Pricing Strategies for Landscaping Businesses

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PublishedMay 10, 2024

Pricing Strategies for Landscaping Businesses

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Setting the right price for landscaping services requires a thorough understanding of job costs, customer demands, and business objectives.

Effective pricing strategies:

  • Attract customers to landscaping services

  • Increase sales and revenue

  • Sustain long-term profitability

This guide explains landscaping industry pricing models, methods to determine service prices, and how landscaping software provides the tools to develop effective pricing strategies.

Most common pricing models to consider for your landscaping business

The right pricing model depends on the landscaping project, customers, and the company’s financial requirements. Landscapers do not need to limit themselves to one strategy. Changes in the market and business objectives often dictate periodic landscaping pricing adjustments.

Flat-rate pricing

Best for: Small landscaping jobs

Flat-rate pricing charges an upfront cost for the job. It includes the labor rate, materials, overhead expenses, and profit margin.

Flat-rate pricing eliminates customer surprises. While landscapers use flat-rate pricing for any size project, it’s particularly suited for smaller jobs, such as lawn mowing and maintenance. It’s easy for customers to understand, minimizes potential customer conflict, and simplifies business budgeting and planning.

Pros

Cons

Straightforward

Simplifies customer invoicing

Increases profit with efficient performance

Requires precise estimating

Necessitates customer trust

Hourly rate pricing

Best for: Startups or small businesses

Lawn care companies use hourly pricing to charge customers based on the job’s estimated number of hours. It ensures businesses receive adequate payment for labor costs.

Startup and small business owners particularly benefit from hourly rate pricing if they don’t have the experience to gauge how long a job takes. This type of pricing also works well for long-term projects or time-intensive jobs where businesses lose revenue due to underestimated labor hours.

Pros

Cons

Flexible crew scheduling

Transparent pricing breakdowns

Efficient work means less profit

Requires accurate timekeeping

Customers pay more if a job takes longer than expected

Per-square-foot pricing

Best for: Small or midsize landscaping businesses

Square-foot pricing enables landscapers to price lawn care services based on property measurements. A larger property size means additional labor and materials and a higher price.

For this pricing model, landscapers must factor in labor for the specific job, such as how long it takes to apply weed control, fertilizer, or mulch. It requires precise calculations and adjustments based on the fluctuating costs of materials.

Customers appreciate the clarity and predictability of square-foot pricing, especially for hardscape projects like patio installations or paving.

Pros

Cons

Prices based on project size

Transparent pricing

Easily quantifiable

Accurate property measurements

Precise labor costs for each activity

Subscription or maintenance plans 

Best for: Recurring lawn maintenance services

Subscription or maintenance plans provide a set price for recurring lawn care services. Plans typically offer weekly, bi-weekly, or monthly services.

Maintenance plans require landscapers to calculate the right price based on:

✓ Hourly wages 

✓ Materials 

✓Equipment costs

It encourages customer loyalty through consistent, pre-scheduled service. Customized plans increase customer satisfaction because customers pay only for the services they need.

Pros

Cons

Retains a loyal customer base

Customizable maintenance packages

Flexible customer payment options (monthly, quarterly, annually)

Requires accurate labor, materials, and equipment costs

Customers notice price increases

Project-based pricing

Best for: Any size landscaping business

Project-based pricing gives customers a flat price based on the type of project. It’s suited for small and large jobs.

This pricing model takes into account direct costs and markups. Its flexibility allows landscaping contractors to customize individual solutions for customers. Project-based pricing requires accurate estimating to ensure landscapers charge the right amount for an irrigation installation or a complex landscape design.

Pros

Cons

Offers flexibility and customization

Customers appreciate upfront pricing

Accommodates increasing labor and material costs

Involves spot-on estimating

Customers may seek a clear price breakdown

Value-based pricing

Best for: Midsize to large landscaping businesses

Value-based pricing sets a price based on the value of your services. It’s based on customer perception and what they’re willing to pay.

In this model, landscapers must demonstrate to customers why their expertise, quality, and specialty services distinguish them in the market. When customers know the benefits and results, they’re usually willing to pay more for landscaping services.

Pros

Cons

One of the most profitable pricing models

Works well for unique or specialty services

Establishes customer trust and loyalty

Customers must understand the benefits and value

Research needed to know customer perception

Bundle pricing

Best for: Landscaping maintenance services

Bundle pricing, or packages, combine commonly used lawn care business services in one price. This strategy allows customers to choose from various services and boosts landscape contract renewals.

