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View Full Version : Loyalty means nothing


tiedeman
11-11-2006, 02:09 PM
So I was doing one of my commercial accounts this morning, and right across the street is the hospital. The guy that does the hospital I have known for years. He does an amazing job there, has crews on a 24 hr schedule for the parking lot, and aways hauls away snow. I look over thinking that I see him plowing the parking lot and next thing I know I see the landscaping companys truck that does the hospitals mowing. I couldn't believe that he was not there doing the plowing, instead it was this landscaping compay.

So I go home and give him a call up and ask him what happened with the parking lot and why he wasn't doing it, did he not submit a bid.

Well, low and behold, the hospital dropped him about a month ago. Talk about short notice. You could tell that he was really choked about it. He said that they called him up and told him thanks for the service in the past, but they were going to use someone else.

Get this though, he had been doing that hospitals parking lot for 21 YEARS!!!!

Talk about no loyalty.

Steve
11-11-2006, 08:51 PM
WoW! Did he say why? Was it cost?

How does his company size compare to the company who is doing the job now?

tiedeman
11-11-2006, 09:27 PM
It pretty much came down to cost.

Well, his company size is small to medium (approx 2 snow trucks), but he sub-contracted out ALOT of work to the largest snow removal company in the area approx 6 trucks. *That does not include the dump trucks, loaders, etc that they use to haul away the snow with.

The company that took it over has approx 2 snow trucks, but they have no equipment to haul anything away with. *They are very limited in their resources compared to what he had at his disposal. The company that took over doesn't even have salt spreaders that I am aware of. At least they did not have one on their truck this morning

Steve
11-12-2006, 01:27 AM
Tell me this. How much of a relationship with the person in charge of bids, does a snowplow contractor get to have with him/her? How often would they interact?

How much does winning the bid come down to relationships versus price?

Is it important to cultivate these relationships? Or should a contractor simply focus on being as lean as possible?

tiedeman
11-12-2006, 12:38 PM
Well, we think that perhaps another reason that the new contractor got the price is because he is on one of the health boards.


A little back ground info about this contractor: *

I am partly to blame for this. *This is the company, that I approached approx 4 years ago, about buying me out, and I could setup a maintenance division for them. *See, they always did landscaping installation and had a nursery, but no maintenance. *At that time I thought that it would be a great idea to approach them. *They agreed, and I started to put together their maintenance division, but I pulled out of the buy out and setup because of their business values.

So fast forward 1 year later, and they have their own maintenance division, at not bad of a size, but still lack a quality service image. *They have been coming in and under bidding companies big time. *So how they got in good with the hospital is about 3 years ago they approached the hospital about landscaping installation, but told the hospital that the only way they would do the installation is if they got the maintenance contract as well. *The hospital agreed, and that forced out a lawn care company that took care of the place for well over 20 years (that company is sitll mad about the situation).

Now fast forward to this year, they took the hospital snow removal contract from a guy maintaining for over 21 years because of not only price, but the one owner is on one of the hospitals boards.

Steve
11-12-2006, 05:47 PM
Very very interesting. So maybe this could be filed under the topic, it's not what you know but who you know.

The more people you know who make such purchasing decisions, the better.

It makes you wonder, how one gets on the hospital board and also makes you wonder about the benefit of being a member of civic organizations.

tiedeman
11-12-2006, 09:08 PM
It is alot of times about who you know. But I am just still surprised after so many years of service they would do that. I mean, he did an awesome job too

Steve
11-12-2006, 09:11 PM
I am amazed too! Has he said anything about what's next for him after this account was lost? How big of a deal was this for his business?

tiedeman
11-12-2006, 10:02 PM
Just ballparking it, I think this account was around $20,000 a month for him.

He said that perhaps this is a sign to get out of the snow plowing all together. He still plans on doing a few accounts though

Steve
11-13-2006, 03:53 PM
Isn't it amazing how losing one account can make you reflect on the business you are in?

I wonder what he would do next if he got out of snow plowing?

tiedeman
11-13-2006, 06:39 PM
I do know that he owns his own sandblasting business, and perhaps he will do that more.

I can't imagine losing an account that big. But like all the experts say, never put all of your eggs in one basket

Steve
11-13-2006, 08:03 PM
Does it ever make you wonder if you should be sitting on some boards? Then you have to wonder which ones and how would you go about doing that?

tiedeman
11-13-2006, 10:54 PM
I have thought about it before. I have been elected to some boards in the past: chamber boards, church boards, etc. But I never had time for them.