Beyond the Bid: Rethinking RFPs, Culture & Value | E17 – Hard Refresh – An ISSA Podcast

Sam.

Welcome to the final miniseries of this business Growth strategies on site recording of.

Hard refresh and it's not mini series. We have to stop saying that because we have the normal interview for everyone watching. Because typically our interviews are 30 to 45 minutes. We thought we're going to do 10 to 15 for these. Every single one has been 30 minutes. Loved it. Loved that part.

Let's just dive right in and not add any more ad lib to this. We got Billy and Michael here from Kleenmark. Now, guys, I want a quick introduction. And we'll keep it quick.

Right?

But then I want to actually do Two Truths and a Lie with both of you. And so far, Karine and I are failing at this whole.

We're not great at it. Michael.

Take it away, Michael.

Well, thank you for having us, Michael Staver. I'm the chief operating officer for Clean Mark. Two truths and a lie. All right. And you guess which one's truth and which one's lie. So I don't start by telling you. This is probably.

Yeah, don't gotta. Don't do that.

All right, here's three things. I used to have dreadlocks. I play a ukulele bass. And I'm a big Chicago Bears fan.

Okay. All right. So he lives in Chicago, so. Chicago. That's true, right? No, you can't ask anything. Okay. No. Okay. Dreadlocks. I think he is a Chicago Bears fan. And we have to remember, like how he's fast. He said it. And slow.

You're trying to analyze.

No. Okay.

I think that dreadlocks is a lie.

No, I think that's real. I think so.

Which one's the lion?

Dang it. You're right. Ukulele. I don't think you play the ukulele. Did you say the ukulele?

Do I answer these questions?

No, just which one? Wait. Okay, okay, wait.

You gotta decide.

Okay. I'm gonna say the ukulele is a lie. What are you saying?

Dreadlock.

Okay, tell us both wrong.

I absolutely despise the Chicago Bears. I'm from Wisconsin. I have my back response.

Oh, that's right.

We talked about it.

We just talked about it. I know.

So I didn't hear that part.

I know. I just. The worst at this. I normally very good at listening.

It's pretty good.

I'm sorry about that. Dang it.

All right, Billy.

Okay. Wait. You had dreadlocks.

Yeah.

Let's go back to that.

Really?

Yeah, I got pictures.

That's why my hair's falling off.

How long did you rock the dreadlocks.

How long were there? How long did I rock?

How long did you have?

Oh, about two or three years.

Okay.

College.

Wow.

Had to get a real job and I was a bricklayer, so I'd wear a hard hat and then. That just doesn't work.

Oh, my God. I just have to see pictures of said dreadlocks. They sent it to me and we'll share with it.

Zach Dellaroka from Rage against the Machine.

Okay.

A lot of that.

Okay. Wow. I. We couldn't gloss over that. That dreadlocks.

We can't. But we get a redemption right here.

Okay, Billy. Come on, Billy, introduce yourself. And then two truths and a lie. Let's go.

So. So Billy McGrail. I'm the General manager of distribution for Clean Mark. I got a top mic here, so I'm going to say sorry. Two truths and a lie. I was not born in the United States. I have sailed across all the Great Lakes. And I played professional hockey.

Okay, folks, 97 of communication is non verbal. So I think when you're talking, I think the first one, because the way his hands are moving. Wait, no, no. The first one is real. The first one is real.

Huge hockey fan.

I clapped every time.

Yeah, my hands move again. I'm not good at this, so please don't.

Don't think you played professional hockey.

Okay? And I think you. I think. Yeah, you didn't play professional hockey. The other two are true.

Wrong again.

Guys, I think it's you. You're jinxing.

But he's a big hockey fan, so. I did not play in the NHL. When I say professional hockey. I played in the minors. I was not born.

That's a lie.

I was not born in the United States. I'm Canadian. Hence the hockey thing. Yeah, I only sailed one Great Lake. Not all.

Okay, we gotta dial in on this real quick.

Wait a minute.

Who she play for?

So I played for. In. In the minors. I played in the red wing system. So a team in Madison. Actually, that's how I came to the United States. And that's where we're from, Madison.

They're huge hockey fans. Are you geeking out? Are you fangirling right now?

Let's reel it back in. This is the Clearing the Cash segment. This is the whole purpose of Hard Refresh is we're going to flip the script on something that we think about to help our audience understand how they can let go of the old way of thinking and embrace some new.

New.

