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View Full Version : Are you competitve...do you want to be?


xpnd
05-09-2003, 08:48 PM
A buddy and I were discussing an article from a pro mag. The whole theme can be summarized to: Do we really want to compete in price with guys that don't understand their overhead costs? They will be out of business and we would follow. I found this interesting and thought I would just throw it out on the forum.

Green Pastures
05-10-2003, 01:05 AM
In no way am I trying to compete with anyone else. Never, no way, no how.

My price is just that, MY PRICE. If you want me to do the work here is MY price.

I'm in no hurry to compete myself out of business, I HAVE TO make money on every single job.

crazygator
05-10-2003, 10:21 PM
I think we all have to be competive just to survive out there.

Do I want to compete against every mow/blow/go operation? No.

I do not run my company this way so I see them as no competition for me and my quality or work. Its nice when things are this way.

tiedeman
05-11-2003, 12:16 AM
I have to admit in pervious years I would bargain my price with customers compared to the other LCO, but the last few years I have stuck to my price and I am proud of it. We are covering costs better and it doesn't make you feel like you are making next to nothing.

I probably have only had in the last 2 years 5 to 6 people say that the price is too high...but other than that I have noticed that the customer wants to pay more for higher quality and service.

Mr.Stripey Lawn Care
05-11-2003, 07:42 AM
My Fliers say "competitive pricing" but in my book that is the same as 2 football teams with the exact same stats going head-to-head. If another LCO's price is 40.00 dollars, and I know that he bid this, and I also think it is a 40.00 dollar job, I will bid the same thing. Competitive doesn't have to be low balling, it just has to be fair. Am I making sense? Hard to get it out on "paper"...

CMerLand
05-11-2003, 09:56 AM
Tideman,

If youve only had 5 or 6 people in the last 5 years tell you your price is tooo high then your not charging enough yet LOL. I have no idea how many bids you put out there each year, but if your closing 90 or 95% thats too high a percentage.

Im not implying that your doing low quality work or anything, just suggesting that you even charge more then you think you can provided you can cherry pick your customers. If you need work or are trying to fill out an area thats different market strategy, but if your routes are already tight, and some admirering neighbor of your work asks for a price, quote them a few bucks higher then the neighbor your already doing. You already have impressed that fish onto your hook, the extra money is to sink that hook. And if you are fully booked, you can go back and either raise the price on a client you bid to low or drop it all together if your not making what you need too.

I like it when a prospect tells me Im the highest bid or way higher then the other guy, it tells me Im where I want to be. I reallly like it when they hire me anyhow, because of a higher level of quality.

One thing Id like to go do to those guys who underbid me adnd win is tell them how much I was getting on that job. Their expression that they left $5 $10 or $20 per cut or $100s of dollars on the table for a full contract is always priceless.

Good luck to you

CMerrick

Andrew S
05-11-2003, 10:26 AM
It is easy to say my price is my price if your weeks are fully booked and you don't care if the guy accepts your price or not.This usually comes after years of hard work and good service.

However if some of you guys are new to the game I understand why cheaper pricing exists.simply you need some work any work to get things going and to pay the bills

if your business is the second scenario then you have bought yourself a job with many hours of unpaid overtime.

the quicker lcos improve their business's the sooner a better quality of life can be attained

walker-talker
05-11-2003, 12:39 PM
Originally posted by Andrew S
It is easy to say my price is my price if your weeks are fully booked and you don't care if the guy accepts your price or not.This usually comes after years of hard work and good service.

However if some of you guys are new to the game I understand why cheaper pricing exists.simply you need some work any work to get things going and to pay the bills

if your business is the second scenario then you have bought yourself a job with many hours of unpaid overtime.

the quicker lcos improve their business's the sooner a better quality of life can be attained

I can agree with this. As for now, I am part-time and still have room for adding accounts. I have bidded some jobs less than what I should just to get them. I am planning on going full-time next year and probably will continue doing this until my days are full. I still hold to my minimum of $25 from dropping the gate and the jobs that I did bid low are not more than probably $5 less what I should be charging. Once I get my days full then I will able to drop the less profitable accounts for more the the full service accounts that everyone strives for.

MATT

tiedeman
05-11-2003, 04:30 PM
Trust me...I am the most expensive LCO in the area.

Randy Scott
05-11-2003, 09:35 PM
Shooting out lower prices just to get work, has just given you the reputation for charging little for your services. Be prepared to loose customers when you start your new pricing structure the next season or whenever you decide to actually want to make money. Then you will be starting over again with the actual clientele you originally should have gone for. Thus, creating a small client base you once again need to grow, therefore, pricing less to once again try and get work. It's a big vicious circle you yourself create. You also will not have created a loyal customer base if you plan on booting them to the curb to price higher the following season. Poor business on your part.

Do yourselves a favor and price right from the start. You will make the money you NEED to run the business correctly, you will build loyal and satisfied customers, and you will achieve higher standards and goals sooner than you think. Pricing low "just to get work" is a poor excuse on your part. It is very possible to sell work at higher costs and continue to get more work at those price levels. I have stuck to this since the beginning and will never stray from this theory. Our business is in the third season and continues to grow in a satisfied and profitable client base. Our problem is skilled and intelligible help to keep up with the work demand. It's a sad day when I have to turn work down week after week because we are booked rock solid and have to approach help issues like walking through a mine field.

Edgewater
05-11-2003, 09:45 PM
Randy Scott you are 110% right.

I had exactly that problem this spring. I had jobs that I needed to increase by 50% and then add our lovely:rolleyes: 15% tax on top.

I spent most of the spring looking for new customers. I now bing in 20% more revenue per month with 65 accounts than I did last year with 75%.


It's not so bad if you bid a one time job a little low, but if you bid a hedge a $150 one year and they call you back the year after and you say $300, they aint gonna pay.

Just my experience

Adam

Andrew S
05-12-2003, 05:57 AM
to be 50% out on your pricing is huge,no wonder people baulk at such an increase in one go

A more sensible approach is to price somewhere close to the mark and maintain regular small price increases every year.

I think that this is an aspect of the business that lcos find confronting there are many reasons not to increase prices like they are nice people, I might lose the job etc but if you don't increase prices you will either be less profitable or have to take on more lower priced work to keep your turnover up and make ends meet