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View Full Version : Breaking the news..


Josh.S
09-07-2006, 01:46 AM
I was wonder how you guys told your customers when you are raising them. I bought 35 account about 3 weeks ago and the guy I bought them from agreed that almost all of them needed ATLEAST a $5 raise. Most of the customers are very nice, but my delima is that the customers aren't attached to me, and if I jack it they might leave. I'm going to go easy on the raises next year so the customers get to know me, and then jack them all a little bit. I'm not trying to make millions but inflation and gas and all the normal expenses make it a reason to raise people periodically.

What do you guys think? I have been kinda dropping seeds to several of the customer while having a conversation with them and saying things like, "yeah i hope gas prices don't go up very much next summer, beacuse i'm driving way further than the last guy was, and the truck gets less than 10mpg pulling the trailer, i would hate to have to raise people's prices just to make a small profit"

grass disaster
09-07-2006, 02:02 AM
how much did you buy the accounts for?

Sandgropher
09-07-2006, 04:05 AM
Sounds like you brought yourself an under priced business, its easy for the previous owner to say they could do with an increase, but its very hard to increase prices straight away, been there,done that........what i did was waited a reasonable time before increasing them.:)

LawnBrother
09-07-2006, 10:20 AM
I have never raised prices on a new customer. It's like, "Hi, we're your new lawn service! Oh, BTW.....we're raising your price $5...." Just doesn't sit well with me. I say wait until the beginning or middle of next mowing season if you can, hopefully they're not underpriced TOO bad! Show them you're reliable and do killer work and they will take it much better IMO. GL though...

Surf'n'Turf
09-07-2006, 11:38 AM
Maybe try 7-10 accounts that need thier prices 'adjusted' (never say raised!) the most next season (because you're coming to the close of this season) and see what reaction you get before you try all 35.

rb_in_va
09-07-2006, 11:48 AM
I have been kinda dropping seeds to several of the customer while having a conversation with them and saying things like, "yeah i hope gas prices don't go up very much next summer, beacuse i'm driving way further than the last guy was, and the truck gets less than 10mpg pulling the trailer, i would hate to have to raise people's prices just to make a small profit"

As a homeowner that wouldn't fly with me. Don't throw out a bunch of excuses like that (it might prompt me to find someone closer). Most reasonable people understand inflation. If you get some that give you a fit about price adjustments then maybe those are problem accounts that you can eliminate right away. Agreed that you should wait till you have proven your worth though!

nobagger
09-07-2006, 01:42 PM
We had a similar situation this season. We bought out a company of about 30 accounts and when we went over the pricing he said "almost all of these should be raised this year". I agreed to not raise the prices if they all signed with me for the first year. But I simply told them when talking with all of his formar customer's that he was going to raise them but we would'nt this year but the price may or may not increase next (2007) season.

Josh.S
09-07-2006, 04:11 PM
They aren't underpriced to bad, alot of the customers EXPECT a raise, and I don't think I should not give them a raise. May I'll keep them now, and then the one's that sign contracts I don't raise, and the one's that don't sign contract's I should send them a letter or tell them, something to the effect of

Fluffly Letter Opening....
Due to inflation and increased overhead your price will be adjusted from Thirty-Six dollars to Thirty-Nine dollars per mow on your next billing cycle. Your business is very important to us, if you have any questions or concerns about this call me at 555-555-5555.

I don't know what to do but the guy that owned everything before me has a group of VERY NICE and VERY UNDERSTANDING customers, atleast 25 of them need a $3+ dollar raise. Well they actually need more than that but I figured if I raise them all $3 or so that they would all be good with it..



how much did you buy the accounts for?
I bought all of the equipment that the business was ran with, and the accounts. Everything except for the stihl trimmer that you see in my signature was purchased with the business and much more. I estimated by guessing the used value of the equipment that I paid between 7-3 thousand for the acccount.. even though the pricing might be a little low it is still a great deal..

stumper1620
09-07-2006, 04:42 PM
I would finish out the season at the current rates, get contracts agreed to for next year and be sure they include a 5, 10 or even a 15% increase accross the board. Whatever it takes to get everybody on a proper level.
I agree with a couple of the other post
1st never say raise prices "adjustments" sounds so much better.
2nd don't use excuses, just make a adjustment to bring all your new clients in line with your existing accounts. Then do biannual (every other year)percentage based increases. ( don't go overboard.)

