Getting second set of customers

 

This is part 2 in this series, read part 1: Getting first customers.

Somehow, I felt we had gotten lucky to find our fist 16 customers. Things happened too quickly from a hopeless state of 45 days without a single customer to 100% occupancy in the next 30 days, numbers in my spreadsheet were overflowing. This could be beginner's luck, I didn't wanted to get fooled by it. Even if we weren't lucky, and achieved all this by hard work, we had to find ways to replicate this.

We had started trying out SimplyGuest advertisements on the traffic police warning signs. Majority of the calls originating from this were for BTM Layout, specifically Stage 2. It became apparent we needed some houses in BTM Stage 2. Ambarish and me started looking around for to-let boards in BTM Layout. BTM is a small locality, we could finish the whole area in an afternoon. We found a whole building on 24th Main, newly constructed, walkable from Udupi garden, a hot area in BTM Layout. The owner was willing to give it; he wasn't staying in Bangalore. This is when we started noticing competition; the owner was talking to a few others too. He agreed to give it to us - it was a full building of 4 houses, three 3BHKs and one 1BHK - it was huge for us, until this point we had taken up houses one by one. We had 10 rooms to fill all of a sudden and the rent had already started. It was so big that me and Ambarish decided to live in the building; I stopped going home. I didn't realize until I started writing this article, this turned out to be a good decision. The turn around time to show the house to potential customers was very good, almost nil; it had also helped us with setting up the house and find service providers.

We installed sun boards, a small 1ft by 2ft semi-plastic board that you find in malls, in front of the house, and around BTM Stage 2; these are different from sun packs. Since we had signed these houses, we had realized BTM is a hub for young people. Every second house had been turned into a PG; Ambarish and me thought we will be able to sell our new houses very quickly.

First customers. They readily agreed for a photo session; I paid a professional photographer to click some photos.

People started visiting the flat after seeing the to-let board in front the house; we were having 8-10 visits a day. One guy liked the house and he wanted to book it at 10,000; I had priced it at 11,000. He was very keen but I didn't reduce the price, so he didn't come back. I wasn't too worried; I was confident my price was right. I ended up reducing the price to 10,000 when I couldn't find customers for about a month. This person was right in asking the bed for 10,000. He felt it was the right price; but I had overestimated the locality and was overconfident. Sticking to that price turned out to be a bad decision. But it'd been 2 weeks and we weren't able to sell even one bed out of the available 14. We were anxious now.

Finally, a girl walked in after finding us on Google (she can't recall what she Googled for), she liked the place and made the booking! A first booking after 3 weeks. The same week OLX sent me another lead; I had a free listing on OLX and Quikr. This guy had taken up a job at VMware and wanted something in BTM - we used to ferry customers from different places if they wanted to visit and drop them back where ever they wanted - he made a spot-booking. The same day, 2 guys working in Practo booked 2 single rooms and said they had one more colleague who will take the remaining double too. They came via the to-let board in front of the house.

Referrals

I opened up a referral program; every successful referral would get Rs 2000. I messaged existing customers about it; I had created a WhatsApp group for every house. A customer from House #4 referred 3 of her friends; these guys were college-mates and wanted to stay together at BTM. They managed to negotiate the price; when another person came around from a sun pack that we had put up on BTM, I reduced his price too; I wanted to be fair to him. at first what started as a fair price turned out to be operationally efficient. We found it hard to manage differential prices for the same bed. One, flatmates talk to each other and they know who is paying how much; two, I have to remember who is paying how much and accidentally shouldn't reveal prices. Either ways, when one person knows he is paying less than their roomate they may not like it.

The marketing channels we tried to find customers were helping us in other ways. A lady called me one day and wanted SimplyGuest to rent 4 flats in Vijaya Bank Layout! I was surprised to know that she had taken my phone number from the sun packs we were using for finding guests. The flats were in the final stage of construction and they had already started looking out for customers. She and her husband showed us the flats, these flats were close to our previous properties. we hadn't planned having all our houses close to each other. It had just happened that way without we noticing it. But looking back, it worked very well for us, managing them was easy, we could share resources, we could cross sell.. The house owner of House #3 was so happy that she referred 2 of her relatives to rent their houses with SimplyGuest.

BTM Layout continued to attract lots of interest, now that we had a few more flats in Vijaya Bank Layout, which is not too far from BTM, I started offering them to people coming to see BTM; some customers did end up taking them.

By now, housing had stopped giving me any more leads; they were going through troubles and they decided to stop the PGs section. SimplyGuest is self-funded; we don't have too many resources, we had to be careful in spending. But at the same time I can't keep paying rent for empty houses. I decided to try Facebook ads and Google adwords; albeit in small scale. Facebook turned out to be effective, while Google started sending vague leads - leads from different parts of the city where we didn't have houses - Facebook's targeting was superior.

One thing was becoming clear: if the location was accessible, house was fresh, word will spread. It didn't matter if the house was a little interior too. On the other hand, bad houses even if located in the best of locations didn't attract any customers. Some of the people who visited started to bring their friends. A guy from Allahabad had joined a course at Networkers Home, a premier institute for Networking; he had called me a few weeks back but I had totally forgotten. He called me again once he came to Bangalore. He was staying in a hotel at HSR Layout. We didn't have any vacancies left at BTM; he ended up taking Vijaya Bank Layout. He referred two more of his colleagues to fill his flat. Spending money on ads worked too; we got two customers from Facebook ads. We were almost full at the end of 2 months from taking up the complete building in BTM; it helped us fill the flats in Vijaya Bank Layout too.

Call center

I was using a separate mobile number for sales and marketing. I used this along with my personal number in my dual-sim phone. If I am talking on one sim, the other will show as out-of-service or switched off; people would complain often that my number was switched off. So I had to be careful while using my personal number. For a period I used 2 separate phones; a smart phone for personal number which was also being used for WhatsApp communication, and a feature phone for sales number. But it was inefficient, cumbersome, and I switched back to a single phone with 2 sims. Once we filled most of our houses, existing customers would call on the same number for any issues. Some days I'd get so many calls - while bathing, on bike, mid-night, cooking, brushing - it'd drive me nuts. But I was paying Rs 200 for an entire year for this call-center setup; inconveniences don't matter at that price.

Generally, people would visit on weekends, especially on Saturdays; that's when they have some free time. Some weekends used to be dull, no or fewer phone calls; that would push me to a mini depression - when I get a call, I'd recover. There wasn't any pattern to this, just random fluctuations.

When you spend many years at anything - say a location or a profession - you build a conveneient and comfortable environment; you remove all the niggles from this environment, anything that can put us into slightest of inconvenience. But SimplyGuest wasn't such an environment. People would book an appointment and don't turn up, they don't answer their phones; I'll wait for many hours - without food, or coffee or anything that I loved - in the hope they might just make a booking. Some people will almost make a booking; I keep waiting for them to actually book - read, paying money - but they never do, I would wait to a point where its agonising. When I was a consumer, I have done this too; I didn't understand the heartbun then.

At the end of 3 months we managed to reach 96% occupancy. In the second phase referrals helped us get lot more customers than all other sources, including paid ones. But referrals are double-edged, if the service goes down, so do referrals.