PDA

View Full Version : Winning Bid Price


Mission Landscaping
07-20-2010, 04:50 PM
I'm wondering if you ever ask what the winning bid was? I have been working on getting a job for about a year, these homeowners are SLOW, and was told today we lost the bid. I have revised the bid (due to plan changes) numerous times and met with the homeowners multiple times. They said they really wanted to use us, we just weren't the cheapest. I'm very curious how much cheaper the winning bid was. We had very competitive pricing on this job. In case you are wondering, this was a new install.

fastpine
07-20-2010, 06:59 PM
Great question..I too am wondering the same thing..

AGLA
07-20-2010, 09:36 PM
Hopefully, you have a system worked out which you use in order to price out what it costs YOU to do a job and then add a reasonable profit to that. If you do, it really does not matter that someone else is able to price for less. It is not up to you to make a job affordable.

You also have to take into account that there may be other reasons that someone is not hiring you and that it is simply an easy excuse to say that your price was too high. I don't mean that they think you are not good enough. It can be that they just don't have the money, or they got a good referal from a friend, or some other reason that gave someone else an advantage. Its a normal part of being in business. You just have to move on.

If it is actually because you are priced too high, you have to look at your company objectively and ask yourself if you are trying to make too much profit, or if you are inefficient at getting some parts of the job done making it cost you more than someone else might be able to do it for, or maybe your overhead is higher than it could be, or you are paying more than others for materials. If there is something you can do to reduce how much it costs you to get the work done, you can charge less. If there isn't, you can't.

Other reasons can be that others make a customer feel more confident in them, or they have a bigger crew or equipment that allows them to get things done faster, or they have a well established reputation, or maybe just a personality chemistry, ... it happens all of the time. You just have to let go and accept that you won't get every job.

You have to remember that a landscape install is a one shot deal that is usually a pretty good sized investment. Whoever removes the most doubt is the ONE who will be hired even if it is only by a hair.

Another thing is that anytime you have to go round and round re-doing prices it is a red flag that the people can not afford what they are trying to do or that they are using you as a price comparison to get someone else to reduce their price. The only way you'll get the job is if you do it for less than it is worth. When you go to that length to try to get the job, it tells the potential customer that you want the job more than they want to get it done and they own you. NEVER want the job more than the customer wants you to do the job!

nepatsfan
07-20-2010, 09:48 PM
an easy way to get around all that is ask them what their budget is. Then you give them a plan to suit their budget.

Mission Landscaping
07-21-2010, 12:34 AM
AGLA, I agree with you. Always walk away when you can't profit or do a job to your company's standard. I was more curious what the winning bid was for my own knowledge. I know my pricing is competitive, I was more frustrated because I was the refered contractor and this would have been a fun job. I'll be keeping an eye on this job to see who got it and what they do with it.

Neptsfan - I only ask budget when its a small remodel and you can usually tell within the first 5 minutes what they want to spend. You should always ask probing questions and get some ideas of what they are thinking. Stuff costs what it costs.

So no one asks how close they were if they lose a job?

Woodland
07-21-2010, 05:24 AM
I think in this particular case, it would be perfectly acceptable to ask what the price was of the winning "bidder". It sounds like you have invested a lot of time and effort into working with these homeowners, so they should be very willing to be upfront with you. I am not trying to imply that the winning contractor didn't invest the same resources that you did. This would be a good opportunity to talk with the homeowners and make sure that you did, in fact, lose the job based on price alone and there wasn't some other aspect of you presentation that they balked at, and the make sure that everyone was bidding the same job. I have lost bid jobs to a lower price only to find out that the other company included a fraction of what I proposed to do. If the homeowners don't want to discuss anything with you, you haven't lost anything by asking, and you just move on.

AGLA
07-21-2010, 07:19 AM
You could make a follow up form letter that you send to all the bids that you miss to see if you get responses and find any possible patterns to why you are missing them.

Things are tough out there and it is much easier to get several landscapers to respond to potential jobs. I look at a lot of landscape related messageboards. Some are geared to contractors and others are geared to homeowners. It used to be very common to have huge threads between homeowners complaining that landscape designers and contractors would either not respond at all, not come out to look at their jobs, or not send them a proposal. I have not seen one of those threads start for a very long time now. Most people that worked in the landscape business a couple of years ago are still trying to make it AND a whole lot of laid off people think that they can be landscapers as well. At the same time, there is a hell of a lot less work out there and virtually no waiting to get contractors to respond. Customers have no sense of urgency because of it.

