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what would you do ?

Discussion in 'Commercial Snow Removal' started by 518Landscapes, Feb 11, 2011.

  1. 518Landscapes

    518Landscapes Member
    Messages: 43

    I have a nice size account with three large locations in the area, have had them for 5 years
    The problem is the owner started complaining last year how expensive per event pricing was, mind you these are zero tolerance lots. They say all the time we have never had service like this before now, and don't want use to not be happy with the agreement. So I offered what I thought was a reasonable contract price this year. He said he wouldn't mind paying monthly if we had bad winters every year, He asked is there a way they could get a refund if we didn't get a lot of snow/ice:laughing: i Know what I'm going to offer him:gunsfiring::gunsfiring: Curios to know how you guys would handle this.
     
  2. csi.northcoast

    csi.northcoast Senior Member
    Messages: 320

    i have had the same issues from time to time. they don't mind paying if you are losing money but if they have a mild winter they want a refund.. seasonal contracts are like paying insurance, you pay every month whether you need it or not. i would ask him if he want a refund for a "light season, is he willing to pay more for a bad winter
     
  3. Jacobsmovinsnow

    Jacobsmovinsnow Senior Member
    Messages: 315

    Tell him this will happen when you get a refund on the investments you made to set up a snow removal business, that will reduce amount owing during a less than average winter. I have the same attitude as you. :laughing::laughing::laughing:
     
  4. tuney443

    tuney443 PlowSite.com Addict
    Messages: 1,847

    Funny is that client.:nod:That's why I NEVER offer seasonal contracts.Only per event--fair to everybody.
     
  5. bristolturf

    bristolturf Senior Member
    Messages: 435

    Solution is simple. Tell him that yes you would be willing to offer him a refund of some sorts in the event of a lighter winter, however; in the event of an above average winter, he will be required to pay more.

    What we will do is this. Average in our area is like 45 inches of snow. So we will develop a contract for 50 inches of snow. Salting is around 25 apps per year. So we put the limit for each at that. If we have more than 50" of snow, we charge additional per push, and then any salting applications past 25, are billed additionally. Mind you, if we ended up with like 51" of snow and 26 applications of salt, we wouldnt bother charging them for those additional services just becasue its more trouble then good, and we would rather retain the customers.

    On the low side we will say, <10" or 5 Apps = 50% refund; <15" or 10 apps 35% <24.9 in or 13 apps 10% after 25" of snow and 13 applications everything is full price.

    If I have the maintenance as well for the site, i usually wont offer a cash refund, as i will just apply a credit to there account for landscape maintenance for the following season. If its a $1200/month account and they have a $2000 refund coming i will just divide that 2000 by 8 and subtract $250 from each month so they only pay $950 then.
     
    Last edited: Feb 11, 2011
  6. Burkartsplow

    Burkartsplow PlowSite Veteran
    Messages: 3,245

    The point of a seasonal is to have a set price so the client can set up a budget for the year and know what they are paying over the next 5 months for snow removal and d-icing. That means no questioning of the invoice at the end of the month like per push (which I like per push because it is fair to both sides). They asked for the seasonal and there should be no refund at the end of the winter if it is a light one. Because we all know that if it was a bad winter they are not going to pay us more for the extra service we had to provide. The thing with seasonal is getting them to sign a 3 yr contract so over that period of time it usually evens out. We could have one normal winter, one above normal winter and one less then average winter and in the end we the service provider and the client come out even on both ends as an example. It is the companies who think when it comes to signing a snow contract, is the feeling they are in Vegas and switch between red and black on every spin of the roulette table. The client usually asks you the question, "do you think this is going to be a light winter or a heavy one"? And I always answer the question that will lead them in the direction to what type of contract I want them to sign for the property. So in conclusion they do not deserve a refund at the end of light winters. It is the cost of doing business and they know they are taking a gamble as well as you are.
     
  7. dbarkie11

    dbarkie11 Junior Member
    Messages: 20

    I have a few season long contracts as well, they are a PITA, they expect the world because they are giving you a fixed amount of money regardless of the snowfall amount, but i look at it this way, those season long contracts keep the lights on so to speak. they pay my initial operating expenses, and act like a safety net if it doesn't snow at all. There is no reason you should be giving back this guy his money. PERIOD. Like someone else said, its just like insurance, you pay for it, hedging your bets that you wont need it. Don't let this guy bulldog you, Ive been there and done that, and if he wants to jerk you around like this, he's definitely not worth it.
     
  8. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    I like my seasonal contracts. Never had one complain about price. They like to know how much they will pay each month and. I assume they might be complaining about your billing for salt and they don't know how much it will cost them each month
     
  9. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,262

    I like my seasonal contracts as well. No complaints from my customers. If it snows a inch or a foot, I don't really care since I mainly run wheel loaders and bigger blowers. The larger equipment allows me to calculate based on a set number, say 15 pushes per year. Not that we don't get a few more or less than that, it's just that my guys don't get their buts kicked in bigger snows. Most (all) of my seasonal contracts have been with me in the 5 plus year range, so it has averaged out....
    I guess the sliding scale works, but expect to give a refund if you have a low snow year. Oh, and if it's a heavy winter, as you pass up the average, my belief is you should only be covering your costs, not making a killing. The price slides also.