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Frontier-Lawn
02-07-2006, 12:57 AM
i got a email from one of my clients today asking if i would meet valley crests monthly cost of $80 month (no matter if its 4 wk or 5 in the month) i charge $30 a wk for a 1/4 acre. what should i do. tell them good luck and blow it out their ....... or kiss but and meet the comps cost. the lowest i can go is $95mth

LawnScenes
02-07-2006, 01:08 AM
If that's the lowest you can go I'd stick by it. Losing a customer sucks... But they can't start dictating your profit margin nor how you run your company. Your competition shouldn't either. I'd ask myself and them how satisfied they were with the work. Are they looking for quality or whoever is cheapest. If the second is what they are after... I'd send them a letter wishing them luck with "valley crests".

greengiant9963
02-07-2006, 01:30 AM
I personally would not do it. Gas and the cost of living is going up. If anything the price should be raised for this reason. It stinks loosing a customer but I think that your time is money you could be doing another job in its place and making more.payup

Lux Lawn
02-07-2006, 01:44 AM
If it doesn't meet your minimum then you might have to move on.

rodfather
02-07-2006, 08:35 AM
just replace them

Jpocket
02-07-2006, 08:45 AM
We have Valley Crest around here, they haven't really started trying to take over the residential market yet. They'll probably start this season. They are gonna have a hard time though because there is already a few high volume companies in the area including myself

crzymow
02-07-2006, 09:02 AM
id tell them dont let the door hit you in the a$$. I dont lower my prices, if they dont want to pay, that is their choice, but if they end up not being happy with the new company and call me back, most of the time the price is goin up.

OnMyOwn
02-07-2006, 09:37 AM
We never move backward in price, or service. The one excpetion is a multi-location client where you can pad your discount by increasing another job for the same client. Remember...there is more than one way to skin a cat!

i.e. reduce his mowing by $120.00 per year to meet the competition, but increase his mulch prices by $150.00. Reduce his personal home by $120.00 per year, but increase his office by the same.

MarcSmith
02-07-2006, 09:47 AM
think about for a moment. 80 bucks a month for twelve months= 960 bucks... 906 divided by 30 is 32 visits per year....its do able for that part of florida I was running from 30-36 visits in orlando. depends on irrigation and type of grass. non irrigated st augustine or bahai its go...IMO. All depends on the maintenence level the client wants.

If you decied to do, make you they signa contract agreeing you will cut the grass "as needed" which in some cases may mean two weeks between visits in the winter or during times of drought or high stress levels of the grass

But in the end, only YOU know your true costs...

Frontier-Lawn
02-07-2006, 09:54 AM
We have Valley Crest around here, they haven't really started trying to take over the residential market yet. They'll probably start this season. They are gonna have a hard time though because there is already a few high volume companies in the area including myself

Valley crest does all of the lennar/us home community areas of this new 900 home site that most of my clients are in. i heard from another client that his nabor has them do his yard. i blew it off, :sleeping: like i care about what crests does. big mistake. :cry:

MBDiagMan
02-07-2006, 10:39 AM
This scenario reminds me of the old joke about the Aggie that was losing money per job, but said that he could make it up in volume. Unfortunately it doesn't work that way. You can either make money on that job or not. If not, you might as well go fishing, golfing, skeet shooting or whatever you do for kicks because there's no sense in showing up to lose money or decrease your overall income.

Best of luck,

work_it
02-07-2006, 11:11 AM
Nothing I would loose sleep over. Just say "C-YA!" and be done with it.

I don't lower my prices for anybody. As long as you're charging fair market prices and doing quality work there's no reason you should let a customer dictate what they're going to pay. Call your customer and tell him that you'll agree to the new rate as long as he sharpens your blades, maintains your equipment, and pays for all parts and repairs as needed. After all, if you're going to allow him to run your business like he's the owner then it's only right that he shares in the expenses.

ktorrence
02-07-2006, 11:44 AM
I'm curious how Valley Crest could be so much cheaper. Whatever their angle is you have got to flip it to your advantage. Example, lower labor wage usually means lower quality, flip it to the customer as you provide better service. Maybe they don't sharpen their blades as often or their employees aren't as friendly. There has to be some angle. The old adage you get what you pay for still carries a lot of weight. But do not just blow the customer off. This is what Valley Crest wants you to do. Any if you keep doing it you'll soon find yourself putting in an application with them. At least put up a good fight to keep your customers. Besides, the customer at least had the courtesy to ask you to compete. So COMPETE, DON'T RUN.

