What do you say when your bid is higher than the others?

Discussion in 'Landscape Architecture and Design' started by JimLewis, Feb 16, 2009.

  1. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    This is the type of question I usually like to respond to, not ask. But in this economy I am getting underbid like freakin' CRAZY! So I need to now only use my usual responses but maybe have a few backup responses in my back pocket as well.

    So when you give a bid, you know you bid it right, and the customer calls back and says, "Well, we really liked your company and your presentation the best. But after we got the other bids, yours was a little higher than all the others. We were wondering if that was your best price or if maybe you could bring your price down to be a little more competitive. We're really looking for a reason to go with you guys but price is obviously a big factor these days...."

    I mean, with stuff like irrigation or hardscapes or retaining walls there are some great responses in regards to how long your product will last vs. the cheapo guys. But when it's just something simple like a sod installation, what kinds of things do you say to explain why you're more expensive and why someone should overlook the other, lower priced, contractors and go with you instead?

    Again, I have my own usual responses to this. Just looking to start a conversation about this and maybe I'll pick up on something that I haven't tried or used before.
     
  2. richallseasons

    richallseasons LawnSite Senior Member
    Posts: 479

    I generally will not respond on the spot, what I will do is simply ask for the other bids, in writing if possible and then tell the customer that I will double check my calculations and ask them to please be patient as I want to make sure that I have all my bases covered, I then tell them that I will get back to them within 24 hours. This gives me the time to figure out weather I can meet the competitions price or not (sometimes you just cant) then if I can generally I will say that I got on the phone and made some calls and found the material at a better price or that I can adjust some labor time to save a few dollars but I will have to use less help so the job may take a day or two longer, or I simply cannot do any better as this is my best price.
     
  3. The Lighting Geek

    The Lighting Geek LawnSite Senior Member
    Posts: 875

    I have historically been the highest bidder my entire career and I currently have a 95% closing rate. I believe the reason my closing rate is so high because I don't believe it is necessary the play the game as it is being played, I change the rules and make everyone scramble to catch up. Now that said there are a few things I need to make clear. I prequalify heavily, and I earn the trust of the client quickly. I have worked in residential, commercial, installation, maintenance, and of course the last few years landscape lighting. I believe commercial is a different beast and it is by far more difficult to overcome being the highest bidder, but it can be done. That said it is even more difficult in this economy. You need to find what you are unbelievably good at it and let your passion speak to the customer. For everyone that can be very different, but when your passion is from the heart, the customer knows they are going to get a great job. Don't be afraid of doing a little dreaming with your client, talking about how they would use the new yard, or how their customers would love the new look, etc. Act as if you are going to do the job without being arrogant. Be confident in your skills and the skills of your employees. Point out the difference, 'our employees are highly skilled'. Use terms that ring with the customer, which you will find out by asking questions. Pull their desires out and talk about how that will look. You get the point...
     
  4. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,835

    Tommy,

    I always appreciate your responses here on LS. Good to hear from you again!

    It's a little hard to talk dreams or get people too excited when the job is something basic like just a sod installation. The common belief is that most any company is going to do sod about as good as any other company. And it's not something where people care about the warranty or anything. On a simple job like that, it's hard to distinguish yourself against the others.

    Even though I know the guys who are outbidding me will be out of business in less than 5 years, it doesn't matter. The customer doesn't care about that. They don't care that the company doesn't know how to run a profitable business. They just care about the here and now and if they can hire that company and save a few hundred bucks, that's groceries for a few weeks. How do you overcome that?
     
  5. The Lighting Geek

    The Lighting Geek LawnSite Senior Member
    Posts: 875

    I have always said, that if they don't understand the difference, they were not my customer to begin with. I always find that when I am faced with that situation, just sod for instance, maybe I am in the wrong part of the business. I am competing with the wrong people, and need to find my niche. A good niche that defines you makes it hard for the others to beat you. It took me about 2 months after taking over the Landscape division to figure out what makes this company unique and what do the customers that call want from us. I researched old phone calls and what the responses were. I talked to every customer that called, and in the beginning I did not get every job. We had a list of 10,000 past clients and 25 years of a great reputation in arboriculture. I found the niche in providing the same level of customer service that clients were used to, in a service that fit the company motto, 'The Kemper Way'. I redefined our services to fit and now I am booking jobs in April in stead of 3 days out.

