Mastering Target Audiences for Profitable Businesses
Dec 01, 2023Episode 4
Chance & Alex
Do you ever wonder why some businesses thrive while others struggle? Could it be their approach to different customer groups? Join us as we explore the intricate world of dealing with middle and high-income customers in the home service industry, an equation that could make or break a business. We'll be tapping into their unique benefits, challenges, and priorities. You'll be amazed at how the high expectations of high-income customers and the potential for micromanaging with middle-income clients can reshape your strategy.
There's a hot debate brewing - is it ethical to offer different services based on customer price points? We're diving head first into this controversy! Imagine running a cleaning service and grappling with this dilemma. We propose an intriguing solution: tailoring your approach to meet specific customer expectations. It's all about offering additional services or discounts to those who pay less. Listen in as we echo the model used in product differentiation and demonstrate how it could be the key to ensuring customer satisfaction and the success of your business. Quite a gamble, but it's well worth it!
Watch this podcast on youtube! https://youtu.be/jCZKReOzmRI
Do you ever wonder why some businesses thrive while others struggle? Could it be their approach to different customer groups? Join us as we explore the intricate world of dealing with middle and high-income customers in the home service industry, an equation that could make or break a business. We'll be tapping into their unique benefits, challenges, and priorities. You'll be amazed at how the high expectations of high-income customers and the potential for micromanaging with middle-income clients can reshape your strategy.
There's a hot debate brewing - is it ethical to offer different services based on customer price points? We're diving head first into this controversy! Imagine running a cleaning service and grappling with this dilemma. We propose an intriguing solution: tailoring your approach to meet specific customer expectations. It's all about offering additional services or discounts to those who pay less. Listen in as we echo the model used in product differentiation and demonstrate how it could be the key to ensuring customer satisfaction and the success of your business. Quite a gamble, but it's well worth it!
Watch this podcast on youtube! https://youtu.be/jCZKReOzmRI
Speaker 1:
Identifying, getting in front of and working with different target audiences in the home service industry is probably one of the key factors of, I would say, having a successful business in the home service industry.
Speaker 2:
You could agree oh 100%, yeah, 100%. If you can't get in front of your customer, then, no matter how good you are, you're not going to make any money.
Speaker 1:
Exactly so. In home services, most companies identify these different target audiences. As you know, you've got your low income, middle income and high income. Most of the time, you're not going to be targeting low income. There's people out there that do it. But if you're listening to this podcast and you're trying to grow your business, you're probably focusing on middle to high income, right? Yeah? So in getting in front of, you know, middle and high income customers is totally different, right? So a middle income customer you're going to go about a certain way and high income, you're going to go about a certain way.
Speaker 1:
What exactly is those differences?
Speaker 2:
Yeah. So it's helpful to, whenever thinking about middle to high income people, to think about what we call a target persona. So like what are the common factors between people who will buy my services? So, middle income people, you can probably guess that they are in a standard job, they're an engineer, they're a rancher, they, you know, work at a plant or you know they're an oil and gas or whatever. They go to work nine to five, they come home afterwards, they spend the weekends with their family and they go on vacation once or twice a year.
Speaker 1:
Yep.
Speaker 2:
Upper, middle or upper income. You can probably anticipate their lawyers, doctors, very busy people who might not always be accessible on the weekends or you know when other people would, and so that's the most important thing, thinking about those common traits. So your middle income people, they're going to be more accessible, both time wise as well as just being able to approach them. They are typically, if you're in home, services like knocking and hanging door hangers and stuff like that is a very good marketing tactic, which we'll talk about a little bit more in another podcast. But they are in you know clusters of you know areas. Right, there's 100 homes on one street that you can just go down and you can put door hangers on each one and knock at each one.
Speaker 1:
Versus. I think I average, like you know, probably 50 knocks within a matter of less than two hours. I can go in and actually knock at 50 different doors and you know we'll get into close rates and all that in another time. But whereas you know, if I go into a high income neighborhood and it's gated and there's, you know, bigger plots of lands and everything it's going to be, I'm going to get maybe 20 or 30 in within the two hours, because so you get less exposure but obviously higher income typically comes higher price jobs, things like that, yeah, exactly.
Speaker 2:
But also with middle income versus higher income. I would say another big factor between those two target personas is going to be what they care about. So you think about a middle income person. If you're charging $5,000 for a job, that charge is going to be a much greater percentage of their annual take home income than it is an upper income person. If they're making $500,000 and you're charging them $5,000, like okay, you're like yeah, I have that, I can go ahead and pay it.
Speaker 2:
This is somebody who's making $50,000. That's 10% of their annual income, and so you gotta be a lot more competitive with your pricing.
Speaker 1:
essentially, yeah. If you're worrying about the middle income, focusing on them.
