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Dealing With Inflation

Strategies for contractors to consider before raising prices

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After a long trudge through the pandemic and just now seeing the light of day, many jansan cleaning contractors, distributors, and manufacturers believe they have seen it all—and survived. If their businesses can make it through a pandemic, they say, they can make it through just about anything.

Well, that belief is now being tested. For many in the industry, they’ve managed to get out of one pot of boiling water only to find themselves in another: namely, inflation. The last report from the U.S. Bureau of Economic Analysis indicated that the U.S. inflation rate is at a 40-year high. At nearly 10%, inflation like this has never been experience before by most Americans.

Of course, the jansan industry has not been untouched, with its commercial costs of goods and services going up right along with consumers’ costs of their personal necessities, such as fuel and groceries. Further, some within the industry are paying more now than ever before to attain and retain workers. 

And let’s not forget, inflation and higher costs are also impacting the businesses of industry customers. This means the industry as well as the customers it serves are all together in a hard spot. 

This challenge can get sticky. Should jansan businesses raise their prices to cover their increased cost, no matter the repercussions? Or is there a way to address this new challenge that’s more equitable, helps jansan businesses keep their valued customers, and keeps as many people happy for as long as possible?

The following guide examines diverse ways to confront inflation while maintaining a healthy and happy clientele. Not all these strategies will work for everyone or every business. But many of the ideas provided here should help the cleaning industry weather this new set of circumstances. What’s more, they might even help bring new customers in the door. 

Take an altruistic approach

When we say someone or some organization is altruistic, it usually means they are unselfish, philanthropic, and helpful. For this discussion here, altruistic means compassionate—compassionate about the plight some clients might be in right now.

It’s a humanistic approach—a customer-first strategy, which works just as well with the largest clients as with the smallest. Jansan businesses need to employ this mindset when evaluating potential fixes to the inflation problem. It might be necessary to work together with customers to find ways to share the costs of inflation.

Take a very practical approach

Taking a practical approach would apply primarily to steps distributors can take to help their customers but also applies to cleaning contractors who have been pressured by rising supply costs. One powerful but effective practical approach is to conduct a product audit.

In the simplest of terms, a product audit looks to see which products are currently purchased, which are used for the same or similar purpose, which products are no longer needed, which perform the best, and which are the most cost-effective. Properly conducted, a product audit allows for the reduction of the number of products used for cleaning, which often results in cost savings.

Narrowing the number of products needed allows for bulk purchases of those still required. Invariably, making large purchases lowers costs on a per-item basis, often results in rebates or manufacturer’s discounts, and helps reduce overall supply costs.

Scale back

Now let’s focus on what cleaning contractors can do specifically. Facility managers have learned, often the hard way, that hiring low-bid cleaning contractors has its downfalls, with poor service at the top of the list. However, what they have learned in the past might not hold up when pressured to reduce operating costs, particularly with cleaning and maintenance. Cleaning contractors should review each account and determine if there are ways they can reduce their charges, should they be asked. Some items like floor and carpet care could be built into the bid package. Charging those items on an “as-needed” or “when-requested” basis can help lower monthly service charges. 

Start with your most prominent and valued clients first. Then stay close to them. They will likely tell you if they are being pressured to reduce operating costs, including cleaning and maintenance. If they are, be Johnny or Joanie on the spot. Take the opportunity to present your cost-reducing suggestions.

Ask for suggestions

Customers and clients often have ideas on ways to reduce cleaning and product costs. Be open to these suggestions. Appreciate them. This indicates they are trying to collaborate with you to help them address their inflationary challenges and keep you as their vendor.  

What if?

What if you have taken one or more of these provided suggestions but find there is no way out—you must raise your prices? If that is the case, you must be as transparent as possible with your customers. Use a PowerPoint presentation or spreadsheet to demonstrate how much inflation has impacted your costs. Show customers what they paid for an item six months ago and what they are paying for that same item today, or what contractors are paying their staff today compared to a year ago. The customer might soon realize these same cost increases your business is experiencing are likely impacting other contractors as well, eliminating the need for them to look for another vendor.

However you present it, keeping your customer-first strategy in place is most important. Remember: A humanistic approach is invariably a successful way to do business with customers, especially during volatile times.

Michael Wilson

Vice President of Marketing and Packaging, AFFLINK

Michael Wilson is AFFLINK’s vice president of marketing and packaging. He has been with the organization since 2005 and provides strategic leadership for the entire supply chain team. He can be reached through his company website at www.afflink.com.

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Dealing With Inflation
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