"Isn’t it wild how we used to eat cake after somebody blew on it, on purpose? Let that sink in for a minute."
COVID-19 has affected us in a big way. It has impacted the global economy and, honestly, our very psyche in ways we are still discovering (which is certainly not news at this point). Many businesses have been devastated by the pandemic, while a few have actually thrived because of it, and still others are experiencing a shakeup and a once-in-a-lifetime opportunity to reinvent and redefine themselves and their market.
Perhaps more than any other, the $60 billion commercial cleaning industry is experiencing one of those shakeups, and it’s 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 last eighteen months of COVID, it has also been given a golden opportunity to shape its own future like never before in its history.
My name is Jonathan Rockett, and I own a digital marketing agency specializing in commercial cleaning and facility service clients. As I’ve watched the pandemic unfold into the world-changing event that no one saw coming, I wanted to learn how it was affecting my clients and how I could best help them continue to grow and thrive in a post-pandemic world.
I’ve seen a few articles speculating on a coming 'boom' in the commercial cleaning industry, but I wanted to go straight to the source, behind the lines, and hear firsthand from cleaning companies how COVID is impacting them. I wanted to hear their own 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 more proud 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, and I conducted Zoom interviews with more than 20 of them, ranging in size from very small 'mom and pops' with fewer than 5 employees, to large multinational companies and franchises operating in several countries. Needless to say, I learned a lot."
It was like being recruited into an elite bomb disposal unit with no notice. In March of 2020, commercial cleaning crews found themselves thrust from their position as a silent service in the background, into the dangerous role of frontline, essential workers - virtually overnight.
As Martin Nyokolodi, Owner of Mbuti Solutions in South Africa expressed to me over a spotty internet video connection, “We were like frontline 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, TX, told me about his similar experience, but with a positive spin, “COVID really highlighted the frontline 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 out of Detroit, MI, and he shared how this situation impacted his own business, “We had this difficult labor 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 remote if possible, if you were an essential worker, you basically had no choice and were putting yourself at risk.”
Ezzo went on to elaborate, “What was once considered obtrusive to see cleaners during the day is now expected, which has presented additional labor 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 bathrooms. Because of this, we’re facing the toughest labor 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) based out of New York, shared with me that BMS had over 3000 employees at the end of 2019, and they had to let go almost 1000 employees, roughly a third of their staff, early in the pandemic. Even for a $17 Billion organization 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% of those BMS staff were back with the company.
As lockdown brought businesses to a grinding halt, leaving buildings empty of customers and employees, many commercial cleaning companies also felt the hard impact to their revenue. In my interview with Annie Ray, Marketing Coordinator at the Buildingstars national headquarters in St Louis, MO, she said, “Our recurring cleaning services began declining because offices were closing. Clients were cancelling their services with us and saying ‘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 shared with me, “There was a giant shift in the commercial cleaning landscape about 6 to 8 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.”
So, what were the questions in my survey? I asked just 8 questions, and they centered around COVID’s impact on revenue and customer base, shifts in services offered, and changes in marketing budget and strategy. As I mentioned, close to 100 commercial cleaning companies participated, so let’s get into it…
THE SURVEY RESULTS
1: Do you see COVID as an obstacle, opportunity or neither for growing your business?
“I feel very confident in our industry and how we responded. I think our industry, in my opinion, responded very well. I don’t think anybody could have ever been prepared for what we’ve been through. The fact that we were all going through the exact same thing at the exact same time has truly never, to my knowledge, happened before.” -Glen Harris, Owner, Harris Services (Bloomington, IN)
The overwhelming majority of companies participating in this study see COVID as an opportunity, but there were certainly obstacles 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.
“Before March of 2020, I saw what was going on in the news and decided to buy some electrostatic foggers and read up on disinfecting services. A few months later, electrostatic foggers were 4-5 times more expensive than what I paid for mine.” – Rocky Ramon, Owner, Clean Advocate (Austin, TX)
2: Has your revenue increased, decreased or stayed about the same through COVID?
