You have probably been in this situation in the past where you are mowing a lawn care customer’s property and they come out to ask you how much it would cost to have you ——–. You eyeball the job and because you don’t know how much the materials are going to cost, you ballpark the job figure. The customer thinks for a moment about the price you just gave them and then agrees. Little do you know that you now committed yourself to that exact price, even if you told the customer it’s a ballpark figure. That customer just might get fixated on that price and may refuse to budge later if the material costs are higher than expected. Here is an example from the Gopher Lawn Care Business Forum on how such landscape project bidding can become a disaster.
A lawn care business owner wrote us about his situation. “I had a customer today ask for a quote on the spot for some random work in his yard, and I pulled $250 out of thin air as a ballpark for labor and the material costs. I said I had no idea how much the hedge trees he wanted would cost. I ended up sending him a bill for $360 and change after purchasing the two hedge trees for $60 and buying an extra $30 worth of bark mulch that he specifically asked for. He then called me to complain that I was 50% over my quote and I reminded him of the additional material costs then pointed out that the labor overage was insignificant.
He insisted that I was way over the price and that he was a nice guy, not trying to be a jerk, appreciated the quality of my work, on and on. So I finally said ok, I’d be willing to split the difference at $300. He said $275 and after some further argument I conceded. I finally got a check from him two days before the printed due date for $265!!! How should I have handled this better?”
One lawn care business owner said “There are a lot of those kinds of people out there. I have ran into similar situations and had a little talk with my dad who has owned a construction company since he was 20 years old. He had helped me through a few learning experiences.
One important thing he has taught me is when you are a business owner and someone argues with you on your final price, you NEVER lower your price to make them happy. It only kills your credibility as a business owner. By lowering your price, you just proved to them that they were right and your price was too high.
I have seen my father walk away from a finished job without pay rather than lower his price to make the complaining customer win in his quest to try to save some money. Understand that people will argue with you to save $5 just for the sake of thinking they pulled one over on you.
I had a recent issue where I had to stand my ground on and in the end I still got my full deserved pay and my credibility as a respectful business owner. Had I lowered my price to make the guy feel good, I would have looked like a fool. I Hope this sheds a little light on your situation.”
Another shared “This discussion opens up a GREAT learning opportunity of when to use purchase orders / contracts. Verbal contracts seem to often break down when there has been extensive discussion on the exact description of a project.
I know there are a lot of people out there like this, and it does stink! One way to cover any confusion is to have a written install agreement written up prior to starting the job, to make sure both parties are on the same page. Then when they try something like this, you just pull out the agreement you both signed and poof, they can’t claim they weren’t aware or didn’t agree to the specifics of the job and the price when it is right there in black and white.
Written purchase orders help clarify price and keep everything straight for you and your customer. Maybe the next time you are presenting a bid, you will consider putting it all in writing.”
In the end the lawn care business owner who had this issue, reflected on what he learned and wrote “it has definitely been a learning experience for me. Here is what I learned.
1) Never ballparking a quote on the spot again, especially when materials are involved and I’m not quite sure what they cost.
2) I’ve only ever used a contract once on a large commercial property, and I don’t really intend to use them still, since I think they kind of scare customers, but maybe I need to reconsider this.
I have only offered a credit once before, when I simply went way over my estimate. The way I estimate is by quoting them my hourly rate and an estimated number of hours to complete the job. I usually try to overestimate a bit so that the bid comes in at the bottom (I usually estimate a range of hours) or slightly below the original quote so the customer is happier. The one I went way over on was estimated at 7 hours, and I went 5 over…so I was ok with dropping the final price a bit there. At some point, you have to be accountable for estimating that poorly. Next time I will handle it differently.”