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DFW Area Landscaper
02-25-2010, 09:15 PM
CHURN

For those who don't understand, it's cancellations. It's driving me nuts.

I'm starting my 8th year in the business, and today, my mood is petty rotten. I just took 3 client cancellations this afternoon. It's too cold out to begin advertising, so I'm just sitting here watching my total customer count drop week after week when it should be increasing this time of year.

Anyway, I'd give anything, do anything, to reduce this churn.

I just pulled a report of my lawn mowing clients who have cancelled service since Labor Day of last year. As of today, 71 lawn mowing clients have canceled service during that time (just a little over 4 months). How long were these clients on my lawn mowing schedule before they canceled service??? A couple only stayed with me a couple of months. The most veteran client was with me for 78 months. The AVERAGE stay was 24.7 months. That's the overall average.

Experience tells me I'll never hear from 99% of those clients again. Those homes are off limits until they move out and a new prospect moves in. I just think it's a psychology of the sale thing. I liken this to a barber you patronized for a long time. He never did anything wrong, but then you switch to another barber for a year or so. No reason, really, you had McDonalds barber shop and you wanted to try the new Burger King Barber shop. How would you feel walking back into the McDonald's barber shop later on after you esentially fired him...especially if there are DOZENS of other barber shops to choose from? Same thing kinda applies to us.

At any rate, I'd give ANYTHING, do ANYTHING, to reduce my churn.

So here's what I'm thinking: I am the most expensive in my area. I advertise $26.50 for most lawns. After sales tax, I'm banging their credit cards for $28.69 per mow. Most of my competitors don't bother with the sales tax, so when they advertise $25.00, that's the actual cost. When you compare $28.69 to $25.00, it's enough for some to consider canceling.

But what if the client got a postcard advertising $26.50. Called to sign up, and was quoted $26.50 over the phone. Then received a welcome letter that also says the price is $26.50, plus sales tax. But then, when the credit card statement posts, the lawn company only charged $23.27 per mow. Do you call them to ask about the oddity? Do you complain about mowing in the rain? Do you complain about anything? Would you cancel unless you absolutely had to??? Would you even call them at all, for any reason, unless you absolutely had to???

You see, I can afford to reduce my price by $5 per mow, but ONLY if my churn gets reduced, and I, in turn, get to spend less on advertising and less of my time answering the phone to deal with cancellations and new sign ups and complaints and I want Th/Fr instead of Tuesday and all the other bull***t that I deal with every day. These phone calls eat a LOT of my time.

What do you guys think? Do you think this covert "accidental" underpricing would reduce churn???? It would take years to conduct a measurable study of cancellations on these clients, and between now and then, I'm taking a huge pay cut and a huge gamble, but I'm probably gonna try it, at least on a few dozen new clients this spring.

Any thoughts appreciated.

FryDaddy
02-25-2010, 09:45 PM
Only you know if you can live with $5 less per yard cut. If you can, then go ahead, but remember someone else having a hard time can/will come in and cut if for cheaper. On another note, gas is constantly going back up again, just something to keep in your head. Don't give up & good luck on which way you go.

yardguy28
02-25-2010, 10:02 PM
i don't think advertising one price and charging a lower price will help matters at all.

i'm not really sure why you bother with sales tax. most of the lawn maintenance businesses i know don't have sales tax or if they do, it's advertised to the client. kind of like you don't reveal your hourly rate to a client.

if your gonna charge $28 bucks don't advertise $26.50 plus tax. just advertise $28 bucks.

it's unfortunate your loosing clients but i really don't think quoting one price and charging them less will impress them to the point of them staying with you or not complaining about a single thing.

in my opinion the key to client retention is great customer service. do a great job and a reasonable (not necessarly the lowest or highest) price and the one's worth working for will stay with you.

i've heard it over and over and over again from lawn maintenance owners, they don't want the price shoppers because there is no loyality in price shoppers. as soon as someone is cheaper which there will always be, they will drop you like a hot potatoe.......

Turf Dawg
02-25-2010, 11:02 PM
I think is just a fact of life with your type of business, the large unpersonal type, in your area. I'm not saying that it is right or wrong, just the way it goes. This year will be my 15th and out of those I have been fired twice. One res and one com. I do loose some non private owned commercial accounts and some that have moved or passed away. I downsized in 08 and stopped doing some people that had been with me for 11 years and it was very hard for me to tell some of these folks, I even had one clinet call and told me they understood but it felt like they had lost a family member.
So I guess what I am saying is that if you are small and personal then you retain your customers even when people come in cheaper, and if you are large by volume then turnaround will always be a big factor.

