Having started several large accounts late this summer, I am keenly interested in seeing if we now have them under control and operating within budget parameters, it's been 3 months so they should be in-line with the budgets I set when I sold the jobs. They are running like a Swiss clock. What I find disturbing is an increase in labor costs at an account we have been servicing for over 3 years now, so I start back tracking through previous quarters and I see a gradual increase in labor hours starting in April of this year and no correlating increase in revenue.
Now it's not a lot hours to start with, in fact in April and May it's no more than 1 to 1.5 hours per week but by mid-September it has jumped to almost 5 hours per week. To put this in a $$ perspective, if an hour of labor at my payroll rates costs me $12 than I am losing $60 per week more than I was in March of this year or $3,120.00 annually is being spent on labor without any form of compensation to make up for it. Now multiply an error like this times say 20-30-40 buildings!
I have no one to blame but me but I didn't know this at breakfast.
I grabbed my operations manager, which is easy since he is usually at my house with his head in my refrigerator most days, (he's my son after-all) and I asked him if he could explain this phenomenon to me.
The kid actually listens to me! He went out to his car and pulled out his building book and looked up operational notes dating back to last April and pulls out an email from me telling him to have our cleaner on the 3rd floor load and turn on the dishwasher in the executive dining/conference room every-night.
So, that explains the 1 hour more per week given a 15 minute daily routine window, it doesn't explain the current jump to 5 hours per week. So I set him to finding out why the jump and I go back to my logs to find out what I did in April to let this all get started.
Jr. comes back with:
The cleaner is now also roaming the floor every-night collecting cups off desks, clearing the 2 conference rooms of dishes and cups that are left sitting on the tables and she is also loading the main cafeteria dishwashers (2 here) on the 1st floor used by the rest of the building.
How did it progress to this point?
A couple of reasons:
With the new business starting this past summer and fall we weren't paying too much attention to the details of the nightly operations and focusing on a " please, no complaints-while we start the new stuff program, policy" This means we worried mainly about getting the job done right first and how to make money 2nd. This is our first step in defeating ourselves.
Next, I found that back in April the customer contacted me and asked if I could have the cleaner on the executive floor load and run the dishwasher 'whenever' they had a meeting or luncheon.
In my over-eagerness to please, retain and butt kiss a customer I agreed forgetting how these things progress and I should know better after all these years, it never ends with just one favor. This is the second step in defeating ourselves. We are so worried about pleasing the customer, so focused on customer service, so fearful of the low bidding competition that we will agree to these 'little' things without thinking about the consequences.
Finally, we now find ourselves in a bad spot, the contact realizing that they now have an open checkbook on extras has stopped our cleaner several times over the ensuing months to 'ask for one more favor' by including the other cafeteria dishwashers, checking all the executive suites for coffee cups etc... Can't really blame the contact, if we had been paying attention, which is our third defeat, we would have caught this the first or second week and I could have taken up the issue with the contact explaining the need for 'maid service' charge or perhaps suggesting adding a part time day porter to handle these duties. Now I am stuck trying to correct this situation after it's already been doing damage to me since July. I realize I have no hope of recovering lost revenue but I need to stop the bleed before it continues and the profit margins fall to 3%.
And this brings me to the fourth defeat, my own reluctance in today's economy to try and raise prices over something so trivial as loading a dishwasher, which is exactly how the customer sees it.
The way I see it, we are so enamored with customer service that we forget we are also in business to make money, otherwise why are you doing this? Extreme customer service can result in quick bankruptcy.