Yes. And to set this expectation. Right. We're here for the what are you doing? Workshop. It's all about acquisition, retention and expansion. Okay, so the first question is, what's one thing you believed would drive growth but looking back, it's solved or even set you back. Great question.

Do you want that?

Yeah, I can take it. Good, good question. I would say for, for us, the first thing that comes to mind, speaking from, you know, distribution standpoint, is competing on price. For the longest time had a really strong healthy margin, gross profit percentage. But we're getting into competitive bid situations where we felt like, hey, if we want to move more volume and win some of these bids, maybe we need to, you know, cut, cut some more pricing. So it sounds easy. Right. Undercut the competition.

Right.

Hit the po, move product and it works. We, we, we move product. But what ends up happening, at least for us, what we found was that, you know, we really stress our team and strain our logistics, fulfillment. You know, you're getting the top line revenue but you've, you've compressed margin and now you've eroded your net.

Yes.

So for us, it was hard to reinvest back into the company with new capital to, whether it be, you know, the HR side of things like adding more manpower or technologies. We need new systems, we need better processes. So I think, yeah, definitely it, you know, is a lesson learned. And for us, you know, we'd rather go more value based selling than volume based selling. And I think that's how you continue to win and grow.

A timely comment. We just had the conversation with Lise about this and one of the things that we saw in the D.C. market was everyone was doing, going up, back to bid, low bid only. Right. So just bottom of the barrel. And I hate to say that word like that, but that's essentially what we're doing. When you guys changed that pricing strategy, how long until you were like, okay, this isn't working. We have to go back and, and think through this again because I'm imagining it was at least what, 60, 90 days before you were like, okay, this is straining our resources, our people.

Yeah, I think even longer. I think our team just at least for, for our team with Clean Mark Distribution, you know, we're just going to get down and do the work and get it done. So we're just overworking and you know, we're, you're kind of spinning the wheels faster and faster. You're not moving anywhere. Right, right. Or you're, you're still moving the needle, but it's not as fast as you would like. So I think it took us a Lot longer. We kind of took it off of our scorecard per se and we, we put that back on after about a year because we're like, hey, we need to get your margin again and not just go for that lowest bid. Because if customers are going to, you know, price shop and, and you know, sign on with you as a vendor because of low pricing, they're going to leave you as fast as they can.

Exactly, exactly. If that's what they value, then they're always going to go to low bid all the time.

What? Well, I'm trying to keep us on track.

Don't do it. Just.

That would have. Just when you're. There's this cultural shift in the industry that still doesn't seem to like take momentum, especially when facilities people, a lot of people are shopping by price. So there's that friction of like, they really value that. And so it's easy for people in the industry to succumb to, hey, I just, I want to win in business. Right. Eat into my profit margins. We're like not going to be profitable. But I just want my name out there just to say that we have business. How do you balance that?

I think, you know, everything you said, totally agree with Clean Mark is a, it's been around for about six decades and it's a family owned company. So you have a reputation piece. And again from 60 years, you know, we're here for the long game. So we're not just trying to break into the market where the name recognition, the branding, just taking an account to say we service these guys doesn't necessarily work out. We, luckily for us, we came after this foundation was kind of built and we've been able to grow it. Right. So protecting that reputation and I think, you know, there's the financial aspect, but to what Billy mentioned about the team just straining and not seeing those rewards on the scorecard or on the financial reports. And also just like kind of the morale. We've prided ourselves on recruiting really great business individuals that have high culture, high reputation, high competitors that want to win. Right. So when you start to lower your brand and succumb to whatever is going on in the market, you can really derail your company as a whole. So it's kind of are you trying to break in or are you looking to continue to build? Right. So number one thing is you want to retain your clients. They understand the value. That's why they've chosen you. And getting consultative and working with them on scopes to try to bring that price down, I think is Incredibly important. But then when you're going after new business, you got to try to differentiate yourself. You got to be really curious on what their pain points are and then come with different solutions and options where in products you can't always do that. But there are a lot of comparable alternatives. Right. So we're unique in the sense where we're a service company bsc, like a lot of the companies you're here with. But then we're a distributor, right. We're pushing product, we're pushing equipment, we have that manufacturer direct relation. So we are, we do have a competitive advantage in that piece. But again, because we're able to kind of look at it as clean mark tested, clean mark approved, we can come in consultative. If it works for Kleenmark Janitorial, it can work for an in house, it can work for a facility team, gotcha type of thing. So I think you just gotta be. You gotta find that harmony and trying to make sure the brand awareness is there, but don't drop your reputation.

