Churn - Does professionalism pay???

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Dec 1, 2004.

  1. DFW Area Landscaper

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

    I just finished studying my customer cancellation rates now that the season is over.

    In 2003, 67% of the customers who signed up for regular mowing service during 2003 had us mow again (at least once) in 2004. Some of them cancelled during 2003, but of the customers who signed up for regular mowing service in 2003, 67% were still on the schedule in March of '04.

    This year, only 58% of the customers who signed up for regular mowing service during 2004 are still on the schedule. And I know there are more cancellations on the way between now and the time we start cutting again in '05.

    The churn is killing me.

    So, what am I doing wrong? Why the increased cancellation rate?

    I have personally been on all the properties myself. I don't have crews running around without me, so I know the quality was the same or better in 2004.

    The biggest difference I can see is the professional image. In 2003, I had no uniforms and I had really cheap lettering on the truck. It just looked like a small, one man operation. This year, I paid to have a nice logo designed and started wearing uniforms with company logo. In short, the image I project in 2004 is that of a large, successful company.

    Is it possible that some of our customers are keeping us around only because they think we need the money and they feel sorry for us? Poor little Billy Bob the lawn man...I really should be doing this myself but I just can't bring myself to fire the poor guy.

    I mean, since I've started pretending to be a large company, I'm finding customers are much more inclined to cancel service.

    Any thoughts?

    Would like to know what other LCO's are seeing in terms of cancellation rates from one year to the next.

    Later,
    DFW Area Landscaper
     
  2. cleancutccl

    cleancutccl LawnSite Senior Member
    Posts: 698

    I don't think its the professionalism you portray that is taking away jobs. Maybe it has something to do with your customers not being around to see that you are the one doing the work, and possibly assume that you are just running a crew.

    Its hard to say, some customers are just impossible to figure out.
     
  3. naturescaretaker

    naturescaretaker LawnSite Senior Member
    Posts: 851

    Our renewal rate for 2003 was 78% and this year it looks to be 84%. This year we went with standardized uniforms and got ride of all of the magnatic signs. Each truck is professionally lettered. That has helped us based on the feedback that I have gotten from new clients who picked us over someone else.
     
  4. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    last year my renewal rate was approx 97%, this year so far its only at 81%. I really think that its the economy and not professionalism. People are cutting back big time. Heck I just talked with one of my customers yesterday and she gets a $76 per month Social Security check. Now how the heck can she live off from that?
     
  5. GrassBustersLawn

    GrassBustersLawn LawnSite Senior Member
    Posts: 983

    DFW - Good insight into your business.

    I have found, and have had customers comment about..."before you were big" and "are you trying to get big" etc.

    I have a 2 truck operation, which is in NO WAY BIG! I too am personally on every property and know that the quality is there. (I also know that it wouldn't be as high if I weren't there.) I HAVE QUIT TRYING TO FIGURE OUT WHAT PEOPLE THINK or WANT, because most of them don't know what they want! However, this is MY interepretation of your situation, which is fairly similar to mine.

    * CUSTOMERS want to THINK they are getting a "good deal".
    * They THINK they are getting the best deal from small or one man operations. (whether that is true or not is debatable.)
    * They THINK that BIGGER outfits must be charging too much.
    * They THINK that if you buy a new piece of equipment (mower/trailer/trimmer etc.) that you must be making too much money & therefore they are paying too much.
    * They THINK that if you have EMPLOYEES, you are making too much money & therefore they are paying too much.

    MY DECISION (made last season after thinking about all this stuff) is to FORGET ABOUT WHAT THE CUSTOMER THINKS! It will DRIVE YOU NUTS! We are going to have customer turnover or "churn" for a myriad of reasons. Many of which are BEYOND OUR CONTROL! My new THEORY: MAXIMIZE YOUR CUSTOMER RELATIONSHIP, while you have it. BECAUSE THEY WILL LEAVE YOU SOONER OR LATER! (Those guys that don't realize this are seriously deluded! I read all the time threads to the effect of "I have a great relationship with my client & I retain 100%. BULL SH!T. If you are retaining 100% of your customers YOU AREN'T CHARGING ENOUGH!!!!!! THey are staying with you because you are the CHEAPEST guy they could find!!!)

    By MAXIMIZING CUSTOMER RELATIONSHIP I mean to SELL as much to that customer as possible. It is easier to sell them new services because they already know the work you can do. They think you are reasonable (rate wise) on that and will assume you are reasonable on the other services. They know you are dependable, etc. SO SPEND YOUR MARKETING TIME where it will be MOST PRODUCTIVE!

    Kind of long winded....sorry!


    Mike
     
  6. richard coffman

    richard coffman LawnSite Senior Member
    Posts: 341

    I agree, I believe it's the economy, gas prices rising, and eveyone else is raising there prices on service. customers do away with one or who things to make them feel there not sacrifying something they like to do or way of living.
    :D
     
  7. TURFLORD

    TURFLORD LawnSite Senior Member
    Posts: 834

    No way in he!! you're ever gonna pin that one down. Too many reasons. Some people look for ratty looking crews because they think your ignorant and don't know to charge enough. I'm a solo LCO. I use amigos when I need help. I just bought an '04 F550 turbo diesel with nice lettering. First new truck I've ever had. Never worn a uniforn in my life ( I do have a bunch of t-shirts all the same color lol). 90% of my customers will come back next year just like they always do. Try looking at the services you offer. Good customers like one stop shopping. I do just about everything short of irrigation and large trees. When they trust you and know you'll be there for them in time of need, they won't care about $1 more per week. And don't be sucked in by people asking for alot of quotes. That's just a ploy to get you to lower your mowing price because you think your gonna get alot of work out of them. Oldest one in the book. Sorry for the rantings.
     
  8. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    i told you before. some people like to be abused. take me for example, i pull up in a rusty old truck, shirt halfway unbuttoned, chest hair hanging out all over. gold cross hanging from my neck. i sing loudly while i work. when i'm done, i bang on the door with the butt of my shovel, and say, "i'm ready to go, you got my dough?" bingo, no problemo. btw, my cancelation rate for 2003/2004= MAYBE 2 clients. BUT, i also had 4-6 clients return, that i had cancelled previous years. hope you figure it out buddy
     
  9. DFW Area Landscaper

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

    ++++last year my renewal rate was approx 97%++++

    I want to make sure we're comparing apples to apples. Are you saying that of the customers who agreed to sign up for regular mowing service at any time during 2003, 97% of those customers were still on your schedule in March of '05?

    If my retention were anywhere close to that, this business would be a cinch.

    Later,
    DFW Area Landscaper
     
  10. naturescaretaker

    naturescaretaker LawnSite Senior Member
    Posts: 851


    Maybe your should change your name from Bobby to Bubba or Mr. T. Gold chains... that's the spare chain for the saw... right... :p
     

Share This Page