Episode 39: Why Cleaning Contracts and Residential Cleaning Don’t Mix

Episode 39: Why Cleaning Contracts and Residential Cleaning Don’t Mix

Brandon Condrey:
A good contract needs to be enforceable. So you have to pay an attorney to analyze this, make this document, your service agreement, whatever it's going to be. That contract, there's a cancellation fee in it. You can work out all those numbers if you want, but someone's going to have to sign it. And then if you get someone who's particularly like, okay, well, I'm going to have to sit down and read this. You were in the sales call, you got to the point where like, all right, we're going to do the thing where we decided to like, hold on, what's this legal document. I got to read this with my reading glasses, push back. For sure. Yes. Right. So you're going to get pushed back. And then on the enforceable side of things, okay, let's say you got your contract. You went that route. You wanted to do it. If you picture a customer, canceling a contract for some hardship. And I was just trying to squeeze 110 bucks out of our clean, imagine charging them the cost of whatever the cancellation fee was. There'll be livid. So that's definitely one of the reasons not to do it.

Announcer:
Grow your cleaning business, make more money, have more time. This is the Profit Cleaners podcast with your host Brandon Condrey and Brandon Schoen.

Brandon Schoen:
Welcome back everyone to another episode of the Profit Cleaners, the only place where you can learn from the top 1% of cleaning business owners from around the world to level up your game and win in the cleaning business. So let's get started. I'm your host Brandon Schoen. This is my cohost -

Brandon Condrey:
Brandon Condrey.

Brandon Schoen:
And today we've got another exciting episode for you guys. We're talking all about a question. We get a lot, which is contracts. How do I do cleaning contracts? When should I do them? How should I do them and why? And all these questions we get. And let's just start by telling people a quick story about when we first started out in the cleaning business, we were actually wanting to do contract.

Brandon Condrey:
Contracts give you the warm fuzzies. Like I am guaranteed to get this much money out of you because you signed this document. We've talked about Corby before our mentor in Denver. When we went up there for the very first meeting, it was like, the exploratory can make this work sort of setup. And one of the questions we had on our list was do you do contracts? And how do you do contracts? Corby is very quick. One-liner response was, I don't think you should have to sign a legal document to get your house cleaned. Part of the reason that the contract sounded appealing is hypothetically, the document will protect you from certain liabilities. If you do X, Y, Z problem. You know what I mean? So why had I asked him, like, what if you screw up in this document and you get sued or something, it's like, Hey, we've never been sued. And B that's what insurance is for. You should have commercial liability insurance that covers your various scripts. We've told you some examples in the past scratching appliances, we've got insurance that covers theft of Rolexes and paintings and things. And those things have never happened, but it's in there.

Brandon Schoen:
And let's tell them one other story, because this is an actual personal story of one of our customers, Tara,

Brandon Condrey:
Tara, we didn't go into the name.

Brandon Schoen:
But Tara was one of our customers. So tell him the story Brandon.

Brandon Condrey:
We had a check bounce from a customer. And so our office manager, our superstar office manager, Claudia wasn't in the office that day. So I thought I'd be helpful called her up to inquire about bounce check. It turns out her house was robbed. And so they had to cancel the accounts because they got the checkbooks, but worse, her and her kids were there during the robbery. And it was very terrifying and my smooth brain just glossed over that part and just went to, yeah, sorry, but how do you want to cover this bill? And so she was like, I'll get you another one. I'm like hung up on me. But then she went on to leave a bunch of one star reviews. And that was a lack of empathy on my part. It had nothing to do with the contract. But the point is, if you picture a customer canceling a contract for some hardship, and I was just trying to squeeze 110 bucks out of our clean, I imagine charging them the cost of whatever the cancellation fee was. There'll be livid. So that's definitely one of the reasons not to do it.

Brandon Schoen:
Yeah. So I think a couple of things here to, I have learned listening to this was first of all, let your team do their stuff. So like if Claudia had called and maybe wasn't doing other stuff and like Brandon was doing sales and all this other stuff, and then he was like, I'm going to jump in and do this and let your people do those things. And sure, probably they're more skilled in those areas than you.

Brandon Condrey:
Claudia would have been empathetic and reacted and totally the right way.

