WE HAVE ALL HEARD the traditional wisdom that keeping employees happy results in happy customers, which brings in more money, which makes you insanely rich.
But honestly, I don’t see too many companies which actually structure around this kind of philosophy. More often, building a great and loyal employee base is more like “do as much as we can afford.”
I met Pete Gazlay a few years ago, when both he and I had just started our businesses. After working in the industry for a decade, he created Total Facility Care to service business janitorial needs in northern Colorado.
Yeah, I know – has this just got to be just the most boring industry ever? Let me tell you about why TFC is special.
Pete has extensive experience with leadership – in the local police department, and with another janitorial services company. He found that the demands of the job could negatively impact his personal life, and decided that he’d rather set his own course.
He studies all the leading thinkers in leadership, so he decided to launch his great experiment.
In this kind of business, it’s all about the customer service. His workers ARE the service which is provided, and their work is exactly why clients are satisfied or not. So an investment in finding and retaining the right people should, theoretically, result in outrageously high client retention, right?
As Pete has proven, it does indeed. Here’s how he’s set this up.
But more important, they look for people who have a customer-oriented attitude, who want to serve people. The company philosophy is that “we work in the best interest of our clients, period.” It’s all about the quality of the work, attention to detail, and doing what it takes to make the customer happy. If someone can’t live that philosophy every day, then they’re not a good fit for this business.
In order to find and keep these people, TFC has to pay a little more than the competition. And they have a suprisingly generous bonus package which kicks in soon after the employee is hired. They invest a great deal in employee training, understanding how that creates a reliable and seamless service for each customer. Every weekly team meeting focuses on issues of building and creating a great client experience.
Can they command much higher customer prices than normal? Not especially. Pete’s pricing is somewhat in the middle of the pack, because competition is fierce. They do great quality work, but can’t command penthouse pricing in return.
So let me understand, Pete: You have average prices, you pay employees well, and you’re in a business with tight margins. So how does this company survive?
It’s because the formula really does work.
- When you find and rigorously train people with the right attitude, they deliver great work for the customer.
- When you treat employees well and develop a strong team ethic, they want to stick around with you longer and make the customer happy.
- When you reduce mistakes and misunderstandings, and aggressively fix them when they happen, your clients are happy and stick around with you much longer.
- When you reduce client turnover, you don’t have to spend a whole lot on new client acquisition.
- When you reduce employee turnover, you don’t have to spend as much on finding and training new workers.
- When you have a more reliable revenue stream and reduce expenses, your bottom line improves.
It’s a virtuous cycle which results in a healthy and growing company.
What issues lie ahead? The big one is a discussion which is still a few years away, which is deciding the continued course for growth. Like most leaders who have created strong company cultures, Pete worries about how that will scale up to the next level. Or if they even want to do that.
I’m not a big fan of the “you’re either growing or dying” philosophy, because I think it only applies to certain industries at certain times. Perhaps Total Facility Care will do just fine at its moderate size, just serving customers in Colorado.
At the moment, that certainly seems to be a winning formula.