What to tell customers to expect from working with a Crane Company

I think your crane guy does work with other tree guys. There's nothing special about you. I think you should reflect on that fact.

You've had a string of good luck so far and you've only had to deal with a small crane company (your guy has 2 cranes).

Sounds like a nice, cozy arrangement you have. I have an arrangement like that, too, with a local crane company. They are always there on time, never cancel, appear to love us. But they aren't the problematic larger company.

Even if I had your winning smile TC262, I don't think this is going to sway the big crane companies. They just don't pull cranes off site unless the job is finished. That leads to cancellation and rescheduling. Has nothing to do with donuts, winning smiles, etc.
 
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Just to be 'fair and balanced'--a section praising the crane:

Cranes are great. Cranes have lifted humanity from its primitive past and helped erect the modern world around us. Cranes have built bridges, skyscrapers, monuments. Archimedes said 'give me one immovable point and I shall lift the world!" Well, well, look around us at the monument of civilization, a testament to the value of the crane. Archimedes did get his immovable point and our world has been lifted by the crane. Modern arboriculture has benefited from the crane too. Immense trees in the squeezed backyards of houses can be removed. Crane companies abound in our free economy to service the demand. Arborists have formed valuable partnerships with Mr. Crane and together they are here to serve their appointed task.
 
ward said:
I think your crane guy does work with other tree guys. There's nothing special about you. I think you should reflect on that fact.

You've had a string of good luck so far and you've only had to deal with a small crane company (your guy has 2 cranes).

Sounds like a nice, cozy arrangement you have. I have an arrangement like that, too, with a local crane company. They are always there on time, never cancel, appear to love us. But they aren't the problematic larger company.

Even if I had your winning smile TC262, I don't think this is going to sway the big crane companies. They just don't pull cranes off site unless the job is finished. That leads to cancellation and rescheduling. Has nothing to do with donuts, winning smiles, etc.
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Well you must be one of those shitty guys no one wants to work with.
 
Let me return to the main question. When crafting boilerplate at the bottom of the quote, or as an add on page, what do you tell the client about the billing practices of crane companies and what to expect? Gradually over time in my business I noticed that the big crane companies would reschedule at the last minute. This never happened with the smaller companies. I found out that the policy exists--especially on the larger cranes--that they stay put on the job until it is done. It doesn't help to be the little guy who doesn't compete with the volume of work of a big entity, like a utility or a construction project. The fact that they can put you on the schedule doesn't mean you get that slot. That is weird to me and I'm sure it is not immediately understood by clients.

When we need big cranes, it may be for hazard jobs. If they cancel, crazy stuff can happen . If we don't prepare the client with a statement describing how we have no control over the final scheduling of the crane, this could lead to difficult situations. It seems like this is needed in the legal disclaimer boilerplate quote language. What have others done to write out these kinds of conditions?

As for whether to quote the crane as a variable cost or bundle into the estimate and take what bill may come as a part of the cost, either bettering the estimate or losing relative to the estimate. My reason for the variable cost is that it is transparent and fair. On smaller crane jobs I can understand billing this way, but when we get into cranes which cost north of $350/hr (with all the surcharges) and the uncertainty of , say, Friday afternoon traffic and the ability of the crane to get home on time. Seems to me like the most honest way to bill the customer for the crane company's costs and to mitigate potential losses should there the crane bill longer and more than you had estimated in the quote.
 
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flyingsquirrel25 said:
The reason I asked is as long as you have the time down on how long it's going to take (because you do well on your aspects of the job) you could very easily come up with how much an hour (including all the extra charges) the crane will cost and lump it all together in one price. Add a "safety factor" if it makes you feel better. Cool thing is if you knock it out of the park, cut the client a break, they are loyal to you forever (and you still do well). This just puts everything in black and white, no questions it cost $xyz. No need for complicated boiler plate.
I can't even fathom how frustrating it is to deal with scheduling like that, I would have an ulcer or a coronary buy now. There is way too much set up lining things up for a crane day to have it cancelled that often. Sounds like there is a great opportunity for a tree oriented crane service out there in the west!
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I think our markets are a little different. Here there is possibly more intensive competition than in your market. Under these circumstances, the larger jobs will have a greater competitive pressure downward on the winning estimate prices. If all tree services price their tree work in this market based on their estimated crane costs and do not bill for actual crane costs, if we consider the market distorting effects of, say, optimism bias, we will see an unhealthy lowering of the price of doing larger jobs with cranes. Those estimates will tend to win which are lower in cost, and as may be the case, they may win because they underestimate a cost which they cannot possibly profess to fully be able to anticipate, namely the crane cost. Thus, a vicious negative cycle is reinforced again and again in the local marketplace. Could see it becoming very tight in that market and the profit way undersized relative to the overall risk and skill layout for such endeavors.

