Expanding Your Arsenal

Don E. Mittelstadt was stuck. For the past 20 years he’s been forced to charge a nickel per square foot for cleaning, while his costs continued to increase. He needed to find a way to kick-start revenue.

Three years ago, he had an idea. Buildings require services other than just cleaning. There’s grounds care, snow removal, re-lamping, security, electrical and dozens of other services to be maintained. If he could offer more services to his clients, he could add to customer satisfaction and generate extra revenue.

Mittelstadt decided to give it a shot: He gradually let building managers know he could help them with repairs, re-lamping, lawn care, snow removal or security. He even changed the name of his company to show customers that he could assist with their needs, not just clean their building.

His plan worked. Mittelstadt was able to generate new revenue, but more important, his customers appreciated his offer of extra services.

Expanding services is nothing new, but with stagnant cleaning rates and increasing costs, some BSCs such as Mittelstadt are offering maintenance services as a way to set themselves apart from their competitors.

“You have to be aggressive in the janitorial field,” says Mittelstadt, president, Assisted Building Services Inc., Salt Lake City. “There is daily competition. More and more companies are entering the field each day.”

BSCs perform minor maintenance tasks as value-added services or include major maintenance services in bids to get a leg up on the competition. The services they offer depends on what they’re capable of handling and what their clients need. By fulfilling those needs, BSCs can increase client satisfaction, which could result in continuing contracts and revenue.

“[Maintenance] is a niche that’s profitable,” says Mittelstadt. “It’s not just mopping and sweeping anymore. It’s a full-service job.”

The benefits of these added services are not limited to BSCs. Building managers also have an opportunity to gain.

What’s in it for building managers?
Lynn Linhares, property manager of the California Plaza in Walnut Creek, Calif., only uses one vendor to take care of both maintenance and cleaning needs. She is happy with the single source; if she were forced to change vendors, she again would search one out that does both.

“The [fewer] people you have to manage, the smoother things go,” says Linhares.

By utilizing fewer vendors, the lines of communication are less likely to cross. Fewer vendors equal less paperwork. Instead of delegating tasks to different departments or companies, building managers can assign them to one staff.

“Property managers are very busy,” says Mittelstadt. “If they can have one guy take care of all their needs, the better.”

With fewer vendors, building managers can establish greater control over their building. On large accounts, workers could be staffed within or nearby the building, giving building managers a firmer grip on worker scheduling, says Jack Althoff, the managing director and consultant for Althoff Industries Inc., Crystal Lake, Ill. Managers would be able to determine when they needed people on the premises rather than relying on a maintenance staff’s fluctuating schedule.

For building managers, perhaps the most appealing benefit of fewer vendors is reduced costs. If services are packaged together, building managers can get a better rate, says Mittelstadt.

Also, BSCs may perform minor maintenance tasks as value-added services. Though small, the cost of these jobs can add up.

“It saves a lot of money for the perspective customer by the time you figure in the added cost [of a maintenance vendor],” says Todd Didier, president, Didier Cleaning Inc., Port Washington, Wis.

These added incentives aren’t just limited to large accounts. Many smaller organizations don’t have a building manager; usually, a receptionist or personal assistant looks in a phone book for vendors when a maintenance problem arises. An easier way to handle this, however, would be to ask the building service contractor if he would take care of the problem, says Gary Laubert, managing general partner, BTS Enterprises, Farmington, N.M.

A company’s BSC already knows the building. New vendors won’t. It can be more effective, and cheaper, to have one vendor provide both roles.

“I save them more [money] than what they pay me,” says Laubert.

Even if BSC’s can’t handle the job, they still can subcontract it to a reputable vendor.

Increasing customer satisfaction
The pitch to provide extra services will not be effective without a good deal of trust between the building manager and the building service contractor. Building managers and building service contractors need good rapport, whether BSCs are simply cleaning at night or providing all the services, says John Engebretson, operations officer, Home State Bank, Crystal Lake, Ill.

Otherwise, building managers might question contractors’ desires to expand their role. A client might see the BSC as just trying to get business to satisfy his own needs, says Althoff.

If there is a strong relationship, the next step for BSCs is to approach the building manager, alert him to the building’s problems and ask what he can do to help. Often times, the building manager will say, “Take care of it,” says Mittelstadt. And if you offer one service, building managers will ask you if you offer others, he adds.

Replacing light bulbs, hanging dispensers and fixing broken furniture are all jobs that tend to fall through the cracks, says Didier. But BSCs can take on these tasks as value-added services for the client.

