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mowerbrad
03-03-2008, 07:54 PM
I got a new customer this year that is in an area that I have no other lawns. I was thinking about offer the lady a deal that for every one customer she refers me to in her neighborhood I would take off $5 from her bill. Of coarse that new lawns must be a year long deal and not just a one time thing. Have any of you guys tried this? If so how well does it work?

tamadrummer
03-03-2008, 07:58 PM
No way you can do that for the long haul. Are you just giving her $5.00 off for the month that you get that customer? That is just too much money to give up.

Better money could be spent on door hangers being put up on all the neighborhood doors and then offer her a small break for a SHORT time but don't make it permanent.

Just my opinion. Good Luck in the new season!
Brian

IndyChad
03-03-2008, 07:59 PM
It seems like a year log contract referral would be worth more than $5. Try a gift card to a restuarant. Make it worth her while, but do not give away the farm.

mowerbrad
03-03-2008, 08:04 PM
The $5 would be a one time thing, it wouldn't be taken off her monthly bill month after month. I thought $5 may be a little cheap if I get a few customers from her referrals, I might either make the deduction more or do a gift card to somewhere for her.

cz lawn care
03-03-2008, 08:06 PM
i just did that today as a matter of fact......i gave her 5$ off each month(we now have a yearly contract) BUT she had to get me her neighbor on a YEARLY contract..... it worked well

kleankutslawn
03-03-2008, 08:12 PM
it can work out well

GreenerSideLC
03-03-2008, 08:18 PM
I offer all my customers a $10 credit for any referrals that sign a 1 year contract or purchase a min. of $100 service. Its a one time credit and works well for me, referrals are 80% of new business ive never had much luck with the yellow pages. I would definitely offer her something to try to make the trip worth it.

lifetree
03-03-2008, 08:22 PM
No way you can do that for the long haul. Are you just giving her $5.00 off for the month that you get that customer? That is just too much money to give up. ...

That does sound like you would be giving up a little too much just for one referral !!

tamadrummer
03-03-2008, 08:33 PM
That does sound like you would be giving up a little too much just for one referral !!

If it is a one time deal no it is not but if it is a full on thing, then it can really eat into your bottom line.

I like the gift card idea. That doesn't put any term on the deal. some kind of Dunkin Doughnut or Krispy Kream card or Blimpe or something. It would be good.

If it works for the majority, maybe I am totally wrong with my ideas and I need to revise how I think about business. I don't write anything in stone. At this point I need all the help I can get but I always cringe at the idea of dropping money in the customers hands because it just makes me feel like they get the idea that "we didn't need the money we were already making from them"

rucker lawn
03-03-2008, 10:53 PM
a gift card would be an expense, which = tax deduction
$5 off would be a reduction of income

Just my opinion.

Either way I agree with you offering her something, gaining customers is never a bad thing.

IndyChad
03-04-2008, 08:59 AM
The tax deduction is one of the major benefits of giving a gift card. Plus the customer is thanking you when they receive the card and remembering you when they use the card. Anything to brand your name in a customers head! It is also something tangible that they can hold and it is a lot easier to impress with a tangible good instead of a mindset of $5 off. But with all that said if your system works then there is no need to change. Good Job

grass-scapes
03-04-2008, 10:12 AM
So, getting a 150 to 200 dollar a month (1800 to 2400 yearly) job isn't worth 60 bucks? Riiiiiiight. Sounds like a plan in my book.

of course, they have a valid point about the gift card, but with the discount, you break it up over 12 months. The reduction in income helps with taxes too, but that wasn't mentioned.

DA Quality Lawn & YS
03-04-2008, 10:19 AM
I agree with grass-scapes.....you give a one time $5 credit for a referral that results in over $1k seasonal? What is wrong with that? I would not go so far as giving a repeating $5 credit every month though. Make it one time only, and I think it is well worth it. If you want to do gift cards to local businesses - that is a great way to do it as well.
Remember, you can always cut off the referral program at any time - its your business!

UrbanGreen
03-04-2008, 10:21 AM
On some of my smaller lawns I have set up with some customers a system where with every new year contract they get me, I give them one month half off on regular services. It sounds like I am being to generous. Is this a bad system? From one customer I got 16 new yearly contracts all in the same neighborhood! So to do his at half price a month isnt so bad when it only takes us 20-25mins a week to do his lawn.

grass-scapes
03-04-2008, 10:26 AM
I agree with grass-scapes.....you give a one time $5 credit for a referral that results in over $1k seasonal? What is wrong with that? I would not go so far as giving a repeating $5 credit every month though. Make it one time only, and I think it is well worth it. If you want to do gift cards to local businesses - that is a great way to do it as well.
Remember, you can always cut off the referral program at any time - its your business!

no, I said 5 dollars recurring is good, not one time. One time 5 bucks is the el cheapo way out. If I were his customer and he gave me 5 bucks for getting him 1800 in business, I wouldn't be apt to do it again.

IndyChad
03-04-2008, 10:28 AM
I really do not think there is a good way and a bad way of doing this. If you are getting a good return on your investment, then it is not bad. I will give anyone $60 if they give me $2000 back throughout the year. Even more. 16 referrals for one month of half price mowing for one client. That is great! You should put him on payroll.

rucker lawn
03-04-2008, 10:44 AM
I agree with your discount. If it is working for you and it sounds like it works for others, keep doing it. I agree with IndyChad, you give me $2000 worth of business-I will find a way to give you $60 as a token of my appreciation :).

16 referrals in one neighborhood, I would mow his yard for free! referral business is the best kind of marketing.

grass-scapes
03-04-2008, 10:50 AM
I really do not think there is a good way and a bad way of doing this. If you are getting a good return on your investment, then it is not bad. I will give anyone $60 if they give me $2000 back throughout the year. Even more. 16 referrals for one month of half price mowing for one client. That is great! You should put him on payroll.

man, you need to comprehend what you read. He gives half of one month for EACH customer they get to sign up. Still a good deal. ITs not half a month for all 16.

UrbanGreen
03-04-2008, 10:52 AM
Sorry I think I explained it wrong. 16 customers 16 months at half price. This has also worked well for me in other areas. Not quite as many as 16 but most of my good ones will get me generally 5-6 new customers. Almost always either they are neighbors or friends that live like 2min away. As for the guy that has gotten me 16 new ones I do a lot of little extras for all the time for free.

MarkintheGarden
03-04-2008, 11:06 AM
I agree whatever works, works! So there are many ways to skin the cat.
Gifts are tax deductible, and so are discounts if you do the accounting properly.

But consider this, if a customer is willing to refer you to their friends and neighbors, it is most often because they appreciate you and your services. My customers are not particularly interested in a five dollar discount, but they do seem to appreciate me and they feel like they are doing me and their neighbor a favor. I do the best I can for my customers and I thank them for referrals and do my best for the new customers as well.

People are either interested in suggesting me to others or they are not, an incentive program just does not seem to make sense, when my business plan is to provide the best I can at a fair price.

UrbanGreen
03-04-2008, 11:16 AM
I agree with you that you dont want a customer that just wants the discount and will tell anybody and everybody about you. However that is why I only do it with certain customers that I know dont really care about the discount but rather think i do a great job and want to see my business grow. I have very personal relationships with a lot of my customers that have developed over time. These are the ones that I approach usually about this.
Even though you do a great job on a lawn, sometimes that customer just needs a little reminder to spread the word.
With my system you would be suprised at how many of my customers still pay the full months bill instead of taking the discount.