how long to recover from "lowballers"

Discussion in 'Lawn Mowing' started by bobbygedd, Jan 17, 2005.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    four years. it has taken 4 years. there is a new development here, well, fairly new. it's been around for like 5 yrs. homes start at $750,000. well, a guy i know, worked in this development when it first became inhabited. he provided EXCELLENT, top notch service for LOW, LOW fees. he had it all, great equipment, pest license, insurence, you name it, totally legit. well, he put himself out of business in less than 2 years. he gave them me as a reference. here was the trouble. he was mowing these should be $40 properties for $25, and doing a great job. when i went in at $40, i could not get a single client to sign. they all had this $25 price tag imbedded in thier heads, and said they would not go higher than $30. adios, see you later. well, after 4 years, they have come to the conclusion that they need to pay more for a decent service. i'm working my way in there at $45 a clip, 3 yr contracts, with a locked in 3% annual increase. but, it took 4 years because since they had a guy doing great work for $25, they knew it was possible, and that number stayed in the back of thier minds. so how long does it take to "recover" from a consumer aquainted with low priced services? you'd be surprised.
     
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Good point Bobby. Still to this day many wealthy people (those who can afford 750K homes) regard us as just 25 dollar help.
     
  3. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433





    Do you think that has anything to do with the way a company presents itself? Or just a lack of respect from the customer?
     
  4. Rollacosta

    Rollacosta LawnSite Senior Member
    Posts: 331

    great thread bobbygedd, i used to have a friend who due to his very high work load would very often give me some of his job's [un-priced/ not bid on]i very rarely got any of these jobs ,the reason ? i was more expensive and he was to cheap !,this was also the same reason he had so much work,i must also point out he did a good job ,now after 20 years he has packed his business up ,he couldn't make any money is my guess..now I'm getting his old client's call me ,when i give them a price they think i'm a scam artist ,con-man etc, but in reality i'm just charging the correct rate..my friend the low-baller though good worker messed things up not only for himself but other tree services :angry:
     
  5. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    I agree this is a great thread. When I have gone in before and given estimates, which the customer thought was high because of them dealing with lower rates before, I have noticed for me it usually takes about 2 years before they come around again.
     
  6. proenterprises

    proenterprises LawnSite Silver Member
    Posts: 2,297

    good point bobby. it really shows how areas are effected by these price shocks, and regardless of the industry, wether it be cutting grass, selling food or writing insurance claims, below standard prices kill the industry for everyone, and the after shock is felt long after the "low price guy" puts himself out of business.

    good luck with these new properties bob.
     
  7. glllc

    glllc LawnSite Member
    from CT
    Posts: 61

    Bobby Gedd it's like you read my mind. i'm going though the same thing.
     
  8. grassworks

    grassworks LawnSite Member
    Posts: 134

    sometimes markets never recover. For each service leaving , 3 more are "breaking into the biz" with low starting price.
     
  9. packerbacker

    packerbacker LawnSite Bronze Member
    Posts: 1,433






    Im just curious but how is it killing the industry? Prices are different around the country and companies have to adjust to that whereever they decide to do business. What could be a 40 dollar minimum here in KC could be a 50 dollar in California.

    Its not killing the industry nationwide, maybe in your area but not in mine because those companies come and go within a year. They dont stay around long enough to do any significant damage.
     
  10. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    There's one subdivision here, all large homes on 1-2 acre lots, pretty much just all grass, very little in the way of trees or landscaping. For some reason the "accepted" price in this neighborhood is $50 a cut. Ridiculous. I don't know if LCOs think is prestigious to mow in such a high-dollar neighborhood or what, but one day when they all go under the customers are gonna get extreme sticker shock.
     

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