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Need help dealing with residential customers about pricing

Discussion in 'Introduce Yourself to the Community' started by Jeg18142, Mar 4, 2013.

  1. Jeg18142

    Jeg18142 Junior Member
    from USA
    Messages: 1

    Hello, I am new to this site. I posted a thread on another forum and was told to join plowsite.com and ask my question here. Anyway, here's my story; please bear with me.

    My brother and I have been running a small neighborhood handyman/ landscaping/ snow removal company for the past couple years as a side job. For snow removal, we have around 6-7 jobs all within the neighborhood and we know all the customers on a personal level. It basically started a few years back when we bought a snow blower (Ariens 24" 2 stage) to use on our property. Eventually, a bunch of the neighbors called and asked if we could take care of their snow, as they don't have snow blowers so we agreed and do the driveway, sidewalk, front walk, steps, brush off the cars, etc) any time it snows. One of us runs the machine, while the other one shovels. We charge our customers $25/ hour per person working and normally (less than 8") it takes us half an hour (1 man hour) so we bill them for $25. When there is more snow, we obviously charge more money because it takes more time. Never had any issues with that. We have no contracts and do a $25 hourly rate for all our services, whether it is snow removal, hedge trimming, mulch spreading, leaf removal, or fence painting.

    Here in CT we had a very large snowstorm last month. We got 3.5 feet of snow (after the plows came there were 5 foot high snowbanks at the ends of the driveways). I talked to every customer after the storm and told them that the work will take considerable time and money if we did it and advised them to try to find someone who can plow since we don't have any heavy equipment like a bobcat, etc. None of people were able to find someone who wasn't completely backed up with plowing so they instructed us to go ahead and do the work so they could get out of their driveways and go to work. We had to hire on a friend of ours to help us work. So we had 3 people working, each for $25 an hour which comes out to be $75 an hour and each job took us 3 hours to do so I billed each customer $225. Mind you we were busting our asses the whole time trying to finish each job so we can move on to the next so people could get to where they needed to go. We were not wasting time or going slow whatsoever. Also, once this was all said and done I needed to do $500 worth of snow blower repairs.

    Now I have customers calling me up saying "There must be a mistake with the bill. Normally you charge $25 and now its $225. This can't be right!!" and I go on to explain to them the price breakdown of 3 people X 3 hours X $25 an hour = $225 and they just can't grasp the concept that it will be more expensive to remove 3 feet of snow than 6 inches. I have already had 2 people tell me they will be finding someone else to remove their snow and quite frankly I am fine with that if they are going to be so stingy and difficult to deal with. I doubt they will be able to find anyone to do it cheaper anyway. There were headlines in the local newspaper a few days after the storm saying how people were charging upwards of $250/ hour to work that storm. So, what do you guys think is the best approach in dealing with these kinds of people in a somewhat professional manner? Am I crazy for charging $25/ hour for back breaking snow removal or are these people just being cheap? I would appreciate any input. Thanks a lot.
    Last edited: Mar 4, 2013
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    This is where the saying,right equipment for the right job. You were fine at 25 bucks for a normal snowfall. Where you got hurt was more snow they you could handle. So your customers in a way got boned because you didn't have the right equipment. If you had a truck maybe you still would of charged them 25.00 each time you came by. So even if you hit them 3-4 times they would only owe you 75-100 bucks. Lesson learned,
  3. gpservices

    gpservices Junior Member
    from CT
    Messages: 29

    pretty much well said, i understand your situation but im in CT as well and had to plow same snow, and not that im talking down to you (so please no offense) but im running a 3/4 ton truck with thousands of $'s in insurance and fuel taxes etc... so basicly a lot more overhead then you and i spent over 2 hours in some very long drives and didnt charge as much as you did with just shovels and 1 blower. So as was said it comes down to equipment but you did give them a warning and a chance to back out so i would try to explain that to them and say you saw what i did and had to clear.
  4. GVL LLC

