Advertisement

Trends and Pricing Pitfalls

An interview with Gary Clipperton

 

This month I had the opportunity to interview Gary Clipperton, president of National Pro Clean Corp. Clipperton is a 40-year industry veteran who provides consulting services for small- to medium-sized cleaning contractors.

In this question-and-answer session, Clipperton provided valuable information regarding trends and pricing pitfalls for building service contractors (BSCs). Read below for a summary of his answers.

Q: Who is your typical consulting customer and why do they call you?

A: On some days, it is a new startup contractor stressed by a first-time proposal, and they have no clue where to start. Other times, I receive inquiries from seasoned BSCs who need advanced methodology to navigate the land mines of complicated proposals. They are looking for a proven system. They want to nail down all the variables that contribute to accurate pricing.

National averages are only a starting point. They must be fine-tuned with precise cleaning production rates, and adjusted for overhead charges and profit rates.

Q: What are some of the changing trends in bidding?

A: In the past, BSCs were able to add a cushion to cover the unknown. Today’s markets are more competitive. Accurate pricing is an art and a science, and prices often cannot be bumped up to cover the unknown.

Another trend is that a partial clean—the omission of dusting, detail work, vacuuming, and dust-mopping from wall to wall—on certain days is replacing a complete clean each night. Some buildings are OK with four partial cleanings, and one complete clean each week. This reduces labor and allows you to suggest a discount, or offer two different pricing models. This approach may not be suitable for medical or food service accounts, but for many accounts, it is a viable option that can reduce cost, while maintaining quality.

Q: What tips can you recommend for pricing a job?

A: Cleaning times increase when the facility is not cleaned daily. If building occupants help with internal housekeeping, and the workstation density is light, all of this must numerically factor into the production rate.

As a general rule, the numbers should be calculated on a graduated scale, related to the ease or difficulty in performing the required tasks.

One of the issues that new contractors often overlook is the cost of supervision. When a working supervisor has to deal with issues that arise, this takes time away from the cleaning. A BSC should factor in those costs, so it does not reduce net profits.

A working supervisor’s lost production time could easily run 10 to 40 percent, depending upon the demands. A working supervisor must stop cleaning in order to fix a vacuum, retrieve supplies, train a new worker, converse with the building manager, complete reports, or run a quality control inspection. If an area manager is assigned to watch over the building, it is common to add 5 to 8 percent to cover account management.

Q: Do you get questions about countering low-ball bids?

A: Almost daily. I suggest discussing why “fair market value” pricing is win-win.

Fair market value is when the BSC experiences a reasonable profit so the company can stay in business, and at the same time, the customer is happy with the quality and value of the service. A low-ball bidder often struggles to maintain quality because they are forced to provide less service than promised. Or, in some cases, the work transfers to an unaware subcontractor who ends up working for minimum wage.

Cleaning requires a certain number of hours of labor to accomplish the scope of work. The only way to reduce the hours is to skip or omit some of the required tasks. When this happens, the contractor must focus on damage control, and tread water to hang on to the account.

The question the prospect or customer must face is the following: Do you want it done cheap or do you want it done right? You can’t have both. Some accounts you should turn down because your name stands behind your service commitment.

Keep it clean out there.

 

Posted On September 3, 2015
William R. Griffin

William R. Griffin

President of Cleaning Consultant Services, Inc.

William Griffin is the president of Cleaning Consultant Services, Inc. He is an industry consultant, author, and trainer with more than 35 years of experience. Contact him at wgriffin@cleaningconsultants.com or visit www.cleaningconsultants.com.

Topics Tags

Join the Conversation

Also in Business and Management

Recent News

Trends and Pricing Pitfalls
Share Article
Subscribe to CMM