Table of Contents

Introduction
Industry Analysis Company Analysis Target Market Issue Identification

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Analysis
Customer Decision Making Pre Purchase Stage Important and Determinant Factors Perceived Risks Service Encounter Stage Post Purchase Stage

Strategy
Positioning Place Product Core Service Facilitating Supplementary Services Information Order Taking

Billing Payment Enhancing Supplementary Services Consultation Hospitality Exceptions Pricing Promotion Marketing Communications Mix Overcoming the Problem of Intangibility Messages Transmitted through Traditional Marketing Channels Messages Transmitted through the Internet Messages Transmitted through Service Delivery Channels Messages Originating from Outside the Organization Process Service Process Redesign Removing Non-value adding Steps Shifting to Self-service Bundling services The Service Blueprint Capacity Management Physical Environment Russell’s Model of Affect People Managing Employees

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The Cycle of Success Human Resource Management The Wheel of Loyalty Building a Foundation for Loyalty Targeting the Right Customer Searching for Value, not Volume Managing the Customer Base through Effective Tiering of Service Effective Service Recovery Making it Easy for Customers to give Feedback Compensation Service Guarantees Conclusion

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Appendix
1. Positioning Map 2. Newly Improved Website 3. 24/7 Online Consultation 4. Pricing Tiers 5. Marketing Communications Mix 6. Advertising 7. Service Blue Print 8. Russell’s Model of Affect 9. Cycle of Success 10. Rewards

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Introduction
Industry Analysis
The carpet cleaning industry can be sub-divided into commercial and residential. The residential house cleaning market is dominated by independent companies and is expected to grow at approximately 5 percent per year. The commercial cleaning market is mainly serviced by janitorial service providers that provide a one-stop service with a range of services such as general office cleaning, carpet and window cleaning. As a whole, the industry is relatively saturated with the various cleaning and janitorial firms still engaging in aggressive advertising to establish new franchises and secure a greater market share.

Company Analysis
Pro Clean LLC, a carpet cleaning business located in Knoxville, Tennessee, has been serving customers for more than 15 years. With recent expansions in the last 2 years, moving from a home office to a commercial facility located in the north-eastern region of Knoxville, Pro Clean now owns 3 cleaning vans and 4 employees. Pro Clean specializes in the carpet cleaning business, offering steam and dry cleaning services. Their main competitors are King Rug, Green Clean, Right Clean, Kleen Clean and D-Cleaner. The company’s goal is to supersede King Rug and be the best high-end service provider in Knoxville. Carpet cleaning is also classified as a possession processing service. Pro Clean provides their service at the customer’s site. Being in a high contact service industry, customers are constantly exposed to many attributes of Pro Clean throughout the service delivery process. Due to this nature, an excellent servuction system is crucial.

Target Market
Pro Clean will target families earning an annual income of more than $250,000. The key characteristics of these families include stay-at-home spouses who are the purchasing decision makers and most have either young children or pets. These families seek a high quality of living and do not mind paying a premium to enjoy better quality and greater convenience.

Issue Identification
Currently Pro Clean has secured 5% of the market share. Efforts to expand the business were not working. Business was not improving at the same rate as the increasing production capacity and the company was facing major cash flow issues. Attempts to emulate competitors did not result in an increase in profitability. On top of the lack of a concrete business model, the problem of idle capacity was rampant.

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Analysis
Customer Decision Making
Pre Purchase Stage Following the realization of the need for a carpet cleaning service and after conducting relevant information searches, customers will then make purchasing decisions. We have identified several important and determinant factors and perceived risks that will affect a customer’s evaluation of choices. After which, appropriate actions and mitigations can be planned and executed to make Pro Clean the optimum choice.
Important and Determinant Factors

Carpet cleaning services are high in credence and search attributes. Customers will evaluate options based on availability of choices, professionalism and cleanliness, amongst other factors. However, though cleanliness is deemed as an important attribute, features such as value for money, availability of choices, customizability, convenience, professionalism and other supplementary services would be more important determining factors.
Perceived Risks

Functional Risk – Will the stains be removed from the carpet? Financial Risk – Will the cost of cleaning be more than the original estimate? Temporal Risk – Will I have to wait for long before the cleaning is done? Physical Risk – Will my carpet be damaged by the cleaning technician? Service Encounter Stage Being a high contact service, customers are constantly exposed to many aspects of the company during the various contact points in service delivery process. Given the relatively premium charges, high delivery standards will be expected and tolerance levels due to service failures are considerably lower. Hence, Pro Clean will need to live up to and exceed expectations through standardization of procedures amongst staff, allocate roles appropriately and build close relations with the families to ensure that customers are highly satisfied. Post Purchase Stage Following the service encounter stage, customers form positive or negative disconfirmations based on their expectations to decide if they would return to the service provider in future. Hence, it is crucial to set the customer’s expectations right during the pre-purchase stage and obtain any feedback to ensure high delivery standards. Feedback channels on the website or via sealed feedback forms will be used to ensure that suggestions or complaints will be duly received and taken into account.

