A cleaning contractor was one of several contractors that responded to a request for proposal (RFP), also known as a “tender” in many parts of the world. This contractor was excited to find out that his proposal was one of four being given serious consideration. Moreover, a couple of weeks later, he was asked to give a presentation to the management company in charge of the bidding process, for a meet-and-greet and to discuss his proposal.
He thought he handled himself very well at the presentation and the entire meeting appeared to go very well. This was a large account and he was definitely enthusiastic about the possibility of winning the contract. However, a couple of weeks later, he received a letter from the management company, thanking him for his proposal and presentation, but indicating they had decided to hire another cleaning contractor.
Certainly dejected, he assumed another cleaning contractor came in with a lower bid. Called in to review his proposal to see where he may have miscalculated his charges, it appeared they were fair and reasonable. However, the problem with his proposal, and the likely reason he did not win this contract, was written on virtually every page.
The proposal was laden with the features his company brings to the table. For instance, this contractor was proud of the fact that the company had been in business for more than two decades. The proposal also noted that the company is now green certified by a leading certification organization.
While the features were impressive, this contractor did not take the next step: he did not translate those features into benefits that would prove valuable to the customer. While there may have been other reasons this contractor lost this account, far too often cleaning contractors lose bids because they fail to discuss the benefits and the value their company brings to the table.
Features, Benefits, and Winning Bids
Before going any further, we need to be clear as to the differences between features and benefits because very often these terms are confused or used interchangeably.
A feature is a characteristic that stands out about someone, or in this case, a company. For instance, the contractor noted he had been in business for more than twenty years and that the company is green certified. Potential customers tend to gloss over features because these simple statements of fact do not mean that much to them or their implication is unclear. Further, most suppliers tout the features of their products or services. Over time, they simply lose their impact.
A benefit is the value or advantage a feature provides to the customer. For instance, how would the fact that the company has been in business for more than twenty years be a benefit to a customer? Being in business that long, this contractor has likely learned how to handle all types of situations and address a variety of cleaning challenges. They are not learning on the job. Instead, they know the job.
Or how about the fact that the contractor’s company is green certified? The goal of green cleaning is to reduce cleaning’s impact on building users and the environment. Using cleaning products that, for instance, have few volatile organic compounds (VOCs) or, taking this a step further, selecting equipment that cleans effectively using engineered water, all contribute to a healthier indoor environment. The key benefit to the customer is that a healthier indoor environment has been shown to improve worker productivity, morale, and reduce absenteeism.
These are just two examples. Often contractors will tout that their companies are locally owned or are mom-and-pop owned; do not outsource cleaning work; offer a variety of services; or require all of their staff to be CIMS certified. * We could go on and on but to make these features have meaning to the customer—and provide value worth paying for—they must be decoded and turned into benefits.
Low Bids/High Bids
When taking bids, it is true that some facility managers and business owners still hire the low bidder. Very often, this is because of their inability to evaluate competitive bids and determine which contractor will provide the most value. In most cases, this is because of what we have been discussing. The bids list a multitude of features but fail to describe how they benefit the customer.
There are also situations when managers/business owners do not accept the lowest bid, but not because they find that one or more proposals provide more benefits than the others. Instead, they have learned from past experiences that low bidders and inferior service tend to go hand-in-hand. They accept a mid-priced proposal, hoping to avoid repeating that experience.
Higher bids, while often weeded out during the review process, could warrant further investigation and consideration – and even win the contract—if they clearly connect features to value or provide benefits to the customer that no other contractor provides.
Ultimately, this discussion is a reflection of how the professional cleaning industry has evolved in the last twenty-five years. At one time, cleaning contractors were viewed as a commodity… all about the same. Now building managers and owners are far more aware of the benefits of effective cleaning. To win bids, contractors must make sure their proposals speak the customer’s language and demonstrate that they can offer valuable benefits.
Ron Segura is president of Segura Associates. His company works with large and small contractors helping them build their businesses and streamline business operations so that they can reduce costs and operate more profitably. He can be reached through his company website at email@example.com
*The Cleaning Industry Management Standard (CIMS) is a best practices training program designed to instruct custodial workers to perform their duties more effectively and efficiently.
Sidebar: Tips for Successful Bidding
In addition to what we have discussed, here are some ways cleaning contractors can win more bids:
Do your research. Find out as much as you can about the company such as its goals, mission statement, its products or services, the types of customers it serves. If possible, bring these attributes into your proposal.
Ask questions. While some companies will have policies denying individual follow-up conversations or meetings after the initial meeting, if possible and if uncertain about anything in the RFP, ask the manager. Some bids are lost because of simple misunderstandings.
Write early. It is often best to start preparing the bid as soon as the initial meeting and walk-through have been completed. Very often details about the facility or what was discussed are forgotten, which can have unfortunate ramifications.
Check your numbers. This is more for your own benefit than the customer’s. Double check labor and supply costs, and profit margins. If your bid is selected, rarely will the customer be open to re-negotiation.
Timely delivery. Bids should always be delivered before the due date. If asked to give a presentation, be sure and arrive early. Never leave the customer waiting.