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South Florida Lawns
01-22-2010, 07:09 PM
I have a customer that I have been servicing since 2000, and just recently for the first time increased their rate 5%. This would be for the first of January, I just received payment late with a note saying they can't afford the increase right now and payed what I have been previously charging them.

With all that being said they are good customers that pay almost always on time, and are in a row of about 20 yards I maintain. I would like to keep them but its about time they start paying more for my services.

How would you handle this situation? Let them slide for a few months and raise price during summer? Or argue about the fact everything else is going up and you have to charge more.

I know my price and its about time for a rate increase.

WHIPPLE5.7
01-22-2010, 07:16 PM
Ask them if they are willing to keep your services if you postpone the increase till mid season. You wouldn't want to lose one close to other work like that unless you really had to.

JayD
01-22-2010, 07:18 PM
Wow........they are upset for a 5% increase and its the only raise in 10 years!
I would just go over there and talk with them. It may be true and it is a bad timing for them for some reason, but I would have to know why and it better be good, sense you have never raised them sense you started and not to mention that it has been 10 years....That's crazy

......and if it was not convincing, I'd be :walking::walking::walking::walking:

mowerbrad
01-22-2010, 07:26 PM
Like JayD said, I'd go over and talk to the customer and see what the situation is. Maybe you can work with the customer and raise the price later in the season, when maybe they would be able to afford it. I would hate to lose an account over a 5% increase, but yet it really shouldn't be that big of a deal to the customer anyway. On a $1000/year account, that 5% is only $50 more for the year. It seems a little rediculous to make a "fuss" over a 5% increase.

torotorotoro
01-22-2010, 07:42 PM
every one should get raised every year.if they have a problem with it you dont need them.if you do a good job im sure you can find a new customer near by who will be happy to pay you more.

JayD
01-22-2010, 07:52 PM
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WHAT THE HECK IS THIS MAN?:hammerhead::hammerhead::hammerhead::wall:wall

gtmorgan89
01-22-2010, 07:54 PM
They could afford it if they "WANTED" too.

FYS777
01-22-2010, 08:48 PM
10 years for no raise? 3 years ago had to raise prices because of fuel was at almost 5 dollars a gallon. sense then has drop by two dollars a gallon at lest. haven't raised prices sense. we put a clause in our service contract that if product cost raises we may have to raise prices, so far we haven't had to.:)

South Florida Lawns
01-22-2010, 08:51 PM
This customer is really starting to rub me the wrong way the more I think about it. I'm half tempted to chew the guys ass out not even caring wether I lose the account or not.

MudslinginFX4
01-22-2010, 09:02 PM
I'd work with him real nicely on it. You dont want to loose him to someone else cheaper because others might start changing also.

Landscape Poet
01-22-2010, 09:12 PM
This customer is really starting to rub me the wrong way the more I think about it. I'm half tempted to chew the guys ass out not even caring wether I lose the account or not.

I think you are correct in being upset on this one. No price increase in 10 years? And now you just want a 5% increase. Let me list a few things for you and what I purchased them for less than 10 years ago and what they cost now!!! Tell me how bad that 5% increase is in perspective.

1. Little Debbie Cakes less than 10 years ago $1 now at least 1.46 at WalMart
2. Doritos - less than 10 years ago $2.00 a bag now roughly $3.50 per bag
3. Bread - used to be able to purchase Wal-mart hot dog buns or hot dog buns for less than $1.00 - now they are roughly 1.47
4. Angel Soft 24 roll TP - was $4.38 cent less than 10 years ago..now well over $5.87 at Wal-Mart
5. Can of pringles - less than 5 years ago $0.97 at Wal-Mart now usually at least 1.25 on sale.
6. I used to be able to buy Coke or Pepsi for $2.50 a 12 pack and could get for 2 for $4 on some weeks less than 10 years ago, now on a good week I can find for under $3.50

These are just some of the things that are usually on my weekly grocery list that my wife and I were talking about the other day. Maybe if you put your need for a increase in terms like this he would be a little more understanding? I do not know, I hate to lose any customer but it does not sound like you are asking for too much to me!

Raymond S.
01-22-2010, 09:23 PM
This is a tough one. I would probably talk with them and work out a compromise. If they are in a row of say 20 houses, they're probably talkers. You give them a break, they tell their neighbors, soon they're all bitchin' because they got rate increases and neighbor #1 didn't. You hold them to the increase, they bail and have another company pick it up for cheaper, now the other company is in on your "turf." likely going to steal some of the other accounts as well. I'm not really sure. I think I would just eat it if those 20 accounts are a dealbreaker in your gross sales and tell them their situation is unique, they're valued, etc. etc. and you would appreciate their confidentiality because you can't do this for ALL the accounts. Maybe agree to 2.5% this year and the other 2.5% next year so they're on track with the rest of the neighborhood. It won't be a dealbreaker for you, let's them know you want to work with them, and you didn't back down completely. It may be B.S., but I think the alternatives are much worse if you tell them to go packing.

