Case Study: 1-800-GOT-JUNK? Becomes a Successfully Crappy Brand

junk1

Blitz Magazine, March 2000

A freak storm hits. As you watch hail bounce off your Jaguar, you wish you had a garage.

Oh, wait. You remember that you do, in fact, have a garage. It’s just full of. Of…you can’t remember what it’s full of.

Determined to reclaim your garage, you call a charity, which says it’ll send a truck Monday, between 8:00 and 5:00. You spend your week-end sorting through mounds of old furniture, sports gear and broken gardening equipment. On Monday morning, you lug it all down to the bottom of your driveway and head to work, thoroughly pleased with yourself.

But when you get home from work, the heap is still there. You leave a message for the charity. No one calls back.

‘Next morning, you look in the phone book under ‘Trash Removal Services’. You call Guy With Truck, who says he’ll be there Saturday at 10:00 a.m. He can’t quote a price until he sees what needs to be removed. Your junk sits and waits; the city garbage men come on Wednesday, but ignore the silent plea for help.

Saturday, 4:00 p.m., Guy With Truck appears. His truck is filthy and so is he. He has one arm and one eye. Your neighbours call their dogs inside and lock their doors.

You have neglected to hide your Jag in your now-empty garage. Guy With Truck sees the Jag, sizes up your house and quotes you $600. You don’t care; you want your junk gone. You write him a cheque and watch him take two hours to load the stuff before chugging off in a cloud of exhaust.

This is not an exaggerated scenario. It happens all the time. But Vancouver entrepreneur Brian Scudamore has taken this unhappy situation and turned it into a multi-million-dollar enterprise.

In 1989, the 18 year-old Scudamore was working toward a commerce degree. At the end of his first year, he needed a summer job but couldn’t find one. Then he spotted Guy With Truck and thought ‘Hey…’.

He paid $700 for an old truck; $100 to have fliers and business cards printed. He didn’t want people to think he was a one-man operation, so he called himself ‘The Rubbish Boys’, and came up with the slogan ‘We’ll Stash Your Trash in a Flash!”. While his little brother stuffed mailboxes with fliers, Scudamore drove the lanes of the city’s west side. When he found an over-flowing garage, he knocked on the door and offered to remove the junk. By the time he returned to school, he’d made a $1700 profit.

Scudamore kept working at the business. By 1993, it was so successful, he decided to make junk removal his life. He incorporated, hired student drivers and invested in more trucks, all bearing the slogan and ‘Rubbish Boys: 738-JUNK.’ Between word of mouth and these mobile billboards, business took off. By 1995, revenues were $100,000.

junk7  junk2

This success had much to do with how Scudamore differentiated himself from Guy With Truck. He offered same-day service and promised to remove everything except toxic substances. Rather than charging a rate based on his perception of a client’s income, he provided a printed, pre-set pricing structure (from $35 for a mattress, to $339 for a full truckload).

Not only did the Rubbish Boys not show up late, they called 30 minutes before to confirm the appointment. Their trucks were spotless. They were clean-cut, polite university students wearing snappy blue and green uniforms. They cheerfully removed your junk, and then cleaned up after themselves, sweeping garages and driveways and/or raking the grass. They provided proper receipts and, a few days later, called to make sure you were happy with your service.

junk6By 1997, Rubbish Boys had 16 trucks, 45 high-season employees and revenues of $1 million. Scudamore was nominated Entrepreneur of the Year by Ernst & Young and the Business Development Bank of Canada. He was one of 11 BC firms to make Profit Magazine’s list of 100 Fastest-Growing Companies in Canada—its five-year growth rate of 1,169% put it at #74.

There were contributing factors to this success. In Greater Vancouver, residents are allowed just two bags of garbage per week. And practically every city block hosts renovating yuppies, most of whom don’t know where the nearest dump is, let alone have the requisite vehicle.

Another factor is that charities are increasingly selective about what they take. They get way too much junk and don’t get a break from the dump—some charities spend $20,000 a year on dumping fees. You may think you’re doing someone a favour when you give an old couch to the Salvation Army, but if it’s torn or broken or water-damaged, it’s going to the dump at a pricey $65/ton (the average truckload weighs 1.1 ton).

In addition, Vancouver has many commercials and residential buildings belonging to absentee owners. These buildings are operated by property management firms—professional organizations that don’t want Guy With Truck anywhere near their clients’ properties. Also, while dumpster rental is cheaper than Scudamore’s service, construction companies often find it more efficient to hire him. Now, half of his business is residential, half commercial.

Then there’s the staffing aspect. Junk removal is an April to October business—that’s when everyone cleans up. With commercial contracts, Scudamore still has work in the off-season, but his business is largely seasonal. Seasonal business can’t afford to hire guys who need salaries; they need to be staffed by people who want to work only from June to September.

