With services nowadays that allow us to order an organic dinner online for $6, chauffeurs for less than a taxi, and house cleaning for less than $25 an hour, a new generation of entrepreneurs is finding ways to cut costs, specify niche markets, and find specific data through technology that traditional small business owners haven’t adapted to. With the rise and success of “on demand” virtual services in a variety of industries, there has never been so low risk and high reward a time for entrepreneurs in the history of business.
Accessibility and Flexibility in the Virtual World
One thing I realized when I started the Beta of SecretariesOnDemand.com was the average business owner’s inability to provide prompt, effective communication and customer service because the owners were doing it all. They were in the field, at the store, marketing, budgeting, booking appointments, providing customer service and doing payroll! Here are a few resources to help to avoid or break out of the Superman Syndrome:
- John Warrillow's Built to Sell: Turn Your Business into One You Can Sell
- Timothy Farris’s The 4 Hour Work Week
Technology has allowed the small business owner to move from working IN his business to working ON his business. The virtual space enables real time activity and statistics tracking and quality control. In the service industry particularly, companies are able to execute ideas that have been tested in the virtual space. They are able to get real time feedback and focus on niche markets. Take for instance Zeel.com, a company focused on bringing massage therapy services to your home “on demand”. They started with acupuncturists and herbalists, but numbers quickly pointed them to their most in demand service: massage therapy. They pivoted entirely to this beckoning and have been successful ever since. This allows providers of “on demand” services to be flexible and deliver what people are asking for.
Imagine this: One room of programmers and an office full of customer service professionals. Throw in your occasional business development crew and you have a good idea of what today’s startup looks like. Using the latest software and technology, each customer service professional can now field hundreds of calls, emails and text messages. In this "permanent beta" business growth mindset, nothing is ever completed or perfected. Instead, both the services and the buying experience are constantly being improved, software enhanced to automate tasks and actions. The goal is to make buying easy, seamless and enjoyable.
These new on demand and virtual businesses are able to operate at lower costs because their offices are packed with programmers working to build custom, automated software. Automation is the key word here; most tasks are being delegated to technology. That means that the only thing the companies need to focus on is client relationships.
The result is a service so agile and seamless that customers can book an appointment on their smart phones, laptops, and tablets in a matter of minutes. Clients can opt to receive text message confirmations and emails to confirm the details. They will also be paired with a service technician who has been peer reviewed, complete with a picture and short personal bio. Can you see a relationship forming here?
That’s the point. Build a platform that allows the customer to experience minimal confusion, with maximum emphasis on trust and credibility. Complimented with an extremely fast response time from customer service, you have an end product people are going to gravitate to.
Outsourcing Everything But the Client
Along with technology, virtual companies do something else that’s pretty dramatically different from traditional business: they out-sourcing the business services that are not directly related to the delivery of services so they can focus on the customer:
- Payroll and Accounting services: InDiner.com or ZenPayroll
- Customer Relationship Management Software: Zendesk or Salesforce
- Virtual Phone Services: Ring Central or Five9
- Automated Marketing: Loopfuse or Mailchimp
All of this software has the ability to integrate and interact with each other, providing real-time updates to your cell phone. Changing to an “on demand” mindset and outsourcing non-client business services opens up many opportunities for the business owner, in particular allowing him time to time to focus on quality, revenue and growth.
Whether an owner considers adding an “on demand” or virtual division or remain committed to a traditional services-by-appointment model for your cleaning business, I recommend all business owners looking to survive in the service industry do the same. Great services themselves aren't enough to attract clients in such a competitive space; while the business owner focuses on the client and the expert service she provides to that client, the other experts in marketing, payroll, and other support services can be doing their best job as well. In particular, with frequent and fast changes in marketing almost a daily habit now, your clients have far too many options for you to cover every base and too short of an attention span to deal with any obstacles you miss.
Depending on the Independent Cleaning Contractor
The biggest downside to a virtual company entering the service space is its (in)ability to provide service quality assurance. Most virtual services are outsourced to contractors, each operating as a sole proprietor with a variety of boundaries and management structures among the collection of contractors. The disadvantages and challenges of hiring contractors and outsourcing work are well documented; contractors have strict standards in order to maintain their given status. Legally you cannot train, mandate hours and give benefits to anyone labeled as an independent contractor, but training in particular is the path to quality assurance that the virtual services companies of today are missing. But in a practical manner, the contractor-based model is associated with things going awry in the service business and mistakes still happening: jobs get switched, technicians don’t show up, clients want to cancel last minute, the list goes on. There are so many human variables; nothing virtual or technology based can solve this problem. Both consumers and business owners alike can sense this, and it is certainly an impressive obstacle to tackle for any virtual service.
Though there are significant legal and logistical challenges to outsourcing services to contractors, the virtual and “on demand” services are attracting as their primary clients a startling number of Millennials in their 20s to early 30s as well as people looking for services for the first time. This generation is deemed "The Peter Pan" generation for a reason. Millenials want things their way; they expect the buying process to be easy, friendly and enjoyable. And they are willing to forgive lack of service in exchange for communication, convenience and empathy.
Forecasting the Future of the Virtual “On Demand” Service
I recently had a chance to meet with the CEO of AmericanHouseCleaning.com in Palo Alto, CA. Michael Chinchilla has been in the industry for almost 30 years and runs a very successful business. He warned me that this virtual on demand business model would not last in the cleaning business. He states “To insure excellent quality requires great training, good pay, and a path to growth. Skipping this is like going to a beautiful new restaurant with great ambiance, chic décor, great service and leaving disappointed with the food.”
We can all relate to this experience: a promising platform, a glittery aura and a bad taste left in your mouth. Ironically, the only way for these companies to manage is to keep attracting new clients. Using daily deals sites seems to be a great way to compensate for the invariable client turnover, but that is only a short term fix to a long term problem.
Chinchilla offers this advice: “This business is a referral business. Your neighbor should know who you are and what you do. It starts there, and ends with a service that under-promises and over-delivers.”
Combined with the proper tools and business plan, the market for the virtual “on demand” service is still wide open. Tapping into this new market demands that business owners
- learn to think in terms of technology; it is not going away.
- be a specialist rather than a generalist in your industry.
- capitalize on personal strengths and delegate or outsource weaknesses.
To compete in this new climate will require focused specialization from business owners, the belief that automating workflow is a God-send, and a little bit of technology.
Dewaine Torregroza is an entrepreneur, sales specialist, and a founding team member of Homejoy, Inc. and SecretariesOnDemand.com. Dewaine is currently working on a project dedicated to provide off-site sales and customer service to service industries.