• Americas

Leveraging Pricing on a Local Scale

By David G. Hilton, CPM, Senior Vice President

Business people discussing at meetingLeveraging pricing based on scale traditionally involves global or national pricing agreements, but should it stop there?  Most property managers would say, “No!”

Bundling service providers on a local level can be an effective management tool. If a property manager can bundle services by geographic region, the service provider knows they have a specific labor requirement in an area. Yes, the time to complete their scope of work may not change, but there is a secret many service providers will not disclose to you—realization.

What is realization? Realization is the concept that revenue can only be earned if the service is delivered.

Assured contracted work in a limited geographic area allows the vendor to bill out staff more efficiently and negates the time paid for driving between assignments and sitting in traffic. Therefore, vendors are more efficient and can bill more work in a limited time—providing a lower cost to preferred clients.

This method is effective in many disciplines including, but not limited to:

  • landscaping vendors
  • janitorial service providers
  • snow-removal vendors

Let’s use snow-removal vendors as an example. In 2015, Cushman & Wakefield St. Louis bundled over 150 managed commercial properties into distinct geographic regions across the metropolitan area and bid snow removal services to a group of pre-qualified snow-removal vendors. The results were clear, as contractor rates for bundled pricing were 15% lower than non-bundled pricing.

Successful managers continue to create efficiency for all clients. Our industry leading talent focuses on integrating and streamlining vendor services on a local level, creating reliability and consistency for all clients. How are you employing more efficient and effective pricing models?

 

DaveHilton1David Hilton serves as an Account Manager for a portfolio of real estate consisting of office, retail and industrial properties. His primary focus is coordinating the efforts of all services offered by Cushman & Wakefield to meet the client’s objectives. This includes management, leasing, financial reporting, and analysis. 

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