There is a lot of talk about Web strategy, sales funnels, email lists, and other Internet marketing techniques. But there is a category of entrepreneurs for whom these approaches are more complex to implement and make profitable. I’m thinking of hairdressers, snow removal specialists, massage therapists, carpenters, and all businesses whose services can only be offered in a very limited territory.
These entrepreneurs have the particularity of having to physically meet all their clients, one by one. The human relationship between the two, therefore, becomes the main factor on which to focus most of the marketing energy. While digital strategies are still necessary, it will still be necessary to get off the screen and away from the keyboard to go directly to the people.
But before I get into the six strategies for finding your first 100 customers for your local service business, I’d like to first “set the table” with three preparatory techniques to get your project off the ground.
Preparation #1: Targeting a local clientele
For local service, the customer base is usually nearby. Nearly 72% of people who do an Internet search for a local business go to it within five miles. In addition, 40% of smartphone users will search for a local business around them.
Targeting an ultra-local customer base also saves a lot of transportation and time. If you think less about this aspect at first, it may become a major irritant after a few years of business. A janitor does not want to travel 200 kilometers to unclog a toilet.
Imagine, for example, the 500 residential addresses in the neighborhood around us. Behind each door lives a household whose average income in Quebec is $77,000, for a total of $39 million spent annually. A small percentage of that is enough to make a great salary. It’s up to the entrepreneur to get it by becoming part of this economy.
Preparation #2: Determine your price
Many entrepreneurs determine their prices based on their start-up goals. Very often, they will try to enter the competition with very low prices. But if you think about the longer term, this strategy can play bad tricks. In particular, it can give the illusion of low-end service and attract customers who will immediately flee as soon as the entrepreneur increases his prices.
To determine the ideal price, I generally suggest the following two exercises:
Exercise #1: Project yourself ten years from now. Will you still be satisfied with your current rates?
If you are an entrepreneur and you have ambitions, the answer will probably be no. So it might be a good idea to ask yourself what your longer-term goal is, and start working on it right away. The reason for this exercise is that each price increase will cause you to lose up to 30% of your customers. This will reduce your profitability, and your motivation and eventually jeopardize your project.
Exercise #2: Analyze the competition and identify the price range in which an equivalent service to yours is offered.
Generally, you don’t want to be the cheapest because of the bad reputation it could create, and you don’t want to be the most expensive either since naturally, everyone stores around for prices. Instead, I recommend setting your rate in the second third of the market price range. So if you are a massage therapist and the competition is between $40 and $120 per session, you can start right away at $80.
Preparation #3: Plan for the first two years
According to Statistics, 75% of new businesses do not survive their first year. This rate rises to 84% for restaurants and lodging. This means that the first two years are a crucial time to determine the success of a project. The reasons for these failures are mainly the lack of experience of the entrepreneur, a poor analysis of the market and the competition, and an overly optimistic expectation of results.
It may be wise to use these first two years to prepare and develop the business rather than taking it for granted, i.e. to take your time (especially when you already have another salary) to implement different strategies and work very hard on the “relationship” aspect with your future clients. During this period, as much time as possible will be invested in getting known and the market itself will dictate when the business is ready to take off.
Marketing Strategy #1: Be seen everywhere in the neighborhood
The “secret” to getting more customers is to develop a strong human relationship with them. People get to know and like a person by hearing about them or, better yet, by talking to them directly.
On average, a customer has to hear about a business 5 to 7 times before he or she notices it and up to 18 times before becoming a customer.
A local entrepreneur must therefore be very active in his or her community if only to establish contacts with as many people as possible.
Block parties, fundraisers, spaghetti dinners, extracurricular activities, regular coffees at the local restaurant, volunteering, sports groups, any reason to show your face anywhere. The people you meet want to know who you are, the human being you are, just like them.
Once they get to know you and like you as a person, they will value your company and will be happy to do business with you.
Successful entrepreneurs are often known for being generous with their time, not always with money. Giving back to the community is an effective way to get a lot back.
