Developing a fact-based,
1. Determine your scope of service based on your business needs.
Retailers that carry essential goods and supplies that customers will want before, during and after a storm – home improvement and grocery stores, for example – need to have snow and ice removal contractors on site early and often.
“But if I’m an apparel retailer or a jewelry store, I don’t need to pay to have my contractors catching the flakes out of the sky,” Hartnett said. “You won’t see an increase in revenue or foot traffic during the event
Time in the calendar year is also key in determining snow removal. About 40 percent of retailers’ revenues are generated in November and December, and nationally more than 30 percent of snow falls during that time. While you might want to beef up your snow removal during those two months, by late January you can adjust to a less aggressive trigger or clear less of your lot.
2. Base your decisions on good data. “When most organizations make the choice about going with a seasonal, per event or per push contract, based on either no data or poor data, they’re going to make bad decisions,” Hartnett said. “You need to understand the actual weather; the number of events, the types of events, the probability of those events and match that up with different cost structures.”
The problem is that much of the widely available snow data (including that from the National Weather Service) is based on inexact measurements. Retailers may also go back only five years or so to determine the average snowfall in an area; Hartnett recommends going back at least 50 years.
“FMs should consider working with a company that analyzes available data and can match that with pricing information,” he said. “It’s incredibly complex; people try to oversimplify this, and if you do that, you’re literally taking the dice and rolling them.”
3. Start the process early. Snow removal contractors are competing with a lot of other users, including municipalities and large retailers, for a finite supply of deicer. The longer they wait to order supplies, the more expensive those supplies may be.
The earlier you lock up a contract, the earlier the removal companies can get their supplier and the better the pricing you’re likely to get.
4. Audit on the back end. Snow removal is much more complex than janitorial and floor care service. With seasonal contracts, contractors have an incentive to work as infrequently as possible, while per push or per event contracts encourage them to provide more services.
“You want to make sure you audit their performance and compare it to other locations in that area,” Hartnett said.
5. Use centralized decision making. “When decision making on snow and ice removal is centralized, it’s more likely to be based on a very structured set of rules, even if those rules are flawed,” Hartnett said. “But they are likely to be better than individuals at stores randomly making decisions.”
To develop the best strategy for their companies, FMs must understand what it is they’re trying to achieve. Do they want to spend less and assume more risk? Or spend more and have less risk? The answers will help determine which type of snow and ice removal services are right for their stores.
By: Mary Lou Jay