Landscaping packages could include:

  • Mow, trim, and edge

  • Spring and fall cleanup

  • Bed maintenance

  • Shrub and tree trimming

Landscapers typically offer discounts for packages, which increases value and encourages customers to choose a package instead of individual services.

Pros

Cons

Simplifies sales for common services

Encourages upsells

Allows for customization

Lack of flexibility in set contracts

Must communicate raising prices to current customers

Tiered pricing

Best for: Any size landscaping company

Tiered pricing provides service options at different price points to increase sales. Landscaping companies offer essential, standard, or premium pricing packages for customers to choose their preferred services and prices.

Using tiered pricing and communicating the value of higher-priced options empowers customer decision-making and increases sales and revenue. This strategy also works effectively for landscaping projects as customers choose add-on services that were not initially considered.

Pros

Cons

Provides customers with flexible options

Boosts sales

Increases upsells

Must communicate the value of higher-priced packages

Involves monitoring costs so all pricing levels remain profitable

Market penetration pricing

Best for: Startups

Market penetration pricing increases interest in a new company by offering a lower price than competitors.

This strategy attracts customers away from the competition, quickly builds a customer base, and increases revenue. It can work effectively initially but won’t sustain long-term business success. Eventually, a landscaping company needs to increase its prices to sustain the business profitably.

Pros

Cons

Creates interest in a new company

Attracts new customers

Initially increases revenue

Won’t sustain business long-term

Customers expect the same low prices

How to determine the right pricing strategy for your landscaping company

The right pricing strategy depends on your business size, location, services, customers, and objectives.

To assess market demand, follow these steps:

  • Research customer demographics: Identify the needs and values of your customers. Segment customers based on specific characteristics. Obtaining feedback through customer surveys or social media posts helps you understand how to create attractive service packages.

  • Analyze competitors: Examine competitor services, pricing, and strategies. This will show what customers are willing to pay and assist in competitive pricing.

  • Perform competitive analysis: Determine how your landscaping services or prices differ from the competition. Demonstrate value to customers and highlight how your business stands apart from the competition.

Landscapers often use a combination of pricing strategies to achieve business goals.

Aspire landscape business software lets landscaping companies bill their customers in the way that makes the most sense, with multiple options for construction and maintenance contracts, including:

  • Fixed price on completion

  • Fixed price on payment schedule

  • Fixed price open billing for change orders and invoice adjustments

  • Time and materials 

  • Per service billing (maintenance contracts only)

With Aspire, you can establish one billing type for a large project or maintenance contract and then use a secondary one for one-off and add-on services. Using business management software designed for the green industry lets your team adapt pricing strategies to the customer's needs and maintain velocity in process execution. 

To effectively structure prices, landscaping business owners must know the true business costs.

Aspire provides real-time insight into the direct and indirect costs of every job. This empowers landscapers to make accurate resource allocations and price adjustments to safeguard profitability and grow business.

Product Illustration | Reporting Dashboard - Sales Pipeline Insight 2023 (Desktop)

Make informed pricing decisions with the right tools

To price services accurately, landscapers need the right tools to:

  • Bid accurately

  • Track costs in real time

  • Measure performance

  • Automate reports

The Aspire platform is the only end-to-end landscape business management system that does all this. It streamlines operations and provides precise performance data to help business owners make better decisions to improve productivity, sales, and profits.

Request a demo to see how Aspire improves business.

Frequently asked questions (FAQs)

Find answers to questions about increasing landscaping business profitability.

Q1. What is a good profit margin for landscaping?

A good profit margin for a landscaping business is 15% to 20%. The average profit margin depends on a business's type, size, and growth stage.

Landscaping business startups may operate with a 10% to 15% profit margin, while a business advancing to the next growth stage could generate a 45% profit margin.

Q2. What is the most profitable pricing strategy?

The most profitable pricing strategy is value-based, which allows landscaping businesses to set a price based on what customers are willing to pay.

That being said, landscapers often combine pricing strategies to maximize overall profitability. 

Q3. How should a landscaping business adjust its pricing strategy for seasonal changes?

For landscapers in temperate climates, demand typically decreases in the winter season. This is the best time to examine your pricing strategy and increase prices if needed.

Communicate price adjustments with customers before the busy season begins. Some landscapers handle seasonal cash flow fluctuations by offering additional services like snow removal.

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