Well, and I think you hit something like for me, I think it erodes culture, which bottom of the barrel it. Right. It gives your team members a sense of like, all right, what's the point if we're going to be here? And oftentimes when you are low, the client still expects the same level of excellence, but they're nickel and diming you and it just does not feel good. And I think culturally it has, like I said, erodius effect, but. And it's very difficult to come back from that. And so I'm so impressed that you were able to see, okay, this is not working. We're going to shift, and I do think from a brand alignment and a strategic partnership like you were mentioning, when you work with companies that value your work, it's a more sustainable relationship and it's a more fruitful one because you're essentially becoming an extent. And we always used to say this pioneer. We were an extension of the property teams that we serve and it was, how can we be a strategic partner? And it expands the vertical into a more dynamic relationship and you're able to see creative ways to grow because everyone is cost conscious. But then you get creative, you're like, let's do brand activation, let's do exterior services. How can we help each other?

Yeah, yeah.

So in the spirit of the workshop that we're doing tomorrow on understanding acquisition, retention and expansion, the whole premise behind that is there's foundational pieces and processes and business that have to be in place now in the Spirit of hockey. One of the best skills a hockey player can have is the ability to anticipate the puck and where it's going to be. Right. So this is a perfect question for you, Billy.

Yes.

And fangirling Billy, no big deal. Just kidding.

But your ability to anticipate, we know that about the industry. We know there's a lot of people trying to break in. So the low volume.

Right.

So how do you anticipate that and what do you do from a standard operating procedure to give clients confidence that yes, they're cheaper. They're also probably skipping things just trying to enter the market. So how do you, what angle do you play to say, I'm going to anticipate that someone else is doing that? So here's what we're going to double down on so that the client sees value in that.

Oh, I have a follow up question to that. Yep.

Yeah, great question. I think is what Mike kind of alluded to, like a, you know, a constitative approach. Right. We're not just, you know, we sell a commoditized product like paper liners, so things of that sort. We don't want to just be the paper guy. We want to be a strategic partner.

Yeah.

So we want to find ways to be more strategic and help them. And if we can help our customers, you know, when it comes to things like predictability or budget defense. Right. By running reports or looking for ways for them to save. Right. Usage reports, let's say now we're, we're kind of getting sticky with the customer. We're not just that paper guy. So I think looking for creative ways to add more value, whether it's, you know, through quarterly reports, you know, hey, you know, Mr. Buyer, you're, you know, by switching to this floor care product, for example, your usage has been reduced by X percent and you're saving X amount per year. You know, if you can help them justify, like a customer, justify budgets through leadership, they're going to stick with you through thick and thin. They're not going to leave just on price. They're, you're an added value for them. So I think it's just thinking outside the box. One thing recently that comes to mind is the tariffs. Right. All the discussion about tariffs, like no one's going to be able to escape, you know, kind of this. Every industry is, you know, susceptible to this. So for us trying to be creative and thinking ahead, like how would our customers want us to treat them, you know, when it comes to the tariff discussion, because there are going to be price increases on product. So we, we took our 8020 and we set up, you know, in person meetings with all of those marquee and key accounts and, and just worked with them directly and ran these reports on whether it be like a gap analysis and looking for other ways for, for us to capture business.

Yeah.

But also for them to save. Like where we don't have to cut costs but we're finding product alternatives for you guys to save money. And the, the response was just overwhelming with our customers like no other vendors doing this.

So we're being intentionality and thoughtful partnership because you still want to provide the value know you the value of your service and your offering but you also are intentional about helping them and providing a solution. It's like oozes intentionally.

I love that being being service driven. I tell my team all the time, services, sales, sales service, yeah. So just providing that service to the customer. So those discussions opened up more opportunities and they're more open to recommendations for different categories and we got POS out of that. You know just that one example.

So the relationship piece of it allows you to learn more about their company, what's their mission, what's the initiatives. Sustainability is a big piece. Right. So if you're helping them get lead accreditations or technology advancements, you know that's, that's a great way to separate too.

So I have a follow up for Mike. So this is what I'm. When we talk about low bid, a lot of the times these companies are doing that, they're actually doing a disservice to our industry. Right. Because then it sets this norm that somebody can go out there and do it cheaper. But what it's actually doing, it's impacting the frontline team members in a way that is. I've always said the frontline team is my north star. They're the people that are in these buildings. They're servicing the account. The most humble, just the level of resiliency that they have. So my question to you would be how do you fight that narrative of a company coming in, starting off and saying I'm going to low bid this because I know clean marks, the pioneers of Harvard, they're going to be much higher 10%, 12% management fee. But I'm going to just do that. So what would you say to them?

