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View Full Version : charging good customers more, because.....


bobbygedd
12-21-2004, 09:15 AM
well, it seems to me, that every business has it's share of losses to deadbeats, or expenses involved collecting from deadbeats. alot have said, "this is factored into my prices." so, the bottom line is, you are charging your GOOD, or paying , customers, for the loss you suffered from non paying, or slow paying customers. is this correct? i'm all for it by the way...somebody has to pay for it. the only thing that seems dishonest, is when you do your summery at the end of the year, if you find you have suffered NO LOSS do to late or nay payers, do you adjust your fees the following year, lowering them?

Gilla Gorilla
12-21-2004, 09:27 AM
No because you will eventually have a slow or non payer to deal with and you will already have gotten that little bit of extra money from the past year.

Its kind of like when I worked at the dealership. We charged $25.00 for shop supplies for any labor amount over $200.00 for each repair order. Did each and every customers vehicle require $25.00 worth of misc. nuts, bolts, rags and chemicals Nope. Maybe no vehicles for that year required that much for shop supplies, but come the next year when they had to use $75 or $100.00 worth of
supplies that did not have a part number on one vehicle they had made their money the previous year. I know that this is not the best analogy but it is what I could think of.

jlewis
12-21-2004, 10:03 AM
Based on your past experience a certain percentage of your accounts recievables should be going to an accrual account for uncollected A/R. (If in the past 2% was uncollected that is what you use etc.) At year end, this money goes toward the uncollected A/R and the remained (if any) goes to your profit/loss for the year.

Norm Al
12-21-2004, 10:13 AM
the medical and retail industry has been doing that forever!

captaingreen
12-21-2004, 11:10 AM
From a business standpoint, I couldn't agree with you guys more. But from a practical standpoint I don't feel I should have to pay for the deadbeat who doesn't pay his bills (although I realize I do), so why should I charge my good customers for the moron that slacks off. I had actually been thinking of what you guys are talking about but it just wouldn't seem right, I mean they pay me a honest days wage for an honest days work, isn't that enough.

KathysLGC
12-21-2004, 11:33 AM
Nope. Every customer pays me for what i do for them, not what others don't pay for. It's a good way to loose business to a low baller. I try and keep my prices fair. We all want to make more money but a loss is just that, a loss. I will stop services if a customer is 1 month late. That would be a 2 month loss if that matter isn't resolved and depending on how much is owed to me i will do a BG and take them to court. The loss is our responsibility not our customers. In retail they use shoplifting as an excuse for high prices but when shopping for services many look at the price first, then shop around.
Even good paying customers may want to shop around. That's a chance I don't want to take because of high prices. I am far from a low-baller so don't get the wrong idea, but if a lawn is $45 per cut I'm not going to charge $49 due to expected losses.

geogunn
12-21-2004, 12:33 PM
BOBBY WEASEL--after 8 years I am down exactly $85 due to non paying customers. one account for $50 and one for $35.

and those losses were claimed as apropriate at the time of accounting.

so while your catterwalling about your customers is entertaining, I just don't believe it is the biggest problem that most of us face.

GEO payup

fga
12-21-2004, 12:57 PM
BOBBY WEASEL--after 8 years I am down exactly $85 due to non paying customers. one account for $50 and one for $35.

and those losses were claimed as apropriate at the time of accounting.

so while your catterwalling about your customers is entertaining, I just don't believe it is the biggest problem that most of us face.

GEO payup
cat·er·waul ( P ) Pronunciation Key (ktr-wôl)
intr.v. cat·er·wauled, cat·er·waul·ing, cat·er·wauls
To cry or screech like a cat in heat.
To make a shrill, discordant sound.
To have a noisy argument.

:) everyonce in a while i add a new word to my vocabulary. I remember when i was in college, my friends didn't understand a word i said.. :)


Geo, did you sleep on the dictionary instead of your pillow last night? the old osmosis trick, huh?

bobbygedd
12-21-2004, 01:05 PM
BOBBY WEASEL--after 8 years I am down exactly $85 due to non paying customers. one account for $50 and one for $35.

and those losses were claimed as apropriate at the time of accounting.

so while your catterwalling about your customers is entertaining, I just don't believe it is the biggest problem that most of us face.

GEO payup
that's what happens when you work cheap, they can't wait to pay you. dog burial huh...... :rolleyes: fake cops have the right to remain silent. please excersise that right! ...........CATTERWALL: a land mass surrounded by water on three sides

rodfather
12-21-2004, 01:28 PM
do you adjust your fees the following year, lowering them?