Having the crane cost be variable, is more transparent, fair, and puts the profitability of the work on the shoulders of the tree service where it should be. And you are not winning the bid because of underestimating the crane cost which is more likely the case than being over the top in a tight market. It might be just the opposite in another market, where it would be easy to win bids even though you overestimate the crane expense. You know what the market will bear.
 
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All of this comes down to your market. By which I mean, YOUR market. Who your clients are and are not. Everything you do is meant to qualify the buyer such that you're better assured that they will agree to hire you on your terms. Whatever you choose to do with respect to the verbiage in your contracts needs to be seen through the filter of what your clients' value and accept as part of the cost of doing business with you.

By including language that spells out the variability of the costs of the crane and the challenges of scheduling, etc, it should illustrate an advantage of working with you over the competition and also clearly spell out a benefit to the client. When the client values the timely removal of the tree then there may be a mismatch with you especially if your competitors can provide such a guarantee.

From my recent experience we were very limited to the cranes we had access to. There were 2 companies that I could call with a crane the size we felt was needed in order to meet the objectives of the job, 150 ton. There was plenty of lead time for scheduling and we met several times to confirm the details of the work thereby nailing down the costs. We negotiated with the client what was covered within the contract price and what would be outside of it. That still left a lot of room for us to get hit with additional costs but I feel our planning efforts helped minimize the risk.

Put together some basic wording for the clause but make it flexible enough to allow for variation based on your negotiation with the client. This is really a matter of frequency. How often do you spec cranes that are outside of the norm? Is it monthly, weekly, yearly? What are the typical dollar values of the job? How many can actually handle these jobs and are they faced with the same impediments that you are?

While the idea of a boilerplate may sound good in theory, in practice it may become too limiting. In my estimation, it would be better to discuss this aspect with the client, get agreement from them that they are willing to work with the variability and to what extent then craft the wording to reflect the specifics of the agreement reached.
 
I like the idea of discussing with them and getting them to agree to the possibility of reschedule and the reality of variability in the pricing beforehand. Especially on larger jobs, clients appreciate transparency and honesty . But I do think it is important that they get more than just a conversation. They need a document that informs them of what to expect, otherwise its easily forgotten. I think an addendum would be a good thing to supply with all of the boilerplate on it--maybe given to them concurrently with the estimate. . The boilerplate may look discouraging on the page, but it has to be there. Its hard to imagine having to do this for cranes in the 30-70 ton crane class, as these cranes are pretty easy to obtain and there's not a lot at stake because the smaller cranes don't (often) charge for the travel back, like if they have another job. But the bigger cranes are a different matter. I'm actually pretty good at predicting the length of time of crane jobs, but with the traffic and the crane schedule outside of my hands, it makes no sense to try to nail it down to the half hour, when it could be an hour and a half more. Adding another $1000 on a bid for slop factor is not an easy option in a competitive marketplace.
 
You can poo poo everything if you want. We are in different markets, great that's how I can do what I do. A tree is still a tree and a crane is still a crane. I'm not afraid to put a number on a tree and stick with it because I'm confident in our skill, our equipment and my ability to set the price that is fair. If I get the job great, if xyz gets it even better they could do it cheaper. I haven't lost money on a crane job yet and don't intend on starting. I'm through arguing about it. I'm looking forward to my week off !
Peace, and be safe
 
I certainly don't want to poo poo what you do. Sounds like you've got a plan and you are working it. Let me show you how you might be vulnerable to estimating against a guy like me, however. I could point out to the client that in the enclosed model, where the crane cost is included in the cost, there is a greater likelihood that X tree service is trying to make extra money by being 'over the top' on the crane cost. In the variable cost model, the cost is transparent to the customer. You might lose a few bids to people who are presented with this logic.

Have an excellent Memorial Day and thank you for your contributions
 
The price on the job is the price on the job. I would never get away with telling the customer that it might vary depending on how long I take to work with the crane. You should know how long it takes and what you can do. The work pace with a crane usually depends on the climber and the ground crew, not the crane. You work slow or don't bring enough guys to the job and the customer should pay the crane an extra 3 hours at 300 per? Not in this world.

