Question for Greg Cole, Ken Snow and others

[harryhides]

I have been following the debate about the definitions of "Bait and Switch" with interest and we have our very own local scam artist who runs several Porty crews, advertises $39.00 specials with a free arm chair cleaning, thrown in. But his most outrageous scam is the selling of super special sauce - "enzyme" pre-treatment for "heavily soiled" carpets @ $ 120.00 extra.

The other common practice that I have observed in our industry is the tendency of the "discount" operators is to charge below cost for "cleaning" and way above cost for Scotchgard, ( or Aqua-gard or Scotch-Mist but that is another topic ), in order to make most jobs profitable.

So my question for Ken and Greg and other bean-counters who track the minutia of their business models is this:

What do you think your profit margin is for "just cleaning" and what do you think it is for "protection treatment" alone ?
I.E.
What is the mark-up on Protection treatment revenues over cost of product and cost of labor to apply vs cleaning revenue over cost of labor and cleaning chems ? I do realize that many other costs like insurance, rent, depreciation and administration complicate this so just give it your best shot.

I have a hunch that discount operators over-charge for Gard because they have to and that high priced operators conveniently follow the pricing habits of the discount operators simply because they can get away with it and not because of figuring their costs and factoring in their own Company mark-up.

I have only picked on you two guys as you are more likely to have the answers to these questions than most - no other implication(s) is intended by me, whatsoever.


With regard to the Lisa/Greg discussion about the effectiveness of Scotchgard or Teflon - I have often wondered the following:

1/ Can we trust the manufacturer's of a product to be completely honest as to their effectiveness?
2/ Why is Scotchgard or Teflon "baked in" when applied at the Mill and how does our "cold" and surface only, application compare ?
3/ Why do 3M and Dupont promote 5 - 7 yr warranties for their product regardless of whether we apply any or not, in the interim ?
4/ I wonder if 2 identical carpets were installed in the same place and one was cleaned and protected annually and the other was cleaned twice per yr with zero Gard applied, which one would look better after 5 or 10 yrs ??

I'm not pushing any particular agenda here, just curious what all of you think about these questions.

Thank-you.

 

[hogjowl]

Successful operators such as myself don't have the time to wade through long assed DAP's such as that and then answer them.

If you want my professional opinion, go back and get to the point.

 

[Brian L]

It was much easier on my brain to read Marty's post.

 

[harryhides]

What's your profit margin for "just cleaning" and what is it for "protection treatment" alone ?


ps, When did you "become successful", Porkchop - I must have missed that announcement.

 

[Jim Pemberton]

Everyone should test the products that they use.

You should test them on year old and several year old carpet

Test on nylon, polyester, olefin, and wool

Test after the use of detergent, rinse agents, and/or clear water. Whatever it is that YOU use.

Grab some old stuff from alongside the road, test your carpet at home, test your carpet at the office (if applicable). Tape some of the "dumpster stuff" to your garage floor and walk on it each day.

Yes, I've done all of these tests over the years with a variety of products. The results might surprise you.

The reason that I never publish the results is that you cannot truly know the benefits (and limits) of your product until you see it for yourself.

I know you hated this post Marty. But you've seen me post it before, so you know I didn't do it JUST to annoy you.

If I did so, its just a happy coincidence!

 

[hogjowl]

What does THAT have to do with profit margins?

 

[Ken Snow]

Hi Tony

I can tell you a little about our situation without divulging too much.

We do make a profit cleaning only and do 30% of our res & about 50% of our comm. jobs with no Scotchgard, or other treatments. We do not have any price variance for lightly vs heavily soiled carpet so whatever it takes is done at each job, which obviously mean some are slightly more or less profitable than others. Since we pay commission only, the only variable costs for “nasties” vs lightly soiled is the nominal additional cleaning solution and a tad of gas for additional run time on Butlers. Since these costs are such a minute amount in our cost structure the impact would not be more than a 1% or so from worst job to easiest.