Well, you got to be picky to be honest. We've got to a place we're fortunate where we don't have to go after every rfp. Right. So if they don't allow us to Present. And this is something we're working on now. How do we supplement our proposals with some videos, some different things that are just not. Here's your checklist of what our needs are.

Right.

So we try to differentiate ourselves and not. We certainly don't slander competition or the industry because that's a terrible look.

Right?

Yeah.

Right.

So it's pointing out some things that they may need to ask the other bidders. Right. And then we have the solutions that are part of our proposal.

Right.

So here's some things I would ask the educate.

Right.

Talk to them about, you know, what's their client retention, what accounts have they won in the last six months, what accounts have they lost in the last six months. Right. So you put it back on them to start to think about. Here's some things that I might need to look out for.

Right.

The other stuff is if there's a price component, you know, from a budget aspect, I'm all about transparency. I don't want to know what they're paying, but I want to understand what their budget is.

Right.

I think that's fair. As long as you are doing this professionally, can ethically, of course, like we're not looking for the numbers, but it's. I can give you three scope of work inclusions. Right. So you can always. A la carte these things. And we understand facilities have another slush budget for agencies. Right. So maybe we keep out some things that are floor care related. Maybe we keep out some of the floor. Some of the. We look at centralized trashing and things like that.

Right.

Look at day cleaning versus night cleaning. How can we bring down your energy savings? How can we, you know, help other. Other areas of indirect and direct cost to help bring it down? So trying to work with them, you want to make sure they know you're the right company.

Right.

Don't trust us. Look at our references, look at the testimonials. Talk to these other companies. We've got a 98% retention, right. Got high employer retention. That speaks for itself. The money's gonna go to these guys, right. It's gonna come to the client, it's gonna come to you. But let's find something that works for you. And we can always build off it if we need to. But if you need to see a nice base budget, we can give you three options of how we can get there. The other thing that I look out for is how many companies have they went through.

You see a company so telling. Yeah.

If there's been three BSCs in there in the last decade. Yeah, they're just doing. Every time. It's just, let's get the best dollar. And yeah, again, we try to, I don't verticalize it necessarily say we're going to stay away from that industry, but we just look out for those flags and that again, if we can't present, is there something we can do without spending too much time on this rfp? Because we know that they're just going to scroll right down. Doesn't matter if you're using Flag or.

Whatever you're going to.

You don't need that to know where they're going to look. They're not looking at scope, they're not looking at sustainability. It's this person's viewed your proposals five times and they're looking at the numbers.

Right.

Same thing on a website pricing tab. Go right to it.

Fast product. Got it.

So, you know, and that's the industry. We totally get that. But again, we're fortunate to be able to be a little bit picky.

Yeah, but that's sustainable. That's retention. That's a partnership. Right. If you're conscious about how you're attacking your potential clients, then they're conscious of sustaining you and keeping you. Because if it's not thoughtful, it's never going to be. You're never able to cure it. I think a misconception is every so in D.C. and can speak only to the D.C. metro area, but every three to five years, ownership puts pressure to go back out to bid. And so you get that, like, pit in the stomach. You're like, oh, no, this is. Is it going to keep it or not? And the companies that have been intentional and one thing that you said, I think really stuck out, stood out for me was the education piece and saying, I can educate you and show you what is ask these questions of other bidders. And I think that always comes across as very authentic. Because you're trying to say, you don't have to pick me, but at least ask the right question.

Yes.

Know what you're supposed to be providing. Because ultimately we are trying to serve the property managers, but the property managers are trying to serve the tenants. And the tenants also deserve a good vendor, one that cares about sustainability, cares about the people, cares about retention. And so ultimately, we're all just trying to collectively. And if they don't, then they're probably not the right partner.

Well, and if you can put that hat on and say, I sit, I sit in your seat sometimes. Because we, you know, we do national accounts and we're not everywhere, but like Utah. Right. We. We had a client in Wisconsin that had a big office in Utah. They said, we want to get the Clean Mark brand. We want you guys to be here.

Right.

We didn't have a presence then to be able to do it direct.

Right.