South Florida Lawns
01-22-2010, 09:27 PM
Very good points here in the last 2 posts. I will have a chat with this customer on Monday and give him a piece of my mind.

FYS777
01-22-2010, 09:40 PM
good points . has this customer brought you any other accounts through the years, or none? a lot of the first clients that i have, have produce more then just themselves,just a thought.

Yater
01-22-2010, 09:42 PM
This customer is really starting to rub me the wrong way the more I think about it. I'm half tempted to chew the guys ass out not even caring wether I lose the account or not.

Do it. Anyone who rents a home or an apartment sees a rent increase almost every year. Fuel prices go up, EVERYTHING goes up. Tell them to piss off if they don't like it.

FYS777
01-22-2010, 09:46 PM
Do it. Anyone who rents a home or an apartment sees a rent increase almost every year. Fuel prices go up, EVERYTHING goes up. Tell them to piss off if they don't like it.

ha! all the rent prices have dropped around here!!! for the last two years because of the flood of rentals.

echeandia
01-22-2010, 09:52 PM
Explain to them that you have held prices for several years and need to raise the price to reflect your costs. Tell them that the $2 extra is very reasonable and that you would like to keep them as a customer but the cost will now be $2 more.

It's up to them.

familylawncare
01-22-2010, 09:59 PM
Why are you guys afraid to lose one customer. I'm sure your costs have increased over the past ten years. Check out what your fuel costs were as opposed to now. Geez, move on. There are more customers willing to pay for your services.

FYS777
01-22-2010, 10:12 PM
here is a ?? how big is the lawn and what do you charge,? this could answer a lot of debate, or assumptions. for example, this guy has been aerating a lawn for 6 years at 75 and hasn't raised prices even when fuel was high, dosen't that make you think that he may have been over priced to begin with? i would do it for 50 bucks now, its only 1200 sq foot of grass! 15 minutes with a blue bird and its done.

topsites
01-22-2010, 10:31 PM
Don't cuss'm out man, but I wouldn't give in either, just be firm and polite about it and you might lose the account but dang...

Sometimes I think we set ourselves up, I know I do...
Give them a good price to get the account initially or maybe they played a little Jedi mind trick on me
but whatever the reason I bid it too low and then over time it never gets to where I can ever set the
right price, every time I try to do it I get this type of BS.

Almost as if all they ever wanted was the super low price, don't care about nothing else.
And I'm not sure if that is the case here but it's kind of what sprung to mind...

I dealt with it and put up with it for many years, often losing accounts in the process as well.

I learned...
When I underbid a job, no matter the reason, when I leave the bill I do so by writing down
the 'regular' rate (what it should have been) minus a discount (the difference) and then I
do that for a bit of a while like maybe until end of the month or 30-60 days out or so and
then I just knock off the discount.
Some go for it, others don't, but the good news is those who don't go for it are weeded out early in
the process because I got tired of getting stuck with these low-priced accounts year after year, too.

brucec32
01-22-2010, 10:34 PM
Or you could run it like an actual business and neither let the customer dictate to you what prices you charge (by paying the lower amount instead of the proper amount) or blow up at them and chew them out.

How about "sorry, I have a business to run, that's a fair price, I can't work for you unless I get my price".

It really isn't all that complicated. 5% is nothing. They just don't want to pay more. But who does? If they're a serious customer, they'll pay it. But what are you gonna do the next time this comes up? You'll eventually wind up with a lot of low paying accounts.

Finally, next time don't make the mistake of no price hikes for years, then suddenly a relatively large one (there wasn't any 5% of inflation last year). B

FourTrees
01-22-2010, 10:43 PM
I have a customer that I have been servicing since 2000, and just recently for the first time increased their rate 5%. This would be for the first of January, I just received payment late with a note saying they can't afford the increase right now and payed what I have been previously charging them.
Just clarifying: You sent them a bill for work performed, with an increased rate of 5%, expecting to be paid in a timely manner. My question is when did you discuss this rate increase with them. I could be wrong and correct me if I am not understanding, but did you just increase the rate with no discussion and then bill them for it during the worst economic times that you have had this client? If so then I see there point of view kinda. True they may need to be raised up, but you have chosen for 10 years not to raise rates, then suddenly during bad time do. Most companies in this industry and others work the other way around raise during normal good times. hold off if you can during bad.

If you did discuss this price increase earlier and give them a fair amount of warning than by all means disregard what I just said. All but the part about watching increases during lean times, I don't really support raising rates during bad years when all are suffering. Now that does not mean I am against any increase I just recommend being careful.

topsites
01-22-2010, 10:45 PM
There is one other problem...
20 customers all in a row...

