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This Monday a new oven cleaning company, in Bristol advertised on Living Social the coupon site. We know that this company, a one man van operation, has only been trading for a month to six weeks at the most. So one van going out and cleaning the ovens. Living Social sold nearly 300 oven clean coupons over a two day period. As the coupon only lasts to the end of March this means if all the people with a coupon phone up in the next few days and book in their oven clean then the operative will be working solidly cleaning four ovens a day for the next 12 weeks to get them all in, this also allows for a 10% fall off of people who won' t go a head.
We've worked out that the company is getting about £7 an oven clean as part of the deal. So this company is going to spend the next three months working for £28 a day! It is siginificantly more than this just to keep one person employed and to get them to one job. So this company will be losing money big time on every job for three months and at the best time of year for oven cleaning! What a crazy time of year to offer this deal!
The only benefit we can see is that the company will get paid their cut in a lump payment up front by Living Social – Groupon give you the money due to you when each coupon is used – so you get the money in dribs and drabs over the period.
So what happens to those people who bought a voucher when they go to book in and they are told 'sorry we are full up'. I suppose these people will go to Living Social and ask for a refund. What do Living Social do when they get lots of people asking for refunds? They ask for the money back. So this oven cleaning company who have lost money on every job over a three month period will have by then spent the money they got up front Living Social and will have to pay the money back somehow! I think a certain way to go out of business. So in all not the best of starts.
If you reading this as you are having problems booking in with this company give us a call on 01275 370571 and we will help you out and I'll give you £5 off your clean if you book it with us on mentioning their name.
We have tried Living Social ourselves, in January of this year. We looked at it as a way to acquire a new customer base to whom we could market and get referrals from. With our five vans we managed to book them in on a couple of days of each week for the three month period. But it felt painful doing them – I did a lot of them myself – a lot of effort for no money really does take the shine and the satisfaction off of oven cleaning. We sold a similar number to this company in Bristol and another 100 the next day in Cardiff. But did we get any repeat business from it? No did we hell! They want to pay the £20 again and they said that they'd wait for the next Living Social Offer! Did we get any referrals from it – maybe a few. So in all we won't be doing one of these deals again and really I wouldn't recommend it unless you can deal with the amount of cheap ovens you are going to have to clean as your part of the contract with Living Social.
Contrast the new company with our bookings this week – they have been up. Things are getting busy with Christmas fast approaching, only 20 days to go!