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Written Guarantee?

Discussion in 'Bidding & Estimating' started by ExecutiveLawns, Nov 6, 2009.

  1. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91

    Has anyone out there written and given a customer a Formal Written Guarantee?
    Here is what I am doing ....
    I have a customer that has multiple properties and has multiple contractors performing snow operations. The thing is, is that I am the highest price contractor with them by a minimum of $20+ an hour above the others. I have sold them on the fact that we are a very efficient, high quality service with excellent references.
    I have told them I will write a formal guarantee that we will not exceed a dollar amount for an equivalent occasion(snow accumulation, ice issues, temp, wind, time of day and day of week.)
    Basically what I am telling them is that we are far more efficient, and honest on time sheets at our higher price than the other contractors they have worked with in the past. In the the long run we will end up saving them money and headaches of client complaints.

    What I am asking is has anyone ever done this before? If you have what info should I look at making sure is in it? I know I will include snow and ice occasions that are equivalent to archived past occasions with equivalent snow fall totals, wind speeds, snow start and stop times, day of week, and type of snow(wet & heavy, dry & light) There is alot of factors that can create multiple variables.

    So what do you guys think?
  2. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,252

    I think I'm confused.

    Why don't you just give them a per app, per push price and guarantee it that way?

    Or seasonal?
  3. Bajak

    Bajak Senior Member
    Messages: 999

    I think you are one hell of a sales man!!:drinkup:
  4. LoneCowboy

    LoneCowboy PlowSite.com Addict
    Messages: 1,760

    I"ve never done it with snow, but I've done a "not to exceed XXXX dollars" before.

    never even get close, I know what it's going to take. But it seems to help them put an upper limit on it in their mind.
  5. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91

    Central Iowa snow seasons are so unpredictable. There are very few companies around here that will do flat rate per push or seasonal flat rate on 5 plus acre lots.

    I am a very honest person and dont believe in billing a minute more for our services. I have build my company to what is is off trust and have gained our customers confidence in the fact that we may be one of the highest priced services around but we are one the most trustworthy and efficient.

    One thing I cant stand is the lowballers that will throw a low $65 an hour truck rate out there and then take 4 hours to plow a lot that should take 2 hours 5 min, or they take 2 hours and 5 min to plow that lot and bill 4 hours so they can feel as if they are making money. What comes around goes around and you will be caught! Cheating a customer will never end up good for you.
  6. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Go seasonal then they will know how much they are going to spend for the season.
  7. Superior L & L

    Superior L & L PlowSite Veteran
    from MI
    Messages: 3,041

    All i Guarantee is that the snow will fall and i will move it :laughing:
  8. TCLA

    TCLA 2000 Club Member
    Messages: 2,707

    I may be confused too. Are you all offering a price based on the same specs, or are you offering a creative way to charge for your service? I'm interpreting you may be charging hourly while others are charging either per push or seasonal. The classic apple/orange comparison.

    Regardless, how are you saving your clients money when you are charging more than your competitors? If you are "far more efficient" than others, wouldn't you make more profit than others at the same rate, or even a lower rate?

    Or are you trying to formulate a guarantee stating you're better than them? That's quite an unnecessary boast......your client will determine whether or not you are are better than your competitors.

    What are you willing to do when you fall short on your guarantee?

    I couldn't guarantee I'll be alive tomorrow.
  9. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91

    Ok my competitors are charging $60/hr for a straight blade old truck, Im charging $85/hr for a 8.5' v-blade new truck. The other thing is we invoice out to the minute not 1/4, 1/2 or full hour increments.

    I have seen the invoices from years past on a particular property and they are are 6-8 hours per push where I dont see any way we are going to be there more than 3 hours.

    Another thing I pretty sure is they are boosting or padding their hours.

    As far at what I am willing to do for the guarantee is match the price for the total occasion as long as it is equivalent in snow accumulation, winds, ice issues
  10. buckwheat_la

    buckwheat_la 2000 Club Member
    Messages: 2,254

    i get what you are saying, not sure how you are going to make it up though, mainly due to the fact you would have to have another contractor doing the same contracts for them to be able to do a comparison, the best i think you should shoot for is a per push price, that way your competitors can say they are charging less per hour then you, but in reality, they know they can't get it done as cheap/efficiently as you, i have had this happen, we lost a chain of mattress stores one year because someone had a cheaper hourly price, but then they started coming in with 1-1 1/2 hour charges on a property that has never taken us more the 40 min-1 hour to do, when everything was said and done they were more expensive, so the next year i took a average amount for the time we spend there, (it was something like 38 min) and charged them $45/push per store on the properties
  11. big acres

    big acres Senior Member
    Messages: 653

    A few years back, a contractor had the entire portfolio of a retail management company, about 20 malls.

    They were dishonest with their times, and the retailer started reviewing security tapes and found a pattern of over-billing.

    Made the evening news, and now that contractor has only one of their properties.
  12. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91


    Everyone knows that this is happening. Guys will come in with a stupid low hourly rate and inflate their times on the job so they are still making money.

    Thats what I am up against is a client that has other contractors that are throwing a low hourly rate, inflating the hours and to top it off the client clearly stated "NO SUB CONTRACTORS for ANYTHING'' when I asked them further about it they said all drivers and sidewalk crews must be employees of the contracted company with all trucks and other equipment (skid loaders, sanders, anti/de-icer set-ups) must be owned and insured by the contracted company.

