Broke and Google Ads Weren’t Helping… Then I Found This

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So it's time to focus now.
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This is the one video that if you're going to get anything out of and you really need to focus, this is the video.
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This is the secret sauce to building your business in the landscaping and lawn care industry.
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And that is your hourly rate.
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It's the cornerstone that everything else is built upon and it will determine your profitability, which will determine how much money you have for marketing and how much money you can pay your employees.
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That's the quality of your employees.
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And so this is what everything else is built upon.
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You are hourly rate.
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In the video in the past, I talked about hourly rate, etc., and how it's your secret sauce.
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It's something that you don't necessarily tell the customer what your hourly rate is, because we're giving the customer the job, the quote, based upon budget hours, and we are determining how many hours we're allocating towards the job and multiplying it by some number.
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However, we don't tell that number to the customer.
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We don't tell them how much we charge per hour.
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It doesn't really matter to them.
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They're just looking at the dollar amount for the job
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being completed.
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But the thing that I never really talked about is, well, how do you determine your hourly rate?
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In my opinion, this should correlate directly with pay for performance.
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Because with pay for performance, what you're doing is you are basically taking a number that is typically fluid, and that is the percentage of your revenue that goes towards wages, and you're making that a fixed number by giving a percentage of that revenue to the employees.
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So in the past, you know, if it rains, you know, it's a lot of people who are doing it
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bad luck happens, customers picky, whatever it might be, you might spend 50, 60% of your labor revenue that you charge for labor on that job might go to the wages of the employee.
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Whereas if you just crush it, the weather's perfect, everything goes well, you might be able to pay 10, 15% of your labor revenue that you charge for that job might go to wages for the team.
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By fixing that number, you take a variable expense of labor based upon weather and whether or not people feel good or whatever, and you fix it, you can make your profits much more dependable.
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And also, it should really come into how you determine your hourly rate.
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So this is what I want you to think about.
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The hourly rate that you...
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hourly rate that you pay employees on base pay of P4P.
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And we'll talk about base pay and P4P in the future.
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But basically, when it comes to P4P, they get a base pay that they cannot make less than per hour.
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That amount right here divided by the hourly rate to customer that we're charging the customer.
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I want this to be less than 25%.
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I've seen this across the board in service-based businesses be something that is a good benchmark.
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For some people, they're going to scream, oh, 20%, oh, it should be 35%, whatever it is.
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This is a really good benchmark.
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What do you have to pay your employees on base pay, and then what are you charging the customer per hour should be less than 25%.
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So for example, if I am paying my employees $20 per hour on base pay of P4P, and I'm dividing that by what I am charging the customer, let's just say it's $80 per hour, that equals 25%.
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Let's change the math up a little bit though and say, all right, well, I'm able to get away with $15 per hour and I'm able to still attract talent.
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$15 per hour is my base pay in P4P.
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And divided by 80, guess what?
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I'm like 20%.
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What is that, 20?
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It's like right around 20% now is my percentage here.
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So it's less than 25.
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Great.
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The lower I can get this number, the better.
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Usually means I'm going to have better margins, and it's also meaning that on P4P, the majority of their pay is going to come from performance dollars instead of just their base pay.
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Okay, and you might be saying, well that's so bad for the employees.
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No, I'm giving them a percentage of this revenue here, but my base pay is right here.
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Now this number right here is gonna be determined usually by your local labor market.
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If you can get employees
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At $15 per hour base pay, that's the number you should have as base pay on P4P.
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Now, you might give them, say, a third of labor revenue, which means they're going to make a lot more than $15 per hour as long as they're half decent.
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But that number needs to be less than 25% of the number you're charging the customer.
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So in this case, pass as the litmus test.
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Now, what does not pass the litmus test is if you're charging, let's just say, $60 per hour to the customer, and then in order to get employees, because your labor market's really hot, you've got to literally offer $20 per hour as a base pay on P4P.
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Now all of a sudden, you run the math here, 20 divided by 30, we're gonna come up with 33%.
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Very bad news.
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I consistently see this, and I see this as being a very hard business to make any money and any profit on because not less than 25%.
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We'll talk more about P for P in the future, but ultimately, you need this base pay per hour that you're paying employees to be less than 25% of what you're charging customers.
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So the question is, well, how do I determine my hourly rate?
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Very simple.
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Ask yourself, what's the kind of average going rate for labor in your market?
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If it's $20 per hour, that means in order for this equation to work, where I'm gonna be at 25% or less, it means that my hourly rate to the customer needs to be $80 or greater.
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And if I can't do that, I've got to figure out either A, I'm going to lower my base pay, or B, I've got to increase the value to my customer, have a great website, have great customer service, have someone answer the phone that's live, have a web chat on my website, have a great truck that's painted, uniforms, training employees, my marketing's got to be in point.
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That all generates value to the customer where I can increase my hourly rate to the customer to where this equation works out.
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So, in my opinion, your hourly rate to the customer, that's always the golden question, what should I be charging per hour, should be determined by your biggest variable cost, which you are basically reselling to the customer, which is labor.
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You are selling an hour's worth of someone's labor and a marked up rate, and I want that rate to be at least $2.
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I want a 4x, all right?
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So at least a 4x is the equivalent of saying this ratio, 20 divided by 80, equals less than 25%.
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Now, the greater this number can be in terms of right here, and if I went, if still I had $20 and I was in my base pay, and I was able to make this 90, well, now guess what?
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this is now going to be like 22, 23%.
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And that's great.
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The lower this percentage can be, usually the higher your profit margins are going to be.
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And most importantly on P4P, the more their base pay is gonna be further away from what they're actually making on P4P, and there's gonna be a more and more bigger piece of their paycheck that's constituted by performance dollars instead of their base pay.
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We'll talk more about that when it comes to P4P, pay for performance.
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But this is what you are going to use to determine your hourly rate.
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Your hourly rate needs to be determined by the going hourly rate for employees just to get them onboarded.
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I believe that in this case, for example, this is a local shop right here.
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Let me show you what we have at our local shop now.
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And again, this always goes up, but 18 is what we get for employees locally in terms of their base pay.
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And we charge $90 per hour to the customer.