    GVL LLC Senior Member
    Messages: 121

    Hindsight is 20/20 but you probably should have told them that since a blizzard is coming that they are going to have to pay more for an unusually big snowfall since it will take more man hours to complete the job.
    Also if i were you guys i would have tried to hit each house 3 times during the storm so that you could keep up with it and keep the costs down.
    This is especially true since your accounts are so close so that you wouldnt be driving down the roads in whiteout conditions so getting to the accounts wouldnt have been a problem.
    But at the end of the day the customer needs to realize that these storms happen every week and when a big one comes they have to pony up the green especially seeing how they wouldnt have made it to work if you guys blow them out.
    If customers dont realize this then you should be happy if they discontinue your services because cheap people arent the types of customers you want.
  5. Burkartsplow

    Burkartsplow PlowSite Veteran
    Messages: 3,246

    I charge at least a hundred for one time snow services if it is over 12 inches when I show. You did the work and told them before hand it would be more. Take your money and move on.
  6. Meezer

    Meezer Senior Member
    from Indiana
    Messages: 300

    If they can't grasp the concept, you need to get rid of them & find other customers.

    This is a big mistake for a variety of reasons. Had you had something in writing with them, then you can easily tell them to STFU with their whining & read the contract that they signed. :laughing:
  7. 32vld

    32vld Senior Member
    from LI, NY
    Messages: 622

    Plow's were getting $175 to do a regular sized two car garage driveway on Long Island.

    I do not know what size driveways they were doing. So can not say how over priced they were.

    Though I will say there are 4 problems with their operation.

    1st problem they needed to give a price and get the customer's OK before they got
    out of their truck and touched a shovel or blower.

    2nd problem is they do not realize the cost of doing business. Because they would not care that they had to spend $500 to repair their blower when the event was over. Worked price right will provide the money to repair and replace equipment without causing them pain.

    3rd problem is leaving money on the table. Related to not knowing the cost of doing business. Just because they are living at home, working out of mom and dad's garage, with a next to nothing over head does not mean that you charge way less then the going rate for their area.

    4th problem is they are low ballers. Offering work at below market prices only attracts the cheap customers that will continuously shop around until they can find someone not smart to charge the going rate. These customers were spoiled by getting work done too cheap. Then to ask them to go from $25 to $225 is not going to happen.

    Edit to add their lanscaping prices seem to low as well.

    How low can a low baller go?

    Low enough to play hand ball off of a side wall of a curb.

    Last edited: Mar 5, 2013
  8. bdlawncare

    bdlawncare Senior Member
    Messages: 276

    your fine, thats alot of snow price seems fair plus you gave them a heads up... If they are being stingy screw em.. If they dont understand that 36" is more expensive that 6" you shouldnt even waste your breath of them... Like others said take the money and run!
  9. Triton2286

    Triton2286 Senior Member
    Messages: 653


    Everything you said was perfect. But to point out some things you touched on in a little more depth. The per hour thing would be just fine, but charging per hour per man is absolutely rediculous in my opinion. Especially how they did it.

    To the OP how can you justify hiring on an extra hand without notifying you cusomter? Why is that wrong? Because you just jacked up the hourly rate from $50 to $75 because you cannot get it done with your current crew. That's your problem not the customers. You can't just say oh yea you bill is this high because i felt it would be easier to hire 5 more workers and charge you an hourly rate for each worker.

    Also you have a 24" 2stage and need $500 to repair it? What the hell happened did you leave it in the street an a municipal plow smacked it?
  10. blowerman

    blowerman PlowSite.com Addict
    Messages: 1,275

    Triton 2286: not trying to give you a hard time, considering I don't agree with the OP's beef.
    He did say his rate is $25 per man hour. So if it's 1 guy for 5 hours or 5 guys for 1 hour, that point is moot.
    I agree on the $500 repair; what happened to the blower?
    Regardless of the amount of snow, you are unable to properly perform the service you are offering.
    I don't care if it's a storm of the year, you offered snow removal and when the "big one" hit to tell the customer to go find someone else for the one event? Time to quite and move on.
    Even with our large equipment, you win some and loose some. Not every storm pans out.
  11. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    See for me it difficult for this. I do seasonal, I don't care if its 3 inches on the ground or 30,they pay no extra ,a deal is a deal.Still comes down to equipment, you need to plan for the worst. Thing is ,he said they have 6-7 driveways to do,they should of been out during that storm to keep things open,Also charging by the hour for a driveway? Flat rate price,I would like a see a image of this driveway.Also he is trying to compare a customer to a 1 timer, if it was a 1 time call ,then charge as much as you can.But it does seem like they were sitting home till it stopped snowing before they went out.
  12. pohouse

