Negotiating vs. Bidding

[Jim Colton]

I have noticed quite a few comments from members stating they refuse to or "don't" negotiate with customers. Guessing this means their first price is firm.
As a stump grinder I find that bidding without equipment on a trailer behind me rig reduces my close rate and guarantees a second trip. I also figure it is more trouble to make a bid if I include travel in the effort than it is to grind a typical stump if I am already on-site. With a general $200 minimum for the first stump, it is difficult for me to drive away after submitting a $300 bid and being countered at $250 or even at my $200 minimum. Since getting there and going home was already $100 income I had looked forward to and would now become basically a wasted hour plus mileage.

I "negotiate" with the caveat that every bid trip includes the expectation that if I am willing to do the job for $200, I can do it on the same trip. Generally, and fortunately, my customer(s) do not think this far in my direction and often just consider the actual grinding as my whole investment in the transaction.

Many of you generally bid crew sized jobs that need to be scheduled even if they get scheduled for later in the same day so there is that difference for perhaps most bids. Many also spec out each job based on customer objectives while others just tell customers what service they will be providing as related to cleanup, chipping, firewood, hauling, etc.

Should I be looking at this differently? How do you look at the bidding vs. negotiating situation?

 

[Bullseye T&L]

Once I give a bid, it is generally not negotiable, except in rare cases.

For small jobs ($400 or less), to save a trip, I will do a remote estimate (price range) using photos and phone call. If they agree, I will show up, do work, then usually charge actual. This is very effective for keeping small jobs priced reasonably. If they want me to show up to give bid, I either: 1) charge them for trip, usually $75; or 2) up their bid and/or set bid at a minimum amount, usually $400, which will also include the $75 trip charge divided by my historical conversion rate for those customer types; or 3) decline the job completely because of too many red flags.

If I do show up for small bid, I will at least have my climbing gear, dump trailer, and gassed up saws just in case. If I do convert it on the spot, when I'm done, I will charge more than actual because I factor in the conversion rates for those types of interactions. They will get the sales pitch on why they should have let me quote a range remotely, and they are usually onboard afterward.

A lot of my customers have gotten to where price is not the first concern, so negotiating doesn't even come into play. They just want to get on schedule. Then they ask for a range, because they know I have a pretty solid reputation for charging fair and not screwing them over.

My stump guy does remote quotes too if you send him a photo of the stump and surface roots with tape measure laid out. If he has to come out, he will up the bid.

 

[HumBurner]

I charge an hourly rate. If the big saws or not-daily gear has to get loaded up, OR if its an incredibly sketchy tree, that price may rise slightly. Living in a rural area, it can take 1-3+ hours to get to a jobsite. Drive time and a gas stipend is charged.

I do give discounts for elderly/disabled/low income, and don't charge drive-time/gas for neighbors unless theyre really far out the mountain, and often adjust my rates downward as I see fit. If I boneheadedly rock a chain, I'm not going to charge the client to sharpen/fix the chain. If I'm dragging ass, I might sharpen my chain at lunch off the clock to make up for some lost efficiency.



So, any client is willing to try to "negotiate", but this is how it is. I can give estimates, and prioritize objectives/zones based on a client's budget (and obviously wants/needs), but there's a thousand variables and no exact cost can be accurately determined unless the client gives a "Stop at $x", and we stop there.


It works the same way where if a client doesn't want to cut the "beautiful Doug fir they planted with their kids 20 years ago...." 3' from the house dripping flammable sap everywhere, dropping needles and branches, and undermining their footings/pads, I can't negotiate with them. I can offer my detailed recommendations, but they are the ones who would make the call to cut or leave.


Our work speaks for itself and is largely unmatched by other crews around in efficiency and attention to detail/effectiveness of work. We just had a former client have their house not burn in a recent fire that was lapping at their siding. We did nearly 27 acres for them a few years ago, and have done some follow up work for them, as well as an adjoining ~12ac thinned/burned immediately neighboring that same parcel.

Clients have the right to look elsewhere and try out other folks/crews.

/end rant

 

[HumBurner]

Once I give a bid, it is generally not negotiable, except in rare cases.

For small jobs ($400 or less), to save a trip, I will do a remote estimate (price range) using photos and phone call. If they agree, I will show up, do work, then usually charge actual. This is very effective for keeping small jobs priced reasonably. If they want me to show up to give bid, I either: 1) charge them for trip, usually $75; or 2) up their bid and/or set bid at a minimum amount, usually $400, which will also include the $75 trip charge divided by my historical conversion rate for those customer types; or 3) decline the job completely because of too many red flags.

If I do show up for small bid, I will at least have my climbing gear, dump trailer, and gassed up saws just in case. If I do convert it on the spot, when I'm done, I will charge more than actual because I factor in the conversion rates for those types of interactions. They will get the sales pitch on why they should have let me quote a range remotely, and they are usually onboard afterward.

A lot of my customers have gotten to where price is not the first concern, so negotiating doesn't even come into play. They just want to get on schedule. Then they ask for a range, because they know I have a pretty solid reputation for charging fair and not screwing them over.

My stump guy does remote quotes too if you send him a photo of the stump and surface roots with tape measure laid out. If he has to come out, he will up the bid.

Charging a fair rate for a job.and not trying to get rich goes a long ways, at least where i live.

Some of our clients have hired other crews once only to have us come out again the next season. If your hourly rate is high but your production is high and consistent, it's worth it. If the reuslts are garbage and the client paid the same price (or slightly less or more) it's not worth the cost in the longterm and often not in the short term.

 

[Bullseye T&L]

Charging a fair rate for a job.and not trying to get rich goes a long ways, at least where i live.

Some of our clients have hired other crews once only to have us come out again the next season. If your hourly rate is high but your production is high and consistent, it's worth it. If the reuslts are garbage and the client paid the same price (or slightly less or more) it's not worth the cost in the longterm and often not in the short term.

Yeah, I built my network by getting rid of the fat and bs, and passing some of the savings to customer. When you're lean, there ain't no room for haggling, and I will just walk if it gets complicated. Like you, our quality and service is top notch, so my clients generally never call anybody else. I have the occasional knucklehead, but pretty rare. I am one of the few CA's still operating independently and onsite with climbing gear getting dirty every job. I'm also one of the few who can do the $300 job for $300, but I do charge to come quote on small jobs. I don't think it's fair to pass along the costs of several wasted quote trips to the people actually getting the work done. That's fat that has no place in my model. Hourly, we do well, but so does client if you look at the long term cost, everything considered.