How to price tree care services and be profitable is top of mind for most tree care business owners. The business challenges for tree care are not unique to the industry. If you were to survey a random group of business owners and ask them what they would like to change about their business, almost all of them would put more profit near the top of the list.
Being a cost-intensive industry, profit margins are crucial to tree care business operators. But when it comes to increasing profit, most tree care businesses are at a loss as to what to do. Sure, there are the obvious tactics like:
- Work more hours.
- Spend more money on marketing.
- Hand out business cards.
- Go to networking events.
But most of these methods require spending money and time--resources you may not have at your disposal in extremely slow periods OR extremely busy periods.
What if there was an easier way to make more profit from each sale? A way that did NOT require spending more time and money, instead relying on nothing but some basic common sense and positioning?
In this article, we will look at some simple strategies on how to price tree care services and be profitable. These strategies will make you more money from each sale--without spending more money. These are just a few basic strategies that you can implement in a matter of seconds, yet can increase your profit margins by 30% or more. Some of these strategies are as simple as asking your client if they want an add-on or extra with their service--extremely simple, and yet so, so powerful.
How to Price Tree Care Services
Let’s start with the first easy way to up your revenues from each new sale: upsells.
Ever gone to a fast food restaurant and had the cashier ask you, “want to upsize your fries and drink?”
This is the classic example of an upsell: offering the client a bigger and higher-priced version of what they’re already about to order. This increases revenue because, naturally, a larger service order comes at a higher price.
One example of upselling for a tree service business would be offering a client tree clearing over a larger area (for example, in their front AND back yard as opposed to just the backyard). The reason this works so well is because the offer is natural; if the client already wants tree clearing done, it’s perfectly reasonable to ask them whether they would want to increase the total area being cleared, perhaps for a discounted rate on the additional work. It’s as easy as asking the client if they’re interested; yet the effect on your revenues can be massive.
Add-ons for Profit
An add-on is similar to an upsell but instead of offering “more of the same,” you are offer a distinct but complementary service. Add-ons are usually an easier pitch than upsells, because you’re not trying to get the client to buy ‘more,’ but ‘better.’ For example, if you’re already talking to a client about doing some tree clearing, it’s completely natural to offer stump grinding. After the trees are removed, there will be stumps left behind, and there’s a very good chance the client would want these taken care of as well. This is an opportunity to put an easy add-on to your proposal for increased revenue.
Multiple tree care service offers.
A ‘multiple service offer’ is when you put a list of services on a proposal and allow the client to decide which services they want to retain. Instead of just writing a proposal that says, “I will do ‘x’ for $y,’ you propose a number of different services and let them decide which ones they will take.
When thinking about how to price tree care services and be profitable it’s important to focus on the big picture. Sometimes, offering a ‘package’ of 3 distinct services at a 20% discount is better than offering 1 service at the full price, because you will bring in 80% more revenue. Multiple service offers let you do this by giving the client a chance to contract more than one service if they choose (giving a discounted rate for a multiple-order is a great way to get the client to say ‘yes.’)
Repeat selling is just what it sounds like: continuing to propose services to clients after the initial sale. Once you have done one successful project with a client, it makes sense to approach them later and ask if they would be interested in a complementary service. This is a very basic technique, but studies show that most businesses do not actively solicit repeat work, even when the client has a clear need. By taking the initiative to repeat sell, you can turn one sale into a fulfilling, long-term client relationship.
First-time customer discounts.
One counterintuitive strategy for getting more money from each sale is to offer your first-time customers a discount. On the surface, this seems like it would reduce revenue: after all, you get less money per unit of work.
But when planning how to price tree care services and be profitable, you need to think strategically. And once you do so, the value of a first-time customer discount becomes apparent: first, offering a discounted rate gives the client a feeling of gratitude which makes repeat business more likely; second, it lets you upsell and cross-sell the client while making them feel they’re spending less money. Either way, in the long run, your revenue is likely to increase.
One of the best ways on how to price tree care services and be profitable is phased selling. Phased selling is similar to repeat selling, but with one crucial difference: you seed the idea of the repeat sale early on in the sales process. For example, if you are speaking with a client who wants tree clearing done in the winter, you might say on your proposal that you can offer them landscaping for the cleared land 6 months later, in the summer. This strategy works particularly well with seasonal offers because it lets you pitch the idea of a follow-up service months down the road--and as we all know, tree service clients have different needs in different seasons.
At the end of the day, there’s an unlimited number of ways to get more money from each sale. Your only limitation is your imagination and initiative.
One great service that can help you make more revenue per customer--regardless of which strategy you’re using--is Arborgold’s Tree and Landscaping CRM suite. Arborgold comes complete with a number of valuable features to create dynamic proposals complete with upsells, add-ons, cross sells, phased selling, and more. Arborgold lets you create, edit and design your proposals from one simple interface, letting you ‘stand out from the competition’ with value-adding, content-rich, beautiful proposals.
Click here to learn more about Arborgold and what it can do for your business.