This is why you don't do free estimates

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Jun 27, 2007.

  1. DFW Area Landscaper

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

    Yesterday, a landscape truck pulled up to my neighbors house, across the street. There was a crew of four workers, a HUGE truck with all kinds of equipment in the back...the kind that probably gets 5 miles to the gallon on a good day.

    Anyway, I honestly don't know what they were there for, but they didn't do any work. My intuition was that they were there for some sort of an estimate or bid.

    Anyway, today, my neighbor's mom, who lives out of town, is outside with an electric chain saw, pruning the trees.

    I have no evidence outside of the fact that I saw a landscape truck there yesterday for what I think was a free estimate and today the work is being done by the home owner. I suspect a LOT of the people who call you out for FREE estimates have no intention of ever hiring you. They just want to know how much they're saving by doing it themselves.

    I haven't done a free estimate in years and we can't keep up. We quote an hourly rate over the phone and then tell them we discount that rate by 18% if they don't require a free estimate before we do the work. We are BOOKED SOLID doing it this way and our queue of non-recurring work & clean-ups has not been empty in over 30 months.

    There is no reason to drive out to a client's home for a free estimate. I promise. If they really want to have the work done, they'll ask you how soon you can get to it after they hear your hourly rates. The customer is smart enough to realize that their clean-up is probably only a $200 opportunity anyway...any contractor who drives out for a free estimate on what is probably a $200 opportunity will look desperate or stupid. If the client senses weakness, they'll eat you alive.

    Later,
    DFW Area Landscaper
     
  2. green_mark

    green_mark LawnSite Senior Member
    Posts: 494

    I totally agree.

    We charge 29.95 for a lawn evaluation which is fully refundable towards services.

    This has made our closing rate in excess of ~80% within a matter of days.

    Most of the others also close at a later date.

    We hear the complaint that no one else charges for an estimate. Our reply is we are not providing an estimate. No prices are ever quoted.

    We do a detailed evaluation of the conditions of the property and then have one of our customer service staff review the information with the customer and tell the what needs to be done. No sales pitch, just the hard facts.

    Once we are done they ask to get a price for the services they want us to do and then they do what services they can handle. Makes a very good high quality customer.

    The ones that don't take it? Thank God they said no. Generally they just want to go down the list and see who is the lowest price and we are proud to say "IT'S NOT US!"
     
  3. Lohse's Lawn Service

    Lohse's Lawn Service LawnSite Member
    from US
    Posts: 213

    I disagree. Your whole story about the landscaping co. who showed up and didn't get any work done, that's not your fault or mine. If I'm booked for the next few days, I go in the evening and give a free estimate. 9 times out of 10 I will not stop and give someone an estimate until I'm done with my scheduled yards. If they can't wait, then they can find someone else. You said, "I suspect a LOT of the people who call you out for FREE estimates have no intention of ever hiring you." That's an assumption. Most of my new customers as of this year have been word-of-mouth, or my signs posted in a few customer's yards have my name, number and "free estimates" in red.

    I've already made more money this year than I did all last year. I'm not about to stop offering free estimates. It's a potential customer. It's my belief then that they are worth the time to drive out and place a bid.

    I do not have a quoted hourly rate. I look at a yard and give a price. The customer can take it or leave it. I usually earn $35/hour. And that's on a bad day.

    Just my opinion. I look forward to hearing what others say about the subject.
     
  4. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    You can go from one end of the spectrum to the other with this. We do free estimates but as of recent I am seriously thinking of charging at least $25.00. We had to have our new, just out of warranty furnace looked at this past winter and they had a "service call" of 49.95 just to show up and another $55.00 for the guy to look at it and tighten a few bolts. It took him less than 45 minutes! IMO, once again the problem seems to be an industry that is saturated with cutters. Next season we are implementing minimum charges for EVERYTHING! and this is something I should have done years ago! I believe this (charging for estimates) would help weed out price shopper's, penny pincher's or whatever you want to call them but then you might be left with a days worth of work vs. a weeks worth. IMO, another problem is so many people are so used to the word "FREE" they just expect it and your the dirty S.O.B thats ripping them off if you charge for estimates. I was thinking next year of doing this, charging say 25 bucks and if they go with us doubling that back to them in a credit towards any service. It sounds good and it might work or might not, we'll see.
     
