Register free!

The Green Industry's Resource Center

Thread Tools   Display Modes
Old 02-08-2002, 11:30 AM
LawnLad LawnLad is offline
LawnSite Senior Member
Join Date: Jan 2002
Location: Cleveland, Ohio
Posts: 738
The cost of a new customer?

What's it cost to get a new customer?
1) Cost of advertising piece (printing plus delivery method)
2) Cost of receiving calls and qualifying them
3) Cost to meet with prospective customer
4) cost to produce estimate/bid
5) Cost to follow up if necessary
6) Cost to 'train' new customer and develop relationship
7) Cost to train crews to understand what customer wants

What does all this add up to? I suspect if you put a dollar amount on your time, you might find that it costs hundreds of dollars per new customer that comes to you through advertising.

What if that customer stays with you for only a 1/2 season or only one season? How long does that customer need to be with you to make the cost worthwhile? Where is the break even point?

What does it cost for referral customers?

What does it cost to keep an existing customer?

Just a few thoughts since we're all throwing around advertising ideas and the related advertising costs. We all advertise to some degree, just be careful that you're not wasting your dollars or fooling yourself that a method you are using or that someone is selling you is working or will work for you. Look at your time and all the costs associated with it.
Lawn Lad, Inc.
Cleveland, Ohio
Reply With Quote
Old 02-09-2002, 04:10 AM
65hoss's Avatar
65hoss 65hoss is offline
LawnSite Fanatic
Join Date: Sep 2000
Location: Memphis, TN
Posts: 6,360
Its always cheaper to keep a customer than it is to find new ones.

Finding and getting new customers are usually hidden cost to some degree. The driving, estimating, time talking with them, etc is hard to calculate. The advertising $$ are easy to find.

Once you get established enough to where "word of mouth" keeps you really busy your in much better shape. Cheapest form of finding new customers is keep existing customers happy and get them to refer people to you.
Reply With Quote
Old 02-09-2002, 09:42 AM
SprinklerGuy SprinklerGuy is offline
LawnSite Bronze Member
Join Date: Oct 2001
Location: Scottsdale, Arizona/Colorado Springs, Colorado
Posts: 1,778
We have steadily grown in size and database for the last 6 years and it amazes me how few referrals we get. Now that I've said that I'm gonna look.........73 referrals from other homeowners last year.......
Wait though, we also get referrals from landscape maint. companies, realtors, p.managers, and many many more. Every time I debate this topic with myself in my head I realize that if I were smart I would be grooming these relationships and save the 1500-2000 dollars we spend monthly to get new customers in other ways.

It is cheaper to sell something else to your existing customers. shouldn't it also be cheaper to get them to refer you?

What if every customer you had referred you to one client......Wouldn't that be great!

Sorry this is sorta confusing but the bottom line is referrals are much better that advertising. Question is how do we convince ourselves of that and implement ideas to make it happen more often?
Tony Neumann
Reply With Quote
Old 02-09-2002, 02:11 PM
LawnLad LawnLad is offline
LawnSite Senior Member
Join Date: Jan 2002
Location: Cleveland, Ohio
Posts: 738
A suggestion... ask for a referral from your customers. Though not religiously, we ask our customers if they know anyone who would benefit from our service. We ask for their name and number, and our customers do give us names/numbers.

Also, when you go on a sales call, ask them if they know anyone who could use your service. You'd be amazed how many neighbors are looking together - and then swap information. The more people you connect with, the better the chances of making a sale.
Lawn Lad, Inc.
Cleveland, Ohio
Reply With Quote
Old 02-09-2002, 07:48 PM
Randy Scott Randy Scott is offline
LawnSite Bronze Member
Join Date: Nov 2000
Location: Wisconsin
Posts: 1,915
I've had a pretty good rate of referrals and it definately is the best way to get work. I also have a handful of customers tell me to my face they don't want to refer me and want to keep me to themselves. That is nice to know but doesn't help with getting more work.
Reply With Quote
Old 02-09-2002, 08:16 PM
greensummer greensummer is offline
LawnSite Member
Join Date: Oct 2000
Location: canada
Posts: 93
Reply With Quote
Old 02-10-2002, 07:12 AM
PaulJ's Avatar
PaulJ PaulJ is offline
LawnSite Bronze Member
Join Date: Nov 2001
Location: Columbus, NE
Posts: 1,777
I've thought of offering a reward for refarals. like $5-$10 off the next months bill after the refered customer has signed up for service. Not much insentive but it might help and since I wouldn't pay unless they actually signed up I should be able to come out ahead. Not saying I'm going to do this , just an idea .
Reply With Quote
Old 02-11-2002, 11:50 AM
lbmd1 lbmd1 is offline
LawnSite Senior Member
Join Date: Jan 2000
Location: Coastal NH
Posts: 461
LawnLad brought up an excellent topic that we have not discussed much in the past. To me, the thread shows in an unrelated yet related posts about how other members on the board feel about buying or selling a business, and what it's worth. How many times do people here say the client lists aren't worth anything, don't bother, just take the money and advertise. Lawnlads 1-7 lists in detail what we have spent or will spend in the future on existing or new clients. When I had purchased an existing LCO's client list (no equipment) about 4-5 years, I realized what this guy had to do to get these 40 some odd accounts and he should be compensated for it. As well as when the time comes for me to sell off, I would expect the same respect of what my time and goodwill with all my clients are worth for my efforts. I'm not saying that spending money on advertising doesn't give you a good result as well, it's just that Lawnlad's post on this topic show really what owners go through to get and keep clients.

Reply With Quote
Old 02-11-2002, 07:01 PM
mike payne mike payne is offline
LawnSite Member
Join Date: Jan 2002
Location: blue springs, mo.
Posts: 75
I will usually mow a lawn free once for a good referal that last the entire year. I make their last mowing of the year free.
Reply With Quote
Old 02-13-2002, 09:19 PM
garydale garydale is offline
LawnSite Senior Member
Join Date: Jan 2002
Location: Mount Airy, Maryland EST
Posts: 813

I could use some guidance on purchasing a client list of about 50+/- from a local fellow going out of business.

Neither he or I have any idea on how to price each account and what terms to apply.

I would appreciate some input.

ps: great site!

thanks, gary
gary crutchfield
po box 630
mount airy, md 21771-0630
Reply With Quote

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Layout Style:

Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2015, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012,™ - Moose River Media
All times are GMT -4. The time now is 02:21 PM.

Page generated in 0.10182 seconds with 8 queries