- THE MAGAZINE
“No one can long make a profit making anything unless the customer makes a profit using it.”
- Samuel Pettengill
In this challenging economy…OK, OK, let’s just stop right there. I’ve always tried to be honest and plainspoken in this column. So let’s call current business conditions what they are: tough! And in some parts of the country, they’d call it worse than that.
Unemployment is up, consumer spending is down and millions of hardworking Americans have fallen prey to foreclosures, forced layoffs and financial disaster. And yet…
You, as the owner of a small service business, have a wonderful opportunity. You don’t have to be a victim of the current miserable business conditions. Why? Because to a large degree, you are in control of both your personal and business destiny. Unlike the poor “wage slaves” out there, you get to call the shots. But with greater freedom comes increased personal responsibility. At the end of the day it is up to you. So what can you do?
Your “tough economy options” are limited. If you want to not only survive but actually thrive today, you can
- Become more efficient (read: lower your personal lifestyle and/or business expenses/overhead) or
- Implement “Value Added” customer service which allows you to charge more or
- Offer additional higher profit services to your existing clientele or
- Think outside the box and diversify into other complimentary industry sectors, or
- You can do all of the above and not just survive but prosper and dominate your market area!
- Interview the business customer on-site to determine his or her maintenance needs.
- “Zone” the job logically depending on traffic and soil levels.
- Determine your suggested cleaning frequency for each zone.
- Calculate how long each proposed cleaning service will require.
Add up the entire cleaning cost for the next year for all services and then
divide by 12 for your proposed monthly contract amount.
So now you have a projected monthly price in hand that not only makes financial sense for you but also gives a superb bang for the buck to the business. Great! But remember, you have worked hard to get this far so don’t screw this deal up! Now you must “sell the sizzle” by presenting your proposal with the Emotional Dynamics of the sale in mind. Here are some reminders:
Muster up your courage. Never, ever set your prices based the fear of “bidding too low.” If this does happen (and assuming your costs and cleaning production are competitive) you are not “too high.” More likely, your competitor was too low and will suffer accordingly, including either dropping the quality of his work giving you another chance or even going out of business entirely! Use the five-step system we discussed last month to set your price objectively, rationally and based on your company making a long-term profit. If you can’t do this then run, don’t walk, away from the job.
Business managers will manipulate you shamelessly by stressing how many carpet cleaners are desperately bidding for their account. However, many times the opposite is true. People are in a hurry nowadays. I find it incredible how often choices in business are made impulsively and after getting only one quote. No matter what your contact says, you may be the only bidder! (All the more reason to get back to them quickly with your proposal.) Therefore, the need to avoid intimidation and to not set your price too low.
Increase the curb appeal of your proposal. Sure, I know, your contact is a hard-bitten, cut-to-the-chase businessman. Don’t believe it! You would be amazed at how often business decisions are made emotionally and have little to do with the actual price of your service. (Read again the aforementioned point on how often they aren’t really taking bids.) So focus on the physical appearance of your written proposal. Invest in professional-looking binders. (If you are serious about developing the commercial market I recommend the “GBC ring binding” system. You can get everything you need in a startup package for around $100 at any office supply store.)
Cut to the chase. I honestly think having ADD is a prerequisite for being a business manager nowadays. You have a very narrow mental window to capture the attention of your prospect, especially if your proposal is going to be “kicked upstairs” for review by others. So the first page of your proposal should be a cover letter giving a brief summary of your proposed cleaning frequencies, areas and methods along with a prorated monthly amount. The second page should be a proposed calendar page displaying exactly how your proposed cleaning schedule will play out over the next year (remember, your goal should always be to develop a long-term, regular contractual relationship that will provide regular cash flow for years to come!).
Include your supporting materials. Bound behind your proposal letter should be (in order) a business profile letter with a brief company history, a list of services you provide, and your staffing and equipment capabilities. One page of professionally printed photos works well too. Then add your reference list, any commercial testimonial letters you have received, and your Worker’s Compensation and business liability coverage certificates. The goal here (if your client cares) is to provide a glimpse of a “real company” they can trust.
