Landscaping Pricing Strategy: How to Deal With Lowball Competition
The teenager looking to make extra money on weekends by cutting lawns is probably not the competition most landscapers are worried about. However, enough of these kids, or adults looking to add grass cutting as a side hustle or to possibly replace income during a job loss can definitely add up to a loss of revenue for a lawn maintenance company.
Landscaping companies constantly have to deal with competition that undercuts the value of their service. Landscapers have said low-ball competition is one of their main concerns along with high fuel prices, labor shortages, economic recession, and high worker costs. It’s one thing to deal with ‘Joe Grass Cutter’ who is offering to cut his neighbour’s lawn, but it’s an entirely different story when other landscapers undercut prices just to sign contracts.
Some of these companies use this as a loss leader like a large department store would. Sell a service really cheap in hopes that the customer will eventually buy a larger construction project. It’s almost like a form of marketing where they get their foot in the door through lawn maintenance and then tack on the add-ons to make a profit.
For landscapers, it’s part of the industry. But there are ways to compete with them that can benefit your business. It’s lawn maintenance after all, and landscapers offering a professional service are selling something entirely different than the guy looking to ‘cut the grass’.
Don’t get into the low ball game – find your fit
While it can be tempting to get into the same game as lowballers do, the truth is, that you aren’t offering the same service. It could be argued these customers aren’t even a fit for you, and if they are going with a lowballer service, chances are they are one step closer to doing the cutting themselves than hiring a professional service to do it for them.
Landscapers want to find customers that fit their long-term business strategy, and more often, lowball clients will be the ones not continuing with their contracts. Focus more on customers who will fit your business goals and help you scale, not ones that will be a headache year after year. Homeowner Associations (HOAs) can lead to thousands of potential customers that are willing to pay for a professional service to keep up with their agreements.
Dealing with a competitor that wants to undercut prices can be frustrating, to say the least, but chances are, you aren’t after the same clients anyway. These types of services are not going to win the HOAs, large commercial contracts, or high-end residential clients. So, rather than focusing on the anger of being undercut, use it as an opportunity to figure out your ideal client and put your marketing, sales, and crew efforts on those potential customers.
The lawn maintenance over grass cutting reminder
There is a fairly large distinction between people who care about proper lawn maintenance and those who just see it as someone cutting the grass. Lawn maintenance is
- Weekly lawn mowing
- Regular watering and weeding
- Border edging around driveways, walkways and patio areas
- Cleaning of driveways, patios, and walkways
- Pruning trees and shrubs
- Mulching leaves in the fall
Customers who want lawn maintenance are not the same as those who just want their grass cut. One way to distinguish yourself from lowballers is to remind your customers that they are getting lawn maintenance and everything that goes into it. You’re not just showing up, turning on the lawn mower and doing a pass of their grass. You’re providing a professional service that increases the health of their lawn, keeps their lawn, yard, and home looking clean, and can even help increase the value or curb appeal of the home.
Educating your customers is important so they constantly see the value they are getting from your service. Providing this educational reminder keeps you in front of your client and ensures they are always seeing the value of what you bring to their home, even when faced with the option of going with someone much cheaper.
Work on optimizing your service delivery
If you do have to get into a battle with lowballers, you still need to make sure you are turning a profit. Lowering your own costs means you have to be on the ball for every single appointment and have the best service delivery possible. Every minute you’re wasting driving, refuelling, or making unscheduled stops, is profit out of your pocket on jobs that already have slim margins.
Scheduling will become of the utmost importance to your lawn maintenance teams to ensure they are going from job to job in the faster, most efficient way possible. Routing would become very important to your business and would include:
- Grouping jobs in a close location together to reduce driving
- Mapping refuelling stops into the routes your crews take
- Finding the best routes when driving longer distances
- Tracking crews with GPS and mobile applications to reduce unscheduled stops
Lawn maintenance companies who want to take on slim-margin customers have to find every way to increase those margins on their end. That means running a tight ship and ensuring your crews are constantly working at peak efficiency.
Dig into the analytics behind your business, pricing, and crew performance
Lowballers just come with the territory in the landscaping business. From young kids looking to make extra money to competitors who think they can succeed long-term by offering discount services, low-priced competition can come in many forms. Ignoring them is an option, but using lowballers as a way to look deeper into your business is a way to succeed long-term.
With lawn maintenance software, dig into your business and make sure your pricing strategy is competitive. Are you actually turning a profit on lawn maintenance and if so, can you afford to reduce your prices and by how much to still make a profit? Software like DynaScape’s Manage360 offers in-depth analytics so you get a full view of your lawn maintenance operation.
Run reports to see your profit margins down to the customer, contract, or entire maintenance department. Keep yourself competitive by knowing exactly what you make on each job so you know if you can take on a lowballed client. With reports on your crew members, find inefficiencies in their work and address them before they become routine. With the crew tracking mobile app, ensure your crews are always moving forward and running at peak efficiency.
No one wants to get into the race with lowball competitors, but if you need to, have the backing behind you to make informed business decisions. Contact DynaScape today to see how our lawn maintenance software not only helps you against lowball competitors but also sets you up to look at your lawn maintenance delivery in a way you haven’t looked at it before.