MarcSmith
02-07-2006, 11:52 AM
is you customer going to be able to communicate(spanish) with the leadman, or is the client goingto have to call in and spek with an area manager when they have problems. more work for them....

VC, much like TG is tryingto capitalize on the "monthly payment" IE same price each month. You price fluctuates each month based on the how many visits you make. VC is jsut spreadingthat cost over the entire year. makes it easier for th eclient, same amount each month, but it also makes it easier for VC to budget their income as well. They know how much is coming in each month and it makes for easier bookkeeping as well. Less change of screwing up an invoice when they are the same each month.

mslawn
02-07-2006, 12:24 PM
I'm curious how Valley Crest could be so much cheaper. Whatever their angle is you have got to flip it to your advantage. Example, lower labor wage usually means lower quality, flip it to the customer as you provide better service. Maybe they don't sharpen their blades as often or their employees aren't as friendly. There has to be some angle. The old adage you get what you pay for still carries a lot of weight. But do not just blow the customer off. This is what Valley Crest wants you to do. Any if you keep doing it you'll soon find yourself putting in an application with them. At least put up a good fight to keep your customers. Besides, the customer at least had the courtesy to ask you to compete. So COMPETE, DON'T RUN.

I agree-don't run - learn how to compete with them and be profitable at the same time.

Jpocket
02-07-2006, 12:37 PM
Valley crest does all of the lennar/us home community areas of this new 900 home site that most of my clients are in. i heard from another client that his nabor has them do his yard. i blew it off, :sleeping: like i care about what crests does. big mistake. :cry:

I always investigate, what the other guys are doing big or small. In order to stay ahead or develope a fit defense mechanism you have to know what their strategy is. It's usually the big companies you have to watch, because the small guys USUALLY don't have the resourses to to any really agressive.

JimLewis
02-07-2006, 12:51 PM
You should NEVER discount your price for any reason! Stick to your guns. You know what you need to charge to make a living.

I never appologize for our [higher than average] prices. I always turn the tables on them and explain with our service we will be doing more than the competition (and we do), we will be more reliable than the competition, more experienced than the competition, more thorough, etc. I always turn it on them and sell service, not price.

You get what you pay for. And a lot of people realize that. Nobody hires my company because we are the cheapest. They hire us because our quailty and reliability is better. And those are the customers you want to get anyway, not the ones looking for the lowest price.

Frontier-Lawn
02-07-2006, 05:56 PM
Heres the email im sending her back tonite

Dear Kim,

I played with my P&L and I can go down to $95 month. I would also like to point out the reason you picked me to take care of your lawn. 1) I wont cut below 4” on your type of grass. 2) Edge & Trim Weekly & 3) I trim off dead branches as I see them. 4) And clients only half to deal with one person for there account. If you want to save even more money and not have to pay to fertilize your property, keep paying the $120 month, and ill include your fertilizer 4 times a year & all listed above. Please let me know what you think of this proposal, my $95 is half between there’s and my price. If you have any other questions please call me so we can talk in person about it. Also could I have the names of the company’s that gave you the quotes? I like to find out how they and afford to cut it that cheap for a crew of at least 3 people.

Shawns Lawns
02-07-2006, 06:18 PM
I would not do it. What would happen if next year he finds a quote for $60 and wants you to match it again. Also try to find out if that quote is real or if they are testing you to see if you will do it for less.:waving:

PROCUT1
02-07-2006, 06:21 PM
Please proof read it....First

Second...Are residential lawn accounts that hard to find in your area to require this type of on-your-knees begging?