As far as the scheduling I guess that could depend on the market. We deal with a few crane companies we deal with. At times we don't get the crane or operator we scheduled because they are stuck on another job. On those times they have sent us another unit, sometimes much larger while still charging the rate of the smaller unit. We have never been stood up completely.

Paid for a 50 ton a few weeks ago and ended up with a 100 ton demag ac80.
 
Every crane company I've ever used has billed by the hour with expenses.

Looks like some tree services are billing their crane to the client by the estimate, not by the hour.

Either these tree companies are passing along the true cost of the crane in their estimate (they predict the time and expense just right) or they have underestimated the crane cost or they have overestimated the crane cost.

The obvious problem with underestimating crane time is the added cost. You will lose money on your work.

It should also be obvious that overestimating the crane cost allows the tree company to make more money off the client but this is potentially an unethical profit. There is no rational basis for billing a customer more for the crane hire than it actually costs and clients who suspect they are being charged more for the crane than it costs have a grounds for complaint.

Its one thing to make money with a crane (tree work), its another to make money off a crane (overestimating the crane cost and pocketing the difference). I think clients are okay with making money with crane but not off the crane.

I think crane companies don't give us 'estimates' but bill us by the hour because they know that they cannot predict with sufficient accuracy their actual expenses. They don't know how long they will take and they don't know how long we will take.

When it comes to estimating crane time, I think I do a pretty good job estimating 'hook time', but I cannot accurately predict travel or set up time, because I don't have control over the variables. Scheduling big cranes in any major metropolitan city you are going to be facing traffic which can be anticipated but not necessarily predicted.

I think clients have every reason to suspect that the tree service who bundles all of the costs together and won't itemize the crane cost separately is more than likely overestimating the crane cost in order to make money (not just with the crane), but off the crane itself.

In my mind, passing along the crane cost as a variable expense is honest, transparent, fair. It spares the customer the experience of being gouged, but also spares the tree service the potential loss from unpredictable changes in travel time, set up, etc. of the crane.

It goes without saying that a good tree service will make efficient use of its hook time, to spare clients extra expenses during this phase.
 
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It all comes back to your business model. Some companies will build in a margin of error on the crane and leave it as the cost is the cost. In some instances they make out well, others they take a hit. This goes for all of our work. We may apply a standard travel time cost that in some cases doesn't cover the actual cost. In this case setting up a boilerplate works for you if it gives you a competitive advantage. i.e., look we only pass the actual cost of the crane on to you, customer! What's the benefit of that to the customer? For some, it may be they actually will know they are only paying for what is billed yet others would find it a problem because they prefer to know the cost beforehand.

The notion that they are being gouged is a false one. Gouging is something that occurs when the client is backed into a situation with little recourse and the companies no this. Prices tripling after major storms, etc.. But here the client is not under pressure and has options.

Clients will pay more for work to be done based on the value proposition that is presented by the company. Either you make that clear to them or leave it up to them to figure out. By making a boilerplate addendum or clause that looks discouraging on paper is not communicating the value of your approach.
 
What about the costs associated with using a crane, besides the crane company's bill?

When I use a crane, I prune other trees as needed for boom access, prep areas for outriggers, like fence panel removal, coordinating my schedule to match with the crane availability (including starting earlier, as they like to be onsite at 8am).

Yesterday I 'ran around' for 6 hours with plywood for stump grinding protection on buildings, watering down dry, dusty soil and stumps, cutting stumps low, tarping the lawn, removing and replacing fence panels while the grinding-sub plowed through 15 stumps. I had supporting operations to make the stump-subcontractor as efficient as possible. I won't just pass on the sub's bill to the customer, and itemize the rest. Just a package.

Its not unethical to build in rush-hour traffic time into your bid for a crane or for your crew. Its just CYA. They can choose other contractors; they're not bleeding-out and your run an ambulance service.



I've underbid crane time. Sucked to be me. Just moved on. Couldn't ask them for more money after giving them a price. Thankfully, that guy understood I underbid it, and gave a me a bonus/ tip.
 