“[Performing a minor maintenance task] is no different from the client wanting you to shampoo the carpet,” says Dick Dotts, president, Diversified Maintenance, Los Angeles. “You do it because it needs it.”

Since the janitorial staff is usually the first to find and report the problem to the building manager, fixing it is merely taking the next step.

“We have a head start because we are in the building before the building manager can call another vendor,” says Mittelstadt.

Contractors who want to diversify can start by offering services to existing clients, says Dotts. The added services can help strengthen the BSC/building manager relationship, possibly resulting in continuing contracts and more revenue.

“It’s a one-time sale on an ongoing basis,” says Dotts.

Bigger goals, greater income
Performing maintenance work to please and retain customers is not the only way these services can generate extra income for building service contractors. Jobs such as snow removal, landscaping or security, are services that BSCs can offer during the bid process — and be paid for their work.

To offer these services, however, BSCs need more than simply a good relationship with the building manager. Managers want proof that a BSC can provide quality service.
“A BSC may not have equal ability as someone who specializes in services,” says Althoff. “Those who want to get the most out of their properties would be better off with those who provide the best service.”

To prove themselves, BSCs must train their employees to reflect the new services.

“The background and training of the individual is what makes the difference,” says George Horn, facility coordinator, Chevron-Texaco, San Ramone, Calif.

Some BSCs may find they already have employees on staff with the credentials to perform maintenance tasks. As a clientele base grows, BSCs may need to hire additional employees, but figuring out when to hire can be a difficult balancing act. If contractors hire too many specialty employees without enough clients, they may find a lot of them sitting around the office.

Given the proper time and training, however, a BSC’s staff can become as efficient as a maintenance vendor, says Bob Getz, assistant to the vice president for construction and special projects for Haviland College, Palatine, Ill.

“On the first day, you can’t go and take down an air conditioning unit,” he adds. “But if they’re working on it day after day, they will know the machine better than someone you bring in for emergency service from the outside.”

Doubt
Before building service contractors run off to the building manager and alert him of problems they can fix, they need to make sure it’s what their clients want. Not all building managers believe that BSCs performing dual roles is a good idea.

“Even the thought of handing a custodian a grease gun does not sit well with me,” says Horn. “It’s not just running around squirting grease on something and saying, ‘I’m doing maintenance.’”

Home State Bank’s Engebretson believes BSCs have to know the individual needs of each client. He wants the people who come into the bank, both employees and customers, to feel like it is their home.

“In an open public place, you have to be very proactive in keeping the place clean and free of defects,” says Engebretson.

For years Home State Bank hired a BSC to provide both cleaning and maintenance services. However, the work did not measure up to his standards of quality.

“In one instance a toilet backed up. Unless one of my employees like a teller or lender could plunge it, I had to call and place my request on their service line,” he says. “They had to schedule when they could come and fix it at their earliest convenience. It was very disheartening for us.”

The result: Home State Bank now has an in-house maintenance staff along with its outsourced BSC.

Building managers also want to remain in charge of the building. Engebretson doesn’t mind BSCs alerting him of building problems, but he doesn’t want them to go ahead and fix them.

“If something needed repair, [the BSCs] most likely would fix it, period,” he says. “But if I see it, I look to see if it needs to be upgraded a little bit more than just fixing it.”

For example, if someone knocked a hole in a plaster wall, instead of merely fixing the hole, Engebretson may notice that the wall should be painted as well.

But skeptical building managers are not the only obstacles BSCs may face to prevent them from offering maintenance services. Some building managers may hire only union maintenance staffs with contracts that prevent BSCs from providing dual services.

And even if BSCs are hired to perform maintenance work, there probably will be some tasks that building managers won’t allow them to handle. Building managers may still rely on a specialist for technical jobs such as electrical and HVAC. Services that are related to work that the building service contractor already provides have a better chance at being accepted, says Althoff.

Whether BSCs are accepted to perform maintenance services or not, given today’s slow-growth economy, more contractors may find they need a new approach to boost revenue. The old standby of “pleasing the customer” may entail providing additional services to get ahead in the business. Maintenance is only one route and may not be the road for all; some clients may not even entertain the idea. BSCs like Mittelstadt, however, believe that more clients will want or come to expect a one-stop service center.

In any case, it is clear that customer expectations are changing. Even if contractors don’t want to jump on the maintenance bandwagon, they at least need to be cognizant of what their client’s new expectations are, and whether they are willing and able to meet them. If they don’t, someone else will.