Quality vs Quantity

Discussion in 'Business Operations' started by 1BadHawk, Jul 2, 2005.

  1. 1BadHawk

    1BadHawk LawnSite Member
    Posts: 127

    Based on my current work load and net income for the 1st 1/2 of the season Im reconsidering some advertising/opertating stratgies.

    Initialy I was targeting lots 1/4- 1 1/2 acre in size, single family homes. Pricing accordingly, between $35-$100 per cut. This has acquired me an ok to fair amount of customers. The down side to this is Im wasting valuable time driving from place to place unloading and loading equipment not to mention gas.

    Ideally, the more customers in the same neighborhood/block is best. To make this happen Im thinking of drasticaly dropping prices/ Perhaps 50% cut. or atleast until I acquire an equally profitable number of customers.

    Example1: A $40 cut takes 20min to do + 5min load/unload time + 15 min travel time to next job... given traffic, lights, and misc delays. = $40 for 40 mins labor (-) operating costs of course.

    Example1a: Same lot size now $20/cut (@20 mins ea), two in same block, eliminates load/unload & travel times, = $40 for 40 mins labor (-) operating costs & gas for drive time.

    Not much difference when theres only 2 properties involved, $/hr is roughly the same. Now if we expand that to 5 customers. The $/hr significantly increases while the $ for truck gas decreases, lessening operating costs.

    Your thoughts?
     
  2. J Hisch

    J Hisch LawnSite Senior Member
    Posts: 952

    Volume is the key and route density is also a key. One reason so many aren't able to grow is they forget about sales, if you don't ask for the sale you will most likely never get it. I'll share a tactic with you that has worked really well for me. If I get a call from someone for maintenance and we have no one in the area we make them a simply deal get a neighbor to sign on and you both can save money. then when you get that new neighbor you tell them the same thing, before you know it you will be cutting 5-10 maybe even the whole block. move the truck a few hundred feet instead of a few miles. I don't however reduce the cost that much but it is usually lower than the competition, became they are bidding based on there drive time per hr. Now commercial is totally different. I am usually more expensive than most. I have one route that was built this way, by neighbor marketing, then I have another route built out of the phone book/ other media advertising. The neighborhood marketing route is solo, it is more profitable than the 2 man crew route, in a nut shell I am making more off the solo crew than the 2 man crew, simply because drive time. However, when the neighborhood marketing goes into effect on the 2 man crew it could quickly add 2 more crews. I would say it is almost like the pyramid theory.
     
  3. BigChaz

    BigChaz LawnSite Member
    Posts: 69

    Dont go as much as to drop half off the cost but try maybe a 10 dollar discount if your current client can recruit some more of his neighbors. Or offer a free cutting for the original client if he refers you to a neighbor who will sign on at your normal cost ($40)
     

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