I started in the pumping business in approximately 1972. I thought it would be interesting to make some comparisons between 1972 and 2005. In 1972 the average price for a house was $27,600.00 and the average income was $11,859.00. A new car cost approximately $3,853.00 and you could rent an apartment for $165.00 per month on an average.
A ticket to the movies was $1.65 and gas was 55 cents per gallon. In 1972 you could mail a letter for 12 cents and you could send your kid to Harvard for $2,800.00 tuition per year. I remember the pumping rate at this time in Kansas City was $90.00 per hour or $4.00 per yard whichever was greater. Plus one hour move in at $90.00 per hour. The bill for a 200 yard pour in eight hours would be $890.00.
Today the same pour with a 28 meter at $125.00 per hour and $2.00 per yard if poured out in six hours would be $1125.00 plus one hour move in at $125.00 for a total of $1250.00. Based on the average increase on Concrete of 100% the comparable cost of pumping should be $180.00 per hour or $8.00 per yard which ever is greater for a 28 Meter.
It is apparent that we as an industry are way behind the curve for our charges. Ready Mix concrete has increased close to 100% since 1972 in our city and this seems to be pretty much the same around the country. The cost for our equipment has increased 250%. The cost to our customers has increased approximately 70%. This leaves us with a potential for 30% growth to get back to the increase we should have compared to other industries that compare with ours at a minimum.
The fact that we are this far behind does not make good economic sense, and we as an industry must look at the costs we have and the rates we are charging in comparison to other industries and ask why we are so far behind. The reason is because many Concrete Pumpers only do what the other guy does. I am guilty of this as are most in the industry.
If so & so can do it for this price I can do it better and more efficiently with my lower overhead and still be all right. The problem is that the whole industry is not addressing our true costs. It is true that we all get by at the current pricing, but there is no reason to just get by. People that are in the industry that own other types of equipment have told me that they do not understand the reluctance on Concrete Pumping Companies to charge what they should.
Think about what 30% would do for your bottom line. Talk about your costs - Talk about your profits - Talk about fuel increases - Talk about insurance increases - Talk about equipment increases - mostly just get together and talk !!!!!
Bob Weatherton may have hit the nail on the head when he said just "shoot the salesman". This is and always will be our weakest link to better pricing. Every salesman believes in his heart that the only reason he did not get the sale was because his price got beat. They never think that the customer might "like" his competitor better or that the customer "likes" someone's service better or he "likes" the equipment and operators better. The salesman always thinks they got beat because the price was better.
Talk to your competitor, talk frequently, and develope an association in your area. The more you talk about things the more you will learn and the more you learn leads to an understanding of what makes the other guy better then you or not as good as you. Either way it is always a plus if you "talk".
Ed Lothamer |
