stick to your price i'm told

Discussion in 'Lawn Mowing' started by Jason Rose, Apr 22, 2003.

  1. Jason Rose

    Jason Rose LawnSite Fanatic
    Posts: 5,858

    Well i just lost a customer today living in a nice golf course community. the lawn is over an acre i believe, mowed it all last year weekly for $40 a week. TOO LOW! but the homeowner promised me when we talked before the season started last year that HE would talk to both his neghibors and I could get theirs too. season started and I found out he didn't hold his end of the deal! (no suprise i guess) I did acquire the neghibor to the south after a few weeks of my mowing looking better than what his guy was doing!

    Anyway...The $40 lawn, really should be priced at at least $60 here, i feel, at least in comparison. I do a few other $40 lawns, and their nearly half this size. So after the first two cuts i send a bill for two mowings at $40 each, however i included a letter stating my intent to raise him to $60 a week pending his approval. THIS DID NOT WORK! He did call me, to tall me of my bad business practices and that he would not accept any kind of price hike over a couple of dollars per year. Basically he wanted me to back down and say ok, i guess i will continue to do it for $40, but i would not comprimise, I did like so many here say to do and heald my ground. Yes I lost the job. I hope like heck he can't find anybody to do it for under $55 or $60 too!!!

    Sorry i just had to vent tonight. I have picked up a few nice new lawns, but lost as many too, actually have a bit less coming in this year than last. Same problem here as everywhere...every Joe Blow with a mower is mowing for hire these days.
     
  2. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    well how did the conversation go last year...did he say something like, "Hey, how about if I talk to my neighbors and if I can get both of them to sign on will you do it for $40?"

    I feel that if he said something like that and hasn't came through then yes you should raise your price and tell him why. And if he complains just tell him that you came through for him, but he hasn't. That should shut him up.
     
  3. I've learned that lesson the hard way as well. I don’t know how you got that account, but I imagine you bid to get it. That price was his impression of you, and his level of respect. When you place a bid, that is one of the dangers of bidding low to get an account. High or low, you only get one chance to make that first impression.

    Any particular area has a price standard. It’s easy to reduce that standard, but takes a while to raise it. I’m convinced the main way to make money in this business is to charge what the market will bear (at or above that price standard), servicing those accounts well, at a rapid rate. Thereby winning by quality and quantity.

    Raising prices is tricky. I have learned some tricks, but won’t tell them because they work as long as they’re not widely known. But even the best trick doesn’t work too well with a 50% increase. It’s best to be brave with your bidding. Learn the area standard and don’t ever go below that. Assuming your “dance card” is full, bid like you don’t care if you get that account or not.

    You won’t get price-shopper accounts that way, but you will make an impression. Everyone gets “ideas” about why someone is higher than the standard. Make quite a few “good” bids and a few customers will just assume you’re good. Try to leave some flexibility in your schedule to drop everything when those people do call, but maintain your professional demeanor. Perform for them, and you’ll have a winner account. That’s what I mean when I say stick to your price.
     
  4. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    I hate it for you, but this is a great learning tool for everyone. I've been talking with several people lately trying to get them to understand this very thing.

    Customers think much more highly of themselves than they should. They will promise to get you more business. They actually think they can. Some say it because they think it makes you give them lower prices. I have never had anyone that said "treat me right and I will get you lots of other business" get me anything. The good customers that will give you referrals are not the customers trying to get lowball prices.
     
  5. What can you do with this guy now? If you need the account, I'd shoot for $50, but that's IF he likes you AND your work. Apologize for the negotiation blunder and that you realize a $40 to a $60 increase is excessive. If you don't need the account, tell him you were new last year (which he knows) and that you've learned much about the business and that $60 is the standard for his type of lawn. But most important, $60 (or $50) is what you need to make a profit above all your business expenses. If you play it right and he’s just using a negotiation tactic by reacting (countering) that way, asking for $60 is not that bad if you can live with $50.

    Looking at your post again, don't use a phrase like "pending your approval." It just gives a customer more power and makes you look timid. Of course its only going to happen with his approval. I hope that doesn't sound too picky, but you will remember this lesson for a long time, LOL.
     
  6. Keith

    Keith LawnSite Gold Member
    Posts: 3,977

    As enticing as it is to try to get into a neighborhood, discounting the price rarely works long term. I've tried it numerous times and it always has bit me in the azz :eek: It's just like giving a price for a lawn that, say, has a fenced in back yard, and the price you give is based on them agreeing to enlarge it to get your big mower in. Almost always it goes unmodified and they forget about it. Same thing with your customer agreeing to get you two more customers :( The customer never remembers things that they don't see benefiting them :mad: Now if you had given them a price and would offer a discount based on you getting more customers when it actually happened, they would have a different attitude assisting you in getting those other customers :) Often that backfires too, though. They think they should get the bigger discount because they were the "original" customer.

    The guy saw what he wanted to see. He saw a 50% price increase. He may very well pay 60 bucks to the next guy, but he didn't increase his price 50% either...and thats what he sees :(
     
  7. scott's turf

    scott's turf LawnSite Senior Member
    from NH
    Posts: 949

    I don't think that there are too many customers that wouldn't baulk at that kind of increase. I would have raised him $5 per year if the job was still profittable enough. It all depends on how much work you have and if you have employees to pay. If you do not have a full plate it is sometimes beneficial to keep as many jobs as possible even if they are low profit because it will help cover your expenses for equthat are relatively fixed regardless of the amount of work you have.
     
  8. A1 Lawn@Landscapes

    A1 Lawn@Landscapes LawnSite Member
    Posts: 220

    First of all notifying a customer of a price increase, no matter how extreme, is not a poor business practice. If this guy promised you business in exchange for a lower price and did not hold his part of the bargain then you did the right thing. I personally do not make arrangements like this for the reasons that 65hoss mentioned above. Price correctly to begin with. If you want to get neighbors on board, sell them. Drop off flyers, wave as you drive by, let them know you are available if needed, project a professional image.
     
  9. slowleak

    slowleak LawnSite Member
    from 63055
    Posts: 96

    bluesteel makes a good point. don't give them an easy out.there are any # of ways to get your point across .giving him the keys is not one of them.you may have just "won the battle and lost the war" but you also slammed the door shut and you both ."lost face".
     
  10. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,076

    If you need to make $60.00 per cutting on this lawn and the customer has said no then move on and learn from this. I would have spelled why they were previously getting a low price due to you telling me that you were going to get you two additional accounts and that is the reason for your discounted price of $40.00. You are doing this not because you need to be right and the customer is wrong but you need to convey the reasons for the increase to customer. You don't want them just thinking you are jacking their rate for no reason…because they will have forgotten the prior arrangement.


    Gravely_Man
     

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