Cleaning & Maintenance Contractors - April 2013
By Darius Helm
Hard times can often bring clarity, and the last few years in the flooring industry have seen their fair share of challenges. Downstream, retailers and flooring contractors have struggled to generate enough business. Many had never taken strategies like diversification seriously, until they noticed that their phones had stopped ringing and their showrooms were still.
Recently, the tide appears to be turning. Many retailers and flooring contractors are adopting a market-facing approach that focuses on giving the customer more—diversifying in breadth with more products and in depth with more services. In terms of product, it’s all about broader selections and broader price points—ideally calibrated and managed with software developed specifically for the flooring industry (see article on page 57)—and often it means going beyond flooring to offer window treatments, cabinets, countertops and other interior elements.
On the services side, it’s mostly about cleaning and maintenance. To a business considering adding a maintenance program, the prospect may be daunting. It has become a very competitive market. First there are the established businesses, which include independent operations, national programs and specialized contract dealers and retailers serving the commercial and residential markets. Then there are all those folks who are looking to get into the business, sometimes knowledgeable professionals but too often failed or failing retailers who feel like they know enough about flooring to make a go of it, and their primary strategy is to put out the lowest bid and figure out the details later.
COMMERCIAL FLOOR CARE
The commercial cleaning and maintenance business in particular has experienced, as Randy Weis, president of RD Weis Companies, puts it, “a lot of churn.” Residential flooring retailers have been targeting the commercial flooring market for a few years now, in both product installation and floor maintenance. It’s been a headache for established commercial contractors like RD Weis and Tampa based ReSource Flooring & Maintenance, which now have to deal with competing against bids that are lower only because the bidder doesn’t understand the business—and will likely end up cutting all sorts of corners to get the job done.
On the floor care side, the knowledge barrier makes things worse. End use customers, who, like the rest of humanity, instinctively prioritize near-term over long-term—today’s dollar over tomorrow’s dollar—don’t necessarily think hard enough about the role of cleaning and maintenance when they’re already spending all this money on product, product that is for the moment new and clean. Without knowledge or good advice, they’ll be tempted to go with the low bid without looking closely enough at the quality of service. The contrast is most stark when a client issues a generic spec for flooring care, and the vast gap between the bid of a professional that uses the right chemistry and equipment and follows all the manufacturer guidelines and the bid of a newcomer eager to do anything for a contract can mean an 80% swing in the price of a bid.
The result is a lot of clients who eventually come to realize that their floor care program is inadequate. Some upgrade and work with established professionals, but too many still move from one floor care company to another, chasing the lowest bids in the hope that this one will also magically do a good job of it. Hence, the churn.
So, on the face of it, it doesn’t look like there’s a lot of room in the ring to throw in a hat. But a closer examination of the market tells a more nuanced story. First, just to understand the scale of the market, it’s worth noting that there isn’t a carpet or hard surface flooring installed that doesn’t follow some kind of care and maintenance plan. This is flooring; it starts clean and then gets dirtier, and at some point someone has to clean it. At one end of the spectrum is a contract with a floor care professional with strong bona fides, who follows all the manufacturer protocols. At the other end is a guy pushing a wet vac for minimum wage using the cheapest cleaning agent on the market. Either way, there’s a vast amount of flooring out there, growing every year, and it all needs to be cleaned and maintained.
The math on the economics of floor cleaning is also solid. A good floor care plan will extend the life of the flooring, and the cost of maintenance is reliably lower than the cost of replacement. This is particularly true for carpet, where embedded dirt will immediately start grinding away at the backing, breaking down the latex, and before long the carpet shows signs of wear. Without consistent maintenance, VCT can also be irreparably damaged, and to varying degrees that’s true of all flooring types, even stone and porcelain tile installations.
It all comes down to selling the program. These days, even though their budgets limit their spending, everyone from facility managers and property managers to owners understands the concept of lifecycle costs versus upfront costs. The better a floor care provider can explain the value of maintenance and the value of his program compared to those that come with bottom-of-the-barrel bids, the better the chance of securing a contract.
PROFILE: RD WEIS COMPANIES
Randy Weis has been explaining the value of maintenance programs to clients for 23 years. In 1990, Weis founded RD Weis, a New York based commercial flooring contractor, as a mill certified maintenance company, partnering with carpet mills to deliver clean methodologies endorsed and supported by the mills. As a recovering facility manager, Weis had seen firsthand what happens to new carpet when under the care of janitors with no training, so he felt confident that there was room in the market for professional floor care that would tie into warranties and also give longevity to the product.
Weis didn’t get into the installation side of the business until 1994, when Shaw, Interface and DuPont made a go of it. Weis realized that he too could take advantage of the opportunities available to a single-source provider. Since he had already established his maintenance business with clients for four years, he had the relationships he needed to get started.
These days, 70% of the firm’s revenues come from installation and 30% from maintenance, and the two are run as separate businesses. Weis has 70 direct employees doing the maintenance business. He points out that because his maintenance business is contractual and often multi-year, it’s less volatile than the installation side of the business and therefore provides more stable revenue streams.
When it comes to selling the program, Weis acknowledges that it can be difficult for clients to find time to sit down and learn about what they need and what they’re buying in a maintenance program. He finds that facility managers are generally aware that the claim that cheap maintenance saves money is a fallacy, and they’re more likely to understand the lifecycle value of good maintenance programs than are, for instance, property managers, who must bid for their own jobs every one to three years. Property managers tend to be more focused on running costs and can be reluctant to boost their floor care budget, since it could make them vulnerable in the bidding process when they try to renew their contracts.
