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Per event pricing

Discussion in 'Bidding & Estimating' started by Longae29, Oct 13, 2015.

  1. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,954

    There's a couple threads on this already but they are mostly filled with the typical senseless banter without anyone really answering any questions.

    Around here the only way I ever bid is per push (whatever is on the ground when plowing/clearing is whats charged for) and seasonal (100% inclusive - hauling off site)

    We have numerous sites that we've been servicing for a few years through a middle man but I have since gotten through to the right people at corporate (out of state) to bid directly, they only want per 24 hour event pricing, so being new to this I thought I'd seek some advice from you guys who bid this way regularly.

    For 2-4" event I took ((plow+salt)x13 +(2xplow + 2xsalt)x7)/20
    4-6 (1.9xplow + 1.9xsalt)
    6-8 (2.5xplow+ 2xsalt)
    8+ (3xplow +2xsalt)

    Seems like a good place to start, anybody have a better method? See any tweaks i should make?

    Feedback appreciated.
  2. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,468

    Good luck!

    So is the 24 hours from 0000 to 2359? Or does it start when the "event" starts?

    I'm always intrigued by this type of pricing. I am also scared to death of doing it, and would walk away, so more power to you.
  3. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,954

    The specs come from corporate in Los Angeles, I'm sure they're all very well versed in the real world of snow.

    "For a cost of ____ per occurrence, the Contractor shall plow 2-4" of snow within a 24 hour period. This includes salting and shoveling of the property and Sidewalks when the snow is being plowed."
  4. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,954

    It was over 100k in work the last 3 yrs, they are very happy with our service, don't want to walk away as much as I'm being beat up on a lot of other jobs this year.
  5. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,468

    Interesting wording.

    So what happens if there is more than 2-4" of snow in a 24 hour period?

    I can remember a foot in a 3-4 hour period a few years back. And the 18" in a 6-7 hour period. Or the 22" back in the late 90's.

    That's why "per event" scares the crap out of me.

    More power to you. I don't remember your average annual snowfall, and I'm not as much a gambler as GV, but I wouldn't touch it. I understand where you're coming from though.
  6. LapeerLandscape

    LapeerLandscape PlowSite.com Addict
    Messages: 1,465

    How did you get paid or bill this to the middle man in previous years?
  7. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,954

    There are separate blanks for 4-6 6-8 8+. We get about 50"

    Like everything else just have to price it accordingly I guess.
  8. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,954

    We got per push/application from the middleman
  9. TCLA

    TCLA 2000 Club Member
    Messages: 2,696

    I'll give clients (or prospective clients) pricing every other possible way, but never event pricing.

    Good luck with that. In order to protect yourself you have to price it too high.

    Since you broke through and are able to communicate directly with them, maybe explain to them why event pricing is not in their favor?
  10. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,468

    You sound like a smart guy.

    Why the manpris, socks and sandals?
  11. Longae29

    Longae29 PlowSite.com Addict
    Messages: 1,954

    I've always been able to avoid pricing like this in the past. When I look at the prices I submitted I think it looks awful high, but I feel the way I calculated covers us?

    I did write an email explaining that if there's sticker shock on the quoted prices its because they're looking to set it up completely different this year....we'll see what happens.

    I've been told "it ain't gonna snow this winter anyway" so probably don't even need to worry aboot it.
  12. ryde307

    ryde307 PlowSite Veteran
    Messages: 3,131

    Why do you say it's not in their favor? Not arguing just learning.

    We use event pricing. It is very common. It does depend on the size of accounts we are talking about though and what type of account they are.
    Longae you have similar snow to us I would think. Most snow falls fall in the less than 6" category in a 24hr period. We don't get the large lake effect stuff where we get 12+ in 24 hours. It does happen but not a ton. So for us the way it is set up is you pay based on the total in 24 hours. The 24 hr thing is a little grey. some people use start of the storm some the day but we have never had an issue with people questioning this. Again most snow events here are over in 4-8 hours. We typically plow overnight and if it was 6" then it's billed as a 6" event. We do have language that states we will do open ups at 3 inches during open business hours.

    So billing would look like
    1-3" $200
    3-6 $300
    6-9 $400
    and so on

    Then Open ups $125

    Salt applications $150.

    A possible bill on a 6" event would be
    1 Open up @ $125
    1 6" event @ $300
    1 salting @ $150

    Total $575.

    (These are just random numbers to give an example)
  13. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,921

    If it's in there favor your loosing $$$, I'm doing this so the$$$ is in my favor.
    Incremental pricing leads to disputes.

    My customers like to know how much it will cost up front.
    All of my accounts are seasonal or per-push with a " extra blizzard rate"
    A event could last a hr or a few days.
  14. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 10,468

    If there is a time frame, it isn't really per event.

    Think of the blizzard of '78, that "event" was the better part of 5 days long. Lots of snow and even more wind.
    Last edited: Oct 13, 2015
  15. John_DeereGreen

    John_DeereGreen PlowSite.com Addict
    Messages: 1,719

    X2. Per event scares the hell out of me.

    I'm interested to see how it goes for someone that's as big as the OP is.

    Personally, I would also include the prices that I was charging/being paid by the middle man as well. Obviously they were somehow marking up your services to corporate, so it would stand to reason that they would be able to see value in not going per event pricing I'd think.
  16. ryde307

    ryde307 PlowSite Veteran
    Messages: 3,131

    We define an event as 24 hours. If its a multi day snow storm it's multi event. Maybe it's just weird terminology. It is pretty close to being billed per push with rates for higher amounts of snow. We have not had any disputes on depth or timing. ( not to say it can't happen I am sure it does) In a per push model I would see just as many disputes from billing X for plowing during the day and the same X for plowing the whole lot at night.
    I don't really see where we are losing the $$$ but maybe I am missing something that is why I asked.
  17. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,921

    If you price per event with a incremental rate and plow 3 times and it is half full 2 of the times how do you bill it?

    I bill for 3 pushes at set price, it doenst matter that 3inches fell over night
    ( empty lot)Or that 4inches fell during the day.( plowed twice)
    Yes during the day you cannt plow parking spaces but if there is a car there the spot doesn't need to be plowed.
    I sell a service, not the amount of work we do.
    Less work per punsh= more profit for us at a set price for my customers.
    It's just how we do it, it may not work for you.
  18. ryde307

    ryde307 PlowSite Veteran
    Messages: 3,131

    I don't disagree with you. I am just playing both sides. If a customer is complaining about a per event structure on how much fell and when that same one would probably complain about only plowing half during the day and paying the same price. I agree we sell a service and not an amount of work. If we were selling an amount of work we would sell hourly.

    Ours is I guess somewhat of a hybrid of per push per event. I explained it up a few posts but they pay the event price and a price for daytime open up plowing. Ultimately I am sure your way, my way, or seasonal will all work out to be pretty close in terms of total revenue a site pays over a full season.
  19. Maclawnco

    Maclawnco Senior Member
    from OH
    Messages: 612

    a true "per event" would not include the open up charge.

    We were forced to bid an very large account that way last season for a 3 year deal. Corporate in CA said that was how it had to be. We ended up making quite a bit more than if we would have bid it per push and I told them that initially too. They didn't care. I'll pm you how we did the increments.
  20. ryde307

    ryde307 PlowSite Veteran
    Messages: 3,131

    I understand. I was just explaining a way we set things up. We do have a couple that are per event pricing. That was how management wanted it and there was not an option for another pricing structure.