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View Full Version : Need advice correcting a newbie mistake..


Sweet Tater
12-03-2007, 01:27 AM
one of my very first accounts I qouted, I had not yet gotton the info or experience to correctly price. Hence I drastically under priced this lawn and now getting set for my second year I need to correct this.
Do you think a $15 increase is to much at one time?
I really need to move this lawn from $45 to at least $60.

corey4671
12-03-2007, 01:52 AM
one of my very first accounts I qouted, I had not yet gotton the info or experience to correctly price. Hence I drastically under priced this lawn and now getting set for my second year I need to correct this.
Do you think a $15 increase is to much at one time?
I really need to move this lawn from $45 to at least $60.

how long is the job taking you to do? that is a 30% increase. how quick was the customer to agree to the $45 price?:laugh:

Tadams
12-03-2007, 02:01 AM
$15 is a big price increase! You could raise their price by $5 pretty easy but you might just have to talk to them and tell them that you under quoted their price and you will need to raise them up to $60. Good luck.

willjones4
12-03-2007, 03:02 PM
You screwed up now you gotta eat it. I think Id rather have the $45 than $0.
Live and learn young Skywalker...You could try to talk to them but just think if your mechanic came and told you, "Hey I know I quoted you $45 to fix it but it was a real pain so I think its worth $60"

humble1
12-03-2007, 03:17 PM
can you make it up in other services. The other thing is are you still under priced at the 60 maybe its really a 80 cut for me and if you jump to what ou need to make they may still take it.

hackitdown
12-03-2007, 05:38 PM
If it is a $60 lawn, it is a $60 lawn. Call them up, tell them you underpriced it and need to adjust. Tell them that a fair price is $60. Tell that that you understand that it is a big increase, and you understand if they need to shop around (because they will). Ask them to just give you the same consideration as the next guy.

If you lose it, you lose it. You will need to face that risk if you know the lawn is a $60 lawn. If you need to reduce the risk, go $55. And $50 is even less of a risk.

Step up and ask for the money!

Sweet Tater
12-03-2007, 07:55 PM
"how long is the job taking you to do? that is a 30% increase. how quick was the customer to agree to the $45 price"
Its just a bit over an acre, usualy takes me 1 hr
WillJones4, this is for a price increase next year, but I understand what you are saying. If he balks and says no, I agree 45 is better than 0
I believe it should actually be $65 but even I would fire me for a $20 jump.
It seems the general consensus is that is a big jump. I will talk to him and explain that I underpriced him last year and need to bring it up. If he balks, at least I am getting the 45, I'll settle for that. shhh don't tell him tho

echeandia
12-03-2007, 08:26 PM
I had a customer that I bid $50 per mow. After doing the place for a three weeks I knew I had underpriced my service. So I told them that I had made a mistake and would have to charge $60 per cut. Since I didn't have a contract I could make the change. The customer didn't bat an eye. Remember to never negotiate on price alone. If they want to pay less then provide less, like no trimming or edging.

NC Greenscaper
12-03-2007, 08:38 PM
"how long is the job taking you to do? that is a 30% increase. how quick was the customer to agree to the $45 price"
Its just a bit over an acre, usualy takes me 1 hr
WillJones4, this is for a price increase next year, but I understand what you are saying. If he balks and says no, I agree 45 is better than 0
I believe it should actually be $65 but even I would fire me for a $20 jump.
It seems the general consensus is that is a big jump. I will talk to him and explain that I underpriced him last year and need to bring it up. If he balks, at least I am getting the 45, I'll settle for that. shhh don't tell him tho

Bad move. If you fill that 1 hour slot with a job paying 45 and pass two (30 min) lawns for 35 each. Then he is costing you 30 bucks each time you mow it. Just tell him the truth and let the chips fall as they will.

hackitdown
12-04-2007, 10:01 AM
Bad move. If you fill that 1 hour slot with a job paying 45 and pass two (30 min) lawns for 35 each. Then he is costing you 30 bucks each time you mow it. Just tell him the truth and let the chips fall as they will.

Very good point. This is what marketing turds call the "opportunity cost". You need to ask yourself what opportunity are you passing up to do this $60 lawn for $45. If your phone is ringing with leads, your opportunity cost is high. If you are still aggresively building a client list, your cost is zero.

