What does a dead guy have to do with Lawn Care and Landscaping?
Well, that’s not just any body – that body is your pricing strategy. Your pricing strategy is riddled with holes, and bleeding profits all over the grass.
The problem is – you don’t even know he’s dead! You’re too busy in the other room, with your head buried in quotes and estimates.
Today, we’re going to put a spotlight on the most common pricing mistakes in the lawn care and landscaping industry.
This will repair your pricing strategy and bring your profits back to life:
Mistake #1 – They don’t know how much their services cost
Most lawn care and landscaping pros have no idea how much it costs to provide their services. These costs include:
- Drive time
- Fuel and Maintenance
- Costs per labor hour (time on job x employee wages)
Quick Fix: Figure out your operational costs. Find out your average time per job, and you’ll be able to price with 100% accuracy.
Want to figure out your optimal prices in under 10 minutes? Download this FREE Pricing tool now and start making higher profits!
Mistake #2 – They price too low
Most owners fall into this trap.
When they are surrounded by cheap competitors, they think: “I want to sell more work, so I have to sell my work for as cheap, or cheaper than the other guy.”
DEAD. WRONG. Do not fall into the bottomless “price war” pit. You need to focus on bringing your clients the best value, not the lowest price.
Quick Fix: Know your “break even” numbers. Make sure you price your services for profit first.
Do not feel guilty about charging more for your services. You are worth it.
When you raise your prices the right way, you will keep more clients and bring in more profit.
Higher prices also tend to attract more high-quality clients. So, while the cheap guys are fighting over scraps and bones, you get to dine on premium rib eye.
Mistake #3 – They offer too many discounts
- Senior discounts
- New Client discounts
- Military/Vet discounts
- Long-term Client discounts
- Discounts for Spring Rush, Fall Cleanups, etc.
Instead of adding value to your services, discounts “leech away” your profits. Most of your profit margins are already fairly thin, so discounts are more likely to eat into your bank account without providing long-term profits.
It’s not uncommon to see lawn companies “discount” themselves out of business.
Quick Fix: Add value to your services. Instead of discounts, give away an extra service as part of a package – “Bonus Edging” or “Free 1-time Fertilizer Treatment.”
This will give your clients a better experience, and it makes it easier to upsell them in the future.
Another option is to provide coupons instead of discounts. Because coupons are physical, they feel like have a “real world” value. Coupons are a great idea for your Direct Mail or Door Hanger pieces.
Mistake #4 – They copy the competition
It’s a good idea to keep an eye on the competition, but…
…most lawn and landscapers spend too much time stalking the other guys. They sell the same services, for the same price, and sometimes they even use the same advertisements.
Don’t copy your competitor’s pricing. You don’t have the same equipment, the same crews, or even the same clients.
Copying is a surefire way to get your prices all wrong. It will make it 10 times harder to make money.
Quick Fix: Instead, track down your ideal clients. Find out what they are willing to pay, and build your services to match that.
When you do that, you’ll be able to market and sell more services to better clients. Before you know it, your competition will be copying YOU.
Mistake #5 – They offer the same “blanket” price to everyone
You aren’t lazy, but…
…after a 10-hour day, working out in the field or managing your crews, everyone gets tired.
When you have twin mountains – stacks of quotes – waiting on your desk, it can start to affect your pricing. Anything above X square feet becomes this much, anything below X sq. ft. becomes that much.
Quick Fix: Do you want your services to price themselves?
Service Autopilot (scheduling software for the Lawn Care and Landscaping industry) has the perfect tool for you.
Mistake #6 – They don’t use expert pricing psychology to win more clients
Here’s a secret you should know: most people don’t buy services based on logic.
Instead, they will buy your services based on Perceived Value. There are a number of tricks you can use to increase your perceived value (and, therefore, sell more work at better prices).
Most of these techniques revolve around:
- Your customer experience
- Your pricing
For example, do you charge $35 when you should charge $34.95?
For a very deep dive into this subject, I highly recommend Nick Kolenda’s “Pricing Psychology Strategies” blog.
Or, if you would prefer a book, here’s a quick list:
More than setting pricing, you can use psychology to close deals with “sales triggers.”
Mistake #7 – They don’t test their pricing
Think of your business as a mower:
Your profits are the grass, just waiting to be cut.
…and your prices are the blades.
Most owners never sharpen these blades. They’ll play around with all the gadgets and gizmos, adjust the seat height, maybe even throw some paint on the hood.
But they NEVER test the one tool that is actually closest to the money.
Quick Fix: How do you actually test your pricing?
Use it to keep track of small groups of clients you are testing price changes on (you can do this easily with Service Autopilot’s software, too).
Next, start testing new prices and pricing structures on small groups of clients.
- Start with the “lower value” clients who you don’t really need to survive.
- Listen to their objections. Their responses will show you the best way to change your prices in the future.
The more you test, the more you know. The more you know, the more power you have over your market, and your growth.
Patrick Hoffman is the lead marketing writer for Service Autopilot. He writes about growing healthier Service Businesses - primarily for the Lawn Care, Landscaping, and Cleaning Industries. When he's not writing, he's probably reading: books on marketing, self-improvement, or science fiction. Contact Patrick: email@example.com