In this article by Jonathan Rockett, owner of a US digital marketing agency specialising in the commercial cleaning and facility services sector he shares findings of an international survey conducted by him amongst close to 100 commercial cleaning companies. As Rockett watched the pandemic unfold into the world-changing event that nobody saw coming he wanted to learn how it affected his clients and how best he could assist in helping them achieve continued growth to thrive in a post pandemic world.
The COVID-19 pandemic has significantly affected us. It has impacted the global economy and, honestly, our very psyche in ways we are still discovering. Many businesses have been devastated by the pandemic. In contrast, a few have thrived because of it. Still, others are experiencing a shakeup and a once-in-a-lifetime opportunity to reinvent and redefine themselves.
Perhaps more than any other, the US$60 billion commercial cleaning industry is experiencing one of those shakeups, and it is shining a new spotlight on cleaning’s role as a crucial piece of the infrastructure and backbone of the global economy. While commercial cleaning has certainly seen obstacles over the period of the pandemic, it has also been given a golden opportunity to shape its own future like never before in its history.
I’ve seen a few articles speculating on a coming boom in the commercial cleaning industry. Still, I wanted to go straight to the source, behind the lines, and hear first-hand from cleaning companies how COVID-19 is impacting them. I wanted to know more about their thoughts on the future of the industry.
I have to say, I was truly touched and impressed by the openness, enthusiasm, and transparency of the cleaning professionals I spoke with, and the genuine attitude of teamwork, solidarity, and adaptation within the industry. After going through this process, I’m prouder than ever to call myself part of the commercial cleaning community.
For this study, I surveyed close to 100 commercial cleaning companies, from over a dozen countries, across five continents. I conducted Zoom interviews with more than 20 of them, ranging in size from small mom and pop operations with fewer than five employees to large multinational companies and franchises operating in several countries. I learned a lot.
In March 2020, commercial cleaning crews found themselves thrust from their position as a silent service in the background, into the dangerous role of front-line, essential workers — virtually overnight.
As Martin Nyokolodi, owner of Mbuti Solutions in South Africa, expressed over a spotty internet video connection, “We were like front-line workers. We were trying to save lives. But at the end of the day, we were also putting our own lives in danger.”
Rocky Ramon, owner of Clean Advocate in Austin, Texas, told me about his similar experience, but with a positive spin. “COVID really highlighted the front-line workers and the job we do. It went from keeping the building clean, to keeping people safe. And it also strengthened our relationships with our customers because we went through something tough together.”
But with great power comes great responsibility, and sometimes not everyone is willing to answer the call of danger. I had a frank conversation with John Ezzo, CEO of New Image Building Services Inc. out of Detroit, Michigan. He shared how this situation impacted his own business. “We had this difficult labour situation, and we were having to pay more and more money to hire people, because the perception was ‘I’m taking a risk to do this work.’ While everyone was afraid and told to stay home and work remotely, if possible, if you were an essential worker, you basically had no choice and were putting yourself at risk.”
Ezzo elaborated, “What was once considered obtrusive to see cleaners during the day is now expected, which has presented additional labour recruitment challenges beyond the danger aspect. A client-facing daytime staff member who works alongside a clients’ own staff is a much different recruitment than someone who comes in the dark of night and just empties the trash, vacuums, mops, and cleans the washrooms. Because of this, we’re facing the toughest labour hiring situation I’ve ever seen in over 30 years.”
While some cleaning companies were running up against hiring difficulties, others were experiencing the problems found on the other side of that coin. Michael Doherty, president of Building Maintenance Service (BMS) in New York, shared with me that BMS had over 3,000 employees at the end of 2019, but they had to let go almost 1,000 employees, roughly a third of their staff, early in the pandemic. Even for a US$40 million organisation that’s not likely going anywhere any time soon, that’s quite a staggering blow. It’s worth noting that by the time of our interview, about 60 percent of those BMS staff were back with the company.
As the lockdown brought businesses to a grinding halt, leaving buildings empty of customers and employees, many commercial cleaning companies also felt the brutal impact on their revenue. In my interview with Annie Ray, marketing coordinator at Buildingstars’ national headquarters in St Louis, Missouri, she said, “Our recurring cleaning services began declining because offices were closing. Clients were cancelling their services with us citing, ‘We don’t have people coming into the office, so there’s no reason to clean it.’”
This pandemic, of course, has also created casualties of the most permanent kind, driving some cleaning companies completely out of business. Joe Fairley, director of business development at Laser Facility Management, headquartered in Florida, said, “There was a giant shift in the commercial cleaning landscape about six to eight months into the pandemic. So many businesses in retail and other sectors were closing their doors, and many facility service companies were heavily leveraged with those clients who were going out of business, so then we saw facility service businesses start to fail too.”
