Arghhh! &*$%@$@! lowballers.

[PLD 14]

So far, I am 1 for 10 in bids over the past 7 days. On one of the bids I lost, I managed to get the homeowner to share some information.

My bid:

2.5 story brick and vinyl house - $185

clean 300sq.ft deck 12' elev/16 steps - $240

400sq.ft concrete patio - $ 30

300sq.ft walkway - $20

The winning bid: - $100

back side of 2.5 story house

clean 300sq.ft deck 12' elev/16 steps

400sq.ft concrete patio

300sq.ft walkway

A hundred bucks?!? The back side of the house and walkways alone were worth more than that. And throw in the deck for free? The steps alone will take as long as the flats. And this wasn't a friend of a friend job. This is a FT washer that advertises side by side with me in the local paper...

I hate to say it, but unless things change for the better this may be my last year PW'ing. I just cannot compete with the hordes of "Any house $90.00, and driveway $50.00" that have descended upon sunny Fayetteville. Just today, I was told that $125 for green (was beige) two story stucco was "way outside my price range". I thought $145 was fair, $165 would be good. I bid $125 in an attempt to book some work.

Don't get me wrong, I can find decent paying customers and leave them happy. I just can't find them in sufficient quantities to run this as a FT operation. At present circumstances, I'd need to expand my marketing to ~2500/month just to gross $3k/week. Back out labor and expenses, and I'm down to $1000-1500/week. That may sound ok, but spread it across 12 months and that's about 40k. And I'm working WAY too hard to make 40K.

FWIW, last saturday at northern tool you would have thought they were giving away pressure washers for free. They were carrying them out one after another. And not just the $399 homeowner units. These are next weeks batch of lowballers...

[Jon 533]

Not sure of your area but rather then give up make a change, go for industrial/commerical work.

Go after restaurants, department stores, strip malls, WalMart (they are CHEAP in what they will pay) Kmart, Denny's, KFC and the list goes on and on.

I assume you do have a hot water unit since you mentioned driveways, if not then the above won't work as you do need hot water to clean those places, and for sure the dumpster pads.

As for low ballers, don't sweat them as they have been around for years and will be around long after all of us a gone. Fact of life in any industry even my new chosen field.

Here is what I am up against in selling books, say I have a book worth a fair price of $1.50 used, guess what there will be 25 others selling that same book for a PENNY, yes a PENNY. I don't compete against them, I list mine for what I feel it is worth and sooner or later it will sell.

Now some guys offer discounts for the next job if that customer refers you to others. Pass out flyers on all the neighbors homes, (if it is legal there, some places it is not legal to do that).

Follow up with a THANK YOU card with you card inside.

Go back once the low baller is finished and ask the homeowner if he is satisfied with the job they did.

In the meantime look over how you market your business and see what changes might bring in more business.

[Beth n Rod 1,279]

Show them your certificate of insurance, and your license ( if you have one in your state) and ask them if the other company provided proof? Let them know they are paying a professional, not a hack.

Beth

[Russell Cissell 65]

Philip-

We talk to a lot of contractors here and I am hearing the same thing more and more everyday. The wood restoration industry is growing at a very rapid rate. Because of the low up front investment the industry will always be attractive to those looking to make a quick buck. In addition there are a lot of guys that really want to run a successful, legitimate company but they simply don't know how to establish a good rate structure. Many of these companies will choose to undercut the competition and try to survive on volume.

I am currently working on an article that deals with this issue in more detail for now, my best advise is, hang in there! You know what you have to charge to be successful. Stick to your guns and go after the customers who are willing to move on quality rather than price. Change your marketing so you are reaching out to the higher end markets. Move away from the pack! If you must advertise in the same places that your competition does make sure you stand out! Remember, advertising doesn't always mean offering a special price.

Every ad you place will return a certain response. If you advertise specials you will attract people who want to save money. Imagine if there are three companies each advertising the same service and they compete (20% off, 30% off, whole house $5.00) then there is your add: Nice ad explaining the importance of the service why you are a good choice and then when they look for your coupon they find a slogan instead. . ."If you want to be sure, you're gonna pay more!"

I can guarantee the people that call you are not going to be bargain hunters!

You will do less bids, but close a higher percentage at a premium.

Keep up the good work because it's guys like you that fuel the industry rather than drag it down!

Best of Luck!

Russell Cissell

[PLD 14]

Show them your certificate of insurance, and your license ( if you have one in your state) and ask them if the other company provided proof? Let them know they are paying a professional, not a hack.

Beth

Beth,

We do, and I wish it helped. People seem quite happy to hire any old joe who ambles along. I just has a conversation with a potential roof customer (lost to a low-baller) who sells insurance for a living and knowingly hired an uninsured person to clean their roof.

