How will COVID-19 affect your snow removal business this winter? Ultimately no one knows the true answer, and many of us are grappling with strategies to proactively protect our companies this season.
To gain a broader perspective on how we can all prepare for any potential challenges, I sampled a large group of fellow contractors to understand what they are experiencing. I have distilled much of the information I’ve gathered to try to provide some direction to aid in planning for the upcoming season.
Assess your portfolio
Segment your customer base to assess potential risk. While speaking with other contractors, they shared particular concern over certain already affected segments of their customer base. For example, we have already witnessed the vast impact of the coronavirus on office, corporate headquarters and retail segments; as well as anything associated with the hospitality industry, like hotels, entertainment venues, airports and stadiums.
Take a deep dive into your existing portfolio and pipeline of prospective customers. Segment your existing customer base by property type (office, retail, industrial) and document any and all concerns you may have about each of these segments. Then, break down each segment from your largest to smallest clients.
There is no foreseeable return to any normal demand or capacity in the above-mentioned areas. So preemptively restructuring your agreements in these segments is absolutely where I would focus my efforts.
Take your clients’ temperatures
Once you’ve analyzed your existing customers and put together some logical assumptions based on your findings, the next move would be to validate as much of this perceived insight with them as soon as possible.
If the facility manager, property manager or property owner isn’t prepared to begin the dialogue with anything constructive, I recommend that you do so yourself. In other words, have a Plan A and a Plan B. Your current or standard agreement being Plan A, and Plan B being a modified version (re-scoped) for each site. By doing so you can begin some conversation to help these individuals recognize not only some of the things they need to think about themselves, but also what they may need to share with their peers.
Some modifications that might be suitable for both parties could include raising tolerance levels, performing sidewalk work that was previously done in-house, or closing off sections of parking lots to employees.
I would recommend mapping these options out for your client with a labeled site diagram, preferably created with an aerial or satellite photo, so that it’s very clear what you are agreeing to if a reduction in services is the final outcome for some properties this season. Make sure any changes to the contracts are documented and signed by both parties. You’re still under contract, so in all likelihood you’re still on the hook if someone slips and falls.
By conducting this exercise, you’ll also get down to what your minimum participation would be in order to meet your needs financially should the customer ask for a reduction in scope and services. There is a point of no return if the scope gets so small or uncertain that committing your resources no longer makes sense. This will also help you to determine how much capacity you could end up with based on what they’re sharing and agreeing to.
At the end of the day, agreeing on the scope of work is the ultimate goal, modified or not. Having clear demands identified through your contracts is paramount to all of us in this business. You need to be able to forecast equipment, labor, subcontractors and material quantities. The sooner you’re able to assess any reclaimed capacity, the sooner you will know how much you can leverage against winning new business.
Continue to seek new customers
The idea that snow contractors will be faced with requests for cutbacks was unanimous among those I reached out to prior to writing this column. It’s something many of us are preparing for, especially for the property types that have work-from-home orders for employees and that will be operating under limited capacity for the foreseeable future.
But those contractors I spoke with also shared that being flexible and working with clients to get through tough times pays dividends, as uncertainty produces opportunity for those prepared to participate. Some competitors will be making decisions that will ultimately affect their relationships with their existing clients, thus putting their customers into the marketplace for a different provider. So, there’s no reason you shouldn’t seek the ordinary amount of additional growth to your snow business.
Play the long game with clients
Digging into the details of your existing customer base and sales pipeline should lead you in the right direction to create plans for meeting new customer demands in this upcoming pandemic snow season. The sooner you can begin this, the better. As we all know, even in an ordinary business environment, negotiations can tend to drag out; so be proactive.
Most commercial property owners can understand that they’ve agreed to the terms of service set forth in the contract. However, being as flexible as you can be is meaningful to your clients both in this season’s negotiations as well as down the road. It’s unlikely the winter of 21-22 will be as challenging as 20-21. Play the long game with your customers and stay safe so you can continue to prosper!
Mike Rorie has been a participant in the snow and ice industry for nearly four decades. He owns GroundSystems, and is CEO of GIS Dynamics, parent company to Go iLawn and Go iPave. Contact him at Sales@gisdynamics.com.