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View Full Version : What is the right price to charge customers for services provided?


dcplace2004
03-14-2006, 03:53 PM
This information is for the uneducated or just plain stupid "business" people in the lawn care/landscaping industry...I am saying this because one of the accounts (of several others) that I acquired from a lowballer last Spring just went out of business...This information is from a business manual:

"The Right Price is the highest price that your customer agrees is justified by the value AND that gives you a fair profit."

Cost of Goods Sold (COGS) "All costs directly linked to the production or sale of a product or service."

With this in mind, this idiot business was charging 25 dollars for lawns that are at least 40 to 50 dollars a week...by charging 25 dollars, you set the current market value lower and misinform and mislead customers with these low charges. You do no legitimate lawn care business any favor (including your business) by lowballing...Sell your quality of work and not the price and you will do well...I will continue consuming lowballers, one at a time, until most of them are gone...that is my goal, and my website I am constructing will address this and inform customers that we do have considerable COGS and many other factors affecting the prices we charge, customer knowledge being one of the factors...if there are any misspellings here, I apologize...peace...

2menandamower
03-14-2006, 04:14 PM
Well put. I agree with the lowballer cut outs. I hope that they all fall to the wayside (although we all know that as soon as the ones that are there now are gone more will come along with there 21" murray mower and charge 15 bucks to cut a 35 dollar yard and then in about 3-4 months when it gets hot will fold up and the customers will be calling begging to take them back. It just pisses me off.

Scott

wissel_landscaping
03-14-2006, 06:06 PM
I gave a guy a price $30 a cut small postage stamp yard he said the guy who did it last year was charging $15 i laughed and told him to call the other guy back,he called me on saturday and said he couldnt get ahold of the other guy and could i do it for $20 i told him sorry i'm booked for the year. theres noway i will lower my price i'm not working for the fun of it if they dont like the price call someone else.

MMLawn
03-14-2006, 06:25 PM
This information is for the uneducated or just plain stupid "business" people in the lawn care/landscaping industry...I am saying this because one of the accounts (of several others) that I acquired from a lowballer last Spring just went out of business...This information is from a business manual:

"The Right Price is the highest price that your customer agrees is justified by the value AND that gives you a fair profit."

Cost of Goods Sold (COGS) "All costs directly linked to the production or sale of a product or service."

With this in mind, this idiot business was charging 25 dollars for lawns that are at least 40 to 50 dollars a week...by charging 25 dollars, you set the current market value lower and misinform and mislead customers with these low charges. You do no legitimate lawn care business any favor (including your business) by lowballing...Sell your quality of work and not the price and you will do well...I will continue consuming lowballers, one at a time, until most of them are gone...that is my goal, and my website I am constructing will address this and inform customers that we do have considerable COGS and many other factors affecting the prices we charge, customer knowledge being one of the factors...if there are any misspellings here, I apologize...peace...

So I guess you have changed your mind from when you posted this response below 8 months ago in the thread "How Can This Guy be Making any Money? " and now you do think you should pay attention to other LCO's????

So, good for you too for leaving the darkside...... :laugh:



"<b>Thread:
How Can This Guy be Making any Money ? </b>


Maybe you should mind your own business and worry
about yourself...the problems with many LCOs is that they worry about the other LCOs out there and "what are they doing." It is almost like scenes from "The Burbs" with Tom Hanks and the bunch...Oh my goodness, that guy is a scrub...oh my goodness, how can that guy be making money mowing with a 22 inch mower...Does that guy have an weedeater brand trimmer from wally world? I mow with a 22 inch mower and make enough money to support my family...I don't have a trailer, and 13k worth of equipment...I have no overhead and have little costs except a good quality blower, edger, trimmer and a 5k ford f150...while you were out there taking pictures, someone was making more money than you unless you have all your crews out there slaving for ya and making nothing but peanuts...When I see fellow LCOs or employees out there busting their arses, I am happy for them, as our city has many many houses and plenty of accounts...

grass disaster
03-14-2006, 06:34 PM
nice catch mmlawn

hey dc2004 do you need a band-aid for your a$$hole

dcplace2004
03-18-2006, 05:54 PM
I done patched it up...when you are new to all of this I suppose one can be misinformed about certain things or just plain ignorant...Now, to keep things in perspective, if that guy mowing that field on that walkbehind was charging the right amount then perhaps the "what you do to grease on a pan to clean it" thing might not be an issue, as I still have my used toro personal pace I paid 200 bucks for...it has not broke, and when it does I will buy a honda or toro proline...it is underpowered for commercial use and I know that...all my other stuff is new Stihl commercial stuff...however, I charge the same of above what others are charging...I just bought a trailer and it is a 4x8...it holds 990 lbs and it foldable to put in my garage in the winter...I will board it up with plywood with clamps and bolts I can remove later...I need it to put my mower, trashcans, tarps, and such in it as the mower in the truck thing got old without a ramp...I will have a trap on the truck for the trimmers...we all have to start somewhere and although I was offered a loan I decided to start small and pay as I can afford it...I am learning and will only get smarter as time goes on...peace...

edward hedrick
03-18-2006, 06:45 PM
Check how much it cost to get Truck repaired. My repair shop gets $65/hr

I find this is quite accurate. Try to time each job. get more jobs

at one stop.You get paid to mow not travel.

cantoo
03-18-2006, 09:03 PM
How much overhead do you have now? Keep in mind it will only get to be more as you grow. Better quality equipment also costs more, sometimes that piece of crap cheap thing at wall mart or wherever is all you need if it's only used once in awhile.
Your also going to be pretty busy once you consume all or most of the lowballers considering they are all over the whole world or were you just talking about the ones on your street. There is no way you or anyone else is going to get rid of low ballers. Even your loyal customers will be tempted when someone offers a just as good job for $5 less. We didn't invent this game.