Speaker 2:
Yeah. So whenever targeting middle income, you really have to take that into account. Like, how do I make this as accessible as possible to these people? And price for them is going to be a very big factor. So what can I do between payment plans or maybe introductory offers or something like that, versus a higher income person? Then you know, hey, I don't need to focus on that as much when I'm trying to get in front of that type of customer.
Speaker 1:
Right, yeah. And then the thing that I've noticed, talking about pricing, kind of getting into the job side of things, is like working for, and maybe it's not like this for every single person. Every person has their own personality, see and stuff like that.
Speaker 1:
But I've noticed when working for the higher income, specifically within the handyman services, they typically are a lot less hands off Right. So it's kind of like, hey, I need you to come do this, and then they're gone doing whatever they're doing and they typically pay right away. They typically don't really care about the price as long as you're treating them right. Now, they're smart, they're not dumb.
Speaker 2:
They didn't get there without being smart.
Speaker 1:
They're going to know if you're totally screwing them over. But for the most part, if they know that you're presenting yourself in a way that is way more professional than everyone else, a higher income person is probably going to prefer that. We had a client just a few weeks ago. I don't know if you remember, but he was like I really don't care about the price, you're the best looking company, you look national, you look like you're going to get the job done and we're dinner last night and then boom, he pays without even looking at the job. He didn't even look that the job was done. He just had that trust because of how we built the smart fix.
Speaker 1:
And whereas middle income, you get a lot more middle income jobs because you can get more Noxin, you can get more targeting to them. But it's a little bit more difficult to deal with sometimes because they might be what you would call a helicopter customer, where they're standing over you making sure they're just a lot more aware of their money and they're more aware of it and so they're going to be more safe with it. They want to make sure the job's getting done 90% correctly, no matter how you present yourself to the middle income, especially the lower income. They're just going to be a little bit more cautious. They're not going to pay right off the bat. They're not going to pay the second. You're done.
Speaker 1:
You just have to treat them what I would say just a little bit more carefully, and then it's the same. I kind of jump them back to the high income. I treat them even more carefully because they just have 100% trust in me. But I don't have to actually handle the customer in a different way, because they're typically just not even part of the equation. I just have to make sure the job's handled 100% perfectly, yeah.
Speaker 2:
Thinking about high income, it makes sense If somebody doesn't have a lot of time they're very busy with their job, their company, whatever they're going to put a premium on being able to hire somebody that they can just trust, and so for them, professionalism showing that you can do the job right and it's going to be done right the first time they don't have to micromanage you is going to go a long way in helping you win bids for those higher income earners versus middle income earners. You're going to get more bids if you can be more competitive in your pricing and turnaround times.
Speaker 1:
Yeah, I'll do a little example real quick on TikTok. The guy I thought it was awesome, the guy had a backpack, I'll just use this box. He was like, hey, so what would you say if I told you that I'll sell you this box for a thousand dollars?
Speaker 2:
Mm-hmm.
Speaker 1:
What would you say if I told you that?
Speaker 2:
Well, I'll say it's a box. It's a box why? Why?
Speaker 1:
His mentality was rich people think what's inside the box If it's four thousand dollars mm-hmm there's got to be something good inside the box, and to me, that's how a rich person thinks. Compared to a middle income or more poor person. Right Is like it's just a box, whatever, right? Yeah, whereas and you know it's just a box because we just pulled this out, yeah.
Speaker 2:
The.
Speaker 1:
Thing right, but that was his perception is like a higher income, wealthier people are going to value the services, the products more and they're going to care less about the price, because it's what are you going to get from it.
Speaker 2:
Yeah, so how so you run the SmartFix? You work with both different types of clients middle and upper income earners. How do you position your, not just the quotes, when you're bidding the job and saying here's how much it'll be Right? How do you manage the entire process of the phone call through going looking at the project, bidding it, doing the project between middle and high income earners?
Speaker 1:
Yeah, so A the cool thing is, is the software we have? We used Jobber right. And so the second the first thing I do is I get their information and that's across the board, everything they send in their name, phone number, address, yeah, and with that info I can look at their address, I can immediately see they're in this neighborhood and I know, based off this area, is it middle income?
Speaker 2:
or high income, right yeah.
Speaker 1:
They're in the country club, they're high income. If they're in you know, I forgot the name of it, but if they're in one of those other neighborhoods, they're probably middle income, yeah, and if they're over here, maybe I just don't worry about the plan, right? So, from the beginning of it, if I can see, let's start with middle income. If I can see that they're in a middle income, housing development or whatever, I'm going to immediately treat that a little bit differently. I'm going to be, like I said, more cautious with it. Yep, I'm going to make sure that I go in person to that appointment because they care, they want to build a connection with me, they want to see me, they want to do all of that. I'm going to make sure to do that.
Speaker 1:
Whereas a high income person I've noticed is actually very, very impressed with the fact that I can immediately send them a quote, right then and there. Based off of what we've done in the past and because they're, I would say, a little bit more impressed with how our website looks and how our reviews are and everything like that, they have a little bit more trust. Yeah, so I can just send them that, and the high income person appreciates that because I'm saving them time, yeah Right, whereas a middle income person wants me to come to their home and talk to them and build that trust and get to know me before I can say it's this amount of money.
