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Is it possible? Customers turned off by LOW price?

Discussion in 'Lawn Mowing' started by Precision Lawns, Apr 6, 2006.

  1. Precision Lawns

    Precision Lawns LawnSite Senior Member
    Messages: 283

    There's this really ritzy neighborhood that we really want to get into. HUGE homes in the $1-2 million range on 1/4 acre lots. Since the houses are so big, they take up most of the lots so the mowing is minimal. Right now there's one company that does most of the lawns in there and they charge $50-60/cut. And they do a crappy job - the lawns just look sloppy. In reality, these lawns are NOT worth that much - they'd take no time to cut and they're tiny. They are what we would charge our minimum price for (but oh, the prestige to be in this subdivision!)

    There's no reason for there to be just one company in there (it's not like there's an HOA regulating the mowing), but they just got in first. The homeowners don't like the work that LCO does, and we have given out several quotes in that subdivision. The homeowners are always VERY interested in our presentation, what we offer, etc. But as soon as we quote them a price ($28-30 - our minimum is $28), they completely lose interest.

    Could we be UNDER-pricing ourselves? We're giving them a very fair price, as these lawns are NOT worth more than $30 (according to the current market rate). The only reason the LCO in there is charging $60 is because the homeowners are millionaires, but we like to treat all our customers equally and not charge more just because someone can afford more. And we would definitely do a better job.

    We're thinking of raising the price we quote just slightly, to $35. I don't like doing that, but it's likely these customers will also be extra-picky, so it's probably a justifiable increase. We're just wondering if maybe they're so used to paying more than they should, that they think that a lower price means lower quality? So maybe if we raise it slightly, they'll bite.

    Anyone encountered homeowners that aren't willing to pay a fair price on their lawn because they'd rather pay more?

    HOOLIE LawnSite Gold Member
    Messages: 3,981

    I at least am suspicious of anything that seems "too low" Regardless of what you think is a fair price the bar has been set at $55-$60. So coming in at half that people will naturally wonder what's going on there.

    I used to know a guy, he opened an auto repair shop, offered $9.95 oil changes...hardly any takers. A friend pointed out he might be TOO cheap, so he upped it to $19.95 and people showed up in droves.
  3. jameson

    jameson LawnSite Fanatic
    from PNW
    Messages: 7,383

    Hoolie brings up a good point. Anytime I see a business with a name like *****-FOR-LESS or Affordable ***** (fill in the blanks: brakes, lawns, tires, monkeys etc.); I pass on by.

    I have a great mechanic that helps out with our work vehicles, is he the cheapest? not by a long shot. However his quality of work is excellent; and he himself is an honest and reptuable guy. I have doubts that *****-FOR-LESS will give me excellent, honest and reputable service.

    There is something to that ole saying "You get what you pay for". Sometimes more is more.

  4. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    Why would you want to charge less then the market price?????? If you can do the same job better then why would you offer it cheaper knowing that they already pay $50 for sloppy work.

    Up your price and make more money doing 50% less work.

    TURF DOCTOR LawnSite Silver Member
    Messages: 2,138

    Yea why less,that would make you a lowballer we have one on here anyway.
  6. AintNoFun

    AintNoFun LawnSite Bronze Member
    Messages: 1,807

    i have a few family members that are millionaires and alway buy the most expensive. you could show them 2 of the identical same trees and if one is $175 and the other is $325 they are gonna buy the $325 just cuz it costs more it MUST be better, even though they are the same..
  7. Precision Lawns

    Precision Lawns LawnSite Senior Member
    Messages: 283

    That's NOT the market price. The same lawn in ANY other neighborhood in the area (and it's a nice, high income area) would be $30 (actually, many companies would do it for $25, but our minimum is $28). If you view "the market" as the area, and not just the one subdivision, our price is right on, if not slightly high.

    The company in there is price gouging, plain and simple, because the customers can afford it. I guarantee they can't be charging those rates for the same lawns in other subdivisions in the area because the market won't support it. I don't view quoting a fair market price as lowballing, but apparently the homeowners in this subdivision don't realize they're paying way too much for the area. However, since we can't seem to convince them that they're overpaying for their crappy service, we seem to have no choice but to up our price at least some if we want to get in there. I just don't feel right charging $60 for ten minutes of work, so we're trying to find the happy medium in between.

    TURF DOCTOR LawnSite Silver Member
    Messages: 2,138

    I know what you are saying, but fuel went up here 22 cents today roughly 2.80 a gallon.
  9. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,281

    If they are getting $60.00 per cut WHY WOULD YOU LEAVE SO MUCH MONEY ON THE TABLE?!!!!

    If they are getting $60.00 a price like $48.00 will do the trick just fine....I can't understand why you would do it for half when a dollar or two will win you the job??????????:dizzy:
  10. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

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