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So that's like 20%.
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Very good.
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Passes a litmus test.
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Very profitable.
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And you've got to realize that this number here is probably going to go up with time, the $18 per hour, just what you need to attract them.
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You want that number to be high enough to attract talent, but low enough to make sure that this number still works.
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Because guess what?
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On pay for performance, I'm going to give 33% of labor revenue to the employee.
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So they're not going to make 18.
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The average employee at the local shop makes like 23, 24, $25 an hour.
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But I want to keep this base pay as low as I can while still attracting talent because this base pay is going to attract talent.
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And by raising this number, I'm really only giving more money to my lowest performers because the highest performers are already making way above $18 per hour.
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So raising base pay on P4P doesn't really help your best performers.
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We'll talk more about that when it comes to P4P.
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But that's the first thing is determining your hourly rate should really be determined by what's your going rate for labor in your market, making sure that this equation equals less than 25%.
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So you can literally work this backwards.
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Oh, you know what, Mike?
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In my market, I don't know what I need to charge per hour.
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What should I be charging to my customers?
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Go on Craigslist, go on Facebook, look at all the landscaping and long care companies.
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What are they offering per hour underneath hourly wages just as an average?
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Okay, so that's $15.
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Great.
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What do I need to be charging my customers per hour in order for this to work?
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At least $60 is what's going to allow...
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this equation to still work.
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Ideally it's 65, 70, 75, and this percentage gets even lower.
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Next thing I want to talk about, because I talked about price quite a bit there, but what I want to talk about is in general, in your business, there's something called levers.
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And levers are something in your lawn care and landscaping business, any business really, that allows you to make a small change and have a massive impact in another part of the business.
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So if you look at this, this is what's called a fulcrum.
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And then we're going to have this kind of like a teeter-totter thing here.
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Boom, like this, okay?
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This is the fulcrum.
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And you have two different weights, right?
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So you might have a weight here and a weight here, okay?
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Now, when you have this kind of dynamic, what happens if I move this side of the equation by, say, two inches to right here?
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If I do that, it's going to move the fulcrum, or the other side of the equation, I should say, it's probably going to move it by, like, four inches.
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Okay, so if I move this by two inches, literally there's a 2x impact over here because the distribution is so great with this lever.
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Okay, this is the lever.
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So the question is, in your business, what can you do that is small changes that leads to massive results?
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And the three levers that I want to talk about today are going to be the things that in your business you can make small changes on, and they're going to make massive impacts on your bottom line and in your profit.
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The first thing I want to talk about
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is retention.
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Retention is simply the opposite of attrition.
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So if I lose 10% of my customers every single year, that would mean that I retain 90%.
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I lose 10%, that just means I retain, I keep 90% of them on.
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If your retention is really low, and it's like 20, 30, 40%, well, let's just say it's 50%.
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If your retention is 50%, that literally means that one out of two customers leave your business every single year.
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That is bad in the lawn care and landscaping industry.
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What's typical in our industry is about 20% attrition or I'd say 80% retention.
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Why?
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Because about 20% of your customers are going to leave every single year because they pass away, they move, they sell their house, they downsize, whatever it might be, and you lose a customer.
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So about 20% is going to be inferred.
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Now this is why it's so impactful.
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Because if I have a 50% retention rate, 50% of my customers I keep every year, but I lose the other ones, I lose half.
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There's a 50% attrition, 50% retention.
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That would mean that the average lifespan of a customer is two years.
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Now if I take that same business, but instead of having a 50% retention, where I lose half of my customers every year, I only retain 50%,
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Instead of my retention being 50%, let's have a retention rate of 80%, kind of average for the industry.
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How can you improve that number?
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Well, you can have better customer service, you can make sure that you make the customers happy, you have great office staff, you answer the phones, you take care of your customers.
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Those are all ways to increase retention.
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Have a credit card on file, that's how you can increase retention.
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So instead of having 50%, which would imply a two-year average lifespan of a customer, if I change the retention to now being 80%, where I only have an attrition of 20%, that would now lead to an assumption of five-year lifespan of a customer.
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So just by changing my retention, I'm able to increase the lifespan of a customer by literally more than doubling it.
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I'm more than doubling the lifespan of my customer.
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So if I make $1,000 per year...
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on each customer, I go from $2,000 per customer, that's the value of the customer, the lifetime value of a customer, or sometimes you do LTV, lifetime value of the customer, at $1,000 per year, two years is the average, I made $2,000 on my customer.
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I can literally turn that into $5,000 simply by making sure that I increase my retention.
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I keep the customer.
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So I'm going to do more than 2x
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My profits, just by retaining my customers, and instead of losing 50% a year, I lose 20%.
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Little changes in the business, improving the way that you communicate, having automations, having credit cards on file, having where you talk to the customers, having sending monthly newsletters, all of this allows you to increase your retention.
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Little things in the business that lead to dramatic results and profitability.
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The second thing I wanna talk about is close ratio.
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I talked a little bit about it in the previous video, but when we talk about close rates, this is a massive, massive lever in your business, especially when you're first getting started.
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I truly believe this is the only thing you should care about when you're scaling your business from zero to $250,000 in revenue.
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Now, in my opinion, you should have a 30% to 50% close ratio if you are in profit mode.
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Remember, go back to the previous videos.
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I talked about the two different directions you can go with your business, either profit or growth.
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If you are in profit mode, you are going to be thinking about 50% to 30% margins.
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If you have higher than that number, it means that you can raise your prices.
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If you have lower than that number, you probably have a serious flaw with your business or your prices are too high.
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Whereas if I'm going for growth, I'm going to have 50% to 70% margins.
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close ratio if I'm trying to grow the business fast.
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Okay?
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And the reason I'm going to do that is because my prices are going to be a little bit lower in order for me to have a higher rate of growth.
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I'm getting more customers.
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Now, why do I not want over 70%?
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Because if I'm over 70%, I'm literally leaving money on the table.
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My prices are too low, and I need to increase them.
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So for everyone else that's bragging that they close every single job or 95%, you're leaving money on the table.
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And the next thing is going to scare you by what you're leaving on the table in terms of price.
