Leveraging lowball competition

Competition is inevitable. But what do you do when you’re up against a company whose price is just so low you can’t compete?

Joe Floyd Sr., owner of Impact Landscaping & Irrigation, in Jupiter, Florida, and Josh Newberry, owner of Chop’s Turf Management in Monmouth, Illinois, say they both have to deal with lowball competitors, which was one of the top concerns according to Lawn & Landscape’s 2020 State of the Industry report, but lowballers can come in all shapes and sizes.

FACING FIERCE COMPETITION.

Newberry works a full-time job in addition to operating his landscaping company. Being from a small town, he says that a handful of landscapers are in constant competition with one another.

“There are probably only three or four commercial lawn care companies that we compete with,” he says. “The majority of the lawn care done around here is the one guy, with one or two mowers. That’s $25 or under for yards.”

Newberry says that while he doesn’t worry too much about this kind of competition, it can be frustrating at times.

“I can’t knock it,” he says. “When I was a kid, I rode around on my mower with my trailer and that’s how I started. It doesn’t hurt me. I’m at a number of yards that I’m comfortable with and I’m not upset that people are doing that. But I also know that we’re paying for insurance and taxes and everything else and those guys are just throwing the money in their pocket and moving on.”

Due to his type of clientele, the lowballers Floyd encounters look a bit different.

“We don’t tend to do individual residences, we tend to do big HOAs,” Floyd says. “Once you get in on a big HOA that has 1,000 homes, someone coming in to bid a job like that has to be prepared.”

Floyd says that most of his work is won through bidding processes. While he isn’t contending with guys who have mowers in the back of their trucks randomly finding lawns to mow, Floyd says that other companies intentionally submit lowball bids to try and win the work.

“We’ve got work with some of the bigger developers in South Florida, so naturally they want to get the work,” he says. “We’ll get some of the bigger guys who come in and try to lowball some stuff to try and get the work. Some of their numbers are crazy.”

Floyd notes that the joke is on them, because bidding at such a low price doesn’t allow for a nice net profit.

“It turns out they get the job and then find out they didn’t make any money. It turns out not to be worth it for them,” he says.

Newberry says that lowball competitors are unavoidable, and in a market like his, they even have their place in the industry.

“There’s a lot of people on fixed incomes…and those guys have their little niche in the people that don’t care what it looks like and just don’t want to get a call from the city about an overgrown lawn,” he says.

CLEANING UP THE MESS.

Though Floyd and Newberry have both lost work to lowballers, they say their customers almost always come back.

Floyd says that he’s gotten plenty of calls about re-doing work done by someone who outbid him.

“There’s been times…that when it’s all said and done the president of the company, or whoever’s in charge, comes in and looks and says, ‘We’re not happy with this. Get a hold of Impact and get Joe Floyd over here to fix it,’” he says.

Floyd says that this is nothing new, and when he was first starting out, some developers would hire landscape architects to do the bare minimum, and then bring him in to push a project over the finish line.

Newberry says he lost three customers at the beginning of the year to cheaper competition.

“This was the first year I had anybody say, ‘Hey, we’re going to be doing something different.’ All three of those yards that did that to me have all come back,” he says. “One called and said, ‘He doesn’t string trim nice or take care of the nooks and crannies that you did.’”

Newberry says when those customers came back on board, he had to spend extra time getting their yards back in order.

“We had to go back in on most of them and do an initial clean-up to get the yard back straightened up, and then get back into our normal mowing cycle,” he says.

Newberry says his customers realized quickly that cheaper isn’t always better.

“The quality is obvious,” he says.

“This was the first year I had anybody say, ‘Hey, we’re going to be doing something different.’ All three of those yards that did that to me have all come back. One called and said, ‘He doesn’t string trim nice or take care of the nooks and crannies that you did.’” Josh Newberry, owner, Chop’s Turf Management

PERFECTING YOUR PRICING.

In terms of pricing, Newberry says quality speaks for itself and the quality of his work allows him to charge more.

“What we’re known for is high quality,” he says. “Our services really drive our pricing and we’re able to price ourselves a little bit higher. People are willing to pay it. We’ve really been trying to push the market up and show people what we can do versus the $20 lawn mow.”

Going into this year, Newberry says he actually raised prices.

“We had done an increase on costs for all our mowing properties this year,” he says. “We’ve evolved our company and set up the full LLC. We also changed our direction a bit to gear toward more commercial, so we had to increase pricing a little.”

But the economy still plays a factor in what Newberry will charge for a job.

“We’re in a small market. Monmouth is a town of 10,000 people,” he says. “We’re in a medium- to low-income economy and that really drives our pricing. We fairly price for teachers, elderly people and some people we know. We know that they’re on a fixed income, or that the teachers around here just don’t make a lot of money, so we try to give them a fair deal.”

Despite pricing competitively, Newberry says there’s still plenty of people who just aren’t interested in improving their lawns.

“Out of the 50 yards we have, I’d say five are actually interested in making their lawn better,” Newberry says.

In the South Florida market, Floyd says he finds himself about average with the competition.

“We’re competitive with our pricing. We’ve had our pricing pretty much the same for quite some time,” he says. “We’ll adjust with the market and what materials have sold for…but we’ve been pretty consistent all along.”

Floyd says he’s been able to grow Impact by having great relationships with his clients.

“The reason I think we get so many projects is because, from the top down, our employees truly care and we provide top-quality materials from our supplier,” he says. “And there’s just a lot of positivity. We get along with our customers so well that they understand our pricing and know we’re fair about how we do it.”

By keeping their prices competitive, Floyd says his company has still been able to grow in despite the hardships the COVID-19 pandemic caused.

“We bid so much different work. Generally, our contractors want us on the job,” he says. “Through the pandemic, we’ve continued hiring people because we kept getting other jobs.”