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Old 03-05-2013, 03:06 PM
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McFarland_Lawn_Care McFarland_Lawn_Care is offline
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Automatic Built-in Price increases?

Hi folks,
In the past years, as our costs and overhead have increased, I have increased our clients prices "as needed" as the beginning of the season. Talking primarily of maintenance and weed/fert accounts.

This spring I have been thinking about adding a clause in our agreements that states their price may be increased X% each year based on higher expenses and cost of living.

What is everyone's thought on this? I mean it makes sense to me, but not sure how it might sound to a customer. I'm only talking like 1-2% or so. Haven't come up with an exact figure yet, but more thinking about the idea of the whole thing.

I know personally, sometimes my bills will arbitrarily increase like even 10% all of the sudden ( my high speed internet just jumped from 44.99 to 49.99 out of nowhere).

Thanks for the input!


Jason
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Old 03-05-2013, 05:01 PM
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jrs.landscaping jrs.landscaping is offline
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Just make sure you inform them very plainly about the increase. Some people may think you are sneaking it in the bill, but most people shouldn't have a problem with the increase.
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Old 03-05-2013, 05:48 PM
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McFarland_Lawn_Care McFarland_Lawn_Care is offline
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Yes, good point. I'm thinking we are doing enough changes this year, I'll keep prices the same and consider doing this next spring. Still would love to get everyones' input! If someone is going to drop us over a $1.00 increase, they really aren't a good match for us anyways. hahhaha. Personally, I would rather have slow moderate increases in my bills, instead of a sudden $5 increase one year. Maybe this isn't common practice but it should be - makes LOTS of business sense.
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Old 03-05-2013, 10:51 PM
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bohiaa bohiaa is offline
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I would NOT do this....

your telling the customer, Prices may increase at the begaining of next year.......

Simply inform your customer of the upcomming price change. " increase is NOT a GOOD word "

BUT be sure to do your math.....

I have seen people change there prices. 3%. when there cost changed 7% so by the time everythign was said and done. they lost 2%.....
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Old 03-05-2013, 11:38 PM
jungerla jungerla is offline
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this is such a hard thing to do say your average price of a lawn is $40 is it really worth the possibility of losing $40 over $1. for me for my existing customers its kind of knowing my customers which ones will be ok with it. any new customers def get a higher quoted price from the start. but im my area the going rate used to be 40 per lawn now it seems to be bumping to 45 at least.
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Old 03-06-2013, 06:11 AM
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123hotdog 123hotdog is offline
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Quote:
Originally Posted by jungerla View Post
this is such a hard thing to do say your average price of a lawn is $40 is it really worth the possibility of losing $40 over $1. for me for my existing customers its kind of knowing my customers which ones will be ok with it. any new customers def get a higher quoted price from the start. but im my area the going rate used to be 40 per lawn now it seems to be bumping to 45 at least.
I totally agree with this, in the past I would raise the price $1 every other year on the accounts that did not have a contract. I have since stopped this practice. I now bid lawns at a higher rate, but my core group of twenty customers prices remain the same.
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Old 03-06-2013, 07:25 AM
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McFarland_Lawn_Care McFarland_Lawn_Care is offline
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Okay thanks folks. We are fine right now and I'm not going to raise rates this year anyways, but was just thinking ahead into the future and running some ideas around. After talking with an adviser and bouncing the idea of several other people, I think I will not include this clause in the agreements. Sometimes too much honesty can hurt business. My wife mentioned to me that if Directv had said right at the beginning their price is going up so-and-so much per year, she probably would look elsewhere. Even though that's exactly what happens. It's the forgone knowledge of it, that could turn people off. Thanks for the feedback. Always good to be thinking of ideas, but this is one for the garbage can =D. Good luck this season folks!

Jason
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