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But this is the general rule of thumb that I'd be using if I was you.
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I'd be trying to use this to at least $250,000 in revenue, assuming you want to grow a million-dollar business.
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If you want to grow to a million faster, you might literally use this 50% to 70% close ratio until you hit a million.
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If that's really a big goal of yours is growth, that's what you want to be at, 9%.
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Not higher than this, because then you're leaving a ton of money on the table, but not less than this, because you're going to really inhibit the rate of growth, and you're going to really not grow as quickly as you possibly would want to.
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So again, you've got to determine, do I want to profit and have a higher margin, increase my prices, charge estimate fees, charge dump fees, really increase my hourly rate, back to what we just talked about, increasing that hourly rate to the customer, or do I want to go into growth mode and have a higher close ratio?
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And close ratio is simply...
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Won estimates divided by total estimates.
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That's how you're coming up with this number.
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The number of estimates that you won divided by the total number of estimates is going to give you the percentage that you've closed or your close ratio.
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Okay?
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Now the third lever in your business, again, these are the things that make massive impacts in your business.
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Because literally, you could run the math on this over the course of four or five years.
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If you have a 30% close ratio versus a 70% close ratio, your business will literally be a third of the size in a few years.
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If you just have a close ratio of 30 versus 70%.
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So trust me, close ratio, very important.
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How can you improve close ratio?
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Have a better response time to get the estimate to the customer.
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Maybe you do it over the phone instead of meeting them in person.
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How can you make sure that once you do meet them in person for a project, the estimate gets back to them within a day or two instead of a week or two?
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All of these little things that you can do to improve your close ratio.
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Your communication skills when you're on the property with the customer.
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Your online reviews that you send with the proposal so they get that feedback, that social proof that they need to make the buying decision.
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All of that increases your close ratio.
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These are three things that you must be focused on.
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And the last one is most relevant to what we're talking about today, and that is price.
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Changing the price on your work is going to dramatically improve and affect your profitability.
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Let's assume real quickly that we have a $40 per cut lawn that we are charging on, you know,
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all of our lawns.
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As an average, we're charging $40 per cut.
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And we're going to just assume that we are making 25% profit margins.
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So not bad, right?
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You could scale this up as big of a business.
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You're going to have 100 customers, 1,000 customers, whatever.
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Let's just assume we're doing an average cut price of $40 per cut at 25% profit margins.
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That would assume that we're making $10 per cut.
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Now, let's assume that we have 100 mowing customers, and we mow everyone's lawns four times per week.
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So let's just do the math on this.
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So four cuts per week times 40 equals 160, and that's the amount of revenue per customer.
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Multiply that by 100 is going to equal $16,000 in monthly revenue that we're making from mowing.
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And if we assume a 25% profit margin, our profit is literally going to be
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$4,000.
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Pretty cool, hey?
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Check this out.
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Let's go ahead and erase these top two real quick because I want to emphasize price here is a massive lever in your business.
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And really, ultimately, your goal in your home improvement lawn care business is to be able
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to increase your prices.
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That's ultimately the goal of your business.
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Make a very sticky service that people do not want to leave, and the pain of leaving and finding another provider is way greater than the pain of a price increase.
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And we'll talk more about price increases down the road,
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We have a letter inside the templates and documents.
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We raise prices consistently almost every year to our customer base.
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And we usually have two to 7% attrition.
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People that leave because of our price increases.
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And usually it's more around the 2% marker.
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So you've gotta keep raising your prices, but the only way you can do that is having a very sticky service.
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that customers do not want to leave and go change providers and risk making the wrong decision on finding another vendor, finding another landscaper that is $5 cheaper per cut, but they don't show up sometimes, and they don't have a credit card in file, and they don't have automatic billing, and everything is done with check underneath the front porch mat.
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All of that is value to the customer, so you can raise prices, and your service is sticky enough to where they stay with you.
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So you've got to have a high enough value to the customer, like we talked about in the previous video, in order to be able to charge higher price.
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You can't just be like, I'm just going to jack my prices up.
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But again, remember, the transaction will only go through as long as value is higher than price.
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If you just jack up price, you're
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This is when you lose customers.
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So instead of on a race to the bottom of always making the price lower and lower, focus on how do I focus on improving the value, having a better website, having a great experience for the estimate request form, having a great automated response system for the estimate request follow-up.
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All of these things are improving the value so that you can increase price, and as long as price...
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price is lower than value, the transaction will still take place.
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And my goal is to have a premium product where I can charge a premium price and still the transaction goes through.
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So, comes down to price.
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Let's take this example here.
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Now, instead of $40 per cut, we're gonna charge $50 per cut.
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So now the math is this.
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Four cuts per month, still the same amount, but now instead of $40 per cut, we're gonna charge $50.
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okay and that's a lot no it's 40 anyone that accepts 40 is usually gonna accept 50 very marginal difference you might have to keep them for a year and then raise the prices in year number two or three or something like that but the goal ultimately is watch what happens here a little tiny change in price we're gonna increase the price by ten dollars per cut watch what happens here
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OK, so now it's going to equal $200 for our, whatchamacallit here, our $200 is our cost, or sorry, revenue per customer.
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Now down here, we can assume that our expenses equal
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whoops, equal $12,000, my goodness I can't write.
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So because I know that I have $16,000 in revenue and $4,000 in profit, I can assume that I have a $12,000 in expenses.
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Now what's really cool about raising your prices is it doesn't change your expenses.
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I'm still going to have $12,000 in expenses on all these customers.
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It doesn't change anything to raise price.
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It's a lever.
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I change it and massive change in profit.
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And I do not have to change my expenses.
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But check this out.
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$200 per customer that I'm gonna make and I'm gonna have 100 customers, whoops.
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not 1,000, 100 customers, that I'm going to be able to keep these customers to have great value, I'm going to retain them, but instead of $40 per cut, now I'm charging 50, now it's going to equal $20,000 in monthly revenue minus $12,000 in expenses is going to equal $8,000 in profit.
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Check this out, by raising my prices $10 per cut, I am literally going from $4,000 profit to $8,000 in profit.
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So a 25% increase in price resulted in a 100% or a doubling of my profit simply by raising my price.
