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DFW Area Landscaper
01-14-2004, 01:02 PM
Ever notice that just about everything that retails in the store and costs over ten bucks has a price that ends with .89 or .95 or .97?

I was thinking of trying this out with my bids. Instead of bidding \$25.00 per cut, I was thinking of bidding \$25.95 per cut. I think the customer still sees a \$25 price range. If I could gross an extra \$0.95 per cut, it would add up fast.

Any thoughts?

PS: Please don't relocate this to the elements of business forum. More people will see it here.

Thanks
DFW Area Landscaper

greensummer
01-14-2004, 01:14 PM
\$24.95 OR \$25.95

paponte
01-14-2004, 02:57 PM
It can be a PITA when figuring out numbers. Just off the top of your head... what's 24.95 X 4 ? When you know that 25 X 4 = 100. Think you get the idea. :cool:

coonman
01-14-2004, 03:03 PM
That would be too much trouble for us. We have several people that pay us cash. Its much easier on them and us to keep it rounded.

Flex-Deck
01-14-2004, 03:07 PM
What do you guys do about sales tax? - In SE. Iowa it is 7%, so that makes numbers go bonkers.

DFW Area Landscaper
01-14-2004, 03:13 PM
++++What do you guys do about sales tax? - In SE. Iowa it is 7%, so that makes numbers go bonkers.++++

I service two communities. One is 8% and the other is 7.25%. All of my monthly statements are for odd amounts.

I was just trying to find out if people think \$25.00 and \$25.95 are the same amount. I mean, I know they're not the same amount, but what is the perception?

There's not that much perceived difference between the two amounts to a customer, I think. But when you start adding \$.95 to every cut you do and \$.95 to every app you do during the year, it can add up.

I think I'll start forcing myself to write down that extra 95 cents on my bid sheets going forward. What have I got to lose?

Later,
DFW Area Landscaper

FrankenScagMachines
01-14-2004, 03:17 PM
Originally posted by coonman
That would be too much trouble for us. We have several people that pay us cash. Its much easier on them and us to keep it rounded.
I agree with that to an extent but especially for people that pay weekly with cash. However for accounts that pay with a check or have a credit account with us (pay monthly) then I use the numbers to make the price appear slightly lower if I think it might be difficult to get the job. I look at it as “what will they round that figure to?” Lets look at it:
\$25.00
\$24.95
\$25.95
\$25.49
\$24.49
\$24.89
\$24.99
\$24.97
\$25.99
\$25.97
\$25.89

I think you get the picture- they all round out to something in the customer’s head. If I’m looking at a lawn and I think “this is about a \$40 lawn” but it seems like the customer might not pay quite \$40 but I want the job and don’t mind sacrificing alittle then I might say “\$37.95” and it looks like \$37 or \$38 to them, which is indeed cheaper than \$40 but it’s a good bit more than \$35. If you only went by \$25, 30, 35, 40, etc. you might be losing money. If a job is worth \$40 but you might be persuaded to do it for \$35 and customer probably won’t pay \$40, then you can say \$37.95 for example and it looks like a good halfway point but in fact it’s closer to your number than theirs. Maybe this isn’t a good logic :p but I do use it sometimes if I sense that this would make a good customer and I could get extra work from them and I need the work and they might not pay quite what I want for it.

In fact, one I have that I put at \$37.95 and they pay monthly, usually they pay in cash and round up to the nearest \$20 or \$100. Not as a tip, but just as “paying what I’ve got and put the rest on credit”. Works for me because I always like prepay.
However there’s something to be said for even numbers, I do prefer it more but again I only use odd amounts if I think it might help get the job. One customer told me they had been paying \$25 but were dissatisfied with their service and basically I got the idea they might be willing to pay a little more for better service. To me it was probably a \$25 job or maybe \$30, but in order to make it look like they were getting the best deal I put it at \$27.95 this way it’s plenty for me and they’re happy because they thought they might have to pay \$30 for a good job. Also this lets me have room to raise the prices on these lawns without it seeming like so much. I can go to \$40 and \$30 on these two lawns and it won’t seem like so much of a raise because they’re still at the \$40 and \$30 range, not bumped into another price bracket (did any of that make sense?) Do whatever works for you.
sorry this is long-winded but i hope it was easy to understand and helped someone.