The survey results
So, what were the questions in the survey? We posed just eight questions centred around COVID-19’s impact on revenue and customer base, shifts in services offered, and marketing budget and strategy changes. As I mentioned, close to 100 commercial cleaning companies participated, so let’s get into it…
Do you see COVID-19 as an obstacle, opportunity, or neither for growing your business?
“I feel very confident in our industry and how we responded. I don’t think anybody could have ever been prepared for what we’ve been through. The fact that we were all experiencing the exact same thing at the exact same time has truly never, to my knowledge, happened before,” said Glen Harris, owner of Harris Services in Bloomington, Indiana.
The overwhelming majority (80%) of companies participating in this study see COVID-19 as an opportunity. Still, there were certainly obstacles (16%) as well, from dips in business and revenue, to hiring challenges and supply chain issues caused by the increased demand for disinfection and decontamination services.
Has your revenue increased, decreased, or stayed about the same through the pandemic?
While there were customers who decreased or completely paused cleaning services due to little or no staff present in their facilities, many customers began increasing their frequency of cleaning services, especially for high-touch surfaces, which naturally translated into more revenue from those customers.
“Before COVID, our customers’ main criteria was price, which created a ‘race to the bottom,’ but COVID has made people more aware of the impact that disease and infection transmission can have in their work environment. Now our customers are more concerned with how to limit the spread of disease and limit employees getting sick, for the future of their organisation,” reported Francois Carmichael, vice president of JAN-PRO Canada East.
In my interviews for this study, I was curious about how pricing was affected by this shift in demand for higher levels of cleaning services and asked all the study participants whether they increased their pricing or not. To my surprise, less than half raised their pricing.
“We’re trying to be careful about raising our prices, but because the level of cleaning quality required raised, some of our clients would definitely say our pricing has increased from before COVID,” claimed David Grossman, CEO of Renue Systems Inc. of New York.
“Because of the difficult labour situation in 2020 needing to pay more money to hire people, we did increase our prices, and we did increase our margins, and when we priced a job, for the first time in my career, we added a line item called Risk Factor,” explained Ezzo.
On the other hand, some companies, like BMS, actually re-negotiated their contracts down in price for certain customers who were hurting financially.
Have you acquired more customers, lost customers, or stayed about the same during the pandemic?
Overall, about half of the companies I spoke with have gained customers (50,7%) through the COVID-19 pandemic, although the feedback indicates that the bulk of those that did were larger national brands. As businesses are opening back up, Doherty and I discussed this apparent shakeup of the cleaning industry, and I asked for his thoughts on customers leaving smaller ‘mom and pop’ companies and moving to more recognisable national brands. “I think that’s exactly what’s happening. What we’re seeing at BMS are a lot of requests for price quotes, almost unsolicited.”
It was also interesting to hear how COVID-19’s impact on other industries shifted the client base of many cleaning companies. Robert Beatty, owner of Next Level Facility Solutions in Kentucky, told me, “Before COVID, our business was about 90 percent schools and 10 percent medical facilities. Then lockdown happened, schools were closing, and medical facilities were filling up. So that 90/10 ratio flipped almost exactly.”
Has your profit margin increased, decreased, or stayed about the same during COVID?
Consistent with the study results related to revenue and customer base, right at half of the cleaning companies surveyed (52%) indicated that their profit margin increased. At the same time, about a third stated their profit margins stayed about the same, and only about 17 percent actually saw their profits decrease.
According to Grossman of Renue Systems, which operates in 25 cities in the US and has a presence in several other countries, the profit margin for decontamination spraying and electrostatic fogging can actually be higher than other services because it’s quick to perform and labour is the biggest cost. “It’s expensive equipment and expensive chemicals, but once you get good at it, you can be pretty quick.”
With the increase in specialty services comes higher price tags. “Our recurring cleaning services were declining, but we also found that clients were requesting more specialty services, such as electrostatic fogging, decontamination, and regular day porters focused on cleaning high-touch points, so we pivoted our focus to specialty services, which increased at least 600 percent for us,” says Ray.
Have you added new services or enhanced your current services since the COVID-19 outbreak?
In addition to virtually all companies surveyed indicating that they added some kind of decontamination and disinfection (or beefed up what they were currently offering), some companies, like JAN-PRO Utah, added COVID-specific packages, such as a tiered COVID cleaning service: COVID 1 (COVID prevention), COVID 2 (suspected COVID exposure), and COVID 3 (confirmed COVID exposure).
“We’ve seen an increasing number of new players in the industry wanting to offer disinfecting services, which we’ve been offering at JAN-PRO for the last 10 years,” said Carmichael.