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Small change in price, $10 per cut, literally doubled my profit.
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That is the power of pricing.
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That is the levers that you must focus on, and that's why it's so important to build value with a website.
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Build value with uniforms.
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Build value with great trucks that are painted and have a great brand and your uniforms and you have a great CRM and everything is functioning on automations.
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You've got to do all that so you have the ability to raise prices and not lose these customers.
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That is the whole thing.
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Goal and ambition of starting your lawn care business is create a recurring revenue stream that you're able to have price insensitive customers to be able to raise prices and literally double your profit.
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That's a lever.
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This is what you've got to focus on when it comes to your lawn care business.
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Let's talk about how to estimate for a mowing recurring lawn service.
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Now, the reason we want to start with mowing, especially in year number one and especially in year number two, and as we kind of grow the business, we want to continue to make sure that I'd say at least 30 to 40% of your business, at least 30 to 40% of your business is recurring revenue.
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That revenue is most of the time for mowing and maintenance services.
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We're just going to kind of combine all of those maintenance services into what we call lawn care or mowing.
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And so the reason we want to start off with the mowing is create that recurring revenue, we make sure that we know we have money coming in the door, and then we can focus on, once that's established, on getting those higher profit margin landscaping jobs.
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Now the reason that works so well is because you can actually see a direct correlation between the amount of recurring lawn mowing jobs you have and the number of landscaping jobs that you're going to get.
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So as you get 100, 200 lawn care jobs that you're mowing every week, what happens is all their neighbors start to see your trucks more and all the word of mouth, that's when it really starts to go to action for landscaping, where the meat is on the bone, where you get your profit margin really working and get higher priced products.
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And that's what you're trying to sell.
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But in order to get there, you'll see a direct correlation between the more mowing clients
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The word of mouth increases.
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People see your trucks more.
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There's more employees.
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You're just around in the community more.
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And then you'll get those higher profit, higher priced landscaping jobs.
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I do believe if you only have 15, 20 customers, it's not a good idea to be trying to do things over the phone because, especially if you have really, really thin margins and like every dollar counts, because $5, $10 difference on mowing price is going to happen.
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You're going to be off by $5 or $10 occasionally if you're doing estimates over the phone.
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The reason you do estimates over the phone is when your volume is so high and speed is more important than accuracy.
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You are going to close more jobs if you get
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if all things are held consistent, if you get the job, get the estimate to the customer faster, you will close more jobs.
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The question is, how accurate are you on that estimate?
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That's going to come with time.
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So typically when you're first getting started, you're not going to be able to accurately know how many square feet of lawn you get cut per hour, per minute.
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And you're not going to be able to look at a 3,000 square foot lawn or a 8,000 square foot lawn and know accurately how long it's going to take you.
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I'm a little bit hesitant to tell people, like, you're going to use hourly... You're going to do it over the phone when you have five or ten customers.
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Because you might lose a customer that would otherwise be really good, but because you did the wrong calculations, you're charging $80 when they should be $60, and you lose the customer.
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So...
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A couple of reasons why I believe that you should do over the phone is if you're getting lots of estimates, you're getting like literally you have 100 plus Moen customers and you're getting lots of leads every single day and driving around with all of them is a waste of time.
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If you're getting multiple estimates every single day,
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multiple leads for mowing, probably a good idea to start thinking about doing it over the phone.
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Because the time it takes you to drive to all of them is killing your margins, it's taking your time, and ultimately, if you can save 30 minutes and be on a job site where you're charging $80 per hour, it's not the 30 minutes it takes to go to the client's house.
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It's $40 worth of labor that you would otherwise have gotten
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Because the opportunity could have also been that you were on a job site.
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So just realize that there is absolutely the value of your time.
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And if that's becoming one, two, three, four a day, and now you're spending two hours driving around doing estimates, you should just do those over the phone and realize that you might lose an occasional job or be inaccurate slightly.
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Now, worst case scenario, you do an estimate over the phone by square footage.
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and you were off by $5 or $10, and you just tell the customer, be honest with them, and you reset the price.
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You might lose some of them, but most of them, they realize, hey, they're doing it over the phone.
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They never showed up at my property.
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They realize that you might have to edit the price.
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So that's the worst case scenario, is you do the wrong price over the phone, and you have to edit that with the customer.
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It's not a big deal.
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And so, again, what you're trying to do is save time, and you're willing to sacrifice perfection of your estimate and accuracy in exchange for speed.
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Not usually necessary or something I would recommend.
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If you have a really tight route, and you're literally, all of your jobs within a few miles, like, you're literally passing all of your estimates quickly.
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every day, you might as well just drive by the property, get a more accurate estimate, build a rapport with the customer.
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Like at the beginning, you actually want to meet with the customer because you can build a rapport and then you'll get a higher close ratio.
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Whereas when you're getting five, 10, 15 estimates a day, you do not care about rapport.
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You do not want to talk to the customer.
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You want to pump these bad boys out.
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It's all a speed game because you might only be able to do several appointments per day at a certain time.
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Whereas you can pump out 50,
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So, number one, I would be looking at, if you start getting multiple leads per day for mowing, probably wanna start thinking about doing it over the phone via square footage.
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Have a rate matrix that based on their square footage is a certain price per week and for biweekly, okay?
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Now, the other reason you would wanna do this is if you have a very, very large area that you service,
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which I don't recommend you do.
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You should have really good route density.
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But if you don't have good route density, it's going to push you more in the direction of doing it over the phone because now it might take you an hour to go drive to their property.
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And that's horrible.
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You're wasting a ton of time and money going and driving and the fuel and your time has otherwise been on an actual project.
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Lots of costs are going just to get the estimate of them.
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So...
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That's going to push me more in the direction of doing it over the phone.
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Now, over the phone is most impactful, doing estimates over the phone.
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We call them OTP, over the phone estimates.
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Most impactful when you have an actual live agent, a live office person on the phone.
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Because think about it from the customer's perspective.
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If they give you a call, they leave a voice message, they submit an estimate request for them.
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and the next day they get an estimate in their email.
