customer does not like fuel sur-charge???

Discussion in 'Lawn Mowing' started by LawnScapers of Dayton, Mar 17, 2005.

  1. LawnScapers of Dayton

    LawnScapers of Dayton LawnSite Silver Member
    Male, from Dayton, OH
    Posts: 2,574

    I actualy had a customer last night call me and say she was not comfortable with the 5% fuel clause in my residential agreement. It simply states that if 93 octane gets to $2.19 per gallon, 5% will be added to all service covered by the agreement. This is assessed on a week by week basis.

    It was not the amount of money she did like, she just thought it was confusing. So she decided to just pay the 5% more every week rather than just when warranted. That kills me......since it is all documented on the monthly invoice she gets.....

    I do think that clause is going to get used alot this year.

    Have a good one......

    Derek
     
  2. David Grass

    David Grass LawnSite Senior Member
    Posts: 485

    My customers might be easily confused and irritated too with surcharges. I think It is perhaps better to either go up this year a fixed amount, or tell them you will have to wait and see, as I did. Several last year asked if I would have to raise prices with gas going up, and I said, "not yet, but may if it goes much higher", so people are sort of expecting it at some point, if necessary.
     
  3. DennisF

    DennisF LawnSite Bronze Member
    from Florida
    Posts: 1,381

    I bumped all of my accounts by $2.00 per week beginning March 1st to cover rising costs. Gas is only one item that is costing more. Insurance, equipment, replacement parts, filters, trimmer line, etc...are all going up quickly.

    Most customers understand that our costs are rising and that a reasonable price increase is justified. I didn't have anyone drop service after I raised rates and only one customer questioned the need for an increase.

    I think if you use a fuel surcharge the customer will not understand that all of your costs are rising and will ask that the surcharge be removed if gas prices level off or drop in the future.
     
  4. grass_cuttin_fool

    grass_cuttin_fool LawnSite Gold Member
    Posts: 3,504

    I was going up $2.50 just because my rate was a little low ( been 5 years since I had an Increase) but now Im thinking of $5 hike across the board to keep up with gas prices this year. Customers may as well get used to some increases in lawn care also.
     
  5. jpmako

    jpmako LawnSite Senior Member
    Posts: 593

    Instead of the fuel surcharge I am just raising prices for all of our services.
    I struggled greatly with this over the winter and finally mailed out my new contracts without the surcharge.
    Basically most of my clients are full service so I am padding all of their services to make more without having percentages of fuel to worry about.

    Basic increase:

    Monthly Maintenance From $120.00 to $130.00
    Spring Clean-up From $225.00 to $250.00
    Fall Clean-up From $250.00 to $300.00
    Debris Removal From $75.00 to $125.00

    These increases will definitely cover the increase in fuel.
    Also these are just a few of the service that we perform, so any other services that they sign up for get an increase as well.
    For instance most of my Spring clean-ups have never gotten dethatched.
    So this year I added that as a "Freebie" to about half of my customers.
    Well it's not really free - they got an increase of anywhere from $75.00 - $150.00 for their spring clean-ups, and in my opinion using a JRCO front mount dethatcher on a 60" deck with a collection system speeds up the clean-up process quite a bit. So in essence I am getting paid more to make my job easier.

    I did have one Lady question my increase and she said they were going to shop around and get back to me. I gave her a price of $35.00 to cut and last year it was $32.00 She doesn't get a spring clean-up so I could not pad anything until the Fall clean-up. Well she called me back and said well I got another price of $32.00 and a price for $35.00 what can you do to match the lower price? I said that I can't and after analyzing the cost of servicing her property that my price would now be $40.00. She went crazy... I don't have time for price shoppers. I need to make money. Long story short I don't think that I will be doing that lawn anymore.. But that's OK I don't want disloyal customers that are going to question a $3.00 increase.


    Jason
     
  6. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    Derek,
    How will you ad this charge? Weekly at 5% of the total balance owed or weekly at 5% of the work done for that customer for that week?
     
  7. MMLawn

    MMLawn LawnSite Gold Member
    Posts: 3,569

    I personally don't like adding Fuel Surcharges. We all know that fuel is one of our biggest expenses and we all know fuel prices are very unstable right now, so instead of a surcharge the cost of service if anything should be adjusted. I personally think that the customer (esp if you explain why it is going up) has less problem with that than they would a "surcharge". I also think 5% is too high, because I seriously doubt that even at the price you gave that increase over what you are paying now for gas would equate to the same percentage use/cost increase in the amount used at each customers property. I but it would be more like a 2% cost increase max divided by the number of customers.
     
  8. procut

    procut LawnSite Bronze Member
    Posts: 1,853

    My question is why do you run 93 ocatane?
     
  9. rbeitz

    rbeitz LawnSite Member
    Posts: 138

    My trash service has been adding on a 2.50 fuel surcharge for almost 2 years now due to the high cost of fuel. It started when fuel first hit $1.50/gallon. I say enough already with the surcharge. Just up the cost of the service and do away with the extra line item on my bills.
     
  10. bigz1001

    bigz1001 LawnSite Member
    Posts: 128

    Amen. If your prices are to low raise them, don't hide it in a fuel surcharge.
     

Share This Page