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  #21  
Old 01-10-2013, 10:13 AM
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rcreech rcreech is offline
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Quote:
Originally Posted by jc1 View Post
I assume those raising prices every year are not primarily fertilizing companies.
No matter how good of a service you provide there is a threshold of what someone is willing to pay. It is far cheaper to keep a customer than to market for their replacement.
Totally agree!
Just like someone said...we r not the only game in town.
I consider our program and quality the best around.
But guess what if my competitors use the same products at the same time and do detailed work I am no better.
It comes down to density or customers, volume discounts and being effecient.
Take care of who pays the bills...and never take advantage of them.
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  #22  
Old 01-10-2013, 10:29 AM
grassmasterswilson grassmasterswilson is online now
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I might raise existing companies every 3-4 years a little depending on cost.

If I need new prices I implement them on new customers.

If you are raising prices every year you aren't charging enough to start with. We hear about lowball era in mowing all the time!
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  #23  
Old 01-10-2013, 10:35 AM
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ringahding ringahding is offline
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The question I would/do ask myself every year is: If I keep the same rate as last year, will I make a profit with that same rate this year?

Whatever your answer is will help with your decision.
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  #24  
Old 01-10-2013, 10:47 AM
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rcreech rcreech is offline
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I understand that thinking.

But honestly ur margins may get smaller per customer.

It isn't can I make what I made last year...but can I be happy with what I make on this customer and grow my business enough to make up for the lower margin.

Just using that as an example

Case n point

There are very few buisness's today with the same profit margins they had say n the last 2-10 years.

Margins are realistically getting smaller in every business you just have to manage it.

Luckily our margins have been very stable.
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  #25  
Old 01-10-2013, 10:53 AM
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ringahding ringahding is offline
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It is tricky for various markets. And yes margins get smaller as the years go by. If you are continuously growing every year, passing the buck to new customers is not out of the question.

Example: Let's say you have maxed out rate increases with current clients. What would you think an increase for a current client would look like if you could do increase it?
If you are charging them $35 per week for lawn mowing, would their rate increase look like this $37.50. That is what you would charge new clients.
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  #26  
Old 01-10-2013, 11:21 AM
jc1 jc1 is offline
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Again fertilization and lawn cutting are two different animals trying to compare pricing strategy is difficult.
How many lawn mowing company's are pricing against national or regional mowing company's that have thousands of customers?
It is better to increase the number of services provided to a customer than to keep inching the price on the single service you are providing to them.
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  #27  
Old 01-10-2013, 11:25 AM
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rcreech rcreech is offline
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If I was mowing I would have a $100 minimum just so I wouldn't get any work.
Lol

I agree this Is a pesticide forum.

I don't even mow my own lawn.
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  #28  
Old 01-10-2013, 12:03 PM
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ringahding ringahding is offline
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I agree and can see this is not a Lawn Mowing Discussion, hence that was an "Example".

But I suppose if i were charging applications @ a Per Square Foot Dollar Amount Rate, I would use my previous post "Example" when retaining new clients.

Example:

If I am charging $45 per application up to 10k sq. ft for "Example", I would consider making it $46 per app for new clients and keep current customers @ the same rate, since I am assuming(according to the poster, rates have been maxed out for current clients)you are still able to make a profit.

Adding $1 per sq ft or more could possibly cover any new over-head(Fertilizer Prices included)you may need recoup.
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  #29  
Old 01-10-2013, 01:31 PM
Landgreen Landgreen is offline
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Thank you for all the replies

Quote:
Originally Posted by AI Inc View Post
Cant realy blame em. Fuel is your cost , not theirs. Hide it in the bill.
Yep. I never wanted to raise prices based on fuel since price per gallon was so volatile. A surcharge allowed us to adjust for that volatility but now it is always on an invoice. Fuel has stayed high for so long that it should be incorporated in the the ap price.

Quote:
Originally Posted by RigglePLC View Post
Take a lesson from the professionals. Hide it by pretending it covers new improvments and features, like when cable TV adds new channels you never watch in foreign languages. (add a tiny bit of iron...or zinc.)
Or like potato chips; bigger bag same price. ( less fert--cheaper nitrogen source.)

So much the better if you have actually improved your program--better fert, better herbicide, wetting agent, partial organic ingredient, better guarantee, you took an educational course and learned more about grass fertility. Better equipment. Upgraded your computer and software. more...any suggestions?
I agree that a price increase needs to be sold. The customer expects some sort of justification. That will be explained in our spring newsletter. Probably include a mention of business expenses and cost of living but also our changes we have made to better our program. With the wild weather, crabgrass seems to be an added expense and our customers expect it to be controlled no matter what.

Quote:
Originally Posted by rcreech View Post
Totally agree

If a lawncare co has to raise their prices every year then there is one of two things that are happening

1) Their prices are or were too low
2) They dont have a clue how to run their business

If you look fert prices and fuel they are both about the same price or less then 2008.

So why would you raise your prices in 2013 (and every year in between)?

Glad we know how to run an efficient business and know how to buy. We have contemplated increases over the last two years but felt greed was the only reason and chose to stay where we were.
I think the customer appreciates it and it pays off in the long run.
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I'm impressed you have found a source for fert that has not raised their prices. Our price of granular has gone up 25%.

You may also want to look at expenses outside of your business expenses. Cost of living is skyrocketing. I don't mind paying myself more to cover that and certainly never considered greed to be a factor.



Quote:
Originally Posted by Will P.C. View Post
I would drop my fert company if they informed me of a 7% increase. I only pay 40 bucks an app which is a fair price for my lot. However, I could have a number of companies out here within the week that would do it for 35 with similar results. My current fert company is great, but they aren't the only game in town.
Customer loyalty at its finest.
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  #30  
Old 01-10-2013, 01:34 PM
jc1 jc1 is offline
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If you are saying your cost for fertilizer went up 25% this year you need to find a new supplier.
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