[Business Primer] Bid Adieu to Bidding Blues

Bidding a multi-unit housing complex can give even the most seasoned professional a serious case of heartburn. Bid too high and you lose the job. Bid too low and you’re stuck with a time-heavy account that doesn’t deliver on profit. What’s the best approach for bidding apartment buildings, condos and similar commercial jobs? Experts recently shared their tips for success with PCT.

CUSTOMER COURTSHIP. A winning bid starts well before the required paperwork is submitted, said Gary Monts, director of sales and marketing for Gregory Pest Prevention in Greenville, S.C. “The first thing we do is build a relationship with the customer.” Regularly visit prospects to educate them about your company and service offerings, “so when the bid does come due, your name is in their mind,” Monts said.

Cook’s Pest Control Sales & Marketing Vice President Joey Harris, Decatur, Ala., agreed. Customers who recognize your professionalism may help you with the bid or ask your input for what the bid should include, said Harris. “They may still look at price, but that may not be the only thing they look at.”

Before the bid is the time to emphasize your professionalism and reputation, said Arrow Environmental Services Vice President Stewart Lenner, Morganville, N.J. “You have to put your marketing foot forward.”

ALL-MIGHTY INSPECTION. A thorough inspection also is top priority, said Ray Busley, vice president, Crane Pest Control, San Francisco. “Crane never bids a job until we’ve done an inspection of the property” to determine building set up, possible problems and required preventative services. It is impossible to accurately bid a job over the telephone, he warned.

The inspection will help formulate the service you hope to provide. Preventative cockroach control in an apartment complex, for instance, depends on the type and number of units, existing conditions that may make the building prone to infestations, tenant cooperation, frequency of treatment, and the time needed to access and service the units.

TELLING TIME. “In pest control, we’re selling expertise based on time,” said Busley. “Whether we’re waiting to get into the unit or doing an inspection under the sink, we have to charge for that time.”

Once inside, preventative treatment can be a simple process. In three to four minutes, Busley’s technicians can inspect around the stove, refrigerator, under-sink areas and bathrooms, set monitors and place bait. Clean outs are a different story — and line item. “If you’re dealing with a heavy infestation, you’ll have to determine the amount of time and material it will take to get that infestation out of there,” Busley said. Several treatments and more time are necessary. “A one-bedroom apartment may take 30 minutes for a thorough treatment,” he explained.

Compared to larger buildings, where a manager or maintenance person with  master keys can provide quick access, buildings with fewer units often require more time, and technicians still have the same up-front investment, including travel, set up, making contact with the manager and gaining access to the units, Busley explained.

CREATIVE BIDDING. Pros suggest thinking outside the box to balance time requirements and profitability. Billy Blasingame, vice president of pest control operations and commercial division for Arrow Exterminators, Atlanta, puts a cap on the number of units treated monthly and charges a separate fee for callbacks. If every unit has to be treated every month with no limit on complaint calls, “you really stand to lose a lot of money,” said Blasingame. By the time you track the number of callbacks, a technician may be treating 375 units a month in a 200-unit complex, he explained.

Instead, structure the bid to treat one-third of the units per month, with an additional charge for a limited number of  callbacks, he said. Cockroach problems in a large apartment, where you’re making $1 to $2 per unit, can require the same amount of work as a single-family home, but with more challenges. “What can you do for $2 that’s going to be effective?” Blasingame asked. “I can assure you, your labor costs more.” Property managers fed up with ineffective service will pay, said Blasingame, but he admits this approach is not widely popular with customers.

Condominiums pose another challenge. Gregory Pest Prevention’s Monts recalled a brown recluse spider infestation at a Nashville condo complex. All owners but one let technicians treat their units’ interiors. “The spiders gravitated to one place — the untreated unit,” said Monts. “(Servicing condos) can become a logistical nightmare.” Since some owners are unwilling to let you in, look for different ways to perform the service, such as exterior perimeter treatments and reflect this in the bid, said Monts. Then offer owners a group rate for interior treatment.

The mistake many professionals make is pricing the job to win the bid, Busley said. “They should determine what it takes to do the job and then price it accordingly based on what their hourly production has to be.”

