Profit Sharing in the Carpet Cleaning Industry
Confucius said “The path to wealth is rich in hate.” This is one of my favorite sayings, partly because it is so very true in most cases. But also because I love challenges and proving that statement to only be solid wisdom instead of solid fact is a challenge worth taking on.
The carpet cleaning industry in the Twin Cities Area of Minnesota is an industry that employers and employees can make a good living. In most cases a bonus system is set up for “upselling”. Raise the bill of your clients far enough above what it was when it was booked and you get a bonus. This is not bad for the employee’s wallets but not always good for their conscience. This can indeed breed “hate” from the consumers towards the companies and even employees who use high pressure sales tactics. It also breeds an environment where sales training and skills outweigh quality control and technical training essential to doing a great job.
The best carpet cleaners are rarely the best salesmen. I don’t think upselling should be rewarded that way. Employees should understand the products and be knowledgeable about them enough to inform the client when asked or when it is obviously necessary. Mentioning and selling are two different things.
There is another method that breeds “hate” even more. This is the bait and switch method. Everyone has seen ads for $5.95 a room or something along those lines. If you check the small print you will see that it says something like “deep cleaning 40 cents a square foot”. When the cleaner shows up to do the job he turns down his equipment and cleans a room with plain water. Then he pre-sprays the carpet and turns his machine up to full power and cleans a stripe down the center of the room. He then asks if the customer wants him to do that method over the whole carpet for 10 times what they were originally quoted. By the time they leave the customer is left feeling cheated. The employee makes a good living this way but only in the monetary sense. That method leaves the customer feeling cheated and foolish. The employee can’t take pride in how he makes his living.
There is only way that I have found makes sense to compensate employees well while also making the customer truly happy as well. This method is simple profit sharing. At the end of the year when the profit numbers are figured out the employees split 10 percent. Each year at the company the employee is vested one more share in that percentage. This rewards both loyalty and quality. The more work the company does as a whole, the more profit there is to go around. Yes the employer has to give up 10 percent of his/her profits but with the increased quality and attentiveness from the employees, I don’t doubt it adds more profit than it costs.
This way the employees can take pride in how they make their living as do their families.
This way the customer can take pride in knowing they got a great job at a fair price and that their money is going toward a company that treats their employees with respect.
This way the employer, in this case me and my family, can take pride in knowing that they are building a successful company without the expense of anyone involved. Or rather without the “hate” that usually accompanies that success.
Profit sharing has worked great for my company in both employee retention and quality control. To be honest the results have been immeasurable.