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New pricing structure

Discussion in 'Commercial Snow Removal' started by chris9724, Dec 20, 2014.

  1. chris9724

    chris9724 Member
    from calgary
    Messages: 52

    Hello

    I have been thinking of a new pricing structure for my clients.

    Let me start buy saying that most if not all of my clients own several large warehouse type buildings that are grouped in to large industrial parks. Generally 8-12 buildings in a group with multiple tenants in each building. Each building is treated like a separate site and invoiced individually. There is no cost averaging across multiple buildings.

    We all know that for us as contractors having a mixed portfolio of 50% per push 50% seasonal is best. But this becomes very hard to accomplish with such large customers. They want all of the buildings in the park under the same pricing structure so that all tenants are being treated the same. After all it is the tenants that end up paying for all this work.

    My idea is to split all the buildings in two, half of the building would be per push the other would be seasonal. This would allow for my clients to have the same benefit as us and keep the pricing structure the same for all buildings.

    I just want to know if anybody has tried this approach?

    Thanks for the comments.
     
  2. BC Handyman

    BC Handyman PlowSite.com Addict
    Messages: 1,854

    Interesting idea, but IDK if that would fly with customer, the customer wants a easily understandable invoice.
    What is the price spread from smallest to largest lots? I'd think the answer would be to average out the pricing assuming its not a huge price spread.
    Example:
    lot 1: $200
    lot 2: $240
    lot 3: $180
    lot 4: $240
    Just charge $210 for every lot, or try to group the buildings in 2 price points & explain that lot A,B,D,G are X, while lot C,E,H are this x due to time needed to service lots.
     
  3. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003


    Set your pricing by square footage so that you are getting paid the right amount for the amount of work you are performing. Then submit pricing per building with total sq footage for that building. Then let the property owner or management company (whoever you deal with) decide what portion of the charge each tenant in that building pays. Ex. building is 10,000 square feet and occupied by 2 tenants. Tenant #1 occupies 7500 sq ft while tenant 2 has 2500 sq ft, so if your price to service that building is $800.00, tenant 1 pays 3/4 of cost ($600.00) and tenant 2 pays the remaining amount of $200.00 or 1/4 of total cost. Now the owner/PM can tell all tenants that they are paying the same thing, BASED ON THE AMOUNT OF SAID PROPERTY THAT THEY UTILIZE. That is the only fair way that I can think of to charge in that instance. Obviously, the customer has to be smart enough to realize that if they use twice as much of the property as their neighbor, their cost will reflect twice the amount their neighbor pays.

    As for per push vs seasonal, I don't know how to divy that up because I don't/won't do seasonal pricing. You pay me for the work I do, END OF STORY! If we have a big winter with lots of snow, you pay me a lot of money, if we have a ****** winter like 3 years ago when we only got 4.5" for the whole winter, you aren't paying me to sit on my ass and catch up on my DVR'd programs.
     
    Last edited: Dec 22, 2014
  4. Herm Witte

    Herm Witte Senior Member
    Messages: 553

    "My idea is to split all the buildings in two, half of the building would be per push the other would be seasonal. This would allow for my clients to have the same benefit as us and keep the pricing structure the same for all buildings."

    What if you charged all of the proprties on a per push basis with a minimum (your call) number of pushes per season. Best of both worlds, not quite as complicated as your scenario, and all properties are treated the same.
     
    Last edited: Dec 22, 2014
  5. snocrete

    snocrete Banned
    Messages: 2,862

    I recently did this for the first time on a group of 4 locations for a customer. They really liked it, which surprised me. I was skeptical, because I thought all they would look at, was that I was charging the same for the 2 smaller lots.....but they loved it. A short explanation of what I was going to do before submitting the bid and we had a signed contract within a day of submitting it. Not a structure I would do for most of my accounts, but I feel good about these.....and it does simplify things a little bit for both parties.
     
  6. Antlerart06

    Antlerart06 PlowSite Veteran
    Messages: 3,437

    Am I reading this right you want to try give them a seasonal price for half of the lot and other half is a per push price

    You do that you might find how long the unemployment line is

    Keep it simple like Handyman said
     
  7. Herm Witte

    Herm Witte Senior Member
    Messages: 553

    Antler, the first part of my post was a quote from the OP. The second was my suggestion which works well for some, including myself, in our area. My suggestion for the OP as follows;

    What if you charged all of the proprties on a per push basis with a minimum (your call) number of pushes per season. Best of both worlds, not quite as complicated as your scenario, and all properties are treated the same.
     
  8. chris9724

    chris9724 Member
    from calgary
    Messages: 52

    What some of you have described I would call a caped seasonal. This would be great for me but not for the customer. (per push with a monthly min charge).

    What I am trying to do is give my customer the same benefit that we have with a mixed portfolio. (50% per push 50% seasonal).

    The invoicing would be no more complicated than a per push witch is what we do now. we would just add one line item the monthly seasonal price.

    I know it seams complicated but it really is not.

    As far as cost averaging goes this is not an option and would not help me do what I am trying to do.

    Thank you guys for all the input.
     
  9. derekslawncare

    derekslawncare PlowSite.com Addict
    Messages: 1,003

    I suspect if it were so easy to do, more of us would be doing it that way. Sounds to me like you have a high maintenance/whiny customer who wants to have his cake and your cake and eat both of them too.

    At this point, to accomplish what you are trying to do, I would say, bid half his buildings per push, the other half seasonal, and he can tell his clients to move into whatever building they want to be billed for. I think your customer is asking for and you are trying to provide the impossible, which is that EVERYBODY is happy. It doesn't work that way. Welcome to the Real World. (Meant towards your customer, not you). Good luck.
     
  10. pohouse

    pohouse Senior Member
    Messages: 322

    You do not need to be concerned with your customers portfolio. Only your own. Meet the clients needs as simply as possible.