Beware of the Cost of the “Lowest Price” Game
Beware of the lowest price

The “lowest price” game is a bad business strategy. Unfortunately, it is a common one.

I saw it when I was in radio advertising. The unskilled salespeople resorted to selling their “puffs of broadcast air” based on price. Those of us (yes, I’m putting myself in this camp) who were good marketers and competent salespeople, sold that same air for top dollar based on valuable expertise and a track record of quality advice and results.

The construction business is another industry challenged with low-balling. And from my current perspective, the cleaning business has some of the worst culprits of this same bidding strategy. Certain service providers do it because it’s a lazy method of winning business requiring no expertise. Certain service purchasers do it because they don’t value facility cleanliness and they believe they are helping their bottom line. Both parties soon discover this is a costly way of doing business.

Even worse, we are now seeing cleaning equipment manufacturers evolving their business to target the low margin operators. At a recent meeting, we chatted with a manufacturer’s rep who proudly told us they are now selling a vacuum that is specifically built for spot cleaning. Knowing cleaning companies’ margins are getting smaller, they developed this vac to let the cleaners cut corners and save time. Of course, this is a problem for the client who, according to the scope of work in the contract, is expecting a full vacuum and is unknowingly only get spot cleans.

Just recently, my company, EFS Clean Building Services, lost a contract to a lower bidding company. We had bid the job realistically, for what we knew it would take to do the job right. A strategy that we pride ourselves on. Sure enough, a few months later this client called and asked if we could take over the contract. The low bidding cleaner they had originally chosen was doing a terrible job and the client finally realized that the low price they were paying was causing the cleaner to take short-cuts. It ended up costing the client a remedial clean to get their facility back up to standards as well as time and energy to fire and re-hire the services.

If you are looking to hire a contract cleaner and you see a bid that is much lower than the others, BEWARE, and do your due diligence with the following:

  • Talk to that cleaning company about their time and task schedule. Are they allowing enough hours to do the job you are expecting? The cleaning business is not rocket science. It is based on time required for scope of work requested. In fact, the ISSA (association for the Worldwide Cleaning Industry), provides a guideline for cleaning times which credible cleaning companies use when allocating labour hours to cleaning tasks.
  • Inquire as to what this company’s employee compensation position is. Do they pay a fair or better wage to their cleaners? How long have their employees been with them? If a company can do a job for much less, then something is being compromised. That something is usually employee wages. It’s the client who will then pay when these undervalued cleaners leave to find better opportunities or do a poor job because they are not respected for their work.
  • Ask about the size of cleaning crews and flexibility of personnel. A mom-and-pop cleaning operation may be able to do the job for less, but the client suffers by only having two cleaners available. What happens when one of the cleaners is sick? Or they are always late and in a rush because they have to get to the next job? We recently got a call from a client who wanted us to take over the cleaning from a mom-and-pop operation because the two people doing the work could no longer keep up with what this growing company needed.
  • Find out what the low bidding company’s policy is on pricing adjustments. Typically what happens is a company will provide a low bid to get a job. Then once they are in, they will constantly come back to the client asking for more money for one task and then another, because they don’t have enough time to get it done. Eventually, the client pays just as much or more than if they would have gone with an honest, more realistic bid.
  • Evaluate your results, on-going. If you decide to hire the cheapest guy, then evaluate the work regularly to ensure the standard is where it needs to be. If the work quality drops because the cleaners can’t afford the time, then have a 30-day clause to get out of the contract. Better yet, don’t get yourself into this situation to start and you’ll save yourself a lot of time and frustration.

Listen to reason when it comes to pricing. If a higher priced service provider gives you a reasonable bid and backs it up with industry guidelines, ethical beliefs in staffing and a genuine goal to help your business then this is much more valuable to you than a low price.

Remember the old adage, “you get what you pay for” ? The same can be said for your cleaning services so shop wisely and beware of those that are luring you with price versus expertise, experience and honesty.

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EFS Clean Building Services is Calgary’s locally-owned-and grown, and “Realistic”, Commercial Cleaning Company. Our services include commercial cleaning, post-construction cleaning, quality assurance inspections, ceiling restoration and hard surface restoration. Let us help you get a better clean by calling 403-949-3344 or send us a message on our Contact Us page.