gerrard]

so let me get this straight....... at the moment I'm taking 2 grand a week  but i should stop what I doing becuase its not the right way to run a Business

bloody hell!!!!!  just think how much money I would be making if I did know what I was doing

You said it

[Mike Halliday]

Steve if I took 2 grand every week and worked 52 a year you're right (last year i took 6 weeks) .

as I  have said in the past I'm an employee of the company, I also have a small business working independently as a sole trader which does the power washing side.

I.m legitimately under the threshold

[John Kelly]

Mikes is right it is legitimate to have a limited company and a sole tradership with both taking under the vat threshold. If you had 2 sole traderships then it would be different and you would be liable for vat.

[Colin Day]

If you could save on your advertising costs, could you then not pass that saving on to the customer? You benefit and almost as importantly, they benefit too. Perhaps you could give your newly found customer's a money off coupon for next time they get you in...

Sorry if someone's already asked this ?, I CBA going through all the other posts...

[Craigp]

Mikes business sounds pretty good to me.

If it ain't broke don't fix it.

[andrew christopher]

Mikes is right it is legitimate to have a limited company and a sole tradership with both taking under the vat threshold. If you had 2 sole traderships then it would be different and you would be liable for vat.

John/Mike

You have to be careful how you do this.

I do it myself, I can separate general/window cleaning from carpet cleaning by having a ltd company. I have two vans: because the carpet cleaning can only be done from one van ( truckmount fitted), no other cleaning is done from this van then it is looked upon as an entirely different entity.

You have to be careful if you share office space/ vehicles / equipment etc. between the two business. It needs to be looked at carefully. There are lots of case studies on the net, for example where husband and wife run a pub and the wife does food and doesn't want to charge vat, if she leases the kitchen and pays utilities etc. then its ok, if she doesn't then HMRC can demand vat.

Iv simplified this for the post but researched myself and also my chartered accountant set up everything within the guidelines. I think Mike has a browser type pressure washer set up so could most likely say its independent i think you may struggle if you were using one van, carrying pressure washing equipment in and carpet cleaning equipment in it and operating from it for both cleaning processes.


I'm no expert but would definitely say a good accountant needs to be consulted before splitting up "related" industries to keep under the vat threshold.

[Simon Gerrard]

Likewise fuel, repairs, materials etc.
I know someone who got well and truly stung doing this, ended up with bill for thousands. Unlike criminal proceedings where your innocent until proven guilty, the tax / vat is different, you have to prove you don't owe them the money when they send you a demand.

Simon

[Tony Rowley]

Dfs and carpetright have great ongoing marketing campaigns, probably spending millions and millions. I have purchased from both over the years but not more than once, they sell rubbish but have a massive marketing budget so are always busy.

Being busy does not mean your doing a good job if all your customers are first time users, what is your evidence that you are doing a good job if you don't have repeat customers?

Heavy marketing is a good marketing strategy for some but quality recommendations is what it's about. Along with repeats, how else do you know you did a good job??,,

Tony

[gwrightson]

"Being busy does not mean your doing a good job if all your customers are first time users, what is your evidence that you are doing a good job if you don't have repeat customers? "

I can assure you Tony, Mike does a great job, uses all the best equipment carrys out the cleaning procedures as is needed, has a good rapport with his customers, has a smart van, appearence is very acceptable  and imo does not over charge , i have worked with Mike on many occasions ,rest assured nothing wrong with his cleaning practices.

Geoff

ps. maybe, just maybe   ,, he is so ugly 

[Mike Halliday]

Tony you make a very valid point, what being passed over on this post although I don't get a great deal of returning customers i do get recommendations.

Tony when you walk out of the customers door do you know if you have done a good Job? or do you have to wait for that customer to come back next year to find out? I get a lot of feed back from customers when i finish who are really happy with the work,  and if my work was sub-standard in such a small area the word would get about, i often have multiple customers in the same street

I mentioned earlier on that  i believe the lack of repeat customers is the amount of other companies targeting my small area

[Simon Gerrard]

i believe the lack of repeat customers is the amount of other companies targeting my small area

Mike,
But that doesn't make sense. Other companies may be targeting your area but they haven't served your customers and you have and that should generate a whole lot more customer loyalty than you appear to be getting.
The problem may well in the constant leafletting of these areas by you and others, where people have got used to your services being marketed like that and are aware that there are a number of you in the area to choose from and so didn't think about loyalty because they don't have to, as there is always someone else offering exactly what you do.
I don't envy your predicament.
Simon

[Steve Barnett (Carpet Care Plus)]

Mike, maybe it's time to spread your wings a little further afield

[John Higgins]

Tony you make a very valid point, what being passed over on this post although I don't get a great deal of returning customers i do get recommendations.

