Low Ball Prices

F

FlashTreetop1

Location
tulsa oklahoma
At the beginning of the mayhem in nw arkansas we were qutoing very fair pricing and getting lots of work. We have been here a week and a half with one large crew and have blown through a lot of work. We still have one week of work left. The problem I have found is that on recent bids guys are doing jobs for one half or one third what the job is worth. I want to work and want my crew to keep busy, but there comes a point where it isnt even worth it. Any suggestions or reccommendations on a good way to overcome this????

Derrick Hulsey
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If it's like a price war, can you do okay without lowering your estimates?

I'm aware of a couple of companies in Portland lowering their prices near half, and they are decent outfits.

Not the best - but not hacks.

It might make more sense to get half the work at regular pay, than half the pay for twice the work.

If a company can ride-out a cheap-offers trend, they will probably come out of it with the better referrals and not run themselve ragged.

Guess it depends on how close the gap is between money coming in and the total needed for bills and income.
 
You all are both right, that is where I am at. It is slower than a wet turd sliding down a dry rock at home, so I do wanna work. I just hate to lower my prices from what is fair to what is completely unfair for me or any other quality tree service.
I saw some nice new equipment while I was up there and they had Cheap$ Cheap$ Cheap$ all over there trucks, and I dont understand that. The guys did nice work. Why would we want to cheapen what we do. We provide a quality service and our labor is one of skill. I guess I just dont think like that.
I figured up what is the bare minumum that we can work for per day and I will just go with it because like Hollenreich said,"Something is better than nothing."

Derrick Hulsey
beer.gif
 
I agree with Hollen, in an area I don't plan on returning to I would take what I could til the work ran out. In an area you are established could potentialy hurt you. I know when playing the game of beating a low competitors estimate, they remember come next time how cheap you were willing to work. I try to avoid those jobs. So if it is a matter of paying bills I say work as cheap as you have too. If you can ride it out and charge a fair amount I think you will gain better paying clients well into the future.
 
The guys who are advertising "cheap, cheap, cheap" know no other way to get business. They don't understand how to sell their service for a reasonable price. Since they can't convey the value proposition of the company they drop the price out of desperation. All those new toys probably have some serious financing costs that need to be covered.

What you could do is offer a "storm damage discount" Show the regular price on the quote then show the discount and then finally their final price. If you choose to throw something in for free make sure you show it on the invoice with the normal price then the discount to zero. When they see the invoice their should be a total without the discount and then the final price they pay. This way the client will see what the work is worth and the great deal they are getting. With the freebie they will see what it is actually worth so in the future you can charge for it.

This way you can maintain your price points but still give a break on the price.


Take a sales and marketing course. This is the biggest shortcoming for most small business owners.
 
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I know when playing the game of beating a low competitors estimate, they remember come next time how cheap you were willing to work.

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Totally true.
 
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All those new toys probably have some serious financing costs that need to be covered.

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If their credit is good that cost at this time aint too much. Most equip dealers feeling the pinch harder then we are. Some are pushing the stuff off for little more then what they paid for it, and rates is low. Wish I could find that artical about car repos, some banks aint even going after the car. They just collect what they can, not caring if it's way behind payments.
 
You will have a harder time beating people on removal jobs. Focus on Storm Damage Management.

Explain (use pictures, too!) if/ how your skills and knowledge will make their trees come out better than if they hire a cheap service that is just randomly cutting.

Explain that there are proper techniques and standards for workplace safety and pruning, and special differences for storm damage pruning, with the follow up care in the coming years. If Tulsa to NW Arkansaw is not too far, explain you plan to come back to the area for the next two years for the completion of storm damage management plans, as it is not a one time thing, providing you get the commitment from enough homeowners to have their trees taken care of properly.

this might be a week, half a week, next winter when its slow.

compete with you knowledge, not your muscle alone.
 
[ QUOTE ]
You all are both right, that is where I am at. It is slower than a wet turd sliding down a dry rock at home, so I do wanna work. I just hate to lower my prices from what is fair to what is completely unfair for me or any other quality tree service.
I saw some nice new equipment while I was up there and they had Cheap$ Cheap$ Cheap$ all over there trucks, and I dont understand that. The guys did nice work. Why would we want to cheapen what we do. We provide a quality service and our labor is one of skill. I guess I just dont think like that.
I figured up what is the bare minumum that we can work for per day and I will just go with it because like Hollenreich said,"Something is better than nothing."

Derrick Hulsey
beer.gif


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Cheap cheap cheap are from around here and man they are cheap cheap cheap. But they will also tear your yard up to get it done in time.
And no ppe at all.
I'm sorry you have to be with them, I seen them in the Houston area also, after Ike.
Sunstate tree correct?
Scotty
 
You may also want to point out that the homeowner can be liable if someone is injured on their property and not wearing proper PPE.

HR whether they're motivated to make the payments or not, the end result is the same. Cheap pricing. It's tough selling against it when cash is king but what I suggested is to not drop prices but to show the value of the work. This way the client can still see the worth of what you may be giving them at a cheaper price or for free. Otherwise they get it in their heads that it's really not worth what you were originally asking.
 
Scotty you are correct.

Humper the main thing that you have to realize in this situation is that no one planned on dropping 2 or 3 grand on treework and now they have to. So cost is going to be king no matter what. There are exceptions but this is the rule. Client xyz,"Well tree service abc said they can get all the hangers down for one thousand less than you." Me,"Yes maam, but my price also includes putting clean proper cuts on all the torn ends, and making the trees right." Client xyz,"I understand but i just care about the hangers." And it goes something like that.

I wont just get the hangers down, as dumb to some as it seems, I wont do it. Hangers and Clean cuts or I really dont want the job.

Derrick Hulsey
beer.gif
 
[ QUOTE ]
[ QUOTE ]
All those new toys probably have some serious financing costs that need to be covered.

[/ QUOTE ]

If their credit is good that cost at this time aint too much. Most equip dealers feeling the pinch harder then we are. Some are pushing the stuff off for little more then what they paid for it, and rates is low. Wish I could find that artical about car repos, some banks aint even going after the car. They just collect what they can, not caring if it's way behind payments.

[/ QUOTE ]

I always found finance charges for commercial gear was a whole different game then when doing personal stuff, like cars, appliances etc. Any business loan is going to higher in finance charges. I would think even more now, given that the risk of so many businesses may fail in the new economy.
 
Then you may want to point out to them that by not spending the extra now it will cost them much more later due to problems that can arise from improper practices. I understand that you may only do it the right way but if you want or need the business then reduce the work you will do so the price is still in line with what you feel will make you money. Then let them know you'll be in contact with them later to discuss the continued care of the trees.
 
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