Why trust is often a bigger deal than price
Over the last few years, the landscape industry has returned to growth mode. This increases the competition and forces you to re-examine your bid process to lower your costs and win more bids. How can you be competitive, continue to be profitable, and win more bids? Follow some of these rules before, during and after the bid process and you’ll win more bids.
Prequalify each and every bid request. Asking qualifying questions before you accept the bid request could save time and money. Knowing your niche will help you focus on the type of work that will allow you to become more profitable in the long run. Some jobs may be too large or too small, out of your service area, or not part of your specialty.
The location of the property will be critical if you focus mainly on residential work. The smaller the job, the less revenue it will provide you and the profit margin will diminish. Gas prices are increasing, causing your vendors to increase their prices. Windshield time and fuel costs should force you to build up specific areas to remain competitive and profitable.
Also, ask why they’re requesting a bid. Many commercial property management companies require three to five bids. Are they calling you just for an extra bid? Figure out how large the job is to help determine if it can be measured in the time allowed. You don’t want to lose a bid by not giving yourself enough time to get the bid together. If it helps, put together a questionnaire for all your prospects when they call for a bid request.
Once you’re confident that you want to bid the property, set up a time to meet with the property manager to go over specifics and measure the job while onsite.
Walk the property with the manager if possible. Find out what kind of quality the manager is looking for. This is also a good time to investigate further the reason they’re going out to bid.
Are they looking for lower cost due to a smaller budget? Or are they unsatisfied with the service or quality they’re currently receiving?
Put together a portfolio of your current or past jobs and share it with the property manager. This will provide the prospect with confidence in the quality of service your company can provide to them. Everyone says they provide the best service and quality for the price, but giving them proof that you’re reliable and can deliver value will help justify your claims.
If you find out that price is a big factor in their decision process (When isn’t it?), don’t become discouraged. Price is always a key factor, but an equally large – and often larger – factor is trust. By building a relationship of trust with them, they may pull for you if the price differences of the bids are close. While you’re walking the property, point out any irrigation leaks that may need repair, possible plant replacements, or anything that shows you’re taking an added interest in the curb appeal of their property.
Building a relationship will take time and effort. If you’ve built that relationship and feel comfortable, ask what the budget constraints are for that property. If you know you cannot stay within that budget be prepared to offer budget alternatives. This can include changing the amount of services included in the monthly price of a maintenance bid. Providing the client with the bare minimum of services will greatly lower the monthly cost to them.
You must be proactive though in providing the client with a proposal to complete enhancements when they come due: for example, overseeding, weed control, flower change-outs and fertilizations. Excluding these enhancements from the monthly-agreed price can also help you better plan your costs and make increases when gas or vendor prices increase to you. If you bid the monthly low, you can try to pick up some profit in the extras by controlling labor and profit margins more closely.
When you successfully receive the job, perform the way you said you would perform. Don’t lower your price and then cut corners to make money. Do your best to make a profit or break even while providing the service you sold them on. You may find that the economy has caused you to lower your prices. If you ride the wave while the economy recovers, remain true to your quality of work, and do your best to keep your own budgets tight you will come out on top and beat the competition in the long run.
If you’re a newer company, it may be harder to build brand awareness and get property managers to trust in your service if they are not familiar with you. Take an honest look at your costs and realize you can’t charge a higher price for your quality or experience if the market doesn’t have proof of your service. The first few years you are in business you may have to charge a lower price and earn a lower profit than you would prefer, but over time you should win over the clients as long as your quality and service is superior than the competition.
Ask for the opportunity and prove your results. Once you build brand awareness and are known for quality, you can become a premium brand and charge a higher price for that service. Consumers pay more for Apple products, Mercedes and Coach because they know the products and service that comes with those products are superior.
The landscape maintenance industry continues to grow and your business must stand out from the competition. Be a market leader and stand out. Find out what everyone else is doing, but concentrate on what you do best. Find out who your real competition is, what they’re doing, and find a way to do it better.
Show the property manager how you can make their life easier by being proactive, taking an interest in their property and convincing them you will be an extra set of eyes on the property weekly.
Take pride in the work that you do and it will show through referrals and your reputation. Remember, it will take time to build your up a respected reputation, but it could take only a day to ruin that reputation by a bad referral. So, even if you do not receive the bid, respond with respect and be thankful for the opportunity.
Lori DeRoche is co-founder with her father, James, of Tandem Landscape Services, Inc., in Phoenix. Contact her at [email protected].