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What this Industry really needs!

Discussion in 'Commercial Snow Removal' started by Snow Picasso, Dec 10, 2012.

  1. Snow Picasso

    Snow Picasso Senior Member
    Messages: 250

    It seems to me that the majority of businesses simply don't care about the the contractors they hire or the quality of work they provide. It's all about the cheapest rates! What this Industry really needs is one corporation to get sued for their negligent hiring practices! The proof that they're hiring incompetent service provider just to pass along the liability would change the way they think! It would rid us of all low balling and put everyone on a level playing field. Just saying! Thumbs Up
  2. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Most lawsuits are settled out of court. I'll bet it costs less to settle the suit then pay for extra services.
  3. Second Nature

    Second Nature Member
    from Ohio
    Messages: 67

    Budgets matter to everyone. A local manager may want YOU to do their work, but his CFO or regional manager may be riding him on every dollar spent. In a number of cases I've encountered, the person saying "no" isn't someone you'll ever have a chance to meet or make a pitch to. They simply want lowest possible price and adequate service. They will put up with some headaches to save some dollars. You and I may give the best service in the area...but we'll never get on certain properties if the bottom line is price. We know the intangibles matter, but they're still intangibles to a customer. Things like commitment, timeliness, detail, insurance, reliability....these are all nothing but words to a potential customer. Pay attention: If the potential customer is focused only on 'their needs' and 'low price', you've probably got a reverse auction on your hands...and the lowest bidder wins. Conversely, if the customer seems to take an interest in you, your business, other customers, equipment, and track record...well, you might just be talking to someone who is looking to hook up with a quality contractor for the long term. These are the customers I work very hard to find and keep.

    I personally don't sweat this lowballing thing...or people trying to drive down their costs. What we do is what we do...and I make people aware of that. I'm not interested in customers who consistently push and manipulate for a lower price, while my cost of providing service is on a steady incline. Money matters to both of us, and I'm not willing to give away mine so they can have more. I'm also not interested in being part of a 'marginal service' situation: that's a formula for aggravation or worse. I tell my potential customers up-front: "If I can't do your snow removal the right way...proper way...safe way, I don't need to be here." I simply discard customers who have an above-average likelihood of causing me grief or loss of sleep. Money is not worth misery.
  4. Meezer

    Meezer Senior Member
    from Indiana
    Messages: 300

    There never has been, nor is there such thing as a "level playing field"

    Everyone is not the same. Experience, equipment, employees, subs, costs of doing business, etc., are all unique.
  5. Eronningen

    Eronningen Senior Member
    Messages: 447

    Nicely done!! Exactly my thoughts. People come on here and ***** ***** ***** about lowballers but its everywhere in most all of the trades too. I deal with it in the home exterior market and the snow business. Most of my customers I've had for 10+ years. Some come and go quickly due to pricing. Some come, go, and come back to me. There should always be enough of the customers I'm looking for in my market to satisfy my needs and wants and keep me busy. And if it comes to a point where this is not, no big deal, I'm out and could care less.
  6. theplowmeister

    theplowmeister 2000 Club Member
    from MA
    Messages: 2,617

    what we need is snow making at every driveway so if there is no snow we can make it.

    After all all you lawn service people water the lawns so you have to mow them ... and you fertilize them ... so you have to mow. why cant I make snow so I have to plow
  7. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

  8. thelettuceman

    thelettuceman PlowSite.com Addict
    Messages: 1,218

    This should be on page 1 of The Snow Plowing Bible !!!!

    Grandview >>> Where do you get all of those picture?
  9. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,823

    I recently lost a store that was a national pizza chain's store. I've been doing it for 4 or 5 years at around $5k, its reasonably small takes about 20 mins to fully plow. Turned in the same bid every year, never went up at all. They came back and said other stores were being done for $1150. flat rate seasonal. Yea they're small places, but what commercial risk/parking lot is worth that? They wanted an entire breakdown of how I come to my price, including efficiency rates (why I think it will take as long as I do), hourly rates, and how I came to all of them. I was shocked and just walked away. Its unfortunate because the manager really liked our service, we all had a great relationship, but this was being forced on him by his District manager.

