Would you give a 5% price reduction to renew a contract?

Discussion in 'Business Operations' started by Toro 455, Jan 21, 2013.

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  1. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Messages: 3,465

    For what they charge you for a drink,the meal should be free.
  2. Will P.C.

    Will P.C. LawnSite Senior Member
    Messages: 966


    Sounds like they hired an efficiency expert who sent this generic letter out to possibly hundreds of suppliers, vendors, and service companies.

    It is just a quick swoop to save as much money as possible and a common tactic. They know many places will say yes without blinking an eye. If their have been no problems and you are fair on your prices, I doubt they would spend the time and effort to look for a new company if you declined.
  3. slowleak1

    slowleak1 LawnSite Senior Member
    Messages: 532

    The "profesional" letter said it first...they are analizing all their clients. That right there would have made me go up on my price
  4. Toro 455

    Toro 455 LawnSite Member
    Messages: 238

    I considered this might be a pfishing expedition too, if they hadn't just been bought out by some holding company. So I thought I'd better go along at least for now.

    They have to be only hurting themselves with this. More of an insult to me than an injury.

    Being a solo operator I can't save any money by doing 5% less work. Might save myself a little time but no money.
    The only way to save money is on out-of-pocket expenses like fertilizer and herbicides. The one place you don't want to skimp.
  5. slowleak1

    slowleak1 LawnSite Senior Member
    Messages: 532

    Time IS money.
  6. MJB

    MJB LawnSite Silver Member
    from Wa
    Messages: 2,869

    Sure no problem, I wont be raising my price this year by 5%. There is your 5% reduction.
    Otherwise I take it off my services somewhere, if they complain tell em thats what they get for less.
  7. Dragon Rider

    Dragon Rider LawnSite Member
    Messages: 18

    never wrong to reduce price as long as three is a reduction in service somehwere, "What part of our service do you feel you don"t need." Put the ball back in their court. Also need to consider, were you making or losing money on the job.
  8. Marek

    Marek LawnSite Bronze Member
    Messages: 1,388

    So lets say the job wasnt a big money maker. Are they giving you ANY extras ? If not then where do you make up the discount you gave them and better yet do you really think your cost are going to go down? Your insurance and taxes are going to go up a lot this year and into next. You can do work for free for anyone.
  9. branchoutshrub

    branchoutshrub LawnSite Member
    Messages: 118

    We wouldn't reduce the price by 5%. Other industries are raising prices weekly to keep up with their costs. If your company is doing quality work, no need to reduce price.
  10. weaver

    weaver LawnSite Bronze Member
    Messages: 1,393

    Not being nosy, but what is the final cost you'll be out for giving the 5% break? $50 $100 bucks? Just make it back up somewhere else with them...
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