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The Exclusive Magazine for the Building Service Contracting Industry Since 1981

Buying Strategies and Best Practices in Today's Tough Market

Written by  Lisa Kopochinski, Services Editor

When it comes to best practices and buying strategies for your cleaning company, a big step toward profitable growth is “knowing what you don’t know.” This is why guidance or outside help is so necessary. Best practices and strategic buying strategies are key in the growth process of your business and overlooking them can be perilous.

For instance, when it comes to buying products or services for your business, should building service contractors purchase from several suppliers or just one? The answer is, it depends.

“BSCs have the advantage by establishing competition between a few select quality vendors to establish a relationship, but not the sole relationship,” says Barney Gershen, president of Gershen Consulting, LCC in Bellaire, TX. “Regular proactive reviews should be done with each major vendor with specific objectives. And quarterly reviews should be done with all vendors—suppliers, lawyers, accountants, bankers, etc.”

The main purposes of these quarterly reviews are numerous, he adds, and include reviewing costs and usages of the services and products that are in play; reviewing for price discounts, trends and usages; and establishing the type of relationship so that any new equipment or procedures are brought to you first so that you can set up a pilot program.

“These suppliers can act as your research and development department. Utilize them so that when they know of any talented people in the industry who could be beneficial to your company, they feel welcome to bring you this information.”

These quarterly reviews can also change a company’s methodology from reactivity to proactivity and make these people part of your solution.

For Martin Benom, marketing director with WSA Services in Los Angeles, and an industry veteran since the late 1950s, his purchasing strategy includes one main supplier and several others.

“If they carry the product, I get their price and also check with other sources, depending upon how expensive and how much of the product I intend to purchase,” he explains. “If there is a large variance in pricing, I would let our main supplier try to match the other bid. If they cannot do so, I would buy from the least expensive source. I have found that having one source to buy from has allowed for the best pricing and support services when we need them.”

For Angela Paolini, owner of Service-Master PBM of Lincoln, NB, she also uses several suppliers based on quality and costs. “Our brand is national and the first product we go to because it’s a patented quality system of cleaning products,” she says. “However, there are certain things that can be purchased from other vendors based on cost and delivery time. We like to purchase locally in these cases.”

Conversely, Travis Wallace, president of Maintenance of Houston prefers to purchase just from one supplier so as to gain as much “muscle to leverage better pricing,” he says. “We have kept our same strategy that we have always utilized, but have increased our web-based ordering and inventory systems much more.”

Jim Peduto, CEO of Matrix Integrated Facility in Johnston City, NY, prefers to consolidate purchases with just one vendor/partner. “Consolidating purchases drives better service levels and has been a superior model for our firm. As the vendor base has consolidated, there has been a definitely “leveling” of the traditional buying motives. With product and pricing parity a given, the real differentiators are now value-added services.”

Changes Coast to Coast

Buying strategies in the industry countrywide have changed over the past number of years. Today the BSC is more in charge and can negotiate for additional services and percentage price reductions. The current economy has created broader competition between vendors, which is an advantage to the BSC.

While nearly all purchasing decisions include factors such as delivery and handling and price fluctuations, just how large a role do these factors play when a BSC purchases supplies or services?

“These costs can be significant based on volume,” says Gershen. “Price is part but service is part. For example, you might save on a floor finish but have to spend additional dollars to strip the floor. As you negotiate with vendors, ask for price reductions based on reductions given to customers. Many vendors will waive shipping and handling in an effort to keep the BSC from shopping elsewhere. Make this standard company wide with respect to everyone negotiating price decreases and concessions from the vendor to increase your bottom line. Employees should not be worrying about losing their jobs in this economy. They should be vested in your company and work toward increasing revenue.”

Paolini says that at her company, delivery and price play a 30 to 40 percent role in her supply purchasing decisions and a 90-percent role in her supplier decisions.

For Benom, he says WSA has a minimum order that eradicates delivery charges. “We can fill that when we have a partial order by filling in items we use routinely. And when gasoline prices went crazy and our liners fluctuated as much as the manufacturers could make them, we sought a direct purchase program from the manufacturers and now seem to be able to obtain them at our supplier’s wholesale costs, based upon volume purchasing.”

Adhering to Industry Standards

When it comes to best practices, the importance of following industry standards to the “T” cannot be emphasized enough.

“The consistent use of best practices drives quality and is essential to delivering quality service,” stresses Peduto. “In order to successfully compete, the use of best practices has to pervade the organization.”

Wallace adds that many of his larger customers place an emphasis on ensuring his company keeps pace with the latest cleaning techniques. “Following industry standards is a necessary component of any company wanting to gain market share and assure all buildings are being cleaned using modern cleaning methods.”

And in today’s tough economy, many of your competitors are following standards, while they pursue your best customers. “This is why it never pays to be penny wise and pound foolish, particularly when it comes to providing the utmost in quality,” says Gershen.

“Keep current on changes in standards in industry training. Overlooking best practices can be catastrophic in this industry, and overlooking or failing to follow proven best practices can retard or inhibit your pursuit of profitable growth. At worst, it can put the BSC out of business.”

Paolini says ServiceMaster PBM of Lincoln places high importance on providing quality service through accountability. “We are held accountable by independent organizations in the industry. We are members of Lincoln Independent Business Association—a local organization, the U.S. Green Building Council and BSCAI. And we recently submitted our company’s best practices for green cleaning to Green Seal, a respected U.S. environmental leadership ecolabel.”

The company is also held accountable by its managers and customers with a threepart quality assurance program that involves feedback. They have instituted an inspection program where managers conduct monthly inspections of their assigned buildings, and customers are provided with the opportunity to rate the company.

“A job half or not done to the customer’s satisfaction creates unhappy customers and quite possibly a poor reputation,” adds Paolini.

BSCs should also always remember that retaining good customers is a top priority. It costs significantly more to get a new customer as opposed to retaining a good customer.

“Your best practices were established because they were demonstrated and have provided you with your current degree of success,” says Gershen. “If you have not established best practices for growth, customer retention, accounting and human resources, the first step would be to bring in outside help to identify and build your infrastructure. Be specific and stick to your plan, plan your work and work your plan.”

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