why price cutters

Discussion in 'Lawn Mowing' started by Charles, May 5, 2000.

  1. Charles

    Charles Moderator Staff Member
    Messages: 11,077

    YOu stay in business long enough you are going to lose customers. I have never lost any business to competition. I have lost business to the fact that people die, go into nursing homes, move away, management changes hands are the main reasons.Through no fault of your own. You have customers and you go up on them each year to keep up with inflation or the fact that you didn't get your asking price in the first place. If you dont go up to keep up with inflation you are making less money each year. That is a fact. Lawn equipment is going up at a higher rate than most goods it seems.<br>So you have been in this business 10 plus years like some of us one here. You have to go out and replace the business you have been losing. Lets say that for a 1/2 acre yard you have been getting 45$ avg per customer. Now you go to bid on 1/2 acre yards and most of the bids run from 20$ to 35$. There you are you are effected in the worst way by the competition. I recently bided on 2 jobs. 1/2 acre at least with ditches. One had a fenced in back yard that would have to be fenced. I bid 40. But i was told the lowest bids were 30$. I was SOL. Sometimes you may lose a job and not really know why until you think long and hard about it. This guy payed me on time everytime and sometimes in advance. Until I went up on him 5$. Then he was very hard to find and got 5 payments behind. I quit after he paid up. But customers play this game well. When you go up they will make it very hard for you to work for them. Then they go find the lowest price again and the cycle starts all over again.
  2. Gus

    Gus LawnSite Member
    Messages: 75

    I go through this all the time. I`m usually the highest bid and I get as many of those jobs as ones where I`m the only guy. Here in Michigan there`s as many hacks as there are good companies and I can`t tell you the number of times people have complained to me about how the last guy they hired didn`t do this or that. Invariably I ask what they were paying<br>and its a price that`s way too low. At worst these loballers are nothing but an annoyance;<br>they certainly haven`t hurt my business.<p>----------<br>gus....<br>
  3. Charles

    Charles Moderator Staff Member
    Messages: 11,077

    I have been to michigan many times Gus. Comparing the north to the south is like comparing apples to oranges. Homer I believe will back me up on this. The south is a totally different culture than the north. All you northerners migrating down here havnet change the culture much yet. Not that it should lol
  4. I hope more customers and contractors move<br>south. That means less traffic congestion up here in the rust belt.<p>
  5. Charles

    Charles Moderator Staff Member
    Messages: 11,077

    Well they definitly are moving south Lawrence. my neighborhood has turned into a nursing home for retired northerners lol(well almost). Theyare trying to stop more industry or commercial development from moving in so they can keep us as their slaves
  6. gene gls

    gene gls LawnSite Gold Member
    Messages: 3,214

    Hi Charles: I am looking forward to moving south also, South Carolina. You can do my grass because I will be fishing. My business is not coming with me. I am tired of seven days a week for nine months of the year and the BS that goes with trying to find help.
  7. HOMER

    HOMER LawnSite Gold Member
    Messages: 3,183

    I'll back you on that one Charles. My main problem where I'm at is with (sorry if this offends anyone) the military customers, or retired military. They are so accustomed to having things done right now!!!!!!!! We southern boys don't cotton to being rushed and told what to do by military folks! I a'int never been in the Army so I can't relate. We live in such a beautiful little City that a large percentage of out population is now retired military. Most of the snowbirds keep going south to Fl. to retire, can't blame them either, when it hits 40 here it's way too cold for me!<p>I am in a situation where I need to either go up on some of my accounts or give them up. What is a tactful way to approach a customer when your asking for a raise. So far I haven't done this but I made some costly mistakes last year on a couple of my bids. The problem with one of them is it's a package deal, I cut the customers home and other commercial property, they are alright as far as price go's but the biggest one I under bid by at least $50.00 per month. Any suggestions?<p>Homer
  8. Charles

    Charles Moderator Staff Member
    Messages: 11,077

    Gene, I guess we got more room for one more northerner lol and we got a beautiful lake. 85 degrees here yesterday. <br>Homer, I WAS cutting for a retired military man. Went by his home during a drought period one day and his yard looked dead to me. I mean he wants it cut the EXACT day you are suppose to be there. But I didn't want to spend his money on dead grass. Trying to help him out. Well he called me up that evening and screamed at me I DONT care if it is dead cut the damn stuff anyway lol. Nobody and I mean nobody screams at me so that was the end of that.<br>Homer, I go up a few $ per year per cut on most of my customers. But $50, you just have to use a good sales technique and tell them that you are losing too much money because you underbid. Just be honest and if you lose them you lose them. better than going in a 50$ month whole

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