Cleaning & Maintenance Management Online
Bidding & Estimating September 2017
cmmonline.com/articles/238737-how-low-can-you-go
price adustment reducing

How Low Can You Go?

August 24, 2017

Nobody likes to lower their price. But if you want the job and the customer asks for a price adjustment, it’s time to reconsider your bid.

Look at the request from a positive point of view. At least the customer didn’t cancel the account or simply award the work to someone else. You were given an opportunity to take a second shot at the account. Count your blessings, get over it, and move on.

Consider Your Options

You may face challenges when the customer wants you to cut the price, but still wants the same or a higher level of service. There may even be situations when a customer wants you to complete additional work without raising the price. Considering that labor generally accounts for 50–80 percent of costs, fulfilling either of these requests will require you to reduce the amount of labor and time it takes to do the work. This leaves you with two options:

  1. Find ways to complete the work in less time.
  2. Reduce your level of service.

Implementing Your Choice

If you’re bidding an existing account, there are several options for streamlining the cleaning process:

  • Increase responsibilities. Rearrange workloads and assignments, giving each person larger work areas.
  • Upgrade equipment. Automate processes by changing out less productive equipment for equipment that covers more space in less time. However, this may require an initial investment.
  • Change task frequencies. Spread out the service frequency for certain periodic tasks, such as dusting, window cleaning, hard-floor care, and carpet cleaning.

It’s generally more difficult to expand work areas for current employees, as most people already think they are overworked. Unless you can show them how to cut time off their tasks and become more efficient, most will resist change, because their opinion of how long it takes to do a task is based on their previous experience.

When bidding a new account, you may find it much easier to assign larger work areas, since there is no previous experience with the work assigned to that account. Training and close supervision of staff during the transition will ease the process and reduce the pain.

How to Cut

Determine which tasks use the most labor, and reduce those tasks first. Consider cutting down on floor, carpet, and window cleaning first. For example, change daily tasks to weekly or monthly, and weekly tasks to monthly or quarterly.

Another approach involves reducing the number of hours each person works. If everyone works an 8-hour day, reduce the work day to 7 hours. Doing this won’t have much impact on the quality of service, but some of your crew may quit or take on additional part-time work to make up for the lost income. This is important to consider because it will cost time and money to hire and train new staff. You also may consider switching to part-time staff instead of full-time workers.

Ask the Customer

Ask the customers where they would suggest making a service cut. Keep in mind, the last places you want to reduce service are restrooms, food service areas, and building entrances.

Lowering your bid is not a pleasant task. But if it means keeping an account and workers employed, there are ways to make it work.