“You can get anything you want if you help enough other people get what they want. “(Zig Ziglar)
Marketing strategy #2: Make as many people as possible “try” your service
Human beings, by nature, like stability. Once they have discovered how to satisfy a need in a way that satisfies them, they will instinctively keep this habit without trying to change it. We can therefore attach a customer to our company by letting him discover our service during a trial.
Many garages and car washes have exploded their clientele by having a traveling sales representative sell service cards at ridiculously low prices.
Free oil change, free detailing, etc. The principle is simple: the garage is open but empty, and the employee is present but sitting around doing nothing. If the customer wants to come back, he will instinctively go to the place where he has already been satisfied.
So if we allow 100 customers to try our service, they will be just as likely to come back, but this time paying full price. In this way, it is very easy to find 100 new customers very quickly.
There are several ways to exploit this strategy, always adapting it to the type of project:
- Buy one hour of service, and get another free.
- Open house, 15 minutes of free service for all.
- Opening special: 80% discount for the first 100 customers
- Etc.
It is also possible to get involved with social organizations to offer time “for the benefit” of the cause. For example: “Saturday, a fundraiser for such and such an organization: free service, make a contribution to the cause”.
If you operate both a product and service store, it is often effective to offer the service free of charge to promote your products. For example, some pet stores offer free claw cuts or free water tests for aquariums.
Another extremely powerful strategy is to hold a contest where one person wins the main prize, but everyone else wins a secondary prize! It’s so easy to introduce yourself to dozens or even hundreds of future customers this way!
I’ve had entrepreneurs tell me, “I know my value, there’s no way I’m working for nothing. “It’s important to understand that the entrepreneur will have to put in marketing efforts ANYWAY. Investing time is usually the best effort/gain approach for a local entrepreneur, especially in the beginning. No matter how great your value is, if no one notices, your business development will be compromised.
Here’s a simple math example: imagine you’re currently working at a salary of $15/hour. You want to invest $200 in Facebook advertising. So you will have to spend 13 hours of time (from a job you probably don’t like) to maybe get 2-3 new clients if the ad works well.
Now imagine using those same 13 hours to invite 25 people to test your service… while doing something you’re passionate about. Which one will give the best result, both in terms of marketing gain and personal satisfaction?
Another major advantage of these approaches is that they allow you to immediately offer your service at the rate you want. It is much more effective to post: “Massage therapy session at $80, second session free”, rather than simply “$40 per session”.
In the first case, when your schedule is full, you make the promotion disappear and no one will take offense. In the second case, as soon as you want to raise your prices, you will lose a lot of clients, as experience shows. Moreover, the person who came twice knows you better and will be more likely to come back and refer your services than the one who came only once.
Marketing Strategy #3: Make customer satisfaction a top priority
You’ve probably heard those popular adages, such as “The customer is always right” or “Always greet a customer with a smile.” Not only are these statements far from clichés, but they are mandatory commandments for any good entrepreneur.
Up to 82% of customers look for online reviews to get an idea of a product or service before placing their trust. A bad reputation is an entrepreneur’s worst enemy, and once a reputation is damaged it is almost impossible to restore.
People who are happy with their service tend to appreciate it in silence, while unhappy customers vent their anger by making a lot of noise around them.
Therefore, you have to do EVERYTHING to avoid making a customer unhappy. Considering that it is impossible to please everyone, we must avoid losing more customers because of our attitude, our silly looks, our impatience, or our refusal to understand and meet the customer’s needs. It is counterproductive to lose a customer to avoid spending ten minutes on the phone with them, only to go out and do four hours of networking in an effort to gain a new one.
If a customer wants a refund, we give it to them without making them feel guilty, even if it’s abusive on their part. Giving up $50 to satisfy the customer is much cheaper than having to invest the same amount of money to repair the consequences of a bad reference, especially in an area where reputations are made and broken extremely quickly.
