Over the years prior to retirement, I can recall many of our franchisees Electric Winch getting all excited about working with concierge services. Still most were not really concierge type service, although some were, most however were just folks who had websites and really good webmasters with great SEO skills to draw an abundance of traffic. Then they’d capture interested parties who wanted services, then place those customers with real companies that could do the service, but first take a 10-20% cut. That might sound like a good business model, unless you are the hapless operator dealing with the online concierge concept company.
Now then, let’s talk about this because, I see some flaws with doing business with such groups whether real concierge services or their wannabe online version. Here are the problems my franchisees have experienced in the auto motive mobile service sector.
It was amazing how demanding these companies were, often expecting us to stop what we were doing with our regular customers and drop everything and then run over and give service to their catch of the day. Inevitably, that made them look good, and enhanced their reputations, while it cost our crews real money trying to jam in new customers which hurt our workflow, thus our bottom line or profit.
Hold Out Carrot – Take It Away
If our franchisees didn’t jump however high they were told, the concierge would say; “if you can’t take these jobs, we will give them to your competitor, and we won’t give you anymore work.” Gee whiz, you promise, because all we’ve gotten were headaches doing business with you?
Who Collects the Money – Issues with Receivables
Sometimes our franchisees would find their concierge companies would pay their bills slow, thus, not only did they get their 10-20% cut, but made our franchisees wait to get paid, thus, using our money and cash flow as a float. Must be nice? Sometimes they wouldn’t pay at all, claiming that the customer had a complaint, or that we hadn’t kept up our end of the bargain. But that was never the case really, just an excuse not to pay.
Customer Complaints – Miscommunications
One thing that happens a lot is when you are dealing through a third-party there is miscommunication, making the customer upset. Of course, the concierge always blames the operator, thus, damaging our franchisee’s reputation for no reason, other than there shouldn’t have been a middle-man in the first place you see?