Pricing yourself right out!

Discussion in 'Lawn Mowing' started by sildoc, Apr 16, 2004.

  1. sildoc

    sildoc LawnSite Silver Member
    Posts: 2,925

    Ok, after 30 bids in last week I land 1. What the heck? I was in the ball park on time and money why did I loose the bid????
    Low and behold I am driving aroud today, getting stuff ready for next week and to hit the weekend turkey slaughter, and I see the same guy at 5 of the jobs I bid.
    That is it. By the 4th one I was fuming. I finally pull over to talk to him the fifth time I see him at a bid I just did.
    This is what I learned.
    1. You can price yourself out of the game before you pull up.
    2. You can price yourself out of the game when you open your mouth.
    3. You can price yourself out of the game when you hand them the estimate.

    So what did I really learn.

    1. Joe blow mowing and such gives bid that is accepted. Why? People are looking for a cheap price and he fits the image. (even though prices are within 5%)
    2. You spend to much money to try to portray a professional image with nice uniforms, trucks, and quality equiptment. (Ie. My over head for quality puts me out of range for the middle class.)
    3. If you sound intelegent you must want alot of money for your services. (two statements that lead me to this from one customer. " billy bob said heeeddd doit frrrrr 80 bucks a week!" What does that entaill? I ask. " Mowin and such." Ok Probably not someone that I would like to work for but money is money and he some how related to billy bob more than he did I.
    second statement " do you use that miracle grow fertilizer that I hear so much about?" No sir I use the product that is needed for your turf at the particular time that I apply. I do soil tests that tell me what is best and most cost effective for you and your turf. "Hmm No miricle grow? I will be in touch."
    4. In handing an estimate you need to learn how to ease them into the price. Ie there are few people that measley money does not mean alot to and I don't work around Donald Trump.

    HMMM Now the problem. Do I keep up and win about 5% of bids or do I change and charge 3% less and win more bids?

    At this time I don't think I won't change but let me tell you If I don't have a full schedule by mid may I will have to rethink things a bit.
     
  2. grasssin

    grasssin LawnSite Senior Member
    Posts: 361

    Understand where you are coming from, have lost about 35 bids in the last few weeks (about $100 in gas for FREE ESTIMATE)

    About $15,000 worth of jobs by my estimate that i did not get.

    There are two different types of people, the single/divorced moms, and the couples that dont care about the price. I have about 95% of the single/divorced catergory and right now it is like pulling teeth to fert and areat. ......

    There is nothing you can do but make your yards look the best they can without sacrificing price, and more ad. is the best.

    Anyway your question is tough, I am in the same boat, charge less to get the jobs or stay at my price? I have chosen to stay at my price and it has paid off so far. I did not land a few big accounts due to "high prices" but still get the other calls that are paying the bills and IRA.

    One lady today said "I just want it every two weeks as short as you can go, I do not mind the brown stuff, the grass just grows too fast here"

    WOW

    Bid her $35 that will take 20 min to do by myself. Got it because everyone else she has called never called her back(is that a redflag?)

    Drunk and rambling again, do your own work dont worry about others, target your market, and ADVERTISE ADVERTISE ADVERTISE

    You can never have your name out there enough, flyers, yellow pages, direct mailing, cards in restaurants, signs on truck............
     
  3. LynyrdSkynyrd

    LynyrdSkynyrd LawnSite Member
    Posts: 179

    "HMMM Now the problem. Do I keep up and win about 5% of bids or do I change and charge 3% less and win more bids?"

    Kind of reminds me of the coal miners here only going backwards. Strike, strike then strike wantting more until the coal companies get fed up and just close the doors. You bid and bid only to have Jack Leg comes in and say I will do it 5 cents less.

    We only have 3 lawn care operaters in this area. My self and two others. I do not bid on jobs and take what the other two does not want to deal with mainly older home owners. The one that gets me is ran by a guy that we call Ducky. His main concern is that he makes enough to buy a case of beer by noon everyday. And yet I see him mowing twice as many yards this year as he did last, and he does not even own a trimmer. I have no idea how he gets or keeps the jobs that he has.

