Question: Why won’t business owners sign a contract with me?
Steve’s answer: Quit trying to “lock people in” with a contract. Instead, call it a Service Agreement, list out what you will do and leave it “open ended”.
Steve,
I am having a HECK OF A TIME getting prospects to sign commercial carpet care contracts that include a long-term commitment. However, my prospects have no problem using me without a commitment on their part. (I do agree with what you taught in SFS on why contracts are important!)
So could you share some appropriate verbiage for creating term agreements? I’ve even presented term contracts with more favorable pricing to lock in my commercial customers and still NO! People seem to be VERY reluctant to commit in writing.
I have attached our standard contract which prospects have been willing to sign. Bear in mind, this is draft number three for this prospect I’m including for your review. I have eliminated the frequency section because they don’t want to commit to quarterly or semi-annual cleanings. My clients are not crazy about my late fees for past due amounts either! (My current A/R are less than 10 days old).
I would appreciate your help on these issues.
Getting Beat Up in Las Vegas
Wow, Beat Up, I feel your pain! It is so frustrating to find a prospect, take them all along the sales process and then hit the wall when it comes to signing the contract. My views are a bit unconventional in the contract area for regular contract commercial cleaning. However, when I sold my company we had over 100 long term regular commercial carpet cleaning accounts and hadn’t lost one in years. So my ideas worked for me! (And thousands of our SFS members are using them now.) Let me paste in parts of your letter above along with my comments:
“My prospects have been willing to do business with me if I eliminate the term and frequency clauses from my agreements.” Well, that beats the alternative of them NOT wanting to do business with you! So why not “sweeten the pot” by giving them a menu- defined frequency with lower pricing for more frequent service. Plus open access (you keep a key) means a much lower price!
NOTE: In fact, I would only quote the “open access” killer price. Then AFTER signing the contract if they balked at giving me a key I would say, “Whoa! No key means a higher price!” You would be amazed at how many will cave in! A longer time between cleanings and access hassles simply means they pay more. It is their choice plus you still maintain respect for the process. The “key” (forgive me!) is to get them all super involved in the process with your Commercial Carpet Analysis Form before the key access comes up.
“People are very reluctant to commit in writing.” Don’t worry about “locking them in” in writing. Here’s why: Even the most restrictive cast-iron contract (that only an idiot would sign!) won’t keep you on the job if the boss wants you out! Period. So make your Service Agreements (which by the way is a much better term than “contract”) “easy to sign” by letting either side off the hook with 30 days notice. IF you perform then you will keep the account forever anyway!
I’m going to copy in the proposed contract you sent me with my additional comments in indigo italics below. And best wishes!
Steve
Proposal prepared exclusively for:
XXXXXX Restaurant- Las Vegas, NV
Description of Services
A. Carpet Cleaning Services
1. Vacuum entire carpeted area to be serviced. (Why not let them do their regular vacuuming and you skip this step? Less work- more money per hour! However, as Jeff Cutshall explains in his great “Encapsulation Route” mini-manual don’t let the maintenance people know you are coming in that night or they will blow the vacuuming off!)
2. Pre-treat carpeting (paying special attention to spots and stains) using a super concentrated traffic lane cleaner with oxidizer.
3. Clean and Rinse carpets using industry standard equipment. (Are you going to e using truck-mounted equipment? If so, why not specify this?)
4. Deodorize carpet with lemon scented deodorizer. (Be careful with deodorizers in commercial accounts. Many customers are highly allergic to any scent.)
5. Promote drying using high velocity air movers. (I would drop the “promote” word.)
6. Wipe down baseboards from over spray to prevent water stains. (I don’t think I would bring up “water stains”!)
B. Service Areas
Main dining room plus the Everest and Nepal meeting areas
C. Client’s Responsibility
Provide water access.
Provide key access Once again, on our regular commercial accounts I virtually insisted on us having a key. Without a key you become an irritation for the client and likely will NOT keep the account long term. With a key you have flexibility on when you arrive plus you don’t fall prey to the dreaded “I forgot” from the manager with your crew waiting at an account at 11 PM at night!
Allow at least 8 hours for job to be completed so that the carpet is completely dry for the next business day.
Move all furniture from areas to be cleaned. I personally on a regular restaurant account would always have my crew move the furniture. I found with two people and properly “choreographed” the cleaning wand was not substantially slowed down by the second tech moving and replacing furniture ahead of the wand. (If he or she was not doing this then they basically just stood around anyway!)
D. Payment for Services
XXXXXXX Restaurant agrees to pay Cleaning Company Name, the total sum stated on the invoice that is submitted. Net payment is due no more than 30 days upon receipt of invoice. A 1.5% late charge per month will be added to all past due amounts not paid within 30 days. (Have you thought about adding a discount for prompt payment? Sort of the carrot versus the stick approach?)
E. Terms of Agreement
The term for this agreement will be for one cleaning to be scheduled to begin on a mutually agreeable time. Sure, I would take a one time cleaning job. BUT our focus was on building regular carpet cleaning accounts simply because once we were in the groove we seldom lost one. So we would give several different price levels and bid very aggressively to get a monthly cleaning with key access on a restaurant. Given that the carpets weren’t as dirty with monthly cleaning plus our crew would pick up lots of speed with practice we found that our monthly accounts even priced super low were very profitable.
The Cleaning Company agrees to perform the work specified in a professional manner using reasonable care to obtain satisfactory results. The professional cleaner is limited in attaining the best results due to the condition and nature of the article being cleaned. The nature of some spots makes it impossible to restore original color or texture. At times a spot may appear even more visible after general cleaning. REMOVAL OF ALL SPOTS AND STAINS IS NOT GUARANTEED. XXXX Restaurant will not hold The Cleaning Company responsible for shrinkage, color fading, fluffing, blooming, pile shading or any other adverse effects which can occur during cleaning, unless it is caused by our negligence. Sorry, Vegas. But I find this section to be overly protective and a bit adversarial. Is it really necessary? What are the reasonable chances of you encountering any of these: “shrinkage, color fading, fluffing, blooming, pile shading or any other adverse effects which can occur during cleaning,” If the realistic answer is “almost zero” why muck up your proposal with this stuff?
Confidential Pricing Schedule
For
XXXX Restaurant, Las Vegas, NVThe Restaurant will be serviced for a charge of:
Three Hundred Forty Dollars per cleaning
($340.00)Once again, where is your “menu” of options? One price for “as needed”, one (lower) price for every other month and then a super low price for monthly service with “flexible” access. Which just means you have a key and can schedule it at any time during say, the first week of the month.
XXXXX Restaurant Authorized____________________________
Print Name and Title__________________________________
Date_______________________________________________
The Cleaning Company _______________________________
Printed Name and Title ________________________________
Date________________________________________________