Volume 8: Making Assumptions Are Costly
Last year I prepared a janitorial proposal for a prospective client with whom I had a great connection. There were concerns with the current provider’s inability to maintain CONSISTENT performance, often resulting in weekly emails from tenants. I thought to myself, “slam dunk! I’m in!” However, despite evident frustration of the Property Manager and our obvious connection, I WAS DENIED the opportunity, citing my service just wasn’t affordable.
For an entire year, I wondered what I could have proposed differently and thoroughly researched market values in my region to ensure pricing was competitive. I quickly learned that my pricing was not only affordable but LESS than most companies in the area. So why was this prospect certain we couldn’t engage? The answer is now evident! Let me explain…
When I submitted numbers for this opportunity I calculated price per useable square foot like most companies. I also considered the cost required for my team to clean the space, factoring time as well as the necessary chemicals to maintain the integrity of the floors and surfaces of the facility. I did NOT factor in the cost of consumable products because they were being “supplied by the client”. When we met, I was told my price was nearly 2 cents more than their current vendor, making the switch too costly. But how? I knew that seemed impossible. Nonetheless, I was forced to accept the “facts” and move on. But I just couldn’t let it rest completely, so I added the location to my list for this year’s check-in to see how things were going.
Unfortunately for this Property Manager, nothing has changed. Complaints are still pouring in, and tensions are rising because the vendor isn’t fulfilling all obligations. Tenants are now even requesting checklists to see exactly what should be completed nightly because they feel NOTHING is being done outside of trash removal. With this new information, I requested another meeting and asked what now seems so OBVIOUS… What is your TOTAL cost for your janitorial program? That question changed EVERYTHING!
When we sat down and explored the numbers, the vendor had been purchasing the consumable materials and billing the client monthly. This isn’t uncommon by any means, but the Property Manager didn’t realize the COST of that service. I sent the list of items purchased each month to my supplier and quickly realized how they were able to provide services 2 cents less than mine. Their materials had a 40% mark-up! The Property Manager believed the material rate was an ACTUAL cost, deeming it non-negotiable. With the extra 2 cent per square foot, I was proposing in addition to the current material cost, the price was…You guessed it, UNAFFRODABLE. But the truth was my rates were LESS than the current services by nearly 1 cent when we did the math.
Let’s be honest, every business is in business to make a profit. The method in which we do so will look different across companies. That doesn’t make either party’s way right or wrong, just DIFFERENT. It is MY responsibility to do due diligence and understand the needs of every prospective client and educate them on my services and brand.
The moral of this story is, don’t miss an opportunity because you FAIL to ask the necessary questions, leaving room for assumptions. Lead with transparency and be bold enough to challenge the things that seem wrong or out of place because sometimes they really are. Time is valuable and I wasted a entire year. Redeem the time and make it right!
Until the next tipoff, keep changing the game.- GameChangers