Episode 139: Last Minute Cancellation RX

Episode 139: Last Minute Cancellation RX

Announcer:
Grow your cleaning business. Make more money, have more time. This is the profit Cleaners podcast with your hosts, Brandon Condrey and Brandon Schoen.

Brandon Schoen:
Hey, everyone. Welcome back again to another amazing episode. It's the profit cleaners, the only place where you can learn from the top 1% of cleaning business owners around the world to take it to the next level and win. I'm your host, Brandon Shane. And I'm joined by my co host, Brandon Condrey in the house.

What's going on, Brandon Condrey, how's your day going? How's the cleaning business going? I mean, the cleaning business is excellent. That's what we're here to talk about. I think it's a good time to be in cleaning. So all things are good right now, man. It is an evergreen market. It is always in demand. And I'm excited to be in this business. Even seven years into it, it hasn't been very many businesses that have made it that long.

So that's pretty exciting. So we're going to get into it today, guys. We're going to talk about an amazing strategy that I think is going to help you guys a lot that we've actually started implementing in our business. And it's going to help you basically recapture a bunch of revenue that's just flying out the window and you had no idea that it was there. So let's get into it.

Brandon, let's tell them about our last minute cancellation flex schedule. We mentioned this on a coaching call the other week with our private students and people were raving and loving it. And so we're like, yeah, maybe we should share it out to the world here. Just give you guys some extra value. Since you guys are listening, since you're here, let's do it. Let's dive in and tell them about it.

Yeah. So here's the problem, which all of you will be able to relate to. Last week, you had a full schedule looking, you're like, let's say right now, I'm looking forward to next week's schedule. It is 100% booked. That is so awesome. We're going to make so much money next week. Great. Everyone leaves on Friday to go enjoy their weekend. This particular weekend coming up is a holiday weekend.

Well, over the weekend, a number of customers will call in and say that they need to cancel for a variety of reasons. And one of the reasons that this happens is we have an automated text that goes out three days before a service. Hey, your next cleaning is on this date. We did that because we were running into a situation where we were showing up to customers houses and nobody was home, and then we couldn't get in.

That's worse than having an open spot in the schedule, because we spent money going out there to not be able to make money. So we implemented a fee for that, like a no show fee. But that reminder, like, the unintended consequence of that text reminder is that people canceled when they got their reminder. But that's good. That was what we were trying to avoid. We were trying to avoid the no shows where we come to someone's house and they're not there.

But when you sit down and do the math, like the size that we're at now here in 2024, we have 14 cleaning teams in two cities. We're on the verge of a 15th. There's a lot of people that cancel. And so this reduces employee hours. It reduces revenue for the team. The worst case scenario is, like, you had five houses, let's say the one right in the middle of the day cancels.

You can't always bump up the two below. They may have very strict schedule requirements, and so you have to do something with that team. For 2 hours. We have them come back to the office to clean there. Sometimes we'll have them wash their car, sometimes, like, there's filler. But it still means that I paid out, you know, three cleaners, full time wages to bring in no revenue. And it just makes the business less profitable on that day.

So that's what we've been dealing with for seven some odd years. Cancellations, last minute cancellations. We implemented little, little fees. That's a $20 fee. If you cancel the same day, it's $50. If we show up to your door. People tell us that we should increase the fees, but I'm trying to keep the customers happy for a long time. So I don't want to make you mad by charging you the full cost if you weren't there.

I just want to make it hurt a little bit. But we started kicking around this idea, how can we minimize the impact of those cancellations? And I don't know who came up with this. I think it might have been our sales coach, because I wasn't on that call when it came up. But I remember when you told me about it. You might be able to tell me about the genesis of the idea better than I can.

Yeah, the genesis was, we do these sales trainings every week with our team, you know, role playing, how we're talking to customers, how we're closing more deals, how we're overcoming price objections. And one of the things that came up, Claudia, our director of operations, was like, hey, we're having these cancellations. And we just started brainstorming. We just started coming up with ideas of like, well, how can we offset that?

What would be some ideas? And we started doing the numbers calculations. It was like, yeah, we have the numbers, Brandon, why don't we just share them real quick? But it was like one or two a day, right? And then we just started getting, it's 2.3, technically. Yeah, 2.3 a day. And we'll share all the numbers because once you see the big picture, you're like, whoa. Once we did these numbers on the call with our coach, we were like, this is a big hole.

