Virtually all PCOs have to deal with bidding — whether it’s bidding for residential work (like the local homeowner and condominium associations); industrial and commercial accounts; or local, state or federal government accounts. Bidding for pest control work may be a common occurrence for your company or, it may be something you do only occasionally. But bidding opportunities abound, and while there are probably as many different strategies as there are PCOs, certain bidding principles should be applied across the board.
Bidding occurs when a PCO offers a price for services that a customer has requested. The customer compares that bid to others that are submitted and then decides on a PCO. Bidding, in part, has contributed to the competition of the industry. “Bids are structured so that the customers get the best price. I’d rather sell the best value,” said Rick Rupkey Sr. of University Termite and Pest Control in Tucson, Ariz. Rupkey delivered a presentation on effective bidding strategies at the 1998 Dialogue Conference in San Diego.
Because the acceptance of bids is sometimes based strictly on price, PCOs that offer specific pest control programs (for example, IPM or other various techniques) may be left out in the cold when it comes to bid-acceptance time. Although they may feel their approach is better than others on the table, it may not be the most cost-effective for the customer who requested the bids.
Jim McHale Jr., president of JP McHale Pest Management in Montrose, N.Y., says when working with homeowners he has found it most effective to sell customers the best service for the money. Because many homeowners have a zero tolerance for any pests, they are sometimes willing to spend more money to make sure their homes are pest-free. “We try to sell on value and not price because the first time another pest control company offers them a lower price then they will leave us for someone else,” McHale said. “Homeowners will pay more so we try to sell them on value.”
How the company presents itself is important to the customer as well. “We provide a technician that is more personable and knowledgeable,” said Ric Kessler, president of Ormond Pest Control, Ormond Beach, Fla. Although his company uses “the same chemicals as anyone else,” he says his employees are constantly improving their skills, and that is what sets his company apart from others. McHale agrees. “The service is more about our technician being uniformed, responsible and receptive,” he says.
THE BIDDING PROCESS. Kessler follows certain steps when approaching a bid project. He surveys the property; analyzes the situation; talks to the decision-maker to learn their expectations; and decides if the project is a good fit for his business. If it’s not, he declines to make a bid. Otherwise, Kessler returns with a written package detailing the type of service that will be provided along with a timeline for reaching the customer’s goals. He quotes a fair price for the work and also explains what the treatments entail.
If the customer is interested, Kessler also provides references on his company’s work. “If the customer wants to, I’ll take them out in the truck and drive them around the town and show them accounts we have done, properties that are like theirs and what their service can look like,” he explained.
It’s important to ask customers questions, McHale adds. PCOs will present the best image to customers by being curious. “The first thing is to ask a million questions. Do a lot of listening and find out what is important to them,” he said. “Be quiet and let them tell you what they want.”
BIDDING STEPS
Ormond Pest Control, Inc., in Ormond Beach, Fla., follows these steps when approaching a bid. The company:
COMMERCIAL ACCOUNTS. There are many specialty accounts that request bids for pest control work, Rupkey said. “You have to decide what you are going to do because you want to be the best you can be,” he said. “Don’t try to be all things to all people.”
Specific commercial accounts include the health care industry (hospitals, nursing homes and doctors’ offices); factories; various food processing accounts; and transportation accounts such as railroads and airlines.
In the private sector, Rupkey said, PCOs need to convince their customers it is not in their best interests to go somewhere else for pest control work. The PCO is going to have to bring the customer to that conclusion.
Long-term relationships with customers are most important. “Don’t let your message get lost or diluted. Make big promises and deliver on those promises,” Rupkey said. Companies should not only have the policy of “service after the sale,” Rupkey said, but should also offer a quality assurance program. “Verifying and validating the service are the most important elements of account retention,” he said.
In commercial accounts, price may be a factor in deciding on a PCO, but customers are less price sensitive if there is an immediate problem that must be corrected. For example, McHale says that a catering hall will usually pay top dollar to get rid of pests. The reason — if a bride, for example, sees a roach at her wedding, the hall could lose out on $20,000.
Another way to set your company apart from others when competing for a bid is to offer an extra touch to your service. Rupkey recommends that when servicing commercial accounts, PCOs should maintain logbooks that contain the following updated information:
Also, Rupkey says, there are other things a PCO can do to help make the commercial service run smoothly: plan and schedule regular progress reports for management; schedule regular visits by your firm’s quality assurance officers; plan regularly scheduled meetings with top management; ask for referrals or suggest add-on services; and maintain a filing system to track the history of the account.
GOVERNMENT BIDDING. Government bids can be much more difficult to secure because they have tighter specifications, or specifications that are no longer common practices. Although it isn’t appropriate to tell customers their specifications were “written in the dark ages,” Rupkey said, PCOs need to inform customers about new types of services. “PCOs need to build the case that IPM is a necessity, and not a luxury,” he said.
Customers are sometimes unwilling to adopt new pest control policies because they think the way things have been done in the past is fine and nothing new needs to be done. But just because there are potential customers out there who are unfamiliar with IPM or other new techniques, doesn’t mean PCOs should feel discouraged, especially with regard to government contracts, Rupkey pointed out.
