Price increase advise

[lawnperfections]

I searched on this subject but I didn't find what I was looking for.

I'm a part-timer (2 years) and I have about 35-40 customers that are 7, 10 and 14 day cuts & some "call and cuts" (ranging from $25 to $35). All on these customers are in my neighborhood of 225 homes with another 200 being built. I want to increase my prices($5 per cut) for next year on most of them due in part to my bad bidding. I plan on this being my only increase. I also plan on going to some sort of service agreement for next year to make scheduling easier and to get a better idea on how much I'm going to make each month. My questions are:

1. When is the best time to announce this increase to my customers? If there is one. I plan on using the 20 letters template that arrived this week. I was thinking about January 2002 before the season starts.

2. Should I announce the "Service Agreements" at the same time?

I don't really care if I lose a FEW customers, especially the PIA's. I'm looking to get more $$ and less yards and be able to offer more for fewer customers.

[fivestarlawnken]

I would start talking to your good clients and ask for there input also.One way to increase the price and justify would include a service(fert,edging,etc)without charging for each indiv. item??? I would get away from the customers calling on you to mow(headache).January will be a good time to send out the info etc.Good luck

[kutnkru]

Originally posted by lawnperfections
1. When is the best time to announce this increase to my customers? If there is one. I don't really care if I lose a FEW customers, especially the PIA's. I'm looking to get more $$ and less yards and be able to offer more for fewer customers. Sounds like you've answered your own question. There is no RIGHT TIME to make this move unless you are ready to make more money.

Before you get into a $5 price hike have you checked what your market will bare, so that you wont have to hike yet again in 6 months because your not where you should be yet???

If you have done your homework on the homefront then you should be alright when you take the plunge.

Good Luck!
Kris

[lawnperfections]

How do you bring it up to good customers. I mean you don't just come out and say "I'm thinking about raising my prices, what do you think"

I can't use the gas excuse, most of the time I unload the truck once. They know I'm part-time and I don't think they would believe that I need the money, I don't, not that I would come out and say that. Just trying to get prices in line and maximise my earning potential. I know most guys in my area wouldn't unload the truck for less than $30.

They all tell me that they are happy with my work but are they happy because of my crappy bid.

[kutnkru]

You should know what you need to make to recover operating expenses, insurances, overhead, equipment replacement, and what you think is a fair profit.

If the average LCO is going to charge $30 you should charge $35. Afterall, you are not going to give them mediocre service are you??? I would hope not!!! It doesnt sound as if you want to just get by even as a part-timer.

Another take on this is to offer them a set price for 2-3 yrs once you give them the hike. Just make sure that you are prepared to live by those figures.

You also have to be offering them something that they cannot get from another LCO. Do you have a definitive edge that you put on their properties??? Do you weed the beds weekly??? Are you cutting them with a wb instead of a Z??? A 21" instead of a deck???

Figure out what your offering them and sell it to them. They are your clients, and you need to give them piece of mind as to why they have found a working relationship with you that works - and then up-sell your services.

Hope this helps.
Kris

[fivestarlawnken]

Bringing up the topic to good customers:::Ask them are there any services that you would like that i'm not providing? kutnkru had a good idea of a price freeze for 2-3 years , espically if you are part time.

[Runner]

Part time or not, you still have to have a curve for expense increases, esPECially fuel. As far as timing goes, I would NOT do this in January. It would be good to send out some type of flyer, as a word of hello or something, but I would wait on the price increase news. Perhaps when you send out a confirmation letter just before your REAL work kicks in. The reason is this. Marketing. First of all, if you send the increase out in January, it gives the customers a whole 2 months or so to "dwell" over this price increase and mull over different ideas (like PRICE shopping for a different service!) Secondly, because it's in January, this is REAL bad timing to hear about cost issues, especially increases, because everyone is strapped from Christmas and most have major credit card bills and such to make up. When you send news of an increase at that time, it is MAGNIFIED. Good luck with it, it can be done effectively.

[lawnperfections]

Thanks Runner, I didn't think about the "after Christmas" blues and I don't want to add to them.

[Lawn-Scapes]

Just make sure you offer some peace of mind and not piece of mind ;)

lawnperfections... are you billing each month for the cuts given that month? If so... you may want to go to a set monthly price instead. Based on the number of cuts (36) divided into 12 months. This would be a good way to slip in an increase...

[awm]

thats always a tuffy. smooth talkers probably know a better way but id think about doing it 25% at a time. now might be a good time to start. then if you loose to much. try somethin different.never ask them if its alright or stuff like that. just nicely explain that your cost have gone up,so you have to increase.
they seldom think its alright so dont expect a lot o smiles.
but you keep smilin:)

[kutnkru]

touche - ROFLMAO :laugh:

Blonde moment! :rolleyes:

[AztlanLC]

Few year back I had the same problem, What I did first was to figure out which customer needed to be raise, you don't want to raise all your customers $5.00 just cause sound like a good number, maybe some customers are paying a high price allready and you just don't know, figure out how much profit you make on each customer and you may be surprised that some customer may need a $10.00 increase rather than $5 and some others are paying real good.

If you can go talk to the ones you are planing to increase but don't ask'em what they think just tell them that you have to do so to be able to keep doing the service, think about a good speech, look confident and don't look down.

Another solution should be knowing how many times you have to mow a property during the season, down here we do it 28 times every week and 14 times every other, than make a contract for the whole year and set up payments, 10 payment works good for me and if it gets dry you don't have to worry about it because you still charging the same.

I do thid because when the grass grows around here it really grows and wethever it takes we make the lawns look clean all the time, even if we have to bag, that's the main reason I went with contracts only..
I was afraid to loose customers but at the end I only lost 2 out of 80.
Whe you offer a nice service people doesn't mind paying a little extra. And if they do you are better off with those customer.

[bobbygedd]

we increased some of our customers by $3-$5. we sent out notices the begining of june that said the price increase will go into effect july 1st. nobody cancelled. im gonna raise others next season too. i do this part time also, when i first started i used to tell my customers i was part time and found that they often thought i should work cheaper because of this. now i dont tell customers about my other job. i think that anytime u feel u need to raise a price, and u r being realistic about how much, and u dont have an agreement with the client stating otherwise, then do it. nothing worse than doing a job while thinking u should be getting more.