I WANT TO SHARE A FACEBOOK POST THAT I WROTE IN ONE OF THE JUNK REMOVAL GROUPS

This entire blog post stems from a Facebook post that I wrote. I'd like to share that with you first, and then we'll start breaking everything down. *Warning* It's a long post, but worth the read.

The Facebook Post Reads:

When you’re having a hard time closing jobs, you need to ask yourself: Why should people hire our business over another?

Let’s do a quick rundown. There’s this flooring company (franchise) that really piques my interest as a marketer. I love seeing what other industries are doing so I can learn from them. Every now and then, I stumble across a landing page that just blows my mind. This flooring company's landing page blew my mind. I thought to myself "If I needed a floor, I'd call them immediately."

I bet you would too.

Let’s put this into perspective. YOU are a customer, looking for new floors.

You go to the internet, and here are the first 2 options that pop up:

Company A’s Advertisement: “Flooring Installation | Free Estimates”

Company B’s Advertisement: “We’ll Beat Anybody’s Price | Lifetime Installation Warranty”

Let’s be honest. Company B’s ad is significantly more appealing. This is already looking rough for Company A.

But let’s say you check them both out.

You give Company A the benefit of the doubt and have them provide an estimate.

They come out, give you a quote for your floor, and it seems sort of high. They want 50% down, 50% on completion. Their work is backed by the manufacturer warranty. The contractor tells you he’s been doing this for 20 years, and he’s not the cheapest but he will do the best work.

You decide to get Company B to give you an estimate as well.

Company B comes out and quotes you an even HIGHER price.

The salesman is really nice, but you’re not sure why they’re advertising the best prices, if they charge more than everybody else. What happened to the price match guarantee?

The salesman explains that they’ll price match ANYBODY that installs the same floor, with the same warranty. He explains that they provide a LIFETIME INSTALLATION Warranty, as well as a manufacturer warranty. See, Company A is backed by the manufacturer's warranty, which means if the floor itself fails, the manufacturer would replace that part of the floor. However, the contractor isn't going to come back out and fix the floor for free.

With an INSTALLATION WARRANTY, the contractor WILL come back out and fix the floor for free. Therefore, although Company A's price is lower, they aren't offering the same product.

The salesman will follow up with something like this: "So IF you find a company that will offer a lifetime installation warranty AND they're backed by a lifetime manufacturer warranty, and they give you a cheaper quote, we will beat their price."

Just so we're clear - If your new floor were to have any issues or separation over the next 30 years, they will fix it free-of-charge.

By the way, they offer 0% financing, AND you don't have to make a single payment for a whole year. How does that sound?

Let’s be real here… Company B is getting the job. You don't care if Company A is locally owned and has a bunch of 5-Star reviews. Company B has all that and more, and they've given you an offer that's almost impossible to refuse.

They advertised as the best. They came out here and did everything they could to convince you to hire them and it worked.

Now, how does any of this relate to junk removal or dumpsters?

Well, here’s what’s important to understand: People WANT a new floor. Nobody WANTS to pay more to get rid of junk.

It’s a reality of this business. That’s not to say that the typical approach doesn’t work sometimes… obviously it does, or you wouldn’t be here.

But it doesn’t work most of the time. That's why most junk removal companies only book 20%-30% of their phone calls.

It’s important to identify what our customers' needs are, and we need to try to fulfill their needs and do it better than our competitors.

We have to understand what is going through our customer’s mind. When we’re trying to figure out what makes us the best, we have to be real with ourselves.

There are 3 things that are simply fact, whether you like it or not.

- They don’t want to pay more to get rid of junk. If there’s another company that will do it cheaper, they’ll probably get the job.

- We are not going to do a “better job” of picking up a couch. There are multiple insured junk removal companies with pretty trucks, uniformed employees and great reviews in your area, that will give them a better price if they hang up and call around.

- It will be very difficult to “convince” people to spend more money, because in reality, there is no good reason to. You can’t make a junk removal job “look better.” You can’t offer a “warranty.” There is no skill gap or craftsmanship here.

Lots of people aren’t going to care for my take on this, but it’s a reality of this business.

If you don’t have the best pricing, or the best availability, or the best offer, it’s always going to be a dog fight with your competitors, and you’ll only land 25%-30% of new customers who call you.

Now, let's create the same scenario, but for a dumpster rental business.

