View Full Version : residential target market $
09-04-2004, 03:44 AM
In the residential market, what class of customers in relation to the housing prices do you try to market. Upper, Middle upper, Middle, Lower Middle, etc..
I live on a large lake with about 1700 waterfront homes and a surrounding community of probably 30,000 more homes. The average 25 to 30 year old house is worth $500k, the houses on the island with the golf course are going for 750k, and the big dogs are their own island are 1.1mil to 5 mil.. Houses off the lake is typical suburbia, in the vicinity of 200k-350k.
My question is, in your areas, what market has the most favorable clients , from a financial profit to I guess what you guys call PITA clients. I remember a quote from the local pizza guy after I tipped him, he said "I don't like delivering on the island those guys don't tip."
Should I concentrate my solo company on the middle to upper middle customers, because of the limited workload that I will be able to take just starting out?
09-04-2004, 04:29 AM
In my area the average house with the average lawn nets me more profit. I can cut these lawns in 20 minutes for $30-35. The higher end homes are usually built on larger lots and require much more work to maintain then they are worth. Much of this is becasue most higher end homes are owned by people that really can't afford them, causing them to not be able to afford the higher price. This then causes some of the guys desperate for work to lower their price. I can't /won't compete for these customers.
I do have some high end homes are my route, but they came frome referals and are willing to pay my price, but I still have to admit I gross less per hour cutting these lawns. Lake properties are the worse, alot more trimming.
09-04-2004, 08:11 AM
I wouldn't limit myself to any group. The more they have the slower they are to pay. I think it's some stupid game they play. They all get together on Monday and talk about how they can make the lawn guy wait 6wks. for his check. The one who can make him wait the longest, wins.
09-04-2004, 09:20 AM
Soupy makes an excellent point.I found out that one guy,living on the lake,nice cars,all,makes the same amount of money I do.I can't afford a house on the lake.
After pricing him on a few things,he lost interest.
there are some who live there that don't blink at pricing though,so I service them.
IMHO,you need to look into both middle and upper class neighborhoods.Check pricing in your area,then see if you can match it.Then,set yourself apart from your competition by offering something they don't.That's where you'll make the money.It could be something as simple as shrub trimming or it could be pesticide apps.You'll have to find the market that you can corner.
09-04-2004, 05:41 PM
thanks for the reply, about the smaller 1/4 acre type lawns that you can get in and out of in about a 1/2 hr, on average has a higher margin than the larger lawns. That is what I kind of figured but wanted to hear from the pros.
thanks for the reply, yes I do need to research the market on prices, from what I have done so far the average development lot seems to go for what I've seen on the board, about $35-45 dollars a cut. Yes, I do see what your saying about doing something to separate myself from the competition. Excellent point. The people that I personally know that pay for a lawn service all complain that they just want a good job done, from a honest dependable company that shows up when they say they will. They make it seem that this is hard to find. Doesn't seem like an unreasonable request that I can't meet.
09-04-2004, 06:34 PM
I also like doing the lawns for 100K - 200K houses. They seem to be more down to earth and willing to pay a fair price. You will just have to get your feet wet for yourself and do some of those bigger properties to find out you will have to charge them more, probably than they are willing to pay. Experience is a great teacher.
Yesterday I got a call from a Middle Eastern fellow and I went out to price his yard. I told him $40 because it was a little bigger than most I do and there was a fair amount of trimming. He really gasped at my price and said it wasn't worth more than $30. I said, okay, I'll try doing it for $35 and see how it goes. He insisted on paying me $30. I declined and walked away. Sixty seconds latter as I was driving home, he called me, but I didn't answer the phone. Someone like that would be terrible to do work for. I'll leave that headache for my competition.
09-04-2004, 07:17 PM
In my experience.....(famous last words)....the wealthy tend to be tighter with money that doesn't benefit them. i.e. If it isn't a new car they can drive, a coat they can wear or a meal they can eat they don't appreciate it as much. They tend to look at lawn care as paying money to someone else and not getting anything tangible in return. Stupid but true.
The poorer neighborhoods don't have the money for lawn care period and are used to doing it themselves anyways.
Now comes the trick. The money is in the middle class with smaller lawns. However, you have to find neighborhoods where the people are not house poor.
There is a neighborhood near where I live where the average house costs about $220K. Yet, the people living in them should be in a neighborhood of about $150K. So although the homes look like the owners have money they are really tied up in the house and can't truly afford an LCO.
Hope this helps.
09-04-2004, 08:25 PM
House price means little as where I am 500 k a house is the poor neighborhood I have some beach houses that sit on a lot 50X75 feet and are worth more then a million. Then I have some more inland that are full acres and are only worth 250 k I go for lawn size more then house value these days. I do all kinds but I have found that the big ones are much better moneymakers. We run 2 crews of 2 men each. When we do 30-35 small lawns a day which is not unusual for crew #1 we find crew #2 makes 200-300 dollars more per day with the same amount of guys doing 18-22 lawns in the day. Bottom line is a 15-20 dollar lawns does not add up like 35-50 dollar lawns.
09-04-2004, 09:41 PM
I don't limit myself, If they want the service I will mow. I can however get better money off of the middle income levels anyways. The more expensive the nieghborhood, typically the cheaper they are.
09-04-2004, 09:48 PM
The other big factor is salesmanship. I get poor people and rich people to pay my rate (which is higher than average). I also get poor and rich who balk. The trick is if they are looking for someone to do a good job, someone who is knowledgable, seems honest and can do more than mow and blow. If they are looking for a mow and blow they are most likely price shopping.
Like someone else said you need to offer services that most of your competition doesn't. Then sell them on your service, work ethic and that you are legit (with insurance and all that).
09-04-2004, 09:54 PM
I prefer to service five $50 jobs daily vs. ten $25s. Way less travel involved, and you only have to load and unload 1/2 as many times. The older I get, the more this matters.
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