No, in my business plan I adjust my % of uncollectible funds. Simple.

mtdman
12-21-2004, 01:58 PM
Nope. Every customer pays me for what i do for them, not what others don't pay for. It's a good way to loose business to a low baller. I try and keep my prices fair. We all want to make more money but a loss is just that, a loss. I will stop services if a customer is 1 month late. That would be a 2 month loss if that matter isn't resolved and depending on how much is owed to me i will do a BG and take them to court. The loss is our responsibility not our customers. In retail they use shoplifting as an excuse for high prices but when shopping for services many look at the price first, then shop around.
Even good paying customers may want to shop around. That's a chance I don't want to take because of high prices. I am far from a low-baller so don't get the wrong idea, but if a lawn is $45 per cut I'm not going to charge $49 due to expected losses.

While this may seem to be the "right" thing to do, it's not the smart thing to do. If you aren't considering ALL of the expenses that occur, including deadbeats, you aren't getting paid enough. If your gas costs go up, do you not increase prices in fear of losing customers and take the hit to your pocketbook? Deadbeats are just another expense that should be considered in setting prices.

To answer Booby's question, yes you spread it around to your paying customers, and no you don't adjust your rates down when you have no deadbeats.

geogunn
12-21-2004, 02:03 PM
that's what happens when you work cheap, they can't wait to pay you.

WEASEL--work cheap and get paid? work otherwise and chase your money?

actually, it seems I must have a pretty good plan.

ADAM--YES....the osmosis thing works great. BOBBY WEASEL should try the osmosis thing to see if he can up his payment rate with a new business plan.

GEO

J&R
12-21-2004, 03:07 PM
WalMart will up there price to pay for shoplifting.

KathysLGC
12-21-2004, 03:11 PM
I may increase a bit but fuel goes up and down with a steady increase. Yes that is considered. The cost of steel is going up too but i don't add that surcharge to my paying customers. I have oil heat and it's now costing me more to heat up my house but I don't charge the customer for that either. I know some want to go up each year for cost of living, in our case I would assume fuel is the main increase. Lets say you cut a customers lawn 25 times a year. You charge $2 extra per year for cost of living so thats $50 extra to cover gas for that account. Thats not basing total fuel is going to cost $50, it's just extra to cover the difference but the difference doesn't amount to $50 extra. Now if i start adding other charges like a dead beat surcharge and any other surcharge any one wants to add, over the years the customer is going to wonder why it's now cost X amount of dollars for something that wasn't the case before.

Now heres an example of this surcharge you guys are talking about; Cars get stolen, auto Ins. goes up. Does only one auto Ins. carrier go up tho? Nope they all do.
One landscaper get ripped off, fees go up. Do all landscapers raise their fees? Nope. Customer has the choice to go out and find a better price. There are too many low-ballers out here for me to risk loosing a customer because of added charges their not responsible for.

KathysLGC
12-21-2004, 03:14 PM
WalMart will up there price to pay for shoplifting.

Can they stay competitive that way? No. They prosecute and seek reimbursement. Where Walmart makes there money is they don't have sales.

bobbygedd
12-21-2004, 03:26 PM
actually, the deabeats themselves should pay the expense in THE FORM OF late fees, and penalties. but heck, if you guys say i can raise em all anyhow, i'm going with it. this one is called "because i feel it" surcharge. 3% accross the board and start cutting the apps with more cat littler. CHA- :) CHING :)

Soupy
12-21-2004, 03:29 PM
Every business, and I mean, every business! Has to pass it's expenses onto the customers or it will fail. Un-collectibles is just another expense. If you don't have a lot of un-collectibles then you are working at a lower expense and can offer a cheaper price. But don't sit here and tell me that it's not fair, so I don't charge my paying customers extra. How do you know what kind of customer they are when you give them a price? Doesn't the price have expenses covered?

Soupy
12-21-2004, 03:32 PM
actually, the deabeats themselves should pay the expense in THE FORM OF late fees, and penalties. but heck, if you guys say i can raise em all anyhow, i'm going with it. this one is called "because i feel it" surcharge. 3% accross the board and start cutting the apps with more cat littler. CHA- :) CHING :)

I thought we were talking about non-collectibles. Yes, slow payers are paying you in late fees for the added work in collecting.

I went back and re-read your first post. No you do not lower prices every time you find a cheaper way to run your business. Getting better at collecting is just an efficiency that you reap the rewards on.

bobbygedd
12-21-2004, 03:38 PM
what the hell are non collectibles? even death is no excuse for letting them slide. i had an old lady die about a month ago (peachpit we called her). she owed me fourty american dollars, yes, that's right, $40. i drove over, the relatives were in there cleaning the joint out. i helped myself inside, and said, "who is in charge of the lawn bill?" i got my dough.

Soupy
12-21-2004, 03:43 PM
what the hell are non collectibles? even death is no excuse for letting them slide. i had an old lady die about a month ago (peachpit we called her). she owed me fourty american dollars, yes, that's right, $40. i drove over, the relatives were in there cleaning the joint out. i helped myself inside, and said, "who is in charge of the lawn bill?" i got my dough.


