I started this post a while back under the title, “They’re not the cheapest, but…” which we hear a lot from clients when they are recommending us to do work. A returning client who is considering us for design/build of their new landscape asked me today to explain why our mulching price was so much higher than that of her “lawn guy” at their other house. Here’s my response:
First is a business issue. I don’t know who your lawn service is, and I am sure that they do a fine job for what they do. However, since you’re asking me to compare on price, I have to point out that there is a huge variation in “landscaping” companies. Those that do primarily maintenance have much lower overhead – they need a garage to store a mower and some rakes, no inventory, fewer specialized tasks that require ongoing training or certification, very simple job-costing that a salesperson should be able to do in the field (or even with a Google Earth flyover). Their direct costs tend to be lower, because they can throw a lower-skilled person out there with a mower, and if they get hurt or quit, they have invested little in their training, and can easily replace them. They also have much tighter price competition, because they are usually dealing in volume, trying to hit as many properties as possible in a day. Of companies who stay in business for any length of time, it’s not unusual to have a 3% rate of profit, which is fine for a guy with a truck, but no way to create growth and provide jobs. So, part of the answer is that your lawn company probably has a different business model, different costs, and therefore different pricing.
Second, they probably have a different value proposition. We spend about a week at the beginning of each spring training our crews, reviewing specifications on industry best-practices on everything they do in the field, from pruning trees to building stone walls to mulching. Why would we spend time teaching people to mulch? Too little mulch allows weeds and doesn’t retain sufficient soil moisture. Too much can smother plant roots and invite disease when touching bark. Since we guarantee all of our new plants for 2 years, it’s imperative that we protect that investment with proper planting and mulching. Believe it or not, we’ve been brought onto jobs by designers who fired previous contractors because improper mulching was killing their plants! It does take more time to apply mulch correctly, and it costs a bit more to get natural, undyed mulch.
Third, and probably most important, is how we treat and compensate our employees. Most landscape companies do not give paid holidays or vacation time, because it’s a seasonal business. Many pay low wages because they employ or are competing with companies who employ workers who are paid under the table, with no tax or unemployment burden. Some avoid worker compensation costs by dismissing those same employees if they are injured, knowing that they will not take legal action. We feel like safe, healthy employees who have growth potential in their work can do the best job for our customers, so we pay a living wage, and offer good benefits including continuing education.
We’d love to hear your thoughts in the comments section: When you think “fair and reasonable pricing”, are you asking, “Fair and reasonable for whom?”