“We are terminating our custodial service contract with your firm effective 30 days from today.”

Unless you have an ironclad contract that stipulates a specific length of service, most contracts are written with a 30-day cancellation clause. This means at any given time, we are 29 days from losing our customers!

Losing a client is a painful, emotional experience for everyone in the company. A lost account means a loss of commission for the salesperson, loss of jobs for the line workers, and a sense of failure for the operations team. But the true hallmark of a professional is how he or she deals with a terminated contract. By taking an analytical and gracious approach to the cancellation, building service contractors can exit the account and still leave a positive impression on the customer.

Emotions
The first reactions to a canceled contract are shock and anger, and these emotions are understandable since many hours of time and effort are expended in maintaining an account. Many business managers literally run out the door and land in the customer’s office within minutes of receiving a cancellation letter.

Immediate confrontation with the client, or pleading not to cancel the contract, generally serves no positive purpose and may alienate the customer further. A phone call with carefully worded concern and acknowledgment of the cancellation is a more professional approach to the situation, and staying calm and unemotional with the client keeps you in better control of the outcome of the situation.

After the initial shock has worn off, begin looking to the root cause of the cancellation and put energy into preventing the same mistake from occurring again.

Warning signs
Many times the warning signs of a pending cancellation are obvious, yet other times are extraordinarily subtle. A sudden increase in service complaints is just as troublesome as the abrupt decrease in complaints. When a customer has become frustrated with their vendor, they often just stop calling with service issues and begin looking for a new vendor.

Another warning sign is that the customer fails to return your phone calls or is no longer available to meet with your customer service representative when they call on the building. Other facility managers don’t like confrontation and may avoid it by telling you that they are pleased with your services while at the same time are in discreet negotiations with another vendor.

Each customer handles termination differently, but few actually enjoy being in the position of starting with a new vendor. Many times the decision is out of their control, and there were no apparent warning signs. When signals are becoming noticeable, try to sit down with the customer to see if you can prevent the cancellation.

Why?
In multi-tenant facilities, property managers tend to take their favorite janitorial service providers with them as they move from building to building, so often the reason for cancellation is that you are simply not their favorite vendor.

In addition, with the volatility of the multi-tenant market, a competitor’s drop of even one-tenth of a cent per square foot may be enough to entice the property manager to change vendors; therefore, this market unfortunately doesn’t foster many opportunities for long-term contracts. A cancellation in this market may be out of your hands.

Since trust is a quality associated with reliability, another reason for cancellation may be the client fails to trust you any longer. Unresolved service requests, broken promises, and prolonged resolution to service issues leave the customer feeling less than confident with your company and eventually results in a poor relationship with that customer.

If you are not clear why the contract was cancelled, a full understanding is needed from the client in order to improve your service to the next customer. Make an appointment with the client and simply ask, “What could we have done to prevent losing your business?’

Then, listen to your contact with both ears open. Knowledge and understanding may be the key distinguishes between success and failure with your other clients.

Gracious to the end
Grace costs nothing, and being gracious to the end of the contract is a show of true class and dignity. Unfortunately, some contractors may decrease the amount of labor in the building or intentionally deplete the paper goods in an attempt to get the last dollar of profit out of the contract. Another tactic is to stop all periodic work such as floor maintenance during the final 30 days. This type of bullying is not only passive-aggressive, but is a fatalist approach and will certainly guarantee no future opportunities are possible with the client.

One building service contractor I know in Texas believes that customer partnerships are more about affirming the relationship through great customer service than about making a quick dollar. Upon being notified of a pending cancellation, they increase their service level up to the last day of service, and leave in an affable manner. Several lost contracts turned into future opportunities due to their policy of exiting the account.

Customer relations
During the final days of a contract, customer relationships may become strained and uncomfortable. If the normal practice is to provide weekly customer service visits, keep the routine consistent, keep the time in front of the customer friendly, and keep the atmosphere light. Customers are driven by their needs and are far more interested in what you can do for them than to hear you voicing your opinion of the cancellation. It’s your job to meet their needs, not theirs to cheer you up. Don’t lay a guilt trip on the client.

Employees
The loss of a contract means the loss of jobs for people that very much need the work. Notifying the employees of the cancellation poses an interesting dilemma. If told too soon, employees may leave to find other work which causes decreased labor and poor service in the building.

However, if told on the last day of the contract, they tend to feel used and betrayed. One answer is to hold a brief meeting at the end of shift about half way through the cancellation period. Ask the staff to work through the end, emphasizing their commitment to service and your commitment to keeping them employed. Reassign employees in other accounts if positions are available or assist the staff in seeking employment elsewhere.

Since the incoming contractor may be in need of experienced staff for the building, permit the new contractor to interview the employees you are not able to keep. This can provide three benefits. It may eliminate unnecessary unemployment claims against your company, it helps a fellow contractor, and it shows the client your professionalism.

Learn from your mistakes
Louis Brandeis says, “Progress flows only from struggle.” Lost contracts can become a learning experience for the prudent company that is dedicated to improving their company. The mistakes with the account may include poor customer service and attention to the client, as well as not budgeting the correct amount of labor required to clean the building.

Take an open and honest look at your service to the client and analyze what went wrong and fix what you can. For example, if you lost the account due to pricing, is it possible to take a percentage point lower in profit or locate a way to slightly reduce your overhead? Or if you lost the business due to customer service, would another representative have been a better match for the client?

Keep the door open
A new client of mine recently told me how unprofessionally their contractor handled the exiting of service. The quality of service worsened during the final 30 days, supplies disappeared, and the number of complaints significantly increased. The customer service representative said, “We’d like to keep the door open in case the new company doesn’t work out.” My client said that she was so upset with the contractor that she was bricking the door shut on their way out.

Seek happy endings. Let the customer know you were honored to provide service to them even though you lost their business. Remember that the last encounter with your customer will be the one remembered.

It is inevitable reality that a business will not retain 100 percent of its customers year after year. The contracting superstars learn to be professional in all they do, including being congenial as they exit the account. Good reputations will remain intact, and the foreseeable future may include the return to the client.

Dannette Heeth, CEH, is director of medical treatment facilities for Aztec Facility Services, a contracting firm headquartered in Houston. She can be reached at: dheeth@aztec1.com.




POSTED ON: 1/1/2006