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Sunday, February 19 2012

Groupon Tile & Grout Cleaning II:

Last month I shared with you an interesting story about a local carpet cleaner, Sacramento area, who was using Groupon to get new business. If you did not read the post or you are unsure what Groupon is please click on the January 2012 section for this article.

This month another Sacramento carpet cleaner has chosen Groupon to introduce his business to the great people of Sacramento. His Ad promises 'up to' 83% Off Carpet Cleaning or Tile & Grout Cleaning. For just $39.00 you can purchase (3) rooms of carpet cleaning - a "$232.50 value". Or you can purchase (4) rooms of carpet cleaning for $69.00 - a "$310.00 value". Finally he is offering to clean up to 175 square feet of tile & grout for only $75.00 - normally priced at $306.25 (this translates to $1.75 per square feet, which would probably make him the MOST EXPENSIVE tile & grout cleaner in the WORLD). The ad was for tile & grout cleaning ONLY. No mention was made concerning sealing, grout repair, tile repair, tile & grout restoration, stone polishing, etch removal, stain removal, etc. The Groupon certificate could only be used on floors NOT showers, vanities, or countertops, and the certificate expires August 22, 2012. In other words if you don't call him by August 22, 2012 and schedule your appointment you will forfeit your money. He sold 700!

Let's assume for just a moment that all of the sales were for tile and grout cleaning. If we divide 700 sales by six months (the time you the buyer has to use the certificate) it averages 116 cleaning jobs per month. Keep in mind that Groupon will keep half of the $75.00 you spent which leaves the carpet cleaner with $37.50. It is my understanding that the carpet cleaner will get his money spread out over a (6) month period. Groupon holds back money in case of complaints & refunds. I have a feeling there is going to be a whole bunch of complaints from this carpet cleaner. If we divide 116 monthly cleaning jobs by 4 weeks in a month this would give our carpet cleaner approximately (30) jobs per week. If he can successfully clean 175 square feet in one hour (Even though I am factory trained and certified I would NEVER try to clean 175 square feet in one hour) and if we assume that it is a 30 minute drive to his destination and then 30 minutes to his next destination this would be 2 hours per job X 30 jobs per week or 60 HOURS. Keep in mind this does not include servicing his equipment, ordering supplies, buying gas, managing payroll, going back to certain homes that were not satisfied the first time, setting appointments, etc.

Let's also assume that he consumes (3) gallons of gas between driving and running his truck mount. Gas prices are currently $4.00 per gallon X (3) gallons = $12.00. Remember his share of the Groupon deal is $37.50. Take $37.50 - $12.00 = $25.50 or $12.75 per hour. Keep in mind that he still needs to deduct insurance, cleaning solutions, cleaning supplies, maintenance, possible truck payment, and payroll. How does he make a profit and stay in business? The answer is he doesn't.

I predict that this is going to be a nightmare for the carpet cleaner and for many people who purchased this Groupon deal. Many people will probably have to wait weeks for an appointment and when the appointment is set there will be a (5) hour window for if and when he will show up. Because he is not going to get paid right away from Groupon I predict some high pressure selling too. There is an old saying "If it sounds to good to be true it probably is."

If you have questions about this blog please contact me at paddle@frontiernet.net.

Michael Hull

 

Posted by: Michael Hull AT 06:33 pm   |  Permalink   |  6 Comments  |  Email
Comments:
If the Groupon Certificate expires on August 22, 2012 that means he will have to clean (4) houses per day seven days a week for the next (6) months. Is this even possible?
Posted by Rachel on 02/20/2012 - 01:01 PM
Rachel - Good question. It is unrealistic to assume that this carpet cleaner will be able to service everyone. What kind of service do you think these people will get? I would hate to be the 4th client at the end of the day. Personally I believe this will be a nightmare for him and for many of the people who bought Groupon.
Posted by Michael Hull on 02/20/2012 - 01:17 PM
His price, $1.75 per square foot, to clean tile & grout seems to be HIGH. What is the going rate for tile & grout cleaning? Did he artificially inflate his prices to make his groupon deal appear to be better than it really it is? Thank you for your thoughts.
Posted by Alice on 02/21/2012 - 05:58 PM
Alice thank you for your question. Here in Sacramento, California the going rate for tile & grout cleaning is $1.00 - $1.25 per square foot. Natural stone is usually more. I doubt very seriously if he ever charges anyone $1.75 per square foot and actually gets it.
Posted by Michael Hull on 02/22/2012 - 06:05 AM
I think I am one of the customers you are talking about in your blog. When I called for my appointment I had to schedule it (3) weeks in advance and I had to give them a (5) hour window of when they would show up. I also told them I am only interested in the Groupon offer and it became very uncomfortable on the phone with them. Any suggestions?
Posted by Linda on 02/28/2012 - 06:17 AM
Linda, I hate to be the one who told you so, but... With these types of deals the cleaning company has to rely heavily on up-sells to make any money. Because they have basically given away the cleaning part of the job they must apply the pressure on you to make a buck. Most carpet cleaners, who do not own the business, are comissioned salesman. They typically earn 17% of the gross sale and I can bet you money they confidentially hate Groupon. I would call Groupon and explain to them how you have been treated so far and ask them for a refund.
Posted by Michael Hull on 02/28/2012 - 07:32 AM

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