Just my thoughts

Landscraper1
02-25-2010, 11:09 PM
For you to be losing customers that fast, there is something wrong. Is it all about the price or is it the service your giving them?

grassman177
02-25-2010, 11:47 PM
For you to be losing customers that fast, there is something wrong. Is it all about the price or is it the service your giving them?

i kind of agree, that is pretty huge, i am crying over three so far this year, but they are very large ones.

lawnlandscape
02-25-2010, 11:50 PM
Its never to cold out to start advertising.

We advertise when its 10 degrees outside up here in wisconsin! :)

$26.50!! I hope those are some small lawns! My minimum charge is $35, even for a 2,000 sq. ft. lawn.

Darryl G
02-26-2010, 12:01 AM
Does this sound familiar?

"I just can't understand why an LCO would reduce prices to obtain customers".

That's a quote from you DFW, from probably a few years back...I have a photographic memory.

I'm not bringing that up to bust your stones, just to get you to think about what you're saying. I think you'd be better off giving your customers a greater value or at least a greater perceived value than lowering your prices. Is there something you do that other's don't...like blowing off all hard surfaces, not just the ones you get debris on? Moving objects in the lawn rather than just mowing around them. Try to find a way to differentiate yourself..mowing is a service business, not a commodity. Or has your quality slipped somehow resulting in a lot of cancellations? What made you special and able to charge more to begin with? Have you gotten complacent about your accounts? I don't know..but the DFW guy I know would not be lowering his prices.

Just trying to help...good luck

DFW Area Landscaper
02-26-2010, 12:02 AM
++++For you to be losing customers that fast, there is something wrong. Is it all about the price or is it the service your giving them?++++

No, there is nothing wrong with our service. I drive around and I look at the lawns we service. Right now, the clients with our chem program have nothing in terms of weeds. They are pretty spotless and I'm proud of our work in that area.

Of course, it's impossible to keep all the people happy all the time. I've driven out on some complaints over the years, and usually, the complaint is just ridiculous. I've learned over the years that those who can barely afford the service are way more inclined to complain. I think they feel that if they're going to pay so much for lawn care, it ought to be to whatever standard they dream up in their mind.

I always ask clients, when they call to cancel, if they have found the service to be satisfactory and by and large, the answer is always yes. It always amazes me that the same crew, the same service, can generate complaints from some clients yet get rave reviews from others.

Consumers are just fickle. That's about all there is to it. With 600 clients, I have very little rapport with most of them. That's about the only thing missing. But what I can tell you, is, from experience, back in '03 & 04, when I started, and I was the one on the truck doing the labor, of course I was polite to clients if I saw them on the property and there was lot more in terms of rapport...and of course, the quality of the work was fine. But churn then wasn't much different than it is now.

Maybe it's just part of the big city DFW metroplex mentality. In a smaller community, you might bump into the poor landscaper schmuck you fired at the bank or church or whatever...but in the DFW metroplex, it's highly unlikely.

I'm inclined to try the covert "accidental" $5 discount on a couple dozen clients just to see if it helps. 24 clients X 32 mows X $5 = $3,840 per year pay cut just to try it out. But if it keeps them on the schedule until they move or die, it's worth it. I kinda doubt it'll help much. But it might be worth trying.

DFW Area Landscaper
02-26-2010, 12:10 AM
+++ Its never to cold out to start advertising.++++

Yes, I dropped 5,000 post card in the mail on Feb 5th and got a total of TWO clients from that. My cost per client was $500 each. It snowed, record snowfall, 7", the day after they were delivered.

++++$26.50!! I hope those are some small lawns! My minimum charge is $35, even for a 2,000 sq. ft. lawn++++

$25 is the going rate here in the DFW metroplex. It hasn't gone up a cent since I entered the business in 2003. I just got an ad from a guy via Valpak the other day, $20 small lawns, $23 medium sized and $25 normal sized. This is 8 years later.

I don't know if my little plan will work or not. I swear I was convinced a while back, a few years ago, that being cheap didn't keep them on the schedule any longer. I was guilty of under pricing some lawns when I first started out. Consumers are just fickle.

I'll let you guys know if I try the covert "accidental" discount or not.

lawnlandscape
02-26-2010, 12:19 AM
+++ Its never to cold out to start advertising.++++

Yes, I dropped 5,000 post card in the mail on Feb 5th and got a total of TWO clients from that. My cost per client was $500 each. It snowed, record snowfall, 7", the day after they were delivered.

