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ttrying to sell customers on seasonal bids

Discussion in 'Bidding & Estimating' started by trqjnky, Aug 23, 2011.

  1. trqjnky

    trqjnky Senior Member
    Messages: 620

    Alright, I am liking the idea of seasonal bids, here's my 2am idea cause I can't sleep....

    Say I have 15000 in equipment for 5 properties, and my goal is to pay the equipment off every year.

    So in Iowa there's an avg of 34" of snow and 65 days of snow on the ground, average that out to 4" snows and that's just under 10 snows, with an occasional 2" and a rare 8-10", I think would equal to about 10 pushes on the average year. Which seems low to me.

    Now, 10 pushes at these properties would make me 14k per year. That's charging by the hour on a 4" and under snow.

    I would bill salt as an additional service, possibly callbacks for drifting, etc. also (to eliminate people abusing seasonal pricing).
    That would more than make my money to pay off equipment all in 1 yr.

    I was also thinking of capping the seasonal at 40 inches of snow. Unlimited pushes, but if we get a couple freak 12 inch snows, I wont lose my ass.

    Thus, if it snows 10 times, everyone is even, that's what they would pay/I would make on 10 snows if I were charging by the hour. If it snows over that, the business is saving money, even if they break the cap, because they get free snow removal from 32" average until the 40" cap is met. That's 8 inches of free snow removal, up to 4 plows at a 2" trigger. Think a manager would bite on that sales method? If it snows less than that, I make out good, but so do the customers because the know what the bill is going to be. And can budget for it.

    Soooooo what do you guys think? do you need more details?
     
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I invented seasonal pricing!

    Here's a simple way to price seasonal. Figure out how much you would charge per push them multiply it by how many times you think you'll go out and add a couple for just in case . Then take that price and divide it by 3,4 or 5 payments
     
  3. wizardsr

    wizardsr PlowSite.com Addict
    Messages: 1,557

    I'm surprised customers go for "capped" seasonals. Seasonal contracts are an insurance policy for the property owner, and a capped seasonal wouldn't allow them to budget which is the whole point. Apartments and churches especially like seasonals as it allows them to budget for exactly what it's going to cost them for the season, versus a complete unknown of how much it's going to snow and how many times you're going to push. With your idea of a capped seasonal, you're basically telling the customer, if it snows less than average, you lose, I win, and if it snows more than average, you still lose and I still win. :dizzy:
     
  4. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    Whats wrong with that?.....payup;)
     
  5. wizardsr

    wizardsr PlowSite.com Addict
    Messages: 1,557

    Nothing if you don't have smart customers. ;) Most of my customers are smart though, that's why they hired us after all, so it'd never fly here.
     
  6. Mick76

    Mick76 2000 Club Member
    from Maine
    Messages: 2,157

    LOL...Ya, same here...stinks doesn't it?....LOL
     
  7. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    Seasonal works well with multiple year contracts. Above average a couple years, below average a couple years, everyone wins some of the time but it averages out.
     
  8. trqjnky

    trqjnky Senior Member
    Messages: 620

    i kinda thought the cap idea wouldnt fly. i didnt know if it actually happened or not so the contractor doesnt lose his ass on a record snow year.
     
  9. JDiepstra

    JDiepstra PlowSite.com Addict
    Messages: 1,780

    You set the cap high enough to satisfy most customers but sill save your butt.
     
  10. TCLA

    TCLA 2000 Club Member
    Messages: 2,699

    No. Lose the cap.

    I know some get away with this....good for them.

    Put a provision in your proposal that a storm of xx" will be charged at xxx.xx per inch. This will cover your blizzards.

    You really need to lose the cap.
     
  11. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    No deal. You gambled on it ,so if you do get a big one upsell some loader service instead and make the money up through the back door.
     
  12. mnlefty

    mnlefty Senior Member
    Messages: 970

    I've found it to be a sales/closing tool in selling my uncapped seasonal contracts... just casually mention to the customer with the "awe shucks" tone how I don't understand how some get away with having a cap at a few trips over average, as I'm sure they're not going to refund money if we fall 3-4 trips under the average. Customer finally "gets it" and is usually enough to close the deal for those on the fence.
     
  13. B&K LawnCare

    B&K LawnCare Member
    Messages: 68

    I am wondering if anyone who has a seasonal cap, does a discounted price once you have reached the cap. this way the customer is getting a discounted price still but the contractor can cover their cost.