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Commercial Account Retention

Discussion in 'Lawn Mowing' started by KingOfCupCar20, Mar 3, 2010.

  1. KingOfCupCar20

    KingOfCupCar20 LawnSite Member
    Posts: 60

    My question is pretty straightforward. What would you say your average Commercial Account Retention is? specifically based on your 1 year contracts? What percentage of them hire you again in the following years and for how long do they stick with you? obviously i know this depends on the quality of work you provide, but on average how long do you keep them for when they are 1 year contracts? What is the longest you have retained a commercial client for?
  2. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    I have kept all of mine the last 3 years I have been in business, I do great work and make sure I get paid more my extra time. The more quality product service you get = the more time it takes to put into it which equals more $$ they will have to pay. I have always done great work and kept in communication to let them know we are on top of things and showing interest in the property etc. I act like their property is on the top of my list and I want it looking great and I care about how things look. I keep a good working relationship as well. I said 'act' I do care and it shows, just saying I do what I am contracted to do and talk my way to maintain good communication. Always try and make business relationships personal, if they just sign a contract you perform your services send the invoice and get a check and never follow up you do not feel connected with you and if they get a recommendation by a friend for another service or you didnt know they really cared so much about one very particular small area you will loose out.
  3. Turf Dawg

    Turf Dawg LawnSite Gold Member
    Posts: 3,719

    Depends on what type of commercial accounts you are talking about. I have privately owned ones like Dr's, Lawyers, ect....... that I have had for years and they do not even take bids. Something like apartments that may not change managers often I have for a couple of years and then they may take bids if they are Government Subsidies. Now the ones that are chain types with managers in and out and corporate places is a different story. I usually have to bid them every year and sometimes I get them and sometimes I do not. Last year I had to bid one that I had done for the last three years, which I was not the cheapest on but they used me anyway, but had to go with the cheapest this year so I lost them.
    So I guess what I am trying to say is that it really just depends, because some have to have x number of bids every year.
  4. mcw615

    mcw615 LawnSite Senior Member
    Posts: 473

    Yes exactly, it does just depend on the type of business it is. HOA's re-elect board members each year, and a lot of times they have their own people they know who work for a landscape co. Or want to use the company that services there work etc. You can have a new manager come in that doesn't have taste, eye, or care for what the grounds look like. They look at it as an expense and not an investment to attract clients of there own so when they submit their own budget to corporate they will call a few cheap services get bids and wipe out the property maintenance budget to nothing and put money in other areas of the business the way they want it. Your right, it does just all depend. In my opinion once I found out of a staff position change I would be right at the new bosses feet to kiss ass to get to know them and re-emphasize the importance of the care of the grounds to prepare and accommodate them, hopefully things will work out and still retain the account, but if that situation does happen were you just know they are going to cut dollar amounts maybe say we can mulch once a year instead of twice, but again just depends on the account and condition of property. I have a reputation to withstand and I don't want my other clients or prospects to know I service a property that is not being maintained 100%, they will most likely not know its because of budget cut they just think of poor quality work and has our name all over it.

    I work with a realtor and property manager and she was in charge of a new condo development and thought it could only cost 175 a month for total maintenance and set that in the budget and they can't change dues until the end of the year and by law she had to gather 5 bids which ranged from 450-550. I signed at 175 for mowing bi-weekly or more and that's it as long as they sign an additional 3 year contract when they can raise dues for 542 a month. They agreed, I just wore safety vest over shirt and used one of our old generic trucks without logo to service property so no one knew who it was. So it worked out okay, the 175 for 12 months paid off, I actually did less mowings then expected because of weather and came out ahead now I have a nice contract where I will be making good profits and they are happy and I have gotten close with the board and most of the residents letting them know I will be workin hard to have the place looking sharp again as soon as we get to the next contract which started two days ago. I went and spent 15 min blowing out the stair ways today just to give a good impression real fast.
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  5. LwnmwrMan22

    LwnmwrMan22 LawnSite Platinum Member
    Posts: 4,372

    If you're in my service area, the properties I do change hands ALL the time and are DIRT DIRT DIRT cheap.

    If you're not in my service area, I lose 1-2-3 accounts / year, but am able to add about 4-5.
  6. AzLawnMan

    AzLawnMan LawnSite Senior Member
    Posts: 409

    My contract renews itself monthly. So in other words, I dont have a yearly contract with my customers but a 30 day contract. I have had customers with the same contracts going on 10 years! I think if you have an expiring contract, they may feel since they are not obligated to "re-sign" then why not take some other bids and see what happens. So that is a main reason why none of my contracts have an expiration date. I dont want another company on my property for any reason. If they want one that expires, my price goes way up. On the flip side, they can give me my 30 day notice anytime. But I figure if you do good work and you dont get greedy then they have no need to move on. I have one HOA that I do thats about $18k a month and I have been through 4 different Presidents in the last 6 years. So if your good to them, they will be good to you. But you gotta remember, you only get new business when someone gets fired, and sometimes that someone is you. So take it in stride and work to be the best, the business will come.
  7. Turf Dawg

    Turf Dawg LawnSite Gold Member
    Posts: 3,719

    I am just wondering how you have a 30 day contract? Does that mean the price changes per month also? Mine are one year contracts that they pay the same amount each month although I am not there but once per month in the winter. I guess what I am saying is that I take the whole year into account when I am bidding like cuts, hedge trimming, fert/squirt and mulch then I take that price and divide by 12 and that gives me the price per month. I am not trying to be a smart arse, I just do not understand how a 30 day contract would work. My residential pay per cut [or job]
  8. inthemoment

    inthemoment LawnSite Member
    Posts: 9

    I've got a 12 month contract that auto renews for the same amount of time. I also have a 30 notice required to terminate that has to be sent prior to contract end date. More security built in is that there is a clause that if there are any deficiencies, I have 30 days to rectify before termination.
  9. Marshman

    Marshman LawnSite Member
    Posts: 31

    So if they wanna cancel in october thats convienent because you just aerated and overseeded and don't have much left to do? A few years ago i started a HOA maintenance agreement that was run by a property management company. Was hired in october and let go in march due to management changing and they had there people. Worked out pretty good for me. Anyways, good origonal question. hit or miss i reckon.
  10. TX Easymoney

    TX Easymoney LawnSite Platinum Member
    Posts: 4,078

    I suppose you could just accept the 30 day termination notice and stop the billing and not bill anything more and eat all the cost of your hard work in some cases and in your case, making out really well.

    For example--a customer who starts in May and stops in October....in this example, by what I have heard, the client would be practically stealing the lawncare.
    To protect against this...your 'out' clause could state that 'in the event of early terminatuion by either party prior to the completion of the years term, the cost of all completed work will be added up and compared to the amount paid on the contract to that point to get an account balance-- ...Lets say client did the above and you had 30 cuts already performed at $100/cut (your estimated amount)$3000...but he made 6 payments of $350...or $2100...I'd go back and collect the difference

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