Deal of the day websites such as “Groupon” and “Living Social” have been around for a long time, and most of us have probably purchased one of these deals. I myself purchased a dinner deal a few years ago for my last trip to Vegas. A little sports bar in the Miracle Mile shopping mall called Blondies. Nothing to write home about but for $10 we got a couple of burgers and a pitcher of beer. These deal websites can be a terrific way to save a little money and find new places, but they are not good for every type of business. Case in point, carpet cleaning. If you purchase a daily deal for a carpet cleaning service, the chances are good, in my opinion, that you will be highly disappointed, and here is why.
What you may not know about these deals is that the company offering them only gets about 50% of the proceeds and sometimes less than that. That means the carpet cleaning company offering a 50% off deal is really selling their service for 75% off. Expenses in the carpet cleaning industry make up far more than 25% of the ticket price for the average company. So, every deal that is sold is actually costing the company money. The only way that a company can profit from a daily deal then is to charge some serious up charges and hidden fees. For example, you purchase what you think is 5 rooms of carpet for say, $80. The carpet cleaner will come in, and if they honor the price, they are only getting about $40 for 2 hours of work. $20 an hour will be a serious loss for the carpet cleaner who really needs to make at least $80 an hour to be profitable. So, some of these companies, I am not saying all of them, but some will charge you for extra things like pre-conditioning, spot cleaning, dual scrub methods, etc. There are dozens of hidden fees that could be charged. By the time they are done adding up the fees, your deal will be no deal at all.
At this point, you might be saying to yourself, “daily deals are to attract new customers, not to make the company money.” True, that is the idea behind deal sites and it is what they pitch to companies when trying to get them to make deals. If a company could pick up hundreds of loyal customers just by taking a little loss on the initial visit, it would be a great deal for everyone. The problem is that unlike that restaurant that you develop a taste for, the only taste a customer develops with a carpet cleaning deal is the taste of saving money. This makes them loyal not to the carpet cleaning company, but to the deal website. Carpet cleaners have caught on to this pretty quickly and the word is out. You would be hard pressed to find a company that has run multiple daily deals. If you do find one, you should be wondering if they plan on honoring the terms of the deal or if they are using it as a way to get into your home.
This article is not meant to say that daily deal websites should be avoided. It is a great way to get deals on products or services that you might not have ordinarily tried. It is also a great way for many businesses to attract and earn loyal customers. It just does not translate to some businesses. Especially smaller, local businesses with high operating costs, such as carpet cleaners. So take the deal on dinner for two or 2 for 1 movie tickets, but pass on the carpet cleaning deals. Instead, find a reputable local company with good reviews and fair prices.