auto renewing contracts

Discussion in 'Business Operations' started by hoyboy, Feb 21, 2004.

  1. hoyboy

    hoyboy LawnSite Senior Member
    from Chicago
    Posts: 346

    I don't send new contracts to my customers every year. Each contract states that it is ongoing and good until cancelled. I do send a letter in the spring telling the customer of any new services we are offering, any changes, hope they had a nice winter, blah blah blah....and a reminder that they are still on our service list this year.

    Also, my contracts do stipulate that prices may be raised based on the increase in the consumer price index. That way I have a way of increasing prices without sending new contracts.

    It works great for me. Wondering if anyone else does the same?

    My rationale (sp?) is that sending contracts every year is basically an invitation to bid out the work. If I happen to give a spring cleanup to a couple customers and they call and say they won't pay because they didn't sign a contract this year, I just show them the contract. They will usually pay and say don't do any more. But even if they don't pay, it is usually only maybe 2 or 3 (out of about 350) so it's really not a problem.

    I try to be very up front about it when first selling a job. Just compare it to the garbage service, telephone service, etc...they don't send contracts out every year and neither do I.

    Any one else out there?

    Dan
     
  2. cklands

    cklands LawnSite Senior Member
    from MA
    Posts: 360

    i do the same thing. the original contract has a the price on it but it does state that prices may increase. it also states that we are a continuos service from year to year until notified in writing to stop. save a lot of paper work every year. they are sent a letter at the end of the winter stating the services scheduled and gives the opportunity to prepay for the season
     
  3. DFW Area Landscaper

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

    Yup. Me too. I think these guys that are sending new contracts out to their customers are insane. You're exactly right...I think sending out a new contract to existing customers is just an invitation for them to get other bids. I'll take my chances by assuming I've still got their business.

    Later,
    DFW Area Landscaper
     
  4. Jason Pallas

    Jason Pallas LawnSite Bronze Member
    Posts: 1,325

    I'm with you guys 100% on this. It just invites the customer to bid out your service. I've found 2 important things 1) Most people are too lazy to change (even if they've got a reason to) - so by just re-newing the service, you've "gained " a customer that you may have otherwise lost. 2) When I used to send out contracts yearly. I always got 15%-20 of my clients calling after 2-3 weeks into the season wanting to know why their grass hadn't been cut (they never sent in their contract) = I lost 2-3 weeks of revenue on their cuts AND their lawn was a ***** to get throught the first time!

    BTW - when are you guys sending out your renewal letters?
     

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