Is it time to change?

Tony Shelton

Tony Shelton

BS Detector, Esquire
(This thread is mostly about commercial work. But feel free to add any thoughts about residential. I just don't know enough about residential pwing to start a thread like this about that kind of work)

Grocery stores run on an extremely small margin. AND we all HAVE to have groceries. Here is a story on how markets, grocery stores and other retail stores are now finding that they must cut costs and lower prices just to sell product.

http://apnews.myway.com/article/20091004/D9B4D6C01.html

On a personal level I'm already a cheapskate. For years we bought meat almost daily from the grocery store down the street in the clearance section for that day's dinner. Now the clearance center is empty almost all the time. Now everybody's doing what we've been doing for years. Everybody is tightening the belt.

This was touched on earlier this year but for the most part I think it was dismissed as something that is not going to affect our industry to a great extent. The general consensus was that this was only temporary and everything would spring back to normal soon.

The fact is, on the commercial end business is coming back to some extent. But from what we can see it's not NEW business as much as it is SHOPPERS looking for better pricing and OLD customers coming back because their concrete or filters are filthy now and they MUST be cleaned, but now on less frequent schedule.

Here are some discussion items:

Have you been looking for ways to show cost cutting to your customers? Have you discussed "splash and dash" service with your customers at a reduced rate?
How about cold water only except for gum removal to save fuel?
What about HIGHER frequency cleaning at a lower rate?
What about targeting advertising to the customers who MUST use your service and not spending as much where cleaning is an elective service?

I know many of you are going to cringe when you read this. But the fact is, many customers are more than happy with mediocre service. In the end which is better - to provide a high end service with no customers? or to bend and flex to match what your customers want.

I will put a disclaimer here though. We learned a hard lesson with the filters. When you give a customer a reduced rate for reduced service you MUST keep contact with the customer and remind them that THEY chose the reduced service and that you RECOMMEND a higher level of service. Keep a record of this because some new guy will take over and just think you are doing a crap job and get rid of you. But if you keep in touch frequently the "new guy" will be another opportunity to upsell to a higher level of quality.

Any thoughts?
 
Great post Tony!

A lot of that is happening here, some of the work that is supposed to happen is being less frequent because they are cutting back.

What doesn't make sense to me is that a lot of shopping centers are more and more vacant but they keep building new shopping centers, maybe everyone is just migrating to the south side in a big way, bigger than ever before.
 
As usual, an insightful post from TS

Sure, it is important to show customers that you are willing to feel their pain -- ie price reductions. But more importantly, give them more value for the money they are currently spending.
 
Christopher said:
Great post Tony!

A lot of that is happening here, some of the work that is supposed to happen is being less frequent because they are cutting back.

What doesn't make sense to me is that a lot of shopping centers are more and more vacant but they keep building new shopping centers, maybe everyone is just migrating to the south side in a big way, bigger than ever before.
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Chris, that is the way it was here last fall. But now construction is at a dead standstill. At boom time the ironworkers hall (a good barometer for construction) was jam packed and the wait for work was usually only a few days. Now the hall looks like a ghost town.

An article in the paper today says that major casinos in Las Vegas are postponing all planned new construction for at least 10 years to focus on other ways to bring in customers. Does that look like a glitch that is going to go away soon?

This isn't all doom and gloom. There is money to be made right now. Have you changed the way your do things or accepted work that you would have formerly passed on because of the economy?
 
carolinawildcat said:
Sure, it is important to show customers that you are willing to feel their pain -- ie price reductions. But more importantly, give them more value for the money they are currently spending.
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That's good too.

Here's one we do:

For electrostatic filter customers - if they call to cancel because of budget reasons I tell them we can reduce their costs in other ways.

I explain that a dirty condenser coil increases their energy cost by up to 26% then ask them how much they pay a month for electricity. I then tell them if they keep the account current I will clean their condensers once this year free of charge and hopefully that will get them through this recession and next year we can reevaluate.

This costs me only a few more minutes of time once per year to keep a paying customer. It's worth it.

What are some things that can be done in other areas of pressure washing?
 
When washing older homes, I can usually add $100 or so to caulk skylights, vent pipes and/or chimneys if needed. Gutters too, or point out rotted wood and refer the job to a buddy. Also, customers like to know that you are looking out for them and their investment.
 
Tony,

I think this is a very good post. We have been evaluating our business in much the same as you are. It seems that alot on PM's and owners are now looking for "the best price" not the best work with a good price.
 
Tony Shelton said:
That's good too.

Here's one we do:

For electrostatic filter customers - if they call to cancel because of budget reasons I tell them we can reduce their costs in other ways.

I explain that a dirty condenser coil increases their energy cost by up to 26% then ask them how much they pay a month for electricity. I then tell them if they keep the account current I will clean their condensers once this year free of charge and hopefully that will get them through this recession and next year we can reevaluate.

This costs me only a few more minutes of time once per year to keep a paying customer. It's worth it.

What are some things that can be done in other areas of pressure washing?
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I hope that they see that added value you just gave them.

You saved them at least $80.00 per year per unit from having a HVAC company out there to clean the unit.

You just probably saved them 5 to 26% on their bill for the year which could be hundreds to thousands of dollars.

You just saved them time from calling around and having to wait on the HVAC company to show up, show them the roof access, etc.... Probably saved them a lot of aggravation too, maybe 20 minutes to 1 hour per unit since they all do not go down at the same time.

You saved them from a potential hack HVAC contractor that might or might not have cleaned the unit properly.

You saved them excessive wear and tear and potential heat damage to the compressor.

I am sure that there is more if we think about it, this would be a good list to put on a flyer.


What else do you think you saved them or what else in added value by just doing this one extra little service which only takes you a couple minutes?
 
It's going to get tougher out there. I'm glad I have some room to move in my pricing. So far I've been able to accomplish what I need to through added services at no extra charge, but I'm afraid the time will come when I will have to cut it to the bone.

I have room to move because of the speed of the operation and the simplicity of it. I don't see how the job can be done much faster without a four man crew. If worse comes to worse, that may be what I'll have to move to instead of two.
 
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