We’ve all seen them. Coupons for 25% off! 30% off! Who doesn’t love a good coupon? And what’s not to love? Coupons work great for shaving some dollars off of a pizza order or new shoes. Those are items that typically do not cost thousands of dollars. Tree services, on the other hand, will generally cost well over $1,000.
Due to the hazardous nature of the tree service industry, expenses are high and profit margins are low. It makes it difficult for any arborist to offer a large discount of more than 25% off. Let’s break it down. A tree company has a net profit margin of 15% (which for the arborist industry is considered to be very good). That means that after all expenses are paid, such as payroll, insurance, and gas — only 15% of revenue is left. This company quotes a customer $1,000 for a tree pruning. But wait! This particular customer has a 30% off discount coupon! That’s a whopping $300 off — leaving the business with only $700 left for wages, truck payments, gas, insurance, dump fees, etc.
The only way an arborist would be able to offer such a hefty discount is if they mark up the standard market rate for a particular service in order to make up for the loss in revenue from the coupon. This is what price gouging looks like. You need your large tree trimmed. Other companies would quote roughly $2,000. But you don’t even bother getting multiple quotes because you found an awesome coupon in a local coupon book for 30% off of tree trimming services! So why look elsewhere? You’ll be saving hundreds of dollars with this coupon! This tree service company that you contacted tells you that it would normally charge $3,000 — but since your coupon shaves of 30% — your estimate now comes to $2,100. So as you see, it still falls into the same ballpark as the other companies without the coupon.
You may wonder why all of that matters? Well, what happens next time you need your tree trimmed, but you don’t have a coupon. Will they still offer you a deal? Or is their quote going to be significantly higher? Does it mean that you’ll need to spend more time again trying to figure out what tree service company to use AGAIN? Once people find a tree contractor that they like — whose work and people they trust — they tend to stick with them. Why spend all that time researching different companies and meeting with multiple estimators, when you can just go straight to the one you know?
In addition, it’s important for you to feel like you can trust your tree service company. Discounting overinflated prices is a common sales technique that many businesses use, especially in the product-based sector. It’s a pricing strategy that is effective in moving a consumer towards a purchase because they feel like they are getting a good deal — until they do a little more research and realize that their “good deal” is in line with other quotes.