Brandon Schoen:
But then the other side of that is what Brandon is saying is how would people react in that scenario? Just think right now, all the things that we buy in our current day to day like a Spotify or a Netflix subscription or all these things that we buy. Just imagine how you would feel if you want to cancel your Netflix subscription one month. And Netflix was like, cool, we're going to charge you for the whole rest of the year. See you later. Yeah. Did they do that in the first place? They don't. There's a reason they don't do that is it's a horrible customer experience. People are going to have a horrible taste in their mouth. They're going to go tell everybody it's a scam. And they took all my money.

Brandon Condrey:
And even like Comcast, I signed changed my internet plan and got a faster and it's speed. And it was less money, no contract. So that was news to me. Comcast normally does this all the time, but this is just the way that the world is evolving in general is that you are on a month to month. You don't have to be latched to a thing for the rest of your life or for a year. You don't have to pay 500 bucks to get out of it. It is just the way it is. I mean, the reason we're not doing contracts are several fold. One. We just told you about the apps that it's not going to be just people aren't into that. That's just not the way that things are going. The other one is that a good contract needs to be enforceable. So you have to pay a attorney to analyze this, make this document, your service agreement, whatever it's going to be. That contract, there's a cancellation fee in it. You can work out all those numbers if you want, but someone's going to have to sign it. And then if you get someone who's particularly like, okay, well, I'm gonna have to sit down and read this. So you were in the sales call, you got to the point where like, all right, we're going to do the thing where we decided to like, hold on, what's this legal document. I ain't got to read this with my reading glasses back for shifts, right? So you're going to get pushed back. And then on the enforceable side of things, okay, let's say you got your contract. You went that route. You want it to do it. They're going to cancel. I have to move. My kid broke a leg. I got to cover some stuff I got to cancel. Okay. Sorry to hear that. I just need your cancellation fee of the rest of the year, which is $3,000. And they're going to lose their minds. They're going to be so pissed about, so let's say the best case scenario. You put it on their credit card, charge you your, the cancellation fee. They're going to give you a charge back on the card that reflects negatively on your business credit finances on the back end. Especially if you have a lot of them, you'll start to lose credit card processors. They won't cover it.

Brandon Schoen:
They'll just straight up. Shut you down. If you start doing this people.

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Brandon Schoen:
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Brandon Condrey:
In general, the one-star review thing that's why we brought up that story by that customer. They will leave messages everywhere. I can't believe that they wouldn't let me out of my contract because my kid broke my leg or blah, blah, blah, blah, blah. There's so many downsides and very little upside. So I think you need to lean on the insurance to cover whatever the contract was going to protect you contracts there to make sure that you've got revenue protection. So we lost this customer. Now we're going to get X out of them. That's fine if you want to piss everybody off.

Brandon Schoen:
Yeah. And I think it just goes back to treat your customers how you want to be treated. Think about the time or the scenario. I've had companies do this to me. And it just makes me so mad when they won't let me out of my contract when I want to cancel early. Right? Like what a bad experience versus the experience that you just let them decide. It's open-ended we trust you're going to do what you say. We're going to do what we say. You're going to what you say. You're when we show up to clean, you're going to pay us. We believe that you're a good person. It goes in full circle. And if you trust your people, they're going to trust you. There's this reciprocity. And that's what you want. You want to create this culture of trust. They trust us coming in their house. We trust they're going to pay us not this. We've got to sign a contract because I don't trust you. It creates this weird feeling and you don't want that.