This is a lot of money. And if we could fix this little hole, it was a big hole. But if we could plug that, we would be in a much better spot profit wise. So that's where it all started. And then we just started going down. What are some ways we could do this, you guys, on our coaching calls and just us internally with our own teams. You're always talking to customers that are pushing back on price, right?

There's always these objections of, oh, that's too much, I can't afford it, I have to cancel. I lost my job. This thing happened, whatever happened, right? So that's kind of the whole idea was we wanted some ammunition that our team could have to kind of combat that, right. And to offset that and transition people from these objections of price. And so this is where we came up with the solution of having a system in place to give people more of a flex schedule.

Hey, if you're really concerned about price, the price is a really big issue. Maybe we can work with you. We've got this plan, a flex schedule plan for select customers like you. It's kind of like a scholarship or something. Like, you know, if you've got a more flexible schedule, you can work with us. We can work with you on the price because you're helping us, so we can help you.

So everyone's going to win. So ultimately that's where it all started. And we just started going down that rabbit hole. And I know the team right now is just starting to implement this, so we don't have a whole lot of feedback, but I have seen them say, hey, we're booking these, so it is working, but maybe, Brandon, just share those numbers. Like, for us, it's going to be a lot more depending on where you guys are at with your business.

But any amount of money that you're losing. If you could recapture, that would be amazing, right? To keep in your business. Yeah. As you know, we don't love adding new services to our business, but in the case of breezy blue, we're all for it. It's easy to implement, affordable, and your customers will love how you can quickly sanitize every inch of their home in a matter of minutes.

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So sometimes that means the cleaning company comes back early. Sometimes that mean we have to pay them to do some filler activities. But I would prefer if we just had some money coming in instead. So what we did, like Brandon kind of talked about, is we built out this list. Customers that canceled recently because of price considerations, like inflation's been high, people are canceling because of personal budgets.

So that list, combined with a list of leads where you came in, you saw the ad, you thought it was compelling. We got to the point where you got the price, and you were like, ooh, I just can't swing. That's too much for me. So we reached out to those people, said, hey, we have this new program. I think we're offering 30% off. So 30% off of whatever we gave you on your estimate or 30% off of whatever your pricing was when you canceled being a customer, we will still come clean, still, same level of service.

We're not altering the service at all. It's at a deep discount. The caveat for the customer is that there is no guaranteed time if you are a paid customer. We're coming on Tuesday at 1030. If that's the time that you asked for, that's when we're coming. If you're on this flex scheduling program, hence the name, it's a first come, first serve. So we kind of have these lists divvied up into our cleaning district.

So by zip code in our case. So we had a cancellation in 8711 today. Let's call the list. And we're still honing out this mechanism, the mechanism on how to reach out to the people. You can send a group text message, we can send a group email. But it's basically first come, first serve. And if you say yes, you can take it. Its your responsibility as the customer to make sure that you can take it on short notice, but well come out.

Well do the clean 30% less at the job level, were probably making considerably less money like that. 30% is basically the profit margin. But im more concerned that were breaking even for payroll. So I didnt pay out of pocket as the business owner to have them come clean the office or to sit around and do nothing while we waited for the next customer. Instead, we brought in some revenue, maybe a little bit on top of it.

And that revenue, it's not small. So 70 spots per month at $240 as our Average invoice, that's $201,000 a year that we're missing out on by cancellations. If we fill every single one of those spots with a 30% discount, we are recouping $141,000 of lost revenue, essentially. So all the components for this are there and they're there in your system. You have a list of people that canceled.

You have a list of people that said it was too expensive. Now you just have to flip the script on whoever's in charge of TAlking to customers on the phone. Call THEM up. Hey, I know you wanted to be on Tuesdays. We have an opening today. Would you like to get clean today? Sure. Send them out. And then the nice thing is, is because you came up with a system to work with a customer that was having some financial difficulty.

The moment that goes away, the moment their financial problem is solved, they will remember that you were there for them. They loved it. They're tired of the flex scheduling thing and having to micromanage it over the phone. So instead, hey, you know what? I thought about it. You guys are awesome. I'd love to come back on the full price schedule so I can guarantee that it's on Wednesdays or whatever I want.

