Lowering prices

Kory

Member
I have seen a lot of contractors around town have lowered their prices to "get work" I do not undertand this. This year I raised my prices and will continue to due so next year and here is why. Most contractors are still charging the same rates they did from 10-12 years ago. Yet the fallowing cost have gone up meaning we have to do a lot more volume.

Gas is 4x as much
Quick connects and other small parts are 2-3 times the cost and rising
Hoses are 2x as much
Vehicles and maintenance cost more
Chemical cost have gone up significantly
Labor costs, insurance, taxes, workers comp have all gone up
Insurance -business and vehicle have gone up
Postage for advertising has gone up

My point is everything around us has gone up in cost and will continue to rise so don't lower your prices in an effort to beat out the competition to "get work". It will only hurt you in the long run. The customer will call you next year wanting that same low rate you charged when you where desperate.

If you have any thoughts or input please post.
 
We had a customer call us from FIVE years ago. With the scope of work involved, we told her we would do the job for the 2006 rate. She nearly fell out - and didn't hire us. Unbelievable. Can't wait to hear from her again because someone butchered her nearly 3K sq ft deck. We need some sort of regulation - we're obviously not doing it well ourselves :(
 
We had a customer call us from FIVE years ago. With the scope of work involved, we told her we would do the job for the 2006 rate. She nearly fell out - and didn't hire us. Unbelievable. Can't wait to hear from her again because someone butchered her nearly 3K sq ft deck. We need some sort of regulation - we're obviously not doing it well ourselves :(

I always charged more to clean up someone elses mess. You get what you pay for.
 
Kory, You nailed it. I dont understand it either. I've been raising my rates each year a little, but have gotten so efficient I can drop them when I need to. But for the most part, I compete against guys that are half my price and still have a 35-40% closing rate.

Speaking of which, lets talk about what you charge for sealing pavers...
 
I have said this from day one, but there will always be others who will do the work for beer money. And the customers who hire them will always be there as well, the sad part is when they need a plumber or electrician they pay top dollar because they have no choice. This industry will always be looked upon as a handyman service because anyone can get into it with little or no training at little to no cost.
 
I have said this from day one, but there will always be others who will do the work for beer money. And the customers who hire them will always be there as well, the sad part is when they need a plumber or electrician they pay top dollar because they have no choice. This industry will always be looked upon as a handyman service because anyone can get into it with little or no training at little to no cost.
+100!!
We have guys pressure cleaning around St Augustine for half of what I charge. Their excuses are "I have employees to keep working" or "I do what I have to do"
There is a guy cleaning roofs who charges $200 for a small house and $250 for a large house. This is in a high end gated neighborhood.
O well we keep training new contractors at round tables
 
In the past 3yrs or so I have pretty much doubled my prices on most all cleanings. I am making two to three times what I used to and working half as much. Go figure! All I can say is, Thank God for these BB's, RT's and to the people whom I have met on here who showed me the light . They have taught me a lot about how to run my business.
 
Well said Larry!

I'm not seeing buying any new equipment or a new truck in my 1st year in business. But, by diligently seeking a solid customer base and learning along the way, I honestly think that business will continue to grow.

We've established an awesome relationship with the customers that we do have, and I'm not really all that concerned about losing them to "hacks".

It's fine by me that the customers that we didn't get can hire them. And then the next guy that bids lower can do it, because quality just doesn't matter... as does any kind of loyalty.
 
In the past 3yrs or so I have pretty much doubled my prices on most all cleanings. I am making two to three times what I used to and working half as much. Go figure! All I can say is, Thank God for these BB's, RT's and to the people whom I have met on here who showed me the light . They have taught me a lot about how to run my business.

This is post is totally ruining your "lowballer larry" image....im just saying lol
 
This is post is totally ruining your "lowballer larry" image....im just saying lol
Your absolutely right big J. What am I thinking? I will lower my prices back down starting Monday. LOL... My Bad!
 
Nick I agree with you! But my post is refering to guy that have been around and also the painters, landscapers and everything else that wants to pressure wash. I lost a 75k sq ft driveway and sidewalk contract to a painting company they only charged $1600 because they where slow. I am almost done with roof cleaning as the risk is getting greater than the reward.


Jon I can not get more than .75-.85 a sq here in Hillsborough for pavers. Not when guys are spraying tranny fluid on pavers for .35 a sq. It's just like roof cleaning here in Hillsborough good luck trying to get over .12 a sq on any roof.

Pinch a penny just announced a price increase again!
 
Times are really hard right now.

Anyone can wash a house with bleach and soap and water.Until this becomes a licensed,State licensed occupation there will always be guys washing for beer money so to speak.

I have always wondered why we are so dead set on training our competition.Joe blow comes on here and he says he's from canada(Who knows where he is but there aren't many from Canad so we all jump right in to help him)and asks a question and someone answers it.Well come to find out the guy is a landscaper in your town looking to get a price on a job you bid on.Who's to blame for the lowballers?

The price thing is all relative.What's a good price is up to the guy asking for it.I think I'm worth more than the next guy so I ask for more.Well I have to convince the customer that it's in their best interest to give me more of their hard earned money for the same job somehow.

I would also say this look at your pricing if no one is paying the price you think you are worth than it's time to find something else to do.

Have you priced yourself out of your market?