Speaker 2:
Yeah.
Speaker 1:
A high income person loves the fact that within two hours I sent them a price.
Speaker 2:
Yeah, and they're like oh perfect, great, let's do it.
Speaker 1:
That's step one. So high income. I've realized I can be a lot more straightforward. Here's the price.
Speaker 1:
Let's go for that. Middle income I kind of nurtured a little bit, a little bit more, right, like, go talk to them, tell them about whatever things going on, explain the price to them. High income I can just kind of shoot it over. As long as they're impressed with the jobbers, changed everything right. They can see that everything's automated. They immediately think that they're going to be taken care of just because of that. Yeah, so that's kind of step one. I immediately change. I immediately handle it a little bit different there.
Speaker 1:
The second part is actually on the job, right. So handling the on-site part. Middle income is typically they're going to want me to be there in the evenings or the weekends because they want to be there to watch me do the work. Yeah, perfectly fine, I just have to know that. Whereas higher income, I've noticed that 90% of the time they're just like, hey, the key's under the mat, come in, get it knocked out. They don't. They typically don't really care a whole lot more and as long as you a high income person, I make sure that I spend an additional hour every single day cleaning up after myself.
Speaker 2:
Yeah.
Speaker 1:
And but I bid that into my quote they're going to pay for a premium price. I'm going to clean up every day. I'm not going to leave my tools there.
Speaker 1:
I'm going to treat it like a high income job right, middle income I'm going to still have that same value and pride in my work and everything. But maybe I don't sweep and mop every day right, high income I literally sweep and mop every day after a job Middle income I'm just going to go and get what I need to get done, come out, come back the next day and they're happy with that and that's kind of you optimizing for the price. Exactly.
Speaker 2:
Yeah, at the end of the day, if we are doing work and we're losing money, then it's not worth it. We shouldn't do that job, and so you are pulling out things that they are not. It's not top priority for them. So, middle income. Their focus most of the time is more on the price.
Speaker 1:
More on the price. How can I afford it? Is it affordable?
Speaker 2:
Yeah, and so you pull out certain elements from the job that help you reduce your time commitment and therefore offer a more competitive price versus higher income. They care more about not having to micromanage you when you're having a clean home to come home to, so you just bid that to a job and put a premium on that price.
Speaker 1:
Yeah, and people don't really like so many contractors, subcontractors nowadays. They don't do that. They treat every client the same, yeah, and the whole motto of, like you know, the treat every client the same in general, that motto I don't agree with at all. Because if somebody wants to pay a lower price, they're going to get a lower package or lower you know a little bit lower, not necessarily in the end result.
Speaker 1:
it's just how you're handling it. Maybe you're not having two or three guys on it knocking it out and making sure it's perfect and pretty. Yeah, Like you would a very high, you know what I mean.
Speaker 2:
Yeah, I've always thought about it like this If I have two people once paying me $1000 and other ones $500, is it ethical to do the exact same thing for both people? No, you're ripping off the person who paid you twice as much, exactly, so have differentiating, treat them differently. Yeah, do for the $500 person what they paid for in the $1000 person. Do a little bit more to make up for that, that double payment.
Speaker 1:
Like I was talking about the cleaning up afterwards. I mean, just that little thing, it's an hour right. Well, if our billable rate is 150 an hour. I can save them $150 every day that I'm there, yeah, and if it's a five day project and that's saving them, I'm not good at math what's 150?
Speaker 2:
$750. $750. This is why we have soft for them. This is why we have softwares in place.
Speaker 1:
Yeah, so it saves them $750. So if I give that $750 off essentially to that middle income person, then they're going to be a lot happier. The higher income person they have a very nice home. They want it to be very well taken care of. I'm going to charge them $750 for that week to clean up every single day.
Speaker 2:
Yep.
Speaker 1:
But I know in my schedule I have an hour of cleanup every day and people don't do that. It doesn't mean I do a worst job or they're. You know, she-rox can look like crap, it's just a little bit of a differentiated factor there. And if you do that you're going to save time, maximize profit and you're going to grow within your industry, because you're treating each target audience the way that it should be treated. The way that they want to be treated.
Speaker 2:
They want to be treated that way.
Speaker 1:
And I feel like it's kind of the same in probably all industries, right? Like if you're paying for a higher premium product, same thing, you know, if you pay for an iPhone 15 Pro Max you're going to get different features than you are in an iPhone 15.
Speaker 1:
And so if you're doing that in products, why are we not doing that in services? Most people I don't feel like do that in services, and that's why their businesses fail. They try to do the same across the board all the time for the people that pay $100 and the people that pay $1,000.
Speaker 2:
Yep.
Speaker 1:
Change those tactics. Give them certain things off so you can get to their price point.
