Hi Ross-kesava
57%.......................
Well, years ago (1981 to be precise) when I started to sell cleaning I was trained by two guys called Julian mcGregor and Derek Hopwood. They both went on to hold VERY senior positions in Rentokil before the merger with Initial.
They were brilliant salesmen and even better teachers. They taught me that to get the charge for a cleaning contract you just doubled the wage bill. That would mean that the wage 'content' was 50%. This worked for a few years but then it became more competitive and companies had to narrow their margins.
For about 10 years I shifted the wage bill to 55% of the charge which made me more competitive but less effective operationally.
If the wage bill becomes 60% of the charge you are struggling to operate properly AND make any money. At 50% you are not competitive so a happy medium needed to be found....................
..........................57%!
If companies keep reducing their prices the customer will come to accept that they can get a promise of a 'loaded' cleaning spec for little money. What will happen then is the customer will get a poor service and will look elsewhere (expecting to pay even less) and the cycle starts all over again.
We MUST collectively, as an industry, maintain these sensible margins. If we don't we will reduce them to the point where we are providing a crap service, changing Clients every five minutes and making no money.
Then, I feel, it will be all over and customers will drift back to employing their own cleaners for about the same cost!