As the pandemic is ending, do you anticipate your business growing, shrinking, or staying the same?
Optimism within the cleaning industry is exceptionally high, with almost 90 percent of companies surveyed expecting growth going forward. This newfound respect for cleaners and the amplified focus on health and safety are presenting opportunities like never before. With that said, it’s apparent that the cleaning companies equipped to drive the most growth are the large, established, and recognisable brands.
“All of those smaller cleaning businesses closing their doors created a flood of talent looking for new work, which is actually allowing us to grow faster because we’ve had an easier time picking up quality people. I’m also anticipating mergers and acquisitions in our industry. Some of them simply because of financial strains that have been placed on smaller facility service businesses over a long period of time,” said Fairley.
Have you increased, decreased, or kept your marketing budget the same during COVID?
As a marketer, it was interesting to see that nearly half of the companies involved in this study recognised the fact that their current marketing investment was possibly insufficient to fully capitalise on the shakeup and opportunity presented by COVID-19.
In my 10+ years providing marketing services and consulting for business-to-business (B2B) clients, I’ve seen that marketing spend for facility service businesses and commercial cleaning companies has often been much lower than the average B2B marketing spend. For example, the bulk of my clients land within the US$2 million to $5 million annual revenue range, and the Small Business Administration (SBA) suggests an allocation of six to eight percent of gross revenue for marketing. For a $2 million company I might work with, that’s $10,000-$13,000 per month for marketing. But while that’s a good number on paper, the actual reality is that I have yet to bring on a new client who has invested even half of that prior to coming on board with us.
“Running Google Ads was kind of daunting at first, because you see a lot of clicks that are wasted, but I figured if just one of those clicks presented a big opportunity, it would be worth it. I started getting leads almost immediately, and got calls from some big-name companies, and was able to land some of those, so the money was definitely well worth it,” explains Ramon.
Have you changed your marketing and sales strategies to gain new business during the COVID-19 pandemic?
Even more interesting to me than the large number of increased marketing budgets, was that the fact that a massive 77.3 percent of all companies surveyed indicated that they actually changed their marketing strategies (regardless of marketing budget). Specifically, it wasn’t enough to simply pour more gas on marketing activities and just do more of the same, but rather COVID-19 forced a reckoning of sorts within the cleaning industry to take a more serious look at digital marketing strategies, like SEO, email marketing, social media, etc.
“In our industry, you hopped on a plane, and you visited your clients or your prospective clients. That’s what you did, and that’s what I’ve done for 30 years. You attended the tradeshows that were in the verticals you were trying to network with and, for large nationwide companies the size of ours, that meant six, eight, even 10 tradeshows a year. We saw those eliminated. Just gone. We immediately created networking groups with Zoom or Microsoft Teams — local, regional, and national — which became part of our weekly schedule. We literally shifted from physical to virtual overnight,” explained Fairley.
Based on my interviews, the general prediction for a post-COVID-19 future of marketing, sales, and business development will be a hybrid of virtual and in-person. While it will be great to get the in-person contact back, the efficiency of virtual communication is here to stay.
Tom Richter, CEO of JAN-PRO Utah, told me, “We took a new look at the keywords in our SEO efforts, and we did a fair amount of additional social media marketing.” Ezzo also shared, “We wanted to figure out what more we could do, especially in terms of digital marketing. We published our first blog last Friday, and we’ve updated all of our LinkedIn profiles.”
Marlene Geyen, president and CEO of Geyen Group South, based out of South Tampa, Florida, told me how important it was to stay in front of her clients through email and social media. “Our biggest concern last year was that we stay in front of our clients, even if we were not servicing them due to shutdowns. So, I contracted someone to help us accomplish that through email, Facebook, and some SEO, so that people know we are still here and will be here after this is over. I definitely think that added to our momentum.”
Before this pandemic, the commercial cleaning industry was already projected to grow over the next 10 years at a rate higher than the national average growth rate, and COVID-19 has presented an opportunity to accelerate that growth even faster.
According to Tim Mulrooney, a commercial services equities analyst for William Blair, as quoted in Fortune, “Commercial cleaning is a mature industry. It grows in line with GDP, [but] after the pandemic, I think you have a secular tailwind to commercial cleaning. Everyone from governments to corporates to individuals has a heightened focus on hygiene. And when you have a heightened focus, you have more money spent.”
But growth often comes with some growing pains. Commercial facilities are demanding higher levels of cleaning services than ever before. They also want to see a more physical presence of cleaning activities for a level of peace of mind among staff and customers that wasn’t as much of a priority before COVID-19.
