Customer paying in full

Discussion in 'General Industry Discussions' started by The Grounds Crew, Apr 27, 2012.

  1. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Posts: 1,384

    p.s. So sorry about the grammar and spelling - it's been a long day and very tired!
     
  2. Wayne 55

    Wayne 55 LawnSite Member
    Posts: 108

    Why would you give back for up front payment?? I myself have no crystle ball and can not read into the future to see where gas and oil prices will be come July. My costs rise daily due to the gas prices as I am sure so does everyone else. My supplies I get also go up maybe not daily but prices never drop. My price stands if I made a mistake and shorted myself would they the HO make up the diffrence out of the goodness of their heart? Or force me to live up to the contract. Sounds like they watch a lot of Suzie Orwin.
     
  3. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    This is exactly what I would do. Free aeration, shrub trimming, sprinkler system blow out, fertilization, etc. Give them a one or two time service that takes 30 minutes while you are already on site. Keep the rate at the full price.
     
  4. weeze

    weeze LawnSite Fanatic
    Posts: 7,803

    yeah i wouldn't discount the price. all in all it's what you make for the whole year that matters. i'd rather get paid each month and make more money than give a discount and get paid upfront.
     
  5. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Posts: 1,384

    Like I said, in my case, the only reason I offered it this year was to get in better position for the coming season. With record low revenues over the winter and growing and expanding business in the summer, it gave me some extra capital to work with. That's all. Yes, I understand I am losing some income from the discount, but the small number of people that took me up on the offer won't bother the whole scheme of things. Plus it's usually easier to sell them on additional services now that they know they have a credit anyways. It's not THAT crazy.
     
  6. yardmanlee

    yardmanlee LawnSite Senior Member
    Posts: 898

    we offer a 10% discount off mowing if paid before March 15th, we usually have 10 to 12 customers doing this every year, its great start up for the season and if we've had a slow winter
     
  7. yardguy28

    yardguy28 LawnSite Platinum Member
    Posts: 4,464

    personally I've never offered or had anyone ask about paying up front.

    I do know some offer a discount if paid in full for the season.

    my thoughts? you want to pay in full for the season go right ahead. but NO discount. the saving of paper, envelopes and stamps on my part and checks, envelopes and stamps on your part should be enough.

    I manage my money just fine receiving monthly payments. all paid in full does for me is save me from invoicing monthly. why should I take less money for a full payment when I can make the full amount invoicing monthly.

    I don't find monthly invoicing and trips to the bank with checks so much of an inconvenience to offer a discount for paid in full.

    that's my $0.02
     
  8. OakNut

    OakNut LawnSite Platinum Member
    Posts: 4,051

    Think about any time you've ever gotten a discount - for anything.

    Did you REALLY get a discount, or was the regular price already set high enough for the business to cover any "discounts" offered?

    If you are already pricing at or below the average for your area and you offer a discount, you're only screwing yourself.
     
  9. herler

    herler LawnSite Fanatic
    Posts: 5,145

    A lot of it has to do with how many times I have had to explain something...
    In a way, only a number of years and several thousand explanations boils it down to perfection.
    And it's just that, one day and one explanation at a time, 5, 10, 20 years later and nobody even asks anymore.
    But just answer the question best we can, all anyone can do.
     
    Last edited: Apr 29, 2012
  10. MarkintheGarden

    MarkintheGarden LawnSite Bronze Member
    Posts: 1,067

    I have handled this situation two different ways in the past. In retrospect I have come to think the second way is best.

    1. Tell the customer that you cannot discount the cost of the service by paying in advance because you are already offering the best price you can and that you can guarantee no increases in price for the year.

    2. Give the customer a 5% discount but make sure that the price is high enough to still make the same amount from the account.

    I think that people are so conditioned by advertisements that there are certain words that they want to hear, and if the word discount is one of them, then I use the word, even if in the end the cost is the same. If you think that this is unethical, just consider that this is the way business is done in our society. Look at the coupons you get in the mail, look at the online offers such as Groupon. Most advertisement pretends to offer discounts but really does not.

    I do offer fair prices and I do not need to lower my profit margins in order to get enough business to continue growing, but that is not what customers want to hear.
     

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