    Of course the constant addition of competition, and some of which have no real grasp on their numbers can contribute to the destruction of rates. And national ESM companies might hurt a bit too. But I truly believe that most of it comes as a trickle down of the overall economy. Budgets get tighter, district managers turn the screws on local managers, and at the SAME TIME contractors are finding less work, and become more desperate to close any work they can. Hense the devaluing of the overall market.

    In our commercial rental market, we were charging more in the late 90's and the first half of the last decade, than we are able to get today. Same scenario playing out here in this completely different business, except it is with prospect company's rental budget VS. landlords fighting sq ft price against each other instead of plow guys.

    I know this is slightly off topic to the OP, but it really got me thinking when "SecondNature" brought up the fact of District managers riding every dollar they spend.
  10. MR. Elite

    MR. Elite Senior Member
    from E Town
    Messages: 557

    Does any1 else believe in any way shape or form, that with the lack of snow/income the past 2 seasons now... that It may (level the playing field)?? Kind of in the sense that since the uneducated, unprofessional and down right waste of space plow companies around may either go belly up or jus straight up throw in the towel n walk from the industry all 2gether??
    Midwest guys.. does any1 remember after the 10'/11' season (blizzard) we had, how many fools went out n said..(plowing is easy! Im going to go out and buy a truck and plow n make a million dollars this winter!) does any1 remember the vast amount of plow trucks for sale in the middle of the 11'/12' season n soon after...?? Now maybe its jus me thinking an hoping this industry takes a turn for the better real soon!? But I seem 2 think (as horrible ****** as it sounds) that if we have another (KNOCK ON WOOD) season as bad as we did last year, that some, hopefully MOST of those stupid, grimy, companies out there that will literally almost bid out such a low figure on sites, and damn near plow it 4 free.. just to say they have accounts, will parish this year n hopefully walk away from the industry and finally admit that U have to have some common knowledge to survive in this industry!!
    Maybe Im just dreaming or babbling...... But hey, a man can dream, cant he...!??
  11. Second Nature

    Second Nature Member
    from Ohio
    Messages: 67

    One of the hardest things for any business owner to do...really do...is step into their customer's shoes and see things as the customer does.

    I love my business as much as any man could, and we put a lot of value on solid work and professionalism. When we roll, we're a snow-fighting team and our competition knows it. Our trucks are all identifiable and look much the same. We've been doing this work a good long time. I often feel some pride when I see us getting things accomplished. I've never let myself forget that the owner of an established trash/sanitation service probably operates and feels the same way I do. What's my point?

    A customer looks at the trash truck and sees only the truck doing a service. It's a 'have-to-have' service, and meets a basic need of their business. As long as they haul trash and don't cause a major problem, they mostly get ignored and will keep working...as long as their price is considered 'good'. When a lower price point is offered, why wouldn't the customer listen? "It's only a trash truck hauling my trash, and not rocket science." I personally have no loyalty to my trash service, my phone provider, or my propane company. I'll save money where I can, as long as my needs will be met. I will ignore the "you're gonna be sorry you left us"....because these are services I can get from other companies. Just remember...the customer usually only sees the truck and the work it does...then the cost of that work. I might want to believe otherwise, but I remind myself that 'ground level services' like plowing, mowing, sweeping, cleaning, and more...are all viewed like the trash truck. We're necessary for business to go on, but we're replaceable with a phone call. You and I cannot stop that call from being placed. There are a number of ways to lower the likelihood of getting dumped for a better number, and I employ most of them, as I'm sure you do. In the end, we don't have final control of our destiny with a given customer...and reminding myself of that is key to maintaining my sanity.
  12. nighthawk117

    nighthawk117 Senior Member
    from Ma
    Messages: 165

    VERY WELL SAID !! There is no more loyalty, company recognition, friendships in this or many other price point industries anymore. All I read on here is " lowballer this and lowballer that, then the guys crying about it in turn inquire about an item in the classifieds and offer ridiculously low money or tell the owner that his price is ridiculous or they can get it cheaper elsewhere !! This economy has and will continue to be bottom line price driven for many, many clients. The market is saturated with " chuck in a trucks ", and isn't going to change anytime soon. :salute:
  13. Neige

