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Customer complain on price

Discussion in 'Ice Management' started by TPC Services, Jan 4, 2011.

  1. TPC Services

    TPC Services Senior Member
    Messages: 875

    We plow an sand/salt a pond request these stores we do 11 of them an most of them are under a ton so we charge a $60 min for most of them which is under most my other clients that get a min charge on their stores we go do every time. So he called me to had saying that he could not see paying the $60 for each store when other clowns are charging him $35 per store, WTF!!! I was like ok whatever fine we charge you that. An left it at that. But the more I sit in my office the more I am fuming about this. How in the hell are you doing it for $35 a store even if it only takes ½ which it does on most of these places, Still how in the F are you making money. With sand at $11 a ton delivered salt at $85 a ton gas at $3.00 a gal, and paying a driver $15 a hr let’s say you take all in ½ except the salt take that into ¼’s so cost to spread just spread this material not counting gas, Insurance’s stuff like that is $34.25 per half ton. This is no Frigging way I can do this. What would you say to this guy, I would like to keep the plowing for this year because it’s keeping 4 trucks busy.
    Last edited: Jan 4, 2011
  2. Allor Outdoor

    Allor Outdoor Senior Member
    Messages: 438


    I had to read that a few times...although it eventually made sense it was tough to understand!

    I think the first problem is that you are letting your customer set your price. You are the professional, and you know your pricing.

    I can't think of any successful business model that allows the customer to set the pricing.

    Good luck!
  3. Advantage

    Advantage Senior Member
    Messages: 766

    If I understand correctly, you already told him you'd match that price?! Don't give in to this guy. I would've explained that you were already at a good price and then sell him on the quality of service. Dropping price on one service to keep another is never worth it.
  4. Westhardt Corp.

    Westhardt Corp. Senior Member
    Messages: 845

    I'm with these guys. No offense, but you need a little more "business vertebrae". You lowered your price by over 40% at the drop of a hat, and now you're beating yourself up over it.

    Learn from this. Don't shoot from the hip just to keep the work.
  5. TPC Services

    TPC Services Senior Member
    Messages: 875

    So let me get this right, What you are saying is I should tell him that this is my price an that’s that right?? So what happens when I tell him to take a flying leap that these are my sanding prices and that’s what I have to do them for? Do you really think he’s going to keep me around to plow when I tell him that?? Especially when they have other clowns doing it for $35. Like I said we have four trucks plowing these stores for them , We are right now a third through the season, I really don’t think I can afford to lose this account an let four trucks just sit because I got in a pissing match with sanding prices??

    Would this be wise???
    I'm thinking to wait tell the next freezing rain storm an when he calls tell him very politely, That I’m sorry but we cannot sand/salt for that amount. An then go over with him just the basic cost of what it costs us to apply the sand/salt material. Then ask him can you see why I have to charge you that amount and if we cannot find a middle ground that then he might need to find someone else to sand it for him if that’s what they want to be charged. When we first pick up this client up we did not sand them they had to call another contractor in and they charge them $100 min.

    I agree it does'nt make since to me either to to drop one price on one service to keep the other but being the this far into the season I can see no other choice.
    Last edited: Jan 4, 2011
  6. mycirus

    mycirus Senior Member
    from Mass
    Messages: 589

    Maybe the other guys are charging more for plowing and can offer cheaper salt? I dont know. Why is there other guys anyway? He uses 2 different contractors?
  7. TPC Services

    TPC Services Senior Member
    Messages: 875

    For one I am not beating myself up over it!!!. I simple ask if there is another soultion to this with out getting in a pissing match with the client, can't really afford to Lose them an then having four trucks now sitting for the rest of the season!! I unlike the rest of you that have posted so far cannot afford losing a client during the middle of the season an some how make up what we lose in potental profit some place else.
    Last edited: Jan 4, 2011
  8. TPC Services

    TPC Services Senior Member
    Messages: 875

    they have multiple contractors. they have over 40 stores. I'm guessing most are a one man and a truck kind of deal. I know of one other contractor that works for them that has multiple trucks and they do a crappy job of it.
    Last edited: Jan 4, 2011
  9. Westhardt Corp.

    Westhardt Corp. Senior Member
    Messages: 845

    Actually, from what you posted, you are/were beating yourself up over it. By going back after agreeing to the 40%+ lower price and scrutinizing that pricing, and figuring out that it's just not possible/worth it...I believe the word you used was "fuming".

    You're pretty clearly still upset by the whole thing, based on your demeanor here. You posted up a scenario for public comment, which I imagine was the intended purpose of said post. BUT, when you get some responses--honest, candid and experienced responses--you go on the defensive?

    Nobody can ever "afford" to idle equipment. But in business it's sometimes the better alternative, versus operating with a razor thin margin (just to get the work), where one setback can topple you into red ink. And in business, you absolutely have to stand your ground when it's appropriate. And you have to be willing to walk away--just like any negotiation. "No work" is better than "working at a loss"--period.

    But honestly, I think your first move is to hold off on these decisions until you have a minute to rationally think it over, rather than make it hastily, and lament over it later.
  10. Westhardt Corp.