Statistics show that it costs 5 to 15 times less to KEEP a customer than to find a new one; you might as well do everything to ensure their satisfaction, even if you have to pound your ego sometimes!
If you can’t be polite, and understanding, and keep your cool if a customer doesn’t show up for an appointment or makes a derogatory comment, change jobs: you may not be cut out for this type of entrepreneurship.
Marketing Strategy #4: Insist on referrals
Referrals are without a doubt the most effective and least expensive way to get a new customer. Although 83% of satisfied customers are in favor of telling their friends and family about their good experiences, only 30% of them do so on their own. So we need to encourage them to talk about us.
Many lodging companies, for example, offer a discount on a future visit to anyone who takes the time to write a positive review on social media.
Another strategy is to give each new customer two coupons for a future visit: one for themselves and another to give to the person of their choice. This strategy again leverages the principle of underselling a service with a much higher sticker price.
For certain types of services, it is possible to offer a discount if the client comes accompanied.
Other services lend themselves well to a system of rewards for referrals.
You’ve probably seen contests on Facebook where people are invited to share an offer. While this strategy should not be abused, it is still very effective.
Marketing strategy #5: Be easily accessible
It is already difficult to convince a customer to contact us, if on top of that we do not answer when they take action, we put ourselves in the way. A customer who contacts us must be served as quickly as possible.
Ideally, to obtain maximum results, statistics show that you should respond within the first five minutes, while the prospect is still “hot”. Obviously, such a quick response is often impossible when you are busy; you will not abandon the customer you serve to respond to a hypothetical new one. Nevertheless, it is advisable to try to respond within an hour.
The contractor who offers a service is generally difficult to reach by phone. Therefore, the client will be provided with the easiest means to contact us, i.e. at least a telephone voice mailbox and an e-mail address.
Being accessible by text and Messenger can increase sales by up to 40%. If one operates in a visual field, having an active Instagram account is certainly a great idea.
Accessibility is very often one of the triggers that will determine whether the customer goes to us or to the competitor. Therefore, it is an effective way to delight customers from the competition.
Marketing strategy #6: Have an active digital presence
In the 21st century, there’s no getting away from it: you have to have a strong presence on the Web. The Trench already has a lot of resources on this topic. So I won’t dwell on that today, other than to reiterate some basic principles:
- Be active on Facebook and post at least 2-3 times a week. Of course, you can publish achievements and service offers, but it is also good to publish slices of life, anecdotes, and other types of publications that let people see your personality. People particularly appreciate the “authentic” character of a publication.
- Having a website is a definite advantage. Over 40% of entrepreneurs and small businesses do not yet have a website 2019. Please don’t be a part of this statistic.
- Offering an introductory video can increase conversions by up to 86%.
- A Google Map listing is always highly recommended for a local business.
- An email list is always very useful, not only to get new customers but also to keep the ones you already have. We can ask each new customer or those who participate in contests to give us their email address. This will allow us to remind them of our existence, give them the news, promote discounts, etc.
Conclusion
A good local contractor never sits back and does nothing. They are proactive and make sure they are doing something every day to move their project forward. If he has to wait in his garage or store, he will use his free time to give his customers something to try at a discount (or even for free) in order to be discovered, known, and appreciated.
Promotions should always be temporary; they are used as much as possible during the first two years, which is the minimum time necessary to develop a sufficient relationship with our future customers, the goal being to have enough of them to be able to offer our service at full price, and this, as soon as possible in the history of our project.
People often judge the quality of service by the personality of the entrepreneur. Let people know who you are as a person: be smiling, patient, generous, and friendly. Meet as many people as possible by being active in your target neighborhood.
At the end of the day, let’s note that every project is different and requires the development of a marketing strategy adapted to the specificities of each one. That’s why you shouldn’t take everything written here at face value; adapt your strategy to your market.
In the context of labor shortage, service businesses today have a lot of potential, especially those that require manual labor. I can only encourage you to go ahead with your projects. A bright future awaits you!