FYS777
01-22-2010, 10:51 PM
Just clarifying: You sent them a bill for work performed, with an increased rate of 5%, expecting to be paid in a timely manner. My question is when did you discuss this rate increase with them. I could be wrong and correct me if I am not understanding, but did you just increase the rate with no discussion and then bill them for it during the worst economic times that you have had this client? If so then I see there point of view kinda. True they may need to be raised up, but you have chosen for 10 years not to raise rates, then suddenly during bad time do. Most companies in this industry and others work the other way around raise during normal good times. hold off if you can during bad.

If you did discuss this price increase earlier and give them a fair amount of warning than by all means disregard what I just said. All but the part about watching increases during lean times, I don't really support raising rates during bad years when all are suffering. Now that does not mean I am against any increase I just recommend being careful.

very well put!!!!!!
:clapping:

JayD
01-22-2010, 11:16 PM
You know, you could look at this way, 5% is nothing from a 10 year time frame. Tell them sorry, thats what it has to be and if you cant stay with me, well I'm sorry and let them call another and find out that when they get a new estimate, wait until they see what that one will be sense they were stuck with a 10 year old price, it will be a lot more than your 5%.....

They will come screaming for you to come back, and when they do, then take it up to a 10%.....

Raymond S.
01-22-2010, 11:21 PM
There is one other problem...
20 customers all in a row...


why is this a problem?

jiggz
01-22-2010, 11:23 PM
i would let it go this year and say next year its going up, hell i probably wouldn't care and let him pay what hes been paying... i cannot afford to have someone else working on a block where i have 20 properties in a row..

PROCUT1
01-22-2010, 11:33 PM
You know, you could look at this way, 5% is nothing from a 10 year time frame. Tell them sorry, thats what it has to be and if you cant stay with me, well I'm sorry and let them call another and find out that when they get a new estimate, wait until they see what that one will be sense they were stuck with a 10 year old price, it will be a lot more than your 5%.....

They will come screaming for you to come back, and when they do, then take it up to a 10%.....

or more likely they call for other estimates and hire someone 25% less

lawn prices are going down, not up.

Customers are expecting decreases and incentives to stay.

torotorotoro
01-22-2010, 11:43 PM
are you kidding this poor guy has been mowing their yard for $20 for the last 10 years. if any one else would quit in the neighborhood so what. it is not likely that they would find any one else to do it that cheep. the last thing any of us wants is after 15 or20 years in the business is a bunch of $20 weekly mowings.leave that for the newbee's

FYS777
01-22-2010, 11:44 PM
or more likely they call for other estimates and hire someone 25% less

lawn prices are going down, not up.

Customers are expecting decreases and incentives to stay.

ya no kidding!!
last year for my regular cust, we gave a 5% discount on work other then routine maint. and a free mow if they had someone they knew sign on for season contract, worked well, resulting in gained clients. but to each his own.

FYS777
01-22-2010, 11:46 PM
are you kidding this poor guy has been mowing their yard for $20 for the last 10 years. if any one else would quit in the neighborhood so what. it is not likely that they would find any one else to do it that cheep. the last thing any of us wants is after 15 or20 years in the business is a bunch of $20 weekly mowings.leave that for the newbee's

i don't think he said how much he charges, were did you get 20 bucks from?

JayD
01-22-2010, 11:48 PM
or more likely they call for other estimates and hire someone 25% less

lawn prices are going down, not up.

Customers are expecting decreases and incentives to stay.

Do you really think that the prices out there this year will be 25% LOWER than prices from 10 years ago?

I still will take my chance.....were not talking about a big commercial job were it would hurt to let go.

10 years and now soon to be 11 YEARS! No Way would I let them bully me on my price......Hell....what was the gas prices 10 years ago?

Is he still mowing there lawn with the same mower that he had when he started? I very much doubt it!

So with that, he has bought maybe TWO new mowers now sense he started them........if he cant raise his price in over a 10 year span............there is something very wrong here!

Florida Gardener
01-22-2010, 11:49 PM
There is no question about this one. They don't want to pay more, not that they can't afford it. Why? You haven't raised their price in a decade and they were fixed on what they are currently paying you. To heck with them. 5% is nothing. This shouldn't even be a question. A good customer who values your work will have no problem with a 5% increase. Even if this was an account that wasn't way below what it should be, you should still get an increase every 2 years or so to keep up with rising prices.

LouisianaLawnboy
01-22-2010, 11:52 PM
Tell them you will give them a 5% discount if they sign a 1 year CONTRACT(penalties for leaving earlier, etc.)

FourTrees
01-23-2010, 12:07 AM
what was the gas prices 10 years ago?

Is he still mowing there lawn with the same mower that he had when he started? I very much doubt it!

So with that, he has to buy maybe TWO new mowers now sense he started them........if he cant raise his price in over a 10 year span............there is something very wrong here!