As for pricing we charge 50% of the cleaning cost for SG or basically $50.00 for 4 rooms, which equates to around 10 cents a sq ft plus or minus depending on room sizes on average. I have no idea if that is higher or lower than others here, but is a pretty reasonable price in our market and certainly not high. There are lots of ways to manipulate numbers so it could be argued that all our fixed and many variable costs have already been covered (buildings vehicles, HVAC, phones, cust ser reps, management, accounting, health & retirement benefits, advertising, etc) and that SG etc., only cost have the product and commission in them and the rest is profit. While I certainly acknowledge all that to be true, it also is part and parcel of how we operate so it really is an expected sale at the 70ish % it occurs.

Hope this helped answer your questions & Marty I hope it wasn't too long :-)

Ken

 

[Jim Pemberton]

Not much. I just did it to find a post that would annoy you more than Tony's.

Seriously, I posted it because I find that those who sell the most protector often are the least informed about its efficacy. I also think that those who sell very little of it because they don't trust that its any good also know less than they should.

But the question remains out there: How many cleaners REALLY know if their big profit protector actually does their customer any good?

Or do they just take the manufacturer's word for it?

 

[hogjowl]

Not too long at all, Ken. I read every word of it, and actually got something from it.

Unlike the old leather dying DAP's from the days past.

 

[harryhides]

Not too long at all, Ken. I read every word of it, and actually got something from it.

Unlike the old leather dying DAP's from the days past.

Then you could at least thank me for prompting some of these posts that you "got" something from.

I am still anxiously awaiting a useful Post from you.

 

[Bjorn]

some thing tells me if his guys don't sell the SG they starve

monday sales and staff meeting

6]http://www.youtube.com/watch?v=y-AXTx4PcKI6]

 

[Ken Snow]

Good one T!

As many have said, all you have to do is ask for the sale, it is the easiest one in the world.

Ken
Ps for the record SG sales account for about 20% of their wages, not including benefits etc. which would bring it down to less than 15% of total compensation.

 

[Greg Cole]

I can't speak for other people, but our rate is $25 per room for protectant. I won't reveal specific percentages as I don't want to hand the world a business plan with projected earnings. With the lessons I learned at SFS - I was able to increase our protectant sales by a couple of percentage points. Alas, there are 2 companies here called Houndstooth and Swift Breeze (smaller outfit) that advertise scotchgard and cleaning for $99 so I have focused our attention on other revenue streams

 

[harryhides]

Thanks to Ken and Greg for their responses.
It is and has long been an issue with no easy answers and I hope that we will see more useful and usable commentary, here on this subject.

 

[truckmount girl]

Ken - Since your guys are using your equipment and chems they don't have an incentive to save money by over-dilluting chems....which is good. the only thing you have to worry about is if they are going too fast, not doing a good enough job or skipping steps. Aside from customer feedback/complaints how do you monitor this? Do you ever "secret shop" your guys? Do you have one or two man crews? how many jobs per day, per truck average? Average ticket?

Greg - Your guys pay for their own equipment and chems, so how do you ensure that they are doing what they say or not over-dilluting chems? Do you ever "secret shop" your guys?

Take care,
Lisa

 

[Ken Snow]

Only got a quick sec so I will reply as best I can to your questions Lisa.

Correct they are employees, so they do not have personal motivation to skimp on chemicals etc to save hard $ (unlike an owner operator I might add, though I would never accuse).

We get a questionaire response card (mailed to them separately and prepaid return postage) from a vast majority of clients and if any concerns are noted we follow up. We also have dozens of unannounced cleanings done by people to evaluate their performance. We also had been doing random spot phone calls, but I admit those have not been done in the last year.

avg res job is in the 136 range I believe (not looking at data now) and commercial is close to 300. Crew avg are all over the place as some are hungrier and work many nights and weekends (including sundays) over the course of the year and others choose to have more time off. We have crews who bring in from a low of almost 200k annually to ones that year after year have been in the low to low-mid 300's, with I believe our record crew htting about 360k. That's a lot of 7 day weeks and lots of night work on top of it. All 2 person crews for residential except some times on Sundays when it is just 2-3 res jobs, and many commercial jobs are done solo (maybe 30% of them).

 

[truckmount girl]

Thanks Ken, really thorough answers!

Take care,
Lisa

 

[Ken Snow]

Welcome :-)

Gotta run, going to see Natalie Cole at Motor City Casino tonight.