    pohouse Senior Member
    Messages: 322

    I think your price was high, based on your operation. I agree with GV. Not the right equipment and no midstorm visits in view of the available tools. The OP was just some guys working hard in the winter, trying to make a buck, but not really prepared to provide a professional level of service no matter what comes. It's like advertising yourself as a mechanic, but only having the tools to change oil. Changing oil can put bread on the table, but sooner or later your customers are going to question whether or not your really a mechanic. Sooner or later they are going to find someone else. My advice to the OP is that if you want to provide professional snow removal services, get the paperwork and equipment you need to service your customers. :salute:
  13. GVL LLC

    GVL LLC Senior Member
    Messages: 121

    bottom line is that three visits should have been made during this storm which would have limited abuse on snowblower and decreased the price while still being efficient.
  14. rocks&blocks

    rocks&blocks Junior Member
    Messages: 21

    I think its a matter of getting caught. Educating your customers is key. Having this discussion earlier about extreme situations probably would have eased the issue. If the customers are aware of the many different scenarios the easier it is for all.

    As many have mentioned, I think multiple visits were in order. In that case you kinda dropped the ball. In the past when I made similar errors, I was willing to split the charge, realizing I could have done it better, but a big snow fall is a big snow fall, so a fair price should be expected. Then afterword,I learnt not to make the same error again and educate all customers on the procedures of all variances.
  15. Tyler259

    Tyler259 Junior Member
    Messages: 6

    Yeah, what happened to your blower btw? I'm the same Tyler259 from the other thread you made.
  16. bdlawncare

    bdlawncare Senior Member
    Messages: 276

    IMO some of you are taking it a little overboard... The op is not doing anything wrong by servicing his customers with a snowblower. Sounds to me like they know each other fairly well, so they know damn well what he is using to clear the drive. If they didn't switch after the first time you used a snowblower than thats on them. Everyone has to start somewhere and I think that the price is fair considering how much snow there was. It wasnt like he did this outta the blue, he went as far as to tell them what they were and were not capable of. And they gave their consent. I had a couple drives, during NEMO that were $375.00-410.00 and I only got 16". Dont sweat it OP your prices are reasonable, the people that are complaining drop em and replace them with better customers. Too many people working for not enough $$ already.
  17. shovelracer

    shovelracer Senior Member
    Messages: 525

    I agree there are too many variables to get crazy. We do not know if this would be a $50 plow driveway, $75, or $25. So really comparison isn't going to work. Also consider that you might have gotten a few plows in, but if this is one of the roads that didn't get touched than you wouldn't have made it anywhere anyways. The hourly thing is fine, the rate would be low for an insured business, but likely it is were they should be. Although I use that loosely because I still think uninsured scabs do nothing to help the industry and are not even helping themselves in the long run. We have some snowblower only accounts and they pay substantially more than $25 per man and more than truck plowed. They will not be able to simply buy a truck and charge the same clients double. Those accounts are forever $25 accounts now. Well the joke is on them in a way because now that these accounts are going to go to market they may be in for a rude awakening. They very well could have been $400 Nemo driveways and non payment of a real contract would have stiffer repercussions. In the end the mistake was not having a clear contract. I'm fine with hourly because it allows for this extra amount. I have a real problem with the guys that do fixed amount plows and then when the big one hit they raised the rate without notification.