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, so now our customers are more and more concerned with how to limit the spread of disease and limit employees getting sick, for the future of their organization.” -Francois Carmichael, Vice President Sales and Marketing, 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 of the study participants whether they increased their pricing or not. To my surprise, less than half increased their pricing.
“We’re trying to be careful about raising our prices, but because the level of cleaning quality required has gone up, some of our clients would definitely say our pricing has increased from before COVID.” -David Grossman, CEO, Renue Systems (New York, NY)
“Because of the difficult labor 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.” -John Ezzo, CEO, New Image Building Services (Detroit, MI)
On the other hand, some companies, like Building Maintenance Service headquartered in New York, actually renegotiated their contracts down in price for certain customers who were hurting financially.
3: Have you acquired more customers, lost customers or stayed about the same during COVID?
Overall, about half of the companies I spoke with have gained customers through COVID, although the feedback indicates that the bulk of those that did were larger national brands. As businesses are opening back up, Michael 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 recognizable national brands. “I think that’s exactly what’s happening. What we’re seeing at BMS are a lot of requests for price quotes coming to us, almost unsolicited. We’re certainly out there, doing email blasts and other outreach, but this has been more than usual.”
Also interesting, was hearing how COVID’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% schools and 10% medical facilities. Then lockdown happened, schools were closing and medical facilities were filling up. So that 90/10 ratio flipped almost exactly to 90% medical and 10% schools.”
4: Has your profit margin increased, decreased or stayed about the same during COVID?
Keeping consistent with the study results related to revenue and customer base, right at half of the cleaning companies surveyed indicated that their profit margin increased, while about a third stated their profit margins stayed about the same and only about 17% actually saw their profits decrease.
According to David Grossman, CEO 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 labor is the biggest cost. “It’s expensive equipment and expensive chemicals, but once you get good at it you can be pretty quick, which we try to do for our customers, so we can get in and get out.”
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% for us.” -Annie Ray, Marketing Coordinator, Buildingstars (St Louis, MO)
5: Have you added new services or enhanced your current services since the COVID 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.” -Francois Carmichael, Vice President Sales and Marketing, Jan-Pro Canada East
“We put a landing page together for electrostatic fogging and disinfecting services and started running Google ads, so when March hit we started getting calls almost immediately.” -Rocky Ramon, Owner, Clean Advocate (Austin, TX)
6: 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% 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 recognizable 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 are going to flourish. Some of them simply because of financial strains that have been placed on smaller facility service businesses over a long period of time.” -Joe Fairley, Laser Facility Management (Boynton Beach, FL)
7: 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 recognized the fact that their current marketing investment was possibly insufficient to fully capitalize on the shakeup and opportunity presented by COVID.
In my 10+ years providing marketing services and consulting for 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 $2MM to $5MM annual revenue range, and the Small Business Administration (SBA) suggests an allocation of 6-8% of Gross Revenue for marketing. For a $2MM 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 onboard with us.
“We hired a marketing agency and actually created a budget specifically for digital marketing in 2021, which is a whole new world for me.” -John Ezzo, CEO, New Image Building Services (Detroit, MI)
“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 really big name companies, and was able to land some of those, so the money was definitely well worth it.” -Rocky Ramon, Clean Advocate (Austin, TX)
8: Have you changed your marketing and sales strategies to gain new business during the COVID pandemic?
Even more interesting to me than the large number of increased marketing budgets, was that the fact that a massive 77.3% 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 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 and so on.
“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 6, 8, even 10 tradeshows a year, and we saw those eliminated. Just gone. We immediately created networking groups, with Zoom or Microsoft Teams – local, regional and national - and it became part of our weekly schedule. We literally shifted from physical to virtual overnight.” -Joe Fairley, Laser Facility Management (Boynton Beach, FL)
This rapid adoption of digital communication platforms ultimately had an even better, if unintended, effect on business development and sales – certainly better than just 8 or 10 trade shows per year could produce. With the removal of time and location barriers, cleaning companies realized they were literally able to have weekly networking and sales meetings with prospects.
