A trend I'm noticing

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Sep 13, 2006.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    Sometime in late June of this year, I decided to create a line item in Quickbooks for non-revenue producing customer contact, as follows:

    Cancel Service
    Switch From Weekly To Bi-Weekly
    Switch From Bi-Weekly To Weekly
    Customer Complaint, Comment or Request

    Since I started tracking the change, I have noticed a trend. The trend is this: A client calls and says "My grass isn't growing very fast. I'd like to have you guys start mowing every other week." So I take their request, go over the fert restrictions and then, towards the end of the call, I mention, casually, that we do charge $5 extra for every other week service. On the phone, no one has ever complained about the extra $5.

    One lady, who requested this change via e-mail, and who did finally accept the premium charge, argued about the charge, back and forth via e-mail, for what must have been a day.

    Since I've started tracking these non-revenue items in Quickbooks, I can plainly see a trend that I wouldn't have noticed before:

    The request to switch from weekly to bi-weekly service is often followed closely thereafter with a cancellation.

    I don't remember having this problem last year. But last year, I was not charging the premium for bi-weekly service, nor was I documenting any changes in Quickbooks.

    Of the 17 clients who have switched from weekly to bi-weekly since June 20th, we failed to raise the price on 2 of them. Of the remaining 15, 4 of them later called to cancelled service entirely. I am guessing the $5 premium has a lot do with it, based on a quick exit interview with one of them this morning. He expressed dissatisfaction with the $31 price tag (which he referred to as $35 and it is closer to that after the sales tax.)

    My question is this: Would you continue to raise prices on existing clients who switch from weekly to bi-weekly?

    Later,
    DFW Area Landscaper
     
  2. scott's turf

    scott's turf LawnSite Senior Member
    from NH
    Posts: 949

    I think your policy is more than fair. I don't think you are losing customers based on this $5 increase because most are trying to save money on a monthly basis not a per unit cost. For example a $30 weekly cut costs them usually $120/month. The biweekly is $70/month. They are still saving $50.
     
  3. Daner

    Daner LawnSite Bronze Member
    Posts: 1,308

    I would not charge the extra 5 bucks...That could be just enough to PTO
    Then triggering a cancellation.
    Some are on a budget and watch there funds carfully.
     
  4. grassmanvt

    grassmanvt LawnSite Senior Member
    Posts: 906

    Seems fair to me to. Now, even though you are seeing a trend, I am wondering if they were likely to cancel regardless now that things are slowing down a bit. It seems that there is a certain demographic that will cancel and look for a cheaper service from season to season anyhow.
     
  5. J&R Landscaping

    J&R Landscaping LawnSite Fanatic
    Posts: 5,096

    Are the customers who cancelled service new customers (2 years or less) or have they been with you for an extended lenght of time? Also, are the customers who quit full service customers or just weekly mow and go people?
     
  6. John Gamba

    John Gamba LawnSite Fanatic
    from ct
    Posts: 10,812

     
  7. sperho

    sperho LawnSite Member
    Posts: 30

    Sounds like free market economics to me. It sounds like at $31 you are above market price and you've priced yourself out of business. Good on your for catching it; now you might use that information to govern your price increases and/or premiums in the near and more distant future. Or find a way to increase your value/level of service compared to what you currently provide so that you can command the premium...
     
  8. John Gamba

    John Gamba LawnSite Fanatic
    from ct
    Posts: 10,812


    Or get out of a business where you are dealing with part timers and the like.
     
  9. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    90% of all our clients have been with us for less than 2 years. All of those who switched from weekly to bi-weekly were fairly new and the vast majority were just having us mow the lawn.

    It really depends on the amount of rainfall. Often, the bi-weekly accounts are a lot more work. Other times, they are no more work than if done weekly.

    It is common practice for LCO's in my area to advertise higher prices for bi-weekly service. Whether or not they actually charge the higher price for bi-weekly is unknown. Most are so desparate for clients, I imagine a lot are waiving the premium when prospects call for a price.

    I only started insisting on the $5 premium earlier this year. Last year, I did not charge extra for bi-weekly, but that was before I realized how many would break their promises about fertilizing and then play dumb.

    Later,
    DFW Area Landscaper
     
  10. MountainMow

    MountainMow LawnSite Member
    Posts: 33

    These must be pretty small yards?
     

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