Looking for new government accounts to bid on may seem like a tough challenge, but Rupkey recommends several ways for finding possible accounts: PCOs can compile list of potential target accounts in the area by driving around, looking in the phone book or simply contacting the government agencies themselves. The company should also define its service area — although that might change if there is a worthy account 50 to 100 miles out of the service area. Rupkey says PCOs should use referrals and keep their ears peeled to find out more about upcoming jobs. Also, create a calendar with upcoming bids and keep track of what is going on. And, if the pest control company does find a new account, the company needs to decide if the account is worth hiring a technician to move into that new area.
With government bids, the PCO often needs to figure out how to make a better offer than what the specifications may require, because those putting the specifications together may not be well versed on newer pest control techniques.
“Submit the bid the way it is specified but then respectfully submit a better plan,” McHale said. “People seem to be receptive to that because sometimes their internal people don’t know all of the latest technologies.” His company will sometimes submit a bid that meets the exact specifications but then submit a second bid with suggestions on how to improve the first. He said this is more helpful to everyone because the PCO gets to perform the job to the best of his ability while offering suggestions to the bidder on new techniques and better ways of doing pest control work. “If you carry yourself in a professional manner, they will listen,” he says.
PCOs should also keep in mind that previous bid abstracts are public records. A government office must provide you with copies of previous abstracts if you request them.
While some companies do a lot of bidding on government accounts, others say the time the entire process takes just isn’t worth it. “I don’t do a lot of government work because they always go with the lowest price and I can’t service them for those prices,” said Bill Medler, president of Med Pest Control, Middlesex, N.J.
McHale points out that in the northeast region of the United States, there is a “lowest responsible bidder” policy: Instead of the state being required by law to accept the lowest-priced bid, the state can opt for the higher value. This discourages companies from bidding work low and then not being able to afford to do the work correctly. He said the option “is not exercised much, but the state can choose the higher bid.”
HELPFUL HINTS. Rupkey’s goal when bidding for jobs is to raise the bar so high that his competitors cannot compete. “I want to write my competitors out of the specifications,” he said. “I want to write specifications that the competitors cannot meet. You may find that you are one of the few qualified bidders around, so establish criteria that not everyone can meet.” His company does that by promoting anything positive that is published about the company. “One of the first things you need to do is to attempt to establish your credentials. Customers have to understand that you know what you are talking about and that what you bring to the table is of real value to them.”
The credentials could be very basic, he notes. For example, University Termite and Pest Control uses a three-fold brochure to help inform customers. The brochure could include basic public relations materials such as a copy of the pest control license, bonding certificates or workers’ comp information.
Kessler agrees. He said he likes to put together a bid package that includes certain documents, including their workers’ comp certificate and liability insurance information. “I want customers to know that I am responsible for my technicians and for the customers,” he said. “If my technician trips and breaks his ankle, it is my responsibility. Or, if a customer trips on a cord, then that too is my responsibility.”
There are other ways to build credibility for you and your company, too, according to Rupkey. Create a company Web page that will educate prospective customers. Equally important is establishing a good-working relationship with the customer.
Even after all of the work a PCO puts into winning a contract, sometimes the account is lost to a bigger company. “Large companies underbid the price because they seem to be able to take the brunt of a loss better than smaller companies,” Kessler said.
But while small to mid-sized companies may lose out on occasion to the larger companies, the best policy is to try to be fair and consistent, and to help customers (and potential customers) expect the most out of you and your company. “Teach them what their expectations should be,” Rupkey said, “and promote professional pest management.”
The author is assistant editor of PCT.
Sidebar: Sample Letter
ACME Pest Control
1234 Main St.
Anytown, USA 12345
Dear Valued Customer,
Thank you for allowing me to walk through your facility yesterday. As we discussed briefly, the following is a list of observations with regard to your pest control problems:
EXTERIOR
1. Several bird nests were found in the roof areas in the rear of the building.
2. Nearly all electrical conduits into the facility have gaps permitting rodent/insect access.
INTERIOR
1. All company lockers should have company issue locks with a common master pass key. This will enable the lockers to be periodically inspected for rodent and insect harborage.
2. Evidence of cockroach infestation in the form of dead cockroaches was observed in several areas of the kitchen. Many were partially consumed by rodents.
INTEGRATED PROGRAM PROPOSAL
We are pleased to present a comprehensive and proactive pest elimination and prevention program for your facility. General specifications for the location include:
1. Service to be rendered once a week.
2. Emergency service to be rendered within 24 hours of request.
3. All work and materials will be in strict accordance with federal, state and local laws.
4. All work will be rendered by specially trained certified applicators.
5. Labels, material safety data sheets and EPA registration numbers will be provided for all materials used.
ADDITIONAL SPECIFICATIONS
1. All cracks, holes and other structural flaws should be permanently repaired or sealed with copper wool and/or caulking to exclude pests from the facility.
2. The buildings can be bird-proofed if necessary for an additional fee.
COMPENSATION
We propose to render a pest control program including all materials and labor, complete in accordance with the above as follows:
Initial abatement cost
Materials, $6000
Labor, $3000
Monthly cost, $1200
Annual Cost = $14,400
Please feel free to call us with any questions you may have about this proposal.
Sincerely,
General Manager, ACME Pest Control
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