Recently, my son, now almost 10, started his own business. He realized that his allowance of $10 per week, half of which he is required to save, just wasn’t enough to sustain the steady stream of Pokemon cards and video game add-ons he wanted. So he analyzed the market (me) and opened Aidan’s Massage Service.
He charges $1 per minute with a maximum limit of $5 per massage. I’m a weekly customer. Actually, I’m his only customer. Knowing that, he makes sure to give great service. After the first week or so, he added a complimentary one-minute back scratch after the percussive massage. That got him fatter tips, so he made it standard for all massages.
He’s been trying to figure out how else to get me to loosen my purse strings. A few days ago, knowing he had a captive audience while pounding my shoulders, he casually mentioned that he’s now offering a “premium service” and would I like to add that on today at a special introductory price?
“What does premium service include?” I asked.
Apparently, two extra minutes of massage, one extra minute to the back scratch, a one-minute rub after the scratch to sooth the skin, and a towel cooler (for hot days). All this for just $3 this week. After that, the normal price would be $5, double the price of a standard treatment. “But don’t worry, Mommy, you can check for weekly specials. I’m going to think of different packages and they’ll only be available at certain times, so you’ll have to act fast.”
Of course, as his mother, I found this hilarious and adorable. How could I refuse to try this new premium service? But beyond that, I thought he did what any smart business owner would do when seeking to expand their business:
1. He tapped into his loyal customer base. Customers who already trust you will be more receptive to new products/services. Also, add-ons are one of the most effective ways to increase profits.
2. He bundled services and priced it attractively. He knew that what he offered was a good value.
3. He created anticipation and scarcity of goods by putting together different packages and only offering them at limited times.
Obviously, my kid didn’t get all these business ideas on his own. It’s a direct result of being marketed to. That being said, being observant of how other businesses are reaching customers is something worth paying close attention to.
In a similar but much more advanced way specific to this industry, expert Josh Henderson explains the metrics his company used to calculate the potential profits from expanding a pool business to include a service division. He offers solid advice for those looking to break into pool service.
Meanwhile, please excuse me. It’s time for my premium massage.