The U.S. carpet and upholstery cleaning service sector was estimated at $5.3 billion in 2006 by Marketdata Enterprises. The market is broken into residential and commercial services. While only moderate growth is estimated for the next five years, the national market is highly competitive.
The initial market for Like New Carpet Cleaners is residential services in Fairfield County, CT, beginning with a five-mile radius of Danbury, CT. The population of Fairfield County is approximately 895,000 with 225,000 owner-occupied condos and homes. It is estimated that 40,000 of these owner-occupied homes and condos are within that five-mile radius. These 40,000 owners spend an estimated $4 million per year on carpet, upholstery, and other floor-cleaning services. For that reason, we have chosen this as our initial market.
Residences require a higher level of customer support, pay higher rates on average, and often include additional opportunities to sell related services to homeowners.
Businesses require less customer support and service, pay lower rates on average, and generally seek ongoing services which can repeat the same tasks without much room for upselling.
Like New Carpet Cleaners will focus on residential cleaning services, rather than businesses, because it believes this market is more likely to accept technological advances and Internet customer service. Like New has divided the market into these segments:
The carpet-cleaning business is characterized by multiple local businesses serving a town or a few towns, and some national franchises. Each town can have from ten to twenty businesses.
Cleaning services are generally managed out of a central office. Delivery vans are used to transport equipment and cleaning crews from the central office to customer homes.
Services are generally ordered by phone. For large homes, on-site consultations are given to develop a more accurate quote for cleaning service, rather than quoting a price site unseen. Some online ordering is done, but most small businesses rely on phone conversations to gather the information needed to quote a price to customers.
Marketdata Enterprises reports that the carpet and upholstery industry for the U.S. is comprised of 40,000 mostly small companies and that the industry is relatively mature. Although some large franchised organizations exist, the top ten franchises make up only 22% of the market. These top competitors include Sears, Stanley Steemer, Chem-Dry, ServiceMaster Clean, ServPro, Duraclean, Heaven’s Best, Rainbow Intl., MilliCare Commercial Carpet Care, and Professional Carpet Systems.
Customers choose between these competitors based on brand name, positive references from trusted sources (friends, family and colleagues, and customer-review websites, such as www.yelp.com), and price. Most cleaning services do not compete specifically on price, although franchises sometimes use this lever. While brand name is important for some customers, many realize that small businesses use the same equipment and hire the same basic labor as the known brands and, therefore, that positive word-of-mouth is more important.