$45 Aerations?

[lbmd1]

Got my new issue of Lawn & Landscape yesterday. Noticed an article on a company called Progreen. He states his $45 aeration fee is rock bottom compared to his competitors' $90, but he's not losing out. He does it to get new business for his lawn care side of biz. I know some of you here also get low prices for aeration but $45????? So would you consider this guy a lowballer? How does one make a profit after depreciating a $3-4,000 machine, drive time, labor, gas, and all other overhead costs in running a legit biz for $45? Also states he made $280,000 in his first year. Wow, zero to $280k in 12 months, may we all learn from this guy using his lowballing techniques. Once again, profit is the key to success, not sales. It says he performed 2100 aerations at $45 a pop equaling $94,500. How much of that was profit? Taxes paid on the net as well. And was it worth 2100 trips with aerators, trucks, laborers, gas, overhead costs, etc..? Maybe next we'll be seeing Lawnboy on the cover with his $21.95 unlimited monthly mowing scheme next. I don't know, just spouting off on why some guys who run big and legit businesses have to resort to lowballing in order to keep gaining market share for the sake of being a big fish in a small pond. Rather work smarter than harder and do 1050 aerations at the current $95 rate and make the same profit, and at the same time, not degrading pricing structures for services that all LCO's could be happy with.

Mike

[LAWNGODFATHER]

Um VOLUME!!!


Suck the new customers in, get them on your programs and whala...

UP SELLING!!!!!

Take some marketing courses.

BTW that's for new customers only.

[Administrator]

If the right equipment is used you could aerate an average size residential lawn in a very short amount of time.

Word has it that some of thoze ZTR attachments work great ? ;)

[turfnerd]

thats the story of economics. if you can't find a way to something faster, and cheaper you go out out of business. Its called the McDonaldsization theory.

[lbmd1]

LGF,

Don't need any marketing courses, used to be a Sams Club manager (Wal-Mart). Am well aware of loss leaders. Making things up on volume is generally a desperate measure used by firms that are losing money elsewhere in business in an attempt to save one's A**. As for Wal Mart, there pocket is deeply lined for loss for quite some time until competitors are forced out by there pricing techniques, only to be raised after they have been forced to close. My point though was this, loss leadering aerations to get lawn maintenance accounts? Why is it that most lawn maintenance guys want to leave the biz to perform aerations and fertilization businesses. Could it be there's not alot of profit in maintenance and there is in fert and aerations? Once you have established accounts that will pay you posted price for aerations at $90-$125 (vs $45) why would you want to charge less? Marketing to get lawn maintenance accounts, then charging for profitable side jobs such as ferts, dethatchings, aerations, pruning, etc.. would be more like it from my point of view. Not loss leadering my profit centers.

[VLM]

I hope they do a follow up article on where this joker is 12 mos from now!

[plow kid]

I have seen people with 18-19" Ryan aerators knock out a 10m lawn in less then 20 minnutes single pass, nobody double aerates up here, I have a $60 minimum and rent a aerator for 2 days and between me and a buddy we can knock out 30 or so in 2 days. ~NaTe

[KirbysLawn]

$45 per what? I have a bunch of large lawn I would love to sub out for $45 a lawn.

[Evan528]

My Jaw dropped when I read this Article today! Cant amagine there attracting very good quality concerned customers with these tactics.:confused:

[LAWNGODFATHER]

I'm going to pursume they are doing 10,000 sq/ft or less for $45 and making $22.50 out of it, and with all the up sell stuff that can go along with it you can make some serious jack.

NUMBERS GAME

Off set the prices to make up for it in the up sales.

[Evan528]

I charge $130-150 to aerate a 10,000 SQ ft property.

[Bob Minney]

I do aerations for $45 and would like to do nothing but that. With my Ryan 4 I can do 2-3 hour on my 1800-2500 sq. ft lawns, even making a double pass. All it takes is effecient scheduling. Lots of these customers buy other services also, but if they don't I'll be happy to come back and aerate 1-2 X per year. A big lawn @ 3,500 sf goes for $65. ( big in my territory)
It gets real competitive around here also, I've seen the service directory in the paper with ads for $15-20. It just motivates me to get more flyers out and earlier so I can keep the schedule full without worrying about the other guy.
The $20 guys keep the price shoppers out of my way-maybe they are doing me a service.
;)

[jason2]

Bob,

We have plenty of the $15 aeration guys here too. It's the major reason I do very little aeration. The only aeration I do in my primary market is for existing customers. My secondary market is another story. It's a small market and I usually get what I ask for. Problem is, its such a small market.

