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Give your price. Stick to your price.

Discussion in 'Commercial Snow Removal' started by DodgeBlizzard, Dec 8, 2011.

  1. DodgeBlizzard

    DodgeBlizzard Senior Member
    Messages: 526

    Two weeks ago I gave a price to a potential residential customer for a driveway for $35. It's two cars wide and maybe three car lengths long. Straight shot with no shoveling or salting. I get a call yesterday (pending snow for later the same day) saying they would like to talk about our services. My price was $35, but the guy they used to have, did it for $20. In calling around for estimates this year, they found a guy to do it for $25. So I said, may I ask you a few questions? If you had a guy for $20, why did you call me for an estimate? The $20 guy had done it for 20 years and has now retired and that's why they had to find someone new. I then ask why not go with the $25 guy? Her response was that he may not be very dependable which brings me to you. You said when it snows, that is all you do. But she asked me if I would come down on my price and match the $25 guy. I said I just can't do that. She then asks to meet me in the middle at $30. I said reliability and good service comes at a cost. What also comes at a cost is diesel at $4 a gallon, insurance, plows, snowblowers, truck repairs and lets not forget the guys want paid on top of all that. I said you can always find a cheaper guy and I totally understand if you do that. But I won't lower my price to match another guys, especially since you already got the vibe he isn't reliable. I said if you want to go with someone else, that's totally understandable. I you want to go with us, I need to know now because snow is in the forecast. Then I played the pause game and she said she would go ahead with us. But think about this for a minute. That same driveway, earlier this year, was done for $20. More then likely it has been done for that price for a very long time. I got the same driveway for $35. So give your price and stick with your price. People will sometimes haggle when it comes to price. Only because they know it works. But that problem only exists because people allow it. You can't get away with that when you get gas, buy groceries, etc. so why should we act any different? When you give an estimate, you're not only selling a service, you're selling piece of mind to a potential customer. You're selling confidence and reliability. You have to make them feel not only comfortable with your service, but mostly feel comfortable with YOU. Don't sell yourself short by lowering your price. Just thought I'd share that with the new guys. Hopefully someone can use my experience and put it to use for their own benefit. ps: Forecasters missed this storm, which makes them 0 for 3. Now I'm up for no reason. Yet another reason why I don't do this work for peanuts.
     
  2. Banksy

    Banksy PlowSite Veteran
    Messages: 3,113

    Great job. Bummer about the missed storm. The weather every where has been really screwy.
     
  3. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,407

    On large bids there might be a little room to haggle.
    Smaller bids theres a lot less room.



    Friend of mine that works with bids that have 2 to 3 0s on the back of that 35 once told me some thing pretty funny. (he doesn't do snow removal)

    Several times hes had some one ***** about his $20,000 bid and want a reduction.
    OK he says I can do that for you. $19,999 and sends it back.
    They ***** again he says OK, I can do that for you. $19,998 and sends it back.

    He said hes never had to go lower than a $3 to $5 price reduction at $1 increments before they get the picture.
     
  4. tbone3

    tbone3 Member
    Messages: 86

    Thanks Man for the advice! This is my first year with a truck and i already did that once and it bit me in the a$$. I will never do that again. Gotta stick to my price and thats it. I am very good at giving an estimate for a driveway. A drive way by me with 3 car lenths long is around 30 dollars. I finally got most of my contracts done and sent back out to the customers. Hopefully i can get about 7 or 8 more.


    Tom
     
  5. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,261

    Good post DodgeBlizzard. Not a bad idea with raising the bar. I'd have to agree that larger commercials have wiggle room, but as for residential, I'm with you on price. I stick with a set number and if they don't want it, go with the other guy. We are not just one truck and a shovel. My end customer should never (almost never) see a break down, need not worry about if I have insurance or that I or anyone that works for me is properly trained for the job.
    With that comes a certain cost and it's not free. Reasons to lower or meet a price: right next door, good referral, or perhaps it's a real easy job.(3 pass straight in push)
    Otherwise I stick to my guns. Oh, and I/we don't stop for homeowners that wave you down in a storm.
     
    Last edited: Dec 8, 2011
  6. 32vld

    32vld Senior Member
    from LI, NY
    Messages: 620

    I think the problem here was not you or the customer.

    But a back door low baller.

    What is a back door low baller?

    A contractor that gets the account for what was good money 20 years ago and becomes afraid to raise the price.

    I know a back door landscaper. Not friends but I'd call a friendly acquaintance. He has been doing mows for $25 for 12 years and has not raised raise his prices. He should be able to get $35 for his 1/4 acre lawns.
     
  7. 7_below

    7_below Senior Member
    Messages: 245

    Great thread. Couldn't agree with you more, stick to you guns and don't be wishy washy about your rates. Why would you wanna cheapen your services just to match a fly by nighter. Like blowerman said the only way the rate changes is if its eferrals, close location or quick job.
     
