Raising Prices?????

[His Scapes]

I was just wondering what you guys did about price increases on yearly maintenance customers.I filled up my diesel today at 3.59 a gallon and figured it my be time for an increase.I have only increased prices once and it was about 3 years ago.What would be an appropriate increase and what would you say in your increase letters.Any info would be helpfull.

[Wrobel#1]

i raised my rates last year 10%-20%

[bohiaa]

didn't you post this twice ?

[joesimoes2]

2.5% each year is your best way to raise. 10% to 20% most of your costumers going to be calling you there is a mistake on my bill.:waving:

[salandscape]

I went up about 4-5%, and not across the board. I did go up significantly on a few to either get them to drop or make it more worth my while. I did hear somewhere that with all the increases in our industry that we will need to go up 5% just to maintain last years profits.

[Mow Mony]

I went up about 4-5%, and not across the board. I did go up significantly on a few to either get them to drop or make it more worth my while. I did hear somewhere that with all the increases in our industry that we will need to go up 5% just to maintain last years profits.

We adjusted each account accordingly, about 80% received a prince increase. Those that didn't just got one last year...about a 5-7% total increase across the board, but each specific account was looked at individually to determine the amount of increase.

I would say that a minimum 5% increase is necessary to continue making the same profit as last season.

[outrunjason]

I was reading somewhere before I came across this thread that some were lowering prices?

But to answer your question I raised my price by a buck. ( I don't do percentages as I don't have the brain power :) Which now I am even wondering if that was a good idea. I have done 4 estimates so far and everyone one of them was paying $20 bucks last year. I charge $27.06 with tax I told one guy and he said forget it I will call the company I had last year. I said well why are they not here this year. He said well they just don't clean up well but for that price I am willing to keep them.

Well I am not a low baller but he didn't know we mow the house across the street from him so I offered him the same deal as the other company. $20 + tax. He said sure.

[kootoomootoo]

You can raise 10% and lose 5-10% of your customers. Do the math first.

[Mow Mony]

I was reading somewhere before I came across this thread that some were lowering prices?

But to answer your question I raised my price by a buck. ( I don't do percentages as I don't have the brain power :) Which now I am even wondering if that was a good idea. I have done 4 estimates so far and everyone one of them was paying $20 bucks last year. I charge $27.06 with tax I told one guy and he said forget it I will call the company I had last year. I said well why are they not here this year. He said well they just don't clean up well but for that price I am willing to keep them.

Well I am not a low baller but he didn't know we mow the house across the street from him so I offered him the same deal as the other company. $20 + tax. He said sure.

I am glad we do not work in Dallas. I realize the market is completely different, but our minimum is $35 for weekly service.

I would stay stick to your initial price and just keep doing more estimates, and don't expect to close even 50% of them...unless need the work very badly. You dropped 30% off of your price by giving in for $20. Why not just start at $25 or $23 if you are willing to go to $20? So now what happens if you lose the lawn across the street? You are driving there to do only one lawn, which is under priced already. After gas and expenses, you are probably losing money on that $20 per cut lawn.

Not trying to give you a hard time, but stick to your prices man, you are running a business, not flea market. It helps you, and the industry as a whole.

[outrunjason]

I agree to sticking to the prices. But the truth is if I don't get the job the next Mexican guy will. So, I might as well take it. As for the neighborhood I have a house on every street pretty much so it really didn't make a difference to price match on it.

[Doug1966]

1. Know what your desired revenue per hour is.
2. Reprice each account individually according to how much time was spend on the account last year, to bring the account up to the desired revenue per hour.

That's it. It isn't complicated. Increasing across the board means that low profit customers may still be low profit customers, and high profit customers may be priced out of the market.

If you customers can't afford your desired revenue per hour, let them leave, and replace them with customers that can.

It scares me to see other LCOs do across the board price increases.

Across the board % = bad/lazy business practice

[outrunjason]

1. Know what your desired revenue per hour is.
2. Reprice each account individually according to how much time was spend on the account last year, to bring the account up to the desired revenue per hour.

That's it. It isn't complicated. Increasing across the board means that low profit customers may still be low profit customers, and high profit customers may be priced out of the market.

If you customers can't afford your desired revenue per hour, let them leave, and replace them with customers that can.

It scares me to see other LCOs do across the board price increases.

Across the board % = bad/lazy business practice

#1. That is exactly how I do it. Sometimes it is better to not lower you prices but keep the hourly rate the same. I expect $25 per man hour on jobs. When mowing we make way more than that. In 1 hour we can do 3 lawns and them being on the same street even if they were 20 bucks that is 60 for that one hour. $10 more than what I expect. I believe it is easy. Just sometimes everyone gets into we charge this and so and so charges this etc.

[kppurn]

Roughly 80% have seen a rate increase for 2008. The percentage varies from account to account, as adjustments were made on an individual basis.

[chipk1]

You can raise 10% and lose 5-10% of your customers. Do the math first.

That's not necessarily a bad thing is it. Grossing more or the same with less work?