NNJLandman
09-07-2006, 05:25 PM
Raise them little by little, 2 dollars this year, 2 dollars the beginning of next year and a dollar at the end of next year and say they are gas surcharges.

Jeff

stumper1620
09-07-2006, 05:47 PM
Raise them little by little, 2 dollars this year, 2 dollars the beginning of next year and a dollar at the end of next year and say they are gas surcharges.

Jeff
I prefer percentage based increases, looks more professional and is easier for a customer to accept when they see a 3 to 5 % increase.

Josh.S
09-07-2006, 09:52 PM
When you increase by percentage, do would you increase and round to the nearest dollar if it didn't turn out right?

Tharrell
09-07-2006, 10:02 PM
I don't like the "fuel" thing. Fuel is at least 45 cents cheaper now than it was a couple of months ago. Rather, just call it a cost of doing business adjustment.

stumper1620
09-08-2006, 07:12 AM
When you increase by percentage, do would you increase and round to the nearest dollar if it didn't turn out right?
If I adjust a price from 30 bucks by 5 percent it will add 1.50 per cut, I charge 1.50 more. so the weeklly cut price is now 31.50.
Name any business other than lawn care that charges even dollar amounts.
Its not professional business management to round off your numbers that way. If your cost of doing business increases 1.5% for this year then by all means you should increase your rate to match that 1.5 or exceed that amount. ( exceed meaning round that percentage up to 2 to 2.5% to cover a 2 year period. Also known as forcasting/planning)

grasswhacker
09-08-2006, 07:16 AM
If I adjust a price from 30 bucks by 5 percent it will add 1.50 per cut, I charge 1.50 more. so the weeklly cut price is now 31.50.
Name any business other than lawn care that charges even dollar amounts.
Its not professional business management to round off your numbers that way. If your cost of doing business increases 1.5% for this year then by all means you should increase your rate to match that 1.5 or exceed that amount. ( exceed meaning round that percentage up to 2 to 2.5% to cover a 2 year period. Also known as forcasting/planning)

It also looks like you put some thought into calculating your costs of business when you don't use rounded off numbers.

Branchland
09-08-2006, 07:16 PM
Was talking to a customer the other day about going up on prices. She and her husband own a very sussful busness so we talk bussines stuff sometimes. Looks like they went straight accross the board with increases.
She told me about her pool service going up on her because of fuel prices. Just started on last monthes invoice. No notice. They went up $35.00! Needless to say she was not happy. They do 2 of her neighbors pools also, so they have 3 pools in one stop. She did understand and agree to a increase but not that much They come once a week. She did think that $15.00 or even $20.00 was fair, but not $35.00.
The other was her pest control service. They come out once a month and bill her quarterly. They went up $5.00 a visit. That is $15.00 more a quarter.They did send a seperate letter with her bill about the increase going into efect next quarter. I didn't ask if they did her neighbors too. She was fine with that amount of increase. She did give me a copy of that letter they sent her. If my scanner worked I'd post it for yall.

Being that you just bought these customers I would not go up on them yet. Give them time to get to know you and your work. And you them. Then go up on them. You don't want to loose any of them being you just bought them. The prices was something you knew about before buying them.

fulano
09-08-2006, 07:29 PM
I have been kinda dropping seeds to several of the customer while having a conversation with them and saying things like, "yeah i hope gas prices don't go up very much next summer, beacuse i'm driving way further than the last guy was, and the truck gets less than 10mpg pulling the trailer, i would hate to have to raise people's prices just to make a small profit"

I guess you should lower prices now that gas prices are coming down from near $3.00 to under $2.40. :hammerhead:

It isn't the customers fault you have a gas hog truck or you have to travel long distance.

