Why commercial is cutthroat+competitive business

[Kevin]

Here is a small example of why, some larger companies are being out bid by services not even a year old. , here is an example of why you need alot of accounts, to sleep easy at night.

This is an example, and hopefully more posts to come.

Lets say three months ago a janitorial service started, well call the owner Sally, she has done some research, made some nice brochures, and did cold calling the same week she started her business.
She was still working a 40+ hour job, told her family and friends I'm off to run a janitorial business, (going to own the world) theres so much information online, anyone can do it, she has made a commitment to succeed.

Mind you, shes still working her job, not fully committed yet. She goes out on her days off and hands out her advertisements and business cards. Sally knows the average going rate, so she thinks shes ready.

A couple of days later she gets a call from a commercial account, they want 7 days a week cleaning its about 4000 sq. ft building, she does her research, uses forums like this or others, gets a good ball park price, puts in her bid, then lightning strikes. Sally won the bid, starts next week. Sally quits her full time job, gives up her benefits. She is now averaging $100.00 a day, probably $30.00 more than her old job pays. She is determined, things are going great, she uses her savings to buy bonding and insurance, health insurance and supplies along with equipment. She is 100% legit, figuring out the taxes, she will pay that soon also.

Now Sally is cleaning herself, doing marketing and all the business duties. Lets say Sally has a child also. Her moms helping out watching nightly while Sally is cleaning about 6 hours per evening.

Moms real proud of her daughter, the successful janitorial entrepreneur.

Sally is happy also, a nice check coming in she is paying her bills, saving a little bit, she thinks the world is great. She is very happy cleaning the local office complex, She thinks she will be there forever, everyone is so happy with her cleaning, she is not doing much more marketing, she thinks she will enjoy cleaning this facility for along time.

The account calls a week later about 2 months into her cleaning, Sally were sorry we have to let you go, were making cutbacks.... WHAM!! (thats reality hitting Sally smack in the face ) Sally just lost her first and only account. Sally`s Mom, friends and family will be so disappointed, Sally sits down and cries, she gave up everything, her career, her savings and benefits, including domestic money, Christmas gift money and Sally spent her emergency savings on janitorial equipment, health insurance, and janitorial bonding and insurance.

Sally is determined though she will not quit, she doesn't tell her family or friends, they will be so disappointed. Sally pushes forward, she has too, its too embarrassing to ask for her old job back, she was going to rule the world. Sally is now coming to your service territory.

Sally is the rogue janitorial service in your town, she is legit with insurance and bonding, has supplies, and some knowledge. She needs money and she needs it soon. She is going to every place in town. With brochures estimates and proposals at half the price of your service. Sally wins another proposal, Sally just took one of your accounts. Sally`s price is half the price of yours. Why? shes doing the cleaning, she needs money, she has pride.

Though a important note, Sally never gets enough money to pay the taxes from the first account, she is 1099`ed and owes the IRS, she will always be in debt, and doomed.

Sally will eventually have a medical bill for herself or child, and her insurance has expired. But Sally today is putting a hamper on your business.

Now you provide the answer, how do you combat against all the Sally`s in your town.

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[Pages Personal Cleaning]

If Sally is working for half price, she isn't going to last long anyway. She won't make enough to pay her bills, taxes, insurance etc. If she gets another account at half price and can't handle all the work herself, she won't be able to hire employees because she won't be making enough money to do so. She will eventually give up and go to work somewhere else leaving the company she works for wishing they had kept the other cleaning company even if they were charging more. People like Sally always crop up in all businesses. I call them fly by night businesses.
Patti

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[RJ Cleaning]

when I get some time very soon, I want to write something about this.

[RJ Cleaning]

The story about Sally, you see this many times with new cleaning businesses. they get a good account and feel there all set, not realizing its a business, your not an employee your now a company. To run a business properly, you must think like a business, not like when you where an employee, because the rules have changed.

