Lowest Bid Wins… or Lowest Bid Loses?
In my previous post, If Pest Control were Real Estate, I got a little heated over an unsolicited email I received asking for a bid on commercial pest control service. More over, I was bothered by the “Lowest Bid Wins” statement. After my initial shock I have decided to put some business and consumer perspective on this lowest bid practice.
How Lowest Bid Contracts Hurt The Consumer
The cheapest option typically brings poor results. This can be detrimental to the consumer. Who really want to eat at a restaurant that has its pest control done by the lowest bidder? The thought of maggots crawling through my Chicken Chow Mein, or a side order of roaches with my lobster, do not sound particularly appealing. In addition, I wonder how Subway, Cold Stone, or Panda Express feel about their reputation being left to the hands of the lowest bidder?
How Lowest Bid Contracts Hurt The Pest Control Industry
This lowest bidder practice welcomes corner cutting, low quality of work, ineffective products, and can even severely damage the technicians prevailing wage. In the pest management industry, it’s pretty safe to say that it’s those companies who always bid the lowest that seem to detract from the quality of industry pride and reputation that has built over the years. More often than not, these companies end up compromising quality; resulting in the consumer losing confidence and being skeptical of our services in the future. This ugly trend should be guarded against. There is need for customer education
How Would You Reply?
At this point, it’s easy to tell where I stand on auctioning off pest management service rights to the lowest bidder. But I wondered how alone I was in my sentiment. So I decided to start a few group discussions with other prominent pest control professionals to see if they felt similarly. Here are a few great comments after asking a few PCO’s how they would respond to such an email:
Those who sell on price make a sale not a client. When a better price comes along, or even worse, someone who can create the value of not selling on price, you lose. Those clients who buy based on lowest price will either leave when a better deal comes along or be unhappy with the value they purchased.. One of my favorite quotes I use: “I would rather explain a higher price once than have to explain later for poor quality of my product or service.” It’s true and it works.
After reading the bidding notice I would send a reply, with my bid, stating, “We believe we have provided the greatest value to your company by combining competitive pricing with unparalleled service and a rock solid guarantee. Based on these three factors, you should find that we provide the best long term cost for your organization. We look forward to being awarded an opportunity to prove ourselves.
Ignore it – you shouldn’t put your company at risk by doing the work at less than it costs you to do it. So the names might prestigious but here is a company that wants everything on the cheap. They’ll be after you for more and more with no price increase and then expect a reduction at the next tender date. And that’s if you get the job. Before that you’ll have spent time and effort working out what your tender should be, for possibly no reward. Let others with big finance and no scruples take the pain and go after good customers who appreciate you and what you do and concentrate on building a good reputation for your business – and the industry as a whole.
There are certain contracts we just don’t have to take on. Most often, it is those who always bid the lowest that detract from the quality of industry pride and reputation the pest management industry has built over the years, as they will end up compromising qualities when the chips are down, resulting to the clients losing confidence and being skeptical of our services in the future. This ugly trend should be guarded against.
This is an often disturbing portion of commercial & government contracts…”lowest bid” can help weed out the over priced vendors, but also welcomes the corner cutting, low quality work, or severely damages the technicians prevailing wage.
This is how all City/County contracts work (Heck all contracts at the end of the day)… Price like you would normally, and see where the cards fall…
In my opinion, that is a very easy one to sort …if you haven’t got any work and you don’t mind working for peanuts then chase the contract. I personally would simply walk away from it.
This is unfortunately the problem with pest management services. Most often the customer looks for lowest bid by the Pest Control Operators, irrespective of type of problem he has. Some times the problem is complex and normal measures would not yield results. Because of this, there is need for customer education.
I would say thank you, but no thank you. There is a reason why our company has worked as hard as it has to achieve an excellent reputation, and that is worth something.
If “the lowest price” wins, this assumes that whatever else you ‘offer’ is insignificant. Bidding against competition you can’t compete with for whatever reason is a waste of money for the most part.
We’re hopeful that this property management company doesn’t really mean the lowest bidder, and that they’ll look at all bids in their entirety.
We can only hope that most of our consumers look for quality, reputation, and effectiveness over price. Pest management professionals need to do what we can to educate the consumer as such.
What are your thoughts on auctioning off pest management service rights to the lowest bidder?