Where pricing for any subcontractor it is normal and customary to add in a percentage or if you are good and job costing your specific administrative overhead and support as Southsoundtree mentioned.
 
treehumper said:
It all comes back to your business model. Some companies will build in a margin of error on the crane and leave it as the cost is the cost. In some instances they make out well, others they take a hit. This goes for all of our work. We may apply a standard travel time cost that in some cases doesn't cover the actual cost. In this case setting up a boilerplate works for you if it gives you a competitive advantage. i.e., look we only pass the actual cost of the crane on to you, customer! What's the benefit of that to the customer? For some, it may be they actually will know they are only paying for what is billed yet others would find it a problem because they prefer to know the cost beforehand.

The notion that they are being gouged is a false one. Gouging is something that occurs when the client is backed into a situation with little recourse and the companies no this. Prices tripling after major storms, etc.. But here the client is not under pressure and has options.

Clients will pay more for work to be done based on the value proposition that is presented by the company. Either you make that clear to them or leave it up to them to figure out. By making a boilerplate addendum or clause that looks discouraging on paper is not communicating the value of your approach.
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Well said. To me, transparency is a value that goes both ways. This is absolutely true for the big cranes. I can see the embedded cost method having certain value to a client, as well. But if they inquire further, the benefit will be outweighed by the risk. But consider how that conversation might go:

Customer :"So company X is giving me a fixed cost for all the tree work, but a variable cost for the crane--which may take more or less time than anticipated. Your company is offering a fixed cost for the whole shebang, is that right?"

(toothpick rolls from one side of the mouth to the other): "Yes, ma'am."

Customer: "So if you underestimate the crane costs--you lose, but if you overestimate the cane costs--I lose. Sounds like a bit of a gamble. Is that right?"

"Yes, Ma'am"

Customer: "Are you usually on the winning side or the losing side of the crane estimate?"

"Sometimes we win, sometimes we lose: it all balances out."


Customer: "Will you refund me the money if I lose?"

"No, ma'am"

Customer: "Why not?"

"Because it all balances out"

"You mean you could overcharge me the crane cost and not refund me the difference because you are balancing your budget on my job?"

"Well, not quite, but sort of...don't question me, lady, I know what I'm doing."
 
treehumper said:
Where pricing for any subcontractor it is normal and customary to add in a percentage or if you are good and job costing your specific administrative overhead and support as Southsoundtree mentioned.
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All of that should be in the fixed portion of the quote. The fact that you are working with a crane and that this represents potential risks, the fact that the work has x difficulty factor, the cost of signage and notification, coordination with local authorities, the additional administrative overburden--all this stuff should be in the fixed portion. No reason why it can't be.
 
ward said:
All of that should be in the fixed portion of the quote
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Right, where it shows up in the quote is not the point but that it's calculated into the cost.

As for the dialog, this is a great example of why one qualifies their client up front instead of after the quote is tendered. It's part of the selling strategy. Ask the questions up front to learn what your client values and then adjust your proposal to their values.

If the conversation does come up about the difference between the variable cost quote and the fixed cost you can relate it to their stated value.
ward said:
Customer :"So company X is giving me a fixed cost for all the tree work, but a variable cost for the crane--which may take more or less time than anticipated. Your company is offering a fixed cost for the whole shebang, is that right?"

(toothpick rolls from one side of the mouth to the other): "Yes, ma'am."

Customer: "So if you underestimate the crane costs--you lose, but if you overestimate the cane costs--I lose. Sounds like a bit of a gamble. Is that right?"

"Yes, Ma'am"
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For one thing, that's a pretty savvy customer. Which is fine. You would know this upfront if you've qualified them. Instead of the closed, albeit polite, answer you posit here, a more open ended response would be better;

"When we first discussed this project we agreed that you didn't like surprises and wanted to know what you needed to budget for the removal of your tree. I've taken into account all aspects of the crane costs based on my extensive experience. I'm confident the number is accurate. There will be no surprise additional costs for you. Does that meet with your expectations?"

It's a competitive process. The client could still decide to go with the variable cost and role the dice thinking that maybe it'll be cheaper. That's really up to them and whether at the end of the day, price is king. Hopefully there are other qualifying values that they apply to determine who they'll choose.

Whether there's a crane involved or not, the value of the work is in the customer's eyes not purely in the numbers charged. We've done jobs where the price reflected a longer day or more crew members being on the job only to have it done in half the time and with fewer people because we saw an approach that the salesperson didn't. It's inconsequential to the value of the work. That was established by the price in relationship to the objectives of the work, not in the number of hours, equipment used, or number of crew on the job.

In other words, we don't need to roll out the "machine that goes, bing!" to make the customer feel they got their money's worth.
 
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