  8. Dr Who

    Dr Who Senior Member
    Messages: 637

    Thumbs Up:laughing:
     
  9. Dr Who

    Dr Who Senior Member
    Messages: 637

    Thumbs Up
    I did this when I owned an auto repair shop, I still do it with my survey work, I am sub contracted, and I do it with what little snow plowing I do. I get the price that I want or I go some were else, only that it sucks that work is so hard to find these days, since it has made it harder to be this way..
     
  10. White Gardens

    White Gardens 2000 Club Member
    Messages: 2,665

    Good Post!

    I agree, stick with your price. When I started my landscaping and snow removal biz, that was the first rule of thumb for me.

    I have seen too many people fail because they weren't charging enough and thus couldn't make enough money to survive.

    This is what I do for a living, I have to feed my family. Even if I have a 35 minimum, compared to some others with a 20 minimum, I'd rater make more money on less accounts rather than playing the high volume game.

    ....
     
  11. bhmjwp

    bhmjwp Senior Member
    from kcmo
    Messages: 309

    Looks like 100% agreement! Two considerations about this type of customer-you will never be able to raise the price-if I am confident in my pricing strategy I should hold the line. The wrong pricing strategy can slowly put you out of business.
     
  12. DodgeBlizzard

    DodgeBlizzard Senior Member
    Messages: 526

    In a former job, I actually had sales training classes with a very large corporation. We had week long siminars along with monthly newsletters. A few things I learned from that was don't lower your price. Your prices should be set to cover your costs and then a percentage for profit. Profit is a neccessity for your business to survive. If you give a price, then lower it, you may have just given away the only profit. Another reason you don't lower your price is because of referrals. If you do good work, you will get referrals. But if one customer gets a reduced price, then they will tell the next person to haggle with you also. It leads to a domino effect and then you start using that as your norm. The other big thing I took from that is most salesmen sell either a product or a service. Plowing is a service. If you get a call because of a referral, your job is halfway sold for you already. It comes down to price and how comfortable they are with you. They are allowing you onto their property and trusting you. Also, if you're landing every job, you're not charging enough. If you're not landing any, then you're too high. When starting out, you want to get every single job to grow your business. But you should price every single thing you do with an included profit. For example I did a job earlier this year. I pressure washed a deck, house, roof wash and they also wanted gutters interiors cleaned. I was going to give a good discount for the gutter cleaning, because I was already there when asked to do the gutters. But if I did, they would expect that same price if they called back just to do gutters. Glad I kept that priced as if would be an individual job, because they called last week and want them done again. Again, hopefully this helps out a few people to gain some profit. Good luck.
     
  13. NickT

    NickT Senior Member
    Messages: 707

    subscribed:popcorn:
     
  14. DodgeBlizzard

    DodgeBlizzard Senior Member
    Messages: 526

    And even though we are doing mainly commercial and less residentials, I still get excited when landing a $ 35 driveway. Is it just me or do you guys also get excited over little things like that? I go home and say gimme five, I just landed another customer. But I'm the only one in the house that gets excited. They all enjoy spending the old man's money though. LOL
     
  15. swtiih

    swtiih PlowSite.com Addict
    Messages: 1,179

    Good for you dodgeblizzard sticking to your price. Last year I had alot of calls wanting me to lower my price to match what they had been paying. I didn't and therefore didn't get most of that work. I will not work for low $. The lowballer or person who is short sighted and doesn't know their costs will always be there just not very long.
     
  16. SnowMatt13

    SnowMatt13 PlowSite.com Addict
    Messages: 1,531

    You make many excellent points but I especially agree with you selling more than just plowing. I always referred to it as piece of mind to the customer. My price was piece of mind that no matter what, if I said your whatever would be plowed by 7am, it was, every time. That's what allowed me to charge the prices that I did.
    You gotta be able to back it up though.
     
  17. Mikemat31

    Mikemat31 Member
    Messages: 72

    Honestly I am 17 years old maybe its because I live in New Jersey, but I couldn't be bothered to shovel a driveway for $35 dollars. I don't have insurance or really any over head other than gas. $35 is just way to cheap
     
  18. DodgeBlizzard

    DodgeBlizzard Senior Member
    Messages: 526

    Leave it to a 17 year old to take away my MoJo. You sound exactly like my son. $ 35 bucks is like three hours of work for most people around here at $12 bucks an hour. I've worked in Jersey before. EVERYTHING is more expensive. So what do YOU charge for a driveway?
     
  19. Banksy

    Banksy PlowSite Veteran
    Messages: 3,113

    A mile long driveway, no. A simple two or three car driveway with a snowblower and no insurance. I'd do it for $35 all day. I'm sure you're telling Obama about that payup too.
     
  20. BPS#1

    BPS#1 2000 Club Member
    Messages: 2,407

    Lazy axx kids now days!!!!!!!!!!!!!


    $35 for a residential drive isn't that bad.