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That's no different to the customer experience if you get an over the phone estimate, like you did digitally over satellite, or if you drove by their property and gave it to them.
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The customer, their experience is the same.
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Now, what really sets OTP apart from everything else is when they can call in and get an estimate on the phone, close the job, get a credit card on file, get it scheduled and rock it and roll it.
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This is what we do at Command Center for our franchisees at Augusta Lawn Care.
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Every single day, thousands, not thousands every day, hundreds are sold every single day of jobs that are called in.
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Customer wants a price.
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We literally measure it live, give them the price, send them the estimate.
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get a credit card on file and schedule the job.
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That's the real power over the phone because it actually changes the customer experience.
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Versus if you're gonna get an estimate to someone the next day using satellite imaging, not as impactful because you could have just drove by the property.
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So the customer experience doesn't change unless you actually have a live agent or someone that gets an S request form in on email and five minutes later is measuring the property and sending the estimate back.
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That just blows people's mind.
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And it makes it more relatable
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when you do need to change the price on the job.
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Because they're like, okay, obviously when I called in, they gave me a price over the phone and told me they were measuring via satellite.
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They're more receptive to a price edit or change occasionally when you need to do that because of a miscalculation via satellite.
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The real power of OTP happens when you have a live agent.
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If you're just doing over the phone the next day or that evening or getting out a day or two later, it's not super impactful honestly to the customer because it doesn't change their experience.
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They don't know if you drove by or if you just did it over the satellite.
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So I recommend
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Really focus on OTP when you have a live, full-time office person.
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That's when you can really cash in on OTP.
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But you're going to go that direction more so even if you don't have a full-time office person that's live.
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If you have a really wide route, a really big area geographically they're servicing, you don't want to be driving 45 minutes out in one direction to go do an estimate for mowing.
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So keep that in mind.
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Now, when it comes to over-the-phone estimates, a lot of people wonder about, well, what happens if it's overgrown?
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What happens if I did price it wrong?
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Just charge on the first visit.
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Just charge a per-minute rate, right?
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So just say, hey, Mr. Jones, it's going to cost you $60 for weekly service, $90 for bi-weekly service.
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Great, we're going to get it set up for weekly service.
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Just so you know, that first visit, in case your lawn is overgrown, we're going to edge it, dial it in, get it to where it needs to be at.
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So if it is overgrown, we charge $1 per minute per man in order to get it up
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to spec, up to our standards, and then after that, it's going to always be that $60 per cut.
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So that's how you can quickly get the sale and then make that indication.
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So that way, if it's three feet overgrown, you don't show up to a $60 mow and take you six hours to get the lawn done.
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You don't want that.
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On P4P, your crew will kill you.
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So you've got to make sure you have that coverage that if it is an overgrown mow, if their edges are way overgrown, you're going to spend five times as the usual time that you are covered in that instance.
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Okay.
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The next thing I
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The fact of the matter is there's multiple ways to do estimates.
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Okay?
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There's over the phone.
384
00:32:26.335 --> 00:32:33.202
Then there is a scheduled estimate, and then there is a exact time estimate.
385
00:32:33.522 --> 00:32:35.323
We do not like exact time estimates.
386
00:32:35.624 --> 00:32:40.028
We do not want to set up the estimator for an exact 2 PM we're meeting the customer.
387
00:32:40.448 --> 00:32:44.933
Very hard to schedule that, especially if you're the owner operator, especially if your estimator is out in the field working.
388
00:32:45.193 --> 00:32:46.674
Very hard to get exact time estimates.
389
00:32:47.014 --> 00:32:50.458
Now, scheduled estimates, I'm going to give them some sort of a time range.
390
00:32:50.878 --> 00:32:53.039
and I typically like this to be at least one hour.
391
00:32:53.439 --> 00:32:56.519
Some of our franchises will be like up to four hours in the time range.
392
00:32:56.799 --> 00:33:00.480
This is much easier to hit if the customer actually wants to meet you in person.
393
00:33:00.800 --> 00:33:03.101
So these are scheduled in person, okay?
394
00:33:03.381 --> 00:33:09.883
I don't like these as much either though because it means that I gotta actually make sure the customer's home, I gotta make sure I adjust my schedule and all the rest of it.
395
00:33:10.243 --> 00:33:11.483
Drive-bys are my favorite.
396
00:33:11.883 --> 00:33:13.124
These are even for projects.
397
00:33:13.384 --> 00:33:18.665
I ideally like this because I can do it anytime I like, in the evening, late at night, on the weekends,
398
00:33:19.045 --> 00:33:21.847
whenever more convenient for my schedule is estimator.
399
00:33:22.267 --> 00:33:31.573
And honestly, I can do like 20 of these a day easily versus if I'm doing schedule, I might be able to get eight to 10 a day because I gotta make sure I hit all the windows of time.
400
00:33:31.793 --> 00:33:35.516
My route isn't as efficient because I'm just trying to accommodate people's schedules.
401
00:33:35.816 --> 00:33:43.160
So much more efficient when you start talking about high volume of estimates per day, you wanna be doing as many drive-bys as possible.
402
00:33:43.220 --> 00:33:45.062
Now your close ratio, if you're meeting people
403
00:33:45.802 --> 00:33:49.205
might be higher if you're scheduling and talking to them and having an in-person connection.
404
00:33:49.225 --> 00:33:53.729
Because remember, if people can know, like, and trust you, they're going to do business with you.
405
00:33:54.369 --> 00:33:59.874
Easier to make that connection and that rapport when you are meeting them in person, but you're just not going to get that volume in.
406
00:34:00.154 --> 00:34:05.538
So if you're just getting started, you might want to do the scheduled estimates to build that rapport, have a higher close ratio.
407
00:34:05.899 --> 00:34:12.804
But again, as time goes on and you get tons of leads, like our location locally now, just 60, 70, 80 plus leads sometimes a day,
408
00:34:13.505 --> 00:34:15.986
We want to be pushing that as much in this direction as possible.
409
00:34:16.366 --> 00:34:19.006
Over the phone is the most optimal because I don't have to send anyone there.
410
00:34:19.026 --> 00:34:20.247
I don't have to have someone drive there.