In order to avoid something like this, you must, as the saying goes, do not put all your eggs in one basket. I look at it like picking stocks. You would never invest all your money in one particular stock; we all know that is a guaranteed to fail in time. it is the same thing with having customers, you need a good variety of customers. of course when you first start out, you basically take anything that comes your way,
But eventually you will really have to start organizing your accounts. and start changing things. And that would mean advertising to particular accounts that you need, replacing some account, yep letting some actually go.
Here is an example of having a variety of customers, in the chart you see a chart for investing your money, know lets use that same chart and make it your customer profile. This is similar to my customers, I have customers here that are owned by company’s outside the U.S. and they all make different products. I also have customers that are owned by U.S. companies, that also make different products, then I have my small percentage of doctor, dentist, lawyers, small office buildings. Then the apt, and condo complex’s, and medium size medical buildings, You see there is a good variety of customers, so regardless to how the economy may shift up or down you are pretty well safe. Because you have a good size variety of customers, all your eggs are not in one basket. remember this is just an example, to give you and idea, On how to pick your customers, and in being more precise in targeting your potential customers. I will finish the second part when I get some time, on how to protect your self from sally’s.

[Kevin]

RJ,
Very Nicely Done!

[RJ Cleaning]

Part 2
Trying to protect your self from sally's.
Some of this was discussed on another board so I just copyed what I said over there, plus changed it a little.
What you need to do is create your customers into loyal customers. You need to build a relationship with them. For example 1) like little extra's, they do go along way, and customer do appreciate it a lot. for example the customer at one of the sights had a truck driver come in the office part and had grease under his feet, left bad stains. They ask if I could get rid of the stains, no problem. I got my spotting machine, removed the spots going down the hall. when I gave them there monthly invoice. They said hey you never charge us for the stains.
I said no need to worry about it, its only few stains. you are a good customer and I have no problem with doing a little extra for you.
some of the other customers, when there big wigs are flying in, I usually make sure everything is looking good before they get there.
of course I don't make it a habit to give away free cleaning, but I don't mind going that extra mile for them either. Usually if I see little things that only take a few minutes, I don't bother charging them for it, and yep they notice it and do appreciate it. and I always make sure they see us doing it. if its done in secret, it stays a secret.

2) creating a personal relationship with the customer. You need to focus on the experience and relationship with the customer. Example: me and my wife broke the business into two sections in order for the business to grow, BUT, also because i was spending way to much time on the field and not enough time with the customers. Even though I was giving great quality service, that was not enough. I was still no different than the competition. I needed more time to do what made me different, and that was building a relationship and spending more time w/the customers. For instance, I spend a lot of time visiting customers, talking with them, were always joking with each other, we talk on the email all the time,
we call each other on the cell phone, and most of the time it has nothing to do with cleaning. in my wife section, one of the company’s there my wife gets along with the ladies in the H.R. this company donates a lot of money to relay for life, there big believers in it, which is good. my wife is on there team for the walk for next year, and is going to help them raise money. The Relay for Life is a overnight event designed to celebrate survivorship and raise money for research and programs of American Cancer Society. During the event, teams of people gather at schools or parks and take turns walking laps. Each team tries to keep at least one team member on the track at all times.
My wife will wear there company shirt to there walk to represent there company, and believe me they appreciate it totally. So we have a lot of involvement with the customers.

Here is something somebody else written, that I liked. His name is Drew.
the difference between customer satisfaction and customer loyalty. That in today’s new market economy, the pinnacle for service isn’t just customer satisfaction anymore. The stakes are higher, the competition greater. The goal to reach is; Customer loyalty, and create Customer Evangelists. And if you base your companies goals on just satisfying your customer by creating good or great services or products, you could be setting yourself up for a let down and possible loss of customers.

3- Why? Satisfied customers, are just that, Satisfied for the moment. They are not loyal. You haven’t crossed that line yet and converted them to loyal customers. If a convenience, quality, price or budget issue were to present itself, that customer could leave or find other services. Because you haven’t created a relationship or compelling experience that binds you, something that the customer can not live without. It’s not about price or value. It’s also learning about how never having to compete for customers based on price.
a couple of books that I been reading, that teach’s on this is.

1) Creating Customer evangelist, by Ben McConnell
2) Customer Satisfaction is worthless, customer loyalty is priceless

Here is a couple links also that I found on a quick search.
www.line56.com/research/download/atkearney_crm_web.pdf

www.entrepreneur.com/article/0,4621,302675,00.html

www.jimnovo.com/Customer-Loyalty-more.htm

[kristevan3k]

Well, I must say, that this is one of the best bits of advice I have read on the forums I frequent. I myself may have been seen as a "Sally", of sorts. The difference is that I do not cut my own throat or anyone else's by lowering the value of my services. I have started and maintained businesses many times, and as I have matured I have learned to value the services I provide. That has been a lesson well learned.