DFW Area Landscaper
01-14-2004, 03:30 PM
\$25.00
\$24.95
\$25.95
\$25.49
\$24.49
\$24.89
\$24.99
\$24.97
\$25.99
\$25.97
\$25.89

All are \$25 to me. So why not write down \$25.97 next time you have a \$25 proposal?

Later,
DFW Area Landscaper

Lazer_Z
01-14-2004, 03:31 PM
Eric mind if i borrow that idea

I know it might seem comon place to just take it but i thought i'd ask first

And all that made perfect sence well to me it did

coonman
01-14-2004, 03:50 PM
I can't imagine walking a lawn and walking over to the customer and telling them I will cut it for 25.97. We have never had a problem with rounding to 5, if we think it just a tiny bit bigger than a 25 dollar lawn we just round it up to 30. I do see what you are saying about the 97cents adding up, but we like to keep it rounded when we bid.

FrankenScagMachines
01-14-2004, 04:03 PM
DFW, I guess we think different north of the Mason-Dixon line :p it works for me. Also, it seems to me it would make it look like you have it down to the penny, instead of just saying \$25 because thats what everyone else charges. Makes you look like you know what you're talking about.

Rob, go ahead, thats why i posted it, in case someone wanted to borrow my logic, twisted as it may be :D

mtdman
01-14-2004, 04:03 PM
I think you're right, DFW. I see \$25.99 and I think \$25. Add the 99 or whatever and get the extra money.

:D

olderthandirt
01-14-2004, 04:27 PM
When you pull up to a gas pump and it says \$1.499 do you really think \$1.49 NO you think \$1.50 its an old trick that no one falls for because everyone uses it. imo

Mac

dougaustreim
01-14-2004, 04:32 PM
Retail pricing experts will tell you that there are major and minor price breaks. The major ones are at \$5 \$10 \$50 \$100 etc, and minor ones such as \$7.

If you go past \$5, you can probably go to \$6.99 without much more resistance. In other words, most people that would pay 25.99 will pay 26.99

Doug
Austreim Landscaping

BravesFan
01-14-2004, 04:39 PM
Originally posted by DFW Area Landscaper
Ever notice that just about everything that retails in the store and costs over ten bucks has a price that ends with .89 or .95 or .97?

I was thinking of trying this out with my bids. Instead of bidding \$25.00 per cut, I was thinking of bidding \$25.95 per cut. I think the customer still sees a \$25 price range. If I could gross an extra \$0.95 per cut, it would add up fast.

Any thoughts?

PS: Please don't relocate this to the elements of business forum. More people will see it here.

Thanks
DFW Area Landscaper

Ah...the ole Sears Roebuck trick.

If you take in much cash...keep alot of nickels in your pocket.

Dennis

Lazer_Z
01-14-2004, 04:40 PM
Thanks Eric :)

Olderthan/Mac thats what i do i see \$29.99 and i think ok \$30.00 + tax

twins_lawn_care
01-14-2004, 04:48 PM
I would tend to think people who will pay \$25 will pay the \$25.99 without a problem. A couple may ask why is it not a round number like everyone else, to which you can just answer I account for everything more closely, to be able to give you a better price, which
1) makes you look more professional, and
2) puts more coin in your pocket! payup

I say go for it!, it's like a 4% price hike without anyone noticing!

