How to stand firm on your prices.

There will always be a certain group of lawn care customers out there who think your estimate price is the price they can start bargaining with you at. At times you may want a job more so than others and because of that, you may be willing to be a little more flexible on the price. However there are going to be other times when you are pretty busy and don’t need to get every job you bid on. Here is an example of how to hold firm on your prices from the Gopher Lawn Care Business Forum. It may help you in dealing with customers who want to haggle.

One lawn care business owner wrote “I wanted to try and promote a new service just to see what kind of response I would get so I ran an ad last Friday for post hole digging and amazingly enough, I got a pile of inquiries from it. With a little research on my part I found I have very little competition for post hole digging. There is a local fence company that offers it and rental stores have the equipment to do it. But after checking online, through the phone books, I found the one company that digs post holes is three times my rate. The way I look at it, if I am grossing $90 an hour plus and making, in my case about 50% profit before depreciation and taxes, then I am fine with the price I am charging.

Now I know we all have clients that try to beat us up a little on pricing, sometimes it’s a game, I guess today I don’t want to play. Three prospects wrote back to my reply saying they needed a better price. This really got me mad, so I went out for a walk to cool down before I wrote them back with the following:

“Thank you for your reply to my estimate. I am already the cheapest in the city for this service, in fact I believe there is only one company in the city that offers it. The equipment we use to perform this job is over $28,000, so in short, no I can not and will not offer a better price.

You can try a rental unit (hand held or tow) a mini excavator like ours can be rented for $450.00 a day plus $150.00 transportation from various rental companies in the area I if you’d like. Before you attempt this, I should warn you that I have done some research and am shocked at the number of personal injuries and back issues that happen by people using the rental units. It would seem mainly due to a lack of experience.”

With that email. I wanted to get my point across without being too strong.  From that, I received two email replies both with about the same wording. They wrote:

“I understand, and would like to hire you. Let’s schedule a day and time when you are available next , thanks xxxxxx or call me at xxx-xxxx”

So I think there are times when we really have to stand our ground and not roll on pricing. I may be in a little different situation than most in that if I don’t get new jobs it’s not the end of the world, we have lots to do. I was just looking for something different to do with the excavators I have.

I think a lot of people we deal with have the mindset we are in the car sales business. For them, the price is not the price but just a starting point for negotiations. In my case I know my costs, I know the competition, and what they are charging. Finally my price is my price. Although yesterday was an office day due to the weather, there are times when certain emails in response to my quote seem to rub me the wrong way, so I was thinking yesterday take a direct approach as you don’t need the business and see what happens.

I have had people in the past respond they will simply rent the equipment, then they contact me a few days later saying they were not able to perform the work. My response for them is always thanks for contacting us again and sorry to hear rocks have hindered your ability to drill your holes. Our rates for backhoes to dig the rock out is $85.00 per hour or a mini excavator starts at $105.00 per hour. We do not haul rocks away. However we do have a trailer dump service which can haul 14,000 pounds per load for $225.00.

When customers get themselves in a mess, quite often they try to make their problem ours. Watch for this as they will sneak this in. It is not our problem and if you allow a client to make it your problem, you are headed for disaster.

I have also had clients accept quotes over ours from other companies. Only to call us after they were through, as the results were poor at best. More often than not, it costs more money to fix an issue then to do it right the first time.

In short, you can take this approach if you know what your costs are, who your competition is, and what their rates are.”

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The GopherHaul Lawn Care Business Show Episode Guide.
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