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  • Fertilizer bidding war

    I have a customer I have been servicing for 3 years now. He always gets 14 yards of mulch, lawn service w/bi-weekly trimming, and 4 apps of fertilizer/weed control. He pays cash up front. This year he said things are a little tight, so he wanted to pay monthly, which is fine. He also saw d he wasnt happy w/the fert company I subbed to last year, and wanted me to check around. I called another local company, and worked a deal out with them to do his fert. I was originally charged $150/app fr om 1st company, and upcharged him @ $180/app. The new fert company came in at $140/app, so I told him the new fert company would do it for $180 still.
    Here is the problem... He called another company, and they told him they would do it for $150. He then informed me of that. So, I called my company back up, and they told me they would charge me $120, so I would be able to upcharge him @ $150. I let him know I could match $150. Now his fert company called back, and told him $138.
    I dont want to get into bidding war, but his fert company that he called is also a lawn service company. I'm afraid if they get the fert contract, then they will have a foot in the door for his lawn service.
    What would you do? I can match the $138 if I wanted. I can beat it into the ground and tell him I'll do it for $120, and not make money off it. I can tell $150 is the lowest I can go, and sell the benefits of using my company with me as the middle man.

  • #2
    You can loose the 30 on the fert and still make all your profit from the rest of the year on the job or you can let the other company get a foot in the door and take the chance of loosing the whole job.

    i would eat the 30 and keep the customer times are tight for every one right now so your customer is shopping around do not let him shop to much or you may loose him
    Chris Hoeltke
    serving Winchester Virginia and surrounding areas
    C&S Lawn Service

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    • #3
      not for nothing but if the guy is a customer and hires you for everything why such a big mark up?
      20% seems a bit excessive for making a phone call.

      if you just passed the work along to a steady application co then maybe they would send some work back to you as well as any time a customer has apps done to their lawn it is a win win for you.
      the lawn will look better and it will grow more there by making you look better and more money.

      i myself am in a different situation because i do everything in house but i will make sure that all my accounts are getting the proper apps for fert, weed and insect control even if it is not as profitable as i would like because the healthier, greener, weed free lawn makes all my accounts look spectacular to anyone who passes by but i make more money because the lawn never stops growing.

      the little bit of profit i may lose more then gets made up from the additional work i get as well as by all my accounts looking their best it sells my services for me.

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      • #4
        20% markup is typical. Yea, I make the phone call, but if the fert company misses something, or a service call needs to be done, I make the call. If the customer isnt happy about it, they complain to me. I prepay the fert company, so I take a risk if the customer doesnt pay, or have accounting to do if they cancel mid season. Thats why the markup.

        If I match or beat this fert price, thenI dont want him t ok come back and have me get into a bidding war over his lawn service. Thats my other fear.

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        • #5
          "I dont want to get into bidding war"

          Too late, your in one.

          I would let the other guy have it. If your customer is looking for the cheapest deal, your gonna be replaced soon enough anyways when the first lawn guy comes along and offers to do his lawn for less than you.

          With the season just beginning, replacing the account if you should lose it shouldn't be that difficult.
          Last edited by Sprinkler Buddy; 03-28-2013, 07:55 AM.
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          • #6
            He also saw d he wasnt happy w/the fert company I subbed to last year, and wanted me to check around.
            Did he ever say what he wasn't happy about with the fert company?
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            • #7
              20% markup is typical. Yea, I make the phone call, but if the fert company misses something, or a service call needs to be done, I make the call. If the customer isnt happy about it, they complain to me. I prepay the fert company, so I take a risk if the customer doesnt pay, or have accounting to do if they cancel mid season. Thats why the markup.

              If I match or beat this fert price, thenI dont want him t ok come back and have me get into a bidding war over his lawn service. Thats my other fear.

              i don't know about you but one of my biggest fears would be my customer finding out that i was over charging him and making money for nothing.

              you should just tell your customers that you use a particular company for your apps and send them directly to him for that service.
              this way you don't have to be bothered by doing anything and covering the bill.
              there is nothing wrong with telling someone you currently do not offer that service and you could even tell a white lie by stating that " i used to do everything in house but it is cheaper for my customers and easier for me to use this company that i trust to do that then do it myself ".

              customers appreciate that honesty and you will gain more from that then you will by pocketing 20 or 30 bucks by trying to sneak one by them.
              you could have come off as johnny on the spot if you just handed them the 130.00 price offered originally and told them that you found them a deal and saved them money.

              i know in the past a mark up is normal and not out of the ordinary but in todays times and this economy people will drop someone for 1 dollar and they will not think twice about dropping someone if they feel they are getting sheep shanked

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              • #8
                Sounds like your winning them over.

                Is that really a question that needs to be asked. Think.

                Loose a $30 x 34 mowings over making $30x 5 ferts.

                Makes complete sense. Please come run a company down the road from me. I wish they all ran one like that down here, I would take em to the cleaners.

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                • #9
                  you should just tell your customers that you use a particular company for your apps and send them directly to him for that service.
                  this way you don't have to be bothered by doing anything and covering the bill.
                  Did you always handle things like this or was there a story on how you learned it was simply better to do it this way than the other?
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