ktorrence
02-07-2006, 07:21 PM
Frontier Lawn you're on the right track. However, I would skip the email and pick the phone up and call the customer. First, this is more personal than a email and that extra personal service is something that a smaller company should always do better than larger companies. Second, you can respond instantly to any concerns the customer may have. Jot down your strong points on a note card and let her know that you enjoy having her as a client and that you intend to keep her as a customer. I would reserve the $95 option as a last ditch effort. If you've been on your game and taking care of business this should not be necessary. Most people don't mind paying extra if they think it's worth it. The main point here is sell your service along with the image you've created.The better your image, the more your customer will desire you, and accept higher price levels. Finally, after you've given your best pitch and possibly even using the $95 option. Be prepared to let the customer go. You can't please everyone. But, at least you will have educated that client what it takes to run a profitable, personalized LCO(something most customers never fully understand) and most importantly you will have given her your best shot.

grass-scapes
02-07-2006, 07:33 PM
Please proof read it....First

Second...Are residential lawn accounts that hard to find in your area to require this type of on-your-knees begging?

I was going to state the proofreading need, but you beat me to it. Spell check and use complete sentences when you communicate to a customer...AT the very least make them THINK you are smart.

AintNoFun
02-07-2006, 08:01 PM
I'm curious how Valley Crest could be so much cheaper.


because they know there costs probably down to the penny and are happy making 10's of millions on low margins!

Metro Lawn
02-07-2006, 10:07 PM
My famous (can you match their price) come back. "I can reduce my price to match theirs, but I'll have to drop my quality to match theirs as well."

Mower63
02-07-2006, 10:24 PM
You mentioned they are doing a large community...is this house in the community? We run into that situation over here in Palm Beach County where a big company (Valley Crest, Phoenix, Annco Services, etc) is providing full boat service for the community. Some customers elect to get their own service due to the production approach of the big company. Frankly a lot of these big providers view the homes as a loss leader or break-even and make their real profits on the common ground maintenance, irrigation, pest control, etc.

So how can they do this work for less than you? Economies of scale and very finely tuned production numbers. Now I would be completely surprised if Valley Crest was going after individual homeowners instead of communities since that is not their business model. That would be like Brickman going after HOA's....they simply don't do it. But again, businesses have to find ways to grow....

PROCUT1
02-08-2006, 12:12 PM
You mentioned they are doing a large community...is this house in the community? We run into that situation over here in Palm Beach County where a big company (Valley Crest, Phoenix, Annco Services, etc) is providing full boat service for the community. Some customers elect to get their own service due to the production approach of the big company. Frankly a lot of these big providers view the homes as a loss leader or break-even and make their real profits on the common ground maintenance, irrigation, pest control, etc.

So how can they do this work for less than you? Economies of scale and very finely tuned production numbers. Now I would be completely surprised if Valley Crest was going after individual homeowners instead of communities since that is not their business model. That would be like Brickman going after HOA's....they simply don't do it. But again, businesses have to find ways to grow....

Brickman DOES service Hoas in my area..... Thats most of what they do

Mower63
02-08-2006, 10:30 PM
I have never seen Brickman on an HOA/POA property in this area but like I said, it doesn't mean they don't do it in different areas. Brickman has grown a lot through acquisition so those might have been existing accounts with companies they bought. I know a few people who work as supervisors for some of the larger companies around here, very production oriented. Crews move through and do not return once a property is passed....5-6 guys...1 mowing, 2 line trimming, 1-2 edging, 1-2 blowing off. Hedge trimming is more intense but it is the same production approach. They know their numbers and it seems like net profit is in the 10 - 14 percent range. This may seem low to a small business person but 10 percent of 2 - 3 million in sales is serious cash.

Envy Lawn Service
02-08-2006, 10:52 PM
Golden Rule: NEVER match a price, NEVER compromise on a price, NEVER negotiate a price, and NEVER NEVER NEVER go backwards in price.

I mean you gotta draw a firm line in the sand somewhere and there is no better place to do it than here... even if it means loosing the customer. Best case, you'll only have them one more season anyway, and you spend it making less while being their doormat. If you go down in price, they are only going to get a lower bid next year just to pressure you to lower again just because they know you will. But it sounds like you can't so they'll be gone.

The whole point of residentials is not having to bid competitively to keep it every year.

