Three stories about framing costs.
In college, our ultimate frisbee marketing wasn’t table tents like everyone else, but t-shirts. It seemed superior to subsidize the extra shirts, Mike C. bought four, than pay for paper adverts. It was an accidental Influence via social proof. Robert Cialdini writes, “there are three main optimizing conditions (for social proof): when we are unsure of what is best to do; when the evidence of what is best to do comes from numerous others; and when that evidence comes from people like us.”
So maybe the shirts were the better advertising route. But that’s hindsight. At the time the thinking was: why not use the money to get something that advertises the club but also which we can wear. It allowed our marketing budget to stretch into our uniform budget too.
Though cleaning Airbnb rentals, residential homes, and apartment turnovers seem the same, the unit economics are not. The rentals required extra work like stacking pillows and sorting silverware and the homes required return visits to address distress and missteps. Plus, the rentals and residences were “times are good” businesses. George wanted something that would cover when times were not good too. That left apartment turnovers.
Then George did two other things. First, George brought all the rental turnover services in house, “one throat to choke.” When a tenant leaves, property managers need to make one call. George’s crew cleans the carpet, patches the walls, and fixes what is broken. Bundling these services is a better solution to the JTBD.
The second thing George did was to hire a quality control manager. This person follows the main crew, addresses small misses, and coaches the crew on the larger items. This, Acquiring Minds host Will Smith, sounds expensive. Yes, George replies, if you look at it only as a cost. But it’s not just a cost in the sense of apartment preparation.
You see, George explains, this is my marketing. It’s through word-of-moth referrals that people find George. The quality control is part marketing. And if that wasn’t enough, the quality control changes George’s LTV-CAC calculation.