We are getting picked out of the crowd when we get hired and simply left in the crowd when we are not. It is a lot less of a rejection of what you are all about and a lot more about being lost in the crowd when you are not selected. They will only hire one contractor.

Turf Logic
07-21-2010, 09:23 AM
AGLA pretty much nailed it on the head.

procut
07-21-2010, 09:14 PM
Since it sounds like you have a pretty good working realtinship with them., I would have said something like, "Were we real far apart?" or "Was I totally out of the ball park?" and just see how they responded.

teejet
07-22-2010, 08:03 AM
This is one reason I prefer lawn applications, bid one time in 10 minutes, and do the lawn for 20 yrs. and maybe never have to talk to the customer again.
Man you can spend a lot:hammerhead: of time making landscape bids, and explaining things to people:sleeping: you do landscape projects for.

db682
08-09-2010, 09:30 AM
Since it sounds like you have a pretty good working realtinship with them., I would have said something like, "Were we real far apart?" or "Was I totally out of the ball park?" and just see how they responded.

I dont do landscaping but I am a PM for a very large subcontractor in Florida and if it is someone I have never worked with before that is normally how I get them to spill the beans. If I know them or am comfortable with them I just outright ask what the bid results looked like and where we placed. Usually they will tell you the top 3 bidders and there numbers and then where we were at. Once they have awarded the project they are under no legal obligation to withhold that info unless they want to. We like to know for the simple fact of knowing where our competition is at. Some of the jobs we lose leave us scratching our heads asking ourselves "what the hell were they thinking". Some overalls bids will be less then just our direct ship materials cost. That means we had more in materials then they had in the entire project.

Weve been able to predict multiple bankruptcies just from knowing the bid results. Guys get a job then find out they were a million dollars low on a 3 million dolllar job and have no choice but to claim bankruptcy. I have never seen it this bad before.

Doug

JimLewis
10-12-2010, 03:34 AM
AGLA pretty much took the words out of my mouth. Good advice there in his reply.

What you are experiencing is one of the main reasons our company does almost no commercial work. I don't want to always have to be trying to figure out how I can be the lowest bid. I was reading the cover article in the current issue of Landscape Management Magazine (http://www.landscapemgmt-digital.com/landscapemgmt/201009#pg1) and reading about how the commercial maintenance business has gotten so bad that some companies bid jobs at a net 5% loss, just to get in the door and make money on ancillary services. I've heard of that concept before. I just think it sucks that anyone would ever have to do that. I think you should always make profit at everything you do, regardless of what else it gets you.

Like I said, we pretty much almost never do commercial anymore. But we've been approached by this one HOA for 3 years in a row now, because we maintain a number of homes in the neighborhood and have done a lot of install jobs there too for various homeowners. They all love us and a few of them are on the HOA board. So every year our name comes up and we politely tell them we're not interested. And one of the main reasons we're not interested is because I know how the game goes. I know we'll be way underbid and they'll go with the low bid. But they begged and begged enough that we finally decided to submit a bid. Having some inside info. on the board we found out (after we submitted our bid) that the other bids were HALF of our price. And honestly, I didn't care one iota. I didn't care if we landed the job. I cared about getting paid good enough to do a quality job if we did get it.

Well, as it turns out they chose us. Even at 2x the price, we got the job. Because they are just sick and tired of crap quality and performance from the last 3 companies they've contracted with.

But I know that's not very common. Most of the time low-bid wins these commercial deals. And that's why I want nothing to do with it. Homeowners are much less concerned about low bid and much more concerned about quality, reputation, references, etc. So it's a much easier climate to work in. I don't have to worry about being the low bid. And thank God for that because we almost never are.

NarNar
10-18-2010, 08:10 PM
You could make a follow up form letter that you send to all the bids that you miss to see if you get responses and find any possible patterns to why you are missing them.

This is a great idea, thanks. Once I lose a bid, I move on. But sending out a follow up letter takes little time and I can compare the response to get a better picture of my mistake (if there was one).

Your comment is right on many points.