However, I do not carry the same 'air' about me than many others here do. Would I fight to conserve my customer? You DANG RIGHT I would. I'd call in a heartbeat to point out the major differences between myself and this company. I would also be honest and very frank with the customer. Yeah, I'm going to tell them what I really think rather it helps me or not. I'm explaining right quick why I'm not reducing to meet their price and I'm also going to point out how I really feel about the business tactics this company is using to try to drive me out and gain monopoly in their neighborhood.

If that doesn't help me in conservation, I'm walking away on good terms. Hopefully the figure out right quick what the difference is between me and this new situation they have gotten themselves into. Hopefully they call me back and I can squeeze them in at a higher rate than they were at before.


I'm telling you guys, I'm really really trying hard to develop some NEW effective state of mind to maintain about this lowballing thing so that it has less effect on me because it's really eating me up good inside at this point. I'll let you know when I find my zone, that's for sure.

befnme
02-08-2006, 11:14 PM
only you know what you have to make to make a living......if you cant match it then dont . i wouldn,t go in the hole just to keep a job. explain to her that you beleive that you can provide better one on one service than the big guys. and that to you she is more than just a number...i dont know but it might work.

6'7 330
02-08-2006, 11:38 PM
Firstly, it would be very easy for me to say, never negotiate etc etc,in a type market I'm not in.

What your up against is a high volume low margin company.If your basically a mow only company, and this company targets your areas of operation, you will have to adapt.As other posters have stated,there are many strategies, you give more personal attention,speak English etc,Sell your quality.

What it will boil down to is, are people in your area's of operation the type willing to settle for an acceptable decent job at much cheaper rates the high volume company will provide for them, as opposed to a bit higher level of quality at higher rates.

Likestomow
02-09-2006, 12:14 PM
Heres the email im sending her back tonite...Also could I have the names of the company’s that gave you the quotes? I like to find out how they and afford to cut it that cheap for a crew of at least 3 people.

Nobody likes to lower their price - I know I don't. But on the other hand, in some cases I will if there is room to still make money. I try to bid at the market rate or higher so if the customer wants a reduction due to competition, I could do so.

But I think the most important thing for you to consider is why this is happening and if this is the beginning of a trend for you. From the list of your equipment it is obvious that you are on the lower end of efficiency compared to a business. I am going to assume that you also work alone, which makes you even less efficient.

It appears that you are up against a business that is able to operate at a much lower percent of profit than you are because they have more volume. You are out there trying to feed your family so you need to make probably double the profit than they are looking for. This is where you are not able to compete.

This concept is better understood as economies of scale, meaning the bigger a business is the more potential they have to be more efficient and profitable.

There is nothing wrong with you being self-employed, its just that you will never be able to compete with a business until you become a business also (have some employees). Let this one go and don't worry about it, but continue to advertise and gain new customers who are willing to pay your price.

Jpocket
02-09-2006, 02:28 PM
Please proof read it....First

Second...Are residential lawn accounts that hard to find in your area to require this type of on-your-knees begging?

I agree, you are going too far out of your way to keep this customer. They don't have any business knowing about your P&L statement.

If you want to compete offer the same price to the whole neigborhood that way it is worth your while. Then I gaurnatee you the both of you (VC) will have almost equal market share in that nieghborhood, if your markeing material is up to par.

cantoo
02-09-2006, 11:11 PM
Try to prove to the customer that you are there when they need you and you will do a better job than them. They would email the client so make sure you phone or talk to the client in person to show that you are there for them. Don't dwell on price when you are talking to them sell your personal service not different people flying thru their lawn every week. Make a list of why you are better then them and be sure to remind the customer of these reasons when you talk to them. Do not lower your price it will just start a chain reaction. If you do other work than the cutting then remind them of it and your reasonable price to do these "extras".

JimLewis
02-10-2006, 12:27 PM
Golden Rule: NEVER match a price, NEVER compromise on a price, NEVER negotiate a price, and NEVER NEVER NEVER go backwards in price.

I mean you gotta draw a firm line in the sand somewhere and there is no better place to do it than here... even if it means loosing the customer. [/b]


YODA: "Agree with this, I do. Making lots of sense, this wise Jedi is. Listen to his words carefully, you should."