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Strategy
Positioning 1
Currently, Pro Clean does not have a clear positioning in the market. The goal is to position Pro Clean in as a high quality value adding service provider at reasonable price, completing our mission of being a holistic care provider for our customer’s household needs.

Place
The location of service remains unchanged with technicians and sales managers going down to the customer’s place for estimates and the actual cleaning service.

Product
Core Service Pro Clean’s core product is the provision of cleaning services for homes. Facilitating Supplementary Services
Information

To address the various concerns of customers during their information search and choice evaluation process, detailed information will be conveyed through our improved website2. Information on our various cleaning services, price packages, testimonials and a video documenting the entire service process will be included to help customers manage their expectations and mitigate any perceived risks. Online appointment booking services, account information, transaction histories, notification of charges and carpet cleaning tips will also be included to provide increased convenience.
Order Taking

As before, all customers will be able to fix appointments for estimations and cleaning services via the hotline. An additional channel has been set up - booking of estimation appointments for new customers and booking a cleaning schedule for recurring customers is just a click away via the new website. Recurring customers who have signed up for cleaning packages will no longer need to call for another quotation before attaining the service, hence eliminating unnecessary steps in the service process.
Billing

The billing process remains unchanged. Printed invoices with detailed pricing of components will be issued to customers after each session of carpet cleaning.
Payment

The payment process for customers remains the same. It is a cash-on-delivery system where the service technician will collect cash from the customer after cleaning. To further ease this process, fully paid cleaning packages are offered on a contractual basis and subsequent payments during the service delivery do not have to be made.

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Refer To Appendix 1 Refer to Appendix 2 3

Enhancing Supplementary Services
Consultation

Pro Clean and King Rug are the only two companies that provide on-site estimates for customers. Pro Clean will compete by eliminating unnecessary up-selling and providing customized advice to its different customers. According to customer’s requests, complete and appropriate services will be selected and a full and final quotation will be given. Existing customers will have customized advice for day to day carpet care as the company will have records of their carpets and treatment history. In addition, a 24/7 online consultation3 manned by employees on a rotational basis will be introduced to assure customers that Pro Clean takes its business seriously. Aid will be provided for customers with accidental spillages, etc who require immediate help or advice. Customers can also opt for emergency clean ups should the need arise (priority will be given to top-tier customers).
Hospitality

Targeting the higher end of the market together with relatively high prices, Pro Clean will have to work extremely hard to offer exceptional service and hospitality. Measures will be taken to ensure that customers feel at ease while their carpets are being cleaned and employees have to be personable and warm, yet professional. This is to ensure that top-notch service and hospitality is offered as customer satisfactory is highly valued by Pro Clean.
Exceptions

Special care will be taken in handling all complaints, compliments and suggestions. Furthermore, should the customer find the service justifiably unsatisfactory in cases such as negligence by service technicians, a money-back guarantee will be given. Top tiers customers will also be offered emergency cleaning services should the need arise. All exceptions encountered will be taken seriously and staff will be trained to manage these situations and provide solutions or restitutions on a case by case basis.

Pricing
After accounting for all costs involved, Pro Clean will take on a value based pricing system to ensure that customers view the service as value for money. Convenience, customization, service guarantees and round the clock care are the key benefits that we aim to provide. Costs such as increased time of cleaning and unpleasant feelings due to unprofessionalism and perceived risks will be kept to a minimum to allow customers to enjoy positive maximum net value. Service bundles ranging from a contractual provision of service for 2 years and above will be offered. Each will comprise of various combinations of services or customized bundles packaged at lower than À la carte prices. To top that off, customers can choose among the different tiers 4 of service where each tier will entail different benefits such as emergency cleaning, short notice appointment bookings, warrantees etc. Customers will have their carpets regularly maintained by Pro Clean at a fixed rate. E.g. Two year carpet cleaning packages @ $699.90 (inclusive of facilitating and enhancing supplementary services). With this, customers will be able to make the choice that best caters to their needs. Similarly, this will allow Pro Clean to better manage capacity. Through this, Pro Clean will be able to retain customers for at least two years. Coupled with the provision of professional and excellent service, the company hopes to enter the Cycle of Success where customers will renew their packages. To further reduce the hassle of information search for new carpet owners, tie ups with reputable carpet sales merchants will be formed. This will decrease search costs incurred when searching for a carpet cleaning company and preferably increase revenue.
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Refer to Appendix 3 Refer to Appendix 4 4

