Economics 101: Decide your going rate

Updated May 4, 2018

The Price is RightThe economy is a roller coaster of shifting prices, which has left many companies pondering the never-ending question: What’s the going rate?

Competition in the community typically dictates the going price for landscaping companies, but there are several key factors an owner needs to address before moving that dollar sign up or down.

A recent article from Entrepreneur addresses what company owners should look for when making that decision.

There is the standard question of how much to change the dollar sign, but have you thought about timing?

Timing is everything – especially when it comes to price changes.

“If you’re lowering prices, choose a time when the change will have the most impact; if you’re raising prices, choose a time when you’ll encounter the least resistance,” the article states.

Landscaping has high and low seasons, so appropriately setting your prices around those times can be very beneficial for a company.

We know we don’t want to enter back into our old high school economics classroom and address the supply and demand chain, but landscaping works around the same business model.

Have you ever thought about changing the value instead of the price?

The article addresses that consumers know the average price of a case of Coca-Cola, and if a retailer charges more than that amount, a consumer will probably steer clear.

Landscapers face similar challenges. There are many price estimators, types of software and calculators that help clients estimate the value of a project. Landscapers are faced with being a competitor in the market, without setting prices so low that no profit is made.

Many businesses are learning to change the value instead of changing the price. Change the number of ounces in a product but keep it the same price. Competitors follow suit to steer clear of being the highest price on the shelf.

Changing the price and value at the same time can be done, but it’s always imperative to keep the client in mind.

Don’t confuse and drive away your clients with unnecessary changes. Make the best changes to keep your company a steadily growing business.

The Attachments Idea Book
Landscapers use a variety of attachments for doing everything from snow removal to jobsite cleanup, and regardless of how often they are used, every landscaper has a favorite attachment.
Attachments Idea Book Cover