Have you grown your business and equipment to the point that it costs more than the area will support?

I don't know just throwing things out there.
 
Roof cleaning prices around here have really dropped as Mike Barrett mentioned earlier in this thread. I have lost 11 of the last 14 bids to two different newer companies (one drives an hour from Jacksonville and is unlicensed in this county). I had to drop my last bid to $295 from $375 to get it as the other guys bid $200. I hate not being as busy now as I was the last 4 months as my new employee (roof cleaner) really wants more work. The residential market has really slowed down and there are two local companies that have been around for a while that are advertising on Craigslist for $95 for houses up to 2500 s.f. I am sticking to my higher residential prices (except for an occasional roof) and maintain a 50% closing ratio. You can always tell when it gets slow as $99 house wash signs show up on the street corners.
 
These conversations are a large part of why the networks and RT's exist. It's funny to see guys saying it helped them next to others who say it hurts. I agree it sucks to give ammo to a guy that's just going to shoot wild, but how many actually become valid competition and help make tha market better for all of us?? Some do some don't and the lowballer will just do it the wrong way for $100, either way the lowballer can not get big enough or support himself well enough to last.

The funniest thing to me is Celeste comment and I agree with her that we need regulation. How blind can a government body be that needs money and ignores trades that are asking, almost begging for regulation to strengthen their price base and industry appearance? Here and a million other places necessary regulation to stop customer damage and strengthen a trade are needed.

Unfortunately with the prize of good regulation comes eventually over regulation and the people in the cleaning industry as a whole would still have to band together and fight the over-regulation.
In the end like many others here I feel that owners have to find common ground to join together even after the bad taste most of the orgs have left.


Kory the people you are seeing lower their price to keep guys working are churning a broken wheel. They will burn out or retire from lack of incentive to continue such an effort. When times get tough we raise our prices too, find ways to seek customers others are not and push our services harder.

Here is an excerpt about companies surviving the great depression:
Cited from: http://ravitlichtenberg.typepad.com/home/2008/09/in-his-recent-newsletter-courtesy-of-techcrunch-jason-calacanis-of-mahalo-shares-honest-and-moving-insights-into-the-impac.html
'What did the companies who succeeded do right? They were able to tap basic human needs relevant to the times. They were able to understand the ecosystem within which businesses could operate at the time and to provide solutions that made sense to people. This, I propose, is exactly what startups should focus on as they plan to wade their way through the turbulent waters of the coming years. This is how they will survive.
Let's also put things in order: operational efficiency and cost cutting are baseline for every company today. Unless it has a trust-fund founder behind it who doesn't mind throwing millions of dollars down the drain, no company will survive without hitting these hard. Lean, mean, relevance and focus are key to survival.
But to go beyond, startups will need to demonstrate that they understand what customers today want and need--and deliver to these needs. At the core, people always seek to overcome helplessness, powerlessness, and hopelessness. They seek control over their lives. At times of affluence, people may be more flexible and have a range. But at times of crisis, all three are play and the need for control speaks louder than anything else. How can your company address these in your category? How can you empower your customers? How can you help them feel in control of their lives--lives that are likely to change even more in the coming 2-3 years?'


I suggest that anyone read the whole article. We have found ways to make our customers feel better about spending money to maintain their home and prevent future costs in these uncertain times. Keep your heads up brothers as there is always an answer. I just hope the answer doesn't become that we all buy lawnmowers to replace our pressure washers from low-balling each other out to keep ourselves busy while broke!!
 
Half of my work, I get great prices, probably half I am doing for less than a couple years ago. 90% of all of it, I make a good to great profit, but on that half that I am making less, it kills me to see pricing where it is.

Pricing around here is sick, good one day and bad the next, depends who's bidding. Some markets I am pulling out of because pricing. There's not to many big $$$$ jobs around, except many that I have had for years

I just landed over 800 units, I was 20% higher than 3 other companies over 40% of one of those companies, they took us because of references, years in biz and large crews, going to be a nice project

Sometimes I just feel like I should pull a price out of a hat, crazy
 
Sell yourself, sell your knowlege, get off your ass and sell. What ever it is you are doing right do more of it, even if you dont like it The slower it gets the more selling time you have.
Everyone crying about the low baller, everyone on this page has lowballed one time or other. Some for good reason, we all have left money on the table
I not just speaking to you I included myself.
If someone wants it done right, and willing to pay for it thats my customer.
on roof cleaning if I dont win it I am not lowering my prices. If I lose a bid on price alone, thats fine with me. If lose a bid do to myself hopefully I have learned from it.

Service Contracts I want to know what I am doing next week, next month, next year,
I dont like waiting for the phone to ring, I like waiting to the Post man to bring
 
I think I am gong to start advertising on craigslist as a pressure washing QC guy. I will love to go behind these low balling companies and QC their work. I bet I could get a bunch of call backs and that way I can start taking them out one by one. Matter of fact I am going to place that add right now.
 
I think I am gong to start advertising on craigslist as a pressure washing QC guy. I will love to go behind these low balling companies and QC their work. I bet I could get a bunch of call backs and that way I can start taking them out one by one. Matter of fact I am going to place that add right now.


I put this at the bottom of my Craigslist ad
"The bitterness of poor quality remains long after low pricing is forgotten"

I am changing it to the top of the page.
 
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