Over the next 2 episodes, my desire is to show you real stories from my local business network of how we can control whether we experience long-term pain or prosperity. This episode will focus on two stories where poor character produces long-term pain. The next podcast will focus on 2 stories where collaboration produces long-term prosperity. Each of these episodes has the thread of selfishness vs. generosity woven through them. Let's go!
Story 1: I met Steve Gouveia at a recent MCBA meeting. He is business partners with my other networking friend Mike Thompson at Envoy Mortgage . Mike has been a friend and asset as we look to purchase a home in the near future. I've heard about Steve many times from Mike and was glad to finally meet him. We talked for a while after the meeting and boy did Steve tell me a whopper of a story! Steve hired a cleaning service a couple years ago to clean his house. They came in as a 4-person team with a lady owner. Steve raved about how incredible they did things. This team cleaned the house with precision. They used a steam cleaner and took care of the hard surface floors. Plus, they did some light carpet and upholstery cleaning each visit. They offered a comprehensive, high-detail service every visit at a reasonable price. Steve loved it! In fact, he loved it so much that he told 30 people in his network about this cleaning service. Many of them hired this team for their homes (10-12 total). This 4-person cleaning team was off to the races. They had a great cleaning system and were very referable. Here's what happened next. The owner of this company called Steve during Covid. "I wanted to let you know that due to Covid and the prices going up, I'm going to have to raise your price a little bit." Steve said no problem as that was totally understandable. A few weeks later, Steve was talking with one of his friends who happened to be 1 of 30 friends he referred this cleaning service to. "Hey, did you get your prices increased?" They said no. Steve was confused. He then called some of his other friends that he referred his cleaner to. None of them had their prices increased. Steve was now more than perplexed and bordering a little bit angry. He then called back his cleaner and asked. "I called some of my friends and they said that their prices weren't raised. Why did you raise mine?" Her response enraged Steve. "Well, the mortgage industry is doing really well right now so I knew you could afford it more than others." He fired this company on the spot, then he told all 30 of his friends what happened. This woman and her 4-person team lost 8-10 other clients as a result. Even though the cleaning was amazing, her character was weak. Let's look at this a few ways. Overall, she gained 10-12 clients through Steve and then lost 8-10. She is still up a few clients. This is good, right? No. She has damaged her reputation in the business community with Steve and his network, which is large. Her name will be synonymous with poor character from Steve and his network forever. She created negative ripples in the pond. There are many of you that hear this story and may ask. "What was wrong with what she did? She only raised one client and took a loss on the others." This is true, but let's break it down. She had a problem. Expenses went up due to Covid. We all experienced that. She wanted to create more revenue, so she found the client that had the most money and penalized him for doing good. Had she talked to each client the same way she talked to Steve, she could have raised everyone's price by a little to achieve the same goal. They all would understand that expenses went up for her and they would be willing to pay a little bit more to continue her amazing service. She could have achieved the desired overall revenue increase evenly distributed to the customer base verses singling one successful customer out. And that's not to say that the others weren't doing well. She made an assumption based on her limited knowledge. This is why Steve was so upset. And my assessment of what the others thought is evident in their cancelling of her service. This mindset is rooted in poor character. She is pricing her cleaning service based on what her customers can afford verses what the service is worth. This will always create short-term gain and long-term pain. You need to price your service based on what it is worth to the marketplace. The people that believe the value outweighs the price will hire you.
Story 2: In the last episode, "Excellence Vs. Perfection II", I shared a story about my friend James Hardy. Jim and I were at breakfast. While we there, Jim shared a story that blew my mind. It is a perfect anecdote to share in this episode. Jim told me a story about another cleaning service in the area that used to attend one of his networking groups. They were already cleaning houses and decided to hire Jim as a subcontractor to do the carpets in one of the homes. Jim completed the work with excellence and sent his invoice. She would then collect the money from the customer and pay Jim. When she got the bill from Jim, she was amazed how lucrative carpet cleaning was. She then decided to add carpet cleaning to her business. There is nothing wrong with this. Please don't misunderstand me. Let's continue. She decided to charge a lot less than Jim and competed against him. Instead of working together, she chose to compete. Again, that's fine. It's her choice. This house and office cleaner and now carpet cleaner began to grow more. Her low prices undercut Jim and took much business from him. This model was working. It's strategic and competitive. Many businesses follow it. Doesn't Walmart? They do alright. There was a character flaw... a crack. Her goal to grow was so strong that she was willing to go to the next level. Instead of just underpricing, she decided to put down Jim's business. She positioned herself as the expert on social media, comparing her results to Jim's. Many in the business community liked and trusted Jim from his 25+ years in the business community compared to this woman's 5 years. Then Jim leaned in and told me this. "Ken, you and I have a mutual friend in one of our groups. I have done her carpets many times. There's this one stain that I haven't been able to get out. It's frustrated me. This other company was new to the networking group, so our friend hired her once. She posted the before and after pictures on social media. I was amazed as she showed that stubborn spot removed. I then called her to congratulate her. I asked how she did it. She told me this amazing product that she used and some other science that didn't make sense. She was very arrogant about it. It didn't compute. I know science after 25 years in this industry. I've tried everything on that stain and that product didn't work for me." I was nodding along and asked for the punchline as I could see it coming. "I called up our mutual friend and asked about the stain. She said that the stain was still there. Ken, this cleaner lied about the stain. She took a picture of the stain as the before picture and a picture of a clean area as the after. She lied and made me look bad at the same time." Our mutual friend never hired her again. Jim avoids her. Multiple local businesses have heard this story and have stopped referring her. This company has continued to grow. I have no idea if she has changed her ways. I hope she has. I can say this. Even though her business comes up with many positive Google reviews, I know many people that would never refer her. This may not mean anything to her. But I want to ask you. Does it matter to you? Do you want to send positive or negative ripples through the pond of your local community? I truly believe that a rising tide raises all ships. If this was me, I would find a way to collaborate with a great company like Jim's. In fact, I have. Spoiler alert. Check out the next episode!
I hope these two stories showcase how poor character produces short-term gain and long-term pain. I want this to stir up emotions in you. Please email me at email@example.com if you hate this episode or love it. I'd love to connect with you to learn why you feel that way.
Check out my interview with the CBF Founder, entitled "A Buffalo Charges the Storm with Debbie Sardone". Debbie is offering free consultations to listeners of this show through the Smart Cleaning School Resources Page to see if CBF could be the right solution for you.
The Smart Cleaning School Podcast helps cleaning business owners from start-up to the struggling solo to the striving seven-figure get SMARTER in their businesses, reshape their mindset, increase productivity, clear the overwhelm, and get clarity through SMART goal-setting & personal accountability. Ken Carfagno is a lifetime learner and teacher. His mission is to help visionaries make the impact they were meant to make.