So that's the idea. And we are currently working the kinks out of it right now. But it's something that you guys can put into place right away. There's not a lot of moving parts. It's just some management of data. Yeah. It's so key. Guys like having your teams constantly in motion when you're starting out. Your very first teams, like what we do is put them on marketing, have them do door hangers, have them do other things that are revenue generating activities.

So as you grow and you have more of those cancellations and you have more spots on the schedule, not only is it, like Brandon said, another opportunity to serve that customer, to make a great experience instead of having no experience at all, not even working with you, not even having that connection or that relationship. Now they have an opportunity to work with you at the rate that works for them.

It also is helping your business at least break even, if not more so now you're not draining money out for no good reason. And like Brandon said, they could come back, they could become a customer at the normal rate at some point because they've had such a good experience. Not to mention now they can refer you business, right? They have neighbors, they have friends, they have a network of people.

If each customer, even one of those flex customers, can turn into five new customers, what's that worth on the back end? What's it worth to have your car if you have a branded vehicle or even just a car topper in the neighborhood, cleaning that house so everyone in the area can see it, and that's social proof. Now there's even more potential for you to generate leads, referrals and all that.

So even in the very beginning when we were doing this, that was the benefit of doing these free cleans. It was just because the teams are out, the car is in the community, people are seeing the brand, people are being, you know, generating interest and engagement. And so the more you can do this, I think it's tremendous just to be out there any way possible. But if you're actually helping, keeping your teams busy, even if it's just breaking even.

But again, now your teams are doing something and you have a lot of upside potential on what could happen on the back end, especially if you just give them a great experience. Right? They're already getting a great experience because you're helping them out. So that's a story that people will tell about your business for sure. So we're excited to see how it goes. I guess we could report back Brandon on some of this, how it goes.

But I have seen some messages from the team and they're filling those spots up and it seems like it's going. So it's already working, it's already in action. It's not that hard to implement, guys, even if you don't have thousands of customers do this with your initial ten or 20 or 50 or 100 customers, just start getting it going. There's money that is just sitting there that is going to, you know, float out of evaporating into the air unless you do something like this.

So. Agreed. Totally agree. Not only do you not know the best tactics for your market, but it's also all too easy to waste money and get zero results. Once we started working with tidy your sales, all of this changed. We saved time on following up with customers so we can close more leads. We now have total control of our marketing system, so we know 100% what's working for our market.

And best of all, the team at tidy your sales is incredibly knowledgeable, and they'll work with you one to one to show you what works so you get results fast. To learn more about working with the incredible team at tidyyoursales, go to profitcleaners.com tidyoursales. That's profitcleaners.com tidyyoursales. Right now. I think the other benefit, too, that I just want to reiterate is you can choose as a cleaning company owner to be really punitive when people cancel, but it's gonna happen.

And usually when they cancel, they're not doing it to make you mad on purpose. They're doing it because of life. You got sick. My kid got sick. I have to come home. Oh, man. Like, there's a leak in the house. We have a plumber coming. We can't have it today. Why would you punish that person who's already kind of having a hard day by saying, all right, cool, we'll take you off the schedule, but we have to charge you full price.

That is not going to be received well ever. I just don't see a situation in which they're going to be happy about that. Yeah, you may have put them on a contract, too, and that's the way the contract stipulates, but that's just very antagonistic. You're just poking your customers with a stick and hoping that they like, no, man, you sign this, you got to pay up. I get that, but that is a short term thought process.

We have another podcast episode out there where we talked about lifetime value of customers, and this is part of the strategy. Our strategy is to like, look, we're gonna, we're gonna make you a little mad. We're gonna charge you the little, teeny, tiny fee for canceling with inside the day. But even then, the customer experience team has such leeway on the reason they canceled. If you called us up the morning of your clean and you had to cancel because there's a plumbers leak, we're not charging you a fee.

We're charging fees to the customers that do it all the time because they forget. I forget you were coming today. Can we reschedule? Sure. We're going to charge you $20 on the next clean, and they're fine. There's some customers that kind of milk that system, but it's not in place for them. It's in place for us, so that we're making the other customers that ever need that cancellation happy by not charging the fee.

And so instead of us trying to recoup the lost money on the cancellation by charging full price for that cost of the clean, we're going to get creative here. We're going to bring more people into the fold of the company with this discount, and then that will just lead to more people. Every single one of these cancellation customers that we put on the flex schedule, that's getting it at a discount.