I am not saying you are wrong. He should be getting much more than he was making ten years ago. But some key points:

1. How much more was gas 2-3 years ago? He chose not to raise prices then. When prices went to nearly $5 dollars a gallon and the economy was thumbing along the price was not raised.

2. Sure his mower might be more expensive and bigger and badder than it was 10 years ago, but on that point the mower would be far more effective and more productive. (If this is truly the case, as we no not what mowers he had then and now; having never felt the need to raise prices before he may be using the same mower.)

3. He did not raise them over a 10 year span. He mowed it at one price and then ten years later suddenly raised it. Should he have been raising it all along, bit by bit; sure by all means. Just so abruptly during these times? I just kinda question that.



Still I just argue the timing and say maybe this should be discussed with client. Ten years in a growing stable economy no raise then economy hits its lowest point in that ten years and price gets raised (I am still very unclear as to whether client even received fair warning or prior notice.)

JayD
01-23-2010, 12:08 AM
Heck...........go up to there door and tell them that you made a big mistake.............


Then tell them that it is not going to go up 5%.......................


Tell them that it is going up by 15%............If it were a $30 cut, your only raising it up by $4.50 in a 10 year price freeze.

Lets see, 4.50 / 10 = .45 a year..........come on now!!!!!

JayD
01-23-2010, 12:18 AM
I am not saying you are wrong. He should be getting much more than he was making ten years ago. But some key points:

1. How much more was gas 2-3 years ago? He chose not to raise prices then. When prices went to nearly $5 dollars a gallon and the economy was thumbing along the price was not raised.

2. Sure his mower might be more expensive and bigger and badder than it was 10 years ago, but on that point the mower would be far more effective and more productive. (If this is truly the case, as we no not what mowers he had then and now; having never felt the need to raise prices before he may be using the same mower.)

3. He did not raise them over a 10 year span. He mowed it at one price and then ten years later suddenly raised it. Should he have been raising it all along, bit by bit; sure by all means. Just so abruptly during these times? I just kinda question that.



Still I just argue the timing and say maybe this should be discussed with client. Ten years in a growing stable economy no raise then economy hits its lowest point in that ten years and price gets raised (I am still very unclear as to whether client even received fair warning or prior notice.)

I hear what your saying, and agree with you on some of it, he is a fault here in a way, and yes he should have raised it a long time ago, But......they should just count their blessings and feel lucky that its been that low for that long. They should understand and never bucked it, heck, infact they should be saying is..... "Wow, I wondered when you was going to get around to doing that"

JayD
01-23-2010, 12:20 AM
I have a customer that I have been servicing since 2000, and just recently for the first time increased their rate 5%. This would be for the first of January, I just received payment late with a note saying they can't afford the increase right now and payed what I have been previously charging them.

With all that being said they are good customers that pay almost always on time, and are in a row of about 20 yards I maintain. I would like to keep them but its about time they start paying more for my services.

How would you handle this situation? Let them slide for a few months and raise price during summer? Or argue about the fact everything else is going up and you have to charge more.

I know my price and its about time for a rate increase.

Hey, South Florida,

Would you do us a favor and tell us what you are charging them?

FYS777
01-23-2010, 12:25 AM
Hey, South Florida,

Would you do us a favor and tell us what you are charging them?

and how big the lawn is !!!!

FourTrees
01-23-2010, 12:40 AM
I hear what your saying, and agree with you on some of it, he is a fault here in a way, and yes he should have raised it a long time ago, But......they should just count their blessings and feel lucky that its been that low for that long. They should understand and never bucked it, heck, infact they should be saying is..... "Wow, I wondered when you was going to get around to doing that"

He definitely should be making more. Some of it is his fault as you say, and yet they should not be surprised that rates go up over ten years. Again it is just timing. Did he notify them prior to the billing or was the bill first notification. From my reading of OP I understand it as bill was sent with increased rates and they paid according to prior agreed rate. In such a case I side with client and say that rates increases should be discussed prior to billing them.

I hope general practice is not to raise rates of services already provided when billing and that prior agreement of prices should always be accepted by both parties. Again this is just based upon my reading of OP, I may be wrong in my understand and would agree that new rate must be paid if it has been agreed to prior to billing for work.

Barefoot James
01-23-2010, 12:55 AM
I think you are correct in being upset on this one. No price increase in 10 years? And now you just want a 5% increase. Let me list a few things for you and what I purchased them for less than 10 years ago and what they cost now!!! Tell me how bad that 5% increase is in perspective.

