Why it’s so important to charge fairly for your lawn maintenance business services.
Hey Clippers! Dave Tucker here to talk about the dangers of bidding low or undercharging for your services.
You can’t leave the house these days without seeing ads for “unbeatable deals,” “rock-bottom prices,” and “our biggest sale yet.” These messages are everywhere! Sometimes it’s difficult to believe that people are willing to pay even a dollar more than the cheapest possible option.
But I’m here to tell you that that’s dangerous thinking—not to mention wrong! Mercedes, Rolex, Carhartt, and even Ben & Jerry’s wouldn’t be in business if everyone picked the cheapest option every time. Most of us can name at least one area where we’re willing to spend a little extra. And that’s just as true for services, such as lawn maintenance, as it is for goods.
I’d like to tell you a story from a lawn maintenance business owner and CLIP user that always makes me laugh.
I was giving an estimate over the phone for basic lawn maintenance on a residential property. I quoted the guy $35. He replied, “The company that did it before charged me $30,” to which I asked, “What happened to that company?” He answered, “They went out of business. I think.” I hesitantly said, “Probably because they were mowing $35 lawns for $30.” He began laughing uncontrollably, and when he finally stopped, he said, “When can you start?” Don’t back down! Someone will define the top and others the bottom. Which do you want to be?
There are several things I love about this story:
- Our guy knows what he’s worth, and he didn’t budge when the potential customer questioned it. He defended his position—and it paid off!
- Our guy’s new customer immediately grasped the point about paying for value. What’s more, he was willing to pay for it.
- That final sentiment is pure gold. You don’t have to be the cheapest option!
Of course, it’s worth mentioning that it doesn’t always unfold like this. Here’s another good story from another lawn maintenance business owner.
A woman asked if we could cut her lawn, and I asked why she was getting rid of the current lawn service. She rattled off: “They’re unreliable! They show up whenever they want, never on the same day. They don’t collect grass clippings and blow them in my beds, and I don’t like how they use the weed eater to edge my sidewalk.” So I said to her, “Sure, we can do your lawn for $35.” She replied, “Can’t you do it for the $30 I was paying?” Without even thinking, I said, “Sure, we can do it for $30—but only if we can be unreliable, show up whenever we want, never collect clippings, etc.” We didn’t get the job. But sometimes you just really want to tell it like it is!
It probably felt like a bummer to lose that customer. But I’m guessing, in hindsight, our friend is better off without this customer. She wasn’t willing to pay extra for quality, which means she didn’t appreciate the value of what he had to offer. The truth is, some people just won’t. Don’t waste your time trying to placate them. Focus on the folks who are happy to pay for good work, without complaint.
The long-term cost of bidding low
Another CLIP user said it best: “The minute you start negotiating on price, the rest of your professionalism and credibility take a big hit.” If you’re a little too quick to bend on price, your customers might be quick to take advantage. They might see if they can push you to knock off another $5. Or they might question your value altogether.
Here’s another way to think about it: Imagine if our guy had said, “Sure, we’ll do $30.” It’s just $5, right?
Wrong.
Let’s say he mows this lady’s lawn 25 times that year. At $5 loss per mow, that’s $125 gone over the course of the season. Even that doesn’t seem like much. But what if he says yes to that lower price for ten customers? Suddenly, he’s looking at a $1250 loss!
Now let’s take this even further. Next year, when he raises prices, he brings most of his customers up to $40. But he can’t do that for these low-ball, $30 customers. Their new price is $35. So that’s another year’s worth of loss, another $1250. Over the course of five years, our guy will lose $6250 by giving just ten customers a $5 discount.
The math is clear, folks. Don’t bid low. Because it’ll never just be $5.
Remember, you are a lawn care professional, not a kid with a lemonade stand. You can and should charge a professional rate for a professional service!
In the end, this benefits your customers, too. Another CLIP user had this insight to offer:
The bottom line is that you can benefit your customers much better by charging enough to stay in business with a profit than by cutting the prices and giving them a small benefit for a short period of time.
In the others, if you’re charging fairly for your services, you can afford to stay in business—and keep providing those services.
Don’t forget, CLIP is packed with job costing and pricing tools to help you calculate a fair price. With CLIP on your side, you’ll always know what you’re worth. See CLIP in action by signing up for a demo >
Until next time, keep clipping!