[65hoss]

As time goes on, the aerating market will get like the grass cuttin market. Dealing with price cutters. People don't realize this is a specialty service. Any idiot can rent an aerator, but regardless of what people think, it does take a little knowledge of turf and soil to do it correctly.

What is worse, the magizine that would publish this type of crap. They are supposed to be lifting the green industry up, not tearing it down.

[LAWNGODFATHER]

The artical was not written to show lowballing.

It was written to show how with the right systems, marketing stucture, and business plan "YOUR" business could take off too.

[LAWNGODFATHER]

First, Brown knew he needed to offer high quality with a low price tag – at least to lure in new business. So, his $45 aeration fee is rock-bottom compared to his competitors’ $90, but he’s not losing out. These cost cuts do not reflect his lawn care pricing, which is aligned with others’ prices. Brown simply uses these aeration jobs as sales leads, turning 60 percent of them into lawn care customers.

“We’ve eliminated the paid employee who runs around doing 100 lawn quotes a week, closing 20 to 30 percent,” he explained. “By offering aeration, you go out, you do the $45 dollar job, and our crew leaves a quote, but their time at the property is paid for by the aeration fee. It’s an interesting way to recoup the costs, and then you’ve done something for them that says, ‘We do a good job.’”

Copied from L&L

So you still call this lowballing? A 1 time aeration job that gernerates 60% of the 1 time jobs into full service clients, and providing a benifitial service.


This guy is a genius, he is now getting paid to give esimates.

I read in elements of business some trying to charge for quotes, he's getting paid for it!!!!!


He figured a way to get a boat load of new clients in a quick amount of time.

Now I don't agree on using the aeration, but he doesn't mow.

Also keep in mind he is not doing a 30k sq ft lawn for $45

Do you all ever look to the future? He gets them in, keeps on, up sells to them constanly.

Open your minds, look at the big picture not the little one.

[jrblawncare]

Also in February L & L.........Bed Shapers...... a guy in NY charges $30.00 to $35.00 an hour for this service.No way will I run My Brown at 35.00 a hour !!

[lbmd1]

After looking over some of his numbers, I have to question his "genius" status. He states in one paragraph that by lowballing his aeration service, he turns 60 % of them into customers. So if you take 2100 aerations and derive a 60% return of new customers that he gets, he gets 1260 new clients each year? And again he says he closes 20-30 % new customers weekly. Come on, how many LCO's get 20-30 new clients a week? Maybe I'm a little mistaken by all his numbers he's throwing out. He states in the 3rd paragrapgh " We provide aeration service at a price below the industry average and we generate a lead out of an economical one time service" Here is a so called "professional" stating right there he is charging below the current rate establish by others in the green industry. And when did aeration become a "one time service"? We all make fun of the guys advertising $10-$15 lawns. I don't see what the difference is. They are trying to get there foot in the door for other services but yet we scoff at their marketing practices? I think you said it before, why leave money on the table. To each his own I guess. We all have our own thoughts on marketing and gaining new clients. My firm tries it's best to keep up or exceed industry standards. By doing that, this area's clients don't perceive us as blue collar morons with mowers. The scapers around hear are actually pretty well respected and sought after. If someone has a good one, the customer is the one afraid of losing them. You can ask member "Site" from Stratham, NH who is also a member on here. He works at some of the estate size homes around here as well. And the funny thing is, by keeping these standards and practices, we are able to charge not only the going rate without a problem, most of the time we exceed it. Rather go after quality than quantity.

Mike

[1grnlwn]

Someone mentioned double aeration. Anybody ever seen a half aeration. I was quoting a series of hotels a few years back and the property had just been aerated. You could faintly see the 19" swath of plugs and next to it was 19" of nothing. This leader in the industry had done a show and go. Not to mention the guys that go out there and plug nickles cause the ground is so hard. And before anybody says "Oh the client is supose to water before you aerate" Yea right. When I aerate I get every area that the machine will fit. My guess is that these people are getting what they payed for or less. I bet his emloyees really love him. LOL:cry:

[kutnkru]

Originally posted by 1grnlwn
... And before anybody says "Oh the client is supose to water before you aerate" Yea right. ...Let Mother Nature take care of this for you -LOL!!! Wait til the ground softens in the spring and then once it gets too hard to penetrate effectively, just wait til those fall rains hit and get right back at it.