Tony when you walk out of the customers door do you know if you have done a good Job? or do you have to wait for that customer to come back next year to find out? I get a lot of feed back from customers when i finish who are really happy with the work,  and if my work was sub-standard in such a small area the word would get about, i often have multiple customers in the same street

I mentioned earlier on that  i believe the lack of repeat customers is the amount of other companies targeting my small area

Mike what your forgetting is the area you attack as a lot of top end rental properties - I would assume a lot of your cleans are for short term tennants on 6month  to 1 year contracts the properties been paid for by the company they work for

[Jim_77]

Mike, I've been scratching my head, wondering why your customers apparently behave differently to mine and many others by the sound of it

My pricing isn't too far out from yours, there's plenty of competition close to me but my repeat rate is high enough, and I only ever manage one or two mailshots a year

I remember you saying some time ago that you didn't send out mailshots, because you're always leafleting the areas you work in and that serves as a reminder.  That's probably true, but think about what comes through your own letterbox.. doesn't it p*ss you off getting the SAME charity bag and the SAME curry menu shoved through there every month or two?  Maybe you're turning customers off you by using that approach?  Just a thought.

Another thought, completely swinging the other way... name all of the companies whose leaflets came through your door last week!  Bet you struggle!  Could be that nobody even notices your leaflets any more?

I'm surprised you've found direct mail not to be profitable.  Even if a mail shot only broke even, in a way it's securing those customers and their referrals for the future for you so it is certainly worth it.  It's also adding to the value of your business.

The beauty of direct mail is that it's completely scalable - you can send one letter or one million!  As a test, why not pick a random cross-section of your customer list, send out a sales letter and see what response you get?  I wouldn't make the group any smaller than 200 otherwise it might not show a true result

I would filter the records so that you don't market to anyone you've worked for within the last 10 months or so, and probably not worth going too much further back than 5 years.

www.imail.co.uk  2-side colour printing will cost you £0.44  per letter... cheaper than a stamp!!!!!  So that's £88 inc VAT in total for 200 letters, so you only need one or two jobs to get your money back and get in to profit 

iMail is a little bit of a faff to get set up but once you've got it sorted it is dead easy.  You can send hundreds of letters in an instant, no printing, folding or licking!!  You don't even see the damned letters.  God I used to hate doing mailshots myself, services like this are a revolution!

There's a few other services around like that, but I haven't used any of them so can't compare.  If you fancy a crack at iMail give me a call mate and I'll help you out with it

[Mike Halliday]

Jim over the weekend I will start another topic about my marketing budget and how i've experimented with it other the last year, its only this month (  for January) i have started back with the 30k leaflets.  i have spent my money on lots of other ideas.......including at the moment a girl in the office  the doing reminder letter & Xmas cards.

John I do many rentals but i don't think that causes a big loss of customers..... but thanks for trying to find an excuse for me

[Tony Rowley]

Mike

So you can put aside that quality/price of work as an issue as you are getting referals, so why do you think your repeats are lower that anyone elses? unless you can give a rough percentage for say repeats referals and new business there is no way of knowing if yours are higher or lower than anyone elses on here, and even then unless the customer says I got your number from so and so  you cant be sure they are a referal or a new customer.

Also as has already been mentioned, it can be down to the type of customer, do you think that the customers you had last year that have not used you this year have gone elsewhere? You probably cant answer that because you have no way of knowing but you (in my view) have only lost them if they have used someone else to clean their carpets, its more probable that they, for whatever reason didnt have them cleaned at all.

The last week of November I did a mailshot, I took my highest tickets from June 2010 to July 2011 and got a list of 150 customers, I sent them a pen (ordered them on ebay 200 for about £50 with my company name and telephone number) and a slip of paper printed off my computer like a compliment slip saying hi etc etc, i now take debit/credit cards and an offer of £10 off the price I quote them until January 2012. To date I have only had three call and all booked, the interesting thing that they all had in common was "hi Tony I got your pen, been meaning to ring for a couple of months to come back and clean again"

I have no idea if that is a poor response for that kind of marketing because I never tried it before but it cost me about £90 including postage and pens and has so far returned £330 which I probably would not have got if I had not done it.

I would put my own figures at somewhere like:

Repeats 20%
Referals 50%
New cusomers 30%

Tony

[Mike Halliday]

Tony I think its a number of factors, but to be truthful whether they are an old customer or new I still have a full dairy of customers so i'm  not that bothered

what has been missed on this topic has been the very point of me starting it in the first place which was the question....

Do you think customer loyalty is influenced by how much you charge?


 which i don't think anyone has answered..... but to be honest will anyone say "I'm cheap and don't get many recommends"  it seam everyone get tons of repeat work ( apart from me )