1. Little Debbie Cakes less than 10 years ago $1 now at least 1.46 at WalMart
2. Doritos - less than 10 years ago $2.00 a bag now roughly $3.50 per bag
3. Bread - used to be able to purchase Wal-mart hot dog buns or hot dog buns for less than $1.00 - now they are roughly 1.47
4. Angel Soft 24 roll TP - was $4.38 cent less than 10 years ago..now well over $5.87 at Wal-Mart
5. Can of pringles - less than 5 years ago $0.97 at Wal-Mart now usually at least 1.25 on sale.
6. I used to be able to buy Coke or Pepsi for $2.50 a 12 pack and could get for 2 for $4 on some weeks less than 10 years ago, now on a good week I can find for under $3.50

These are just some of the things that are usually on my weekly grocery list that my wife and I were talking about the other day. Maybe if you put your need for a increase in terms like this he would be a little more understanding? I do not know, I hate to lose any customer but it does not sound like you are asking for too much to me!

Send them a letter and include above. Great points makes 5% seem like a good deal.

JayD
01-23-2010, 01:19 AM
He definitely should be making more. Some of it is his fault as you say, and yet they should not be surprised that rates go up over ten years. Again it is just timing. Did he notify them prior to the billing or was the bill first notification. From my reading of OP I understand it as bill was sent with increased rates and they paid according to prior agreed rate. In such a case I side with client and say that rates increases should be discussed prior to billing them.

I hope general practice is not to raise rates of services already provided when billing and that prior agreement of prices should always be accepted by both parties. Again this is just based upon my reading of OP, I may be wrong in my understand and would agree that new rate must be paid if it has been agreed to prior to billing for work.

Yes my Brother, you are very right here about him not talking to them first, I totaly agree with you here.....

topsites
01-23-2010, 03:05 AM
The one thing that's not being completely understood is it's not just one customer, it's 20 in a row.

This is probably the one aspect where word of mouth likes to fail a business miserably,
in short this type of a situation can well turn into a "good old boy" network that
leaves the business owner on the receiving end.

Let one of them get away with something and it won't be long before this can of worms goes full bloom,
but put your foot down and there exists the possibility that the entire lot hightails it, leaving the business
stuck with a dire work shortage.

And I'm not trying to scare anyone but either way this might yet become a real problem.
How do I know, years ago some little group snuck its way onto my schedule...
One day one of them tested me, wasn't maybe a year or two later I had lost the whole bunch.
I can't recall how many of them they were, but somewhere between a half to a full dozen,
and most of them left almost right away.
It left me reeling.

Quite a bit pissed off, too.
Because it just tends to do that when a customer is testing the ropes knowing full and well the situation.

But I guess in the end it's just another aspect of running one's business,
the trick here is to handle this delicately, or I should say keep it on a level.

Don't cuss them out, but I do believe you probably need to stand your ground on the increase.

PROCUT1
01-23-2010, 07:17 PM
i did things different in the later years.

I didnt have a personal relationship with each customer. I didnt take cancellations personally either.

A rate increase was not a negotiation. I sent the "welcome spring" letter with their price for that year. If they called to cancel, we canceled.

I used to take every cancellation personally and literally be kept up at night about it. It drove me nuts.

Like it or not, you will always be more loyal to your customers than they will be to you. You may feel a personal relationship toward them, but most dont feel the same.

And yes, you can get your lawn mowed for much less today, be it residential or commercial, than you could 10 years ago.

I saw it during my last couple of years, when customers were calling to see what their price "decrease" was going to be that year.

Golfpro21
01-24-2010, 09:07 AM
if they cant or dont want to accept the increase.......knock atleast 5% of service from them.......like dont trim as much, dont blow walk ways....dont bag grass.......not saying do a job that looks like crap.....but surely you can cut your time by 5% and keep their price....then put them at the bottom of your priority list.....things like that
I hear you on not wanting to lose the account and if someone else gets them...they could go after you other accounts

WildassBaughb
01-24-2010, 09:54 AM
If you see other signs that they are having a hard time, then maybe you can lower the level of service and keep the price the same. (lower the level of service by not edging/trimming every time) On the other hand, if you see money being spent regularly on other things then it could just be a power game so stand your ground.

T-Wrecks
01-24-2010, 10:52 AM
I would ask myself do I NEED thier money, If not let them go.

If they were to do something for you do you think they would give you a break?

MarcSmith
01-24-2010, 11:40 AM
After having rows of customers in florida I can understand the reluctance.

1. multiple customers means you have less overhead on those jobs IE less travel time, less fuel, less wear and tear.

2. drop price on one client, if he talks, they all may be be knocking on your door asking for a break.

3. let the client go and a new scaper may start moving in with lower prices.

If you did not notify them of the price increase and it was a surprise thats just bad business.

All my increases where notified 60 days prior to contract renewal so there were no surprises. Any one not liking the increase we parted ways.

In this situation Id offer them a 60 day waiver and explain that the price will be back up in 60 days. After which if they decide to part ways then so be it.

yardguy28
01-24-2010, 11:58 AM
I have a customer that I have been servicing since 2000, and just recently for the first time increased their rate 5%. This would be for the first of January, I just received payment late with a note saying they can't afford the increase right now and payed what I have been previously charging them.

