Living Social Carpet Cleaning:

One of my competitors is currently running a 'deal of the day' with Living Social. If you are unfamiliar with Living Social it is a website, whose primary audience is women between the ages of 18-30, that offers specials to their members much like Groupon. In order for a vendor to be considered he or she must offer a discount of at least 50% off their regular price. Here is the deal he is currently offering:

$55.00 for three rooms of carpet cleaning, up to 900 square feet. A 65% savings, regular price is $159.00. This ad ONLY mentions carpet cleaning. Pet Urine, red stains, blow drying, carpet protectant, and carpet deodorizer are typically extra, since these services are not mentioned in his ad we must assume that these services will still be extra when he arrives at your door. These are typically called "up sells" because they 'up' the ticket price for your cleaning. If we divide $159.00 by $55.00 we would find that his regular rate for cleaning is $53.00 per room which would probably make him the most expensive carpet cleaning in the Sacramento. Again I must reiterate that his ad does not include pet urine removal, red stains, ink removal, carpet protectant, carpet deodorizer, vacuuming, etc. in his ad.

Let's now look at the money. From the $55.00 you paid he will receive half or $27.50. The other $27.50 is paid to Living Social as a commission for running the ad on their website. If we go back to his original cleaning rate of $159.00 and divide it with his portion of $27.50 we discover that he discounted his rate by his carpet cleaning service to you by a whopping 87%!  If you took an 87% pay cut how motivated would you be to go to work tomorrow?

If the drive over to your home is (30) minutes and it takes him (1) hour to clean three rooms of carpeting because you moved the furniture, you pre-vacuumed, etc., this would translate into (2) hours or about (4) gallons of gasoline which would equal to $16.00 in gasoline expenses. Let's also assume that he only spends $5.00 on cleaning chemicals (Rug Doctor chemicals would cost more). $16.00 (gasoline) + $5.00 (cleaning solutions) = $21.00. If we substract $27.50 - $21.00 = $6.50. Keep in mind that we did not include insurance, taxes, maintenance & upkeep, etc. The only way this carpet cleaner is going to make any money is with his 'up sells'. If you do not buy enough additional services from him he will lose money. Can you say 'High Pressure Selling?'

Remember "Good things aren't cheap and Cheap things aren't good."