++++$26.50!! I hope those are some small lawns! My minimum charge is $35, even for a 2,000 sq. ft. lawn++++

$25 is the going rate here in the DFW metroplex. It hasn't gone up a cent since I entered the business in 2003. I just got an ad from a guy via Valpak the other day, $20 small lawns, $23 medium sized and $25 normal sized. This is 8 years later.

I don't know if my little plan will work or not. I swear I was convinced a while back, a few years ago, that being cheap didn't keep them on the schedule any longer. I was guilty of under pricing some lawns when I first started out. Consumers are just fickle.

I'll let you guys know if I try the covert "accidental" discount or not.

good luck! :drinkup:

Turf Dawg
02-26-2010, 12:35 AM
I noticed you said when you started that you were on the job, but I bet you were still after volume. I guess what I am trying to say is instead of 80 in Lewisville, H.E.B, Arlington, ect.... as to only having 15 in the South Lake or similar areas. To me big volume means turnover. And right now there is a whole lot of people who would rather have weeds than spend a buck to have them sprayed or mowed. Also right now if it comes down to them having a extra 5 bucks or giving it to someone they have never met, I bet many are going to keep the 5 bucks.

grassman177
02-26-2010, 01:37 AM
sad but true. i think i does make a huge difference being in a huge metro like that, and super glad i am not otherwise i am sure we would not be so well off.

KrayzKajun
02-26-2010, 01:41 AM
i just dont see how you guys cut for $25-$28 a cut!

i dont drop my trailer gate for less than $35 and im on the low side sometimes

tmf lawn care
02-26-2010, 03:37 AM
same here but it $45:usflag:

MowinginEureka
02-26-2010, 03:52 AM
Im in one of the most expensive areas to live in the united states, I'm mid priced here, at 37.50 an hour per man. My average cut is 35$ which is 3500 sq ft. A 25$ cut gets you a 2500 sq ft yard. I charge a penny per sq ft per cut, unless its troublesome (bumpy, no mow strips, obstacles) then its 1.3 cents per sq ft per cut up to 1.5 cents per sq ft per cut. But I come once every week, so the grass is never that tall. I had a 20% churn this winter, I came into winter with 51 clients and now I have 41. I always pick more up come spring all the way back to 50 or so.

topsites
02-26-2010, 04:55 AM
I would experiment with how I am presenting myself to try and balance out the type of customer I am attracting,
keeping in mind that our ads are usually the first thing about us a customer sees.

MOturkey
02-26-2010, 05:43 AM
DFW, I hope things get better. I am a small business, and losing even one client bothers me.

Here in MO, we don't charge sales tax on service, only goods, so that is something we don't have to worry about in a "mowing only" business.

I hate to act stupid, but you say you are one of the higher priced services in your area at $26.50 + tax, and also say you can "afford" to reduce your prices by $5, so why don't you just reduce your price to where it works out to $25 including tax and send out a mailing to all your clients announcing that you have had a couple of good years and are reducing prices across the board to help them out during these hard economic times.

Instead of losing $5 per mow, you'd only be losing about $3.55 or so, and would be in line with the others in your area.

Just a thought.

indy2tall
02-26-2010, 09:13 AM
DFW, how many of your routes are in the very affluent areas? I have found that the richer the neighborhood the less it churns if we do a good job. Seems like folks in lower priced homes only care about how tall the grass is (not what it looks like) and they will price shop no matter how long they have been with us. Also perhaps you could hire someone (part time) to cover some of your duties in office so you could get more face time with your clients. Go around and meet with them, not just the ones who are canceling. Ask the ones who are really happy with you what it is that separates you from the rest.

You are a LCO vet so you should have an idea of what got you to 600 clients, maybe the answer is in that. Did you sacrifice profits to grow big? If so are you going down the road PROCUT1 posted his popular thread about?

I do wish you luck and give you lots of kudos because with 600 clients you have obviously been doing most things right and you will probably figure this problem out too.

Turf Dawg
02-26-2010, 09:30 AM
What stinks is that it is not a level playing field. There are tons of people in DFW's area that cannot even spell LEGAL. Also, in his area a neighborhood might get 10 door hangers that are anywhere from handwritten with crayon to fancy, that try to beat the last person by a dollar.

SangerLawn
02-26-2010, 09:34 AM
I am confused on the tax thing that you mentioned? I can understand taxing on spraying since it is a product but why do you tax on labor? Labor is nontaxable?

Turf Dawg
02-26-2010, 10:13 AM
I am confused on the tax thing that you mentioned? I can understand taxing on spraying since it is a product but why do you tax on labor? Labor is nontaxable?