With all that being said they are good customers that pay almost always on time, and are in a row of about 20 yards I maintain. I would like to keep them but its about time they start paying more for my services.

How would you handle this situation? Let them slide for a few months and raise price during summer? Or argue about the fact everything else is going up and you have to charge more.

I know my price and its about time for a rate increase.

since this is my very post on this forum and i don't know you or how long you've been in business i can tell you how i personally would handle the situation.

i would do 1 of 2 things. the first being let them slide without the increase as long as i don't have a huge amount (maybe there the only one) of clients complaining about the price increase. if it's just that one client over the 5% forget it and keep moving forward with them. isn't some money better than none?

the other thing i would consider is possible payment plans with them. now maybe they have looked at there budget but it doesn't hurt to suggest a payment plan. say take the total amount over the season and spread it out over the 12 months in the year.

every one should get raised every year.if they have a problem with it you dont need them.if you do a good job im sure you can find a new customer near by who will be happy to pay you more.

i couldn't disagree more.

if your solely in the business to make money they by all means raise prices every single year.

for me though there is way more to this business than making money. now i know i've only been in it for 3 years but i got into the business because i wanted to have a job i absolutely LOVE doing. and i'm doing that right now.

i'm the type of person who is sastified with having my needs met. as long as i have a roof over my head, food in my belly and clothes on my back i'm happy. i didn't get into the business to make bunches of money.

in the 3 years i've worked i've never raised prices on existing clients. last season i did raise prices for new clients but left the existing one's alone.

i'm a solo operator so my overhead is much lower than the businesses with employee's. my biggest cost is usually gas to which i balance with fuel charges if gas reaches a certain amount.

thats my 2 cents......didn't mean to be so long winded

Chilehead
01-24-2010, 12:04 PM
I have gotten the third degree like many of you when even suggesting a price increase. There are plenty who will have the mentality that if their current LCO decides to raise the price, they will simply find someone else because there are so many in the biz to choose from. The entire Atlanta market is geared this way, so I have had to be wily about upselling them on other services.

topsites
01-24-2010, 01:49 PM
I have gotten the third degree like many of you when even suggesting a price increase. There are plenty who will have the mentality that if their current LCO decides to raise the price, they will simply find someone else because there are so many in the biz to choose from. The entire Atlanta market is geared this way, so I have had to be wily about upselling them on other services.

One thing that does help, and there exist no real shortcuts for it but time in the business, and patience...
Because I used to feel this exact same way back in my 3rd-4th and 5th and 6th year, too.

Now looking back if only I had been more patient, in terms of a business 4-5 years to most folks means almost nothing.
This thread speaks of an Lco who hasn't raised a price in 8-10 years.

But get some years in and let how you do business speak for you, there are a lot of things that we can not force
on a customer to understand but they have to see it for themselves, things such as dependability and reliability and
honesty, don't even try to tell them, just do it and let them figure it out completely on their own.

Unfortunately it takes many years to build a solid reputation and all of that time we have to do all of the deed just right
or it doesn't work, I know all too well this can test the patience factor but that is apparently what it boils down to.

Not sure if that's of much help lol
It's a tough cookie, that's for sure.

ASCLS
01-24-2010, 02:49 PM
Stick to your guns. Is it worth all the headach? (already)

ed2hess
01-24-2010, 05:48 PM
This is how it works. You guys go in and raise prices. Then they call a company like justmowit and he gets the job. Next up is the other 19 who sees this guys doing a good job and inquires about service. Then you lose most of the 20 jobs. I would concentrate on getting 20 more in the same area and forget the increase. If you didn't increase when economy was good it is a bad business strategy to trying selling an increase when the market is flooded with lawn companies.

FYS777
01-24-2010, 06:55 PM
this is how it works. You guys go in and raise prices. Then they call a company like justmowit and he gets the job. Next up is the other 19 who sees this guys doing a good job and inquires about service. Then you lose most of the 20 jobs. I would concentrate on getting 20 more in the same area and forget the increase. If you didn't increase when economy was good it is a bad business strategy to trying selling an increase when the market is flooded with lawn companies.

indeed-------

EARTH5
01-24-2010, 07:43 PM
dont chew him out... if he leaves u he is likely to get a cheaper scab and take his neighbors with him..... suck it up and re group... that could cost u more then just him if they all talk to each other....

Barefoot James
01-24-2010, 07:52 PM
This is how it works. You guys go in and raise prices. Then they call a company like justmowit and he gets the job. Next up is the other 19 who sees this guys doing a good job and inquires about service. Then you lose most of the 20 jobs. I would concentrate on getting 20 more in the same area and forget the increase. If you didn't increase when economy was good it is a bad business strategy to trying selling an increase when the market is flooded with lawn companies.

