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When to lower rates???

Discussion in 'Lawn Mowing' started by Envy Lawn Service, Mar 19, 2003.

  1. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    OK here goes, I am 0 for 12 of my last 12 competition bids.

    So, just when do you begin to get conserned? As a solo operator, at what point must you admit your rates are too high? When do you decide maybe you need to make an adjustment for the economy, scrub operations, ect...?

    I never get the majority of my bids, nor do I mind not getting some of them. Most of the time I eliminate lots of headaches by missing out on the price shoppers.

    But seeing how some of these were big $ bids, 0 for 12 is beginning to seem like a pretty steep loss ratio....

    LAWNS AND MOWER LawnSite Bronze Member
    Messages: 1,129

    One way to address this, is to ask yourself "How hungry am I?" I take it most of these are commercial account bids. They will price shop big time. You might want to consider targeting high-end residentials. Best of luck!!

    PS When are we doing lunch???
  3. IBGreen

    IBGreen LawnSite Senior Member
    Messages: 726

    Don't lower, yet.
  4. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Messages: 4,739

    I just did a spring cleanup today for $50/hr (by the hour not by the job), and I normally shoot for $60/hr for mowing so I am hurting for money I guess. I still will shoot for $50+ per hour mowing.
  5. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087

    Well, I'm getting pretty hungry. So we need to do lunch soon! I was up your way again the other day. Things are looking green up that way.

    Yeah, all of these are commercial bids. I want to have more presence in that market this year. Ideally, I'd like to have a lot of those high-end residentials. But you know they are not as plentiful down here as they are up your way.

    I was hoping to pick up more high-end residential off of the commercial accounts. The Doctor's house, the Banker's house, the Pharmicist's house, and so on and so forth.

    Honestly, these lost bids are just adding insult to injury from those contracts I passed on because I couldn't accept the contract dates. Sometimes when placing bids on big $ jobs it's easy to get your hopes up only to have them crushed.

    I think I am more impatient and disappointed than worried or starving so to speak. March activity has been far below normal and I'm a bit jealous of those guys who have already cut a blade or two of grass, did spring cleanups, installed landscaping, installed a little mulch or made an application or two.

    I think in my case, a slow March is due to several things. I had an above average winter and completed the "spring" cleanups while doing storm cleanups. A slower economy. Procrastination/penny pinching on the part of the customer. Plus, I have imposed annual agreements on all current customers.
  6. troblandscape

    troblandscape Guest
    Messages: 0

    Your overhead,... what it costs you to operate your business hourly, + plus what ever you think is worth, your hourly rate to do a job is your, Bid..... Why would you ever think about lowering your price? If you are thinking you might need to lower you price you might as wall get out of the business???? Don't lower your price, if you find that people are giving bids to a half *** company in your area move on, your location is BEAT!!! Or become a super salesman who can sell your service as the best, most reliable, business that will benefit the customer more than any other company will provide...............Wow this trade is being over taken by the guy who is just making some extra cash on the side.... WE MUST TAKE A STAND AND EDUCATE THE CUSTOMER ABOUT THE PROPER WAY TO PROVIDE A LEGITIMATE LANDSCAPE MAINTENANCE SERVICE!!!!
  7. TotalCareSolutions

    TotalCareSolutions LawnSite Senior Member
    Messages: 518

    Our hopes have been crushed with some Commercial bids:

    Sm Apt Complex...nope
    Chain of Banks, had a contact, apparently now I dont??
    3 drug stores? seemed very possitive, lost it
    Gas stations (8) wanted $35 a piece! We walked
    Auto parts stores (5) went w/ scrubs! Beer money guys
    Self Storage...havent heard
    Real Estate Agents...stiffed us last year & actually are calling
    us back! Are these people really that flaky.

    Currently working on getting back previous Res/Comm. Im subbing out all cleanup work and focusing on sales,sales,sales
  8. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Messages: 11,087


    I can see where you are coming from there. EDUCATING the consumer is very important and being able to sell yourself/your company is important as well.

    But that's only part of the big picture. Also, you'll not hear the whining and crying about scrubs from me either. Why? Because in my opinion there is an equal amount of scrubs who have been in business 10 years & those who have been in business 10 minutes. Also there is the scrub out there with the $75,000 rig who looks like a pro but is operating on borrowed money and the workmanship looks like that of a 10 year old.

    The problem is not these people. The problem lays in a market that is seeking out such ****. It's those people that in spite of your efforts to educate, still are willing to accept sub-standard service for a sub-standard price.

    I have no problem with a person trying to earn a living or extra money at this and I could really care less if he's willing to try to do so for minimum wage either. Also, I can't blame a customer for trying to save a buck. Who am I to say anything if they are readily willing to sacrifice quality and reliability for the difference in cost. These operators and customers are made for each other and deserve each other accordingly.

    I have no problem with that at all. What I hate is a situation like this one.....

    I meet with the prospect, get all the particulars about what they want done, how often ect...ect... Then I take time to measure, number crunch, type up a proposal based on what they told me...

    In this case, mowing, edging, blowing lot and weekly, full fert/pest program...yada yada yada.

    I submit the proposal at $X per service x times a year split into 12 monthly installments.

    Then I find out the contract was awarded to a guy who's been in business over 10 years for 1/2 the price a visit, done every other week, plus fert/pest apps applied free (probably because he has no pesticide license and can't legally charge).

    What the heck is that all about? If they were going to go with that type of service, why not just tell me? I would have gladly moved on and used that time on another location.

    Plus this guy is supposed to be totally legit and insured. But at those rates there is simply no way he can afford to pay taxes or pay for the insurance he advertises he carries. He just simply can't charge that, pay out like that and still have bring-home-income too.
  9. Turf Dancer

    Turf Dancer LawnSite Senior Member
    Messages: 681

    Drop and Eat now !

    I would be raising my rates big if I tried to get $60 an hour.

    Hell Plumbers don't even charge that here !
    If you can get $35 an hour you are considered a thief around here !
    I have been bidding commercials around here for $45 and am having a little luck but not alot I have gotten 2 of 3 it looks like so far !
    The Landscapers here try to get $50 to 55 an hour and even they have trouble getting that !

    I am not a Landscaper nor will I be anytime soon due to very difficult licensing here in Oregon!
  10. Darryl G

    Darryl G Inactive
    Messages: 9,500

    Envy - I would defintely be concerned if I was 0 for 12. Are you sure it's your rates that are the problem? Are you coming on too strong? Bashing the competition? Coming across as hard to work with? Is your contract balanced, rather than being primarily to your advantage? Are you cleaning behind your ears before your meetings, LOL.

    IMO, these types of things have a greater impact on landing a job than price. Granted, I'm 90% residential, which is a different ball game, but I land at least 50% of my maintenace bids, and am 5 for 5 on clean-up bids for one time customers so far this spring, and my prices are not cheap.

    Do you have a close friend or associate you can take to meetings with you to critique your sales presentation and proof your contracts? In my former life, we would always send a team of two for important bid meetings so they could kick eachother under the table if the other started saying something stupid or could be viewed negatively by the customer.

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