Don’t start chopping prices unless you’re sure it’s worth it. (It won’t be.)
Hey Clippers! Dave Tucker here to talk about discounts—and how to be smart about them.
I have strong opinions about charging fairly for your work and your worth. Recently, I wrote about the dangers of bidding too low for lawn maintenance work. Today, we’re going to talk specifically about discounts. More specifically, I’m sharing three things to think about before offering one.
As I’m sure you’ve guessed, I’m not a big fan of discounts, but I understand why people feel tempted to offer them. Let me share three mindset tricks to help you resist the temptation of discounts as an “easy” marketing strategy.
Rejection is normal.
Getting your bid rejected is part of the deal in just about any business. In my experience as a lawn maintenance business owner, getting 80% of your bids rejected is normal. It means you’re pricing your services appropriately. In fact, if I wasn’t getting rejected a lot, I’d be bummed: That’s a surefire sign of underpricing!
Don’t believe me? Here are some other interesting stats about sales and rejection.
You can always go back and negotiate a different price. But don’t let the rejection alone get you down or cause you to doubt yourself. It really is normal!
Do the math on every discount.
I’ve illustrated this concept before, but it bears repeating. Let’s say you offer a $15 discount to two different customers, and they both take it. If you mow their lawns 25 times per season, you’re losing $375 per customer—$750 total. Carry that over into next year, and you’re up to $1500 in losses. Over five years, you’ve lost $3750, all because you gave two $15 discounts.
Here’s the point. $15 may not seem like a big discount. And for one single transaction, it’s not. But this is lawn maintenance. Part of the value of this business is the ease of securing loyal, long-term customers. Every discount you offer is going to multiply over time, leading to more and more losses.
Now I’m not saying you should never offer a discount. But if you’re tempted, run the numbers first. Are the long-term losses worth it? Or would you rather just find another customer, one who’s willing to pay full price?
Reduce your services before you lower your prices.
Instead of offering a discount, you can simply adjust your service offering to match whatever price your customer wants to pay. This allows you to offer the illusion of a discount without actually losing any revenue.
For example, let’s say you quote someone $600 for a fall cleanup. They come back and ask if you can do it for $500. You have a few choices here.
- You can say yes and do it for $500.
- You can say no and walk away.
- You can negotiate what a $500 fall cleanup looks like. Maybe you use cheaper mulch and don’t go quite so far back on their property. Maybe you skip another part of the service. Figure out what $500 worth of work looks like, and offer that instead.
Option 3 allows you to keep your customer without having to shortchange yourself. It’s a sneaky way to give a discount—without actually giving a discount.
If you’re struggling to run the numbers and figure out the cost of a given job, take a look at CLIP. CLIP is a lawn care business software with excellent job costing tools and other handy calculators. No more guessing or worrying about rates. With CLIP, you can feel confident about your prices, and do your work more efficiently.
See for yourself and schedule a demo!