Dumpster Rental Company A’s Ad: “Same Day Dumpsters in Cleveland | We’ll Beat Anybody’s Price”

Dumpster Rental Company B’s Ad: “Affordable Dumpster Rentals | Call for Pricing”

Company B’s Ad might work.

But 90% of people are going to prefer Company A.

*Customer Calls Company A*

How Company A Gives Their Price on the Phone: “For one of our 20-yard containers, your total would be $450. This includes 2 tons of waste, and you can keep it for 3 days, free-of-charge. If you’d like to keep it for longer, that can be arranged! If you’re just getting rid of household trash, 2 tons should be plenty. If you go over a bit, then we just charge the difference in disposal fees as any company would, none of that goes to us. I highly doubt that you're even going to hit 2 tons.”

Customer responds: “Ok thanks! I’m just gonna call around.”

Company A Responds: “Sounds great. Here’s what I’ll do, I’ll send over a text message to this number. If you call around and find a better price for the same dumpster and the same terms, we’ll beat their price.”

Text message reads: “Hey! This is Josh with ABC dumpsters. Just remember, I’m happy to work with you if you do get a better quote from another insured company in the area for the same terms. Our quote was $450 for a 20 yard container for 3 days, 2 tons of waste. This is my number, please don’t hesitate to call or text me if you have any questions. It was nice talking to you on the phone, and I look forward to hearing from you.”

Company B Gives Their Price Like This: ”20-yard container is gonna be $550 for 7 days, 2 tons included.”

Customer responds: “Ok. Thank you.”

Company B responds: “No problem. Have a good day.”

Now, the choice is obvious. The customer can hire the friendly company that seems competitive and cares about earning her business, or she could choose the more expensive company that didn't seem to care if she ordered a dumpster or not.

If the customer only needs a dumpster for a day or two, there’s no reason whatsoever to choose Company B. She’s going to go right back to that text message and call Josh back to order a dumpster.

Love it or hate it, talk all the smack you want, understanding how to compete is part of the core fundamentals of running a business.

We can try to be the best and win people over, or we can deal with cheap price shoppers all day long and complain.

Before anybody jumps ship, I’m not advising you to work with a customer who wants to pay $100 to get rid of a full load of trash.

I’m not telling you to compete with a guy who has a pickup truck.

But why can’t you match another company's price that also has employees, pays taxes, has insurance, expensive equipment, and franchise fees? They're not working for free. They're finding a way to beat you on price.

I know people are going to hate this advice, but companies have been selling themselves on price for a hundred years. Leaf Guard, Empire Today, Stanley Steemer, the list goes on.

You have to sell. You have to convince people.

*IF YOU WANT TO CHARGE MORE* Then you’ll need to give them a reason to pay more, 75% of the time.

And good luck doing that by giving them a price over the phone as soon as they ask for it.

*END of Facebook Post*

SO, WHY ARE PEOPLE CHEAP?

Hopefully, the Facebook post has given you some insight on looking inward, but we're still going to break things down.

People are cheap when it comes to junk removal, because any junk removal company they call is going to make their junk disappear, and they're not going to be happy with your service for years to come. They don't want to spend any more than they have to. This is an inconvenience for them, not something they're looking forward to.

People will happily pay top-dollar for a Mercedes, because they want to drive a Benz. They're going to love that car every single day for the next few years.

When a customer pays you $150 to pick up their old couch, they're going to say, "Thank God we got that stupid thing out of here." That's it. That's all they want out of it. Having junk is simply a headache, and you're the solution. People don't want to spend any more than they have to, they just want their junk to be gone. If they don't want to pay $150 to get rid of their couch, they're going to keep calling around until some company agrees to do it for $79 while in between jobs tomorrow.

Again, there is a percentage of people that won't even think about calling around. There is a percentage of people who need something done immediately and can't afford to shop around. These people are the ones currently keeping your business running. But you're not better than your competitors, and you're not stealing their business.

Referrals and repeats are always going to choose you. New customers could care less about your cute logo. It's just simply true.

WHY STANDING OUT FROM YOUR COMPETITORS IS SO IMPORTANT

I hate asking people what makes their business stand out. You know why? Because I have to listen to the same, boring "pick-me" responses every time.

"We're insured."

Everyone is. Especially everybody on the front page of Google. Your customers who find you on Google aren't going to give up and hit Craigslist to find some crackhead to haul it away for free. They're hiring someone on the front page of Google, and they're insured.

