When you are new to the lawn care field you tend to look for ways to quickly gain new customers. Sometimes you are willing to do this at the cost of not profiting or even potentially losing money per job. These lowball strategies tend to always fail because customers who are attracted to low prices are very difficult to service and when you try and raise your prices, they tend to look for someone else. Here is an example of a lowball strategy from the Gopher Lawn Care Business Forum, that you may or may not want to experiment with.
One lawn care business owner wrote “I’m excited for spring. I think I will have a very good start up. I have new plans and expectations. Hear me out… What is stopping me from advertising to all my neighbors and giving them REALLY nice prices, then adding $5.00 every year until I’m satisfied? Is it a bad idea to try to start customers off cheap as dirt and then slowly build up? I don’t even have to use the truck!
Think of it this way, it is low balling, but it’s also my street. It might sound evil, but I’m ready to take over my small area. If they are my neighbors, it gives them a reason to trust me. If I raise my prices and they decide not to hire me for a season, what are they gonna do? NOTHING, they wont go look for another company who charges double or triple… They will have to suffer and mow their lawn themselves **** LEAVING THE PLAYING FIELD OPEN for me to create another bid for them if I am in need of extra money…
Sound like an awesome plan?
- Low ball on my street only.
- Get many nearby customers.
- Barely use my truck.
- Start at a low $65.00/month for ALL but corner houses.
- Raise the price by $5.00 every season until I reach a profitable secure point, $65.00 /month for the houses on my street is fair game. I might even consider going down to $50.00
I already have 3 houses on my street alone and I’m getting lots of customers who live side by side to other customers, it’s all coming together!
Next season I’m dropping a few clients unless they want to pay an extra $10.00-$20.00 / month.
I figure it will take one season for most to get the prices where I want or two seasons for others. About $75.00 is what I’m looking for per month, so I’m not so far off.
Every house will be estimated like this season to see what price to put them at, but I’ll only choose a price range between $60-$75.00 a month on which they will pay. Even if it’s over $75.00 worth, I will keep it maxed at $75.00. Houses that are less than $60.00 worth will be priced lower, if they are on my street, perfect, no harm done! I will up the price the next season. It’s a strategy I would like to try.
The chances of me gaining clients is seemingly high. There are a lot of elderly do-it-yourself types, but if I can swing by and give them a reasonable price, they might change their mind. I also see neighbors having a heck of a time mowing they’re yards, so I’d like to take the hassle away from them.
I hope this interests my neighbors!”
A second lawn care business owner said “when you use price as your selling point, you tend to attract cheap customers. If you are thinking you can hook them with a low ball price the first year and raise it up and up until it’s profitable, you may find that you don’t get renewed the next year. Then a new start up lawn care business will come through your area with their own low ball strategy that plans on doing the same thing you tried to do.
Why not figure out how much you need to make per hour and bid each job accordingly? Wouldn’t it be better if you could make a profit today, tomorrow, the next day, etc all year long, instead of waiting until next year to hopefully make a profit? You can seriously burn yourself out in a year’s time if at the end of the year you worked your butt off and find you have no money to show for it. So you might want to rethink this strategy.”
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