Help with stubborn but good customer

[blakes estates]

I have a customer that brings me in $10,000 - $15,000 per season, has been a regular cust for three years. All his properties that I cut are a set price, all other work is time and materials. Because he gives me lots of work I cut him a break on the labor per hour which is well below what I charge other cust. Over the winter we had a meeting and he was looking to have me lower my hourly rate. I service an area in Lancaster Pa, looking to see what the going hourly rate is for most landscapers in this area. He says if we don't come to an agreement that he may be forced to look elsewhere. Any advice comments or questions would be helpful.

[Henry]

Are these rental properties he owns? Ask him if he's lowering rents this year.

[carcrz]

let him look. He'll be back if you do good work.

[tthomass]

I had a customer tell me recently that my price for his hardscape was high. "this is very high, know this blah blah".........here's what I know, he's an idiot and just looking to get me to lower my price. Take it or leave it, already a winter rate....otherwise I'll sit at home where its warm.

More info about your customer.......Henry hit the nail on the head.

[blakes estates]

He owns all props , 3 are his homes all others are his businesses. The guy is very wealthy but cheap ( aren't they all)

[CAG]

when u meet with him tell u cant go lower because next year u have to raise everybody's rates and stick to it.. then tell him at the end your willing to keep the price the same, but just for him... their a lot more thats going to have to go into the conversation and I'm sure you can figure it out.. he's just need to feel like hes getting a better deal.. i have one the same way.. he's a big shot business owner (millionaire)thats has spent lots of money with me for five years and just like and one else feels like he deserves a good deal... this guy i deal with always gives me the BS your to expensive and when i ask him if he is happy with a job its always just OK.. he's to scared to tell me he's happy because it might cost him more money next time.. some people r just tools but if they got $ u gotta get it...lol.. just mark up prices then give him a discount..

[blakes estates]

The one good thing about this guy is that he will have a job for me and have me just do it and bill it. No quote or paper work or delay in doing the work. This is worth something.

[JJLandscapes]

He owns all props , 3 are his homes all others are his businesses. The guy is very wealthy but cheap ( aren't they all)

you cant call someone with 3 houses cheap lol thats just stupid . He is wealthy because he is good at what he does.. ex. making you give him lower rates when he knows he can ...instead of having someone else charge him full price on everything

back to the subject if his price drop is reasonable wouldnt you rather gross
14k (1k drop for easy math) extra this year by having a "good" customer as you called him or lose him and have your gross drop 15k

If he isnt reasonable tell him go somewhere else.. u the only one that knows if losing him will affect your pocket enough to do damage maybe you are making tons of money and he is chump change and doesnt matter if you hold your ground and lose him

[crawdad]

Raise his rates. If he leaves, this gives you more of the most precious commodity- time. You can get more customers at the correct rate. Result? More money for you.

[PaperCutter]

When I was in another industry, one of the big car dealerships we serviced sent letters to all the vendors stating "due to a slowing in the economy, all of our vendors will cut their prices a minimum of 5% to retain their contracts, effective immediately." Yep, let me get right on that. We didn't miss their business at all.

Service the customer, let the customer think they're king of their castle, but run your business how *you* need to run it. I'd tell him that as a businessman, you're running as lean as you can to take care of him at a rate well below your average. If he's a successful businessman, I would think he'd get it and back off. Sometimes I think people forget we're running a business here.

[klkanders]

blakes estates

As everyone has said this happens all the time. When you met with him and he mentioned this I would have politely said I was going to contact you also on prices for the coming year. I have been talking with my suppliers for materials for the upcoming season and most everything is going up in price not down. As a result of this I also need to raise my prices. I have always given you a reduced labor cost for your loyalty to me. You have been a faithful customer that I want to keep and I would be willing to leave your prices as is for this year. Can we agree on that?

If this doesnt work then you have to decide if you want to continue working for him. I think it will put him on the spot like he did to you and if he thinks you are fair and sincere he will go with you. Show him what you are charging everyone else. Good Luck!