Ron's Lawncare
09-08-2006, 07:36 PM
isn't it better to loose a couple bucks per acct. per week say $90.00 per week. now if 4 customers find someone else because you raised their rates say they were $35.00 accts that's $140.00 per month

evergreenedmond
09-08-2006, 07:37 PM
Do not give an excuse for the price increase just inform them that the price of services will be increasing X amount. When mower prices go up every year do you get a call from Toro giving you reasons for the increase? Act like a proffesional & bill accordingly.

KINGjosh
09-08-2006, 07:42 PM
There is no Breaking the news, its just plain and simple giving them a letter saying that rising business exspenses went up and I'm raising my rates xyz...

Josh.S
09-08-2006, 11:59 PM
The prices was something you knew about before buying them.

Wrong..

I didn't even get a list if where the customers was at when I bought the business.. He showed me a couple and told me the prices, and told me that I could raise them alot of them.. how I got the deal on the business is a long story though...

DuraCutter
09-09-2006, 12:32 AM
Do not give an excuse for the price increase just inform them that the price of services will be increasing X amount. When mower prices go up every year do you get a call from Toro giving you reasons for the increase? Act like a proffesional & bill accordingly.

Makes sense to me. Also, it does cost more to do business nowadays...doesn't it? Look at all the services/products you buy, and how much they are going up. It may be time for you to look at ways to maximize your time. Pool cleaning as an addon, some handyman services...? they all return 5 to 10 times the profits of cutting grass.

Our company has, and we won't ever look back. Adding $2 or $3 per customer... seems like pennies to me.

Josh.S
09-09-2006, 12:53 AM
... Pool cleaning as an addon, some handyman services...? they all return 5 to 10 times the profits of cutting grass.


I doubt it..

K.Carothers
09-09-2006, 01:14 AM
Everyone sells businesses at the same time telling future owner that the prices need to be raised.

It's a way of getting more money my friend.


kc

K.Carothers
09-09-2006, 01:16 AM
Wrong..

I didn't even get a list if where the customers was at when I bought the business.. He showed me a couple and told me the prices, and told me that I could raise them alot of them.. how I got the deal on the business is a long story though...


Thats your own damn fault.

I have an island in the pacific for sale...are you interested?


kc

Josh.S
09-09-2006, 01:18 AM
Dude my business is running fine, thank you very much a$$hole.. i was just wanting to raise some a few bucks..

DuraCutter
09-10-2006, 12:53 AM
Dude my business is running fine, thank you very much a$$hole.. i was just wanting to raise some a few bucks..


Ok, you're brushing off most advice and calling people names. lol

Sounds like my teenage son... he knows everything...:dizzy:


Good luck

Josh.S
09-10-2006, 12:55 AM
Ok, you're brushing off most advice and calling people names. lol

Sounds like my teenage son... he knows everything...:dizzy:


Good luck

How is this giving me advise? :
Thats your own damn fault.

I have an island in the pacific for sale...are you interested?


kc

par69
09-10-2006, 01:31 AM
Do a good job this year and increase them next year. Increase them enough so if you lose a couple you still make the same money and you have more time to find better clients. I had to maney clients once and I raised them up so I would lose some but they all payed and I made more $$.

Josh.S
09-10-2006, 01:33 AM
Do a good job this year and increase them next year. Increase them enough so if you lose a couple you still make the same money and you have more time to find better clients. I had to maney clients once and I raised them up so I would lose some but they all payed and I made more $$.

That is what I am hoping.. most of the clients are on the wealthy side and don't care about an extra $5 a time or something as long as it isn't outragous...

dlm17
09-10-2006, 10:20 AM
if you feel the need to raise your prices it doesnt matter why , it is your buisness, rising fuel and labor costs, new equipment, summer home in the islands it doesnt matter expect to lose a few but if you dont and you feel like you are working for free whats the difference, depending on how you bill either knock on yhe door or make a note on their statement saying as of the first of next month due to my wife wanting a new mercedes or what ever (i actually just say due to rising fuel and labor costs) my price per cut will be going up x-amount most of them realize the need because they see that they cant fill up thir cars for 20 bucks anymore