Many landscape contractors say the competition in their area has grown tremendously and has led to the emergence of pricing wars. They also report that new people are jumping into the field – many unlicensed and uncertified – and are undercutting businesses that have been around for years.
“When the economy turned, we definitely found contractors from other fields who thought it’d be an easy moneymaker to buy a mower and throw it in the back of their pickup truck,” says Eric Tarr, owner of Eden Landscaping in Langhorne, Pa. Though some worry the price war will hurt their bottom line, most report that established customer loyalty and top quality work is keeping them on top of the game.
In Moodus, Conn., Evan Groom, co-owner of Groom Landscape & Tree Service, has definitely seen pricing, become ultra-competitive. “More and more I see new guys with cheap equipment calling themselves landscapers and offering pricing that is undercutting all of us full-time guys making a living,” he says. “I actually lost an account that was pretty low-paying to start with to a guy on a homeowner-type lawn tractor. He must be making about $5 an hour mowing that lawn.”
Mark Burgess, owner of Mark’s Lawn Care in Mandeville, La., a company that does 90 percent residential maintenance work and 10 percent commercial, adds that every spring it gets worse, with more one-man operations emerging in his area. “I think the economy is making it worse than ever before,” he says. “People need to make money fast and they think it looks like an easy job, so they go out and try to do it.”
Quality Counts
Though he’s certainly seen the competition swell, Groom, like many others, says he hasn’t changed his pricing. Instead, he’s focused on continuing to offer top quality work. “I hope my efforts are noticed by my customers and their neighbors, and that they understand you get what you pay for,” he says.
It’s been the same for Dan McDonald, owner of Bone’s Yard Care Solutions in Denver, N.C., a company that does 90 percent maintenance work for a split mix of residential and commercial customers. He’s actually picked up some new jobs after clients received poor quality work from companies that were offering rock bottom pricing to make a quick buck.
Landscape contractors agree that retaining clients in a low pricing environment has come down to good quality work and top-notch service. Tarr, who has been in business for 42 years, says that his level of knowledge and expertise has made a big difference. “I have a lot more answers than the ‘blow-and-go’ guys,” he says, “and customers appreciate that.”
Burgess has seen trust and win out when it comes to price. “I do my yards pretty much the same day and same time every week because I run my routes the same,” he says. “If I’m a day late – maybe because of the weather – I have people checking on me to see if I’m sick or something because they’re so used to that dependability. I think that wins out over a low price. It’s the trust factor that a dependable business can offer.”
To keep that momentum going, contractors say they’ll continue to work on building client relationships and loyalty. Tarr says that as owner/operator of his business, he makes a point to be on-site as often as he can. “And if I don’t see my clients face-to-face, then I’ll talk to them on the phone on a semi-regular basis,” he says. “It’s important to not only do the job well, but to be a good businessman and build a good rapport with your customers.”
Burgess says he’s always talking to his clients, too. “I definitely keep in touch with them on a regular basis – some at least once a month, others every week,” he says. “I never let it get to a point where I haven’t talked to one of my customers in over a month.”
Some Give and Take
While many have been successful at maintaining current prices, they say that raising prices right now is a challenge. McDonald says this is especially the case with homeowners, who he says are “willing to play the game.” “They know there are people out there who will do it for a lot less, and they’ll use that to negotiate,” he says.
In many areas the commercial clients are also aware of the fierce competition out there, and as a result, aren’t willing to pay more than they already do. Burgess says he recently tried to raise his price on a $40,000 commercial account. “They wouldn’t budge,” he says. “They told me that if I really wanted that price, that they may need to go out to bid. I didn’t want to risk losing the account so I agreed to hold my prices and I got another year contract signed.” Among his residential clients, Burgess says he hasn’t raised prices in three years. But he’s been happy about staying firm on existing prices and has no plans to lower them.
Groom has also become more flexible and this year began offering payment plans for some of his larger projects. He believes he’ll need to continue to do so in the next few years, as his clients continue to curb their spending. “I do not charge interest if things are paid in a reasonable amount of time and mostly only offer this opportunity to existing clients that I know will pay,” he says. “My customers have appreciated my understanding and allowing them to pay over a few months or more.”
It’s a win-win situation, Groom says. It allows him to keep the ongoing work and also keep his clients happy. “If I didn’t offer this, they would have found someone who did – or a company that accepts credit cards, which I don’t,” he says. “As long as I can receive payment for my out-of-pocket costs when the job is done, I can wait for the profits to come in.”
There’s no question that the current state of the market has helped pricing wars thrive, but most feel fortunate that their quality work and service has allowed them to hold steady. Though it can be frustrating, Groom tries to keep a positive attitude.
“There will always be competitive pricing and low-ball guys out there,” he says, “but I choose to believe that quality and professionalism will always win out over a low pricing battle.” SOI
The author is a freelance writer based in Royersford, Pa.