"We have great customer service."

Ok? I expect great customer service. I'm not paying $50 more for great customer service. If you have terrible customer service, then I just won't hire you. Great customer service doesn't sell $150 couch-removals. Maybe sometimes, but most of the time it's just not a differentiating factor. You're no different than the next 3 companies that have great customer service.

"We have great reviews."

Customers absolutely care about reviews. I'd be lying if I said reviews don't matter. But, at the end of the day, great reviews alone aren't going to swing most people to give you money. Excellent reviews will convince people to call, not hire.

Similar to having great customer service, people expect good reviews. 1-800-GOT-JUNK has tens of thousands of 5-Star reviews. Some of their locations have 2,000+ amazing reviews. They're important, but you're not the only one with good reviews, bud. People use reviews as reassurance that they're going to have a good experience with your company. As soon as they call you and you tell them it's $750 to haul away their hot tub, they forget about your reviews.

"We offer same day service."

Join the club.

"We do the best job."

You're picking up a loveseat at the end of a driveway while the customer is at work. There is no "best job" in most cases. Are we or aren't we all going to pick up the loveseat and take it with us? Ok then. Any company is going to do what you do.

"We're reliable."

Unless the customer has already had a no-show, they're not going to Google while thinking "I hope I can find a reliable company." They just aren't, man. They're thinking "I hope this doesn't cost a ridiculous amount of money." Being reliable is obviously important, but good luck convincing them that you're the only reliable junk removal company in the area.

"We use the best tools and equipment."

Nice. Your dump truck is going to remove my mattress from the garage in half the time! Not.. they don't care, guys. They just want their junk to disappear.

"People respect that we charge our worth."

I hear this all the time and... I can't. This is just dumb. Nobody wants to pay more, just because you charge more.

You get the point. None of these things make you the best. They don't really provide any additional value that your competitors can't provide.

People want to hire the company that provides the overall best value.

Selling your services based on these "benefits" alone is not going to lead to 70% book rates.

SO HOW CAN YOU STAND OUT FROM YOUR COMPETITORS AND HEAR "YES" ALL YEAR-ROUND?

In order to stand out, you need to do things that your competitors wouldn't dare to do.

Your competitors will say they're the best.

Your competitors will ask for good reviews.

Your competitors will advertise same-day junk removal.

If everyone is doing it, it isn't special.

You know what your competitors are scared to do?

Offer an $85 Minimum.

Offer a PRICE MATCH GUARANTEE.

Offer a First Time Customer Discount.

Offer 20% Off When They're Slow.

Scary stuff, right? Now I'm not saying that the only way to win over more price shoppers is by lowering your price, but it's definitely the best way.

Now, I know what you're thinking: "Josh, anybody picking stuff up for $85 isn't making money."

But YOU'RE NOT MAKING MONEY BECAUSE CUSTOMERS DON'T LIKE YOUR PRICING!

There are companies picking stuff up for cheap because they're making more money by doing it.

Let's do a quick rundown of cost for 2 guys, picking up a loveseat in between jobs.

The job: Picking up a loveseat in someone's garage.

Labor: We'll assume you're paying 2 guys $15/hour. Essentially, we're paying $30/hour in labor, but after payroll expenses and worker's compensation it's closer to $42/hour.

The job is 20 minutes away, 20 minutes to load, and 20 minutes to the next stop. 1 hour flat.

Mileage: For wear and tear, we'll use $0.40/mile. 10 miles there, 10 miles to the next stop. That's $8.

Gas: Every truck is different, so we'll just use 10 MPG as our reference. Since we're driving 20 miles, we'd use 2 gallons of fuel. Let's say $10.

Dump Fees: Realistically, we don't really need to consider dump fees if you're throwing this on another load and have a minimum at the transfer station. We'll include it anyways. Assuming you're paying $100/ton with a 1 ton minimum, and we can fit 9 couches in the back of our truck, we only need to account for $11 in dump fees.

Overhead: This is going to vary so wildly. We're going to assume you have 1 truck, and your overhead for insurance, payments, parking and software is $2000/month. 200 hours per month would mean we're spending $10/hour in overhead. That's another $10.

Cost per Lead: Now this is where I disagree with most of you. If you're running a Google Ads campaign, and you're paying $50 per lead, then you're going to say this lead costed us $50. But in reality, it doesn't make sense to look at it this way.

