Undercutting the competition still profitable for me

Discussion in 'Lawn Mowing' started by chevyman1, May 28, 2004.

  1. chevyman1

    chevyman1 LawnSite Senior Member
    Messages: 852

    I have a cul-de-sac circle with 6 homes on it. 5 of which are mowed my LCO's, I have 2, another guy with 2, and the last with 1. I took away the 1 last night. I asked the guy what he thought of my quality and he liked it a lot, but was happy with his guy too. I told him I can do him better since I already come this way for 2 others, asked him what he's paying ($35) and I told him I'd do it for $30 and got the account. I'm going to do the same to the other two at the end of the year. Does this make me a bad guy, or very very smart because my costs of travel are lowered and I can pass that along to the customer. Doing this part time this year and full time next year is a great advantage too. Everything will be totally paid for and I'll have some in reserve for next year, so I'm at a serious advantage there too...what do you guys think?
  2. Mickhippy

    Mickhippy LawnSite Platinum Member
    Messages: 4,275

    I'd be really pi55ed off if you did it to me! How would you feel if he did it to you?

    Business wise, Good! Morally, Shocking!

  3. crawdad

    crawdad LawnSite Bronze Member
    Messages: 1,938

    I think you'll be upset next year, as a full timer, when a part timer takes them away for 25 bucks. He'll be able to do that, because he gets benefits at his "real" job, so his expences are lower.
  4. Fuzzster

    Fuzzster LawnSite Member
    from KY
    Messages: 12

    I think thats pretty shitty to be honest. If the customer was shopping for someone, that would be different. But to undercut just to get the job, especially since he said he was happy with the guy he had, thats just messed up in my book. I'm sure you wouldnt like it done to you.
  5. all degree

    all degree LawnSite Senior Member
    Messages: 344

    I do not see anything wrong with that. IF the customer approaches you. What I would have done, and what you should do, is offer to do it at the same price. If he likes your work better he will hire you.

    I got 20% of my accounts this way. It was b/c of the work that I do and more importantly the customers did not like the guys that were doing their lawns or the days the were doing them.

    Biggest mistake people make in this business is being a know it all and not listening to the customer. Lots of guys treat their customers like babies and intimidate them. I picked up a lot of lawns because they wanted to be done on Wens instead of Monday and their LCO would not change them.

    BUT I would charge the same price that way the customer really wants your work and the other LCO can not get mad at you. They were dropped for quality not price.
  6. pcnservices

    pcnservices LawnSite Senior Member
    Messages: 614

    I agree. Why would you want to undercut your competition? If you want to be a strong competitor to your competition your service fee should be market related.
    There are two ways of outbidding yourself - either too low or too high. Lowballing wont help you in the long run. You're the guy that's gonna come short eventually.
  7. Randy Scott

    Randy Scott LawnSite Bronze Member
    Messages: 1,915

    What goes around comes around. If you're comfortable with that strategy, go for it.
  8. Runner

    Runner LawnSite Fanatic
    Messages: 13,497

    It's really a simple term; You're just lowering the standards. You're lowering them for yourself, for your competitor, for me, and all the other lco's out there. If youy did that to me, I would undercut you so bad just to spite you, that you couldn't afford to leave your garage in the morning...and I would tell the customer that THAT is what I'm doing. Not doing it just to "gain more work by unethical practices."
    On the other hand, while this "customer" dropped his regular lco for 5 bucks, he'll drop you for less than that, now, because he has now been taught that "price rules", and there is always someone out there will to do it for cheaper. We have people running all OVER this town cutting for free, and they are carrying 2 Lazers on their trailer doing it. No biggy. I've been in this business for 20 years, and I'll be in it another 20. That's more than I can say for the majority of what I see out there everyday.
    Gr grass n Hi tides likes this.
  9. Littleriver1

    Littleriver1 LawnSite Senior Member
    Messages: 811

    If you have competing bids and you know his pricing strategy and you can still make a proffit and bid lower, then go for it. If you beg the customer for information on price, then cut your price, then you are an sob. I would laugh if the customer lied and was currently paying $40. To me, it would make more sence to suck up to your comp. figure him out then screw him out of all his customers. How do you know for sure he is not a member here and knows your company and reads this? There are a lot of things I could say about my competition, but they lurk here.

  10. BCSteel

    BCSteel LawnSite Senior Member
    Messages: 876

    All the more reason to have good customer relations. If you talk to your customers and they see you as a "friend", five bucks a cut isnt going to sway them and will only make the other guy look bad.

    But hey, its your business so do it like you want. Just because I wouldn't doesn't make it wrong.

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