Inflation is hitting all of us, including the professional cleaning industry, hard. A recent report from the U.S. Bureau of Economic Analysis indicated that the U.S. inflation rate is at a 40-year high. At 10 percent, most Americans have never experienced inflation like this before.
Of course, the jansan industry has not been untouched. Costs of goods and services in the industry have gone up right along with the costs of fuel and groceries. Further, some are paying more now than ever before to attain and retain workers.
And let’s not forget, inflation and higher costs are also impacting our customers’ businesses. This means we all – our industry and the customers we serve – are in a hard spot.
This challenge can get sticky. Should jansan businesses just raise their prices to cover their increased cost, no matter the repercussions?
Or is there a way to address this new challenge that’s more equitable, helps jansan businesses keep their valued customers, and keep as many people happy for as long as possible?
The following guide examines diverse ways to confront inflation while maintaining a healthy and happy clientele. Not all these strategies will work for everyone or every business. But many of the ideas provided here should help us weather this new set of circumstances. What’s more, they may even help us bring new customers in the door.
Take an Altruistic Approach Toward Inflation
When we say someone or some organization is altruistic, it usually means they are unselfish, philanthropic, and helping. For our discussion here, altruistic means compassionate –compassionate about the plight some of our clients may be in right now. It’s a humanistic approach, a customer-first strategy, which works just as well with our largest clients as with our smallest customers. We need to employ this mindset when we evaluate potential fixes to the inflation problem. We may need to find ways to work together with our customers, looking for ways to share the costs of inflation.
Take a Very Practical Approach
This would apply primarily to steps distributors can take to help their customers but also applies to cleaning contractors who have been pressured by rising supply costs. One powerful but effective practical approach is to conduct a product audit. In the simplest of terms, a product audit looks to see which products are currently purchased, which are used for the same or similar purpose, what products are no longer needed, which perform the best, and which are most cost-effective. Properly conducted, a product audit allows us to reduce the number of products used for cleaning, which often results in cost savings.
Bulk Up to Address Inflation
Narrowing the number of products we purchase allows us to make bulk purchases of those still being used. Invariably, making large purchases lowers costs on a per item basis, often results in rebates or manufacturer’s discounts, and helps reduce overall supply costs.
Alternatively, some distributors might consider providing their customers with price discounts for smaller bundles of products instead of making bulk purchases. In place of a discount offered when six or more cases of a product are purchased, consider reducing that to four cases at a full or partial discount. Clients will appreciate the reduced charge. Plus, many are in a “wait-and-see mode.” They are waiting to see if prices come down in the next few months. They will welcome purchasing smaller bundles right now in the hopes it will reduce supply costs overall.
Now let’s turn our focus to what cleaning contractors can do specifically. Facility managers have learned, often the hard way, which hiring low-bid cleaning contractors has it’s downfalls, with poor service at the top of the list. However, what they have learned in the past may not hold up when pressured to reduce operating costs, starting with cleaning and maintenance.
Cleaning contractors should review each account and determine if there are ways they can reduce their charges – should they be asked to. Some items like floor and carpet care may be built into the bid package. Charging those items on an “as-needed” or “when requested” basis can help lower monthly service charges.
Start with your most prominent and most valued clients first. Then stay close to them. They will tell you if they are being pressured to reduce operating costs, including cleaning and maintenance. If they are, be Johnny or Joan on the spot. Take the opportunity to present your cost-reducing suggestions.
Ask for Suggestions
Our customers and clients often have ideas on ways to reduce cleaning and product costs. Be open to these suggestions. Appreciate them. This indicates they are trying to collaborate with you to help them address their inflationary challenges and keep you as their vendor.
What if you have taken one or more of the suggestions, we have just discussed but find there is no way out – you must raise your prices? If that is the case, you must be as transparent as possible with your customers. Use a PowerPoint or spreadsheet to indicate how inflation has impacted your costs.
Show customers more specifically what they paid for an item six months ago and what they are paying for that same item today or what contractors are paying their staff today compared to a year ago. The customer may soon realize these same cost increases your business is experiencing are impacting other distributors and contractors as well, eliminating the need for them to look for another vendor.
However, it is presented, keeping your customer-first strategy in place is most important. Remember: a humanistic approach is invariably a successful way to do business with customers, especially during volatile times.
Michael Wilson is AFFLINK’S Senior Vice President of Marketing. He has been with the organization since 2005 and provides strategic leadership for the entire supply chain team. In his free time, Michael enjoys working with the Wounded Warrior Project, fishing, and improving his cooking skills.
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