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Customer Corrects bid.


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Old 06-14-2011, 02:28 PM
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Default Customer Corrects bid.

Have any of you guys ever had a customer just come out and tell you that you had underbid on the service you were performing for them? I have given several bids over the past few weeks for removing fallen trees. Most said I a was inline with everyone else, a couple said they would cut it up themselves and may call me just to haul it off. One had just had the tree cut and near ready to haul. I knew I would have to finish cutting some sections and knew I could haul it off in two trips.

It wasn't as well cut up as I had thought and took two hours longer than I thought it would. Half way through, the homeowner came out and told me that I had under bid and insisted that I change my bid from $245 to $445. After all was said and done I had the tree and debris cleared and unloaded in 6.5 hours and 30 miles total driving. I am now preparing their invoice (I have changed the bid to $345) on their for the removal and will deliver with their regular service invoice on Friday.
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Old 06-15-2011, 12:53 PM
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What do you think led to this underbid? Was it that you didn't see what exactly it was that you were to haul away before you bid or was it something else?

Also, why not give the customer an invoice for the full fee they suggested you bill them instead of knocking the $100 off their suggested price?
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Old 06-16-2011, 08:58 PM
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Steve,

Someone else had already cut the tree down. From the initial viewing I could see that the tree had obviously been cut up into small enough pieces for fire wood, this was by the base of the tree. For whatever reason it appeared that they had piled all the branches at the other corner of the house. The branches I assumed could use a little more cutting. There happened to be some kind of thick ivy/vine wrapped up into the branches and underneath the branches were the uncut remaining sections of tree rolled into a corner against the house by the porch. This made access and removal a little more complicated.

I didn't redo the invoice for the amount they suggested (I really wonder where they got their number from maybe the average of two other bids), I know they were wanting to be fair with me. I want them to know I wouldn't take advantage of them either though and am sure they'll remember that when referring me to anyone, and If I had it to rebid I would probably bid just a little higher than the invoice but not as high as they suggested.

Also, now that that tree is gone and I don't have to deal with the limbs in the yard from it anymore I kinda feel like I'm overcharging them about $10 per lawn service now.
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Old 06-17-2011, 12:57 PM
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This is a very interesting point you are bringing up. The question I have about this though is, if the customer is willing to pay the amount, is it really over charging? Ultimately shouldn't your role be to maximize the fee your company can charge for a service or no?
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Old 06-17-2011, 11:41 PM
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Yes in the end that is my goal, however just before that is the goal of some good word of mouth references. I believe they may pay the difference anyway in the form of a tip.


I have learned this evening that nearly all tree work I've bid on over the past few months was relatively cheap. That those that said I was priced to high compared to some either lied or just may have asked the few guys they could find on craigslist with a chain saw and trailer.
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Old 06-20-2011, 09:27 AM
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So ultimately you feel there is a growth process here. As you are moving in the direction of trying to maximize your profits, you feel that you should give the customer the best value for their dollar as you are learning the trade?

Do you feel as you improve your skills, you can maximize profits and then still get great word of mouth?
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Old 06-21-2011, 10:09 AM
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My skills in other areas and knowledge of pricing I'm pretty confident in regardless it doesn't mean much to potential customers with seeing a portfolio and even then the recommendation from someone they know and trust seems to weigh in more often than not. I've over time learned when I can get more money in most cases and it's usually in something where in the end there has been some substantial improvement made.

I suppose that I have the same mentality as some looking through Craigslist that it's just simple labor with little skill needed and nothing nice to be obtained and therefore seems worth less. Though this reasoning to me now seems strange as I bid and did work installing shrubs and beds two days later, seemed easier but the hourly labor grossed (due to such short notice of it having to be done now) was more than 5x's as much.

I've actually decided to network with the tree guy I mentioned before. I'll have him help me bid a few of these jobs. If he can get to it I'll try to sub it to him and help where I can so that I can better learn his criteria and pricing structure.

I was surprised to see that a tree like I would help my father cut down and up for firewood (maybe 4 ranks worth) as a kid would cost over $800 just to drop it and leave it laying there for someone else to clean up, and about $1500 to completely remove.
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Old 06-21-2011, 05:32 PM
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Very interesting!

Keep us posted on how it all goes working with the tree guy. It looks like a good way to promote yourself and help him get promotion through you.
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Old 06-30-2011, 04:36 PM
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We haven't done any new tree work, but I thought I would update you to how things ended with this one. We had done our regular service about 10 days ago on the lawn and I hadn't quite given them the new bid as they had requested for the tree. The customer had left a check for that days service as well the tree removal as originally bid.

The customer had called two days ago to confirm the time we would be by there for their regular maintenance so that they could leave a check. After finishing the yard work I went to leave their invoice and collect the check from the shutter. I only noted the check number on the invoice and it wasn't until I got back to enter the payment into quick books that I realized they had written the check out for the additional $200 that they had recommended I bill them for. So, I had to redo the invoice for them after all.
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