Based on my interviews, the general prediction for a post COVID 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 as well.” And John Ezzo at New Image Building Services shared, “We wanted to figure out what more we could do, especially in terms of digital marketing, so we hired a marketing agency. We published our first blog last Friday and we’ve updated all of our LinkedIn profiles. We’re starting an email marketing campaign, and we’ll have all of the tracking and other analytics.”
Marlene Geyen, President & CEO of Geyen Group South, based out of South Tampa, FL, told me about 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 and facebook and some SEO, so that people know we are still here and we are going to be here after this is over. I definitely think that added to our momentum. I even took a creative writing class myself, because I could see how important it is to relate to clients by sharing our own authentic story.”
Pre-COVID, 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 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 coronavirus, I think you have a secular tailwind to commercial cleaning. Everyone from governments to corporates to individuals have a heightened focus on hygiene. And when you have a heightened focus, you have more dollars spent.”
But growth often comes with some growing pains. Commercial facilities are demanding higher levels of cleaning services than ever before and they also want to ‘see’ a more physical presence of cleaning activities during business hours, for a level of peace of mind among staff and customers that wasn’t as much of a priority before COVID.
While COVID hit the world like a tsunami, and the cleaning industry certainly came together and mobilized in an impressive way, that preexisting lack of priority on cleaning’s role in public health and safety shouldn’t be swept under the rug (see what I did there?). 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 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 Cleaning Industry Research Institute (CIRI), an organization dedicated to cleaning science research.
I spoke with John Downey, Executive Director at CIRI, about this apparent blind spot around public health and safety. He expressed to me, “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, as this reckoning within the cleaning industry presents the opportunity for a positive impact on global health in the future. Afterall, the same chemicals and procedures used to slow the spread of the coronavirus also meet CDC guidelines for controlling other diseases, like influenza, which kills as many as 61,000 Americans per year and contributes to significant lost productivity, despite the availability of a vaccine.
Tom Richter, CEO Jan-Pro 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 David Grossman, CEO of Renue Systems, 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. So there’s a higher level of expectation on the part of the guest.”
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 it well, “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.” And in John Ezzo’s experience, “The one consistent message that we’re getting from our customers is that they expect to see a visible presence of cleaning and disinfection during business hours like never before.”
But it won’t be enough to just 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, including things like window stickers to certify the level of cleaning performed inside.
As this shift in cleaning standards and the desire for more visibility grow, many facilities are turning to more recognizable, national cleaning brands that tend to have more sophisticated cleaning protocols and better supply chains and equipment. To reiterate what Michael Doherty said, “We’re seeing a lot of requests for price quotes coming to us, almost unsolicited… this has been more than usual.”
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 companies I surveyed indicated that they increased their marketing budget during COVID, which is a lot, but a whopping 77.3% indicated that they actually changed their marketing strategies during COVID. Of the dozens of companies that make up that 77.3%, every single one of them specifically indicated digital marketing – Google ads, SEO, email outreach, LinkedIn and social media.
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. Again, having never run Google ads before, Rocky Ramon of Clean Advocate started getting results almost immediately, and I heard similar stories repeated throughout my interviews.
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 into the future.
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 next steps to steer its own future. What we’ve all gone through this past year and a half 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. You can’t go to the CDC and get all the answers. You can’t go to the EPA and get all the answers. You can’t go to the FDA, etc... None of them have all the answers. It’s a fluid environment and new information is coming out all the time.” -Joe Fairley, Laser Facility Management
“We just weren’t prepared for COVID, and there will be something similar to COVID in the future that we’ll need to be ready for, because we can’t let ourselves think this is never going to happen again. We’ve all lived through it now and I think it would be sad to have the ability and the opportunity to prepare for something like this in the future and not do it.” -Glen Harris, Owner, Harris Services (IN)
“Even after 22 years, like me, sometimes people get weary, but now is a great time to be in the cleaning industry.” -Tom Richter, CEO, Jan-Pro Utah
Now is indeed a great time to be in the cleaning industry, and I’m excited for the future.