Philip

[Beth n Rod 1,279]

And where will these people be next year?

Thats the primary question to pose your customers...

Many who do the work for cheap will be out of business next year and not be responsible for the damage they may have created THIS year.

Educate your customers. Find out what these lowballers are doing, use that as your positioning tool and support for why you get what you pay for.

I am sure you have many snow birds down in your area and that doesnt help.

Keep at it and market yourself. Photos! Before and afters... Testamonials!

If not involved in the PWNA or certified at least, git-er-done!

Showing you have knowledge and experience over the others makes a difference.

Rod~

[PressurePros 249]

Very sad, Philip. I am sorry to hear you have a bunch of wannabes to compete against. The problem with them is when one disappears, two more pop up so it's an ongoing price war that you lose every time. At 40k a year I would sell my equipment and go to McCollege to learn the art of burger flipping. I am starting to understand what you southern guys are up against. Don't throw in the towel just yet.

Tough markets demand the next level of strategy. You need to refocus your demographic. What group is seeing your advertising? You need to refine your sales pitch. Find out what buttons to push to drive sales. Everyone is out to save a buck, rich and poor alike. But if the dollar was always the bottom line, everyone would drive a Kia, drink Piels and shop at a wholesale club. The fact that Lexus, Sam Adams and Macy's are still in business is a testament to finding the right people to target.

Let those hacks work their ****** off for the cable and electric bill and beer money. Eventually your name will be your guiding light and people will know that if they want your level of service they have to pay for it. This is why I warn people venturing into this business (or any business) don't go in undercapitalized. You need a safety net so you can ride out the storm and find your niche. i really wish you the best, Philip. you sound like you have it together. Hang in..pray and stay grateful..you will be rewarded

[PLD 14]

And where will these people be next year?

Thats the primary question to pose your customers...

Many who do the work for cheap will be out of business next year and not be responsible for the damage they may have created THIS year.

Educate your customers. Find out what these lowballers are doing, use that as your positioning tool and support for why you get what you pay for.

I am sure you have many snow birds down in your area and that doesnt help.

Keep at it and market yourself. Photos! Before and afters... Testamonials!

If not involved in the PWNA or certified at least, git-er-done!

Showing you have knowledge and experience over the others makes a difference.

Rod~

Rod,

That's the source of my frustration. Selling the benefits of a quality contractor, licensing, insurance, photo book, etc. seems to have no effect. It is as if the public sentiment is that PW not a profession and even below being a trade. Nothing more than manual labor. Labor that they would do for themselves if they can't find someone to do it cheap. Like grass cutting. "Easy, anyone could do it. But since I can find someone to cut it for $20 I'll let them do it." I think part of it stems from the home centers selling PW's but the thousands every spring. Every homeowner thinks they can do it themselves for just $399. So, anything over $150 (2yrs payoff) is out. Add a competitive environment and you're down to $100'ish...

That's part of the drive behind the "dangers of doing it yourself" document published earlier. To educate the customer that this is a profession that does actually require some skill.

As for what they are doing: Typically they are just blasting away with HP water. The only chem they own is gasoline, and that's for the engine.

[Mike 64]

Very well said Ken. "lowballers" (I hate that word because it gets abused sometimes) is something that will always be out there. There will always be someone out there willing to do the same thing you do for less money. Nothing anyone here can do will ever get rid of "them" .... I mean look at how great wal-mart is doing. What you have to do, like Ken said, is set yourself apart. Your work is worth the money spent on it because you will do it right, safely and stand behind your work. You will never be able to win everyone over because some people just want the cheapest price period, no matter what it means. Dont fall into the trap of becoming "just another pw company" ... make yourself and your company the best one out there and strive for quality. Hang in there!

[JFife 14]

One thing---be careful of the measuring stick of success you are using. I am not sure about the demographics of Fayetteville, I known it is south Atl., but you cannot compare your money to someone in Cali, phily or nyc. They may charge more and make more, but the house you live in that cost 100K (just a #) would cost them 300-500K. that is just life, you gotta charge what the market will bear. I wouldn't expect a guy working on his own in your area to make more than 60-75K, if you are working pretty hard. Granted, the prices you quoted are lowball, but just don't compare yourself to people in nyc and expect to make as much per job as them.

jon

[PLD 14]

Very well said Ken. "lowballers" (I hate that word because it gets abused sometimes) is something that will always be out there. There will always be someone out there willing to do the same thing you do for less money. Nothing anyone here can do will ever get rid of "them" .... I mean look at how great wal-mart is doing. What you have to do, like Ken said, is set yourself apart. Your work is worth the money spent on it because you will do it right, safely and stand behind your work. You will never be able to win everyone over because some people just want the cheapest price period, no matter what it means. Dont fall into the trap of becoming "just another pw company" ... make yourself and your company the best one out there and strive for quality. Hang in there!