411
00:34:20.447 --> 00:34:22.587
I don't have to have an estimated expensive to send there.
412
00:34:22.607 --> 00:34:25.208
I don't have to pay for gas and fuel and all the rest of it.
413
00:34:25.548 --> 00:34:26.808
Over the phone is the best.
414
00:34:27.148 --> 00:34:31.009
Literally in 5-10 minutes I can get an estimate over the phone, get a credit card file, get them scheduled.
415
00:34:31.349 --> 00:34:35.630
I don't want to be spending 20-30 minutes driving there, walking around and all the rest of it.
416
00:34:35.850 --> 00:34:37.751
I definitely don't want to be spending an hour driving.
417
00:34:38.051 --> 00:34:45.153
meeting with the customer, yakking and talking about the weather and whatever, and all the other projects they want to do down the road that you can't even service.
418
00:34:45.593 --> 00:34:46.373
I don't want to be doing that.
419
00:34:46.753 --> 00:34:49.674
So the goal is always, number one, get to over the phone.
420
00:34:49.714 --> 00:34:58.796
If you don't have an office person, if you don't have a high volume of leads, start moving in this direction, especially if you're trying to build a rapport and have a high close ratio.
421
00:34:59.077 --> 00:35:00.597
If you're getting one, two leads a week,
422
00:35:00.897 --> 00:35:01.937
Definitely schedule them.
423
00:35:02.117 --> 00:35:03.978
You want to close every single one of those bad boys.
424
00:35:04.158 --> 00:35:06.638
You want to meet that connection, build a rapport with the customer.
425
00:35:06.658 --> 00:35:11.259
You've got to build those scheduled estimates in.
426
00:35:11.479 --> 00:35:23.642
And at the very worst, I don't want you to basically ever do this, but sometimes with property managers or commercial work or HOAs, they don't want an exact time for you to show up, but it's very, very hard to accommodate schedules.
427
00:35:23.942 --> 00:35:25.762
It's very inefficient for the estimate.
428
00:35:25.782 --> 00:35:30.803
They're sitting around waiting, a lot of downtime, not efficient at all to do exact time estimates.
429
00:35:31.504 --> 00:35:31.824
All right.
430
00:35:32.866 --> 00:35:37.972
Ultimately, density is going to be the thing that allows you to be most efficient on all of these.
431
00:35:38.252 --> 00:35:42.638
So if I do drive-bys, if I'm super dense and route dense, I can do 25 to 30 of these a day.
432
00:35:42.878 --> 00:35:47.424
If I'm driving 30 minutes here and then 20 minutes here, I might only still get 12 to 15 of these a day.
433
00:35:48.366 --> 00:36:02.091
So really, route density is so important, not only from an efficiency and profitability standpoint when you're out mowing and doing the jobs, but also just your efficiency in getting out estimates is much more efficient if you have a tight route.
434
00:36:03.512 --> 00:36:08.096
Last thing I want to talk about when it comes to mowing prices is weekly versus biweekly.
435
00:36:08.316 --> 00:36:13.039
In that video, I talked about having $40 for weekly service and $50 for biweekly service.
436
00:36:13.420 --> 00:36:14.721
We would never do that now.
437
00:36:15.101 --> 00:36:20.065
We always want to charge at least 50% increase on the biweekly service.
438
00:36:20.325 --> 00:36:21.626
So if I'm going to charge $40 for weekly...
439
00:36:23.027 --> 00:36:23.387
Guess what?
440
00:36:23.707 --> 00:36:26.509
I'm going to charge $60 for biweekly.
441
00:36:27.509 --> 00:36:33.973
If I'm going to charge $50 for weekly, I'm going to charge $75 for biweekly.
442
00:36:34.453 --> 00:36:36.614
Why is this 50% premium baked in there?
443
00:36:36.694 --> 00:36:37.395
Several reasons.
444
00:36:37.435 --> 00:36:40.797
Number one, it incentivizes people to do a volume discount.
445
00:36:41.277 --> 00:36:48.281
How you want to sell this to a customer is, hey, look, you're going to get a 25% cheaper price, a discount, in order to go weekly,
446
00:36:49.001 --> 00:36:49.822
instead of bi-weekly.
447
00:36:50.042 --> 00:36:54.224
So sell it as a discount to go weekly and stay on that volume discount.
448
00:36:54.565 --> 00:36:55.845
Same thing goes when you go to the store.
449
00:36:55.866 --> 00:36:59.548
If it's like, hey, buy three, get the fourth one 50% off.
450
00:36:59.568 --> 00:37:10.315
It's not like the fourth one costs them any less to perform or costs them any less to produce, the same way that it doesn't cost you necessarily more to do the second cut, but it's a volume discount.
451
00:37:10.735 --> 00:37:15.557
And usually when you're biweekly service, there is more lawn to be cut, more grass clippings, takes longer to edge.
452
00:37:15.737 --> 00:37:16.758
But don't really focus on that.
453
00:37:16.878 --> 00:37:19.219
Just focus on the fact that it's a volume discount.
454
00:37:19.559 --> 00:37:23.100
If you do more services with us, we're literally doubling the amount of services.
455
00:37:23.300 --> 00:37:24.341
We're going to give you a discount.
456
00:37:24.441 --> 00:37:25.762
You're going to keep that lower rate.
457
00:37:26.142 --> 00:37:30.904
So when you explain it like that, customers are less likely to go to biweekly service.
458
00:37:31.224 --> 00:37:33.325
And therefore, we're able to increase our recurring revenue.
459
00:37:33.985 --> 00:37:42.572
And if it's slow during the summer, things are dormant or something like that, people want to switch, have a cheaper cost and lower their budget, great.
460
00:37:42.712 --> 00:37:44.874
We will still do their service for biweekly.
461
00:37:45.175 --> 00:37:49.278
This will cost them about $150 per month versus up here.
462
00:37:49.578 --> 00:37:55.023
This is going to cost them $200 per month if we did it four times a month at weekly.
463
00:37:55.203 --> 00:37:56.443
So it's still gonna save the money.
464
00:37:56.884 --> 00:37:59.584
It's still a cheaper option, and we allow them to do that.