Your ACTUAL cost for a lead is determined by your book rate, average job price and your ROI.

If you're like most junk removal companies, you book 25% of your leads. Let's assume you're doing 33%.

If you get 100 leads at $50 each, you'd spend $5000 total. You'd book 33 jobs. If your average price per job is $400, then you'd make $13,200. This puts your ROI at 2.64. Basically, 37% of your revenue goes towards advertising.

So essentially, when you book a job for $100, that job only ends up costing you $37 to acquire. Even if you spent $50 today and only got one call, you're going to get calls this month that are much bigger jobs. You're going to get 4 calls some days, and no calls other days. So, you can't calculate costs per call, or per day, because they're not all created equal.

Total Cost to do this job at $125: Get ready.....$127.25. How? $42 in labor, $8 for mileage, $10 for fuel, $11 in dump fees, $10 for overhead and by the end of that month this job would've costed you $46.21 in ad spend, because you only book 33% of your calls.

Ouch. You're more expensive than some of your competitors, and you're not even making money.

Now, we're going to go over the same scenario for the company next door that has a $79 minimum, doing pickups with 1 guy on Fridays only.

The job: Picking up a loveseat in someone's garage.

Labor: They're trying to offer more competitive pricing, so they can book more jobs. In order to do that, they're only going to send 1 guy to do the job. Before any of you say "It's going to take longer with 1 guy." No, it isn't. It's a loveseat in the garage.

The job is 20 minutes away, 20 minutes to load, and 20 minutes to the next stop. 1 hour flat. At $15/hour, we're actually spending $21/hour on the high side when we account for payroll expenses and worker's compensation. Total labor is $21.

Mileage: For wear and tear, we'll use the same $0.40/mile. 10 miles there, 10 miles to the next stop. That's $8.

Gas: Going to use the same costs here. 10 MPG, 20 miles, we'd use 2 gallons of fuel. Let's say $10.

Dump Fees: Once again we're assuming you're paying $100/ton with a 1 ton minimum, and we can fit 9 couches in the back of our truck, we only need to account for $11 in dump fees.

Overhead: *Copy and Paste * This is going to vary so wildly. We're going to assume you have 1 truck, and your overhead for insurance, payments, parking and software is $2000/month. 200 hours per month would mean we're spending $10/hour in overhead. That's another $10.

Cost per Lead: Now this is where the whole thing shifts. This company is going to spend much less for leads, because they're advertising that they'll beat anyone's price. They're only going to pay $30 for leads, AND because they're cheaper and they'll beat your price, they're going to book 65% of their calls.

If they spend $3000, they're going to get the same 100 phone calls as you.

Because they're cheaper, their average job price is going to be much lower than yours. Let's call it $295. They book 65% of their calls, so they do 65 jobs. That means when they spend $3000, they'll make $20,650. Their ROI is 6.8. They only have to put 14% of their revenue toward ad spend. Every $1 earned costs them $0.14.

So, if they pick up this loveseat for $79, they're only paying $11 for the lead.

Now, when you factor in your organic calls, your marketing costs become even lower. Too often, we tend to look at costs per "job." What matters is how much we make every month, and how much we spend. Period.

If both of these companies were getting the same number of calls from organic sources as well, with the same book rates, then Company A would only be paying $23 to pick up a loveseat for $125, instead of $46. Company B would only be paying $5.50 to pick up a mattress for $79, instead of $11. This is because you can spread your overall marketing costs across ALL jobs, not just jobs from ads.

All I'm trying to do is help you realize that charging more doesn't always equal more money. A lot of the time, it just means less customers and less revenue. Tweak these values and see what you can come up with for your company.

Let's look at a few different ways you could provide more value.

LOWERING YOUR MINIMUM

If you're sending 2 guys out 30 minutes away to pick up a box spring for $85 while in between jobs, you're going to lose money. As business owners, we have to think outside the box. Instead of complaining about how cheap our competitors are, we could find ways to lower our expenses, so we can compete and win more business.

So, here's an idea:

Instead of quoting everybody $150 to send 2 guys pick up their box spring, send ONE guy. Don't let these inconvenient jobs get in the way of your busy days. Schedule all of your minimums for ONE day per week. The customers should be happy to wait a little bit longer if it means they're saving money.