 

["The" Al Bradham]

Ken:

I have ran the numbers and as I see it you will never make it as a carpet cleaner. The best thing you can do is go to one of these "Special Marketing Classes" and get your company on track. Sorry and good luck to you.

 

[Greg Cole]

Lisa,

The Nanny cams run often. We also reserve the right and excercise the right to review their purchase receipts for protectants. If ther are selling dozens of rooms and only buying a gallon a week- it is obvious what they are doing and they are shown the door.

 

[Guest]

let me take a wild guess here

do your techs buy the chemicals from you?

do they own their own portables or do you rent one to them?

 

[Duane Oxley]

Alas, there are 2 companies here called Houndstooth and Swift Breeze (smaller outfit) that advertise scotchgard and cleaning for $99...

Hey, Greg:

I heard from one of the ex- One Price guys that Doug is considering getting back into the biz... :?

 

[Duane Oxley]

let me take a wild guess here

do your techs buy the chemicals from you?

do they own their own portables or do you rent one to them?

Greg is a customer / friend of mine. I can answer the above for you...

They buy from wherever they want. Greg has name brand chemicals there at competitive prices as a convenience for his guys.

He's pushing to have all of his guys in truck mounts. I did installations for two of them in the last month.

He's not a big fan of "trunk mounts".

 

[truckmount girl]

Greg,

Since they don'y have to buy their chems from you, can't they just say they are buying their SG somewhere else?

Nanny cams...you mean the customers run nanny cams or you put nanny cams on jobs?

Take care,
Lisa

 

[The Great Oz]

1/ Can we trust the manufacturer's of a product to be completely honest as to their effectiveness?
2/ Why is Scotchgard or Teflon "baked in" when applied at the Mill and how does our "cold" and surface only, application compare ?
3/ Why do 3M and Dupont promote 5 - 7 yr warranties for their product regardless of whether we apply any or not, in the interim ?
4/ I wonder if 2 identical carpets were installed in the same place and one was cleaned and protected annually and the other was cleaned twice per yr with zero Gard applied, which one would look better after 5 or 10 yrs ??

#1 - Probably depends on the manufacturer, so doing some side-by-side testing would make sense. Worth noting if a "high performance" product alters the feel of the carpet.
#2 - Trusting Shaw here; "Baked" is hardened and cured to be tougher. In addition, the nylon fiber will shrink as it cools and hold the protectant in the dye sites even better. Solutia reps think that even the most harshly mistreated nylon carpet will have Teflon remaining when it goes to the dump. Wool typically isn't treated at the mill, although it should be. Fluorochemical treatments on polypropylene aren't really done to add a protectant, and with no dyesites I'm not sure how much the treatment differs from post-manufacture treatment.
#3 - According to DuPont, there is a reasonable expectation that half of the original protectant will remain after 5 years of normal use and cleaning. This doesn't include high traffic areas, and these are excluded from warranties, which is why DuPont has always recommended "refreshing" the protectant when the carpet is cleaned. 3M says, "Me too!"
#4 - Tom Hill and Mike Guasch did a lot of independant testing of protectants and found them to be beneficial in almost every combination of uses. How much they differ would depend on the scenario. If the carpet were in the path of the spill-prone, more cleaning wouldn't help prevent damage.


I've tested the products we use in a couple of different ways. Since we have a retail presence with moderate traffic directly from an asphalt parking lot, carpet can be placed in the entry and turned to ensure even wear. Since finding untreated nylon is difficult, I typically use a piece of an old pull-up carpet that has had plenty of wear to remove at least some of the factory finish. I'll scrub the test piece with non-Stainmaster approved products to remove as much of the remainder as possible.

Protecting adjacent areas with different products or comparing a product against no protectant, I'll add some of the typical staining agents we routinely see and observe the soiling and cleaning results. Frequently cleaned commercial accounts are also good for testing due to the amount of traffic and a short enough time frame between cleanings to make observation easier.

PS:Try protecting your most horrible recurring job even if the customer won't pay for it. You'll find it isn't so horrible the next time.

 

[Ron Werner]

as far as protectant working, a carpet I've cleaned and protected once every year over the past 11, spilled cereal and milk, you can see how the milk is still beaded up. When I took the picture it had been sitting there for at least a couple minutes. Its a very high traffic area and hadnt been cleaned in year.
Protectant seems to be working.

