Price Increase

[Chuck Sinclair]

Hello,

How do you guys tell your clients about price increases due to HIGH gas prices i would like to charge them a truck charge or somthing any ideas?

[KirbysLawn]

I mailed a letter to each one stating gas has had a 50% increase and most everything else has also risin. Due to that I must raise my prices to stay competitive and in business! Not one complaint.

[Lazer]

I agree on fuel, Kirby.

But most everything else has risen?
Time to shop. Fuel & labor are up. Insurance, equipment, communication, chemicals are down. CPI down .1% in August DISPITE increased oil prices.

Anyway, to answer the original question, some of my collegues have imposed a $7-15 monthly fuel surcharge on their maintenance accounts. Just plug it on the invoice.

[Acute Cut]

I agree and yet i dont. I agree that gas prices are inflicting some damage on our business. I was going to raise the prices but then my dad made a GREAT point that changed my view totally.

Lawn&Landscape
June 2000
Lawn Dawg

He tells his customers he will NEVER raise thier rates as long as they stay with them. So DON't raise your current customers prices. Just raise the price quotes on new customers to fill the gap. Ya gotta keep the customers you already have, so dont make them fret by raising your prices.

Sorry to disagree with ya Kirby. There has to be a first for everything. hehe.

Have a good one yall
Acute Cut

[Lazer]

The LAWN DAWG is a fert/weed/chemical lawn company.

Because of the advancements in equipment, routing, communication - which are more key to fert/weed only type businesses AND because there is greater margins in fert, he can make that claim.

If you didn't raise prices on mowing customers, it'd be a short lived business.

[Richard Martin]

Acute Cut wrote:

<b><i>He tells his customers he will NEVER raise thier rates as long as they stay with them. So DON't raise your current customers prices</b></i>

I still have customers from when I started 7 years ago. You're saying that although my expenses, both personal and business, have gone up I should continue to charge the going rates from 7 years ago? I don't think so.

[accuratelawn]

Trugreen added a $1 surcharge for gas per invoice.
Think if they are serviceing 30 accounts per day, 5 days per week, 150 days per year.
That should covered it and then some!

[dhicks]

I must agree with Dad up to a certain point. :D I doubt that I would increase my price for mowing because when I signed the account, I went in asking for top dollar. Ask me in seven years, and I may be signing a different tune. As for now no price increases.

However, I have no problem bumping prices for fertilization, mulching, and labor, etc. Because of higher gas prices, new accounts are being quoted at a higher rates to include paying an annual increase in hauling.

[Runner]

Exactly how I'M doin'it.

[Charles]

Acute cut i agree that not raising your prices on regular customers to at least keep up with inflation is the fastest way to bankruptsy. Because most of us keep our customer many years and they make up too large of a % of our business. Due to inflation you would be losing money on them every year. Regulars understand for the most part that you need to go up in price to stay in business Drastic jumps in price they don't understand. So I go up a little from year to year

[Acute Cut]

The best part about being me is that i can admit when i am wrong. I think dhicks made a good point and i will have to do some restructuring of my ideas thus far. thanks for all the input guys. I did NOT think of the long term and was only focused on keeping the customers i had/have.

So, what do yall do to the little old couple (90+) that you started charging 15$ 3 years earlier?

Have a good one yall and thanks again.
Acute Cut

[BUSHMASTER]

Yea it is a expence, i have 13 orriganal cutomers that i service and i feel a sence of gratefulnes to then they pay on time they send me a check 12 months out of the year and it pays the bills . I won,t raise there prices unless things get stupid. Now on the other hand any add on work i do for them does get a little higher price than the norm.and all new accounts get the new service prices .
my minium right now is $45.if i go to your house to do whatever it starts at $45.by the end of next summer i hope to be at $55. oh out of the 13 accounts stated 7 are in the same subdivsion make sence not to rock that boat uh.

[Eric ELM]

You say your minimum is $45 to stop at a house, what is the smallest lawn you do? Is that minimum per month or per week?

[GroundKprs]

If you want to give something to the people who got you started, just give them a discount on whatever the current rate is. All clients we had prior to '84 are given an extra 5% discount, because they were the ones who got us started. So if you were to implement this now, and raise your base price 5%, these customers would see no net increase.

[mowerman90]

Any of you fellows who don't raise your pricing to make up for the rise in gasoline are crazy. I raised ALL of my 70 residential yearly accounts in July and guess what, not 1 single complaint. People aren't stupid, they know that gas is 50-60% more this summer than last. And when will it stop. Nows the time to seize the opportunity and raise prices while you have something to blame it on that everybody can understand.

[BUSHMASTER]

Originally posted by Eric ELM
You say your minimum is $45 to stop at a house, what is the smallest lawn you do? Is that minimum per month or per week?

This a per service charge to do :mow,edge,string trim,blow
up to 7500sqft.this is a minum. my smallest yard is 4500sqft
i charge the mimnum $45. I DON;T DO SERVICE ON accounts NO LESS THAN EVERY OTHER WEEK.FIELDS ARE A DIFFERENT STORY.

[Edited by BUSHMASTER on 09-16-2000 at 09:12 PM]

[Stinger]

Sinclac, We followed suit along with other green industry companies by sending out a form letter explaining the implecation of a surcharge due to the rise in gas prices. After extensive thought and reserch we added a $1.50 fuel surcharge for each visit to a client. Not one single call or complaint to us yet! If you would like a copy of our letter please let me know.

[greenlawncare]

What if the opposite happened? Price went to 50 cents a gallon! Would you lower prices mid season? No, but next year, competition would do it for you.

I'm not sure it's ethical to ammend an exisiting contract due to gas prices, unless there was an original understanding that this would happen.

Yeah, no complaints from your clients...but maybe they hold a certain grudge.

If I were to add a charge, I would make a separate item on the invoice so that it could be removed if prices magically went down again - but I'm going to finish the season with these prices.

[Chuck Sinclair]

Stinger,

Thank You i would love to get a copy of that letter. You can e-mail it to: chuck@wblandscape.com

Chuck

Originally posted by Stinger
Sinclac, We followed suit along with other green industry companies by sending out a form letter explaining the implecation of a surcharge due to the rise in gas prices. After extensive thought and reserch we added a $1.50 fuel surcharge for each visit to a client. Not one single call or complaint to us yet! If you would like a copy of our letter please let me know.

[Guido]

I read that compony profile about lawn dawg about a month or so ago, and they can keep their prices the samefor existing customers and not really be effected by gas prices becasue the only gas they are using is for transportation to the job. I'm sure if they were all full maintenance accounts where they had to run euipment all day, the increase in fuel would affect them a little bit more.

I think MOST customers would suck up a small increase due to fuel prices or cost of living no problem........if they're good customers!

:)

[MOW ED]

You have to know if you are making money first of all. When I started out I was making enough money to barely cover my expenses. I certainly do not have a business degree. After I sat down and added up all of the numbers I came up with a plan to raise rates and cut the bad jobs. Gas is just one number in a bunch that I use. Since then I've learned even more from coming to this forum.

I will raise rates next year for some of my accounts that need it. Others are o.k. I am making money as you should be. This is not a hobby.

You have to look at the overall picture and take each customer as an individual. Is it a good lawn to have, are they complainers, do you sell big dollar add-ons to them. These are the intangibles that should help you to make your decision after you run the numbers.

If you are a good communicator you can always sell an increase if not then justify one with the numbers but work on both and you will be well on your way. Good Luck.