Bad Bob's
Yellow Page Scheme
In the last few years, some
dealers have discovered a way to make big money in the garage door
business. Yellow Pages advertising is the cornerstone of the
scheme. Several details of the scheme are sleazy, many are
deceptive, and some details are outright illegal. However, some dealers
don't care about that, and they end up giving the entire garage door
business a bad name. |
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| Here's a general description
of how the scheme would work for an unethical dealer we'll call "Bad
Bob."
1. Locate in a Large Metropolitan
Area.
Since many of Bad Bob's tactics might be viewed as
unethical, he will target large-population centers where the consumer is
unlikely to know him. Even if he creates some angry customers who might
tell a dozen people, Bad Bob knows he can still prey on hundreds of
thousands of other people who don't know what he's doing.
2. Buy Giant Yellow Page
Ads.
This is the key element of the strategy. Dealers have
long recognized that Yellow Page advertising is a critical element in any
dealer's marketing plan. Since consumers generally need door service only
a few times in their lifetime, they will frequently rely on the Yellow
Page to find a local dealer. In his Yellow Page ad, Bad Bob's
strategy is to give the consumer the impression that he is credible.
Here's how he does it:
- Be huge. Bob buys a full-color ad or even a
two-page ad. The consumers figure, "Gee, if he can afford a giant ad, he
must be credible." They don't need to know that Bad Bob operates out of
a house.
- Be first. Bob does whatever it takes to be
listed first. He will often create a company name that begins with "A," because he knows consumers will often call the first name on the
list.
- Buy multiple ads. He often buys 2-4 full
page ads or a couple of double truck ads. (2- page ads). With all Bad
Bob's ads listed first in the Yellow Pages, the consumer is extremely
likely to call the phone number on at least one of them.
- Use several company names. Bob often
advertises under several company names, so the consumer will call at
least one of his numbers. The consumer will never know that Bad Bob is
actually the only person behind all these companies.
- Use as many brand names and logos as
possible. Bad Bob is usually not an authorized dealer of these
brands, and this tactic is illegal. Bad Bob knows that his Yellow Page
rep will never check it out. Bad Bob often uses recognized names like
Sears and Craftsman. Even if a manufacturer seeks legal action against
Bad Bob, he knows they will often just send him a "cease and desist" letter. By then, this scheme will have earned Bad Bob a boatload of
money.
- Focus on service work. Bad Bob's ads use a
big photo of a broken spring to target the homeowner who needs quick
service. Service work and replacement parts have always reaped a lot
more profit than new construction work. Bad Bob doesn't worry about new
construction work; the slim profit margins aren't worth his
effort.
- Promise quick response. Remember: Bad Bob is
targeting service work. His ad highlights "24-hour service" and
Emergency service within an hour." Bad Bob gets in that garage fast,
before a reputable dealer claims the turf.
- Mention "Senior Citizen Discount." This
phrase works every time for Bad Bob. He might go ahead and give seniors
some token discount, but he makes sure his "regular charges" are
exorbitant. The Bob laughs all the way to the bank.
- Promise "Low Prices." Bob often uses this
time-proven phrase, except he doesn't really charge low prices. Bob
knows that homeowners have no clue as to the real cost of garage door
parts.
- Post many phone numbers. In metropolitan
areas, suburban homeowners like to believe the dealer is in their
neighborhood. So, Bad Bob often publishes a different phone number for
each of the major suburbs, but all calls are transferred to Bad Bob's
one location. A bunch of phone numbers is cheap, and they make Bad Bob
look as if he actually reputable.
- Boast "Voted #1 in Customer Service." This,
too, is false advertising, but Bad Bob figures that his Yellow Pages rep
doesn't care, and no one realizes that Bad Bob is the only one who cast
a vote! By the time Bad Bob is forced to remove this from his annual ad,
he will have scammed hundreds of people for mega-thousands of
dollars.
- Look reputable by displaying certain
pictures. Good examples: (1) clean-cut guy with a uniformed shirt
and clipboard, (2) new service trucks with Bad Bob's logo on them, (3)
expensive looking houses. None of these need to be real. Bad Bob knows
his Yellow Page rep can get these images and will even print Bad Bob's
logo on the side of a picture of a blank service truck.
3. Negotiate Lower Prices for Yellow
Page Ads.
Since the Yellow Pages are Bad Bob's largest
expense, he must get the lowest possible price for these ads. To do that
Bad Bob is often part of a national chain of sleazy door dealers. That
way, the chain's "central office" can negotiate sweet deals with low
national rates.
4. Charge Exorbitant
Rates.
These Yellow Pages ads often cost Bad Bob $250,000 or
more than $1 million per year. To pay for that, Bad Bob needs to maximize
profits. So Bad Bob doesn't mess with measly 10% mark-ups. He charges 5-20
times each part's real cost. When the scheme is working properly, Bad Bob
rakes in more than $100,000 per week.
5. Use Subcontractors as
Technicians.
Bad Bob needs to motivate his
service guys to cooperate with the scheme. If Bad Bob pays
employee-technicians by the hour, he knows that the tech will have no
motivation to rack up a big bill and finish the job quickly. If the
technicians are salaried employees, Bad Bob usually needs to buy their
trucks and tools and pay benefits and vacation time.
Instead, Bad Bob
hires subcontractors who often have their own trucks and tools, and he
pays them an attractive commission on each ticket. This gives them every
reason to generate big tickets with every customer. Subcontractors are
more likely to understand profit motive and are less likely to wimp out
when Bad Bob tells them to rack up at least $400.00 in charges to each
customer.
6. A Warehouse is
Unnecessary.
Why should Bad Bob pay for warehouse space,
when others will do it for him? Since most of Bad Bob's income comes from
service work, he doesn't need to own a big warehouse that stocks complete
doors. Bad Bob's subs can pick up springs, openers, parts and replacement
sections at any of several wholesale warehouses in his area.
That's
another reason why this scheme works best in large-population centers.
There are always plenty of distribution centers and wholesalers who
unwittingly cooperate with the scheme.
7. A Storefront is
Unnecessary.
A storefront might add a little credibility,
but Bad Bob knows that it's really unnecessary and way too expensive. Bad
Bob often runs this entire scheme out of his own house, and his Yellow
Pages ads usually don't list a physical address.
As the ads generate
hundreds of phone calls, Bad Bob just takes calls and collects
money.
What if Bad Bob gets caught? No problem. He just
takes his boatload of money and moves on to the next big
city.
Note: Many of the above tactics can be a
part of an appropriate marketing strategy, but problems arise when several
of these tactics are used to deceive the public.
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