Here is something I received in a news letter recently. It was spam from some forum
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How To Really Bid A Commercial Account
I had never been more frustrated than I was when I received a phone call from a property manager of a place I really thought I was going to get. He called me and I could tell instantly that I did not get the job. He told me that he pulled hard for me to get the contract with the people who make the decision, but they went with another company.
I hung up the phone in a daze. I know I did everything right. I met all of their needs, I answered all of their questions, I knew my numbers so my prices were right and I even threw in some freebies.
I called the property manager back and asked him why they chose another company instead of me and I will never forget his words…
“Sean, your proposal was impressive. You came highly recommended. However, they have a budget and your mowing price was $140 more a cut than the company they went with.”
Now wait a minute – mowing price? There were a ton of different services they wanted everyone to bid on – edging, mulching, shrubs, aeration, weed control, leaf removal, flower changes, and even some power washing. How the heck was just mowing the deciding factor? More importantly, how in God’s name did another professional company with the equipment and manpower bid $140 less per mowing than me? This was a 32 cut contract that they asked for – that is almost $4,500 less than my bid?
It did not make any sense… well, not at first.
I could not stop thinking about this and it really upset me and made me angry. There had to be a reason, some sort of magical formula or some nonsense they were using that made it possible for them to win this bid over me.
Then like most things, it hit me. I was so focused on thinking about things from my perspective – the only perspective I knew. I realized that I had to think like the property managers and decision makers thought. I had to literally pretend that I was the one pulling the strings and calling the shots. I had to stop thinking like a landscaper.
So I sat down and decided to do just this. If I had 10 companies providing me bids for my property, what would be the first thing I would look at?
Price.
Of course, price. They don’t care if you are a nice guy or what you’ve done in the past. The first thing they care about is price. So that lead me to the idea of just simply low-balling my prices from there on out.
Wait a minute. I am not a charity organization; I need to make money I thought to myself.
If I went in and just lowered all of my prices I would be losing money – yea I would have all kinds of commercial clients, but I would be broke. That wasn’t the answer.
Ok, what else do they look at when considering a company? Well of course they want to know that the companies are insured, capable, etc… but that should be a given. What else are they looking at?
I could not figure out anything significant other than price. So I dug deeper. What part of price are they looking at? What would I look at? I would look at mowing price first since it would be the most frequent charge. Oh my…. That property manager told me that their mowing price was $140 a mowing less than mine. That is obviously what the powers that be looked at.
Wouldn’t they look at the overall price? I mean, what’s the difference between me charging $140 more per mowing but my overall price being the same or even less?
I had to call the commercial property manager back and see if he would help me get to the bottom of this. I got him on the phone and asked him if he would be willing to help me figure this out.
I asked him why the other company was chosen aside from the mowing price. He told me that it was the only price they genuinely committed to. He said they bid on all the same services I bid on and their prices were about the same as mine, some higher, some lower, etc…. I asked him who’s bid overall was higher and he said he did not know, but he assumed mine since my mowing price was so much more.
The brightest light bulb I have ever seen went off in my head right at that moment.
Here’s the deal…
This company made certain that they included all of the requested services in their bid, but they manipulated the property manager and decision makers into believing that the only price that mattered was the mowing price. They convinced them that all of the other services, although necessary in some instances may not be necessary in other situations. They provided prices but said that the services would only be done if they were absolutely necessary.
In other words -
Their bid and their presentation was one in which they made it seem like they were as concerned with the company’s budget as the company itself. This was very attractive to the decision makers and the check writers. They used the approach of “loss-leader”. They knew if they could get their foot in the door with a lowered mowing price they would make that money back with the other services they would provide. They also knew that commercial properties have long-term advantages over bouncing from one residential to another – less drive time, easier on equipment; employees usually prefer it, etc….
I was starting to understand. But I was still stumped on the $140 mowing difference. I wasn’t using push mowers and brooms here. Their equipment could not be any different from mine. I knew I was organized and we were always efficient so it was not like they could do it much faster than us. I paid my guys well, but it wasn’t like I was paying them twice what this other company was paying. I paid taxes and so did they. I paid insurance and so did they. Even more importantly I knew that I would put our quality of work up against anyone’s any time….
Oh my….wait a second…. That was it…..
They did not do things as nice as we did – they did what needed to be done. They made the necessary areas look the way they needed to look (front entrance, view from the CEO’s window, parking lot, etc…) but everything else was done as quickly and inexpensively as possible. In other words, they trimmed only what had to be trimmed, they blew off what needed blown off, they edged only what could be seen, they applied mulch at 3 inches in the front beds and only at 1 inch in the back corner that no one can see, etc…
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For more reports like this, as well as examples of flyers, contracts, letters, proposals, how to estimate, how to advertise, taxes, insurance and a lot more, go to http://cts.vresp.com/c/?LawnCareSuccess/020a1f2d2d/8396be9d2c/1c8a558328
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Do you see what I am saying here? They were mowing and maintaining commercial properties differently than I was maintaining residential properties. Makes sense now, huh?
Every inch of Mrs. Wilson’s 10,000 square foot property had to be perfect. Every inch of the 20 acre industrial park did not have to be perfect. I was bidding based on the assumption that we would make every inch of that commercial property perfect. They don’t care about the bottom terrace in the back of the loading dock area – they care about the perfect edges and straight lines and weed-free beds at the front of the property.
That was it. It wasn’t that they weren’t doing a good job – and I am not suggesting this to you. What I am saying is, they bid according to the quality they provide.
The lesson here – show them you are worried about price as much as they are, get in the door by lowering your mowing price, make your money back with other services, and when you are doing the work, make the right areas look good and move faster and more inexpensively on the areas that no one sees or cares about.
My success rate on acquiring commercial properties of all kinds increased dramatically from that point forward.
I hope this information has helped you and if you have any questions feel free to contact me any time by visiting my site at http://cts.vresp.com/c/?LawnCareSuccess/020a1f2d2d/8396be9d2c/62cd250742
- and be sure to check out the information I provide for Lawn Care and Landscaping business owners like yourself.
Regards,
Sean Adams
Founder & Owner, Lawn Care Success
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