They're also going to be happy to put it outside for you sometimes. So, you could try offering a $79 single item pick up, if it's outside in the driveway, and you can pick it up on Friday. Even if they won't put it outside, tell them that you're only able to offer killer pricing if you can send one guy. Sometimes people don't care about the convenience of having us load it. Sometimes they just want to get rid of it and will be happy to help you load it.

Now, because you're giving such an excellent price for single items, you're going to feel much more confident on the phone, and you're going to book more of these single item calls.

Just to be clear - We're getting 15 calls this week for mattresses, we're quoting $79 each, we're going to book 10 of them, and we're going to send 1 guy to pick them all up on Friday. 1 guy is going to make you $790 without even having to hit the transfer station.

You don't have to use this exact model. I know everybody's bills are different. I'm just trying to help you think outside the box. Play with the idea of lowering costs so you can lower your pricing and win more jobs.

OFFER BUY NOW, PAY LATER

BNPL (Short for "Buy Now Pay Later") is a great way to swing people to spend more money. Just stick with me here.

If you go to Amazon to buy something, you'll see an option to check out with Affirm at the bottom of your cart, where you can pay for the product over time.

If you look at any large service brand like Refloor, Empire Today, Roto Rooter, they all offer financing.

Now, this might not be very helpful for $100 jobs, but there are plenty of options out there that will finance transactions as small as $200.

HouseCall Pro offers financing for your customers if their transaction is at least $500.

Now, you're not actually financing the transaction. You're not waiting to get paid. You're getting paid in full, upfront. The "lender" is going to pay you and let the customer pay them back over time.

Next time someone doesn't want to pay $750 to have their fence torn down, you can offer 0% interest financing, letting them pay it back on their terms.

People will happily pay more if they can pay for it later.

Just think about how this could help your business. You might not always be the cheapest, but your competitors aren't offering financing, that's for sure.

OFFER TO TAKE SOMETHING FOR FREE

This could potentially be a good way to get more people to hire you, even though you don't have the cheapest price.

Instead of telling a customer that it will be $150 to pick up their fridge, tell them that first-time customers can add an additional 1 cubic yard of junk for FREE.

Now, someone might have given them a price of $125 to pick up their fridge, but you're taking the fridge and something extra for $150.

Even though your price wasn't the cheapest, you're offering a different service, and you're providing more value.

Think about this and come up with some ideas on your own that might work for you.

PRICE MATCH GUARANTEE

No, you don't have to compete with crackheads who charge $40 to pick up a truck load of junk.

Offering a price match guarantee allows you to be competitive. Some customers will hire you without getting other quotes just because they know they're getting a fair price.

Any big brand that offers a price match guarantee, always includes specific terms.

If your customer gets a better quote, ask them who quoted them.

Most of you who do offer a price match guarantee, usually require that the customer must provide a written estimate. This is pretty useless, because the customer isn't going to ask another company for a written quote for $175.

If they don't like your competitive quote, let them know that you'll beat any price that your competitor offers. A good way to make sure you don't get screwed would be to require that the company is sending out 2 guys and is including dump fees and taxes in their quote.

If you decide to offer a price match guarantee, don't just mention it - spam it. Put it on your Facebook page, your website, your truck, your brochures, everything. Tell the customer on the phone that you offer it and send them a follow up text reminding them to call you back if they find a better price.

If you do this correctly, your book rates will double or maybe even triple.

CONCLUSION

So many guys are going to be mad at me for writing this. People are going to accuse me of contributing to saturation and cheap pricing.

But I wouldn't be too worried about that. 95% of you will just disregard everything I said here and continue to do what you do.

At the end of the day, nobody wants to pay more than they have to to get rid of junk. This is the industry that we've chose.

You need to sell people on value.

Business Owners in every industry have to deal with price shoppers. Towing, house cleaning, pressure washing, asphalt paving and every other service industry out there is struggling with cheap customers, and that's because they don't understand that the only way to get somebody to spend money on something they don't want, is to convince them to do so.

We do not have it worse in junk removal and dumpster rentals.

You don't have to take any advice that I've given here. I don't think I know it all. I just want my Google Ads clients to make more money, and I'm constantly trying to better understand our customers.

This article is not The Bible for Junk Removal Companies.

There are lots of people that will tell you to stand your ground, and your pricing isn't the problem.

But the way I see it, if you can lower your costs while still being profitable, you'll win many more customers. It's a win-win.

And if there's a guy out there with an average job price of $500 and books 50% or more of his calls, I'll pay good money to hear from that guy.