[Cedar Valley Landscapes]

It is nice to have work to do, but if you are not making money on it than what good is it to you. Even though he is a good customer, if you cant make any money then it isnt worth it.

[FATWEASEL]

I agree that alot of people just want to feel like they're special and that they're getting a better deal than the next guy.

Does he KNOW that he is getting a deal on the extras you do? If you decline to lower your rates for him, I wouldn't just give him a flat out NO! Remind him of the extras and breaks that he already gets. Sometimes you got to toot your own horn!:)

Better yet, show him. Take some of the work you've done and figure out what your normal charges would have been and explain to him nicely that you're doing as much as you can to keep his costs down and still deliver a professional job, and still pay your bills. If he is persistant, show him, "This is an example of what I've done for you and what I charged you and THIS is what I would have charged anybody else."

If he respects your business and the work you do for him, then he should be understanding. If he doesn't, don't fret. One door shuts, another one opens.

Andy

[mgmlandscaping]

I had an exact customer just like the one you mentioned. Long story short, we parted ways at the end of last winter. He lasted one month with another company then called me back. We sat down and talked man to man, our relationship is better now then before.
Also to point something out. With this Hardscaping project are you bidding on a sq ft price or an exact labor/material price? If you are creative you might still be able to give him a discount and still make the same profit. (ie maybe by bulk stone base to save some money, use material you have left over from another job).

[MarkintheGarden]

The one good thing about this guy is that he will have a job for me and have me just do it and bill it. No quote or paper work or delay in doing the work. This is worth something.

Yes this is worth something, it signifies trust, and it also tells me that you are already providing valuable service at a fair cost.

One way or another we have to make our customers feel like they are getting a good deal and at the same time take care of our own interests. Sometimes they need to call our competition in order to accept that we are providing fair costs.

This customer is a business man and he will know what it means when you tell him, I am sorry, I cannot offer what you are asking and anyone who could would not provide the same quality results.

[AGLA]

Tell him that you have improved with efficiency over time and will expect to continue to do that. This means that you are producing more work in each hour even though you haven't charged more per hour. Also, your expenses related to running the business have increased which means that by keeping your rates the same this year, you are actually making less money and he is getting more out of each hour you work.

Offer to not increase his rate this year, although you are increasing rates everywhere else. Never let yourself earn the right to work for less. If you are worth it, he will keep you. If your not, he should not keep you or you should cut your rate. Only you and he know which situation is truth, but I would bet that you are worth it since he has given you so much work.

Above all, don't act like you desperately want to keep him.

[elmo1537]

Try to work thing out with him first because no one likes to lose a good customer.

You have to remember this is your business not his you want to make a profit. If I has as much money as you say he does he will understand. Explain he is already getting a discount for exceptional work.

If he want to be stubborn then let him go. There are 100 people knocking on my door for everyone that I kick out. If you run a high quality business you should be the same way.

[Stillwater]

I have been doing this for as long as dirt is old, so your question does not require much thought, first you already give him a break on labor cost, this is something he needs to know. If he still presses hard you should let him go. their is no question. Do not be fooled he is not a good customer. their is a lot more that makes a good customer besides 10,000 in work he gives you. Thank him and apologize for not being able to accommodate him and move on in a friendly way. Your not a charity you are running a business. Their is nothing more to say. Take care of your business

[cleancutccl]

He might be giving you 10-15k a year in jobs, but are you making any money on these jobs with your current prices? If not why keep working for free when you could lose this customer and open up space for more profitable customers. I make a point to be "friendly" with my customers and talk about family and whatever else, but first I am a businessman that has to feed his family. I guarantee you, if you lower your price now, you better get used to lowering your price because you will hear him asking you to do it all the time. One of my teachers for my ICPI course used to work for JE Dunn, a huge gen. construction firm, he said the worked with a 3% profit margin and if something happened on the job that cut into that profit margin they didn't eat it they went to the subs and made them cut their price. This guy would much rather see you out of business than him have to lose money out of his pocket, period! Some of these guys you just need to push back to get respect.