Promotion
Marketing Communications Mix5 As the carpet cleaning business deals with many generality and non-searchability issues, the Marketing Mix will address these problems and related customer concerns, informing, educating and persuading them about the works and uniqueness of Pro Clean. Keeping in mind the tight budget that Pro Clean has to work with, the following details the suggestions from management: Overcoming the Problem of Intangibility Pro Clean will make use of before and after scenarios to illustrate the effectiveness of our service in terms of the carpet’s cleanliness. We will also use metaphors like ‘A Baby on the Carpet’ to reflect our work ethic: “We Don’t Just Clean, We Care.”
Messages Transmitted through Traditional Marketing Channels Advertising 6

Pro Clean will advertise in four mediums. The first being print: through home and garden magazines, and newspapers, citing detailed testimonials from satisfied customers. The company will also use the company website to inform customers about our services provided, process and expertise. If budget permits, outdoors – a creative lawn advertisement placed in the middle of the business district to build brand awareness and direct mail to reach prospects.
Publicity and Public Relations

On the website, media releases will be available and a video showcasing the professionalism of Pro Clean’s employees during an unexpected incident (eg. emergency cleaning etc.) will be featured. As the company is targeting high-end users, some of our customers may include public figures like celebrities or renowned business people; whom we will obtain testimonials from.
Direct Marketing

Using permission marketing, Pro Clean will have a monthly newsletter e-mailed to its mailing list of customers who do want to receive the updates. We will hire interns or part-time assignment-based employees (for reduced costs) to do contact referrals and increase our customer base.
Sales Promotion

We will tie-up with companies selling high-end carpets and incentivize them to sell our service along with their product. With such, customers will enjoy a one stop wholesome carpet shopping experience at great convenience and lowered cost.
Trade Shows

Booths representing our service will be set up at relevant trade shows and exhibitions.
Messages Transmitted through the Internet

The corporate website will provide information on our services, differentiating factors such as 24/7 live chat, high levels of convenience, emergency carpet cleaning and the different service bundles
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Refer to Appendix 5 Refer to Appendix 6 5

available. The e-mail and live chat option will allow customers to receive assistance anytime. Recurring customers can expedite the cleaning process by opting to set appointments by themselves.
Banner Advertising

Pro Clean will use this tool to draw online traffic to the company’s website.
Messages Transmitted through Service Delivery Channels Customer Service Employees

Employees in the front line positions – estimating, cleaning and providing advice online, must adhere to the high-quality standardization. They must be trained to deliver the core and supplementary services with the highest levels of professionalism, willingness to assist and attempt to cross-sell additional services effectively when necessary.
Messages Originating from Outside the Organization Word of Mouth (WOM)

The company will increase positive WOM by always delivering services that exceed customers’ expectations and special promotions such as introducing a friend to our services and having them sign up for service bundles will allow them to enjoy special discounts.

Process
Service Process Redesign To stay true to what Pro Clean pledges, measures to increase convenience, ensure professionalism and reduce perceived risks will be implemented.
Removing Non-value adding Steps

Existing customers with bundled packages who have completed initial upfront payment are given the option of making an appointment online, eliminating the need to re-take estimates and to collect payment again.
Shifting to Self-service

Customers will be empowered to set appointments themselves, reducing cost and cases of dissatisfaction due to busy hotlines and increasing convenience. To reduce customer frustration during down time, prior notice will be given and stated on the website.
Bundling services

Pro Clean will change its service offerings from a la carte to bundles that are tailored for our target segment. It will speed up transactions, reduce marketing costs and allow customers to enjoy greater monetary and non-monetary benefits.
The Service Blueprint7