That's one more mouth that can talk to their neighbors about how awesome we are. It's one more person that can be a cheerleader for you out in the public even though they're getting a discount. If I am charging people full price because they canceled, they're not telling anyone how awesome we are. More likely they're leaving a one star Google review about how they charge me for full price even though no one showed up.

So balance these things out. We're trying to push you guys towards the long term, thinking where we want to make these customers happy. Not this week, not this clean. I'm talking about the next ten years. I want that customer to be happy. Yeah. That's what leads you to big returns, big customer growth. That's how you scale. Man. That was powerful right there, for sure. And this is actually, I remember Claudia, our internal, she runs our operations at the business.

She was mentioning, like, there's been times where she's like, actually thought about increasing that cancellation fee. And maybe she even did try charging more, but the pushback was big, right? People don't like that. And people don't like having to pay for something even because like Brandon said, usually they're having a bad day, something happened in their life. So if you agitated even more and you're like, well, we're really going to stick it to you now.

You got to pay for the whole clean because a lot of people ask us that, why don't you charge more for your cancellation fee? And that's the reason. It's enough to hurt people are like, ah, that sucks. I got to pay something. But I get it, you know, it's my fault. But if they have to pay the whole thing and they've already had a horrible day, just think of the experience, right?

That's part of that experience. So if you can actually be like, well, we should be charging you the whole clean, but we're going to let you off or we're going to work with you. Like Brian said, we're going to get creative. We're going to solve this problem together and make it a great day for you, make it a great experience at the end of this. Now, instead of like short term thinking, oh, we're going to get the price of the clean, or we're going to charge 50 or $100 to pay or to break even on our teams.

Now you've created a horrible experience for the customer. They're probably going to cancel. Going back to lifetime value of the customer. That's $6,000 of the year, maybe $50,000 over the next five years you just lost out on because of one short term knee jerk reaction, being reactive instead of being proactive. And maybe you need better communication systems. Maybe you need better reminders. Like we have a series of emails and text messages and things that go out to people before their cleans on the way to their clean.

Maybe that's what you need. Maybe you need better systems to communicate to people so that you're not getting so many cancellations. So think about what are your systems to set those expectations for customers? And if things do happen, how can you work with people to create such a great experience that they're going to be like, wow, you guys really could have handed it to me, but you worked with me and I really appreciate that.

I'm going to go tell people about that now, right? Versus I'm going to tell a horrible story and now people are going to go tell shout to the rooftops praising your business. These guys are awesome. That's what you want. So that's what it all comes down to, guys. It's a bigger picture thinking for sure. So there you go. You got another tool in your toolbox of how to handle cancellations.

Take it for what it's will. Take parts of it, implement it. Maybe that gave you an idea on how to do something else. If you found some value out of it, please leave us a review at whatever app you're listening to this on right now. Better yet, if you come up with a better version of it that we didn't think about, hit us up@hellofitcleaners.com. and maybe we'll bring you on the show and we can all talk about cancellation lists together.

Yeah, that is awesome. If you guys do have any ideas that we're not sharing that you found, that's the power of the profit cleaners reach out share with us. We'll share with everyone because, you know, the more people we can help, the better on this Mission and this movement to grow our cleaning businesses together. And speaking of that, guys, if you're ready to move and ready to take action and take it to the next level, check out the Masterclass.

It's going to go into how we built our business, took it to seven figures in over two years and continue to scale it and sharing more and more of these strategies that we're just sharing with you guys on these podcasts. So that's profitcleaners.com masterclass. Check it out. Book a call with, with our team, with one of us and we'll strategize on your business. We'll talk about these kind of things with you.

Talk about more ways to generate more revenue for your business, more ways to replace yourself, get more freedom and time back in your life so you can have more fun and grow a really, truly sustainable business. So that's it for the show today, guys. Hopefully you took some notes. Go put a cancellation flex schedule into place. I think it'll recapture some lost revenue and you guys will be in a much better spot moving forward.

So with that being said, keep it clean. Keep it clean, guys. Thanks for joining us today. To get more info, including show notes, updates, trainings and super cool free stuff, head over to profitcleaners.com. and remember, keep it clean.