    Which if you are true and honest (which I am) you should have no problem offering up all you insurance certs with vehicles listed and payroll journals. I offered it to them and they said no one else offered that which why would they they are 4-6 man companies out plowing with 6 trucks and have a half dozen sidewalk guys ( No subs huh?)
  13. TPC Services

    TPC Services Senior Member
    Messages: 875

    Well Executive lawn, I know who you are talking about I bet and am not afraid of saying his name on here is it (Christensen) he does this crap with about four other PM companies. I posted my ***** a while back about him and what I thought about hourly contracts and how easily they are to manipulated!!! As far as your pricing goes you are a little high, prices around here has always been about 15 bucks lower on your V’s then what you are offering. Top dollar around here has been $70-$75 tops for a while now. You are offering a reliable, efficient and high level of dedicated service to these clients, we do the same thing but you do have to keep in mind that we are in a very bad economy right now! The PM client we did last year had two buildings that were completely vacant and still are. They are looking at pinching pennies so they do not pass on the cost of maintenance of their facilities to their renters if they can’t do that they will lose them to a different PM company or move out to a new building they can afford. SO keep that in mind ask a little lower for right now show them that you are a reliable trustworthy contractor that has no problem handling their properties and when the economy starts getting better creep up your prices a little!! The only way to beat this is to go in and say hey look, I can do that lot for this amount per event and sale them the reason why this is so much better then hourly. I got two new PM clients that way this year. I told them hey look, you can’t figure out a real snow removal budget by hourly then you could with a per event push. Your per event push is your guarantee. If you under bid what you think it takes to get it done then you eat it. That should open there eyes up and making them think hey this guys is looking out for what’s best for us!! My feelings are there are too many clowns out there that can’t figure out what it takes to plow a lot. You see that every day on here there are tons of newbie’s on here asking how many tons or how many hrs it will take to get a gas station done or a small office building. They have no experience on bidding because all they have ever done is worked for someone hourly or just slapped on a blade and have never keep track how long it takes them to do properties they were on so they can reference those to places to what they are looking at!!
  14. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91

    Thanks for the help guys I figured I would get on here and let everyone know that I wrote something up and It sealed the deal.
    I got the contract signed at what some of you may say to be High hourly rates. But I did it.
    If you would like to know what all I put in there (actually my attorney helped alot) PM me.

  15. TPC Services

    TPC Services Senior Member
    Messages: 875

    glad to here you got it for that price. All you have to do is sell them on why your rate is the way it is and why your services is better then the rest, and how your services best fits there needs better then the others.
    Last edited: Nov 25, 2009
  16. CaptCaveman

    CaptCaveman Member
    Messages: 73

    I am wondering why you know what other people are getting and you insist on running your truck harder than the other guys for less money??? If the customer is been paying X for a storm and you charge more per hour but less per storm (like you quoted)One thing I cant stand is the lowballers that will throw a low $65 an hour truck rate out there and then take 4 hours to plow a lot that should take 2 hours 5 min, or they take 2 hours and 5 min to plow that lot and bill 4 hours so they can feel as if they are making money. What comes around goes around and you will be caught! Cheating a customer will never end up good for you

    Them $65 per hour X 4 hours= $260.00
    You $85 per hour X 2 hours= $170.00

    Meet the new lowballer in town everybody!!!!!!
  17. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91

    If I was lowballing I would not have the new equipment and shop that I have.
    85% of the companies in our area charge by the hour for trucks, loaders, labor. Very few go flat rate. my self and my employees do not beat up my equipment trying to plow a property fast, we maintain them efficiently with top quality equipment. Efficiency pays.

    I never want to leave money on the table however I am not going to lye to a customer.
  18. Madigan Ind.

    Madigan Ind. Junior Member
    Messages: 10

    I would stray away from any written guarantee no matter what you are guaranteeing... Come the end of the season your customer could easily say you didn't meet the requirements of the agreement and you would really have no way to prove it.

    Sounds to me like the customer is already looking to go on the cheap side and is concerned about your pricing so definitely do not be surprised come the end of the season and they are looking for all kinds of holes in your guarantee
  19. ExecutiveLawns

    ExecutiveLawns Member
    Messages: 91

    In the guarantee they have 10 days to notify us of any discrepancies. We bill out after each snow / ice occasion. The guarantee is per occasion not the total season so I cant see them coming back season end and fighting any already paid invoices.
  20. CaptCaveman

    CaptCaveman Member
    Messages: 73

    Just read my post...The customer is already paying "X" and industry standard is "X" and everyone else is charging "X" and you want to be a nice honest guy and charge "Y".....All i'm asking is "Y" would you want to leave money on the table and do it any cheaper??? Is everyone else wrong??? or are you the new low baller in town???

    And I quote "Efficiency pays" and you are not running your equipment any harder than the compitition but you can do it in half the time as everyone else...OK you have figured out what everone else hasn't. It sounds like you are working on a lower bottom dollar. Me, I would rather work half as hard for double the money...Just my two cents worth... And i'll put one of those in the bank LOL