The service blueprint is outlined in Appendix 6. Pro Clean has identified possible Fail Points and will use Fail Proofing to design the Fail Points out of its Service Processes: 1) Busy Hotlines or long ringing times that induce great frustration
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Refer to Appendix 7 6

2) Poor payment 3) Possible missed appointments due to capacity overload or customer’s own negligence Here are some steps the company will take to Fail-Proof the Service Process: 4) Redesign Process – Recurring customers will have the option to eliminate re-estimates and repayments through buying Bundled Packages with different service tiers to better manage capacity. 5) Redesign Process – Service staff trained to pick up within 5 rings and holding tone message that informs customers of online booking and enquiry options 6) Using Technology – Customer can access information on our services and set appointments via the company website. 7) Manage Customer Behavior – Reminders will be sent to customers before appointments and when payment is due. As a whole, to address the financial and temporal concerns of customers, Pro Clean will make it mandatory for employees to brief customers on aspects of the cleaning process such as duration and prices quoted during estimation would be set as the final unless there are additional requests from the customers. Capacity Management Pro Clean will study the Patterns of Demand of our service by referring to accurate past records in our system.
Adjust Capacity to Match Demand

Downtime Scheduled During Periods of Low Demand Repair, renovations and all maintenance of facilities and cleaning equipment will be done during periods of low demand Cross-train Employees Employees will be cross-trained to perform a variety of tasks; for example, being able to do both cleaning and estimations. Part-time Employees Pro Clean will hire part-time employees during busy periods to increase capacity and the lowest possible cost.
Use Marketing Strategies to Manage Demand

Use Price During high-demand seasons (e.g. post-festivities like Christmas), the company will increase price to reduce demand.
Inventory Demand through a Queuing System

Having separated customers into different tiers, different priorities in fixing appointments will be present. The higher the tier of customers the greater the priority enjoyed. From here, allocation of appointments can be executed accordingly by the system. Customers will be educated that they may have to be on the waiting list in full-capacity situations based on tiers subscribed. Customers will also be encouraged to make advanced bookings, through a Reservation System, to beat the virtual queue when approaching busy periods.

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Managing Customers Psychology of Waiting Time

Managers and Technicians will be explaining what they will be doing – for example, measuring, doing estimates and cleaning – and give them approximates of required waiting time to reduce their anxiety.

Physical Environment
Russell’s Model of Affect8

Our target for the affective state is relaxing. Employees will be trained to execute the service with minimal disturbances such as noise and smell to the customer’s environment. We want customers to have a pleasant experience during the delivery, and feel secure in our professionalism. Achieving this state will help build trust and stronger relationships.

People
As Dennis Nickson and his colleagues pointed out, we will use “aesthetic labor” – employees who serve our customers directly have to pass certain standards of physical appearance. They must portray professionalism and reliability.
Managing Employees

Pro Clean will make sure that employees are trained to handle emotional stress, or “emotional labour” and to cope with pressure from customers; no matter the Source of Conflict – be it Organization / Client, Person / Role or Inter-client Conflict.
The Cycle of Success 9

The company will invest resources into better pay and benefits, broadened job designs and training and empowerment to ensure employees are happier and provide better service. This will help to ensure a long-term positive financial performance as the company will be able to focus marketing efforts on strengthening customer loyalty using customer retention strategies.
Human Resource Management Hiring the Right People

Pro Clean will have an attractive value proposition for potential employees – good pay and benefits. Our good image in the community and the high-value services that we provide will make employees proud to be part of the team. When doing selection, the company will Observe Behavior, Conduct Personality Tests and use Multiple, Structured Interviews to identify the best candidates for the job. We will also give applicants a Realistic Preview of the Job before they come onboard via two platforms. The first, will be a shadowing program where prospective employees are given first hand insights; while the second will let potential employees work for two paid days with the company for hands on experiences.
Actively Train Service Employees

Wilson will be implementing a quarterly training program for Scott, Martinez and Turner in the three key areas: 8) The Organizational Culture, Purpose and Strategy: high-value

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Refer to Appendix 8 Refer to Appendix 9 8

9) Interpersonal and Technical Skills 10) Service Knowledge Wilson may need to re-train Scott to improve his closing ratio with other age groups. Also, he may instead empower Turner to target the younger age group, which he may be able to communicate better with (being only 27 years old himself); which will also utilize his knowledge of the Knoxville area.
Empower the Frontline and Motivate and Energize

The company will ensure that Job Content is relevant to an employee’s skills. We will also have several mediums for feedback and give recognition (e.g. Best Employee of the Month) for employees who have displayed exceptional performances.

