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View Full Version : higher price for late payers?


bobbygedd
12-29-2004, 03:07 PM
i'll be sending out new contracts within a month. there are a few late payers i was going to dump, but thought about this instead of dumping them: just like a bank, car dealer, or credit company, HOW ABOUT charging continual late payers A HIGHER FEE for all services, as well as a higher late fee than people who are timely payers? anyone do this, or consider this? personally, i can't tolerate terminal late payers, but for a higher than normal fee, i think i could live with it. for example most of my customers average $30 a mow. i'm thinking of charging later payers like $33. also the usual late fee is 3%. i'm thinking of charging the late payers maybe a flat rate of $15 per month(the average mow bill is now $120 per month). any thoughts?

packerbacker
12-29-2004, 03:13 PM
i'll be sending out new contracts within a month. there are a few late payers i was going to dump, but thought about this instead of dumping them: just like a bank, car dealer, or credit company, HOW ABOUT charging continual late payers A HIGHER FEE for all services, as well as a higher late fee than people who are timely payers? anyone do this, or consider this? personally, i can't tolerate terminal late payers, but for a higher than normal fee, i think i could live with it. for example most of my customers average $30 a mow. i'm thinking of charging later payers like $33. also the usual late fee is 3%. i'm thinking of charging the late payers maybe a flat rate of $15 per month(the average mow bill is now $120 per month). any thoughts?





Can you blame them? If i was terminal i wouldnt pay either. Whats the point?

Precision
12-29-2004, 03:16 PM
As you know raising rates is the easiest way to weed out clients. But in this case you are win win. They balk at the increase and leave, no more chasing money. If they agree to pay, you have covered your risk and the float on the money. Just be careful with upping the late fee penalty. Avoid your states usuary rates. But I think you also know that.

BG it sounds like a good idea. My opinion, it never hurts to increase your income without doing any extra work.

bobbygedd
12-29-2004, 03:21 PM
Can you blame them? If i was terminal i wouldnt pay either. Whats the point?
you are a fool!!! TERMINAL: a land mass surrounded by water on three sides

packerbacker
12-29-2004, 03:24 PM
you are a fool!!! TERMINAL: a land mass surrounded by water on three sides




Sorry i thought you were talking about a bus stop

Soupy
12-29-2004, 03:29 PM
Welcome back Bobby :drinkup:

I raise rates all the time to weed out these people. But it doesn't make you feel any better when you still have to collect.

bobbygedd
12-29-2004, 03:33 PM
i aint home yet. but, i can't wait to be. i'm using my friend's computer, and it moves slower than ol man ric gettin out of bed in the morning.

Ol'time Lawncare
12-29-2004, 03:51 PM
Hello BobbyGedd, hows Florida, have you done any boating while there, I,d charge at least 5 bucks more for late payers, thats a good idea, and i'm doing just that this year!

jwholden
12-29-2004, 04:02 PM
Bobby,

I was running that through my mind last week and thought of slow payers pre-pay for my services. How about a contract that states that all services MUST be prepaid. Send the bill at the beginning of the month and don't mow their lawn until you get a check.

Tn Lawn Man
12-29-2004, 04:06 PM
I don't necessarily think it is a good idea.

This is why.

Although your late paying customers are a pain, they still may recommend you to a good customer. And that customer may not use your services because they think your prices for their PITA friend are too high, where they may have used you had they known your normal price.

If it were me I would simply raise the late fees. If they don't mind paying for being late then you have achieved what you want....more money from the PITA to cover the fact that they do not pay on time.

To use your example of credit companies: what sounds better to you (a good customer)?

1. 10% interest with 5% penalty for late payments

or
2. 15% interest with 3% penalty for late payments

If I am a "good" customer it is obvious that #1 is the best option. And that is the goal, to attract good customers

chevyman1
12-29-2004, 04:34 PM
don't worry he's probably not doing it anyways, he's starting a thread predicated on nonsense, sitting back and laughing at the waste of thread space

JimLewis
12-29-2004, 04:39 PM
You have the right idea. But the goal is to raise your rates enough so that you don't regret having them as a customer.

For me, usually that just means dumping them entirely. I don't like late-payers, even if they are at a higher rate. I got my own bills to pay and if they pay me late (even at a higher rate) that means I have to pay someone else late or delay buying something I needed. I don't like that.

Anyway, if you are going to raise their rates, make it enough so that you will feel like it's worth it. Is a $3 raise really enough to make it worth it to you? For me, it wouldn't be. I'd raise them from $30 per cut to $35 or $40 per cut. If they don't like it, they can go be some other LCOs' PITA customer.

dishboy
12-29-2004, 05:04 PM
I have about four late payers, but they always pay and have so for years. At the end of the year the bill is paid off and it works out for me.

