Managing a Sales and Bidding Strategy in Snow

Each year, snow and ice contractors play the same game; receive an RFP, send in a price with a letter, make some phone calls, and wait. Often times, the control is in the hands of the end user. How do you take back some control, and create a strategy for sales and bidding for the next snow season?

Know Your Costs
The first element is very simple; you need to know what your costs are to manage snow and ice. In order to understand your costs, you’ll need the following:

• Proper financial statements and organization. In order to know how much it costs to do the work, you need to understand the overall financial picture and have information in an organized and accessible system. You also need to be able to differentiate between snow and other services.
• Production numbers. You need to have an idea of how long it takes X piece of equipment to move X inches of snow.
• Overhead/labor/materials. You will need to factor in all overhead (direct and indirect expenses that you will incur over the season), and divide this out per job. You’ll also need to understand how much material and equipment it will take to do the job. Labor costs will also need to be factored in to the bid, and don’t forget any additional costs, like equipment repairs, loans on equipment (you are using the equipment for the job, why wouldn’t you factor the cost of the loan into the equation?), equipment replacement, and other hidden costs.

Once you have a decent understanding of your basic costs, you need to develop an ‘at cost’ or burden rate for doing a single job. Now you are ready for the next big hurdle; mother nature.

Know Your Weather
You are the snow and ice manager, you should be the expert. Many of you can predict the weather better than the weatherman on TV. You should most definitely know the local and regional weather history, and factor this data into your bidding process. An easy way to do so is to look at the average number of events each year (number of 2” events, 4” events, etc.), and contrast these with your costs. For example, you will incur more cost and more time with a 6” event than you will with a 2” event, so you should factor that average into your bid.

Know the Property
Now that you have your numbers and a decent understanding of the weather history and some event averages, you need to understand the property you are bidding. Some properties will be much more difficult to service by the nature of their design. Some clients will require a higher level of service or will have special areas of concern that need more manpower/equipment. Assigning a level of difficulty to a property is a smart way to help you offset the difficulties you may encounter, and will ensure that you aren’t taking on a property that isn’t a good fit for your company. If you are concerned about overbidding the project, just remember that you now know how much it costs to do the work. You can still choose to lower your price, but this now becomes a strategy for gaining market share, not something that is happening by accident because you don’t understand your costs.

Know How to Sell
Having a sound sales strategy is perhaps the most important element, here are some ideas in how to build a strategy:

• Qualify your leads. Ask as many questions as you can, and really try and understand who these potential clients are and what they need.
• Find your niche. The snow industry services many different properties, you should focus on the properties that you service the best and that are the most profitable long-term for your company. Some examples include retail, commercial, industrial, residential, medical, HAS/condos, etc.
• Get face to face. If at all possible, sitting down with someone is more powerful than being just another letter. If you can’t get face to face, a phone call is still better.
• Ask for the sale. It’s simple, but it’s still one of the most important things you can do to gain new work.
• Follow up to get more work. Perhaps even more important than the previous bullet point, most sales happen after 2-3 follow ups.
• Don’t agree to too much. Know where you are flexible, and what lines you won’t cross. Agreeing to too much means you will overextend your company, and most likely lose the account long-term due to poor performance.
  

Article by: Brian Birch, SIMA Assistant Executive Director

Copyright © 2009 Snow & Ice Management Association, Inc. All rights reserved.

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