Good for you Bobby. You are firm when it comes to collections and you are reaping the rewards. I myself except a small % of loss and don't let it get me down. My time and mental health is worth the small percentage. I just find other ways to cut cost and stay efficient.

bobbygedd
12-21-2004, 03:47 PM
why would you find other ways to make it up? the problem is obvious, look no further. you're right though, it is stressful.

Soupy
12-21-2004, 04:01 PM
why would you find other ways to make it up? the problem is obvious, look no further. you're right though, it is stressful.

I don't actually find other ways to make it up. I meant that I try to make wise decisions that allow my business to run at low cost. For example, I don't buy $30,000 trucks to pull a lawn maintenance trailer. Which for some reason a lot of people think they need to do.

KathysLGC
12-21-2004, 04:04 PM
Now that i can agree with!
Low over head.

Soupy
12-21-2004, 04:10 PM
I would like to say this to you Bobby. When I do take a look at my A/R and see these same non-payers sitting there. I think to myself that I wish I lived in Jersey so I could cut Bobbygedd in on some collection fees. I'm not making this up either, I have actually thought that at times. If I didn't think I would get sued, I would hand the phone #'s over to you for 50%. You seem to have a better collection rate then any collection agency :)

richard coffman
12-21-2004, 04:51 PM
I'd agree with that, His methods may be rather extreem, but he does get results. Bobby, Mabe you should open up a collection agency as side work, you seem very convecing, even to me. :D :D

Respectfully,

Richard/Owner

Shawns Lawns
12-21-2004, 04:52 PM
I dont charge my paying customers more for the ones that might not pay. Even though retail business view this as ethical treatment to their customers it is not my way of doing business. I try to control any losses that i might incur to a minumum, but the work that i do for a paying customer should not be punished for it.

Soupy
12-21-2004, 05:03 PM
I dont charge my paying customers more for the ones that might not pay. Even though retail business view this as ethical treatment to their customers it is not my way of doing business. I try to control any losses that i might incur to a minumum, but the work that i do for a paying customer should not be punished for it.

I don't see how all expenses are not passed onto your customers? Are you not making a profit?

YardPro
12-21-2004, 05:06 PM
it's called shrinkage. every business has it and it is built in as an overhead cost.

i read all this tough talk about not cutting nobody any slack and wonder how many times in your lives you have been cut some slack when you needed it.

richard coffman
12-21-2004, 05:12 PM
I charge any customer late on there payment, a 3% late charge charge, after 60 days of non payment, i will stop doing there lawn care and go further if needed. if i don't get a payment in 5 months, a call to my lawyer is all i need. now if a customer is going through a hard time or is a little slow on money, I'll work with them, but i won't bend to where it starts affecting my company.
respectfully,

Richard/Owner :D

Shawns Lawns
12-21-2004, 05:16 PM
I don't see how all expenses are not passed onto your customers? Are you not making a profit?
Expenses are passed on but i do not double up for the one that might not have paid

Soupy
12-21-2004, 05:24 PM
it's called shrinkage. every business has it and it is built in as an overhead cost.

i read all this tough talk about not cutting nobody any slack and wonder how many times in your lives you have been cut some slack when you needed it.

I have had my share of hard times in my life. This is why I don't go running to court to try and collect on every $ owed to me.

If the person hiring me needs my service because they are unable to perform the task themselves. Then I will let these people slide easier in the end. I do stop service on them, but I don't hassle them for payment.

It is the healthy middle age guys that just don't want to mow their own grass that gets under my skin when they don't pay. These are the guys I would like to fetch Bobbygedd on.

bobbygedd
12-21-2004, 05:37 PM
here's the thing......i have some bad habits, and i screw around with a lot more money than these $200-$300 deadbeats do. and, on more than one occasion, i've had to hang my head, and call, or go talk to the person i owed money to and tell them flat out, "i'm sorry, i don't have it. i'll get it to you by xxx date." but i NEVER just ignored the fact that i owed anyone money, nor did i hide from them. if they owe you money, and can't contact you with an explanation, then screw em.

packerbacker
12-21-2004, 06:02 PM
that's what happens when you work cheap, they can't wait to pay you. dog burial huh...... :rolleyes: fake cops have the right to remain silent. please excersise that right! ...........CATTERWALL: a land mass surrounded by water on three sides




Now thats funny Keep it up

YardPro
12-21-2004, 06:08 PM
here's the thing......i have some bad habits, and i screw around with a lot more money than these $200-$300 deadbeats do. and, on more than one occasion, i've had to hang my head, and call, or go talk to the person i owed money to and tell them flat out, "i'm sorry, i don't have it. i'll get it to you by xxx date." but i NEVER just ignored the fact that i owed anyone money, nor did i hide from them. if they owe you money, and can't contact you with an explanation, then screw em.

