Pricing Ethics.

Discussion in 'Lawn Mowing' started by GrassRoots Lawn Care, Jul 8, 2000.

  1. GrassRoots Lawn Care

    GrassRoots Lawn Care Guest
    Posts: 0

    I am facing somewhat of a pricing dilema. My brother and I started this business in early March of this year. I go on all the bids and proposals. There are just us two, with two part-time employees. We have been blessed and are quickly reaching full capacity in the accounts we can handle. <p>In anticipation of this I have been raising our pricing on all new bids in order to start growing slowly. We have never low-balled anything (not on purpose). Right now our referrals are keeping us very busy. We have just pulled our curent advertising and are expecting lots more calls from a Yellow Page ad we purchased due out in late August. <p>Here's my dilema. We have always charged a fair price, not low but fair, for us and our customers. People in this town are starving for good lawn care services that provide quality service and are agreeing to pay the higher (and I mean high) prices I have been recently quoting in order to slow down, regroup and get ready to grow. Some customers (residentials) willing to pay up to $80-90 hr for our work. This might seem strange, but how high is too high? Is this ethical to charge people so much? Also, do we drop existing, loyal customers to make room for these more profitable accounts? With the two of us we can handle about 75-85 accounts (we have some larger commercials in there too). We've recently tried hiring on people, but the lack of work ethic and quality workmanship is unacceptable to us. Any advice would be greatly appreciated.<p>----------<br>Mike Reynolds,<br>GrassRoots Lawn Care, Florida
     
  2. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    Mike, heres my opinion on this. I don't think any price a customer is willing to pay for your service is un-ethical or too high. Its supply and demand. Nike makes golf shirts that cost them under $3 to make but sell them to $50, thanks in part by tiger woods people are going crazy for this stuff. Is that price too high, hell ya, but the two most important things are :<br>Is the shirt selling for that price? (YES)<br>And is Nike making money? (YES)<p>So whats the problem. You are Nike and your customers who are reffering you are Tiger Woods! I like analogies, sorry if it got out of hand.<p>Now the second part is a tough one. I know it would be hard to drop a customer for a more expensive one if you got to know them, etc. BUT, this is where you'll learn to just have a proffesional relationship with your customers. Categorize your customers in the order from most $ per hour to least. <p>Now if you want to make room for new higher $ customers, start at the bottom of your existing customer list and try to raise them up to the $ you'd be making off the new customer. If they go for it, you won't have to drop them, if they don't, too bad, you have another customer to fill there shoes (and then some!) Its a hard thing to do, but its part of a succesful business. You sound like your doing great and I wish you all the best of luck in the future.<br><p>----------<br>&lt;a href=&quot;http://communities.msn.com/guidosequipmentpics/&quot;&gt;&quot;Guido&quot;&lt;/a&gt;<br>David M. Famiglietti
     
  3. Charles

    Charles Moderator Staff Member
    Posts: 7,866

    Well grassroots your are not forcing anyone to pay your prices. So it is really a non-issue. When you start losing customer because the price is to high, then you will know you have reached the limit of what the market will bare. Until then why worry about a problem you do not have? Man just be happy you are doing so well.
     
  4. bill phagan

    bill phagan Guest
    Posts: 0

    Mike,<p>Take it from me...NO price is TOO high. I am a believer in giving the customer an opporunity to say NO. If they accept my pricing, fine...if they don't, I have many other prospects out there and I was looking for work when I found them. Do what you have to do to separate yourself from the competition and &quot;market&quot; pricing. If you are in the profession as opposed to being in the business, they will recognize this and want to do business with you. Go for it!<p>Bill Phagan<br>Greenindconsulting.com
     
  5. Keith

    Keith LawnSite Gold Member
    Posts: 3,977

    Residentials paying $80-90 dollars in Florida is hard to believe, but if you can get this much, more power to ya. That is excellent for a business that is only 4 months old. While most areas of Florida are flooded with maintenance contractors, you seem to have stumbled on one that isn't.<p>I don't understand what advice you are looking for. You are making more money than you know what to do with. Maybe you should give us advice.
     
  6. cantoo

    cantoo LawnSite Silver Member
    Posts: 2,910

    Just a thought, mabye you should sell the accounts that are on the outskirts of the area that you want to work in first so that you can do more lawns in a day. The tighter the work area the more you can do and you can always expand the circle/route if you find some good worker in the future. This might be better than making good customers mad by raising their prices already because you just gave them this price a couple of months ago. I learned years ago to never burn bridges, you might want those customers back someday.
     
  7. MOW ED

    MOW ED LawnSite Fanatic
    Posts: 5,028

    I know how you feel as I have a similar situation that is developing for me. A lawn boy operator is getting out of the business and he has offered a job to me. The job took him 3.5 to 4 hours PUSHING a lawn boy on a large river property. He got 150 per mow. The property owner told me to cut it last week and said that we can talk later about the particulars. I agreed and did the property which took me 1.5 hours total. <p>I'm still gonna charge him the 150 but my dilema is should I charge him MORE because it looks so damn nice :)
     
  8. jaclawn

    jaclawn LawnSite Senior Member
    Posts: 490

    There is no such thing as too much money. <p>Think about that next time that you go to a doctor or a lawyer or a accountant, and get the bill from them.
     

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