  5. Lohse's Lawn Service

    Lohse's Lawn Service LawnSite Member
    from US
    Posts: 213

    Nobagger, you make a good point about other companies charging a fee just to show up. I think that's a bunch of baloney, but it's just the way it works. Charging for estimates may weed out penny pincher's, but do you not agree there are some perfectly good yards out there that may turn out to be weekly customers?

    By giving an estimate, you are by no means signing a contract and you shouldn't even feel obligated to take on the job. I wouldn't doubt you guys have many more customers than me and are a bigger company in general, and dealing with people who want a free estimate may not be a priority. Until I expand to 100-125+ customers, I will continue to at least look at each customer's yard that would be interested in a free estimate.
     
  6. txgrassguy

    txgrassguy LawnSite Gold Member
    Posts: 3,083

    I have a minimum consultation fee regarding estimates or call outs to diagnose problems.
    I will not quote hourly rates on the telephone, and the consultation fee may or may not be credited towards the invoice - it all depends upon the scope of work required.
    I have eleven full time guys right now, we are backed up for at least three months and despite the rain more calls are coming in.
    Regarding the consult fee, this has stopped the quote shoppers cold - and the feedback I am receiving from my clients has been extremely positive - the fee has supported my absolute insistence towards professionalism and my clients like my policy.
    Probably the biggest benefit of my fee structure is that it has stopped the low profit margin calls.
     
  7. DFW Area Landscaper

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

    As for estimates for mowing, we always quote a price for that over the phone. I think the industry of residential lawn mowing proved long ago that free in-person estimates are not a recipe for long term, wide scale success. I have 575 clients on my schedule as of right now and there is NO WAY I would have made this number doing in person, on-site estimates for lawn mowing, whether we charged for the estimate or not. By the way, the vast majority of home owners will not pay for a lawn mowing estimate, so don't even think about it.

    My post was directed towards shrub trimming, clean-ups, tree prunings, etc. The non-recurring stuff.

    If you are quoting firm prices on that stuff, you will probably see your hourly gross from these jobs as high as $100 per man-hour and as low as $10 per man-hour. And any time you get up into the $100/man-hour range, if the client is home and they see how long it takes, they will fabricate complaints and you will have collection issues. The only exception to this is if you are bringing in something with a cost of goods sold, such as plants, top soil...whatever...these cloud the hourly gross and the client can't figure out for sure how much you're grossing per man-hour.

    My shrub man is probably the best in north Texas...he does nothing but clean-ups and shrub trimming all week long, for over 2 years, just for me...and he had experience when he started working for me. Even he will botch man-hour estimates terribly. There is just no way to look at a job like shrub trimming, flower installs, mulching, etc. and be right on the money every time. Most of the time, yes, but often there is a WAY OUT OF THE BALLPARK estimate.

    At least if you are charging hourly, and if you did meet with the client and give a man-hour estimate at the start of the job, if your shrub-man is good, he'll call you a couple hours into the job to let you know he screwed up the man-hour estimate. Then you call the client, tell them what you've done and they are almost always cool with the increased estimate mid-way through a project.

    With an hourly charge, it is always a factor of how long it takes. If you tell Mrs Jones we will trim the phontenias for $100 and it ends up taking you 7 man-hours to finish the job, you'll be lucky to get her to pay an extra $50 out of sympathy...that is, if you have the kahonas to ask for more after you've done the work.

    Later,
    DFW Area Landscaper
     
  8. Turf Professionals Inc.

    Turf Professionals Inc. LawnSite Member
    Posts: 131

    I have been in this business for about 6 years now, but I this is my first season operating my business. Needless to say, I am still learning business aspects everyday. Right now, I give free estimates. It is a good way to get my business name marketed. However, after a few seasons, I plan to charge for lawn evaluations "estimates", simply because as my company grows, my time will become more of a comodity. Not to say that my time is worth more than any one elses, but with that said the a/c man's time is not any more valuable than mine. I will probably give lawn evaluations for $24.99 my first year and see how it goes. I am not super settled on this, but this is what I will most likely do.
     
  9. GreenT

    GreenT LawnSite Fanatic
    Posts: 43,014

    DFW, if you don't mind sharing, could you tell us what rates you are using?
     
  10. bohiaa

    bohiaa LawnSite Fanatic
    Posts: 5,220

    I ran into this on a assit living complex...

    to measure it out and look at EVERYTHING walk al the frounds I woul have been there all day....

    however the customer LOVES the word FREE. It grabs out attention.

    so I always put FREE estimates on advertisement....
     

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