Continued from: The “One Thing” that Needed Saying...
Not surprisingly, after reading my agreements, the best lodgers from their place (all the house proud ones) moved across into my place. The pigs refused to accept my terms. I also charged an extra $10 per week.
Overnight I had the best of the lodgers from next door and their friends (people who always wanted to live in theirs but wouldn't because of the filth), living in my property. They were paying me $1100 in weekly rent.
I was single so that meant I no longer needed a job.
In a matter of weeks the original house they had moved across from was closed down. Everyone except a couple sour grapes wanted to live in my house under these new rules.
I quickly learned a valuable lesson.
Promoting this business was more about keeping customers I didn't want in, out. Than it was about getting new business.
Coincidentally (you will recall) from my [SMARTER] eMail, I only recently learned the same thing about Googles business. The right caliber of B2B advertising customer means more (better caliber) end-users trusting Google.
The wrong advertising customers within Googles ad network repels their greatest ($billion$ dollar) asset, attention and trust of end users.
This reality has never been more pertinent than now with social media dominating the digital marketing mix.
I started implementing systems.
Like a lock up safety box built into a wall for them to drop their rent day and night, and paper maintenance requests. Terms of stay like 1 week’s notice before departing, or lose a weeks rent and a minimum 6 weeks stay.
It wasn't long before I was running 4 other properties. Within 6 months.
I Spent My Days Looking After My 50 Lodgers Like they were My Personal Guests...
Our advertising became all about the wrong people not being welcome.
It was clear in our ads our strategy was to lower expectations in standards of accommodation, focusing on the "5 star experience” we knew our target group wanted.
My customers were mostly single travellers. It was crucial we matched the right people to share within the right household. We were, after all, selling people, a people cocktail. If my ingredient was off, so too would the cocktail, damaging the brand.
8 years later...
The "Sleeping With The Enemy" brand was known throughout world.
Today there are countless married couples, children and lifelong friends all over the world who owe their connection to this brand.
We ended up with 500 lodgers living in 15 properties, all 4 times bigger than my first property.
$4 mill a year in rent, excluding earnings from promoting parties for 500 lodgers {each week} & the capital gain on our properties...
We had on average 35 people sharing each property, paying an average $150 rent.
Each property had its own house brand under the company brand.
Our lodgers competed as teams to keep their homes cleanest...
We built our own cloud-based software systems to manage all of the unique rules, and other relationships in the business.
Our lodgers could log-on to receive their points for cleaning, book house tours for sales, enter into lodger's agreements, report maintenance, pay rent, give departure notices and banter with each other in chat rooms...
... all this was years before Facebook existed.
Local business owners accepted Sleeping With The Enemy rewards (our own currency) as payment for entertainment, food and beer from our lodgers.
Our lodgers earned rewards for cleaning common areas of their homes.
Business owners purchased advertising from us with the same points collected from our lodgers, as payment for their goods or services.
The local businesses advertising revenue funded the cost of cleaning (performed by our lodgers) our properties.
The crux of the value proposition I found myself delivering to our customers was that we sold a unique shared living experience.
“Not once from the outset did we ever advertise accommodation!”
Had we sold accommodation and competed on price, our product was poor.
We sold an experience they could not buy anywhere else in the world.
See what I mean here.
To fulfill each sale my staff and I spent our working days (for 8 years) fixing problems.
Whatever it took to minimize the negatives that always spread like a cancer, and risked diminishing our customer experience.
Negatives our customers knew came with the territory of a traveller share house (especially one with 35 people sharing).
The way our business was remembered however, was by the way in which our company dealt with these problems.
The fact so many problems existed was not of consequence, and you name it, we dealt with it!
I’ve had businesses tell me they don’t want a social networking presence, because they cannot control what people say.
My stock response is that people don’t judge brands by what goes wrong, but by how they deal with it.
Shit happens, it’s how we clean it up that matters.
That’s all that’s on display when dealing with problems transparently on social media.
The story our customers would tell about "Sleeping With The Enemy" that most defined us, was how we fought to protected the integrity of our customer experience.
An experience that in the 8th year of doing business was not dissimilar to the same experience sold to my first generation lodgers.
Our business grew through our ability to manage the negatives, and make the same experience available to so many more people. All at the same time.
The by-product of that process was a well-oiled Communication machine of tightly connected influencers, who extended to 2000 upwardly mobile spenders, not savers.
- 15 house captains connected to
- 500 housemates
- Connected to 2000+ friends...
This created new opportunities like filling nightclubs on weekends, with as little as one hour notice.
Again, this extension of our core business was still about enhancing the integrity of our customer experience.
Our deal with nightclubs was simple.
If nightclub owners looked after my core influencers, making them feel like kings and queens, showing their people a great time.
We would accept 5% of their bar takings as a commission for filling their club.
By accepting we were saying we'll be back to fill the club over again...
If a club did not deliver, we refused to accept commissions.
It was always made clear that our company would not share in money earned at the expense of our customers’ experience.
By refusing to accept a commission payment we were saying to these clubs, “we won't do business with you again”.
My influencers knew the deal with clubs, they made the call each Monday (yes or no), making them (actual) kings and queens by default.
How Strategically Important Is What You Do?
Backpacker accommodations in Sydney at the time was of low strategic importance (think Walmart).
Backpacker accommodation was on every street Corner in the city center.
Occupancy rates averaged at just 65%.
Other vendors would stand at bus stops touting for new business as backpackers arrived.
We, on the other hand, were paid commissions for booking customers on our waiting list, to stay in other accommodation, until beds in our properties became available.
We ran our properties at over 100% occupancy year round, double booking beds on top of paid cancellations.
We never competed with other accommodation sellers.
We targeted "working holiday travellers" only, we sold them a once in a lifetime experience they could not buy anywhere else.
The fact we picked and chose who we accepted as customers meant our product became of high strategic importance to buyers who all wanted our acceptance in our community.
If you're interested in reading more about what being accepted into our business community meant to our prospects, you can read more about "Sleeping With The Enemy" on our website, here.
If you prefer to watch the story on a video, you can watch it here.
Who are you in the eyes of your market place?
Be Interested. Not Interesting!
Simon U Ford
Engage Smarter!
P.S. Reflecting on these memories combined with the nightmare that followed, “my first online business venture flop”, flushed out of me, a mindset needed to succeed in digital marketing.
To be continued:
“$1.7 Million Down, But not Out...”