2008 Customer Forecast
With 2007 coming to an end, in-house service providers (ISPs) and building service contractors (BSCs) are already planning for 2008’s challenges.
SM’s sister publications, Housekeeping Solutions magazine and Contracting Profits magazine recently surveyed ISPs and BSCs, asking what their challenges and expectations are as they look ahead to the new year.
Faced with issues such as declining and stagnant budgets, employee turnover and labor shortages, end user companies look to turn over a new leaf in 2008 with help from their distributors.
For the most part, 2008 for in-house service providers is expected to be an extension of 2007. Results from a recent Housekeeping Solutions magazine survey found that most ISPs say things will remain the same, while a small majority predicts increases in some areas.
Less than half (48 percent) of survey respondents say in-house budgets will see a rise in 2008. However, the increases will be small, just enough to keep up with inflation and rising costs in other areas.
“Our budget will increase due to outside, unexpected, unforeseen reasons,” says Benita Mann, manager of housing and facilities at San Diego State University, San Diego. “Some of them are the cost of fuel, the constantly rising costs of shipping, and manufacturing of products. These are always passed along to the consumer.”
A significant number of ISPs (38 percent), however, say budgets will stay the same.
“Because we have to live within our budget, it’s going to remain the same if not decrease,” says Butch Biskupiak, director of facilities at Carroll College, Helena, Mont. “Money’s always the biggest factor. Our budget pretty much has stayed stagnant for the last five years.”
Because of limitations on budgets, more than half of ISPs say their product purchases (59 percent) and equipment purchases (55 percent) will stay the same in 2008, which is unpleasant news for distributors.
In-house staffing levels are also expected to stay the same (59 percent), with only 31 percent predicting a rise in hiring in their facilities. That means ISPs, for the most part, are left to do more with less. In fact, 56 percent of ISPs are expecting square footage cleaned to increase in the new year.
“The rising levels of expectation is one of our driving forces because our institution is in a growth mode and we are adding maintainable square footage every year,” says Mike Steger, director of physical plant services at Palm Beach Atlantic University, West Palm Beach, Fla.
But that means more to be cleaned with the same amount of employees, especially in a time where building occupants have greater expectations of cleanliness. Most ISPs, however, are looking to compensate for the lack of labor by making smart purchasing decisions through their suppliers. ISPs will be looking to distributors for help in finding products that save time and increase productivity.
“As we look to capital items, we must consider potential labor savings that will result from the purchases and use of particular machines,” says Steger. “We need to make sure that we continue to look for ways to do our jobs better with less cost.”
ISPs And Green
In 2008, distributors can expect to sell more green cleaning products to ISPs, as 56 percent say they expect to an increase in green product usage.
“The cost of buying green products has been number one,” says Howard Timms, facility supervisor at Mercy Special Care Hospital, Nanticoke, Pa. “They are more cost-effective which helps our budget.”
ISPs say the types of green products being used currently are restroom cleaners (74 percent); multi-purpose cleaners (70 percent); glass cleaners (61 percent) and microfiber products (52 percent).
ISPs are looking to incorporate even more green cleaning products into their cleaning program next year. In fact, 54 percent of ISPs plan on doing “whatever they can” to incorporate green certified products into their cleaning program in 2008.
“Green products help us show our commitment to the environment, even in instances where the green product may not work as well as other chemicals,” says Steger. “In addition, we are finding that the health risks to our employees is less with green products, thus lessening the exposure to possible injury.”
Going green especially makes sense in educational facilities where building occupants are younger.
“It improves indoor air quality and reduces the risk of asthma in children,” says Chris Pratt, maintenance supervisor at Mary Hogan Elementary School, Middlebury, Vt.
Building service contractors face some tall challenges in 2008 as well. Year after year, contractors battle issues such as turnover, staffing, pricing and customer retention. Employee turnover, a reoccurring problem, ranks as the biggest challenge BSCs will wrestle with in 2008 according to a recent survey conducted by Contracting Profits magazine.
“It’s hard to find good, solid employees that are going to hang around for more than one paycheck,” says John Larsen, district manager for ABM Janitorial, Salt Lake City. “We’ve tried online services, we’ve tried recruiting, we’ve even tried church groups. We’ve done everything that we possibly can to try and fill bodies in the vacancies we’ve got.”
With a constant flow of new employees coming through the door, BSCs will look to their distributors for help with training.
Despite turnover problems, labor shortages are expected to decrease with 63 percent of BSCs expecting to hire more staff in 2008. Again, with the addition of more staff, BSCs will look to distributors for help in training related issues. Issues such as product knowledge, proper techniques of cleaning and worker safety rank high among the list.
Complementing the addition of more workers, 83 percent of BSCs expect their revenue and the number of accounts to rise in the new year. Eighty-one percent also expect their total square footage to be cleaned to go up. That’s good news for BSCs, but also for distributors, as it means more products will be purchased, which translates to more business for suppliers.
Distributors can expect increases in green product purchasing as well as machines and equipment suitable for day cleaning accounts. Fifty-four percent of BSCs plan on using more environmentally-friendly products to meet certain facilities demands trying to meet Leadership in Energy and Environmental Design (LEED) certification. With 40 percent of BSCs expecting their day cleaning accounts to increase, purchases of battery-operated, low-decibel machines and equipment will be likely.
BSCs value distributors who help them make informed purchasing decisions. They also appreciate distributors who provide training-related support and value added services. So much, that 72 percent of BSCs say they value their relationships with their suppliers enough to stay with them in 2008.
“As long as they keep the product I want to buy in stock and the prices reasonable, we’ll continue going to them,” says Harry Brooks, vice president of Cleaning Service of Tulsa, Tulsa, Okla. “There’s always a little increase in price each year, but that can be tolerated because it happens.”
Most BSCs say they are sticking with their same distributor because they go the extra mile for them. Most importantly, BSCs are looking for their distributor to keep the costs of purchases at a reasonable level and introduce new products that improve labor time in the new year.
BSCs also expect suppliers to maintain a hands-on approach.
“If we run into a situation while we’re having problems with a product or a product is not working quite right, or the floor just doesn’t look right, we appreciate it when our distributor comes out and takes a look, makes a recommendation and comes up with a number of things to help us out,” says Larsen. “If we get into a jam, our distributor will basically drop what they’re doing, load up a truck with whatever it is that we need and take it to the site where we need it. Very seldom do they let us down.”
For a distributor to meet its goals in 2008 may also mean helping its end user companies meet theirs. Knowing how to combat end user customers’ challenges while heading into a new year can be beneficial in improving the bottom line.
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Click and View Chart (pdf)
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