While COVID-19 hit the world like a tsunami, and the cleaning industry certainly came together and mobilised in an impressive way, that pre-existing lack of priority on cleaning’s role in public health and safety shouldn’t be swept under the rug. Some might even argue that it was an avoidable blind spot on the part of the cleaning industry.
Almost 30 years ago, in 1993, a book was written by an upper-level U.S. Environmental Protection Agency (EPA) official named Michael Berry, called Protecting the Built Environment: Cleaning for Health. His book took the cleaning industry by storm and led to the creation of the Cleaning Industry Research Institute (CIRI), an organisation dedicated to cleaning science research.
I spoke with John Downey, executive director at CIRI, about this apparent blind spot around public health and safety. His response, “Berry’s book had a profound impact on cleaning industry leaders but, over time, ‘cleaning for health’ went from an important statement of value to a mere marketing slogan. The COVID-19 pandemic has given the cleaning industry a second chance to establish itself as an important and valuable contributor to public health. Hopefully, this time the value of cleaning for health remains at the core and does not give way to marketing hype.”
So, there may actually be a silver lining to COVID-19, as this reckoning within the cleaning industry presents the opportunity for a positive impact on global health in the future. After all, the same chemicals and procedures used to slow the spread of the coronavirus, also meet the Centers for Disease Control and Prevention (CDC) guidelines for controlling other diseases, like influenza, which contributes to significant lost productivity.
Richter said, “What I’ve seen in this marketplace is that customers are really demanding the services of a professional company that has all the right processes, equipment, and resources to take care of their needs.” And Grossman echoed, “In the past, if a guest saw dirty carpets in a hotel, they weren’t happy about it, but they could live with it. But now, the level of scrutiny is much higher. Guests think that if a hotel is not clean, maybe it’s not safe.”
This need from facilities for a certain peace of mind that comes with seeing the cleaning staff and their efforts can’t be understated. Grossman said, “I think cleaning will become more visible. We used to say, ‘Our actions are invisible, but our results are visible,’ but now there’s more desire from our customers to really see that there is cleaning happening. They want their own staff and customers to actually see the presence of cleaning professionals.”
But it won’t be enough just to improve the actual cleaning and make it more visible. Cleaning companies will have to clearly demonstrate those improvements to customers and staff. Several companies I spoke with expressed that they expect to see more demand for third-party certification of the cleanliness at facilities.
As this shift in cleaning standards and the desire for more visibility grows, many facilities are turning to more identifiable, national cleaning brands that tend to have more sophisticated cleaning protocols and better supply chains and equipment.”
So how are smaller cleaning companies going to compete? According to the results of my study, the simple answer is digital marketing. Creative digital marketing is more important than ever—especially for small and mid-sized companies that don’t carry a pedigree of national brand recognition.
Almost half of the surveyed companies indicated that they increased their marketing budget during the pandemic. Still, a whopping 77.3 percent indicated that they actually changed their marketing strategies during COVID. Of the dozens of companies that make up that 77.3 percent, every single one of them specifically indicated digital marketing.
The cleaning services industry is notoriously behind the times when it comes to technology and digital marketing, and you can easily see the correlation between the percentage of companies that added or enhanced their digital marketing, and the percentage of companies that saw more customers, more revenue, and higher profit margins.
The new frontier
So, there you have it. I have to admit that this project grew into something bigger than I initially intended. While I already had an interest in facility service businesses, the opportunity to speak candidly with so many champions of cleaning has given me a new level of respect for the industry, and more insight into how I can best help my cleaning business clients grow and thrive.
As the industry is evolving, one big takeaway from my conversations was that there is no single source for answers about what the cleaning industry will look like in a post-pandemic world. Rather, what I discovered was an admirable willingness within the industry to come together and collaboratively determine the next steps to steer its own future. What we’ve all gone through with the pandemic has created a springboard for the commercial cleaning industry to develop better standards, better service, and better preparation for potential future pandemics.
“There are some really great minds in our industry, and what I’ve learned from these great minds is that there really is no single body of authority that you can go to for the answers. The answers reside in all of us, collectively assembling best practices from the most knowledgeable sources that we can network with. It’s a fluid environment, and new information is coming out all the time,” said Fairley.
“We just weren’t prepared for COVID-19, and there will be something similar to COVID-19 in the future that we’ll need to be ready for it,” explained Harris.
It became abundantly clear that now is indeed a great time to be in the cleaning industry.
Jonathan Rockett is the founder of Sizzling Digital, a marketing agency that specializes in growing B2B sales, especially within the facility services and commercial cleaning industries. To obtain the complete study that inspired this article, contact Rockett via his website: www.sizzlingdigital.com