Setting up the “orientation visit.” Call and ask your contact for an appointment. Don’t let them detour you with the old “drop off your proposal and I’ll take a look at it” ploy. Instead, politely but firmly explain that based on the previous on-site interview you completed with them, you have developed a comprehensive maintenance plan that will require a bit of orientation. Tell your contact that you only need 10 minutes of their time and will work with their schedule.
Get face to face. Here above all else is where the Emotional Dynamics of the sale come into play. Remember that any prospect only wants two things out of a business transaction: A solution to their perceived problem and good feelings about the process. So calm down, you have both of these needs covered! For example, your “solutions to their problems” are contained in your beautifully prepared Carpet Care Proposal, and you are going to give them “good feelings” about you and your company in the course of this meeting.
So ask yourself, what “feelings” do you want to convey about your company? Here are a few to meditate on: Customer service, reliability, safety, confidence, honesty, internal staffing depth and financial strength. And what feelings do you want to send to your prospect about you personally? How about personal integrity, experience, stability, friendliness, understanding, empathy and at least some knowledge of both their business and the issues they face? Exactly how you transmit these reassuring emotions is up to you. But here are some guidelines:
Handle the paperwork. Be sure to have a “service agreement” all filled out for them to sign. I always preferred to make my contracts cancellable by either party with 30 days notice. With this approach I displayed my confidence in our service to the customer plus made the agreement easy for him or her to sign. (You might as well go this route because even the most ironclad contract will not keep you on the job if the customer does not want you there. So bow to reality and make a plus out of it!)
- Don’t be too early and never be late. Talk about getting off on the wrong foot!
- Dress in professional attire. For most areas this means at least a dress shirt and tie. Dressing up not only sends a positive message to your client but also will do wonders for your self-esteem.
- Look the customer in the eye and use a firm handshake. Basic stuff, but it is amazing how all these things can flee our mind when we are under pressure!
- Try and sit side by side with your client instead of across the desk from her.
- Get to the point by reviewing the proposal. Have in mind a few questions regarding how you have structured the job. Choose questions that hopefully they will agree on.
- Look for “buying signals” from your prospect. These can range from body language (nodding of the head) to specific questions on how you will deal with various parts of the job to actually asking you when can you start. Don’t talk yourself out of a sale!
- Close the sale by asking non-confrontational questions, such as, “We can start on the first of the month or would sooner be better for you?” Or, “How do you prefer us to bill you?”
After the agreement is signed, ask your customer if they or someone they assign can help you fill out a Job Profile which will detail out all the job data including access; emergency phone numbers; lighting; alarm codes; water fill locations; where to park; areas to clean; time and day to do the work, etc. (For a sample Job Profile I used in my company, write me at email@example.com and put the words “job profile” in the subject line.)
At this time, you also will casually mention that you will need a key for after hours access. It is essential to have your own key. When you depend on the customer for continued access to a regular job you become an ongoing irritation and will not keep the job long term. Nor will you want to! Note: As soon as you achieve “critical mass” with your regular commercial route I strongly recommend hiring a separate crew for night work. Simply put, as the owner/manager of your business, your “highest and best use” is not pushing a scrub wand at 3:00 a.m.!
Will the sales process I’ve detailed in this two-part “Finding Profit in Commercial Cleaning” series be easy? Of course not. Finding and signing up regular commercial accounts can be brutal. But remember that, with regular commercial accounts, you will be “amortizing” your initial start-up agony over many years to come. This should cut your perceived pain greatly. When I sold my business I still was servicing a very profitable monthly restaurant carpet cleaning account I had signed up 16 years earlier. Now that was a sale that paid off!
Once again, as an entrepreneur you have a veritable buffet of opportunities on the table. Your family’s future security is not in the hands of a large, impersonal and very likely badly managed corporation. You can decide your financial fate by making wise choices now. Your very best decision? Do something now! Don’t sit around waiting for the phone to ring. As my co-worker Chuck Violand says, “The hardest door to make it through is your own!” So get out there and start selling regular contract commercial cleaning!