sildoc
01-14-2004, 05:38 PM
I have been doing this for the last year and it works great. You always get a feeling when someone might not go for the 30 dollar price tag per cut, I say well normally it would be 35 but since I have some in the area I can go 29.50 or 29.95.
It works and good. I quoted one lady 45 for her yard and triming. she said no and I went on my way. She called me back a week later wondering what the price was again. I knew I had said 45 but I told her I belive it was 43 bucks a cut. She ho humed a second and said I will bring over a agreement for 42.50 right now for you to sign.
Well I lost 2.50 off of my original quote but then I really wasn't making that 45 anyways. I locked her in on a year long contract for 42.50 and picked up about another grand in extras. Of course I gave a higher bid on the extras than I normaly would have.
It can work more to your favor in tightening routes. You might bid a buck or two lower and get it and not have as much window time costing you more.

mtdman
01-14-2004, 05:47 PM
Originally posted by Lazer_Z
Thanks Eric :)

Olderthan/Mac thats what i do i see \$29.99 and i think ok \$30.00 + tax

Yeah, but if you see \$30.99 do you think \$30 or \$31? I think most people think \$30. Once you go over that \$5 round off, I think people will not register the extra \$.99.

Just my \$.02

:D :D

turfmower
01-14-2004, 06:04 PM
I'd go from 25 to 30 witch is my minimum. As far as cents the not a problem, the computers figures all out all that adding and sales tax.

Lazer_Z
01-14-2004, 06:09 PM
Well mtd i see 31 i'm used to it

Ok again at the pump you see 159.9 i've been taught by my dad to round up he had a gas station so he said always round up :)

lawnwizards
01-14-2004, 06:14 PM
just curious, why do you all charge sales tax on labor? or is your labor a flat fee and you charge sales tax on the gas, string, etc... that you use on their lawn. and also, if its the latter how do you know how much gas and string you actually used. man, i think i just confused myself big time.. please someone straighten this out or me... *LOL*

FrankenScagMachines
01-14-2004, 06:17 PM
It seems we're thinking on the same lines, just different wording. I meant it can be used in many ways but gave examples of using it either way also. I also round to next dollar when I see prices like this, but I guess other people (ie, gullible customers) think they're getting a deal?IMHO, the “between” prices seem to work best if it’s \$3.49 or \$2.95, and \$7.49, \$6.95, \$7.95 over the 0 like 23.49 or 22.95, 27.49, 26.95 and 27.95 respectively. Just “looks” like a better deal to the customer. I don’t care why they think that, just that they do :p

mtdman
01-14-2004, 06:28 PM
Originally posted by lawnwizards
just curious, why do you all charge sales tax on labor? or is your labor a flat fee and you charge sales tax on the gas, string, etc... that you use on their lawn. and also, if its the latter how do you know how much gas and string you actually used. man, i think i just confused myself big time.. please someone straighten this out or me... *LOL*

Many states require sales tax on services. Michigan does not. As far as stuff like string, gas, etc, that's all built into the price of your service. You are not actually selling that to a customer, that's equipment you need to do your service. And if you purchase them, you're paying the sales tax on it. Anything you sell retail you must charge sales tax as well.

As far as rounding up, I think lots of people don't do it. Or if they do, \$31 is pretty much \$30 to them and they might not think a thing of the added \$1. I dunno, never took a business psychology class.

:D

macaw
01-14-2004, 06:52 PM
In TN. if you are providing a service (yourself) you don't pay state sales tax.

paponte
01-14-2004, 10:16 PM
Talk about nickel and diming. If you choose to do it for the extra .99 per yard, and that is worth it to you... knock yourself out. But I would definitely laugh if I passed by you when you are using a walkbehind and I see your pants falling down from all the change in your pockets! Are you going to carry around a cash drawer with you also, so you can give back exact change? Not worth it dude. :rolleyes:

gogetter
01-15-2004, 12:34 AM
Why are all you guys talking about carrying change? Do you collect cash on all your stops?

I had ONE customer last season that would insist on paying cash each time I serviced his lawn. Well, that won't be happening next season! Too many times he wasn't home and I had to keep track for next time.

He will now be billed monthly like everyone else. Take it or leave it.

I can't imagine collecting cash from many customers on a regular basis. Too much trouble (especially if they're talkers!LOL!). Forget that!

DFW, I think it's a good idea. I agree that most customers would perceive it as "\$25". Go for it.