Jay Ray
12-04-2007, 10:23 AM
Do you think a $15 increase is to much at one time? I really need to move this lawn from $45 to at least $60.

You are a member of a very big club. All I can add to the good advice of others is that a price increase always carries some risk.

If you lose 75% of the loaf of bread by trying to get 100%, you have to consider how that would affect you. If you know your average advertising cost to get one new solid customer, that can help make the decision of how much at one time.

LawnSharks
12-04-2007, 10:29 AM
can you make it up in other services. The other thing is are you still under priced at the 60 maybe its really a 80 cut for me and if you jump to what ou need to make they may still take it.

I agree with Humble1, we've all made mistakes and have to be vreative in how we re-coup our money. Go after other jobs, bed clean-up or restoration, leaf removal, pruning, trimming, pressure washing etc. If you try to get the entire 15-20 jump at once, you'll probably lose them and then another LCO will move right in and get the $60 with ease.
Good luck. Good customers are a gem. If you take good care of them, they'll reqward you with paying a little more.

HOOLIE
12-04-2007, 06:30 PM
When I have been in this position, I've found it best to just raise it to whatever it should be, vs. doing it in small increments. You'll just be kicking yourself next year if you're not getting the $60 per cut.

This thread points out one of the many difficult situations we all get into, as business owners. No matter how much you may like a customer personally, you have to make sure you're business is turning a profit. You can still be a decent person and make business decisions. You need to make a decision on whether it's $60 or $45...none of this 'what if they balk?' crap. If you're willing to do it for $45, then leave it alone and don't even ask for more. If you want $60, then TELL them (don't ask) that it's $60. When your electricity rates go up, does the power co. call and ask if that's OK? What if you said no? Would they say, "Oh that's cool Tater. We'll keep you at the old rate. We just thought we'd try" :laugh:

Grits
12-04-2007, 08:12 PM
You screwed up now you gotta eat it. I think Id rather have the $45 than $0.
Live and learn young Skywalker...You could try to talk to them but just think if your mechanic came and told you, "Hey I know I quoted you $45 to fix it but it was a real pain so I think its worth $60"

Screw that! If he isn't making money at $45 he should either raise the price or drop the account. Why on earth would you do it for $45 if you are not making money and possibly losing money? Sounds like words from someone that doesn't know their costs.

BeautifulBlooms
12-04-2007, 08:12 PM
A few things to consider, is this place on a nice tight route with other places? If so dotn worry about getting it to $60 right away. If not then tell them what you need to get and if they say no say I am sorry you just cant afford to keep doing it at that price. Are you only mowing or are you getting all sorts of other work out of the deal, if not, then walk, if more work is done there then consider it a cost of doing business, but try and increase it by $5 for the next few years to get where you think you should be.

I havent had to do this yet but I would approach it like this. Tell them that you underquoted them for the past. The price you think it should be at is x. If the cannot agree to that with your honesty then see if you can split the difference, or increase it by $5 per year for the next 3 years? I

DavisLawn
12-04-2007, 10:39 PM
depends on how bad you need the business.... is it a real good customer? Good customers are WELL WORTH keeping..... most of mine VOLUNTEER every year to go up with the gas prices... those are the kind you need to keep..... if you want to keep them and they are really good to you, i'd say just bump the price 5 dollars each year due to the increase in gas prices is a good reason.... if they're bad or just average or you dont need them. ... tell them 55 or you have to let them go... then bump it next year....

Gator Lawn
12-04-2007, 11:04 PM
one of my very first accounts I qouted, I had not yet gotton the info or experience to correctly price. Hence I drastically under priced this lawn and now getting set for my second year I need to correct this.
Do you think a $15 increase is to much at one time?
I really need to move this lawn from $45 to at least $60.

Back in the 80's my mower wore out and I called on an ad for weekly service. The kid showed up sporting a decent truck, trailer and a couple WB's. He quoted $16 wk. Hired.

The 3rd time he cut it he tried to jack the price to $20, blaming me for having a lawn that grew too fast. Fired him on the spot.

Now, your situation is completely different. You completed the season. Every account needs to be reevaluated every year.