    I think you need to find a very specific need and then become the expert they are looking for.
     
  6. letsplay

    letsplay LawnSite Member
    Posts: 95

    Jim,

    Don't be scared to make your proposals or estimates stand out from others either. It just might be a sod installation today but two months from now it might be a new tree and shrub installation etc. We take just a little extra time on our proposals to add "Options". The client probably did not ask for it but we have found that it shows to them that we might know their property better then the competition b/c we have taken the extra time to consider enhancements. Maybe you have a 1000sqft sod installation but you also add the option to do bed edging or metal edging. You might not get the sod installation but the customer might call you back to do the bed edging and or metal edging or refer you to someone else that asks about those services.

    Don't be scared to be creative and show clients why your are different from the competition. Another brief idea is just sketching or drawing a simple diagram of what or where on the site you are planning on doing work. Many clients have a hard time seeing what they are going to get and a simple drawing helps. Now don't go crazy and design an entire front yard project for the competition to bid on........keep it simple. We have actually been asked to bid on projects at the last minute for landscape installation projects and gotten the job and options such as night lighting because we took the time to reduce the landscape design drawing and show the owner exactly where we would install light fixtures.

    I have also seen and heard about so many contractors losing projects b/c they just drop off their proposal at the front door or mail box and do not have any face to face time with the client to even briefly explain their proposal. In this time and age of email, texting, voicemail, etc I think clients really appreciate just ten minutes of your time to show you care and that you want to earn their business. Infact this is one way we weed out clients by their reaction to us proposing to meet with them and go over the proposal or atleast call them first and then send the proposal. If they just want us to send the proposal by email, fax, etc and have no interest of talking then it is a pretty good indication they are just shopping numbers and looking for the lowest bidder which we rarely are.

    This is just my opinion but even in this econony I think contractors leave money on the table for projects. Now there are always going to be lowballers that are going to go out of business sooner or later. I agree with Toms advice above that if you can find a niche that you can be competive in and that you truely enjoy doing....it will make a big difference in your sales pitch and how often you seal the deal and your not the lowest bidder. Well I have written a novel, Good luck.
     
  7. letsplay

    letsplay LawnSite Member
    Posts: 95

    Lighting Geek,

    Where does the saying the "Kemper Way" come from? I ask because that is my name and you don't see it used very often so just curious.

    Thanks
     
  8. AGLA

    AGLA LawnSite Bronze Member
    Posts: 1,740

    Jim,

    If the problem persists on these types of jobs (and you really want or need them) and you still can't come up with a reason why you shouldcharge more than someone else, what is that telling you?

    If you are knowledgable (a given in your case) and don't know why you should charge more then maybe there is no good reason. Just as there is good reason to raise your prices when the economy is growing, sometimes there is good reason to lower them when it is shrinking.

    I'm not saying it is good to lower prices, but if you have to, you have to.

    So I'll ask you. Why do you charge more?
     
  9. White Gardens

    White Gardens LawnSite Fanatic
    Posts: 6,776

    The few times I've been bid against, I've asked the customer what the other companies credentials are.

    As soon as I bring up insurance, I usually here " Well I don't know if they are or not. "

    Then I also bring up quality. Have they shown you any work they've done in the past etc.... I always come armed with my portfolio in case there are any questions about my work.

    In the end my customer service, extended warranties, and image have seemed to land me the job.

    It's a tough economy out there right now. The only thing I like about it is that it's going to weed out the low-ballers who want to do work for nothing.

    It's frustrating non-the-less. :hammerhead:
     
  10. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    I think there are quality issues in every sale, even sod. Is the other company prepping the soil, are they bringing grade up to walkways and other hard surfaces so people are not "falling off the sidewalk for years twisting ankles". Are they going to bring unseemly characters into the neighborhood to do this job. Are they going to do a good job cleaning up and not destroy other things in the process.

    If everything goes right it is simple but how often does everything go smoothly especially for people who are cutting corners.

    So you gotta ask your client "Are you feeling lucky?'"
     

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