Straight Bid vs. Time and material

[lostinmidmich]

Michigan has been hit hard by the economy. Not only is it hard to get the price I would like but I'm getting underbid left and right. Many laid off workers from the auto industry are picking up lawn mowers and chainsaws and starting companies. Many of which are uninsured and are bidding half of what I say. Straight bidding I have found has been scaring off a lot of my customers. They see $1200 as huge number, panic and call undercut tree care. So I have decided to try out time and material bids and to my surprise they have been fairly successful. 8 hours @ $150 doesn't scare as much as $1200. Although I do get the people who still want the straight bid, I am understanding how much linguistics can play a part in being a salesman. I don't want to be a sales man. I always worked by the philosophy that quality work will bring customers. I was wrong. Quality work, conviction and a bit of sales brings the customers.
If the tree care industry is to survive we need to self regulate our standards. Lets bump out yahoo tree care by example. Thoughts? Ideas?

 

[treeman82]

I like T&M when talking about a day rate or half day rate... hourly would kill me.

 

[newbym]

We go hourly

For those customers who just can't handle the thought of there not being a limit on it, we give them a "do not exceed" price which is the most that we will charge for the job. We explain that the DNE price is actually %150 of what we really think it's going to be, but that we have to put that in there to cover unseen eventualities. That way the customer knows that we can't charge too much, and we can't play up how long it's going to take us, get a high price, then bust it out in an hour then laugh on the way to the bank (common practice of my old boss)

 

[Kingsfold]

I have allways wondered about my bidding also. It seems that people find it easier to fork out $2500 to remod a bathoroom or kitchen than take a $2500 oak over the house and power lines that by the way is half rotted. I allways would get underbid on some jobs too that left me really wondering ???? thanks

 

[BC WetCoast]

When you are bidding T&M don't forget to tell the customer that the time includes travel time from the yard. In other words, the clock starts when you leave the yard and not when you pull up to the job site.

At least it should, after all you are paying your guys from the time they marshall at the yard.

 

[Kingsfold]

Very good point Vancouver, I am now charging for estimates and how far I drive to them do to our high gas prices here in the states.