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Price is not reasonable

Discussion in 'Business Fundamentals' started by Jpocket, Dec 21, 2005.

  1. Jpocket

    Jpocket Senior Member
    Messages: 302

    I just got a payment from a customer, with a letter stating that she is no longer interested in my snow plowing services because the price is not reasonable. I may be alittle higher than others but I think my prices are fair.

    I charged $3o for the drive way, $25 for the walks, and $20 for salting for a total of $75.00. Mind you this was a single push 5"

    This is average driveway, with not that much walkway about 60feet.

    I' m thinking to myself how much lower can I go with the pricing? I really don't care if she wants my service or not, im just wondering what you guys are charging for similar service.
  2. SnoFarmer

    SnoFarmer PlowSite Fanatic
    from N,E. MN
    Messages: 7,921

    To high not really at all.
    I Start at $35 no matter how small to start with and go up from there.
    $20 to $35 for a sidewalk no matter how small. and up$$
    Salt at #50lb your cost times 3. so, if you get bagged salt at $3.50 for #50.and your already there.
    If you have make a trip there to salt then a minn of $35 . who do you think you can get to come out to your house at all times of the day and night and get good service, this has a price too.payup so are your prices out of line not for around here it may vary in your area.
  3. Jpocket

    Jpocket Senior Member
    Messages: 302

    I think they never had a snow service before. They are lawn customers, and I guess they are used to the $27 per visit lawnservice. I dunno, I mean at the price of snow equipment I don't charge any less than that.

    The kicker is that I told her what I would charge when she called to sign up.
  4. gpin

    gpin Senior Member
    Messages: 390

    Don't worry about it. Some people are born to argue. Your price is reasonable and if you are reliable, you will have more than enough business.
  5. Pete7

    Pete7 Member
    Messages: 55

    $27 for a lawnservice?? How big a lawn is that? That does not seem like a lot of money to me. But keep in mind I am not a landscaper, and I cut my own lawn.
  6. Jpocket

    Jpocket Senior Member
    Messages: 302

    $30 Is the average lawn cut around here, and it's the average in alot of places.

    Most Lawn companies work on volume, for $27 were only there for 20 minuets, Belive me $27 dollars adds up after 10 -15 lawns a day.
  7. somm

    somm Senior Member
    Messages: 200

    When they balk at the pricing, always lead them into "comparative" thinking with comparative questions:

    "unreasonable pricing...(pause 2-3 seconds for thoughfulness)... compared to(pause 2-3 seconds for thoughfulness).... the excuses you'll receive from the lower-bid contractor who's route is so spread out they arrive hours later than expected, or that for what they are charging they can't afford ongoing vehicle or equipment maintenance, let alone next month's insurance ?

    Some customers just need their minds opened a little, and some can't see the "forest from the trees" and don't deserve to be your customers.
    If any customer's thinking doesn't come around, spend time prospecting better customers for yourself, friend.

    Best Regards
  8. NEAL

    NEAL Member
    Messages: 98

    Unless all your customers are saying your prices are too high I wouldn't worry about it. At least she paid you for the work you did. Some people are just going to be like that and you never really know why. Maybe the customer just cant afford it like she thought she could. If she found someone else that was cheaper there is not much else you can do except walk away. You could call her and tell her you value her as a customer and if she wants a lower price you can plow the drive for her at $30.00 and she can shovel the walk and throw down her own salt.
  9. SLSNursery

    SLSNursery PlowSite.com Veteran
    Messages: 140

    That is a good message

    There is no reason your price should be high or low. Those numbers are either the customer's perceived value (pulled out of the sky) or some number they have stuck in their mind from another quote. They should be based on what you have calculated as your rates for your profit margin, wages, etc.

    If you are out $75 in revenue, and I'll assume that you have 26 customers for this example, each with 3 services (Plow, Shovel, Salt), now you have 25 customers, that at some point you can charge $1 more for each service, and you'll get home 15 minutes earlier, with the same amount of money in your pocket.

