Hold Strong on Pricing to Better Build Your Service Reputation

Why Michael Viramontes will never go head-to-head with mom-and-pop contractors on price

Hold Strong on Pricing to Better Build Your Service Reputation

Michael Viramontes, owner, is shown near a unit at The Lavatory which focuses on trailer rentals featuring Lang Specialty Trailers.

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Michael Viramontes, owner of The Lavatory, a restroom trailer and service contractor in Fresno, California, is committed to offering efficient service in exchange for fair compensation. How does he compete with mom-and-pop contractors who try to undercut him on price? Answer: He doesn’t.

“There’s always a market for anglers who are trying to catch fish at the bottom of the barrel,” he says. “And that’s not a market I have ever been interested in, so I just let them go.”

He offers 100 trailers — 83 restroom, five freezer, 10 shower and two laundry. He says he chose restroom trailers over individual restroom units in part because of the higher margins he could earn in renting them out. Lang Specialty Trailers built all the units.

“Because of those higher margins, it can actually be easy to convince yourself that you can go lower, knowing you can still make money,” he says. “We all have fixed bills and monthly commitments, and when it seems like my trailers aren’t moving, I can understand the temptation to cut prices just to get the cash flowing.”

But Viramontes notes companies that cut prices to the bone can’t easily come back from that position. Once a contractor develops a reputation for offering the lowest price, that becomes a permanent expectation in the local marketplace.

“I’d rather be known for providing timely delivery and providing the best service,” he says. “You can work to maintain that reputation and build on it. We’re known in the industry for being incredibly responsive to emergency services requests and cutting our margins would compromise our ability to do that.”

Cut-to the-bone pricing also leaves cash on the table that could be used to expand business opportunities, buy new equipment, finance additional trailer purchases and attract new talent.

“I'm a big proponent of finding the right employee the first time and hiring people who don’t need supervisors,” he says. “And without exception, hiring good employees means you need to pay competitive wages, provide benefits and offer a working environment that convinces them to stay. Cutting your margins isn’t just about losing profit. It’s about having the capital to hire the right people for the job and keeping them.”

Viramontes also notes that, in his experience, the clients who are most price-sensitive tend to be the clients who require the highest maintenance — and allow the trailers to take the heaviest beating.

As for the mom-and-pop operators in his market, Viramontes says he’s often their best press agent. “Occasionally, someone calls me mentioning that a competitor is offering a four-station restroom trailer rental for a few hundred dollars,” he says. “As they’re waiting for me to offer something lower, I quickly break the silence. I tell them that they’re unlikely to find a deal as good as this and that they should take it.” 

Read more about The Lavatory, profiled in the July issue of Portable Restroom Operator Magazine. 


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