How Can You Identify Your Most Profitable Commercial Cleaning Clients and Why Does It Matter?
As the proprietor of a commercial cleaning company, your obvious key to success is profitability. If you're not turning a profit, your business won't survive long term.
Inevitably, there are some customers that consume too much of your time but don't bring enough profit, and there are some customers that could make you more money if you could devote more time to them! So how can you go about determining which are the most financially worthwhile?
What makes a client profitable?
Profitability is about more than simply how much each client pays. While it may seem counterintuitive, your most profitable commercial cleaning clients are not necessarily those with the largest contracts and highest bills.
Identifying your most profitable clients will help you determine which have the greatest potential to positively impact your bottom line so you know where to focus your resources.
Here are some factors to consider:
What are the startup costs?
Will you need to purchase additional equipment to service a client? Specialized cleaning equipment or products can wind up costing you thousands of dollars. The same goes for if you need to hire additional staff. If a client's startup costs are astronomical or are consuming most of your resources, they will chip away at your profit margin.
Are they easy to work with?
What does the quality of the working relationship have to do with profitability? Clients who value your services are respectful of your time and that of your employees. They pay promptly, communicate frequently and effectively, and send referral customers. Overly demanding clients can be intolerant of your need to service your other clients, which will cost you in the long run.
Are they part of your niche market?
Identifying and focusing on a niche within the commercial cleaning market is an effective strategy that enables you to direct your efforts toward your most profitable clients. For example, if you specialize in cleaning healthcare facilities and physician offices, you can focus your marketing efforts on promoting your employees' specialized training, equipment, and systems. This not only sets you apart from your competitors but also enables you to attract clients who are willing to pay more, thus expanding your profit margins.
What is their stake in the upkeep of their facility?
Commercial cleaning clients who own their buildings have a far greater stake in the upkeep of their facilities than those who simply manage properties. Because of this personal investment, these customers will be more willing to pay top dollar for premium services.
The profitability formula
Steps to determining client profitability:
- Identify the services you provide for a specific client and the total cost per client to provide the services for a specific time, such as per week, month, or year.
- What is the average amount of time to market and deliver each offer?
- Does the client require additional services such as more administrative support, equipment, or products, and what is that additional cost?
Now, take the customer's gross revenue and subtract the cost of services you provide. Then subtract the additional costs for each client and you'll have your profit margin!
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