Pricing blocks of neighbors...

[Bassman]

I'm 8 months into my lawn/landscape maint biz. I'm starting to see the word of mouth referrals come in from existing customers telling their neighbors about my work. These are all yearly accts. Question... I'm picking up blocks of customers in the same area and on the same street. Lining up 1,2,3,4 down the street and then across the street, etc. I'm very happy that my work is starting to pay off this way. These people obviously talk to each other on a regular basis. If I estimate that one would usually be $10 or $15 more than the existing account, I am letting it slide and staying at the same price as their next door neighbor. It is saving me travel time which is money and I'm thinking one will tell the other , eventually, what they are paying for service. If the job is within 10% or so of the others on the same street, am I correct in discounting to keep the price uniform?
Bassman

[Edited by Bassman on 02-13-2001 at 07:22 PM]

[awm]

Sounds like a buisiness judgement call.
Long as the customers dont complain about pricing.
Would not mind having that kinda problem.

[Scag48]

Sounds like you got a good deal goin'. I wish I had customers that talked to people more often. LOL. I wouldn't try to gouge them because they might tell their neighbor and you might lose a job or might lose a chance at a job. AWM is right, this is a judgement call.

[bob]

I'd let the customer know that the discount is based on cutting the neighbors lawn as well. What happens if one customer drops you. Personally I wouldn't discount any lawn.

[Twotoros]

If all take the same time within five minutes but if they differ much in time price accordingly. I do three in a row on one block one takes as much time as the other two combined.

[65hoss]

I wouldn't discount them either. Get the fair amount. If they like your work and your fair, you will get all of them.

[Richard Martin]

I don't give discounts to jobs that are side by side because as was noted above you never know when one of those jobs will disappear and then you are stuck doing the job for cheap.

[Greenkeepers]

Personally, I wouldn't discount 10-15 dollars.. If it was maybe $2 then I may let it slide.. As everyone said, you never know when they will leave.

[lsylvain]

What I actually do is give neighborhood discounts.

Each additional house in a certain area is "X" % off the whole lot of houses. That way if one customer pulls out the rest of the prices go up cordingly, and it encourages neighbors to talk to each other(it saves them $)



How I figure the price is simple.

Say there are 3 houses in a row.

Priced individually they are $30, $40, and $50

The total price is $120

If I was offering a 5% discount per customer they would get 15% off the total bill $18.00 off total.

$18 / 3 + $6 off per customer.

So I would charge them $24, $34, and $44

Your only out $18 and you probibly saved 1 hr+ of loading, unloadind and travell time. if you have 3 employees you save $18 in labor Min.

[TGCummings]

$10 to $15 sounds like a pretty steep discount, particularly if the neighborhood leans out at some point. Like Greenkeepers, I might let a couple bucks slide but nothing that steep.

Be sure to keep track of the total time on the job as you continue there. If, after a couple of months, you're finding that you're saving large chunks of time being there, then you could consider an across the board discount of 5% for the neigborhood, contingent on keeping the entire block.

Either way, it sounds like things are starting to really roll for you. Congrats!

-TGC

[smburgess]

From the clients point of view, this could happen;
"Betty" notices that it takes you 20 mintues to cut her turf, but across the street on the corner you take 40 mintues to cut "Julies'" turf, and from her conversation with "Julie" (Ilove doing that"") yesterday she remembers she paying the same price, hmmmm.... I think each property should be priced individually. If you to say your giving a little neigborhood discount, ok.

[Bassman]

Thanks for replies. To clarify, I'm talking about $10 or $15 monthly fee, not per cut. As mentioned, these are yearly contract rate customers. After the input, I think I'll price jobs according to the work and time involved for same street customers. I don't want to go into the busy summer season with the heat and long days thinking I should be making $10 or $15 bucks more per customer every month than I am, just because they are side by side. Multiplied by 3 or 6 or 10..., etc. it makes a big difference on my bottom line. If customer X asks why they pay more than customer Y after talking to their neighbor, I'll explain to them why. Probably won't come up much anyway. One of the worst feelings is to underbid and then beat yourself up mentally for being locked into an agreed price for a year.
Actually a better approach would be to perhaps make an adjustment if and when, (may never happen period), someone complains about a discrepency with their neighbors rate, just to keep the customer happy and not take the risk of them complaining to other customers on that street. I just don't want a competitor getting a foothold in an area I've worked hard to get over a difference of $10 or $15 bucks a month. I have, (so far), very loyal customers but I'm also well aware of the havic the low ballers can start when they come out of the wood work during spring and summer.