I too agree that there is 1 in a million clients who will water that morning because they know your coming to aerate every sq inch you possibly can.

[progreen82]

This is Scott Brown, of the company mentioned. We have had a phenominal year. The article did not mention that we mostly sell with our Aerations (at $45) a PACKAGE. For 99$, we inlcude Fertilizer and Lime application. The costs on this are mere dollars. We buy a solid, high quality bag of fertilizer for $4.90, and a bag of limestone for $1.15. We add that cost in, and provide the service for an encasulated price of $99.00.

We have had an actual higher conversion rate than 60% this year, and our retention rate is 96%. We have only lost 4% of our regular lawn spraying customers. We are concerned none with profiting from the aeration side of the business, but are concerned with completely alleviating the cost of running and getting leads.

Last season we we supplimented our aeration leads with telemarketing. Paying $27 / hour to get leads that closed at 15%. Not doing that again. We wasted money, and we went head on with the big boys like Chemlawn. Providing aerations, elliminates competing mentally with any other company for lawn treatments. The customer SEES good work, SEES quality, and immediately SEES plugs on the lawn. It's called visual re-affirmation, and stimulation. It's the same example as giving away the free sausage pieces in the grocery to get them to buy the sausage. At now way over 1000+ treatment customers, and with more than 900 scheduled aerations this fall (and it's only JUNE) we are ready to increase lawn treatment to an exponential rate of adding 250% this year.

IT is not about doing aerations and making $ at it, it's about not costing money to get treatment customers. What we save (about 115,000 a YEAR) on marketing for treatments, IS the profit from the Aerations. See would have to spend 115,000 a year at 15% to get what we get from aerations, and we still make about 20% on our aerations. No marketing costs, and we make a profit running a LEAD, never mind if they CLOSE... When they do close, we retain them, add tree & shrub, add 2 to 3 MORE aerations that year, add fire ant control at a 600% profit margin, add bed pre-emergents at a 300% margin, maybe give them a bed trenching, and then cooperate with other vendors like topdressing company and get 15% commision for the job we never touch.

Just hope this was insightful... Lowballing, no.... becuase in lowballing, you need someone elses price to compete with... in our arena ... there are no competitors... They all want to buy us.... Funny how... we get constant offers to be bought and acquired...

[MOW ED]

Welcome to Lawnsite Scott and congratulations on the success of your company.

It is obvious that you have your niche and know how to use it to your advantage. I appreciate the time you took to explain your end. There are 7000+ members here and the same amount of opinions. (they just don't all post em)

Glad to see ya on board.

[Kent Lawns]

Originally posted by progreen82


a solid, high quality bag of fertilizer for $4.90,

an exponential rate of adding 250% this year.

fire ant control at a 600% profit margin,


I think this DOES give us some more insight!

High quality bag fertilizer for 4.90? A 10 lb. bag?

2.5x is exponential?

Profit margin above 100%?
In the business world they refer to it as "mark-up percentage."

Thanx for the insight and I'd consider those buyout offers.

[KenH]

What size lawn do you put 1 bag of limestone on??? Do you soil test??

[KirbysLawn]

Same question, high quality fert for $4.90 a bag? Lime for 1.15? Could you please take the time to expand on this a little? Lime here cost $2.47+ and any good fertilizer is $13+ a bag, just wondering what size, made by who, & the make up of the fert...stuff like that?

[WashMoBrink]

Sounds awfully cheap on the fertilizer and lime. I buy it by the ton at my local MFA (Missouri Farmers Association) bulk facility and I spend approximately $90 / ton for fertilizer, and $45 / ton for pelletized lime.

[Kent Lawns]

Okay...
... so WashMo spends $ 2.25/50 lbs for fert.

Analysis and Chemistry please.

[JimLewis]

There are a few guys around here who do aerating for around those prices. But keep in mind, I live in the land of postage-stamp lawns so a typical aerating job 'round here takes all of 15 minutes.