Because of its background in floor care, RD Weis, which has been part of Starnet since 1997, helped pioneer the commercial flooring partnership’s maintenance initiatives, including its sophisticated system of color-coding by traffic levels blueprints of facilities to be maintained, and tailoring floor care schedules around those high, medium and low traffic areas.
Starnet’s Floor Care Program, which uses consistent chemicals and equipment and is endorsed by four of the big carpet mills (with more to come), currently has 55 member locations around the nation. However, many Starnet members who offer maintenance are not currently part of the formal program, and the group estimates that over 75% of its member locations offer some form of maintenance program.
Most of RD Weis’ maintenance business is in the corporate sector, followed by retail, though the healthcare and education sectors are growing faster. Weis sees a lot of opportunity in both the healthcare and hospitality sectors, which currently do most of their maintenance in-house. Weis feels that, over time, such businesses will increasingly see the value of focusing on their own expertise and core competencies—be it providing healthcare or servicing hotel guests—and outsourcing their floor care to the floor care experts.
For the first few years, RD Weis focused on carpet care, but over the last decade, as hard surface flooring has eaten into carpet’s commercial marketshare, the firm has added floor care for just about all flooring types. The strategy has also helped the firm secure larger contracts. RD Weis has also been at the forefront of carpet care, where the trend has been away from extraction cleaning, which uses a lot of water, to low moisture systems, which are more efficient and significantly more environmentally friendly.
One of the carpet systems RD Weis uses is ResisTech, developed by Antron. It’s a “low-moisture soil encapsulation maintenance treatment” that not only efficiently removes all dirt and oils from all types of nylon carpet but it also confers soil resistance and stain protection to the fiber, and it doesn’t leave behind any sticky detergent residues.
PROFILE: RESOURCE FLOORING & MAINTENANCE
Tampa based ReSource Flooring & Maintenance has also been diversifying beyond carpet care. The firm, which was originally founded in 1991 and became aligned with Interface in 1996, was bought back from Interface in 2005 by president and CEO Ken Jackson. Maintenance was added around 1998.
Through 2010, the floor care focus was on cleaning carpet for corporate customers, and though the business was growing, it stagnated during the financial crisis. At the beginning of 2011, Jackson hired Mike Beam as maintenance manager, and in the last two years Beam has diversified the firm’s floor care offering to include a range of hard surface flooring—everything from linoleum (with certifications through Forbo) and all types of vinyl to concrete, rubber flooring, ceramic tile and epoxy floors. The firm even offers a window-washing program.
Since the firm retooled its maintenance program under Beam’s direction, revenues from the division have doubled, while flooring installation revenues have grown by about 20%. Overall, maintenance accounts for about a quarter of the firm’s total revenues.
ReSource, which is a member of Fuse Commercial Flooring Alliance, goes to a lot of effort to ensure that as many of its installation clients as possible also become maintenance clients. On the carpet side, Beam will go out after installation to meet with the end use customer and go over manufacturer recommendations about care and maintenance, and then he’ll offer the firm’s maintenance service. On the hard surface side, where 90% of the jobs are done through general contractors, ReSource has discovered that GCs are not inclined to do multiple contracts, leading the firm to focus on contracts that include both installation and floor care. Bids are fairly common when working with general contractors, but they’re rare when doing carpet projects with end users.
Like Weis, Jackson appreciates the fact that his maintenance business offers much steadier revenues than the installation side. The checks may be smaller, but they’re generally paid monthly.
Jackson also points out that the real advantage professional maintenance providers have over the amateurs, newcomers and low-bidders is client loyalty. The firm sees almost no turnover when it comes to carpet maintenance, and it anticipates building the same loyalty on the hard surface side.
One of the biggest challenges for the firm relates to fixing problems. A lot of business is generated by clients dissatisfied with their low-bid shoddy maintenance programs. When clients decide to make the switch, they generally demand a swift response. According to Jackson, “As soon as it’s looking bad, they want it done yesterday.”
For carpet, the firm will use both hot water extraction and low moisture encapsulation systems, all following manufacturer recommendations. The firm does not use powder systems, which can void warranties because the powder sits down in the carpet and ultimately grinds away at the face fiber and backing.
As a seasoned floor care provider, ReSource Flooring & Maintenance works closely with Fuse to help group members develop their own in-house care and maintenance programs. The firm has given presentations at Fuse annual meetings, and it also brings Fuse dealers to its operations in Florida to help them learn the business.
Fuse, which currently has 78 members with 115 locations, added about seven new members over the last year. Most new members arrive with little experience in maintenance, and Fuse provides a lot of tools for them and encourages them to get into the business. The group is currently working with Cintas, which is best known for its uniform business, to develop a strategic alliance with Cintas’ substantial commercial cleaning services.
When floor care professionals like Weis and Jackson talk about the quality of their programs, the focus is often about following the recommended care regimens provided by the flooring manufacturers. They’ll acknowledge the importance of certification, but in the same breath they’ll point out that there are, for instance, many ways to clean a carpet, but only a handful are recognized by the Carpet and Rug Institute (CRI) and the Institute of Inspection, Cleaning and Restoration Certification (IICRC).
Weis feels that the mills and fiber producers are doing a great job of communicating the maintenance message and making compelling arguments, and he anticipates that, as the economy recovers, there will be more people at the table making the case that using the right chemistries and professional staffs, and working with manufacturers, offers the best value to the client.
Copyright 2013 Floor Focus