465
00:37:59.925 --> 00:38:06.127
But it allows us also to make sure that we're gonna be really profitable on this because literally charging 50% increase.
466
00:38:06.187 --> 00:38:07.547
Our margins are fantastic.
467
00:38:07.787 --> 00:38:10.048
We get plenty of budget hours when we show up at the property.
468
00:38:10.888 --> 00:38:16.450
And so I would recommend having at least a 50% increase and explain that in the way of a volume discount.
469
00:38:16.770 --> 00:38:19.911
Don't get hung up on like, well, we give more clippings or it takes us longer.
470
00:38:20.332 --> 00:38:24.933
Just, hey, look, every other business you go to, when you buy more of something, you usually get a cheaper price.
471
00:38:24.993 --> 00:38:28.534
When you buy more services from us and more visits, we're able to give you a cheaper price.
472
00:38:28.735 --> 00:38:29.655
That's how you want to sell it.
473
00:38:30.035 --> 00:38:37.457
And this is going to help you with cash flow during those months when people are more inclined, when the grass is dormant.
474
00:38:37.617 --> 00:38:46.279
It's going to help you with cash flow because although you're doing less services, your profit margins are going to be beefed up to the point where your profits will still remain the same.
475
00:38:46.299 --> 00:38:55.921
You might have less budgeted hours on the schedule, but it's definitely going to pad your profit margins during those months when the grass becomes dormant and you don't need to mow it every single week.
476
00:38:56.201 --> 00:38:58.082
So it still allows them to have a cheaper option.
477
00:38:58.642 --> 00:39:07.809
It gives them a discount for volume, buying more services, and it helps with their cash flow during those months when you might not need to mow every single week.
478
00:39:07.829 --> 00:39:13.033
So definitely recommend at least a 50% increase on that biweekly service.
479
00:39:13.273 --> 00:39:25.122
We literally hardly ever have people who have issues with it, and it really incentivizes people to just stay on weekly service throughout the entire year, the whole growing season, because there's not a massive difference in the savings that they'll get.
480
00:39:25.342 --> 00:39:29.545
Alright, so now we're gonna talk about how to estimate for landscaping services.
481
00:39:29.925 --> 00:39:32.087
So this is gonna be anything besides milling essentially.
482
00:39:32.147 --> 00:39:40.433
Everything from weeding, tree trimming, leaf collecting, gutters, pressure washing, building retaining walls, installing mulch, gravel, like the whole bit.
483
00:39:40.713 --> 00:39:43.515
Everything besides mowing, this is what you're going to be looking at.
484
00:39:43.535 --> 00:39:56.564
It has to be built on something that is going to be scalable and that we can use time and time again, regardless of the person, regardless of who's estimating, regardless of the technology or the truck that's not working or is working and the employees that are not working that day.
485
00:39:56.984 --> 00:40:05.130
If you can create a system and a very precise way of estimating jobs, it's not only going to be beneficial for you, but it's also going to be beneficial for your client.
486
00:40:05.150 --> 00:40:08.332
He's going to be able to see consistency and be able to see consistency.
487
00:40:08.772 --> 00:40:11.233
that you are confident in the prices that you charge.
488
00:40:11.253 --> 00:40:20.238
Hey everyone, it's Mike and Andy's and today I'm actually at a real client's house and I'm going to be showing you a couple of things that you want to do at property cleanups.
489
00:40:20.638 --> 00:40:24.080
This specific cleanup is a weeding and property cleanup.
490
00:40:24.360 --> 00:40:25.360
It's completely overgrown.
491
00:40:25.380 --> 00:40:27.582
You can see here weeds coming out to the bed.
492
00:40:27.842 --> 00:40:29.563
This tree needs to be completely removed.
493
00:40:30.183 --> 00:40:32.244
And it's actually a drive-by estimate.
494
00:40:32.524 --> 00:40:36.146
We kind of use this way to get as many notes as we possibly can from the customer.
495
00:40:36.166 --> 00:40:46.110
So we can use drive-by instead of having to meet the customer and take way longer to get the you can probably eight, ten timed estimates in a day where you have a meeting with a customer.
496
00:40:46.130 --> 00:40:48.051
You can get probably 20 drive-bys done.
497
00:40:48.071 --> 00:40:49.131
So this is a drive-by.
498
00:40:49.151 --> 00:40:54.374
I'm able to get enough data, make a video for the client, take a couple pictures, potentially to clarify some things.
499
00:40:54.394 --> 00:40:56.474
But you can see there's a ton of weeds in the flower beds here.
500
00:40:56.494 --> 00:40:57.415
I'm going to flip this around.
501
00:40:57.855 --> 00:41:08.571
see weeds all throughout the flower beds and one of the things that i want to talk about today is how to do an estimate like this what i would recommend doing is breaking up here in the back you can see
502
00:41:09.552 --> 00:41:13.695
You get a whole bunch of weeds overgrown inside of the sidewalk area.
503
00:41:14.176 --> 00:41:14.956
I can't even walk back there.
504
00:41:14.976 --> 00:41:16.217
This is what's called horsetail.
505
00:41:16.558 --> 00:41:18.199
All these massive weeds back here.
506
00:41:18.719 --> 00:41:23.363
But one of the things you wanna do when you're doing an estimate like this is try to break it up, what I call chunk it.
507
00:41:23.904 --> 00:41:37.474
And that is, how do I make sure that if the customer can't afford to do a $3,000 cleanup of all these flower beds, how can I chunk the estimate in a way that is easy for them to understand as well as potentially accept a piece of the estimate?
508
00:41:38.295 --> 00:41:48.851
So for example, in this estimate, I'm going to do the front yard as weeding, and that's going to include from this corner of the house right here, all the way to the other corner I just passed over there.
509
00:41:49.152 --> 00:41:50.674
That's going to be the first line item.
510
00:41:51.415 --> 00:41:52.517
And this will allow
511
00:41:53.378 --> 00:41:56.140
them to be able to prioritize based upon their budget.
512
00:41:56.380 --> 00:42:02.484
So instead of giving a $3,000 estimate, I might give them an estimate that has three $1,000 options.