“For the first three years, Rubbish Boys was a student-run operation—you had to be a student to be hired,” recalls Scudamore. “But by 1998, I realized that, while students were professional, clean-cut and polite, they had no business experience. We were growing and we needed people who knew about building a business.”

junk5Not wanting to abandon his students, Scudamore instituted STEP, the Student Training in Entrepreneurship Program. He recruited students, and then helped them create mini-franchises. They were fronted the requisite cash and provided with a partner, a truck and a route. They received a base wage and a share of the profits; they had to do their own sales and media relations. The most profitable students in each territory received scholarships of $500 to $1000. To date, 180 students have participated.

There was more method to this: Scudamore wanted proof that his operating system could be franchised. Rubbish Boys’ 1998 earnings were $1.3 million; Scudamore saw that there was no barrier to his company’s becoming the Federal Express of junk removal. He had built his brand, it was time to franchise.

The company name became 1-800-Got-Junk? (inspired by the ‘Got Milk?’ campaign). The owner of the 1-800-Got-Junk? telephone number was persuaded to relinquish it. A $30,000, 12-line call centre was installed. Scudamore invested $500,000 in consultants and technology, and perfected a franchise system that easily allowed expansion. Information packages were produced, ads were placed in franchising magazines, the word spread, people started to call. Now there are franchises in Seattle, Portland, Edmonton, Calgary and Toronto. Scudamore’s goal is to have franchises in 30 North American markets by 2003.

junk3The 1-800-Got-Junk? system is simple. Scudamore selects two or three candidates per territory, depending on its size. Successful candidates have to know their markets and have strong sales skills. They must pay $20,000 to the company then invest another $30,000 on leasing, staffing and out-fitting an office; and on acquiring, painting, insuring and staffing trucks. Scudamore does not want franchise owners driving their own trucks.

“We want people working on the business, not in it,” he says. “These franchises are about starting from scratch and using our system to build the business. As people see the trucks and get to know about the brand, they’ll call. In the meantime, we want our franchisees knocking on doors, making presentations to property management companies and staying focused on growth.”

In addition to training, promotional materials and business plans, franchisees receive their phone systems as part of the package.

Regardless of where customers are, when they dial 1-800-Got-Junk?, they get the Vancouver call centre. The centre takes all bookings, organizes drivers’ routes and e-mails the orders to the appropriate franchisee, who re-confirms pick-ups and takes it from there.

junk4Franchise owners also receive the company’s proprietary management system—Junkware, a software package that handles all areas of operations, from scheduling to accounting to marketing.

“All of this is done on our server, but we’re not playing Big Brother,” points out Scudamore. “Junkware is a coaching tool—we want our people to succeed.”

Franchisees pay an 8% royalty, plus another 7% for call centre services. Their gross profit should be 40%, their net 20%. Fixed costs vary by market but, for a $50,000 investment, franchisees enjoy minimal risk in a lucrative, seasonal cash business. And it’s worth it. The Toronto franchisee became the largest junk removal service in that megalopolis after four months of operation. His 1999 sales were $250,000 with two trucks; this year, he has six trucks, 20 employees and sales should exceed $1 million.

 All of this without anything resembling a sophisticated marketing or media program. While Scudamore plans to actively advertise one day, he has always preferred the inexpensive, face-to-face approach.

“Paid advertising has never given us the same return as the face-to-face sales,” he explains. “We’ve tried radio—it wasn’t worth it. We had a little more success with newspaper advertising, but it’s too expensive. We do decals and t-shirts; we’ll take part in home and garden trade shows, construction and renovation trade shows. We just stay out there and keep reaffirming the brand. For us, the most effective way of communicating is via our trucks, our fliers, word-of-mouth and media attention.”

Scudamore has received loads of media attention. He coaches franchisees on how to garner it, and he gets involved in community events. For example, when the community of White Rock was devastated by rain and mud last year, Scudamore’s staff went there to clean up. Scudamore also invented a program called PRIDE: People Removing I-Sores Dumped Everywhere, through which 1-800-Got-Junk? works with community volunteers to clean up littered areas.

Last year, the company posted a website (www.1800gotjunk.com or www.rubbishboys.com). The site gets about 1,000 hits a week, but few people book on-line, preferring to call.

The slogan ‘We’ll Stash Your Trash in a Flash!” slogan is long gone. Now, trucks carry the new phone number and the website address. Liberal distribution of bright, die-cut fliers and $10 or $20 TrashCash coupons remain a mainstay, as does old-fashioned cold-calling.

So Scudamore has taken the most simple of businesses and given it an efficient franchising system and an easily-remembered call-to-action phone number. To date, he and his staff have delivered 15 million pounds of junk to dumps and recycling depots. He has 20 full-time employees and 75 seasonal employees. Sales for 2000 should hit $4 million. And he has no competition. Or….?

“I do have competition,” he says. “The guy with the truck.”

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s