Don't cuss him out this is a pityful idea. You have 20 properties to keep. Follow the advice I gave you before, be professional and if they don't accept rational, 10 years of great service, then you should still take the high road and suck it up - unless you are prepared to lose more than just this one customer. What ever you don't burn your bridge - always take the high road - it always comes back to you!

soloscaperman
01-24-2010, 08:49 PM
Surprised no one mentioned anything like try and sell other services. Keep the price the same if your making a good profit. Now is not the best time to raise prices since everybody is on the edge of looking for some cheap smuck to do the work instead. Every Christmas I spend a good amount of money and time talking to my customers. I will personally knock on every door with a card and chocolates or something else saying thank you very much for using my services and it means a lot. I will leave on the card to make them feel all warm by saying thank you for being a high end customer and it's hard to find good people like you. You have to get to there emotions so it is harder for them to "break up" with you over some cheaper guy. Give them a gas card randomly for like $5 saying thanks for giving me extra work which keeps my prices fair.

I think raising your price is the last thing you do right now. You could raise all the prices in that area by a little bit to make up that customer and you might even make more. If gas prices go sky high no doubt raise it.

Other thing is how would you feel if your insurance, food etc went up you would find alternatives too in a heartbeat. Find a way to make money without raising prices and in the future the customer will appreciate it and reward you.

torotorotoro
01-24-2010, 09:13 PM
since this is my very post on this forum and i don't know you or how long you've been in business i can tell you how i personally would handle the situation.

i would do 1 of 2 things. the first being let them slide without the increase as long as i don't have a huge amount (maybe there the only one) of clients complaining about the price increase. if it's just that one client over the 5% forget it and keep moving forward with them. isn't some money better than none?

the other thing i would consider is possible payment plans with them. now maybe they have looked at there budget but it doesn't hurt to suggest a payment plan. say take the total amount over the season and spread it out over the 12 months in the year.



i couldn't disagree more.

if your solely in the business to make money they by all means raise prices every single year.

for me though there is way more to this business than making money. now i know i've only been in it for 3 years but i got into the business because i wanted to have a job i absolutely LOVE doing. and i'm doing that right now.

i'm the type of person who is sastified with having my needs met. as long as i have a roof over my head, food in my belly and clothes on my back i'm happy. i didn't get into the business to make bunches of money.

in the 3 years i've worked i've never raised prices on existing clients. last season i did raise prices for new clients but left the existing one's alone.

i'm a solo operator so my overhead is much lower than the businesses with employee's. my biggest cost is usually gas to which i balance with fuel charges if gas reaches a certain amount.

thats my 2 cents......didn't mean to be so long winded
what you are saying is fine if you are just getting started.but if you want to be around long term you will have to raise prices.alot of people are happy if they make $50 a day more than working fast food but that is not the road to success. overhead allways increases.the primary reason for being in buisness is to make $$$. if you do not think so , you might think if working cheap makes you happy,working for free should be better than sxxx.

Manscape
01-24-2010, 09:20 PM
Solo- Very good point, make it "hard to break up with you"

...I worked for a guy for years who wasn't a "landscaper" he was a "grass-cutter". He would blow over lawns for rediculous prices...$15-$20 max.

Not a good business man...always in a bad mood yelling at customers about payments and other ridiculous stuff. He told one guy to stop watering his back lawn because the grass was too long each week and he had to empty the bag on the push mower too many times.

The customers would come to me because they didn't want to deal with him...eventually I went on my own, and when I left him a bunch of his customers came with me. (despite my rate being higher)

I guess what I'm trying to say is that the relationship is 80% of the battle, and if people are happy with your work, and how they are treated, they won't have a problem paying what you want. Anyone else isn't the customer you want.

You get what you pay for so if they get another landscaper who does it for $10 less than you, great for them...It's costs all of us about the same to cut a lawn, so when you have someone lowballing they're obviously taking a shortcut, whether it be not bagging, skimping on trimming, or not being insured etc.

**That customer will be really happy saving $100 a year on landscaping, and then getting sued for $XXX,XXX when the 15 year old cutting their grass get his finger cut off and the guy who owns it isn't insured.

FYS777
01-24-2010, 09:46 PM
that dosen't make sense??? the guy mowing the lawn can't sue the cust, for cutting his own finger offff. its not the cust, equipment. weather the be 15 or 50 .

Manscape
01-24-2010, 09:54 PM
Yikesss, you gotta look into that one...If the business owner is uninsured (workman's comp) and an employee, or whoever is working for that person gets hurt, everyone is fair game....the injured person can go after the owner, because they got hurt while working for them....and they can go after the homeowner, because they got hurt on their property. And guess what, 99% of the time they'll win.

My mom works for an insurance company and she gets calls everyday about this...

The most recent one in a nutshell....Self employed painter...working alone... uninsured...falls off scaffolding and breaks his ankle...comp won't pay for it obviously because he doesn't have comp...sues the homeowner because he got hurt at that person house...wins.