    In the snow plowing end of business, I'm not sure there is a point to educating customers that are not really pumping money into your bottom line. I'm all for keeping customers in tune with expenses, gas prices, freight costs, insurance, etc. in landscaping or nursery sales (what we do when it isn't snowing). However, your time would be better spent on gaining a new customer at a the rate you want without justification or argument. I'm not sure exactly where in the northeast you live, but at $27 per lawn cut, they probably felt as though they were getting a bargain. From your point of view you should be looking at how much customers contribute to your revenue stream, and in turn how much profit you make from them, rather than how they feel about the costs. This will teach you quickly about which customers are really contributing to the bottom line. My guess is about 80% of your profit, or even real revenue comes from 20% of your customers. If it doesn't, it will. Spend time on the the other 80% of your customers if they are qualified to get into the 20% bracket.
  10. fms

    fms Senior Member
    from Maine
    Messages: 209

    She probably heard that her sister's friend's neighbor had her drive and walks done for $15. It dawned on her that you were screwing her with your ABSURD pricing!
    I'd thank her for her business and let her know to call you if she runs into problems with her new vendor.
  11. Jpocket

    Jpocket Senior Member
    Messages: 302

    It just bothers me that, we invest so much money and time into our equipment, and are expected to work it for next to nothing.

    Some times I think people think we just get a kick out of working.
  12. Yaz

    Yaz PlowSite.com Addict
    from NH
    Messages: 1,061

    Actually I get a kick out of working, well plow that is. lol

    But never enough to do it for free.....
  13. bobshm

    bobshm Junior Member
    Messages: 17

    I had a new landscape customer this season, a wealthy woman with 2 homes, etc. Her previous landscape guy who she loved had gone out of business. Every time I gave her a bill she would cry and complain that my price was too high and she might have to get someone else. I finally said OK- get someone else. Later in the season I spoke with some other landscape guys who had worked for her over the past 10 years and they experienced the same thing- price too high, outrageous, etc. My point is this- there are plenty of other fish in the sea. Also, I have to ask, where in the NE do you charge $27 per cut with a Lazer ? I'm in southern NH, and the rate here is $45.
  14. SnowIsGood

    SnowIsGood Junior Member
    from eastern
    Messages: 14

    Price too high?

    Those are the kind of customers that you have to let go. Let her go find if the service is better for cheaper prices. You get what you pay for. I predict you will receive a phone call from her in the future for service request. No one can afford to keep giving away services at no/low profit.
  15. drplow

    drplow Senior Member
    Messages: 174

    tell her that you will do half the job for one third less money. and for her to shut the hell up about your pricing.
  16. cincy snowdog

    cincy snowdog Senior Member
    Messages: 262

    jpocket your better off,if you get a complaint at five inches ,what would she say for an ice storm? how about ten inches two passes?i found that if the customer is willing to give you a deposit ,keep that customer.if you went to your lawyer he wants a retainer ,correct? you are a valuable service.get a" retainer" tell them it for salt inventory. and to reserve your service. the more questions the customer ask when bidding the higher the chance of a complaint.your pricing sounds customer friendly so i wouldnt drop price .good luck.
  17. THE BOSS 1975

    THE BOSS 1975 Senior Member
    Messages: 120

    i tell customers i can starve just fine by myself without their help....
    I too start out minimum is 35.00 explain to them this covers your insurance driver and fuel to get there..The cheaper guy is going to run if something happens the guy that has insurance is going to get it fixed and still have a happy customer...Just my opinion
  18. The Cowboy

    The Cowboy Junior Member
    Messages: 20

    Tell her you'll knock off 5 bucks if she'll pay cash.
  19. Brian Young

    Brian Young PlowSite Veteran
    Messages: 3,382

    It's amazing how prices differ from region to region. Where I live you would never get anywhere near those prices. Averega driveway (2 car wide and 30ft long) maybe on a good day $20.00, and sidewalks forget it! I tried to get some sidewalks last season they were about 60' long maybe and I wanted an extra $18.00 they about had a heart attack so its not even worth it for me to even try to get these incoperated jobs. I just tell them I don't get out of the truck. And if they ask why not I just tell them people are just too cheap, they ask well how much and I give them a price and they say well thanks for stopping.
  20. JTW

    JTW Senior Member
    Messages: 137

    You wouldn't get those prices around here either.