Why should you as a carpet cleaner strive to be a monopoly?
Well, I wonder if you're like me when it comes to buying petrol. I buy wherever is the cheapest. And why not? Petrol is petrol wherever its sold right? Well it is to me, even if some of my friends say that some brands get more miles per gallon.
However when it comes to my car, I don't drive the cheapest car I can buy.
Why the difference in buying behaviour? It's because I view petrol as a COMMODITY but my car totally differently. The car I drive is only made by one manufacturer. They have a MONOPOLY. If I want their car, I have to pay the price they are asking.
All businesses are somewhere between a commodity and a monopoly. When people think of a monopoly, it conjures up visions of illegal activity or of using power improperly. Yet for a carpet cleaner there are tremendous advantages in trying to be a monopoly.
First, consider the disadvantage of a commodity business. Price is the main factor in buying and the lowest cost cleaner will win. In order to stay competitive, the cleaner has to maintain their profit margin and can only increase profits by reducing costs... until they are forced to lower their prices because their competitors have reduced their costs too! This is how many carpet cleaners operate and why we have such large turnover in this industry.
But a monopoly is different. It cannot be compared directly to something else so the buyer makes a decision based on value not price. To generate carpet cleaning sales you must offer customers EITHER a meaningful difference OR a great price. In other words be a commodity or a monopoly.
So your mission if you want to stay in business is to create as near as a monopoly as you can. When you have a "dramatic difference" vs all other competitors, you hold a monopoly-like position in the marketplace.
For example, suppose you could wave a magic wand and in five minutes carpets really are looking clean and "like-new". No-one else can do this. Do you really think you would be matching prices? No... you're doing something no-one else can do. You would have a monopoly and can charge accordingly because it has a tremendous advantage to your customer. And they are prepared to pay more for it.
What you don't want is for your prospective customers to think... "It's only carpet cleaning and all carpet cleaning is the same isn't it?" That makes you a commodity which gets sold on price alone.
So how do you create a monopoly? You probably can't wave a magic wand a create "like-new" carpets in five minutes, but there are other things you can create so that you cannot be directly compared to others and therefore hold a monopoly-like position. Perhaps a unique guarantee or maybe even something as simple as advertising that your customers don't need to move any furniture whatsoever. Whatever it is must matter to your customers.
There are real benefits to being a monopoly. Firstly, it creates buzz - gets you talked about because there is now something to say. It also gives you a true story to tell via advertising and can generate free publicity
Above all you can charge higher prices for a unique service... which means higher profit margins.