Crossroads luxury service businesses cope with tight consumer spending
June 20, 2010 at 1:20 a.m.
Paying for a car wash, a pedicure or to have your lawn mowed are luxuries, especially during tough economic times.
Because of this, many companies that offer these luxury services continue to struggle during this post-recession era, according to Crossroads business owners.
While no local data exist to support this specific decline, ample anecdotal evidence shows it to be true. Many Victoria luxury service company owners say they cope with a significant dip in business.
"People have less discretionary money to spend out of their income, which makes them stay away from luxury businesses," Joe Harper, director of the University of Houston-Victoria Small Business Development Center, said.
Mick Moore's luxury business, Professional Cleaning Service, has served Victoria for 23 years. The company offers residential and commercial cleaning services.
"Cleaning is more difficult than people think," Moore said. "Window cleaning on a professional level takes two years of training."
When the economy took a nosedive, though, more and more people opted to do the work themselves and against paying for his services, he said.
To cope, some owners started a second business to create another revenue stream and to help make ends meet, Moore being among them. He launched an advertising business, Impact Advertising.
"We had a few slow months at Professional Cleaning Services, and in those months I started thinking about how I can diversify my income," Moore said.
Many other owners of luxury service businesses - from day spas to lawn-care companies - share similar stories. When the economy dips, so, too, does customer volume.
"We lost about 50 percent of our business during the recession," said Matthew Gaskin, owner of Crossroads Professional Detailing. "We usually have around six employees. Now we are down to three."
To stem dwindling customer bases, many business owners offer specials.
"We run weekly specials and summer specials, and since Tuesday and Wednesdays are slow we have specials on those days, too," said Dena Buchorn, owner of Eden Day Spa.
Scott Taylor, manager at Flex Fitness, said dropping prices for gym memberships helped to lure in more customers.
"More people have joined," he said. "This gives people something to do while their unemployed."
Those business owners who can't afford to adjust prices find themselves doing so anyway. Kevin Brown, owner of Edge Landscaping, dropped prices for premium lawn services.
"People started seeking out lower-end services," Brown said. "We had to start lowering our prices to keep up with our competition."
Successful businesses - especially those that weather down times - rely largely on happy and repeat customers. When discretionary spending is tight, people's expectations of service grows even greater.
"Business is about relationships," said Moore, owner of the cleaning service and advertising companies. "The better the relationship, the more customers will think well of you and the more you will succeed."