    Neige Sponsor
    Messages: 2,215

    Interesting, you have some very valid points. I often think I am old school, when loyalty had some worth. I always try and put myself in my clients shoes, and try and find out what they need. It is not always the lowest price. Our family is well know in our community, and we are 5 households with four of them having 3 children each. A few years back our company landed a grocery store in our community. Our company policy is to support those who support us. So our wives started shopping there every week, spending around $500/week, so roughly 26 grand a year. We had this account for 2 years, and then they went to a lower priced service provider. I went to see the owner of the grocery store and explained that our families would no longer be shopping there. He was surprised, and tried to get me to understand that the reason for their decision was that they were going to save $3000.00 a season, even though they were very satisfied with our service. One business man to another, surely I could understand this. I explained that I could not understand, being that we shopped for 26 grand a year with them. I explained as one businessman to another, that there is more than price to consider, when choosing your service provider. I will see next year if my conversation made a difference with this client.
  14. Second Nature

    Second Nature Member
    from Ohio
    Messages: 67

    Interesting to me is how loyalty and mutual business often works in a small town, but almost never in a city. The more severe the competition, the more likely that PRICE will be the deciding factor. I like my insurance agent, but I remind him that our friendship isn't keeping me from shopping other insurance. I mostly stay with him due to excellent service and generally competitive rates. I walked away from my previous agent when I figured out he was costing me an extra grand per year and it was going directly into his pocket...though he was a nice guy. Loyalty is a good thing to a point, but only if it's mutually beneficial.

    I tend to sell it this way: "Let's be honest. The only reasons to remove your snow are to keep business running, and to keep people from getting hurt on your property. You will simply need to decide how much of this you can compromise in order to save money. You can play it safe and go with an established professional company, or you can gamble and hope. It's your business, your money and your decision." Even at that...90% of it goes in one ear and right out the other. They want to see how low the other guy's price might be. I place no blame...and I remember my 'professional' ex-insurance agent.
  15. BC Handyman

    BC Handyman PlowSite.com Addict
    Messages: 1,943

    Great post & another good thing to think about, I like your Garbage truck analigyThumbs Up

    Another great post, I've done this aswell, but after I lost the account to a guy that was half my price,(with no business licence) I no longer go there like I did while I was servicing them, I never did say anything to him about it like that, but I did think about how he was losing out as much as me cause I dont buy anything very often from them anymore.

    I will say I live in a smaller town/city so the loyalty thing is huge here with alot of people. I've seen crazy things & customers complain & yet they call joe back cause he the old neighbor or suzy cousin or what ever. So it was hard & took me a while to get "in" with some, Now I've come to realize & accept that I'll never be "in" with all due to these small town loyalties, but it's been 9.5 years now & I can say I'm in with some now:D
  16. SnowMT

    SnowMT Member
    from MT
    Messages: 36

    True! The good news, business is business. Greatful we live in a country that you can have a choice. We are not the cheepest and I will be the first to tell my customer this. It's no secret, you get what you pay for. Yes, we have lost some business, over price. Change- is hard for everyone. Watched this year a company that was getting poor service and chose to stay with their current vendor. Which was completly amazing to me, I learned a long time ago that it is a waste of time to try to sell real answers to anyone who just wants to buy echoes.
    Don't let a few changes in business throw you off your game. Stay focused. Business is ever changing. But, don't let a low baller or anyone else stop you from being the best you.ussmileyflag
  17. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,823

    This conversation reminds me of a great book I read awhile back called "Blue Ocean Strategy". The book references crowded market space, such as landscaping or snow plowing, as a "red ocean". It references uncontested market space, such as the invention of google or facebook, as a "blue ocean". Every market space started as a blue ocean, but its only a matter of time until everyone else follows, creating competition, and thus turning an uncontested market space into a "red ocean". As time passes, more and more people will enter the market, technology and education will allow for extreme leaps in efficiencies, that will enable people to do the same job for less money. At this point, the "red ocean" that we call the snow removal industry has become a very bloody ocean so to speak.

