They've officially made it to P-town

[JohnnyU]

Well, it happened today, I knew it would eventually... I got a call from one of my best customers. He said that he was just now getting to looking at this year's bids, and I had been underbid. Not by $10 or $20 per push, but by a substantial amount. For argument's sake, lets say I have been bidding it for $85, and have plowed it for that for the last 3 years. I thought that was a little bit low, I I recalculated everything and saw that I could raise it to $95/push. He says this other bid is for $50. I'm totally taken back. This lot takes about 45 minutes depending on the accumulation, and there are a few twists and turns and medians sticking out, so I bid it to what I thought was fair.

I think my pricing strategy is right, I've not had any other problems like this one in the last four years, but I'm going to ask the customer to get a couple more bids. Both to see if I am too high, or if that guys is just ways too low.

I would like to keep this customer, but will not stoop that low just to keep it, do you guys think that is a decent way to handle this situation?

[BWhite]

You have been lowballed not much you can do except if he ends up coming back charge him your new pricing

[Adams Plowing]

I would stick to your guns on that one. Never lower your price if thats what you feel is approprate.

[ratlover]

Stick to your pricing. You know what you need to charge to make your desired profit. I might revaluate my desired profit margin and the cost to get the job done but if they fall into line then oh well. The guy may be a lowballer with no insurance, he may have just screwed up a bid and mid season be kicking himself in the kiwis, you customer may be screwing with you to see if you will lower, maybe the guy has alterior motives to get the snow, could be he can really do it for alot less and charges acordingly(like a big lot with a pusher) you dont really know. More will come. Find customers that are a good fit for you and dont try to make things fit.

Asking the guy to get more bids to see that what you are charging is market rate isnt a bad idea IMO and definatly stress your excellent service ect.

Wasnt Blackshor was it? I hear that guy is a real **** ;)

[atgreene]

Be sure to take the high road as well. Tell him you'll be happy to take over mid season should the *$#@$#@& not work out, (well don't say it quite like that).

If you leave on a high note, I've found that most people will call you back when the lowballers truck breaks into two pieces mid season.

[JohnnyU]

Nah Philip, wasn't Blackshor. Although... He was subcontracted for the demolition of my grandparents driveway this fall.... I very briefly got to talk with your dad, seems like a nice guy. ;)

I am going to ask him to get a few other quotes, and just let him know that it was a pleasure working with him for the last 4 years. You win some, you lose some... got a request to bid on a bunch of smaller properties right after I came home today, so things might be for the better :D

[BOUNDS-ELECTRIC]

Is this customer going to pay for your next truck and plow?
He is not, and why work for nothing! Stick to your price!
He will be calling you willing to pay your price! If not what have you lost! A customers who cares nothing about you, just how
cheap of price he could get! He will be the one to lose not you!

[JustUsDe]

John,
Keep your head up. There are still people out there who want qulity service and pay a fair price. I just got a call from a HOA I bid on and they want references, the ladies exact words was price doent mean anything if we cant get the service we want. I gave her a few references and she said They will make a desision this week. I talked to one of the references and he was called right away. I don't know if I am low bid or not but they seam to be looking for dependabily, and quility service, not just a lower price. I'll let you know if I get it.

Price is not always the ending factor.


Ray

[Mick]

John, don't worry about it. I know it's tough when it happens, but it works out. I've lost a couple like that, now. I absolutely refuse to get in a "bidding war". I let them know up front that I'm not cheap, but I try to be worth it. If they're going for price over service, I'm not the one for them. For the past three weeks, I've been turning down business. I keep a list of other plow guys to refer them to. I also refer PIAs to competitors. Helps keeps them busy and I can get the better ones without having so much competition.

[Snowtime]

He'll get what he is paying for. A CRAPPY JOB!!!!!!!

[JCurtis]

I always build in a little wiggle room ( negotiation room) into my price with certain customers.

These are the customers that I know want me to do the job based on reputation, but also want to feel like they "got a deal" or call you and say we are interested in your proposal, but we really need you to "sharpen your pencil" a little.

Its not a blatant build in, but an amount that I feel is comfortable and doesn't put me way above anyone else bidding. Just enough to allow me to say to these customers, Sure I can sharpen my pencil a little give me a day or two to work on it.

Then I call them back and say ok, here it is... I can knock off xx% off the price If its seasonal, and oh by the way can I sign you up for three years?

Now most of us know that a 3 year is already priced to cya most of the time for the length of the contract. so knocking a small percentage off the seasonal price still allows me to reach my desired profit margins.

[DLCS]

Originally posted by SnowyBowtie
but I'm going to ask the customer to get a couple more bids. Both to see if I am too high, or if that guys is just ways too low.




I wouldn't do that, looks like you are unsure of your prices. Not all but most commercial properties have to take the lowest bid. I'd replace him with a better customer.

[JohnnyU]

Originally posted by DLCS
I wouldn't do that, looks like you are unsure of your prices. Not all but most commercial properties have to take the lowest bid. I'd replace him with a better customer.

There is some truth to that, but at the same time, many people do not want to take the lowest bid. I've been in this business long enough to know what my market is, and how the prices are set. I am not unsure of my prices, it is more than I feel the customer and other 'contractor' are unsure of the fair market value of this work. If someone wants to come in and underbid every job to be sure that they can get it, then be my guest, it is no skin off my back, however I think that in this case, they are simply ignorant as to the actual costs associated with running a business and having all the things needed to do so, Mainly insurance....

[JohnnyU]

Turns out this guy just bought a new truck and plow at the beginning of last season, has no idea how to bid jobs, He's just getting into this business, and from what it sounds like, he's taking on WAY too much for a rookie with a single truck.

My buddy just won a bid for a huge complex in town, so I dont feel so bad about losing this one account, I'll more than double my money on that new complex :D

[atgreene]

It wouldn't be anyone called VALLEYWIDEPA would it? :huh :(

[Waterchikn]

I would just let time take its toll on the poor guy, eventually the customers will see the light and it will only benefit you in the long run. Valley is in PA, not IL. ;)

[atgreene]

After reading this thread, he could be bidding anywhere!

[WoofsPlow]

Is the other guy bidding "apples to apples" does he have all the approprite insurance as you do - have the customer check.