Most recently, though, I have been struggling with growing my business beyond the few clients I do have. The fact is, that fear has kept me from stepping out any further. Fear of getting help, and not being the one doing the actual cleaning (I want it to be excellent). And fear that at some point I will be in over my head as far as experience in a given area.

The fact is, though, that when things are shoved at me unexpectedly, I rise to the occassion, put on the working shoes, and get the job done.

You are absolutely right about the customer loyalty. You have confirmed what I have thought. That relationships are what make the business keep growing. Stay on top of the job-site. Talk to your clients. Find out who they are, and ask about their family, etc. I don't mean to be disengenuous (sp?), but truly be interested and show it. And do a killer job for them.

Thanks for that confirmation and the simple breakdown of diversification.

[RJ Cleaning]

no problem.
but never fear anything. you ever here that saying fear not, but fear itself. there is nothing to fear, but your own fear, the only thing that holds a person back from being successful is his or her own fear from within them-self. its that little voice in us that says, I'm going to make a fool out of myself. or I do not want to fail. we all get nervous about taking that next step, and get all kinds of negative thoughts. and that is what holds us back from being are very best. its to practice to block them out, and over ride them with positive thoughts. basically ignore it, and don't entertain it. don't worry about going over your head, you will figure it out as you go along. for employees, your the boss, you own the business, you call the shots, if they don't like it, and do the job well, fire them, and hire some one else. here is a thread about training staff.
usacleaning.proboards30.com/index.cgi?board=Commercial&action=display&thread=1128457965
good luck, and keep your business growing. you owe it to yourself.

[kristevan3k]

I am just now getting back to this topic. Thanks for the pep talk, and the advice. I continue to plug ahead.

[classact]

My answer might be a little different than anyone else is....... I don't have to worry about all those other Sally's out there because the owner of are business is the LORD, and HE is in control of what jobs we get or don't get. All we need to do is obey HIM.

Matthew 19:26 "With men this is impossible, but with God all things are possible"

God is driving this cleaning business.

God bless you all with more of HIM

Joseph
www.classactioncleaners.com

[FANTASTIC CLEANING SERVICE]

hello, i have a question for you i have been asked to put something on paper for a fourteen floor hotel, making beds and cleaning bathrooms the hole hotel as a matter of fact. how do i prepare something on paper.

[Kevin]

Use this contract and specifications located Here

[dpese]

Wow the advice on this thread have been in incredible. As a beginner to the game of commercial cleaning I am steering my business away from being a Sally or a fly-by-night business. This was very valuable information. I would like to thank everyone who gave such wonderful advice and shouts out to RJ Cleaning.

[www.cmpropertymaint.com]

Some insight for change Client-centric why commercial contracting seems cut throat in a declining market and Just a suggestion on how to change your perception or how you operate to succeed in a downturn market

whitepapers.technologyevaluation.com/download/8938/How-to-Profit-in-a-Downturn-4-Customer-centric-Strategies-for-Growth-in-a-Challenging-Market.pdf

www.cmpropertymaint.com

[coastalmaint]

I have to add great job on the above

I too believe you don't discount your work, when someone says " that's high" for example, I will usually reply with a We're worth it I'll just leave my information and should you ever change your mind ......

We are diverse because of Brian's background and mine to some degree in Building Repairs. Adding another side to your business not only helps you service your existing clients but you can now market to new customers. Generally, when one slows down the other picks up.

For examples:
#1
Cleaning Company that has a portable pressure washer & experience.

Portable Pressure Washer Company also provides Portable Car Wash Services to the same office complex where they can get new cleaning contracts vise/versa

Now your cleaning company has expanded thereby expanding your customer base and potential customer attraction.


#2
Cleaning Company Residential

Drops off to a customer's home their specialty "gift basket" or " diaper cake" ( men you may have to look that one up, lol) and lets the homeowner know for that special event coming up you do "baskets" Hampers etc..
Believe me, you can take a Goodwill 1.99 + wicker basket and decorate it and stuff it full of great $1.00 items and make it look like a $100.00 + special bought giftbasket.

Or buy up every coffee cup you can find at thrift stores and create some interesting smaller gifts to pass out " JUST BECAUSE"

NOTE: You can buy huge bags of good candy ( don't skimp on the candy) but do buy the coffee mugs for cheap cheap clean them ( you are a cleaner ya know) and drop them off at your customer's twice a year or every quarter...... Nice way to pop in or just leave it with a note " got you cleaned last night have a great week"


Now you have just got a Special Order Gift Business.