Why you're wrong to not help with pricing questions.

Discussion in 'Business Operations' started by jonnyz37, Dec 12, 2018.

  1. jonnyz37

    jonnyz37 LawnSite Senior Member
    Messages: 461

    It seems like for every post asking for pricing help...there are just as many complaints about how these people should figure it out on their own. Im going to tell you established guys why your not only wrong..but your hurting yourself taking that position.
    There are two complaints that most every company has in our industry. First is that we cant keep or find good workers. While i wont address this issue, i will say that if you paid more than $10 per hour....you might have more luck:) But onto the second complaint. And im sure we have all thought it at one time or another. It's "these dam low ballers are killing the industry". Well let me ask you a question. How can a lot of these new guys / low ballers learn to charge more if you dont want to help them on pricing? They think they can make money at $25 per lawn. But they dont understand all of their costs. And a lot of you want to take an elitist position of why should we help them figure out what to charge? Well, because they dont understand all the costs involved plus they dont understand charging what the market can bear. Instead of charging as much as clients are willing to pay, they only think about how their truck is paid off and they have a push mower...so $25 for a 45 minute lawn is good money. Boys let me tell you something. If you want to improve the pricing of our industry, you need to be helping your competition with pricing. You need to tell them what your charging. The point is so that your market is full of companies charging nearly the same for mowing or whatever. Let the customers choose their providers based on experience, personality, sales pitch or whatever...but not on pricing. The market will not shrink if we are all charging a good price for our services. So by having 5 different companies charging 5 different prices, we are leaving money on the table. And if you think that low ballers arent affecting you, your dead wrong. Once people have used a low baller, they think that is what the market pricing for that service should be. So lets say the $25 guy does a terrible job and gets fired. Now that client calls you and you give them a $40 price. Even though the previous guy was bad, that client thinks $25 is what the service should cost. So your $40 will sound very high to them. Even if your justified, they dont know that.
    I took a class a year ago on how to install water features. When i got back to town i contacted another contractor installing the same features and asked him for help. He invited me to come take a look at his operation and he would be happy to explain his pricing. He told me that he would much rather compete with me on a level pricing field instead of losing business to me because i dont understand what i should be charging. He understood this concept. I encourage you guys to do the same.
    In my area i always try to talk to my "competition" and get into pricing at some point. Im trying to get them to see that we should all be charging what the market will bear instead of what is our cost and then add on some profit. I want to race to the top of the pricing model. New guys are setting the bar low and they are hurting themselves as well as you and me. So lets start helping them on pricing. Stop with this "you got to know your costs" crap to make yourself feel smart or enlightened. Costs are important, but you know what is more important? Making as much as we can without hurting the market we serve. Lets charge more and do what is needed to make that happen. Part of that equation is helping other guys to charge more.
    Good luck boys.
     
  2. JFGLN

    JFGLN LawnSite Bronze Member
    Messages: 1,498

  3. hal

    hal LawnSite Bronze Member
    from Georgia
    Messages: 1,349

    Give a man a price quote you help him for a day, teach a man how to quote and you help him for a life time.
     
  4. SilverPine

    SilverPine LawnSite Member
    Messages: 4


    This guy gets it.
     
  5. OP
    OP
    jonnyz37

    jonnyz37 LawnSite Senior Member
    Messages: 461

    I am helping them for life...find out how high you can charge and do that. That is the future pricing help you are describing. I do not follow the "know your cost " strategy for pricing. My costs may be much lower than yours, does that mean i should charge much less than you? I mean i can do that. But what about we all charge as much as the market will bear / support? Doesnt that model put more money in everyone's pocket? Because i do
     
  6. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 18,566

    Take a business class.

    Do you know they can't?

    Because they're not educated on operating a business.

    I do? Says who? Because you say so?

    Why?

    Do they own the same size house and have the same size family as I do? Do they have the same financial requirements? Do they have the exact same equipment and trucks that I do? Do they have the same customers with the same pricing that I do? I have multiple crews out, so I have more overhead, but that can be a reason for charging more per hour or less because I can spread it out over more crews...

    Completely naive to think there will never be a handful or more of grass monkeys out there charging next to nothing.

    That's kind of humorous.

    First sensible thing you've said.

    I have a totally different scenario for you. One if not the biggest contractors in my area is also the biggest lowballer. 40-50% lower on a regular basis. They then make it up on extras. Do you really think he doesn't know his costs?
     
    Cam15, gcbailey, hal and 3 others like this.
  7. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 18,566

    No, hal gets it.
     
  8. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 18,566

    How long have you been in business? How many employees do you have?
     
  9. OP
    OP
    jonnyz37

    jonnyz37 LawnSite Senior Member
    Messages: 461

    sure there is a sub folder for pricing. Im addressing the guys that want to insult / not help the guys looking for help. Yes, they should ask pricing questions in the correct place. So it seems to me we can either help them with pricing or encourage them to go to the correct area for pricing. Im saying lets stop saying "know your costs". Because that doesnt help our industry. That doesnt stop the low baller with a paid for piece of crap truck and push mower. Because to him, he has no to little costs. So again, $25 sounds great to him.
     
  10. Mark Oomkes

    Mark Oomkes LawnSite Fanatic
    Messages: 18,566

    Let me ask this...do you think there is a forum for doctors, lawyers, plumbers, electricians, builders where new guys go and ask:

    How much should I charge for an Xray?

    How much should I charge per hour for a DUI court case?

    How much should I charge to plumb a 2,000 square foot house?

    How much should I charge to wire a 3,000 square foot house?

    How much should I charge to frame a 5,000 square foot house?
     

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