FINE PRINT. Details count when submitting bids, and Monts advised reading bid requirements thoroughly. “A lot of times, bids are lost by the fact that what was asked for in the bid is not (included),” he said. “We get a lot of bids that way.” Requirements may call for the bid to be submitted on recycled paper of a specific recycled content with proof of that content, or on a certain form that may not conform to your normal bid process. “If you miss that, you might miss the bid on a technicality,” said Monts. “You have to be specific.”

THE FRONT LINE. Also, carefully consider how the job will impact technicians. Low-bid jobs can adversely affect technician retention, said Harris. “If you’re paying an employee on a percentage of production, but you’re going in at the lowest price, you may lose some people.”

Blasingame agreed. He works with sales inspectors to develop bids that meet both sales and operational objectives. If a bid is too low, the “technician may not be making enough money to service the account well,” he said. “You can end up with a very unhappy service technician.”

STICK TO YOUR GOALS. Professionals agree if you can’t make a profit, don’t bother submitting a bid. “If (getting the contract) means under-pricing it and not being able to do a good enough job, you’re better off walking away from it,” Busley said.

Stick to your core company values, added Arrow Environmental Services’ Lenner. “Let everyone else go at it from the lowest possible price, and then you go at it from the best possible quality of service.” It’s better to get fewer, profitable jobs and spend your time growing your business with new customers, he said. “The name of the game as far as I’m concerned is still being profitable.” 

And that can impact service, cautioned Harris. “If you’ve under-bid a job and find you’re losing money, it’s tempting to cut back on services. That’s going to reflect on your reputation and send the wrong message to your technicians.”

Customers may still go with the low bid. “It gets frustrating,” Busley said. But over time, customers getting ineffective service from the low bidder will come back. A good reputation built on quality service is far better than selling cheap jobs and having upset customers who cancel you, he said.

The author is a frequent contributor to PCT magazine.

Tempted to Bid Low? Pros Say 'No'
 
Unless it’s your specialty, servicing multi-unit housing complexes gets mixed reviews from pest management professionals, mainly because contracts often are awarded to the lowest bid. Going in low is tempting, but could spell long-term disaster.

“I would never bid a job for less than it takes to do properly, even if it is one that’s going to carry you through the winter,” said Ray Busley, vice president, Crane Pest Control, San Francisco. “If you tie yourself into these jobs and you’re not getting enough money for them, you’re wasting your time and risking your reputation, especially if you let them slide during the summer when you do have a lot of other business coming in.”

In busy months, these jobs become a burden, agreed Gary Monts, director of sales & marketing, Gregory Pest Prevention, Greenville, S.C. And in lean times, “you’re still not making a profit, you’re staying busy. I’ve seen people lose bids like that because they couldn’t perform once they got the bid.”

Arrow Environmental Services Vice President Stewart Lenner, Morganville, N.J., agreed.  “When you go in thinking you’re going to lose money, it’s a disaster.  The busywork is not worth it.” And it may have consequences three, six or nine months later, said Joey Harris, vice president sales & marketing, Cook’s Pest Control, Decatur, Ala. Once you bid, you’re committed, and depending on the contract term, you could suffer years for the mistake, he explained.

Never bid low on the hope it will help you acquire future business, added Harris. “You may be thinking, ‘I’ll take this as a loss leader to get additional work.’ But don’t get starry-eyed thinking you’re going to get all this other work that’s not included in the bid.  There’s a very good chance that won’t happen.” 

Property management companies are driven to reduce their costs, reminds Lenner. “You really can’t hope that you’re going to get more locations just from doing that one location. That’s a horrible move.”

Instead, bid at a level that allows professional, profitable service. “A company looking for good service will reject a bid if it’s too low,” said Monts. “If it’s a company motivated just by dollars, they’re going to get what they pay for.”
Make sure the job you’re bidding is one you’ll be happy doing, regardless of the money, said Harris. He finds “monotonous” apartment work can burn out technicians. 

He suggests targeting a commercial niche that recognizes the need for quality service. Food processing plants, for example, could lose revenue, be sued, or shut down if pests become a problem. “Suddenly a quality service provider is more important than a low-bid one,” Harris said.