 

[Greg Cole]

Lisa,
Please read my previous post where I state that we insist on seeing receipts of purchase. Could they cheat the system? Perhaps- but it's pretty tight.. Do you have a better suggestion.
Nanny cams are installed at "secret shoppers". That way we can review the actions of the tech instead of just hearing about it. It's hard to argue when you are looking at video

 

[Guest]

can your subs also rent portables from you too?

 

[Steve Toburen]

1/ Can we trust the manufacturer's of a product to be completely honest as to their effectiveness?
2/ Why is Scotchgard or Teflon "baked in" when applied at the Mill and how does our "cold" and surface only, application compare ?
3/ Why do 3M and Dupont promote 5 - 7 yr warranties for their product regardless of whether we apply any or not, in the interim ?
4/ I wonder if 2 identical carpets were installed in the same place and one was cleaned and protected annually and the other was cleaned twice per yr with zero Gard applied, which one would look better after 5 or 10 yrs ??

#1 - Probably depends on the manufacturer, so doing some side-by-side testing would make sense. Worth noting if a "high performance" product alters the feel of the carpet.
#2 - Trusting Shaw here; "Baked" is hardened and cured to be tougher. In addition, the nylon fiber will shrink as it cools and hold the protectant in the dye sites even better. Solutia reps think that even the most harshly mistreated nylon carpet will have Teflon remaining when it goes to the dump. Wool typically isn't treated at the mill, although it should be. Fluorochemical treatments on polypropylene aren't really done to add a protectant, and with no dyesites I'm not sure how much the treatment differs from post-manufacture treatment.
#3 - According to DuPont, there is a reasonable expectation that half of the original protectant will remain after 5 years of normal use and cleaning. This doesn't include high traffic areas, and these are excluded from warranties, which is why DuPont has always recommended "refreshing" the protectant when the carpet is cleaned. 3M says, "Me too!"
#4 - Tom Hill and Mike Guasch did a lot of independant testing of protectants and found them to be beneficial in almost every combination of uses. How much they differ would depend on the scenario. If the carpet were in the path of the spill-prone, more cleaning wouldn't help prevent damage.


I've tested the products we use in a couple of different ways. Since we have a retail presence with moderate traffic directly from an asphalt parking lot, carpet can be placed in the entry and turned to ensure even wear. Since finding untreated nylon is difficult, I typically use a piece of an old pull-up carpet that has had plenty of wear to remove at least some of the factory finish. I'll scrub the test piece with non-Stainmaster approved products to remove as much of the remainder as possible.

Protecting adjacent areas with different products or comparing a product against no protectant, I'll add some of the typical staining agents we routinely see and observe the soiling and cleaning results. Frequently cleaned commercial accounts are also good for testing due to the amount of traffic and a short enough time frame between cleanings to make observation easier.

PS:Try protecting your most horrible recurring job even if the customer won't pay for it. You'll find it isn't so horrible the next time.

Great answers here, Bryan. One extra tip a lot of our SFS folks are doing is to let the tech apply the Scotchgard for free in their own homes. Nothing beats the "anecdotal testimony" of an employee who believes in the product!

BTW, we strongly recommend using a "Secret Home Owner" mystery shopping program with employees. We never kept this program a secret from them (we always explained at hiring that they would be "shopped"- a great report meant a crisp 100.00 bill in their pocket!) and we always publicly celebrated an employee who had a great check list turned in by the client.

Steve "Island Boy" Toburen
http://www.StrategiesForSuccess.com

PS We've collected lots of other ideas from our SFS members on how to do a "no-pressure" sale of protector in the home. Just click on the title "Upselling on the Home Front" from the list right here:

http://www.strategiesforsuccess.com/649 ... al-reports

No charge for any of the downloads but I would appreciate you posting your results- both here and on the SFS site.

 

[Mikey P]

When I worked for a company that was set up identical to Greg's, most of the "techs" would use the home owners hair shampoo to clean with.


It was always conveniently located right at the five gallon water bucket filling station.


For an extra $19.00 a room they would condition the carpet for softness and manageability. For some lucky home owners Dandruff control was thrown in at no charge.



Think I'm lying?




Isn't that right Greg.



Receipts my ass.