Personally I would not raise their rate if you are already collecting a 3% late fee. Isn't 3% something like a 36% annual rate, which sounds like a great return on your money. Actually if you could get enough late paying customers this would be a great business in itself.

JimLewis
12-30-2004, 04:17 AM
I have about four late payers, but they always pay and have so for years. At the end of the year the bill is paid off and it works out for me.

Five out of how many total regular customers?

I remember when I had a smaller business (e.g. 50 accounts) I had only 10 or 12 people who paid late. Some of them VERY late. But it was not that big of a deal since it was just me and my wife had a great job at the time.

The problem came as we got bigger. I remember one month several years ago where we had over 100 regular clients and like 30-40 were paying late each month. That was like $3600-$4800 per month in late payments. Makes it a little hard to pay your employees AND your mortgage payment on time. It really sucked.

So that's why you gotta get it under control when you're small. Because later, as you grow, so will the number of late payers. And before you know it you'll be paying your employees on time but waiting for YOUR money forever. That really blows.

bobbygedd
12-30-2004, 02:37 PM
jimlewis has a brain. chevy, i'm not sure YOU do. yes i will enforce some kind of very different system for late payers. it's the same thing REAL CREDIT EXTENDING companies do. i'm trying to avoid dumping clients that cause problems, and somehow keep them while making them worth my while. i plan on expanding by about 50% this year, this means i'll have to "work the bugs out" of pita customers, rather than dump them. as appealing as the old dump button is to me, i may try and handle it by making it financially worthwhile.

Lux Lawn
12-30-2004, 02:47 PM
I agree with Jim you really have to make it worth your while to keep them.I have a few that are always late now and they pay my late fee a whole $5 o boy like that really helps me out.Next year the ones that are always late will be charged a flat $15 late fee.

chevyman1
12-30-2004, 02:48 PM
Listen Booby, I think you are a smart guy, but no one is impressed with your internet muscle and your supposed strong arm techniques. Just act and talk as cordial to us as you do your customers instead of trying to impress everyone on here with stories of your tough guy persona. I know you have to weed out the bad people, and I wish you all the luck

bobbygedd
12-30-2004, 03:04 PM
that's pretty funny. you call having balls, and standing up for yourself, an attempt to "impress" people? i am not trying to impress anybody, why would i? it's just that the further and further i get into this business, it amazes me the way so called "professionals" allow them selves to be p!ssed on by thier clients, and it is no wonder the industry as a whole is in shambles. THERE IS no other industry where the client manhandles the contractor the way they do the lawnboy. but it stops when it gets to me. i refuse to be manhandled. I AM in charge, not them. thanks for the compliment though, i think i'm pretty smart too.

JimLewis
12-30-2004, 03:11 PM
but no one is impressed with your internet muscle and your supposed strong arm techniques.

Nothing wrong with some muscle. I just look at BobbyG as the Dwayne "Dog" Chapman (The Bounty Hunter) of lawnsite. :cool2:

chevyman1
12-30-2004, 03:16 PM
What I was saying Booby was the fact that you don't act as tough in front of customers as you do on here, that's what doesn't impress people. You are doing a great thing in that you don't let others run you, but there's a fine line you are walking. Remember if you aren't in sales mode and customer service mode at all times, you will never be the best

Ol'time Lawncare
12-30-2004, 03:18 PM
Nothing wrong with some muscle. I just look at BobbyG as the Dwayne "Dog" Chapman (The Bounty Hunter) of lawnsite. :cool2:
thats the truth!or the Godfather of Lawncare

bobbygedd
12-30-2004, 03:28 PM
What I was saying Booby was the fact that you don't act as tough in front of customers as you do on here, that's what doesn't impress people. You are doing a great thing in that you don't let others run you, but there's a fine line you are walking. Remember if you aren't in sales mode and customer service mode at all times, you will never be the best
what makes you say that? that's crazy. yes, i'm courteous and pleasant at all times, until they try and stick me. if you don't believe i play hardball with these no good deabeats and pita people , just ask the guy who drove me to the police station, or the last lady i took to court and jacked on late fees, and court appearance fees. or the lady who lost her $400 deposit when she tried jerking me on a planting job.or the guy who got a 2am visit over a $50 bill. or the lady whos lawn ornaments went flying 60 feet in a hundred pieces after i told her to keep this crap out of my way.