1. Missed the live Ask the Expert event?
    Catch up on the conversation about fertilization strategies for success with the experts at Koch Turf & Ornamental in the Fertilizer Application forum.

    Dismiss Notice

How to close a deal where you’re $55,000 more annually than the next bidder

Discussion in 'Business Operations' started by BrendonTW, Dec 6, 2017.

  1. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 729

    We’ve got a 6 property contract we’re trying to win. I happened to get the other bidders pricing info out of my contact person because he likes me and because we were the last to submit. Lowest guy is $70,000, middle guy is $90,000, we’re at $145,000. The 70 guy is local and doesn’t know what he’s doing. The 90 guy is a national company that you all would know. This should be an interesting and challenging sell.
     
  2. ShowCaseLawnCare

    ShowCaseLawnCare LawnSite Senior Member
    Messages: 306

    That seems like a big price spread do you think everyone is bidding on the same work load?
     
  3. Mitty87

    Mitty87 LawnSite Bronze Member
    Messages: 1,146

    Have you ever managed to sell a commercial property where you were thousands above the next highest?
     
    Ijustwantausername likes this.
  4. RDALawns

    RDALawns LawnSite Bronze Member
    Male, from Texas
    Messages: 1,367

    Im saying you A lower your price to be competitive. Or B plan on not getting the job. Commercial jobs are looking for the lowest bid. Your contact may have nothing to do with the selection. It very well could be a committee. If that's the case. Your just a number on a piece of paper.
     
    Mark Oomkes likes this.
  5. oqueoque

    oqueoque LawnSite Gold Member
    Male, from Jersey
    Messages: 3,380

    Closing a deal like that, is like closing the lid to your coffin. And on top of that you hope they pay you & in a timely fashion. No thanks. One reason I stopped doing big commercial. The Brickmans/Bright View, Rupperts etc seemed satisfied making $5,000, after paying expenses, or so a year of these jobs. I guess if you have 1,000's of these $5,000 each is good, but not for me.
     
    Love the Green Biz and hort101 like this.
  6. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 729

    The properties are high end properties that have suffered terrible contractors on the landscape maintenance over the years. I think the other bidders aren’t understanding that the customer wants to improve and see things differently that they’ve been done over the years. I happened to get ahold of the other guys list of services they are providing. Over the course of 12 months the lowest bidder was providing 174 total services, the middle bidder was 154, and we were 307. We’re bidding a completely different standard of work here than the competitors, and that’s what I’ve got to hope I have sold them on.

    In my experience the customer is not always looking for the lowest price. We service high end residential and high end commercial and have never won a contract where we were the lowest price.

    Would love to hear stories about some of you other guys pulling off the difficult sales!
     
    hort101 and Blainethompson like this.
  7. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 729

    You all are too negative to close big deals! lol
     
    KAZ, Reliable 1 and oqueoque like this.
  8. oqueoque

    oqueoque LawnSite Gold Member
    Male, from Jersey
    Messages: 3,380

    I'd rather spend time finding the profitable ones. I have seen those type of bids also. $40 a yard for mulch installed almost made me throw up. $200 to mow 8 acres eh. Small commercial I will do. And there is also no loyalty. They want you to provide top notch service at south of the border prices.
     
    Last edited: Dec 6, 2017
  9. BrendonTW

    BrendonTW LawnSite Senior Member
    Male, from Oklahoma City
    Messages: 729

    We have a 15% margin on our bid. We never cut our rates. If we need to cut pricing to be more competitive we do it by upsizing mowers or by cutting services.

    Around 85% of our commercial revenue comes from non-rebid work each year. We have tremendous loyalty from our commercial customers.
     
    hort101 likes this.
  10. oqueoque

    oqueoque LawnSite Gold Member
    Male, from Jersey
    Messages: 3,380

    The one positive thing I can tell you is, I worked for a property management company before for three years, that was mainly involved in office space, but handled others too. It was not uncommon for them to deflate bidders prices and pass them to other bidders hoping that a quality company will match or come close to the lowest bidder. So you might not need to drop that low in price. But a lot depends on the property.

    On some properties they did not care at all about quality. Price was it. Warehouses,or Class C office space etc. If it was Class A office space, quality of work was very important and price was less of a consideration.
     
    Love the Green Biz and hort101 like this.

Share This Page