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Monday, January 30, 2012

How to beat the BIG boys - What the Giants of the industry just don't get

I used to look forward to reading our trade journals. Services Magazine, Cleaning Management, Building Services Management and a couple long gone now. Those magazines weren’t just bathroom reading for me, I would hang on every word, read every article and carefully read every single ad. Editors had names like Terry “ Five Coats” Wilhelm (forgive me Terry if I got your last name wrong, haven’t seen your name in print for many years but I hope you made a good buck selling the magazine and are comfy in retirement).

Professional trade journal publishing companies took over and now the janitorial magazines are only one in an entire portfolio of trade journals, among other trade journals like for gummy worm manufacturers and “ethnic” hair care distributors. I am OK with this, its progress I suppose and the professionals have done a great job converting to digital formats. Terry “Five Coats” could never have dreamed of a digital magazine.

I used to love to read what other successful company owners were doing and what they thought was important. Fortunately, for me, the internet took off and today I talk to janitorial company owners all over the world directly and read what they say with no editors. I still do read our trade journals but now I read the digital versions.

Most new comers into the business want to know how to build big companies like the ones they feel are running over them. The basics of moving dirt seems so simple and big companies have developed systems that are very good in operations and job costing. However, they DO falter as evidenced by one of the biggest companies in our industry who once boasted 75% of the entire downtown market where they are headquartered but have today lost more than two thirds of their buildings in their own backyard.



New comers should not copy everything big companies do because big companies have their own problems. The biggest problem is that they are too big to look around and see the changes that are occurring. Medium sized companies, who have achieved a degree of success, ignore key innovations that they should not. Small company owners have an advantage, they are hungry and they you NEVER hear the worst thing ever said it the business world "...we ALWAYS did it THIS way so why change now"?

The bankruptcy of Kodak is a lesson on big companies who failed to look around and see the changes that occurred around them. Kodak invented digital photography in 1975 but did not bring a digital camera to market until 1995. The digital world gave us America Online and their glory days are behind them now. Our nation’s push west in the 19th century was by pioneers who ALL had Sears & Roebucks catalogs and now this once great American company is in huge trouble.

We stand at a time in history where things are changing. In business, relationships ARE being developed digitally, communication is now instant and today when a businessperson says they have connections they don’t mean a pile of business cards back at the office sitting in a box.

According to the Global Web Index, based on 27 markets and 100,000 surveys “for the first time that B2B decision makers and senior decision makers are more engaged in all forms of social media than the average online user". In addition, online conversations with people from the company are seen as the most influential factor in B2B purchases. This is an amazing statement of the impact of Social Media.”

You need to read that last sentence one more time. You hard corps business folks that need to put a dollar figure on everything, would you please tell me what exactly IS the ROI on your office phone?

For the most part, our industry is lagging WAY behind in adopting many important changes. I found a trade journal where janitorial companies who put up web sites were featured as big news. It was complete with instructions on how to look at those sites on your “personal” computer (so the reader wouldn’t get confused and try to view the featured web sites on their refrigerator sized, supercomputer they kept in a utility closet behind dirty wet mops left to dry out overnight).

American Building Maintenance http://www.facebook.com/pages/American-Building-Maintenance/159170210781478 does NOT get it. I know of one $150,000 million national cleaning company who was afraid of putting computers in their offices because employees would only be playing games on them (emails were sent to the home office and then relayed by telephone to operations and their sales force across the United States). Another regional company that started in 1919 would not put a fax machine in their office because they never needed one before (leaving their sales force to run down to a local print shop to send and receive faxes). Last year, I interviewed with a company with operations in 16 states and the owner wasn't sure professionally printed business cards were necessary.

Are you sure you want to be just like the big companies?

In December 2011, LinkedIn had 92,131 property managers, 27,062 facility managers, 523,254 office managers and a 22,427 facility services professionals (that’s you and me and I am no longer selling cleaning services for myself, I now grow janitorial companies for others who pay me)! Please look again at those numbers, tell me whom you sell to and then explain to me once again PLEASE why social media is NOT important.

We are going to explore this further together so stay tuned!

5 comments:

  1. Ed,
    I enjoy your posts so much. Good job Ed!
    Thanks,
    Linda

    ReplyDelete
  2. Ed, I think you should put it all down I know for certain it could make for good reading if you include miserable east vs west stories.
    During my limited tenure with a 'BIG' company I did get frustrated with the 4 digit per sq ft estimates. I met a guy in the 70's, he is deceased now, we'll call him the GUCCI man. I was a building superintedant that had amibitions of doing everything in-house. The director of the building told me that he knows this guy, that just married the daughter of one of our Clients, Fluor Corporation, and yes guess what he owns a cleaning company, 2nd generation. He came in and asked me how much do I estimate the in house program would cost. $0.0475/sf, he said he would do it for $0.045 and I let him. I signed an agreement with him that had less than half a page of specification, it basically read, keep the building clean. The incumbent was a company called Prudential, remember them, out her in So Cal, LOU, ran things, may he rest in peace. As a customer I learned my lesson, get to know the number but don't bother taking on the headache of doing it yourself. When I jumped over the fence it was for money, YES big money, I started with contract engineering services but very soon discovered the inner sanctum of the cleaning business. I took over the San Diego branch and went to down, literally. I tried to get up into every manager's face that I could, the pitch was, No lies, you get what you pay for. We quadrupled the business in 3 years. Next because of the single digit profit we diversified, the plan was to look for less sophistacted customers, and indeed we were able to find some that were willing to pay the piper for the real magilla, San Diego Gas & Electric, Southwest Marine Ship Yard, Sharp HealthCare and a few others. There was no talk of the cost per square foot, we spoke in terms of man hours. This took us to double digit profit very fast. You mentioned ABM first (who is next in line?) deep pockets, aggregate growth, creative accounting and you're there, the world's largest contract service company. And your correct the little guy cannot do it that way, and it could be for me anyway, I don't want to even if I could, it is a sham. We can servive with organic type growth if we are building something designed to meet our needs, as a little guy.

    ReplyDelete
  3. Ed,

    How true. We are just reveiwing and changing how we contact, interface, and build credibility with the decision makers.

    No one meets anymore,gets their information through the mail or talks on the phone. Unless they are unhappy or in the bid process. Getting your value propostion out is a new game and new channels are required. Even the old guys( like us) have gone digital and viral. And the decision makers in thier 40's are all wired.

    We are revamping our website, goign to face book, you tube, and QR coding just to name a few. It's a new game.

    Looking forward to more insight on this topic.

    Mark

    ReplyDelete
  4. Janitorial services are very essential in maintaining health and safety in a facility. Though they are not related to core business, they play a significant role in facilitating the core business activities.

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    ReplyDelete