Brandon Condrey:
So that being said, there are a couple of scenarios in which I think cleaning contracts make sense. One of them is commercial cleaning. Oftentimes in commercial cleaning, you need to invest in equipment. That's going to be stored on site, typically in a large scale commercial environment, like a warehouse or a hospital or whatever, we're we got the contract. Okay. Now we're going to deliver these floor sweeping machines that you see people writing on sometimes in airports, or we're going to get all these mops and buckets at stay there. Residential is very nimble. We're bringing our equipment with us. It's mops and brooms and vacuums. And we're going to bring it to your house and then take it all with us. We don't have to leave anything there. Commercial. Sometimes that stuff is huge. Like to clean efficiently on a big space, you need one of those right along floor washers. So that type of stuff, you need that contract because like you signed the contract that gave me this down payment. So I can now go invest and buy the equipment that I'm going to bring to your place. So that one totally makes sense. And on cancellations like that, yeah, you're going to enforce that one. And there are business that's different than a person, the business didn't break its leg and can't make money. If they're canceling the contract for whatever financial reasons they know. And they've already analyzed that they're going to have to pay that fee that is built into the mindset of that big corporation. That's going to do that. So commercial totally makes sense. Yeah, totally makes sense. The other one on the residential side that would make sense, I think is Airbnb. If you were going to go deep on Airbnb cleaning, you need to be able to state things like, okay, you as the owner, promise that you are going to set the booking settings so that there's a buffer day in between check-out and check-in so that we have enough time to accommodate scheduling, or you set the settings so that there's never a check-in on Sunday so that we can give people a day off. Those are the things that you would negotiate with a host that wanted reliable cleaning with you. Another thing that we do for our Airbnb, we don't have them on contracts right now. We're not dealing with that many right now. But one thing that we ask of our customers that are on that scenario is that they buy linens and triplicate. So we've done commercial linens. We've gone back and forth. Sometimes it's profitable. Sometimes it's not, there are issues with commercial linens, but if they want to stick with their linens, you buy three sets, one stays in the house, there's a spare in a closet. And one stays with us that we wash and bring back to you. So those types of agreements where there's assets that need to be purchased like linens or machines, things like that, those contracts totally make sense in those scenarios.

Brandon Schoen:
Absolutely. You guys so just think of it. Some of you might be thinking, well, I don't know, to me, it seems like it's a better idea to do it. Well, let's just look at the track record. Like we said, our mentor Corby, I think he's been in business almost 20 years now. And he said, has he ever had any issues? He's never had anybody sue him over it. He's never had no problems. Right. And they let people go often. We've been in business almost four years. I don't think we've had any major issues with it either.

Brandon Condrey:
No, I mean, we've never been sued. We've had a couple insurance claims. I mean, what's the point of trying to enforce it. It just makes everybody mad. You can go a long time without doing it. Cleaning is not a medical procedure. Like there's very low risk. Like the worst case scenario is we're going to break something. And then I guess the really worst case scenario brace on they're really expensive, but that's what the insurance.

Brandon Schoen:
That's what the insurance for it. And the best case scenario is they're surprised that you handled it so well. They're like, wow. I thought they were going to charge me and like most companies. Yeah, but they let me off. They were really easy to work with. I'm going to actually call them back and sign back up. So you might actually gain a customer by leaving them with a good feeling, leaving them a good taste in their mouth versus the other way around. It's going to just leave you with a ton of negative one-star reviews, bad people talking poorly about your company out in the community. So it goes a long way guys, to take a couple hits once in a while, if people don't do what they say and they canceled that's okay. Move on to the next one. There's plenty of customers out there. You'll find the right customers. Get those people on the bus and the ones that are going to cancel and complain and just.

Brandon Condrey:
Yeah, you want the good one. One other contract scenario I thought of is apartment cleaning. If you have a deal, worked out with an apartment building or you're going to come in and clean it whenever a tenant moves out to get it ready for the next one, those are typically ones you'd want to contract because the apartment's going to have four different floor plans. There's a one to two and a three bedroom. And they come in these different arrangements and you want to work out pricing for all those as kind of a standard case going forward. We had tried to do that in the beginning, that deal fell through. But the idea was if we came to clean just one, it was this much. If we were on site and we got to clean like three or four, while we were there, the economies of scale got better for them that it would cost less those types of things you want to have spilled out.

Brandon Schoen:
But yeah, I think so. By and large, if guys are doing residential, you can model after what we're doing, which is no contracts. If you're doing commercial, it probably makes more sense in a lot of scenarios there being beads, apartments, commercial scenarios. Yeah. So test it out, see what works for your market. We're just letting you guys know what works for us. And hopefully it'll help you guys out. Let us know in the comments below, what are you guys doing for your market?

Brandon Condrey:
Give us the feedback. If you are a hundred percent residential with contracts, why does it work? Tell us what benefit do you get out of it? We're just one cleaning company. We're here to teach you guys, but tell us how you're doing it.

Brandon Schoen:
Yeah, absolutely. And if you're listening to on the podcast or other places, subscribe, leave a review. It helps us out a ton. And if you're learning something, if it's shifting your mindset, helping you guys at all, please reciprocate that value, help us out and we can keep doing this for you. Keep help the cleaning community and all you guys out there. So yeah. Thank you for your time today. Thanks for hanging out until next time.

Brandon Condrey:
Keep it clean.

Brandon Schoen:
Keep it clean.

Announcer:
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