not everyone has the balls you do.

alot of people feel embarassed, and have the "it i ignore it it will go away" delusion.
it's not good, but that's the way some people are.
this last reply is 180 dergees from the response you had on the guy trying to collect on a bad check. you told him not to accept payment and to drag her through the system.
Is that how you would like people to treat you or your family members?

bobbygedd
12-21-2004, 06:15 PM
when you send them a bill,3 times, they ignore it. when you call them,5 times, they don't return your call. when you send them a certified mail , they ignore it. when they get notice from the court, all of a sudden they are eager to pay....screw em, let them go to court. you give them 100 opportunities to make it right,they don't want to, now they fear the law, let them suffer. what you're saying is the same thing as this: a man climbs through your window and steals your television set. you chase him down, catch him, and then just tell him give it back and he walks? you don't call the police? btw, i'm granting you a one day probation. don't blow it. i am taking you off ignore for this one day, as a trial period only, i expect you to be on your best behavior.

YardPro
12-21-2004, 08:15 PM
your comparison is not even close bobblehead.

bad analogy. breaking and entering and larceny, as opposed to not being able to pay all your bills

and By all means put me back on. it's been so nice the last few days.

HOOLIE
12-21-2004, 08:20 PM
I think I need a spreadsheet or something to keep track of all these surcharges...

But sure, if I had a problem with deadbeats I would have to raise rates overall to adjust for this.

bobbygedd
12-21-2004, 08:50 PM
your comparison is not even close bobblehead.

bad analogy. breaking and entering and larceny, as opposed to not being able to pay all your bills

and By all means put me back on. it's been so nice the last few days.
i think stealing my service is worst than stealing my t.v. WHY, you may ask? when you stole my service, you looked me square in the eye, and made an agreement with me. you lied through your teeth. on the other hand, when u stole my t.v., we never met first, never shook hands, never had a deal. you were a thief, and never claimed otherwise.

packerbacker
12-21-2004, 09:00 PM
Theres a huge difference in not paying for bad service and stealing someones TV out of their house

bobbygedd
12-21-2004, 09:05 PM
Theres a huge difference in not paying for bad service and stealing someones TV out of their house
now who said "bad " service? are you starting again. you want sean to dust off the old button?

richard coffman
12-21-2004, 09:06 PM
Bobby has a point, i hate it when people lie to your face. It's kind of like shaking your hand with one hand while the other hand is in your wallet. I'm fare with my customers, but they need to be honest and fare with me. just my 2 cents.

Respectfully,

Richard/Owner :D :D :D

Ric
12-21-2004, 09:14 PM
when you send them a bill,3 times, they ignore it. when you call them,5 times, they don't return your call. when you send them a certified mail , they ignore it. when they get notice from the court, all of a sudden they are eager to pay....screw em, let them go to court. you give them 100 opportunities to make it right,they don't want to, now they fear the law, let them suffer. what you're saying is the same thing as this: a man climbs through your window and steals your television set. you chase him down, catch him, and then just tell him give it back and he walks? you don't call the police? btw, i'm granting you a one day probation. don't blow it. i am taking you off ignore for this one day, as a trial period only, i expect you to be on your best behavior.


BooBy

Did you ever stop to realize, Your customer don't think your service is worth paying for. That might be the reason they are not paying you.

BTW congratulations on another fine troll. The Great One, Lawrence Stone would be proud of you get over 40 hits in under 12 hours. That might top his record.

packerbacker
12-21-2004, 09:15 PM
now who said "bad " service? are you starting again. you want sean to dust off the old button?






WTF are you talking about

bobbygedd
12-21-2004, 09:22 PM
keep it up, i bet sean is getting out his duster right now

packerbacker
12-21-2004, 09:23 PM
Go back and read your posts, you'll figure out what i meant.

Soupy
12-22-2004, 12:38 AM
Ric & packerbacker, Bobby wasn't hurting anyone. Have you guys ever thought that maybe you are the problem. You guys follow him around and push his buttons until it turns into a war. If you really think he is a troll and you don't like his threads? Then I suggest you stay out of them.

packerbacker
12-22-2004, 03:26 AM
Wow thanks soupy, i never thought of that









































DUH

nitrotim
12-22-2004, 09:40 AM
here's the thing......i have some bad habits, and i screw around with a lot more money than these $200-$300 deadbeats do. and, on more than one occasion, i've had to hang my head, and call, or go talk to the person i owed money to and tell them flat out, "i'm sorry, i don't have it. i'll get it to you by xxx date." but i NEVER just ignored the fact that i owed anyone money, nor did i hide from them. if they owe you money, and can't contact you with an explanation, then screw em.


Bobby, have you lost any fingers or suffered any concussions because you weren't paying the VIGORISH:laugh: