Low-Pricing Woes

This is a companion piece to the Best of the Web feature "Out Foxing the Fox" in the April 2007 issue of Lawn & Landscape.

If you’re considering being the cut-rate contractor there are a few things you should know about attracting business through low-pricing tactics.

While it may seem like a sure-fire way to generate new clients quickly, the National Federation of Independent Business points out some key drawbacks to this philosophy.

Disloyal clients. Customers attracted solely by low prices may not remain loyal. Attracted to your bargain-basement pricing, they will most likely switch companies when offered with even lower prices than yours.

Zero foundation for growth. Offering you services at a cheap rate makes it difficult to save capital for long-term growth, replacing equipment or expanding your employee base. You may soon find yourself outdated and undermanned.