Low baller

[drod17 14]

After spending 3 months reading this forum, and just about to launch my business, I now know how low ballers can hurt this business. Living in a community where homes range in price form $375k to $800k with square footage ranging from 2100sf to 4000sq ft, I do not know how this individual will survive. This is his advertisement.

One story $ 133.00 up to 3000sq ft which includes

• roof
  
• window frames and screens
  
• exterior walls
  
• gutters
  
• Patio and pool deck
  
• driveway
  
• sidewalk and swales.
  

Two story $158.00 up to 3000sq ft.which includes the same as the one story.

The advertisement alone probably cost him about $400.00. 1/4 page color ad. He states he is licensed and insured. I would list his phone number and the name of his company, but do not feel it will be professional...

[CCPC 26]

Don't worry, he will be gone before you know it. The problem is there will be 3 more to replace him, and they'll charge less than he is.

[Tom DeFrancesco 23]

If he openly advertised this, how is it not professional to post his own advertisement with contact information???

[Mike Williamson 198]

If he openly advertised this, how is it not professional to post his own advertisement with contact information???

Because there really isn't a point to that, is there?

[A and J POWERWASHING 64]

he will cut his own throat

[AC Lockyer 15]

Bad thing is that even after he is gone is that he has placed in the mind of potential customers that $133 is the going price. I call this prostituting the product! So when he is broke and gone you still have to edjucate your customers away from this low ball mentality.

In over 15 years of doing this cleaning thing Ive seen HUNDREDS come and go. It still hurts though.

AC

[John Orr 206]

A simple way to help a customer disregard his ad is: In order to have insurance, you must have a business license (at least in VA). If you have a business license, you must pay taxes. There is no way a legitimate business could afford to professionally wash houses at his prices. Period. It is not possible to lose money on each job and make it up in volume!

[Beth n Rod 1,279]

Nicely put John,

It's common sense business logic that eludes some consumers and they just need a little education to help them understand the difference.

We do it the greek way and add a pinch of guilt by saying that if they hire an non-licensed company, they are helping them to operate illegally.

Some will not care and just want to get the lowest price and take the chance. I often ask if they will use the same company each time and the majority say they do.

I then ask them if they think that by charging such low fees for work a company could possibly stay in business long enough to provide another round of service. Most agree, under those circumstances they would rather pay more for a solid company than risk the investment in another that won't be around long enough to be accountable for their work.

There are many ways to point out the gamble people take with hiring a company that under prices services.

Some have even questioned me if our company could possibly be overpriced.

My response is: Most certainly!

Having to pay the taxes and the various (workmans comp, health, unemployment, vehicular and business) mandatory insurances drives the price up. Add to that the safety training, safety gear and educational material puts another lump on top of that.

If I need to, I will go into the usual overhead legitimate companies have such as office expenses, postage, telecommunications, salaries, taxes, business accounting fees, payroll fees, cpa fees, license fees, equipment/vehicle repair and maintenance, fuel and oil, uniforms, laundering, and various other tools and supplies associated with the job execution expenses...

There are some that seem to have a better appreciation of our company pricing and we are now on par with others who are priced closer to our bid.

Essentially, the low priced company falls out of contention in some cases.

It depends on the persons financial situation.

If they are really strapped, they may take the chance anyway and go with the low bidder thinking perhaps we have over-inflated our position to justify the pricing. You can't convince all the skeptics.

Rod!~

[MudDuck 20]

At those prices he's just splashing some Clorox and Dawn on everything, grabbing check and jetting off. Educate every customer you talk to whether you get the bid or not. Do it DURING your bid walk around. Tell them about low ballers and the liability's associated with them IE,,there home owners insurance responsibility if this guy gets hurt on there roof. Is his "low price" REALLY realistic? Meaning do YOU really think he is making a living on that OR is he just working for beer money? I'm telling you thats a 350.00 job and he's going to do it for 99.99?!! You want THAT guy on your property? He's NOT buying the proper chems nor is he using them in the proper strength because he doesn't want to take the chance on tearing something up. Your place is not getting as clean as you expect it to be because of this and you wont know it until next year when you find out that it needs to be cleaned again because this guy did a half arse job last year. I like to kinda "throw" up to them when discussing quality that "I see you have a BMW out there in the drive and you have a 5K flat screen / surround sound system in the living room, or a 3K set of washer and dryer there. You paid dearly for those things because you expect quality. There are what we call low ballers out there who will do it for beer money but don't trust your most expensive investment to save less than the CD collection out there in your car cost you. Its NOT worth it"