In the state of Taxes, opps meant Texas, we do not have state income tax. Where they make the money is property tax and sales tax, and trust me almost everything gets taxed, whether it be lawn care or window washer and mechanic. The state has a set percentage and then the town and county can vary. My state, county and city sales tax is 8.25%, some maybe more and some less. Heck, even my county appraisal district charges me the same % of property tax on my business goods, which is trucks, trailers, mowers, trimmers, gas cans, shovels.................I think you get the picture. This is what I am talking about a non level playing field, because many do not pay a dime to not even one person and most will never get caught.*trucewhiteflag*

dhunterd08
02-26-2010, 05:09 PM
My feelings exactly. I have been calling about 5 customers a day, and i have heard way too many " i am not sure if we are going to be here" " Let me check with my wife/husband and I will call you back". I hope it gets better for everyone, I really wanted a new walk behind but after the last couple of days i am going to stick with what i have. On the other hand, It seems like I always get worried this time of year and revenues end up growing 15-20% like they did last year.

zak406
02-26-2010, 05:27 PM
Also remember, the more clients you have the more you will lose. Ex. you lose 75 at 600 customers that's equivalent to a 100 client business losing 8. Your number will get bigger with the more clients you have.

ICT Bill
02-26-2010, 06:00 PM
Never sell on price, you have no value if you sell on price

A customer wants to know that they are getting value for their money, if not, your gone or don't get the job

Mowing has the least margin in the industry, what you need to do if find ways to increase your margin per customer

business cards are cheap, if you see something going on at the site your could write a note on the back of business card and say "we have a good deal on annuals through April if you would like me install some next time" "I noticed the bushes really need to be trimmed to make your place look its best", etc

add value, customers like value

hackitdown
02-26-2010, 06:39 PM
I always ask clients, when they call to cancel, if they have found the service to be satisfactory and by and large, the answer is always yes. It always amazes me that the same crew, the same service, can generate complaints from some clients yet get rave reviews from others.

Consumers are just fickle. That's about all there is to it.

How about asking them why they are dropping you. I think you are making an assumption that it is price.

If I were a customer dropping an LCO over a service problem (or whatever), and the LCO asked me if the service was satisfactory, I might just say yes in order to avoid an unpleasant conversation.

Call up a few. Tell them that you rarely lose a customer, so it is important to learn what happened. Tell them that you know they are probably already under contract with someone, so no pressure, but you need their help to improve your business and avoid future problems. Tell them to be direct and blunt, no hard feelings.

Merkava_4
02-26-2010, 09:14 PM
Consumers are just fickle. That's about all there is to it. With 600 clients, I have very little rapport with most of them. That's about the only thing missing. But what I can tell you, is, from experience, back in '03 & 04, when I started, and I was the one on the truck doing the labor, of course I was polite to clients if I saw them on the property and there was lot more in terms of rapport...and of course, the quality of the work was fine. But churn then wasn't much different than it is now.



Does that mean you don't do the work yourself anymore - you're the employer of a crew?

Landscape Poet
02-26-2010, 10:40 PM
How about asking them why they are dropping you. I think you are making an assumption that it is price.

If I were a customer dropping an LCO over a service problem (or whatever), and the LCO asked me if the service was satisfactory, I might just say yes in order to avoid an unpleasant conversation.

Call up a few. Tell them that you rarely lose a customer, so it is important to learn what happened. Tell them that you know they are probably already under contract with someone, so no pressure, but you need their help to improve your business and avoid future problems. Tell them to be direct and blunt, no hard feelings.

I think this is very good advice. You said you are a larger company, so a call from the owner asking these type questions might give that personal touch that larger companies sometimes lose with the growth.

Mike Custom
03-23-2010, 11:15 PM
wow 25 a cut is insane! I hope you can bang out 10-12 an hour! Here in CT where all the Wall street suits live, i get a BARE minumum of 40, and thats for 3 guys and takes 20 minutes, pull-up to drive off.

I don't understand why you would charge less than you advertise, if you want volume, just advertise less and you'll attract more clients due to your lower prices, right?

I assume you're in super-suburbia, and that sucks because competition is cutthroat, any out of work joe with a push mower can be your competition overnight. not to mention a 12 year old kid! Most of my lawns take 45 minutes- an hour and people complain with 3 guys getting charged 65 bucks!

Im convinced, mowing blows, no matter where you are

Mike Custom
03-23-2010, 11:22 PM
I am confused on the tax thing that you mentioned? I can understand taxing on spraying since it is a product but why do you tax on labor? Labor is nontaxable?

Here in CT labor is taxable...on certain services.

If I install a fence required by pool code however, its non taxable.

If my buddy's computer company fixes my PC, non taxable.

My accountant services, non taxable.

Anything I do....Taxable.