So we are going out to bid. We are selecting the company. And I know if they don't do a good job there, it's going to burn me down. And walk you. I sit in your seat. I understand. I need to meet that company's price point and I got to make money, too. So as I go through these companies, you know, these are the things that I'm asking them. And then again, I'm talking to their clients. You. Because, yeah, Mike's going to tell you how great Clean Mark is. But why wouldn't I? I'm biased, obviously. Talk to. Talk to the customers that we've had for a year, 2 years, 10 years, 20 years, and let them tell you why they choose us. Right. But being proactive in this market, you have to. If you're not talking to your clients right now, somebody else is giving them. They are getting bids from the outside all the time. It's not hard to find clean, you know, cleanable square footage.

Wait, I have one more question. Don't do that to me, Sam. Just kidding. Okay. RFPs. This is really. Sorry, is that the code? That is the code word.

I thought it was going to be a Packers question.

No, no, got it. Do you want me to end with a packer's question? I don't know if I know. This is actually really RFPs you're talking about going through the process, the RFP, if. How often. This is what I get all the time. Right. You get presented in RFP 36 building portfolio, and no one's reading the actual RFP. Most of the time, property managers are using a template and so they don't even know that the cigarette. Yeah. Trades are still in there. Yeah. So one of the things that we always used to do is actually read the rfp. And what I used to do is I threw it on ChatGPT and I would extract the pieces. And I find the commonalities between the scope of work for Pioneer and the scope of work for mrp, rmr, jll, et cetera. But when we would talk in these pitches and present, I always used to talk specifically about how our scope aligns with their scope and how the periodic schedule is, you know, and that type of presentation, I think lends to again, the strategic partnership and how you're actually serving them and not just out of the box janitorial, because it's not. Every single client is different and every single service has to be different. In what ways are you guys. You've already presented a lot, but what creative ways are you using to stand out? Like how is Kleenmark really?

I think that option approach, because it's easy to say yes and no, but if you give somebody three things, right, if they do have a scope, great, let's look at it, let's put it into our template, let's highlight some things and then furthermore, let's add a little context of. This is something I really want to explore. I can't tell you right now, but if you give me 60, 90 days, these are some things that I think you will not notice if we reduce, if we omit perhaps or if we are select to areas. Because what happens in the C suite doesn't need to happen everywhere. So by doing that I think you're getting them putting that into their brain that there's cost savings that can come here. Right. So I'm looking out for your best interest. They're going to remember that. Also talking about typically they're going out to bid for two reasons. It's money related or they're having bad service. So the ability to be able to say, let me walk you through this transition plan, right? You're going to review. The word's already out, you guys are going out to bid, they're going to start to feel it. We can start early. And this is our early start transition plan. And obviously that comes at a lower cost. So you're really walking them through how this whole process is going to be. And then let's talk about what it looks like in 13 weeks when we're sitting down. Here's our scorecard to measure us. But one thing we're going to come back to you with is here's cost saving opportunities. Could be robotics could be whatever it is, right. So we'll work through the scope and things like that. But I think that's pretty critical because it's about the dollars still. Yeah, they're going to like to hear that you're planting that seed. And now there's an expectation in 13 weeks we're going to come back and we're going to have something. We never ask for more, Right. If we bid something too low, we're going to deal with that right. Till the contract comes to the next go around. But that's, that's kind of how we go about it. Options and pointing out where we think that we can. We work with other customers that are similar to you. We've been able to do this. It's worked well for them.

Right.

They're happy, they're satisfied. High nps. They're paying less than they were when they first started with us. Who doesn't want that?

Right. 100%.

The other thing you can do is. And I don't, you know, I. I oversee sales. I probably shouldn't, but sometimes it's, hey, if we got to get this deal done, you know, let's go off from a 10, 20% price reduction on that first month. If they say yes in the next two weeks.

Yeah, see, that's what I wanted. I wanted those little nuggets from. You edit that out. Yeah, that's. Cover it with some stuff.

That's the secret. Revolutionary.

Yes. Super creative. I've never done that.

Oh, come on.

I mean, I've done other things in terms of, like, throwing in exterior services, brand activation. We'll talk. We'll talk. Okay.

So, like I've always said, it's not what's taught, it's necessarily what's caught. So hopefully you caught something from that conversation. And Billy, Michael, it was super fun.

Yes. Was really fun. Did you guys have fun?

So much fun.

Okay, good.

I had fun.

I did, too.

I have a new hockey conversation.

I know you just want to get this over with so you can go talk. I knew it. Sam's like, me, too.

But no, we really, really appreciate your guys's time. Appreciate Issa for letting us host this. And we'll also do a part two.

We absolutely need to. Yeah.

To go deeper in some of the. The concepts that you guys talked about today. So.

Yeah. Thanks, guys.

Thanks.