513
00:42:02.924 --> 00:42:12.030
Now, I'm going to make sure I bid each of these options, though, as if it's the only option they accept, because the last thing you want to do is the angle in the back here.
514
00:42:12.690 --> 00:42:15.352
The last thing you want to do is have it.
515
00:42:16.612 --> 00:42:25.158
they accept one of the job line items, the one options, one of the chunks that you put in the job notes, the estimate, and they only accept one of them.
516
00:42:25.178 --> 00:42:27.380
And you're like, man, I put five different line items.
517
00:42:27.740 --> 00:42:30.882
I thought for sure, I'd do three hours for one, four hours for another.
518
00:42:31.242 --> 00:42:34.566
five hours for another whatever it might be and they accept all of a sudden just a three hour cleanup.
519
00:42:35.066 --> 00:42:40.252
Now all of a sudden you're stuck because you're not going to be able to make any money on just a three hour cleanup.
520
00:42:40.272 --> 00:42:46.298
So what I would recommend doing is pricing each line item, each chunk, as if it's the only part of the job that's going to be done.
521
00:42:46.598 --> 00:42:49.221
So you can actually make a profit even if they only accept one option.
522
00:42:49.481 --> 00:42:51.524
Don't assume that they're going to accept all of them.
523
00:42:51.984 --> 00:42:53.005
But what you want to do
524
00:42:54.130 --> 00:43:08.994
You do this so that way, instead of making a massive cleanup and they have questions like, hey, if I wanted to reduce the price, where could I cut all those work change orders and all the rest of it can be eliminated simply by making sure that you take what's here, chunk it up.
525
00:43:09.415 --> 00:43:12.155
Because I'm not able to talk to the customer, they're not home, there's actually a rental for them.
526
00:43:12.555 --> 00:43:18.537
So I can't talk to them, but what I can do is give them options, different line items of breaking the estimate into smaller pieces.
527
00:43:19.197 --> 00:43:20.638
And again, make sure each piece
528
00:43:21.078 --> 00:43:24.259
you'd be okay with doing the job by itself with just that one line item.
529
00:43:24.279 --> 00:43:25.620
So hope that was helpful.
530
00:43:25.640 --> 00:43:25.960
Take care.
531
00:43:26.480 --> 00:43:33.182
The vast majority of home service businesses, including lawn care and landscapers, believe that if they get more leads, they will grow their business.
532
00:43:33.442 --> 00:43:34.283
And they're right.
533
00:43:34.443 --> 00:43:36.683
You can grow your business by getting new customers.
534
00:43:37.184 --> 00:43:41.005
But you can also grow your business by taking your existing customers and selling more to them.
535
00:43:41.525 --> 00:43:45.606
There was one business that I really focused on in a turnaround recently, and they went from $300,000 in annual revenue
536
00:43:47.507 --> 00:43:50.268
to $780,000 in annual revenue.
537
00:43:50.628 --> 00:43:54.908
And they cut their marketing budget that last year they had spent $28,000 on marketing.
538
00:43:55.288 --> 00:43:56.389
They stopped marketing 100%.
539
00:43:56.449 --> 00:44:01.930
And instead, they used Copilot to send out mass emails and mass texts and upsell customers.
540
00:44:02.170 --> 00:44:03.910
And they also used the upsell feature.
541
00:44:04.550 --> 00:44:14.232
Now, the reason that this is so powerful is because if I can take a customer that's on average, and this is about the numbers that was in their business, on average was spending $1,000 per year with the business.
542
00:44:14.872 --> 00:44:23.754
If you have $1,000 per year, or ACV, annual customer value, that means you would need about 300 customers to make that $300,000 in annual revenue.
543
00:44:24.395 --> 00:44:34.717
What that also means is if I could just get that customer to pay me more along the lines of like $2,500 instead of 1,000, I would be able to grow the business just like they did.
544
00:44:34.778 --> 00:44:36.178
And that's exactly what happened.
545
00:44:36.598 --> 00:44:42.782
They moved their ACV, annual customer value, on the same 300 customers to about $2,500.
546
00:44:42.842 --> 00:44:44.103
Now how did they do that?
547
00:44:44.283 --> 00:44:45.864
They upsold them more services.
548
00:44:46.384 --> 00:44:54.830
And so instead of them just having mowing, they would try to upsell them into mowing with aeration and weed control, or mowing and snow services.
549
00:44:55.110 --> 00:44:58.092
Mowing and other services they offered inside the business.
550
00:44:58.432 --> 00:45:00.854
And so upselling is extremely powerful because guess what?
551
00:45:01.194 --> 00:45:02.675
You don't have to go get new customers.
552
00:45:02.855 --> 00:45:03.856
You don't have to go advertise.
553
00:45:04.016 --> 00:45:08.180
Your customer acquisition costs on existing customers in your database is zero.
554
00:45:08.700 --> 00:45:16.027
And so if you're not sending mass texts and mass emails to customers in your database and trying to sell them more of your services, you're missing out.
555
00:45:16.047 --> 00:45:20.771
It's crazy to me that in home services, we somehow go out to people we don't know
556
00:45:21.452 --> 00:45:34.277
that we have never done business with, that they don't know, like, or trust us, and we try to spend money trying to get their attention when there's people in our database that we have done work for in the past, or have at the very least gotten estimate from us that we could sell services to.
557
00:45:34.337 --> 00:45:36.618
They've already raised their hands and said, I need services.
558
00:45:36.658 --> 00:45:37.438
They've already done that.
559
00:45:37.838 --> 00:45:39.299
Why would we not try to sell to them?
560
00:45:39.719 --> 00:45:44.461
If they've already opened up their wallet, if they've already spent money with their business, why would we not sell to that person?
561
00:45:44.481 --> 00:45:48.823
They've already expressed not only interest, but the ability to be able to buy your services.
562
00:45:49.323 --> 00:45:54.879
without getting more leads, without paying more to Google and Facebook, you can grow your business tremendously.
563
00:45:55.260 --> 00:45:59.070
And most importantly, profitably, because you're not running around doing a whole bunch of estimates all the day.
564
00:45:59.331 --> 00:46:03.162
You're simply communicating with customers that have already done business with you.