Should I drop my price, drop the customer, what???

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Jun 11, 2005.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    An e-mail from a customer this morning:

    I have talked to you regarding the following two issues last week:

    1) I need some shrubs trimed and cleaned up in from of my house. I have
    attached three pictures. I am hoping that you may be able to provide me
    with an estimate on the work and the cost. Thanks.

    2) Recently, a company that is mowing my neightbor's yard recently quoted me
    the price of $20 per month, twice a month. I have been happy with your
    service. However, there is a significant difference in price (you currently
    charging me $27 per mow). If there is anything you can do on the pricing,
    it will be really good. Again, I will requiring mowing service for quite a
    long time, so I consider my self to be a long term customer. Also, my yard
    is a small-medium yard.

    Please let me know you thoughts on this. Thanks.


    I talked with this guy last week and the competing bid is for $20 per cut with no sales tax, not $20 per month. As some of you who know me are aware, the going rate in my area was $25-$27 weekly three years ago, but has since dropped to $20-$22 weekly. This customer is every other week and we are charging $25, plus $2 sales tax, which makes the customer's cost $27 per cut.

    So I am $7 per cut higher than what he wants to pay. I regularly quote $23 on this sized lawn so dropping the first $2 per cut doesn't bother me, though I know this will not lead to anything positive.

    Would you:

    a.) Tell him we can't drop the price.
    b.) Tell him we will match the price, but we will still have to charge sales tax.
    c.) Tell him we will drop the price to $18.52 and charge $1.48 in sales tax.
    d.) Tell him we will drop the price to $23.00 per cut, plus sales tax.
    e.) Tell him we will drop the price to $18.52 ONLY if he provides us with a written estimate from the competitor and then turn the competitor in to the state comptroller's office of enforcement AND require a two year commitment from him.

    I am planning on option A, considering option D but I am also giving strong consideration to option E.

    Opinons welcome.

    Later,
    DFW Area Landscaper
     
  2. HighGrass

    HighGrass LawnSite Bronze Member
    from Z5 MA
    Posts: 1,237

    I don't live in your neck of the woods but here's what I think. This guy claims he is a long term customer, but I think he's talking out of both sides of his mouth if he's teedering over 7.00. If you drop the price this year, what's to keep him from pulling this crap next year? If you have been giving great service and performing qualtiy lawn service, he has absolutely no loyalty. If you can afford to loose him, I'd call his bluff.
     
  3. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Posts: 7,547

    I would go with option E. If that works (knowing governmental agencies dont hold your breath), then I would switch back to option A, telling them you arent making money. If the cheap guy is gone, so maybe is the problem.
     
  4. Green Pastures

    Green Pastures LawnSite Silver Member
    Posts: 2,457

    Remind him of your reliability, quality and dependability.

    Remind him you are insured and licensed.

    Do not drop your price.

    Smile and thank him for his business.

    Prepare to continue cutting his grass.
     
  5. Tharrell

    Tharrell LawnSite Silver Member
    Posts: 2,964

    As usual, this one depends on how bad you need his business. Unless your time is better used elsewhere, lower your price. However, be sure to tell him that you're not making a dime to stay in business. He may think twice and keep it the way it is. Regardless, I would make him sign at least a 2 year service agreement to keep this from happening again. If he won't do that, it's option "F" for him.
     
  6. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    ++++I consider my self to be a long term customer++++

    The average 10 year old home in my area, according to my limited study of the Denton County Tax Records, has had, on average, 3.25 owners. This sheds no light on the amount of turnover I can expect with people who are renting homes from those 3.25 owners.

    His commitment will be gone with the wind if: 1.) He gets divorced 2.) He gets laid off 3.) He gets saddled with an unexpected financial obligation, such as a parent having a stroke, etc. or 4.) He sells the house

    A two year commitment is worth very little to me.

    Later,
    DFW Area Landscaper
     
  7. Green Pastures

    Green Pastures LawnSite Silver Member
    Posts: 2,457

    That's whay I said what I said.
     
  8. Mountain Peak

    Mountain Peak LawnSite Member
    Posts: 203

    Don't drop your price....don't let him control your business. Your quality and customer service should be enough. Give him a fair price on the quote he wants and move on with life.
     
  9. yrdandgardenhandyman

    yrdandgardenhandyman LawnSite Senior Member
    from midwest
    Posts: 953



    Sounds to me like you have gotten a rep of being a low price leader in your area. Thanks to all the lowballers who think they are going to follow the Wal Mart model, you'll probably never get the price you need again. Get ready to lower more of your accounts.
     
  10. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    ++++Don't drop your price....don't let him control your business++++

    Customers don't control the prices. The market controls the prices.

    $25 per cut is a little above market rate in my area for this size lawn. Lots of companies are advertising $20 cuts on this size lawn. Some of these companies with low prices have been in business longer than I have.

    One I know of for sure, with multiple crews, and that has been in business longer than me, was advertising $25 cuts last year. They dropped prices on this size lawn to $20 per cut this spring. I am certain this is a reactionary move to increased cancellations from last year.

    Last year there was only one company advertising low prices. Now, just about everyone is priced the same (at the reduced rate). We just can't afford to have the cancellations every time justmowit distributes door hangers with lower prices than what we are charging.

    So actually, the customer's request is not out of line. Many would have just cancelled and switched providers without telling me why. In some respects, this customer is better than average.

    Later,
    DFW Area Landscaper
     

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