If I were u I would explain to them that u underpriced and still honored the price for the season out of respect for the agreement. I would ask for a 10% increase per year until it came up to the going rate. $15 ain't gonna make u rich, but losing $45 might be a pretty good hit to the bottom line. Depends on whether u need this account.

echeandia
12-05-2007, 06:40 AM
I would ask for a 10% increase per year until it came up to the going rate.

Wrong. He does not have a contract with the homeowner so in my opinion he should have told the customer that he was raising his weekly rate. Now that he is setting up for the new season he should tell him $60.

Ten percent a year, your out of your mind. He would never catch up.

supercuts
12-05-2007, 07:24 AM
one of my very first accounts I qouted, I had not yet gotton the info or experience to correctly price. Hence I drastically under priced this lawn and now getting set for my second year I need to correct this.
Do you think a $15 increase is to much at one time?
I really need to move this lawn from $45 to at least $60.

where is this drastic??? im assuming this is for mowing and not a fall cleanup. aslo, you might watn to consider your quote, "You can't run with the big dogs if ya still pee like a puppy". sounds to me you need to learn to stop squatting. get some balls and simply speak to him next time your there. not big deal. assuming your not runnng a full schedual, its poor advice to hear your "losing 30 per mow" rather than doing 2 $35 jobs.

lastly, what are you using to cut this lawn. if you tell me 21" push mower and it takes you an hour, im going to laugh and say i can be done in less than 15 mins on my ZTR and then $45 is fine.

topsites
12-05-2007, 12:01 PM
Ok so it's a bad situation but you already ate crud for a year and you've done the dirty, I respect you for that because I did it too and that is what you do when you make a mistake is own up to it and you put in a whole season at 45, blam we're done here.

No sir, I do not believe for one minute that you should have to deal with this for another year.
You've chalked this one up and you'll be pretty sure you won't make this mistake again, so ...

You tell the man that you made a mistake, the lawn's price for next year is $55.
It's still cheap, but if he'll go for it then I'd do it for another year at 55, if I were in your shoes (and I was at the time, similar situation too). He might go for 50 and that blows, so maybe say 60, I don't know, you have to decide.

But you do have to do it, I see nothing wrong with it at this point.

And DO advertise heavy next spring, you will most likely lose this customer, maybe not next year, but just speaking from my own experiences.

Very good point. This is what marketing turds call the "opportunity cost". You need to ask yourself what opportunity are you passing up to do this $60 lawn for $45. If your phone is ringing with leads, your opportunity cost is high. If you are still aggresively building a client list, your cost is zero.

That's right, the time you spend on this loss leader is when you miss that one phone call where you could've done better.
I like that "opportunity cost," always wondered if they had a name for it.
Man, I wonder what else they have a name for :laugh:

..........
Other notes: The job of a loss leader is to lead you and your company to loss.
And that is all, for the most part, a loss leader does.

Sweet Tater
12-05-2007, 12:45 PM
you might watn to consider your quote, "You can't run with the big dogs if ya still pee like a puppy". sounds to me you need to learn to stop squatting.

That mistake was made while I was still a puppy.

lastly, what are you using to cut this lawn. if you tell me 21" push mower and it takes you an hour, im going to laugh and say i can be done in less than 15 mins on my ZTR and then $45 is fine.

Na its about 1.5 acres, takes a little over and hour on a 48"ztr

Ya'll have some very interesting points and I wil take them all into consideration, weigh them and make my decision. Altho with ya'lls advice I beieve $15 increase is to much and will ask $10 this year and $10 next. I believe I will be safe keeping him at that price. Yes I still need to keep all that I have, My biz is still small enough that loosing 1 will hurt. That why I turn to the colabritive intelligence of LS. Thanks guys.

BTW incase I forget .... MERRY CHRISTMAS

Nate@TLCS
12-05-2007, 01:46 PM
Hey Tater! Sometimes it is better to ask for forgiveness, than to ask for permission. Raise the price to $60 and if they complain.... say you will lower it $5 big deal right. If they don't complain.... raise it again next year to where it needs to be.

BeautifulBlooms
12-05-2007, 03:15 PM
If you arent upfront and honest right away with them they may take one year increase but definitely not two. I still say you made a mistake it should be at $60, but you will split the price raise with them either in half so $7.50 this year and $7.50 next year. They will certainly want to reshop around for pricing next year if not this year too, but at leats you were honest up front and the request to raise the price wont shock him next year.