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Mack77
03-16-2011, 11:35 AM
Hi Guys,

I send out a letter each spring to welcome back the customer and explain how services will be conducted. Included in this letter is the weekly price for lawn mowing services. I have not had a price increase in years, what would you recommend, explicitly WRITING "Due to increased costs of doing business, we have raised prices $5 this year", or just say "This year's rates are $xx.xx"? (without an explanation and let them draw their own conclusion)

What would you recommend?

Thanks

Kelly's Landscaping
03-16-2011, 12:23 PM
We do not feel the need to explain increases we write the price and they either agree or go elsewhere. Most are smart enough to figure out on their own why prices have to go up. A few dim ones always complain but its easier to deal with 2 of them then to get into a debate over your business expenses with the other 200.

Mack77
03-16-2011, 02:35 PM
Thanks,

I appreciate your insight.

tradeyouraccounts
03-16-2011, 07:34 PM
If you want to explain the rise maybe something like this works.

We hope you understand that since “Date” we have been absorbing the rising cost of equipment, Supplies, liability insurance, licenses, and gasoline which have gone up over 50%, we are forced to increase service rates to $amount per month from “Date”. Even with all the increases we have had to endure, we are dedicated to keeping your service rate as low as possible.

And then maybe say you can earn from us if your refer us and pay them an incentive for their referrals this way they may think if i refer it takes care of the raise.

Just a thought.

Brodie
03-16-2011, 09:57 PM
And then maybe say you can earn from us if your refer us and pay them an incentive for their referrals this way they may think if i refer it takes care of the raise.

Just a thought.

That is not a bad idea.

Green Feet Lawn
03-17-2011, 11:34 AM
I just sent out my annual spring letter. In it I put... "efffective this year, we're forced to increase the cost of our mowing service from $XX.00 to $XX.00 per mowing. In the past several years we have had to pay increasingly higher prices for gasoline, insurance and maintenance. Regretfully, we are no longer able to absorb the increase ourselves. Since our goal is to continue to provide high quality services for all of our clients, we believe that this is our best course of action."

bustutah
03-17-2011, 01:34 PM
This is the first year I'm doing a welcome letter. I have called my past customers directly. I'm also raising many of their prices. I was hoping a letter would soften the blow to them and a less likely chance of me hearing, "well, I'll have to get back to you if we need our grass cut". I'd hate to mow all of april to find out they're not paying "they didn't agree for me to come out at the new prices. How have you dealt with these issues in the past?

bohiaa
03-18-2011, 11:15 PM
dont get in to a long drawned out explantion....

just simple and stright to the point,

Due to the current changes, we are forced to increase our prices ?? %

We appolige for the increase, and hope to continue providing you with the best possable service available.

the new prices will be reflected on next months invoice

thank you for your understanding.

Darryl G
03-18-2011, 11:35 PM
I don't explain my increases really. What I do say is that some of you may see a small increase and that we try to keep any increases to a minimum. I go on to explain that the price is based on the equipment and labor required to provide the high level of service bla bla bla. I don't have my language in front of me, but it's along those lines, and I avoid giving any specific reasons.

The ones that don't get increased feel lucky and the ones that I do raise a bit go along with it.

T.E.
03-19-2011, 08:51 AM
I avoid giving any specific reasons.

This is good advice, and also as stated above simple and too the point. If you tell them specifics such as the price of gas. If gas ever drops they'll expect the price to go back down.

Roger
03-19-2011, 09:24 AM
I agree with the comments that avoid any explanation. I've never provided an explanation. If you make a raise based upon some specifics, you have to be sure you can justify the increase. For example, increasing a price from $35 to $40 and saying "price of gasoline has risen," is a lie that can be easily rooted out by somebody who understands financial matters.

Gone Green
03-20-2011, 11:37 AM
I think briefly acknowledging and moving on if the price increase is a small percentage. Likely you won't need to justify it to clients that are happy.

Genuinely analyze and adjust your prices every season
1. so you remain at the profit level your company needs
2. so you are in the range when compared to the fair market value
3. and act quickly to avoid shrinking margins over.

Thanks to the members who posted before me for their great advise.

snomaha
03-20-2011, 10:05 PM
I agree with the comments that avoid any explanation. I've never provided an explanation. If you make a raise based upon some specifics, you have to be sure you can justify the increase. For example, increasing a price from $35 to $40 and saying "price of gasoline has risen," is a lie that can be easily rooted out by somebody who understands financial matters.

Agree on not providing a detailed explanation.

If someone does ask you about the increase it can be as simple as "to continue providing you with the service you expect, our prices have risen modestly in order to continue your ...."

If they question the price you can always use - Questioning my pricing implies an absence of value - where don't you see value in the service we are providing?

Be prepared to accept answers that aren't always easy to hear.