SWD
03-18-2006, 09:40 PM
I pay absolutely no attention whatsoever to other service providers in the area.
The amounts I charge and receive are enough to sustain my growth from a one man operation almost six years ago to the seven employees, full time, throughout the entire year I have now.
I do not entertain nor do I suffer attempts to negotiate prices for services provided.
If the customer wants to pay less, than the scope of the work is adjusted accordingly.
As it stands right now, I have no exterior advertising in place other than a Chamber of Commerce membership and a simple ad in the yellow pages.
I am backed up for at least 10 weeks and falling farther behind.

Richard Martin
03-19-2006, 03:57 AM
I will continue consuming lowballers, one at a time, until most of them are gone...that is my goal,

Good luck with that. The problem with LBs is they are here today and gone tomorrow so even if you do somehow manage to consume one there will be another one tomorrow to take his place. Even if you don't consume any they will still disappear and be replaced because they're like roaches.

You also need to remember that, in most markets, LBs have their place. I don't work against them, I work with them. In my small market I know who most of them are and have spoken with them. If I get a call for a job I don't want I pass it along to one of the LBs in my area and I tell them what I would have charged if I had wanted it. I'll usually see them at some time down the road and ask them how they made out and they usually do pretty good.

topsites
03-19-2006, 04:50 AM
I find it's not entirely the lawn-guy's fault, a lot of customers out there want something for nothing, and this does little for the Lco with no experience and / or an insufficiently large customer base. Effectively, such Lco is caught between a rock and a hard place and if he doesn't have enough business, has little choice but to lower the price until they have enough business.
So it's not all our fault.

What I like to do when I see the low-baller coming (not the lawnguy but the customer because it's a 2-way street), I like quoting my regular price plus 20-50 percent, so your 40-dollar lawn just got quoted at 60 dollars.

What this accomplishes:
- It stops the haggling before it even starts.
- When (yes, when) they find a low-baller willing to cut their lawn, most can not resist blurting out how such-and-such quoted them SIXTY DOLLARS (and they say it just like that). <- This bit can hardly be missed by the low-baller over time.
- It helps out natural selection in a most clever fashion.

Sometimes when I'm in the mood, I quote a ridiculously low price (knowing that's what they want anyhow), and they say yes and I drive off knowing I'll never get up the incentive to come out to cut that grass.

Between the two choices, I prefer over-quoting because the latter option can leave a bad taste in their mouth... The first option shocks, and some folks get angry, but most are just amazed that someone could charge so much. Way I figure it is, every low-balling customer always complains about the price being too high... Well, now they have the reason to complain.

Because I've quoted a price before (just for kicks and testing) that was a third of the going rate (so 20 dollars for a 60-dollar job) and some still have the nerve to either complain, or they want to haggle it down even further! Once I ran into a few folks whom, no matter how low the price I quoted, STILL thought it was too much, that's when I decided now is a good time to start giving them a reason for thinking it's too much.

topsites
03-19-2006, 04:58 AM
Well put. I agree with the lowballer cut outs. I hope that they all fall to the wayside (although we all know that as soon as the ones that are there now are gone more will come along with there 21" murray mower and charge 15 bucks to cut a 35 dollar yard and then in about 3-4 months when it gets hot will fold up and the customers will be calling begging to take them back. It just pisses me off.

Scott

Yes, it frustrates me, too. Every joker and their brother comes out in spring, they come out of the woods almost like in a living dead movie LOL, and they are everywhere you look, there's another one, dime a dozen.
This lasts through about end of June, first week of july or so...

Then, as soon as the first 90+ degree day hits, every single one of them disappears, the map is literally wiped clean from one day to the next, I notice this every single year. Not a soul is out there on a hot day.

So you get through July and August, then the temps cool a bit come september, and the jokers make a comeback, thou it's weaker in the fall and it doesn't last as long because as soon as end of october comes around, that means only one thing: Leaves!!! And once again, the map wipes itself clean.

The part that frustrates me so much is here's all these guys taking the work when things are nice and easy, low-balling and bs'ing and generally messing up the market... And just as soon as things toughen up a bit, they run like punk.

YardPro
03-19-2006, 07:12 AM
we occasionally have a potential customers say that " so and so was doing it for x dollars".

My reply is always " then why are you calling me?"
this is usually followed by some problem they had with the guy.

then i close with " well what can you expect for that price?"

usually that conversation leads to them retaining our services.

befnme
03-19-2006, 11:29 AM
[QUOTE=topsites]

What I like to do when I see the low-baller coming (not the lawnguy but the customer because it's a 2-way street), I like quoting my regular price plus 20-50 percent, so your 40-dollar lawn just got quoted at 60 dollars.

What this accomplishes:
- It stops the haggling before it even starts.
- When (yes, when) they find a low-baller willing to cut their lawn, most can not resist blurting out how such-and-such quoted them SIXTY DOLLARS (and they say it just like that). <- This bit can hardly be missed by the low-baller over time.
- It helps out natural selection in a most clever fashion.

[QUOTE]

also if you quote a high price like that and the homeowner tells the lowballer " i just a quote @ 60.00 " then the lowballer will say in his head " hey i can up my price to 30.00 instaed of 20.00 and still be under the big guy " . if that happens then over time maybe just maybe the average rate in your area will come back up to acceptable levels.