It is wrong I know, but it happens all the time.

FYS777
01-24-2010, 10:03 PM
Yikesss, you gotta look into that one...If the business owner is uninsured (workman's comp) and an employee, or whoever is working for that person gets hurt, everyone is fair game....the injured person can go after the owner, because they got hurt while working for them....and they can go after the homeowner, because they got hurt on their property. And guess what, 99% of the time they'll win.

My mom works for an insurance company and she gets calls everyday about this...

The most recent one in a nutshell....Self employed painter...working alone... uninsured...falls off scaffolding and breaks his ankle...comp won't pay for it obviously because he doesn't have comp...sues the homeowner because he got hurt at that person house...wins.

It is wrong I know, but it happens all the time.

shoot why do i bother to get insurance. if some one is an employee then they should be taking out work comp, if not, probably not legal. but u know there are some stupid laws now days.

Manscape
01-24-2010, 10:07 PM
Ya it sucks...the people trying to run a legit business get wacked left and right, while you have a guy with a pick up and a bunton making all the money because he's hiding and has no overhead.

I love it though when people call me asking if I can give them an estimate, and the first question they ask is "are you insured?"

FYS777
01-24-2010, 10:12 PM
Ya it sucks...the people trying to run a legit business get wacked left and right, while you have a guy with a pick up and a bunton making all the money because he's hiding and has no overhead.

I love it though when people call me asking if I can give them an estimate, and the first question they ask is "are you insured?"

INDEED, some times it's frustrating!!!

PROCUT1
01-25-2010, 03:18 AM
I can count on one hand probably the number of customers who asked if I was insured out of 500 customers.

justanotherlawnguy
01-27-2010, 01:44 AM
If it's in a row of 20 that you do, and your there anyway, I wouldn't even worry about it. What was the 5% increase, probably less than $10? If the price was a $100/month, I would rather have $1200 for the year than lose the account over $120. With a price increase for the other 19 at that stop, is it that big of deal in the grand scheme of things...
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cutterschoice24
01-27-2010, 05:46 PM
i raise my customers prices every year except for last year and this year but i get good money for my accounts my advice would be to make price changes effective march 1st with the grass being brown still its kinda of hard for some people to justify paying more i usually raise 5% every year and my customers are use to it but i make sure the quality and service is excellent also my equipment is kept top notch so they know they are getting the moneys worth.

LouisianaLawnboy
01-27-2010, 05:51 PM
i raise my customers prices every year except for last year and this year but i get good money for my accounts my advice would be to make price changes effective march 1st with the grass being brown still its kinda of hard for some people to justify paying more i usually raise 5% every year and my customers are use to it but i make sure the quality and service is excellent also my equipment is kept top notch so they know they are getting the moneys worth.

Wow, so in 10 yrs a 40.00 yard is 65.00.

topsites
01-27-2010, 06:49 PM
The most recent one in a nutshell....Self employed painter...working alone... uninsured...falls off scaffolding and breaks his ankle...comp won't pay for it obviously because he doesn't have comp...sues the homeowner because he got hurt at that person house...wins.

It is wrong I know, but it happens all the time.

I wonder how long guys like that last, going around suing their own customers?

I can count on one hand probably the number of customers who asked if I was insured out of 500 customers.

Same, with fingers to spare.

justanotherlawnguy
01-27-2010, 07:01 PM
Wow, so in 10 yrs a 40.00 yard is 65.00.

Nope, that $40 will always be a $40 lawn. They may ride out 1 increase, but then cancel the following year when they can get someone to do it for the original price. I am not saying that all customers are like this, just the majority.
You Florida guys know how tight the Florida market is! During the growing season there is so much extra work that gets done, it more than makes up for the measly 5% increase that you don't get fr cheap a$$ lawn customers.
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Florida Gardener
01-27-2010, 09:49 PM
^ I don't totally agree with that. Some customers will ONLY have you do the grass. Nothing else. No tree trimming, fert, mulch, installs, nothing. If I am not making what I need to on that type of customer, I will raise them to where I need to. If I have a customer who gives me extras year round, I may raise them only a little. If I completely underbid something, I will raise em to exactly what they should be. I don't see a point in raising someone for no reason. I believe prices need to go up over time, but for valid reasons. I would much rather have 40 or 50 customers who I can upsell all year than 60 or 70 accounts who I only get mowing from.

Frontier-Lawn
01-27-2010, 10:10 PM
i just did a 10% increase with a note of this;

Due to the rising costs of doing business (insurance, fuel, maintenance, Ect) we are going to add a 10% price increase to clients that did not sign up in 2009 for services or upgraded their service. The Last price increase was in 2007, & we were going to do one in 2009.But due to the economic Cat 5 hurricane that hit we held off until 2010 to do it, So Basically a $20 lawn service will now be $22.