    There is a problem #5 and it also should be the #1 rule. You do not work for family, friends, or neighbors. You want to help out and provide service as a good guy fine, but once you introduce money into it things get messed up. Your going to have to see these people and it will never be the same. It is a lot different than some no relation client that you might never see again. We've all done it from time to time, and I do not think you'll have anyone tell you it's the way to go. I assume you are young, maybe no car, etc. Take that blower over a street or two. At least you wont have to look at them when your cutting your own grass.
  18. JMHConstruction

    JMHConstruction PlowSite.com Addict
    Messages: 1,722

    I agree, you need to be out more than once during a large storm. Hell 3', I'd be out minimum 3 times, maybe even 4. I don't know about your area, but $25 a drive is RIDICULOUS for any size:eek:. Around here you get about $60+ for an average 2 car drive, no matter if you have 1 or 100 people working it. We do have low ballers, but those who have insurance and even a little overhead have to survive during winter. I personally charge full price for first time out, then 75% of price any other time out during the same storm. So say at $60 price per drive, with 3 times going out it would have cost them $60+$45+$45=150 for that storm. I have it all in writing that the customer and myself have signed. I have only had one person complain, I received their check and offered to cancel their contract. They called other people, and for the service we offer for the price they called back after a few days (I told them I had filled their spot). Don't let customers try and run your business, plenty of people will want your services. Good luck in the future, and remember learn from your mistakes.
  19. eastcoastjava

    eastcoastjava Senior Member
    from Boston
    Messages: 165

    Best comment on not letting them run your business. They get what they pay for, and running a good rate involves having proper,reliable equipment for a range of snowfalls from a dusting that needs a quick salting to a blizzard where a driveway needs a loader to remove snow. Being dependable, doing the work that you were required to do, and leave the site better than it was before you got there. Low ballers run junk, lets try and push 2 feet of snow with this rusted to hell fisher and beater half ton from the 90's, yea it may work, but if you break down GL your not subbing your drives to other guys because they know when they are getting shafted on cost. Just my .02 cents
  20. BillyRgn

    BillyRgn Senior Member
    Messages: 728

    I think your rate was fine you didn't say because it's more I'm charging 40 per man hour. Adding a guy does nothing to the price if it takes 3 guys an hour to do something 75 dollars you can bet you butt it would take one guy three hours 75 dollars worth, and working together you are probably more efficient anyway. You told the customer it was considerably more. There were tons of people who paid contractors in my town 450 dollars for a single width 2-3 car long driveway, was it a little steep sure but people need service and this is what they found. As far as hitting it a couple times sure thats what you do in a normal storm, memo was not a normal storm, contractors, the state of ct and towns had to get loaders and blowers from out of state just to open the roads up, it wasn't possible to do it several times . With the amount of snow and how hard the wind was blowing the drives would fill back in by the time they were done same as the lots and roads being done by contractors with the right Equiptment. even doing it a few times I'm sure would have resulted in a price that was similar. The way it was falling it hey did it three times I'm sure it would have averaged 3 hours per time with 3 men coming out with the same price. After the plows came by people were standing at the end off there driveways with 200 dollars begging someone to stop and do the apron guys around here with full size pick ups and plows that couldn't get a loader or skid steer were using snow blowers on the driveways because they couldn't plow them. The customer agreed to 25per man hour, they have paid 25 per man hour in the past so they have to ground to question anything in my opinion. Tell them to ask there friends what they paid to have there driveways plowed and that will put it in perspective. You even called and said you would have trouble and it would take more time, some guys just shut there phones off and never showed up. If anything they were on the low side I know a lot of guys on this site that do drives double there base price every 6 inches and usually do more than that once they hit a foot and a half. well 40 inches fell in Hamden ct where I'm out of. 40 bucks for a regular driveway means 1-6 $40 / 6-12 $80 / 12-18 $120 / 18-24 $160 / 24-30 $200 / 30-36 $240 / 36-42 $ 280. So they were cheaper than I would have charged. I used to go by this except I used to add another 20 to everything over 12 when I did drives. I also would have charged more to go back in some cases a week and a half after the storm to do the apron after the town finished the road.
    Last edited: Mar 9, 2013