The Wheel of Loyalty
Building a Foundation for Loyalty
Targeting the Right Customer

Our target segment will include customers with incomes of greater than $250,000 per year. Our personnel, especially Scott and Martinez, will have the experience to anticipate our customers’ wants and expectations, in terms of both personal style and technical ability. From the case, we have one main competitor targeting the same segment – King Rug. We feel that though we may not be able to match them in terms of standard of equipment, our service will more than make up for it through our customized supplementary services and the personal relationships which we will build and maintain.
Searching for Value, not Volume

Pro Clean will be careful when choosing our customers. We will focus on customers who value longterm high-quality service and who want to protect their investments with regular maintenance. Our Package Program will help to identify these customers as it will lock them into our service for a period of time.
Managing the Customer Base through Effective Tiering of Service

The company will group customers into tiers in terms of profitability. Especially for our top-tier customers, who appreciates the high-value in our service, patronizes us for longer periods of time and spreads positive word of mouth, we will implement the following strategies to strengthen our bond with them: Cross-selling and Bundling Once a customer is contracted, Pro Clean will firstly encourage them to sign-up for our Bundled Packages to lock them in for a period of time. Secondly, we will attempt to cross-sell as many other additional cleaning services and supplementary services to increase their switching costs. Rewards 10 We will be rewarding top-tier customers who provide us with the most value. Higher-level Bonds Pro Clean will create Social Bonds with valued customers by learning their first names as soon as possible and developing a friendship to allow the element of trust to blossom.

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Refer to Appendix 10 9

We will also for Customization Bonds by taking note of special requirements and care-taking for different customers’ variety of carpets. Attention will also be given to details like how they like their carpet arranged, furniture around the carpet positioned, chemical allergies etc.

Effective Service Recovery
Making it Easy for Customers to give Feedback Pro Clean will make giving feedback easy and convenient by putting toll-free phone lines, e-mail and postal address on all customer communications materials. Well will assure our customers that their feedback is being taken seriously by having service recovery procedures in place and making sure that customers know that they are there. We will also keep customers updated on our service improvements based on their feedback and contact individuals if necessary. We will ensure that their feedback experience is positive by firstly thanking them, training our frontline employees how to handle feedback positively, and allowing customers to submit anonymous feedback. Our employees will be trained and empowered to act fast (24-hour response time). Compensation The compensation awarded to our customers will depend on the severity of our service failure. Being a provider of premium service, we generally aim to keep such occurrences to a minimum. But when they do occur, we are prepared to offer our high-end target customers high-value compensations such as, for example, a completely free carpet cleaning session or full sum compensations. Service Guarantees We will be providing customers with a Money back Guarantee: “We offer an unconditional money back guarantee – if after the service delivery you are unhappy with the result, let us know right away and we will compensate you in one of two ways: Either re-do it completely free of charge; or refund every cent you have paid for the service.”

Conclusion
The new mission of Pro Clean will be to provide consumers with beyond excellent quality of service at value for money prices. The new pricing system will ensure that at Pro Clean there will definitely be a service bundle and level for everyone. The new service blueprint will ensure standardization of services such that all employees will be able to deliver services as of the highest standards. For the greater benefit of consumers, the new website will provide great convenience and round the clock assistance. Clearer communication of information during the search phase and all interaction phases will be provided to greatly reduce and perceived risks. All feedbacks will also be taken seriously and appropriate follow up actions will be taken, letting the consumers know that their voices are heard and we take their opinions seriously. These can all be achieved with low costs but would be of great value to consumers. With these new changes in place, Pro Clean aims secure a greater market share and increase profitability through various value adding means. With constant upgrading and training of employees coupled with improved employee benefits, better CRM can be executed, allowing customers to be able to trust us and build stronger relationships. With improvements in internal and external communications, management and service process, Pro Clean will be able to build a business model unique to herself in this highly competitive industry, and secure a base of loyal customers.

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Appendix
1. Positioning Map

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2. Newly Improved Website

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3. 24/7 Online Consultation

4. Pricing Tiers

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5. Marketing Communications Mix

6. Advertising

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7. Service Blue Print New Customers without Packages

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Existing Customers with Packages

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Actual Service Delivery

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8. Russell’s Model of Affect

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9. Cycle of Success

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10. Rewards

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