    If you have a large market area. It would be a hard call as to drop your prices or not. You must think each time that you lose a bid. I could have had that job if I would have..... Yet at the same time you must work for a wage that allows you to keep your status as a "worth hiring" company.
     
  4. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    HEY! ASK ME! ASK ME! I KNOW THIS ONE!

    You really should have read up on my "I'm a fish out of water" thread. A load of good info there. I only won 3% of my bids like that this year and I put in about four times as many as you have!

    Now to answer your question, well that depends. In my case dropping rates by 3% wouldn't have done a bit of good. But a 50% decrease would have put me in the ballpark on some of them. So for me personally that would have been a waste.

    Personally, if I KNEW a measly 3% decrease would win me a lot of jobs, then heck yeah I would do that. But that's based on my business.
     
  5. sildoc

    sildoc LawnSite Silver Member
    Posts: 2,925

    I realize 3% is not a lot but when you add up 3% for the year you are looking at 3-10grand min. That is a heafty piece of money to be putting in a retirement account. Not to mention a new piece of equiptment that allows you to do something quicker at the same price. When I am talking 3% lower that means my monthly bill would be 22 on average less. Multiply that by 35 lawns so far and that is a significant decrease in my monthly income coming in. If that is what I needed to do to land these jobs.
    I agree with the consumer on fair prices but one has to charge for profesionalism and quality. I too could be one of these (I wouldn't say scrubs) lower class mowing services that are wearing holey jeans a nasty t-shirt a beat up old pickup towing a make shift trailer that should be towed to the dump let alone around town and doing these jobs for 25% less than I charge now and make more then what I do now.
    I personaly don't want that image for my company. I will take a little less and when someone hears my name all they hear are good things to follow.
    Oh well we will see going into week 8 of the season and pick up at least one job a week and bid any where between 15 - 45 a week.
    July There should be an influx of people looking cause joe blow quit cause it was to hot and he wanted to goto the lake instead. I guess I will make it up there.
    I guess my moral of the story to myself is just hang in there.
     
  6. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    then multiply it all by ZERO because he got none of the jobs. Did you come up with what i did? NOTHING!!!
     
  7. Likestomow

    Likestomow LawnSite Senior Member
    Posts: 997

    You may be working in the wrong neighborhoods. Maybe you could look for more up-scale subdivisions.

    If not, then you need to consider the economics involved in your dilemma. More LCO's operating in a given market results in lower mowing rates. Equilibrium is simply the law of the jungle.

    If you continue to over price your bids, you will not survive. But then we don't know if you are doing this part time or full time. My guess is it is a part time business for you, otherwise you would be adjusting your bids to get the work. Also, are you working alone? Do you have state-of-the-art equipment to produce at top speed?

    Another thing to remember is when you are doing those jobs at a lower price than you want (now), you will be visible in those neighborhoods and very apt to pick up additional work. By clustering your accounts you will save on the windshield time and ultimately increase your bottom line.
     
  8. DennisF

    DennisF LawnSite Bronze Member
    from Florida
    Posts: 1,381

    One of the key elements that I take into consideration when doing a bid is the overall appearance of the property. Is it an expensive home? Are the landscape beds manicured? What is the condition of the lawn? These things can tip you off to what a customer is willing to pay for lawn care. If the property is not well maintained then the owner is not looking for professional lawn care. These types of individuals will be looking for the lowest price they can find. If the property is well maintained then the owner is more likely to be willing to pay more to keep it that way.

    Either way you have to be competitive with other LCO's in your area and the only way to find out what they are charging is to ask one that looks to be professional. If you ask around..many of them will give you a good idea of the rates being charged for different size properties. Don't just ask one LCO. Ask several and you should get a pretty good idea if you are bidding to high.

    Another element is the customers age. Seniors in general are not willing to pay a lot for lawn care since many are on a fixed income and every dollar counts to these individuals. Younger working couples will pay more for quality service and you can bid a little higher on these people. But you still must be competitive with others or you'll be squeezed out of the market.
     
  9. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    work cheap or not at all. that's the sad reality of it.
     
  10. tedk

    tedk LawnSite Member
    Posts: 100

    why should the homeowner care what the guy looks like. she doesn't want to date him, she just wants her lawn mowed.
     

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