It's not being undercut so much that's the problem. I can sweat a little competition with the best of 'em. It's the degree of cuts that are skewing perceptions market wide. Bids of 50c on the dollar are common and bids of 25c on the dollar are not unheard of.

[JFife 14]

.......or be a lowballer yourself, like Mike's reference to Walmart. There is nothing wrong with doing lower quality work. People say, "do your best!". You can do your best at doing average work, charge less and do more work. If you feel that you have to do 'the very best' job imaginable, be prepared to lose a lot of estimates until you get your niche. Find a company to model yourself after, let's use cars as an analogy.

Low=Kia

Middle=Ford

Upper=Benz

High=Lambo

I'd say I fall around Acura/BMW. I can do better at my work than I do, but it works for me and seems to work for my customers. Maybe in your area, you need to market yourself and price yourself like a Ford, and give Ford quality. Works fine, low on the bells and whistles. If you want to be at the upper end, prepare to expand your market area, and boost quality to primo. Or maybe go down to the Kia, and just spray bleach on houses and decks and rinse, and collect your money. I find nothing wrong with that, as long as the customer knows what to expect and that is what they choose.

[PressurePros 249]

Jon has a good point. The best compromise I have found is to do tiered price work and be discilplined with it. Compete with the "lowballers" by offering soap on, soap off housewash. Mix some dollar store dish liquid and bleach. X-Jet on, X-Jet off. No brushing, rinse well and you're out. I find when you offer competetive pricing in your proposal you get your foot in the door. So far this season I have done about 20 housewashes. Initially, 12 of them were my highest level, platinum. Of the remaining 8, I had five homeowners come to me after seeing the kind of work I do and say "Is it too late for us to upgrade and have you brush the gutters and do the sidewalk?"

It's also true about demographics. If you want a single home in my area, 1/2 acre you better be prepared to part with a half million or more.

[Barry M 73]

So far, I am 1 for 10 in bids over the past 7 days. On one of the bids I lost, I managed to get the homeowner to share some information.

I think your prices are set right if your landing 70%-80% of your jobs. You don't want to land every job you bid. Charge what you feel your quality is worth don't bid low to land a job. Like everyone else has said, I believe your targeting the wrong customers. If a person's biggest concern is 'price' that's not one of your customers. Target the people who's biggest concern is quality and really don't care what it costs. I simply tell people if your looking for the cheapest price, I'm not your guy. My market strategy is to provide a professional, high quality, excellent service at a higher end price. If you just want some sealer slapped on your deck, you could go buy some at Lowes and hire a couple high school kids to do it for you. Don't be scared of not landing every job, it pays to get no's. Walk away with your head held high and a smirk on your face because you know they will get what they pay for".

[PLD 14]

.......or be a lowballer yourself, like Mike's reference to Walmart. There is nothing wrong with doing lower quality work.

I agree, but I'm not sure I have that in me. I've been known to brush gutters for free when a customer turned the option down and I decided afterward that the house just looked crappy w/o it. I'm certainly not going to do their roof or driveway for free, but if an extra 30 minutes doing a patio or the lawn furniture makes the difference between "ehhh..." and "that looks good!" I'm going to take the extra time.

When you grow up with a name like "Doolittle", you gotta learn to either love it or hate it. I decided to love it and protect it. And I'm very peculiar about anything that I associate with it. I don't know if I can "bleach and blow" and leave my sign in the yard...

Anyway, I'll reply to some other posts later. I'd like to discuss it more now, but my 2yr old boss is calling me...

[PLD 14]

I think your prices are set right if your landing 70%-80% of your jobs.

Then that's about $100-120 per house.

Like everyone else has said, I believe your targeting the wrong customers. If a person's biggest concern is 'price' that's not one of your customers. Target the people who's biggest concern is quality and really don't care what it costs.

I couldn't agree more, but in a territory where those types of customers are few and far between it becomes quite difficult to keep a steady business.

I simply tell people if your looking for the cheapest price, I'm not your guy.

Well, that would save me some driving and probably increase my close rate dramatically, but I'd still be facing a bare calendar...

If you just want some sealer slapped on your deck, you could go buy some at Lowes and hire a couple high school kids to do it for you.

For the most part that is the general expectation level here. Lawn svc, pressure washing, construction (any field) = high school dropout making $8/hr.

