Core Group Business Strategy
Originally posted by Ken Galo in 2003 at a peer
forum.
In operating a business, especially starting from scratch
and building it up or buying a franchise and adding to it. How do you protect
yourself and your business financially?
We use what I call 'Core
Group' Customers
These are customers who:
1. Have been with us since we started
2. Are not cleaned by any employee or rarely if necessary
3. The revenue generated by these customers’ amounts to money needed per month
for basic survival.
In other words, only my
wife, kids and I clean these accounts, the monthly billing is equal to the
amount we would need to survive if all other business went down the drain and
everyone was laid off.
Over the years we have added to this list as needed and removed from this list
as well but in the end we know our financial operating costs are covered.
Please understand this
does not replace fiscal responsibility. We still have our traditional
investment strategies and financial planning programs that we utilize to grow
the business and sustain it in the lean times. But this Core group gives us
peace of mind.
Other Benefits of a Core
Group:
-When we started out I
was about 33 lbs overweight, cleaning provides good exercise.
-By cleaning, we stay in touch with our business roots and demonstrate to our
employees that we lead by being on the front lines.
-Our Core Group makes excellent references and has provided numerous leads over
the years.
-We can personally evaluate and validate new methods, techniques, equipment and
chemicals.
Core Group Qualifications:
1. The loss of their income would seriously
jeopardize your operations.
2. They are customers that you make a personal
commitment too, such as the " I will always be a part of the cleaning
operations here" sales pitch. If you say, do it, you can't slack off and
send in employees every night without showing up yourself. (One of my biggest
and first large customers came to me this way because previous cleaner got
bigger and customer quit seeing him!)
3. Geographic location in comparison to you. If you
have 2 customers paying you $2,000 a month and one is down the street and the
other 35 miles away. The one down the street is your core customer.
4. Core customers should not be clients that you
clean as a subcontractor for someone else. They are not your customer the
actual contractor is.
5. Stay away from making chain or branch clients
core customers either. I once had several Home Depots and lost them all in one
month when they decided to go out for a national bid in which I could not
compete.
6. Machine was absolutely correct. Nickel and diming
customers for every little thing will leave a bad taste and a negative
impression you don't need. There is nothing wrong with the little free things
from time to time to set you apart from the run of the mill service company.
Core customers should always get 110% from you
believe me you will get paid back in good references and referrals.
The L & K--Ken