    When we trace the origins of the snow removal industry, it starts as a basic need to enable commerce despite a snowstorm happening. However, when we trace the origins of the "professional snow management industry", it is still a reasonably young industry undergoing rapid change. As mentioned in this thread, we are just like the trash guy. They can hire any company, and we will all put a blade on the ground and move snow. So that leaves the question, what can we sell on? If a customer asked, "why should I hire you?" Does anyone have an answer with real substance, besides the "well we do quality work" or "we show up on time"? At that point, it becomes all about creating a proposition of VALUE for the customer. Besides price, what do you offer that will benefit the customer in a way no one else can? Where is the VALUE of hiring you over the cheaper bid? This is what we need to create, educate, and demonstrate to the customer.

    So now, my thoughts go to how can I create a "Blue Ocean" within the confines of a "Red Ocean" market? Think of Circus De Soleil and what they did. We all know Ringling Bros. and Barnum & Bailey Circus. They set the standard for circus entertainment, and everyone else just followed on a smaller and less impressive scale. As time progressed and the world changed, kids don't want to go to a circus anymore, they want a Playstation or an XBox. So comes along Circus De Soleil. They took the same "red ocean" industry, and made their own unique and defining "blue ocean" within the same industry. People who spend over $50 per person on a circus are not bringing a bunch of screaming 3 year olds to pet animals, they are there to be amazed in a way no other entertainment source can provide. And now look what has happened, Circus De Soleil is a multi million dollar company, with no one else like it, and it is built within the same industry as Ringling Bros was.

    I think we can contribute the downward trend to so many different things. But I also believe that basic business cycles such as I explained above play a big role, and I think it is hard to imagine what the future will hold for our industry. But looking in the long term, politics will play the largest role in deciding our fate. We thrive off the fear that property owners have of getting sued in a slip and fall. People want a "professional" because they don't want to get sued. So what happens in Washington and our general society, with the future of how slip and fall cases are handled will play a major role in our value as snow contractors.

    Imagine if tomorrow it was announced that under now circumstances is anyone allowed to sue to slip and falls. Our prices would be cut in half overnight. From one point of view, we're almost like fear brokers.

    I know this is a far out kind of imagery description of my thoughts, but this is just a concept of explanation for it all that I go over in my head pretty frequently.
  18. BC Handyman

    BC Handyman PlowSite.com Addict
    Messages: 1,943

    First I'll say nice post, & my reply is not directed towards anyone in person but to all us in general.
    I'll talk about if slip & falls were no more then I think your right, prices would drop & it would allow more Joe blows with a plow or even just a shovel into the industry further then they could be with slip & falls.
    But I will add to the queston "why should I hire you?" I don't think there is a 1 or 2 great answers that all customers want to hear. I do think that each customer has their own answer they want to hear, sure most customers want to hear certain things like: affordable price, realiability, experianced ect., but with each customer having differant needs, veiws & opinions I think is is up to us to figure out those needs. Which can be tricky since some people wont tell you or dont accually know what they need.
    Most people can be sold on an idea, so it's up to us to sell our services, discover & relate to their needs. They do not NEED you, but you NEED them! They are doing us a favor by calling, but we are not doing them a favor just cause we showed up & did the job we were hired to do.
  19. merrimacmill

    merrimacmill PlowSite.com Addict
    from MA
    Messages: 1,823

    BC, you are exactly right. We need to identify our target customer and really understand who that person is. What is important to them, and what unique challenges does their property present them. Once we understand that, we can begin to understand how to solve their problems, and in the long term possibly develop a business around that.

    I do think that things will level out sooner or later, but as I said I think future legislation will be a major player in our industry's long term future. Not only slip and fall legislation, but also potential environmental licensing for deicers, as well as operational licensing just to be a snow contractor. While I hate any government control, things like this weed out the ones who should just stay home when it snows.
  20. TJSNOW

    TJSNOW Senior Member
    Messages: 374

    Great Post............They saved a dollar....But it cost them 10 in the long run....Its great that you went and talked to the store manager....Im interested in the outcome down the road......Please keep us posted.....::drinkup:

    Someone has been attending SIMA Events.......:laughing:...Great posts by you too sir....:salute:....Im not sure if the playing field will ever come close to level...Been in and around this business since 1979....It has been going downhill since then.....I like to watch an account and see how long a contractor keeps the account and the level of service he provides in that season.....Its sort of a hobby......Large Big Box stores such as Target rarely have a contractor more that a year or two...It all boils down to price first, service second.......payup