Don't be scared of not landing every job, it pays to get no's. Walk away with your head held high and a smirk on your face because you know they will get what they pay for".

Desperate men do not walk away from a sale AND smirk... :)

[Barry M 73]

Then you better quit posting and go increase your volume, it sounds like that is the only way you can make money. Good luck.

[Guest Sopowerclean]

I had the same problem this week. I gave a lady a price on a house wash and deck clean and seal. She told me that she got price last year of 99.00 for house wash. I told her my price of 165. She said that was to much but she would do the price i gave her on deck clean and seal. I call her this week to schedule the deck job, she had the nerve to tell me that her 99.00 guy came through neighborhood and she let them wash house and that they threw in deck for free, could I come out and just seal her deck now.

What would you have told her about sealing the deck.

Lawrence Carter

[JFife 14]

"Do Little", (LOL)

That was really funny, I was dying laughing! Listen, think long and hard about what you're willing to put your name on. Would you mind if McDonald's changed it's name to Doolittle's and gave you ownership?? You'd be the ultimate food lowballer, but you'd be making some serious paper and wouldn't mind looking at yourself in the mirror every morning. I am sure you know of Sunbrite in ATL, they sure as heck aren't sanding decks and doing 1000 a year. They are fast, reasonably priced and do work in line with what they charge.

Read, "The E-Myth Revisited", believe the author is Gerber.

[Celeste 341]

Lawrence -

If you can afford to do it, tell her to poof, be gone. You have no idea what Mr." $99 housewash clean the deck for free" did to her wood. If she won't go for your method and pay for it, leave it. It would be better to not take the job because you can hardly guarantee ANYTHING coming behind someone else and if you do and your finish fails, guess who did the crappy work - YOU, not the guy that "prepped" it. Bad work comments travel faster than the speed of light.

Celeste

[PLD 14]

Then you better quit posting and go increase your volume, it sounds like that is the only way you can make money. Good luck.

I agree. Today was a thunderstorm day....

[PLD 14]

Lawrence -

If you can afford to do it, tell her to poof, be gone. You have no idea what Mr." $99 housewash clean the deck for free" did to her wood. If she won't go for your method and pay for it, leave it. It would be better to not take the job because you can hardly guarantee ANYTHING coming behind someone else and if you do and your finish fails, guess who did the crappy work - YOU, not the guy that "prepped" it. Bad work comments travel faster than the speed of light.

Celeste

I agree wholeheartedly. That, and she'll expect you to deduct a hundred bucks or so for the wash that's already done.

I had a customer this week who got me to quote washing everything. I gave him a good price since it'll keep us busy a whole day. Then, he wanted to negotiate. Rather than lose a full day booking, I haggled to 10% off (he started at 50% off). The price was still too high for him, so he started deleting items to be cleaned. But he wanted to deduct the full price on the quote from the negotiates job rate, resulting in a half days work at ~25-30% off. I said no way. Anything less than the whole job was at quoted prices.

Anyway, during the price negotiations I mentioned that it was a big job and would take 7-8 hours. Before we shook hands, he asked again if it would be 7-8 hours. And he wanted to know the exact date and time so he could be home to supervise. I fully expect him to nit-pick all day and then argue price again if we finish any earlier than 7-8 hours. I needed the money, so I booked the job anyway. But some customers just need to be passed on...

[Washaway 64]

Dolittle,

I'm not going to quote here but Jon, Russell, Mike, Barry, Rod all have the right idea.

I must admit that I too have had a really tough time adjusting my prices to meet the lesser expectancy prone customer. I, also, am the type of person who will spend the extra five or ten minutes doing something just b/c I'd like to see it look different. However after a short while I learned that most people don't appreciate it.....infact they tended to ask for more freebies. (There are a lot of people in my neck of the woods who want everything for free.......purposely omitting any specific identifiable terminology). At the end of the day I calculated in the area of 1 to 1.5 extra operational hours at no cost and I was tired. For what? So that they would forget about me next time they needed something cleaned?

Forget it!

If I'm not busy then I'll accomodate the bunch that does not care....if I'm busy then they can call someone else.

It was hard but I learned to adjust......hang in there and give it a try.

alright, so here's a quote after all:

.... everyone would drive a Kia, drink Piels and shop at a wholesale club. The fact that Lexus, Sam Adams and Macy's are still in business is a testament to finding the right people to target.

PressurePros, I'm not sure of what your demographics are like but I have to admit that around here, in my experience, it is the middle class that will pay for quality of service and the Macy's shoppers will tend to be cheaper and pickier then anything.

[PLD 14]

Not sure of your area but rather then give up make a change, go for industrial/commerical work.

