1. Maintaining Company Culture During Stressful Times

    How do you maintain a positive company culture during a time of social distancing, economic uncertainty, and health worries? Click here to learn more.

    Dismiss Notice

Pricing yourself out of the riff raff

Discussion in 'Business Operations' started by CrystalCreek, Aug 28, 2018.

  1. wjjones

    wjjones LawnSite Senior Member
    Messages: 568

    If everyone would keep their prices for services up we could avoid the scabs. We need a standard to have for everyone across the board. I have seen some pretty bad ones around my way to. Their standard service mowing, edging, trimming, and blowing for $29 that is whats killing our industry. And thats for up to 1 acre.
     
  2. Joe Shooner

    Joe Shooner LawnSite Senior Member
    Messages: 264

    I feel that a lot of this comes down to the customer. In terms of total number of customers, I bet a vast majority of people who buy "lawn and landscape" services want limited services (like weekly mowing/blowing or just fert/weed control) - and they are mostly looking for a low price for a relatively basic service.

    On the other hand, what we are talking about here is walking away from that whole segment of the market in favor of focusing on the clients who are willing to pay quite a bit more, but who are going to expect more in return. This is a pretty sound strategy and most of us would see much better margins on a project-by-project basis if we were willing to turn down more marginal clients. The challenge is maintaining a volume of work that fits this profile, because if you reduce the number of clients you work for, you are by default increasing your reliance on each of those clients you choose to work for.
     
    wjjones likes this.
  3. Bunton Guy

    Bunton Guy LawnSite Silver Member
    Messages: 2,426

    The down side is some of the lowballers are doing just as good of a job as us for half what we charge. Don't get me wrong there is plenty of crappy companies out there.

    We are constantly working on upping our pricing to a more profitable level. What I have noticed as a down side of this is the customers are getting more nit picky with the service to make sure they get their monies worth. I'm not saying that we use to get by with lower quality work but if we missed handpicking a weed, in the past that wouldn't warrant a phone call. But now on some of our more expensive properties that is a phone call and possible termination if it happens to many times in a row.

    Example:
    Our customer pays $225 per month for complete maintenance of their property situated on 20K square feet. 8K square feet of lawn avg.

    The neighbor on same size lot is paying $155 per month for same services very similar size lot. The neighbors know what each other are paying and the properties look identically cared for. Who is going to feel taken advantage of?

    Client approached me on WHY they are paying more? I calmly said that it cost us more to do business; all of our employees must pass background checks, drug screening & periodic ongoing education courses. We also pay for liability insurance, pesticide licencing, workers comp etc.... Check with the neighbor to make sure their company is doing the same. I bet their company is not operating by the books.
     
    wjjones likes this.
  4. Todd73

    Todd73 LawnSite Silver Member
    Male, from Florida
    Messages: 2,586

    I do the old “Starting at ______” because like you said, there are too many variables. For mowing, is there extra trimming or edging? Do they want hedges included? Do they want fert? Weed spraying? On washing there are even more up sells. But, I will say my starting at price is the legit starting at price and I have plenty of customers at that base price. I hate that loss leader BS pricing people use to get the phone to ring.

    Circuit City used loss leader advertising when I worked for them eons ago and it drove me nuts. People would come in looking for the $99 TV or the $199 washing machine. You can’t switch them off to something higher priced, you make $1.25 commission and your margin would be like -40%. Then, to top that off, you’d get bitched at by the manager for selling that POS. It felt so good to quit the day the district manager was there and believe me, I did a happy dance when they went out of business.
     
    hort101 and MowDaddy like this.
  5. TCSGuy

    TCSGuy LawnSite Member
    Messages: 88

    While I am not in the lawn or landscape business, I am in the irrigation & landscape lighting business. We are not cheap and we do not give free “repair estimates”. We get many people who get mad that we do not do that. We have a higher hourly rate and of course a markup on parts. Very rarely do I get a person telling me that they can get XYZ part st lowes or Depot for XX.XX less. And if they do, I ask them if lowes or Depot will Warranty it like we will. Same with landscape lighting.

    The best is when Winterizations come around. We ALWAYS have trunk slammers and hacks who think that their little compressor will do the job. They charge like $30.00 and of course have all kinds of Winterizations. Usually when I’m doing a customers Winterization, I’ll have a neighbor or 2 come ask me to do theirs and the price. I kindly tell them that they need to make an appointment just like their neighbor did. Then they balk st the price and usually say that so in so will do it for XX.XX. I always tell them that they should call them then, because I won’t do it that cheap.

    My thought process is that if I want to lose money or work for free, I can do that from my own house.
     
  6. GRANTSKI

    GRANTSKI LawnSite Silver Member
    Messages: 2,121

    I was looking at a similar landscaping company site & the front header explains how a homeowner should expect to spend 20% of their homes value on landscaping (not that exact wording) but basically prepares the customer upfront to spend in the 10s of thousands.
    Also noticed the higher my mowing minimum gets - the better the customers overall. @$30-35 range most of those customers are looking for a bargain or really can’t afford to pay more. (Disabled / etc)
     
    Todd73 and TCSGuy like this.
  7. wjjones

    wjjones LawnSite Senior Member
    Messages: 568

    We might have all been low ballers when we first got started.
     
  8. Mitty87

    Mitty87 LawnSite Silver Member
    Messages: 2,517

    We are only our second year in business and already have the highest price irrigation service call in my town of 100k at $90 for first hour, which doesn't seem that high but we get a lot of calls still. We started at $50/man hour for the landscaping work and are now at $60, but generally beat our numbers and end up at $70-80.

    I am shocked because after reading on here and seeing prices on here of you guys down in the states are generally higher than most guys up here, even with the exchange rate.

    I interact with a lot of companies around here and most are at the $40-45/man hour mark and almost all of them pay employees as subcontractors.

    We made friends with one of the larger lawn mowing companies in town with 5 crews and went to their house for the first time. They have been in business for 10 years and we started talking about pricing. They were shocked when we told them our prices and basically said we just want to make an honest living. After 10 years they don't really have nice equipment or vehicles and looks like they just get by. We don't get pensions and running a business is a lot of stress. I don't see the point in running a business to make $30k a year. Anytime I get talking with another landscaper around her I always urge them to consider raising prices and that they will be surprised at how much work they will still land.
     
    knox gsl and hort101 like this.
  9. LawnVeteran

    LawnVeteran LawnSite Senior Member
    Messages: 287

    Always have a mentor. I feel bad sometimes because I feel like I’m gouging people even though they pay with a smile on their face and always love my work.
     
    DaveOhio and Ben Bowen like this.
  10. Mitty87

    Mitty87 LawnSite Silver Member
    Messages: 2,517

    Sometimes I get an accepted quote and start doing the job, thinking to myself, gettinga guilty feeling when I realize it's going a lot better than I thought and I'm grossing$100/hr. Other landscapers have told me I'm over priced. A run down house where I live is 375k CAD and gas at over $6/gallon, I don't have a fancy government pension for 5k a month (which is what my mom and dad get), I remember all of this and don't feel guilty anymore. People can see how hard we work and almost nobody complains about the price because they are glad they don't have to do it.
     
    That Guy Gary, wishfull and hort101 like this.

Share This Page