    Westhardt Corp. Senior Member
    Messages: 845

    And they seem to get what they pay for.
  11. Rc2505

    Rc2505 PlowSite.com Addict
    Messages: 1,245

    So your saying if I can make sense of it all, that in your mind it makes more sense to operate your 4 trucks at a break even point, or at a loss then to let them sit because you lost a contract? Furthermore, don't you have a contract with this company for the prices you started out with? If so then they don't have a leg to stand on. If you don't have a contract in place then I guess it's shame on you. As far as I am concerned, I would keep the price at what it was, and if they cancel your contract, you should still service it for the next 30 days, then your more than 1/2 way through the season. Then letting the 4 trucks sit is cheaper than operating them at a break even or loss.
  12. TPC Services

    TPC Services Senior Member
    Messages: 875

    I’m disagreeing with people because they believe it’s better to piss the client off about the sanding prices and then lose the plowing also . let me make myself clear again we hardly ever sand for this client! Maybe 1-3 times tops a year. So tell me why again when we make money on plowing for them it would be wise to get in a pissing match for the sanding we hardly ever spread for them for this year. Why not just tell them to find another contractor to do that for him if we cannot come up with a agreement on the price for it. As I said before we ever got into sanding . we used to plow them an then when they need the stores sanded they would have another contractor sand the same stores we did.

    I am fuming because he asked me to drop my prices, never did I say I would do it . I just told him “Whatever” I have yet to send him a new invoice. As for me beating myself up over It I could care less like I said we will possibly just not work for this client next year.

    I just don’t think it makes since to me to get into a pissing match over sanding, lose the plowing because of it an then have four trucks just sitting around.
  13. Westhardt Corp.

    Westhardt Corp. Senior Member
    Messages: 845

    I don't think anyone has said that you should intentionally piss off the client. There is a difference between saying "no", and saying "no, and f@*k you for having the nerve to ask".

    If you make money plowing for them, that's great--you certainly should. BUT, as was asked already--what does your contract say? Do you have one? If you do, and the prices are laid out in it, then your response should be to cite the agreed price in the contract. Is the client doesn't like it, too bad, frankly--they signed it. If you don't (have a contract)...yeah, that's a major mistake in this business, and hopefully not your case. If it is--again, learn from this.

    Also, you might consider reading your posts before contradicting yourself...

    Followed by...

    So...what did you do?

    Lastly, the word "whatever" should not ever be used a stand-alone response to a professional/business question. Not only does it leave an ocean of interpretation to the person it's directed at, it just sounds like a dumb teenager comment. Pretty sure you're not a teenager, no?
  14. BossPlow2010

    BossPlow2010 PlowSite.com Addict
    Messages: 1,027

    If I was the client, I would have dropped you because of your attitude.
    Now if I were in your shoes, I'd call the client back and apologize. And try to come to some sort of agreement.
  15. jomama45

    jomama45 PlowSite.com Addict
    Messages: 1,172

    When you ask "how can they do this?", here's a few possibilities:

    - They're getting the sand cheaper than you are, maybe do to volume. I can tell you that we pay less than half of what you pay for torpedo sand.

    - They're paying less for the salt, again possibly thru volume. I won't disclose what my brother pays for salt, but I can tell you it's less than what you noted.

    - They're using more sand by percentage. As I read your first post, it sounds like you're mixing about 1/3 salt. Some folks have gone down to 10-15% with some success.

    - The stores the other contractors service are closer together, or on a route of theirs that already get sand. Maybe these "clowns" are spreading 20 ton per storm, who really knows?

    - Maybe the customer is simply baiting you into lowering your price. For all you know, he called your bluff and is now calling the other contractors to tell them that "TPC" only charges me $35 per sand app., I can't afford you other contractors at $50 each time?

    The list goes on & on, but in the future I would tell the customer that you would need some time to consider, and follow up in a few days.
  16. SnowGuy73

    SnowGuy73 PlowSite Fanatic
    Messages: 24,868

    No, come on that never happens in property maintenance.

    My guess would be this is exactly what is happening, if you have a contract with him he should know the price and when you will salt/sand.
  17. KEC Maintaince

    KEC Maintaince Senior Member
    from N.J.
    Messages: 265

    You should of told him this
    "60 dollars holey crap your right it should of been 65per store"
    tell him the same thing you stated to us. there is no way i can do it for this price but i would work with you as much as possible on the price.
    then raise the price next year on the plow contract by 2-3% more.
    its not worth losing a contract over
  18. dmontgomery

    dmontgomery PlowSite.com Addict
    Messages: 1,238

    Last edited: Jan 4, 2011
  19. SnowGuy73

    SnowGuy73 PlowSite Fanatic
    Messages: 24,868

    Right on. Or do exactly what I do when it comes to bidding, if they tell how much cheaper the other guy will do it for. Tell them to go with the other guy.

    After 13 years running my own business, I'm not afaird to walk away from a job.
  20. hydro_37

    hydro_37 PlowSite Veteran
    from iowa
    Messages: 3,790

    telling the customer you cant do it for "his" price will just make him look for a lower priced plow guy
    you may end up loosing it anyway