I had an interesting conversation the other day with a long time customer I felt might be of interest to share. This individual is the VP of operations for a large BSC, they’ve been around and successful for over a century…yes, 100 years. His company has adopted a best practice quality control program which includes a director of quality control for deep audits and area managers for weekly inspection s and service corrections. It’s a tight, closed loop process.
We were discussing the quality reporting needs for a contract they had just renewed. When I asked “How’s business” as our planning was winding down, he went right into his main concern, the industry is cannibalizing itself. BSC’s are dropping prices to get new business or renew existing contracts. It seems more and more property managers are just looking at the bottom line without regard to qualifications, experience, or quality. Something our industry, like most established industries, has been dealing with for some time…it just seems worse now.
Our customer’s economic realities are ours; ultimately, we share the same dollars. So the question of prospering in our industry of cannibals got me doing a bit of unexpected homework. By the way, an industry that cannibalizes is ripe for innovation, disruption. Apple taught us this, they cannibalized their own products.
Here are a few suggestions from what I learned, I hope this helps your business:
Verticalize Your Business
Verticalize simply means you have chosen an area to specialize. For you that means we clean and service certain facility types, retail, medical, fitness, hotels, etc. This may seem obvious but it’s alarming how many generalists exist in our business and probably the main cause of lower pricing. Look at the pc industry back in the heyday. Everyone joined the purchasing frenzy, tons of pc makers. Along comes Dell, they create a vertical for self-shoppers, do-it yourselfers. They prosper.
We’ve seen our best run customers verticalize and prosper as well. They spend the time to understand their customers, their facility nuances, the common threads of service delivery for process improvement and most important, the value they bring to that facility buyer. Once understood (not always easy) they go after it. Marketing materials speaking directly to that facility type get professionally developed, prospect lists get developed and organized for continual maintenance, web site gets updated with the right messaging for their vertical, and sales processes that can be measured are put in place. One customer went after wellness facilities in this manner and is struggling to keep up with demand (100+ wellness centers in one shot). It works if you commit to it.
Innovate – Provide Customers with Value Added Services
Your customers have many options when looking for cleaning services. Why you? What makes you better? In a market with falling prices, lower margins, etc, the indication is many do not know what makes them better. They’re then forced to focus on price. I get it, pricing is important, but not everything. There has always been, always will be the price buyer. We need less of them and more value buyers. What’s your value add? Are you making life better for your property managers? Many questions you can ask yourself, too many to list here.
The VP of Ops I started this with has created a world class quality program. His customers are involved in the process frequently, and not just getting QC reports. They have moved from a service vendor to a strategic partner. Has it worked on all their accounts? Nope. They still have a container of price buyers…just less of them. Another customer has several accounts that require GS42 compliancy…not an easy task. They decided there was value for all their customers and instituted the process across the board. Can you compete with a company that delivers the processes and reporting required for GS-42 compliance? For the buyer that wants the peace of mind of best practice to protect their asset, along with the transparency, it’s worth extra money!
Try some of these strategies, it doesn’t need to happen all at once (it can’t). The key is to think through the value you can bring and go after it. Good luck, don’t get bitten! And if you are interested in learning more, visit us at www.aceleratorcc.com.