Surprising pricing

[fivestartrees]

Hi All,
I have been meaning to start this thread all year. I just had my 4th instance where I was completely dumbfounded by tree work prices my landscape maintenance clients have paid to have tree work done. By dumbfounded I mean 1/2 to 1/4 of what I would consider a fair and reasonable price. I worked for Davey 16 years ago and prices I'm hearing are way less than what Davey would have got back then as we saw all the pricing and had to hit a daily $ target. I'm really honestly shocked. Am I crazy or is tree work pricing lower now than it was 20 years ago?

 

[blades]

It's a lot like snow plowing. beer money, no over head. When the going gets tough you start getting calls about xyz not showing ect.

 

[ATH]

I don't think there is a market-wide depression. There will always be low-ballers. There are usually always clients looking for quality.

Also...I've seen some some Davey pricing, and yeah, it is not too hard to get lower than that!

 

[ClimberBusinessman]

Hi All,
I have been meaning to start this thread all year. I just had my 4th instance where I was completely dumbfounded by tree work prices my landscape maintenance clients have paid to have tree work done. By dumbfounded I mean 1/2 to 1/4 of what I would consider a fair and reasonable price. I worked for Davey 16 years ago and prices I'm hearing are way less than what Davey would have got back then as we saw all the pricing and had to hit a daily $ target. I'm really honestly shocked. Am I crazy or is tree work pricing lower now than it was 20 years ago?

Maybe what is happening is there are a bunch of people who don't have worker's compensation insurance on their employees. Worker's comp is the biggest insurance expense by far, costing anywhere from 10.5% to 30% or more of payroll on employees, so that might account for the price difference if they are illegally paying cash under the table. Check your competitors on the state website and see if they have coverage. If they don't, anonymously report them using the whisleblower form, and they will get hit with fines so big it might put them out of business (like $1,000 per week and a half period without coverage). Even if it doesn't put them out of business, they will get worker's comp insurance, and you'll be competing on a level playing field. Unless you're in Texas, worker's comp is a big requirement with stiff penalties. A few states allow you to skip worker's comp if you have only a few employees (like three or fewer), but in any situation, you're still liable for the employee's injury.

 

[ZinTrees]

I went to look at a job a few days ago, had a large silver maple, rotted out, 5ft diameter, leaning over HV lines, across the street and almost over the neighbors house, I was going to bid close to 10K, lady had another bid for $1500

"I got a guy who can do it cheaper" happens daily no matter where you live, just gotta deal with it

 

[ClimberBusinessman]

I went to look at a job a few days ago, had a large silver maple, rotted out, 5ft diameter, leaning over HV lines, across the street and almost over the neighbors house, I was going to bid close to 10K, lady had another bid for $1500

"I got a guy who can do it cheaper" happens daily no matter where you live, just gotta deal with it

You gotta be careful. Unless it's a written estimate, there's always the chance the customer is making up the price to try to trick you into lowering yours. I'd even be a bit suspicious of a very low written quote as that could be forged as well.
However, there always will be low-ballers who either undervalue their time, or don't have the right insurance, lack proper equipment, or simply accidentally underestimate the amount of time the job will take and the risks involved. Just try to be professional and focus your marketing on mid range to upper income homeowners; you'll never get every single bid in the tree industry.

 

[ZinTrees]

I get less than half my bids
I walked from that job, lady was crazy, had like 10 trees she wanted to hack everything off her side of the fence, drop zone was non-existent, neighbors are supposedly crackheads, and didnt wanna pay, one of those people that will blast you for 3 weeks on facebook over an outrigger dent in the yard

 

[ClimberBusinessman]

Somewhere around 50% close rate in the tree industry is very good. Considering that the average customer gets 3 bids, and therefore the average close rate is 33%, you're doing just fine. Just make sure you've got a solid website and that your advertising enough; getting enough bids it's a game of numbers.

 

[ZinTrees]

ive spent something like $500 in the last 90 days on facebook ads, got a facebook page, yelp (not payed for) and google business page, also on google maps, im about to order business cards, allot of local stores will put a stack of my cards next to the register

 

[ClimberBusinessman]

How have the Facebook ads worked for you? How many leads did you get? Generally, you'll want to get leads for about $50 or less each lead, and then close somewhere around 50% for $100 per customer. Then, that works out on an average $1,000 job to a 10% advertising cost.

 

[ZinTrees]

the FB ads are doing decent

 

[ATH]

You gotta be careful. Unless it's a written estimate, there's always the chance the customer is making up the price to try to trick you into lowering yours. I'd even be a bit suspicious of a very low written quote as that could be forged as well.
However, there always will be low-ballers who either undervalue their time, or don't have the right insurance, lack proper equipment, or simply accidentally underestimate the amount of time the job will take and the risks involved. Just try to be professional and focus your marketing on mid range to upper income homeowners; you'll never get every single bid in the tree industry.

Any customer who does any of that isn't my target audience anyhow, so they can keep their fake bids and I'll move right along.

My "close" rate is well over 80%. Most of my clients aren't having anyone else look at their trees. They were referred to us by someone they trust. I show up to give them a quote in a timely manner, offer a reasonable price, and the job is ours - even when we tell them it is a few months out.

Very fortunate to have great clients!