Would you give a 5% price reduction to renew a contract?

[jrs.landscaping]

50% I would walk, we were outbid by 60% a few years ago. He assured them "his equipment was paid for and his overhead was low." We were asked to match his prices and politely declined. Two years later he was bankrupt and we got a raise. Sometimes customers don't know how good your company is until you leave and they hire the other guy.

[weaver]

Originally Posted by jrs.landscaping

50% I would walk, we were outbid by 60% a few years ago. He asured them "his equipment was paid for and his overhead was low." We were asked to match his prices and politely declined. Two years later he was bankrupt and we got a raise. Sometimes customers don't know how good your company is until you leave and they hire the other guy.

Agreed... No way at 50%, would have to walk...

[205mx]

I would. Then once you get growing a little more and they are a smaller part of your sales, raise it 10%. You'll have been there a while, they should be happy and comfortable with you. If then they decide to go along, it's not a big deal.

[weaver]

Originally Posted by 205mx

I would. Then once you get growing a little more and they are a smaller part of your sales, raise it 10%. You'll have been there a while, they should be happy and comfortable with you. If then they decide to go along, it's not a big deal.

He's been mowing it for 30 years... What's it gonna take for them to know or get comfortable with him?

[205mx]

Originally Posted by weaver

He's been mowing it for 30 years... What's it gonna take for them to know or get comfortable with him?

Do you know what merger means? New players!

:-)
Posted via Mobile Device

[weaver]

Originally Posted by 205mx

Do you know what merger means? New players!

:-)
Posted via Mobile Device

Ya but that was two seasons ago, the new people just recently asked for the 5% cut. The old managment is the one's who asked for the 50%...

[205mx]

Well 50% is out of the question. Our industry's standard is 25-45 % profit margins
Posted via Mobile Device

[mowman74]

Im not surprised with that offer. TAKE IT! Make it up elsewhere. Dont loose a contract over a 5% drop.

[Groomer]

Toro, I'm curious to know your market demographics? Sabina shows a pop. of around 2 thousand, do you service columbus and those areas? Nice to be in Fla., you ain't missin' anything up here!

[Toro 455]

It was during the drought! It amounted to two mowings at the reduced rate. Then when fall arrived it was back to normal...Well normal plus core aeration, fall fert & weed control.
It sure sounded generous when I agreed to it though.
And I kept my job. At the old rate. Well, the old rate minus 5%. I'm doubting at this point that they'll even apply the 5% discount to me. It was just a blanket letter to all vendors.
To keep these accounts a person at least has to appear like they're trying to go along. I can wait for this to blow over.
If I made an issue over this they'd have 60 people trying to bid this job out from under me. Probably for less than the 95% they'd be paying me. This customer doesn't accept outside bids. They're OK with me. And I'm going to make sure it stays that way.