It should come as no surprise to a building service contractor that client retention is always the most important part of business. It should also be no secret that keeping a customer is more profitable than getting a new customer.
What may be surprising is the extent that good communication and relationship building plays in keeping a client.
“Relationships have always been important in our industry, and now they are critical,” emphasizes Janelle Bruland, CBSE, president and CEO of Management Services Northwest in Ferndale, WA. “Where we used to have our hand on our client’s shoulder, now we have our arm tightly around them! If you have a positive rapport with your client and they see you as their building partner, they will be more likely to share with you their need to reduce costs before they simply cut services or terminate them.”
With this kind of relationship, she says BSCs have the ability to be proactive and assist their customer in ways to cut costs together.
In these tough economic times, it’s more vital than ever to ensure that you understand everything about your client—their issues, their business, the contract, your competition, and what they bring to the table. As the old adage goes, knowledge is power, and if you don’t know, you can’t correct and deliver.
“In this time now being called the Great Recession, it is more difficult than ever to retain clients as financial strains are causing companies large and small to cut back substantially, or go under all together,” says Bruland. “Where we didn’t used to worry much about the customer being able to pay, we now watch very closely to see that our clients continue to be financially stable.”
The need to work with clients during these tough times is more imperative than ever. Make them know that beyond any doubt, by your actions, that you value and appreciate their business. While certain circumstances can and will take place that may cause customers to leave, these fundamentals still provide the best defense.
Martin Benom, marketing director with WSA Services Inc. in Los Angeles has been in the cleaning business since the late 1950s. This veteran says networking is still the most effective way to hold onto your clientele.
“Lunch, dinner, breakfast, sporting events, and common interests,” he suggests. He also says that joining social groups such as the Chamber of Commerce and fraternal organizations, making donations when asked, “and presenting your cleaners in discussions as people (i.e. Barbara works with the Girl Scouts), as well offering additional services, honestly reviewing complaints and quickly rectifying them,” are all successful ways to keep customers.
Dick Ollek, CBSE, a cleaning industry consultant based in Camdenton, MO, concurs and says many customers are lost today because they don’t feel the BSC is communicating with them. This is why he is such a strong proponent of online quality-control monitoring, 24/7-customer-call-centers, the bundling of services so the customer becomes more tied to your organization, as well as customer-only e-mail addresses, and regularly scheduled partnering meetings with a formal agenda for discussion.
“Not a cursory ‘how we doing?’ lunch,” he emphasizes, “but a formally scheduled meeting. Invite customers to company training and educational sessions. If you have an ongoing dialogue with the customer, you will be aware of any bumps in the road that may occur, and if you fix them, they have less reasons to want to replace you.”
Few customers will leave solely because of price. While price is important, it does not top the list.
“The number one reason is that the vendor does not have a relationship with the client,” says Benom. “Price is not the first reason ever. It may be an issue, but with a relationship, it can be solved. Most frequently, when we negotiate a reduction in price, and it’s a commensurate reduction of service, we end up with an identical amount of profit, or in some cases, a greater profit on a smaller revenue.”
It is frequently a chore for customers to change contractors and many are reluctant to do so unless the communication and service delivery is poor. If this is the case, then it’s time to examine how you are providing service. Are you so focused on growing your business and securing new customers that you are not properly taking care of the existing ones? Growth is counterproductive if you are merely replacing lost business.
“If we clearly understand our customer, their needs and expectations, we will keep them satisfied,” says Bruland. “However, in this recession, even a happy customer can be lost because they have been required to bid out the services in order to cut costs. If we can be proactive and assist them in reducing their services and costs ahead of time, it may prevent an unnecessary RFP.”
Ollek agrees and says while there is no question that in today’s tough business climate customers are more price-conscious than ever before, he also believes that if you are communicating with them, you will be more inclined to retain them on pricing issues.
“This is because with ongoing communication you will have a ‘heads up’ if the customer is going through tough economic times,” he explains. “And with you being the incumbent, you should be the first one in their office saying, ‘I understand the issues that you are facing today and I want you to know we stand ready to help in any way we can.’ You can then provide them with alternative cleaning schedules that encompass reduced dollar amounts. Yes, you will have less volume, but you retain that customer before they decide to bid out the job.”
Conversely, customers must also realize that for a contractor to deliver good service, he must produce certain margins. Generally it is known among contractors which customers change for price only. If a customer has no regard for your margin, then it may be time to be more selective in developing your customer base. Find customers that want and appreciate value and then deliver it to them.