Mother nature is unpredictable….I mean, yes we can always count on cold temperatures, snow and ice in the winter. How and when it happens is never the same. Operating a service company based on factors you can’t control can be a challenge. In most circumstances landscape companies who also do snow removal lose money in winter. Challenges are meant to be solved and that’s what we set out to do with Seasonal pricing.
Our Mission is to provide a full portfolio of landscape service with consistency, quality and honesty. We believe snow management is a critical service our clients depend on and we want to make sure we can deliver service with excellent quality. With as many as 20 employees needed to service our clients in the winter, monthly payroll can reach 6 figures. A dry spell with no storms for 6 weeks in the middle of winter leaves us with a choice to either drastically cut hours, lay off employees or go into debt to make payroll. I don’t believe in relying on unemployment to get employees through winter (the politics of that opinion being a great discussion over coffee).
There are two methods for running a snow operation in the winter.
Charging per visit. This is the method Valley has always used. It is a great option for clients during mild winters, but wreaks havoc on budgets during heavy winters like we had last year. HOA’s who set their budget in the fall, businesses who are operating with slim cash flow margin, or families with fixed income get hit hard. Those without the adequate financial margin to pay their bill on big months delay payment making us struggle to make payroll in the months that follow because payments are late.
Similarly for the service provider, lots of extra money can be made on big winters but then a light winter makes it hard to pay the bills and keep employees.
Charges for service are averaged out over a reasonable period of time (in this case using the 5 year average) and divided up evenly over the course of the winter. The law of averages work in both the client and the service providers favor. We are guaranteed a certain level of revenue to make payroll, and the client can build a more accurate budget. It all trickles down to the client because seasoned employees know their job and the client properties are safer, more efficient and the nuances of each property are covered. Keeping the same staff season to season is of utmost importance. Paying them enough through the winter to be able to live here, raise a family and pay rent is the best way to guarantee they come back next summer.
For two year’s we’ve been evaluating these two different philosophies. In the end, the seasonal option is the best fit to ensure stability so we can continue to provide excellent snow service, retain employees and provide uninterrupted service to our clients.
FAQ’s about Seasonal Pricing:
Will I pay more?
No. We are offering no price increase for the second season in a row for those who stick with us for seasonal pricing. The format is very fair and transparent and is a solution that should allow us to break even in the winter while retaining all critical summer time employees. The monthly payments are based off the existing per visit pricing using a 5 year average. If the total number of visits exceed the 5 year average, we will just add the cost of each visit on top of the monthly payment. We have a software that manages the recording of visits so the invoicing of additional visits is accurate, no need to keep track of it.
There is precedent for this type of billing in many industries. Cell phone plans have a set monthly price until you go over on your data. Garbage companies have a monthly price unless you want to add more garbage to your pickup. Housekeepers charge a monthly price based on a certain number of hours worked. Etc.
How do I know the service level won’t drop once you have my money?
Our mission is to provide consistent quality honestly, and we will continue to strive for that no matter how we do the billing. If you feel that our service is not satisfactory, we hope to hear from you so we can make it right.
This is a deal breaker for me, what options do I have?
There are some circumstances where charging by the hour or by the visit still make the most sense. Not every shoe fits every foot. If this format just doesn’t work for your property or budget please give us a call and we can work something out to continue serving you.
I still don’t get it. Can you break down the math for me??
OK. No Problem. Lets say you have a driveway in Melody Ranch that costs $50 to plow.
- Last year we plowed it 33 times. The year before that we plowed it 17 times. 2018, 2019, 2020 we plowed 22, 24, 25 respectively.
- The average of those 5 years is 24 visits. 24 visits * $50 per visit = $1,200 per winter.
- The winter plow season runs mid November through Mid April, 6 months. $1,200 per winter / 6 months = $200/month November thru April.
- If a certain winter exceeds 24 visits (usually beginning in March) $50 per visit is added to the monthly invoice.
How are you managing to keep your prices the same despite fuel prices going sky high again?
Fuel prices are volatile. They will continue to go up and down. I don’t want to raise service prices based on volatile factors, instead our pricing is based on fixed overhead costs to keep your price as low as possible. Any time fuel prices are above $4.50/gal. for diesel we will simply add a $5/month fuel surcharge to the monthly invoice, that way when fuel goes back down you aren’t paying anything extra.
What if I only get a handful of visits per year because my trigger is something different than the normal 2″ trigger?
If you only get plow service periodically with a 6″ or greater trigger, you will remain on per visit plowing.