Another thought on bidding upsells

Discussion in 'Lawn Mowing' started by LwnmwrMan22, Apr 12, 2008.

  1. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    I know alot of the larger companies count on "loss leaders", even mention of it on here once in a while.

    It's where a company will intentionally mark a product or service below value, to gain a customer, get a customer in the door, etc.

    It's much like the huge Christmas deals on the day after Thanksgiving. 61" Plasma TVs for $1,000, because they know that will get you in the door, hopefully buying more product at marked up rates.

    Anyways, I do not use a loss leader. I do charge more for my mowing than a fair amount of guys here, but I do that on purpose.

    When I get a new account, I tell them "yes, I'm higher than the other bids. However, I'll redo your mulch at my cost (without ever telling them what cost is) rather than trying to make more money off of you, the customer after the initial sale".

    When I'm talking with a prospective client, I'll find out what they want done, before I ever submit a bid. Then I'll make the weekly maintenance higher, but if they balk, I'll tell them I'll throw in fertilizing for a percentage of "MSRP" price.

    Rather than going at it to get the maintenance cheap, then charge charge charge for the upsells, I'd rather have the constant of the weekly maintenance at a higher rate, and make a lesser profit on the add ons.

    Notice I'm not saying do anything for free, or take a loss on anything, just making a lesser profit on the add ons, which could be 1-5+ different jobs throughout a summer, but making a real decent number on the weekly mowing, which in my area, is about 24 times per season.

    It also makes it look like I'm not trying to nickle and dime the customer for everything that I do. If I tell them "hey, cover the cost of the mulch, I'll knock 30% off the labor", the customer has no idea that I'm getting a wholesale rate from my supplier which is already 20-25% cheaper than what the same customer would pay at the supplier. Same thing with the fertilizer and chemicals.

    Anyone else look at it this way?
  2. whoopassonthebluegrass

    whoopassonthebluegrass LawnSite Platinum Member
    Posts: 4,214

    I just tell people I'm $5 cheaper than their lowest bid. LOL. :laugh::laugh::laugh:

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