I have a good relationship with one such guy. All he does is aeration and dethatching. That's his business. $35 a yard - front and back. He does a good 10-20 per day and works less than 40 hours most weeks. Not a bad living and relatively no overhead.

What I love is that we charge $75-80 for most aerating jobs. I'll sell my clients on aerating and then I sub out to him to do them for us. We make $40 or so on every aerating job and I don't have to do a thing!

[JimLewis]

Wow. I hadn't read Scott's post before I made mine, above.

I just wanted to add that it sounds like you got a good thing going on there, Scott. It sounds like you've thought this out pretty well - keep up the good work!

[WashMoBrink]

21-6-4, Synthetic

[LAWNGODFATHER]

Scott, thanks for clearing some of this up.

As you saw, if you read, I did indead comprehend your artical.

I will be trying this as I know a few others on hear have.

I will start this Fall.

[roscioli]

Washmo- Am I missing something? You are saying his prices are cheap, but your prices are 1/2 of his? Scott- Congrats on your business, obviously we don't know your bottom line, but it sounds like you are doing well, with a very unique strategy. Everyone (nearly everyone) else, be careful what you criticize, this guy (scott) might be making a whole lot more than you...

[proline32]

I've been charging $50.00 per yard for aerations.... the reason I charge this is that I have a large tow behind plugger for my JD tractor, I only do medium to large yards that I can fit this unit on and most yards take less than 1 hour, a lot of the lco's do charge between 60 to 90 bucks for aeration but they may run a rental and have to offset that cost, I usually spend one day a week just on aerations, that way that is all i'm doing, and I do find I get some leads for mowing services, my aerator only cost me 325 bucks and is not motorized, but it does a good job of pulling plugs and that is what the customer see's I don't bother to get up the plugs but if they want I will mow the yard and grind up the plugs at the same time for an extra $40.00.... I call it sales, it puts money in my pocket and I try to get them on a regular service visit where I come out twice a year. Maybe I'm a lowballer because I can do it cheaper and still make $50 for less than an hours work.

[progreen82]

In regards to the lime and fertilizer we buy. I discovered about 2 years ago that Lesco... was cleaning our clock. There is a hidden rule many folks do not know about....

Companies like Lesco are making exponential profits from sales of their materials, which by the way, are inferior to most. For the price of $12 to $14 per bag of bland fertilizer, their cost is closer to $1 to produce it if not less. In some instances the bag costs more than the product.

There are numerous companies out there that sell at "bulk" rates. They will not seek you out, and will not approach you. One good source is Helena Chemical, United Hort., and even Anderson's direct.

These people will supply you materils for often 1/4 of what Lesco will, and Lesco does never once offered me a container of Vaseline to go with my purchase.

Lime , we buy by the truck load directly from the manufacturer. Try either Georgia Marble, Emery's, or SouthDown. They will all deliver direct.

The Fall is an interesting time. We do a complete Aerate, Lime, Fertilize and Overseed package for $165 for a single Aeration, and $ 185 for a double aeration. We serviced 1600+ lawns this past fall, with a 42% net margin.

Forget about lawn sizes. Target where you know small ones are if you can, remembering , you will also have small treatment quotes to obtain later. Target large lawns also, the costs will balance out. It actually will prove a mathematical epiphany when you realize what you have done.

Today, too many people focus criticially on isolated costs of a job when aerating. Taking large bulk groups, you may loose a little on one job, gain on 10, and end up with a 60% profit.

This whole time you have created a database of customers, and measurements. We mail those past customers 4 to 6 times per year, and phone them to reschedule aerations.

What is interesting is mailing old quotes... We sign people up from 2 years ago, leaving them a quote, it happens every day. Most of our business comes from the 3rd to 5th mailing we send old quotes. Hitting them at the time that is right for them...

[WashMoBrink]

Roscioli,
Sorry if I mislead you. Just posting my fertilizer costs for "nothing special" agricultural grade fertilizer.

[Brickman]

Man it must be nice to get $95 and up for aeration. My min. is $35, granted it has got to be a very small lawn. Less than 2000 sq. ft. But I don't have any that go higher than $100, unless it is for a commercial prop. I have yet to be able to get paid the prices that ChemLawn gets paid around here. In my opinion they are raping people in the price for aeration.