I am getting into that, but being green my success ratio is low. I'm reading here profilically in hopes of making the initial contact look less like a greenhorn.

I assume you do have a hot water unit since you mentioned driveways, if not then the above won't work as you do need hot water to clean those places, and for sure the dumpster pads.

I do not. Here, driveways are only mildew and algae so 4% bleach and cold water make them look very nice.

As for low ballers, don't sweat them as they have been around for years and will be around long after all of us a gone. Fact of life in any industry even my new chosen field.

Healthy competition I can stand. But these are DOZENS of beer money washers working for $10-15/hr gross. They have no overhead and $10-15 is probably on par or greater than their day jobs.

Here is what I am up against in selling books, say I have a book worth a fair price of $1.50 used, guess what there will be 25 others selling that same book for a PENNY, yes a PENNY. I don't compete against them, I list mine for what I feel it is worth and sooner or later it will sell.

Online, I understand. I'm not cheap in my online business, nor do I try to be. I market premium products at premium prices. I can expand my market fairly easily, and cost per aqcuisition is easy to nail down. As long as CPA doesn't exceed 25% of gross I'll take on any ad channel that solicits me. That, and my customers repeat much more frequently than once every two years.

Now some guys offer discounts for the next job if that customer refers you to others. Pass out flyers on all the neighbors homes, (if it is legal there, some places it is not legal to do that).

Referal discounts are next on the agenda. Flyers are problematic. Where they are allowed (about 50% have HOA's with prohibitions), your flyers hang alongside the $90 any house since that is their primary "ad" channel.

Follow up with a THANK YOU card with you card inside.

That I need to start doing.

Go back once the low baller is finished and ask the homeowner if he is satisfied with the job they did.

Generally, yes. Expectations are low, and that contributes to the success of the hacks. As long as the mildew is gone and the facia is clean, they are happy.

In the meantime look over how you market your business and see what changes might bring in more business.

Underway. I'm just taking a rainy day to vent...

[PLD 14]

Very sad, Philip. I am sorry to hear you have a bunch of wannabes to compete against. The problem with them is when one disappears, two more pop up so it's an ongoing price war that you lose every time. At 40k a year I would sell my equipment and go to McCollege to learn the art of burger flipping. I am starting to understand what you southern guys are up against. Don't throw in the towel just yet.

Yea, and I gave up $75k a year sitting on my butt designing computer networks... I still love being my own boss and I can schedule around my kids activities. Those are my most important goals, the latter being first.

Tough markets demand the next level of strategy. You need to refocus your demographic. What group is seeing your advertising? You need to refine your sales pitch. Find out what buttons to push to drive sales. Everyone is out to save a buck, rich and poor alike. But if the dollar was always the bottom line, everyone would drive a Kia, drink Piels and shop at a wholesale club. The fact that Lexus, Sam Adams and Macy's are still in business is a testament to finding the right people to target.

True. I do need to retune. BUT... Gotta make money till I get known as a premium washer... Oddly, I can get $100 out of a single wide trailer much faster than I can get $250 out of a 750K house. In two years, I have run many quotes and only closed one sale in our exclusive gated 1MM+ community. All rejected for the same reason. Too much money. All were very reasonable quotes.

Let those hacks work their ****** off for the cable and electric bill and beer money. Eventually your name will be your guiding light and people will know that if they want your level of service they have to pay for it. This is why I warn people venturing into this business (or any business) don't go in undercapitalized. You need a safety net so you can ride out the storm and find your niche. i really wish you the best,

I am fairly well funded. Can't very well quit your job and kick off a startup otherwise. It's just that as captial burns, and profit margins plummet in PW I cannot help but wonder if it's time to pull the rip cord and change tactics. I'd probably be less inclined to make a change if this business didn't take such a down turn in winter. Being cash flow neutral (or nearly so) in Oct-Mar would have helped a great deal.

Philip. you sound like you have it together. Hang in..pray and stay grateful..you will be rewarded

That's very kind of you to say. Thank you.

[PLD 14]

"Do Little", (LOL)

That was really funny, I was dying laughing! Listen, think long and hard about what you're willing to put your name on. Would you mind if McDonald's changed it's name to Doolittle's and gave you ownership??

Heck, I wouldn't mind if thet just gave me 1c for every burger.

You'd be the ultimate food lowballer, but you'd be making some serious paper and wouldn't mind looking at yourself in the mirror every morning. I am sure you know of Sunbrite in ATL, they sure as heck aren't sanding decks and doing 1000 a year. They are fast, reasonably priced and do work in line with what they charge.

I know them well.

Read, "The E-Myth Revisited", believe the author is Gerber.

Will do.