Snow RFP Best Practices: Four Pricing Models You Need To Be Aware Of
There are four traditional snow removal pricing models: Per Push, Event, Seasonal, and Time & Materials. There are key differences between each model, and it’s important to understand how each pricing model works to understand which one best fits your needs.
What are these differences, and which pricing model is the best fit for your portfolio? Let’s review:
1. Traditional Service Model (Per Push)
Per Push pricing is on a “per service” price
point, meaning there is a set cost billed for each time a plowing or salting service occurs per the contracted service trigger.
Traditionally, small box footprints and route-based services use this model in heavy and light snowfall markets.
2. Consolidated Service Model (Per-Event)
When estimating the total snowfall during an individual storm, it’s standard to use a per-event pricing model. For example, rather than paying a rate for each personal service, tiered price points are established based on snowfall during a winter weather event.
This pricing model is flexible as it fits both small-box and big-box footprints in heavy or light snowfall markets, and it’s the most commonly used format as an alternate option in lighter snow markets for companies that prefer to use an inclusive seasonal model in their more severe snow markets.
Also, the Per Event option is less of a burden administratively due to fewer line items on an invoice than the per-push model.
3. Inclusive Service Model (Seasonal)
In regions where the average snowfall is higher than average and more consistent over a 2-3 year period, seasonal models are commonly used to determine costs for a snow removal program. Seasonal areas include more inclusive pricing options and provide the most budget predictability.
Typically, portfolios with prominent locations in heavy snowfall areas will leverage the seasonal price model to lock in a consistent budget over multiple years. It’s rare for small-box portfolios to implement this model since the inherent nature of seasonal pricing and equipment staging doesn’t align with route-based services rendered on smaller properties.
4. Large Service Models (Time & Materials)
Finally, models based on time and materials are ideal for significantly larger properties that average a million square feet or more. These types of properties require the staging of specialized equipment to deliver adequate snow removal services.
Usually, this model doesn’t fit most company’s needs due to the unpredictability of the cost from year to year. However, this pricing model is useful for select locations such as data or distribution centers.
When choosing a pricing model for your snow removal program, we recommend opening up discussions with your contractor to review which solution may deliver the best value for your portfolio along with an effective scope of work.
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