View Full Version : Strategy
03-15-2002, 11:03 PM
An customer of mine just moved into their new home...huge probably paid $600k for it. Previously I cut there former lawn (smaller) for $25 a cut. This one is 15,000sq. ft.....walking around for the estimate I should charge $40 at least....but being that this is in a new development, should I charge less to guarentee I get it? The goal of course is to get most of the neighbors on my list also....just hate to charge short money for this one if I don't have too.....seems to big for only $35
03-16-2002, 03:05 AM
How bad do you want it?
How bad do you want those other accounts?
How much do you want to discount, in hopes of getting those other accounts?
Trick is neighbors talk, and they discuss prices.
You tell one it is much less than the other, then you're in for trouble.
It starts a chain reaction of never being able to get the prices where they shoould be.
Once you start to cheap you stay to cheap.
Use your best judgment, good luck
03-16-2002, 06:33 AM
Although I do understand your temptation to be aggressive in the new neighborhood, you have one major thing going for you, your current customer knows you and your work.
I would charge appropriately and and if she balks, well, then you've already contemplated charging less so do that and she'll probably stay with you seeing as you have the relationship.
Personally, I would have held her hand every step of the way and begun justifing the increase months in advance.
03-16-2002, 09:33 AM
This one's simple:
Tell your existing client they have a $45 lawn and tell them you'll knock $15 off if they talk.
Price out the remaining clients at your profitable price.
03-16-2002, 10:16 AM
At the same time, your clients just invested in a new, larger, more expensive home. They'd be fools to think their cost of living is not going to go up. Since your weekly price stays relatively constant, it is tough to ever bump it up to where it should be if you start too low.
Tell them you'd like to continue to work for them. Their new property is at a higher rate (which they should expect anyways). But since you value the relationship with them so much, you'd like to make them an offer. If you're considering giving them $450.00 a year ($15 x 30 weeks), offer to give them free annual flowers by their front door - or by the driveway entrance each year. Perhaps your retail cost might only be $300.00 - they won't be able to value it in the same dollars and sense way as they could mowing. Now you get referrals to a good looking property, a happy/satisfied customer who thinks they're getting a deal, you're not discounting your core service, or under valuing yourself in the new community, and you've got a foot in the door.
03-16-2002, 10:19 AM
Ask them if they are driving a Yugo......
If they are.... charge $25.
If they are not.... charge them the fair price.
And, don't ever price to what the "market will bear". Lots of guys out of business that had that philosopy. I've never spoken with a real successful businessman (in any industry) that priced that way and made good.
03-16-2002, 11:22 AM
I would charge a fair price. Nothing less in hopes of getting other customers. That isn't a guarentee. Nor is it smart business in my opinion.
The people will talk, that is a guarentee. You will lose out in the long run.
03-16-2002, 12:00 PM
John, am I misunderstanding your pricing advice, or your definition of what the 'market will bear'? I always took that to mean the maximum amount the market would allow you to charge (ie pushing upward on price all the time).
DMK, try not to get yourself into the mindset of dropping the price to get your foot in the door somewhere. I found that I was then always coming upon doors that needed my foot wedged in them. Instead, charge what you need to charge. If they really like your services, they'll keep you with the higher price.
03-16-2002, 04:26 PM
Has anyone had the experience when a client moves on up that they then need to upgrade the "name" of the service provider to match the status of the move.
I've been left behind a couple times over the years yet I still work the area for many others.
My vote is price the way they need to be becasue they might become more demanding or have higher expectations to go with the fancier digs.
one thing I've noticed along my road in this business is that the harder I work to "sharpen the pencil" or scratch to compete for a job, the less likely I am to get it. This sounds self defeaeting but I am serious in my observation. I've done much better just charging my price and seeing where it goes. My thought on what I charge is this, it is what it is! You came to your figure somehow, so make it legit. Now if you want to offer a free cutting for every referral, or a fruit basket at X-mas or whatever thats a different story.
03-16-2002, 10:55 PM
I would recommend that if you are going to discount off "fair" price, bill at "fair" price then add in a preferred customer discount since they are an existing customer.. this saves face with new potential customers.
$600K house.. if they balk at $15 per cut increase they prob over bought in the house and they are gonna nickel dime you in the future..
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