Customer Retention

Discussion in 'Lawn Mowing' started by bob, Jan 1, 2002.

  1. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    I have a list from Chemlawn of their customer retention percentages. The highest offce is 82.8% and the lowest is 30.4%. The average seems to be around 60%. I couldn't imagine keeping only 60% of my customers every year. I know thats how they do business, in quanity, not quality.
     
  2. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    This is a great topic for a thread. I was thinking about the same thing.

    I have never figured out exactly what our percentage is for customer retention, but I am going to figure it out over the course of this week. I do know that we have lost in the past a lot of customers. "Gasp!" "She said what?"

    Yep, it's true. I guess I should elaborate a bit more. We are not losing customers due to the quality of our work, but for many other different reasons.
    Some examples:
    A good portion of lost accounts are due to the fact that the customer is placed in a retirement home, and the house is sold. Younger occupants move in, and our services are no longer needed.

    Customer keeps us for a few years, then grandson/nephew/relative gets out of college and customer sees a golden opportunity to save money, and we aren't needed anymore.

    Churches: We have had some good churches in the past. Then suddenly they realize how much they are paying for lawn care, and a parishioner steps up to the plate and donates his cutting services.

    Commercial accounts have kept us until they find a lower price.

    We also have intentionally dropped some customers at the end of a season for reasons such as bad terrain (we took these when we first started out; no more though), customers that would heckle us because they didn't want their grass cut weekly, and 2 if I remember correctly that were late payers with bounced checks.

    We like to keep around 90 accounts, no less.
    We already know of two that we lost for the upcoming season.
    One was working for the State highway. It was a house renovated into an office, and after two years, the highway project is complete so we won't be needed anymore.
    The second one hurts. A very good customer. A man and wife both in their nineties. The man died late last season. We assumed we would still be cutting, but the 70'ish year old son wrote us a note in the last payment saying that he would take care of his mom's lawn from then on in. It's not about just cutting that lawn. It was all the services they took from us. That 90 year old man was really on the ball. He wanted his yard to be in tip-top shape. He took spring clean-ups, aerations, mulching, hedge trimming, and fall clean-ups etc.

    In our area, I see drawbacks with both residental and commercial accounts. With residental, in the area we are in, it is a lot of elderly which means more turnovers. Plus it can be hard to upsell to the elderly. With commercial in our area, we just can't seem to be competive with the pricing. We seem to always come in too high. So residental for us right now seems to be the ticket. We deal with some turnovers, but we can command the price that we want.

    The more accounts you have, the more chance you have of losing them.

    Wow, I was really long winded. ;)
     
  3. gene gls

    gene gls LawnSite Gold Member
    Posts: 3,213

    1 Major Tom:

    I'm in the same boat as you. I have also had several devorced ladies in the past that end up with live-in-boyfriends and I'm no longer needed.

    My biggest problem is price increse. For some reason customers don't like the idea of paying for benifits for the lawn service. I have to educate them this year as to some of my cost of doing business. After talking with a few I have come to the concluesion most have no idea as the what it costs or have no idea of how much insurance I have to carry or how much taxes are.

    The bigger the property, the more frugole the owner.

    Gene
     
  4. 65hoss

    65hoss LawnSite Fanatic
    Posts: 6,360

    To top it off it will be a new season of newbies with there shiny new crapsmans that decide to cut a few yards. To make matters worse, the recent financial situation of many people may make even more decide to get into grass cuttin'.

    Then again, let them take the cheapskates, slowpayers, rough terrain, and priceshoppers. There is always a fear factor this time of year. Looking into the unknown and knowing some customers will be going and wondering if new ones will be found. Managing that fear into a positive marketing energy is key. Knowledge and experience is power. Use it to your advantage.
     
  5. OBRYANMAINT

    OBRYANMAINT LawnSite Senior Member
    Posts: 555

    my retention is way up in the 90's....some people move and such, i never seem to lose more than a couple or so a year

    i think the ratio is probably pretty high amoung lco's

    i do agree the more accounts you have the more chance you will have to something happening beyond your control
     
  6. GrassChopper

    GrassChopper LawnSite Member
    Posts: 131

    I lost one account to kids ("MY kids have decided they want to make extra money"), one elderly couple who's house burnt down, one moved, and two because the Chemlawn guy told them the reason their grass wasn't responding properly to the chemicals was because I was cutting the grass too short. I cut at 3.75" and he measured the grass by seeing where it came to on his shoe. Oh well.

    I dumped a couple accounts and am getting ready to dump two more. When an account gets three months behind, it's time for the dump.
     
  7. This kind of bad mouthing the lawn cutter most often comes from Chemlawn. I don't really think it's their company policy or anything, it must be the typical of person they hire. You know, someone who always blames someone else for their own shortcomings. It's really poor business practice, and reflects poorly on them.



    Jodi;

    I've been there too with the Churches. Only it isn't just limited to Churches. Anything that is governed by a board, committee etc. will give you the same "somebody had a better idea excuse"
    I combat this with trying to get one single person to report to. I try to get far enough up the chain of command that the person actually has the power to authorize "extras" and to OK price increases.
    I can satisfy one person, but no one can please a whole group.

    Dave
     
  8. Turfdude

    Turfdude LawnSite Bronze Member
    Posts: 1,900

    I'm W/ Major Tom!!

    We retain mid 90% or so. Most we lose due to moving, passing away, and or financial reasons. Someone else mentioned $ increase drives some away. A lot of my better educated clients have begged me to downsize to 2 crews and just raise them up by $5-$10 per week (on small lawns $30-$40 currently). They know a lot about labor costs, equipment, and insurance, and feel that an excellent job is well worth paying for. I truly wish more of these high end residentials fall my way this year:D !

    Also, with higher retention rates, upselling services seems to come pretty easily.:cool:
     
  9. cantoo

    cantoo LawnSite Silver Member
    Posts: 2,910

    Some of this goes to show that we need to be full service companies to keep our customers. You might make special note of this Gene, a full service company would have kept those divorced women happy, do you not offer fertilizing and trimming services?
     
  10. LAWNS AND MOWER

    LAWNS AND MOWER LawnSite Bronze Member
    Posts: 1,129

    I can relate to Major Tom about losing the 90 year old man's acct. I just lost my largest residential acct. A couple years ago, John Doe married. Mr Doe was one of the nicest guys you could know. He was excited to see me, would offer to prepay me in the winter, etc... 3 months after they married he died. So now Mrs. Doe is in charge. She assured me that things would remain the same, but gradually she would cut corners to save a buck. Finally she sold the house. I enjoyed working for Mr. Doe and felt attached to the yard but when Mrs. Doe took charge it was nothing but headaches. Another acct I lost this year was a client who bidded $200 on $500 worth of lawncare at a local silent auction. He won and called me in July to inform me that he would'nt need my services anymore this year but would like for me to start mowing again for him in the spring. Thank goodness his yard sucks and I was planning on dropping him in the spring anyway. He doesn't know this yet but I figured I would leave him hanging in the spring just like he did to me last season. Anyway, this is my sob story. 8 WEEKS TIL SPRING CLEANUPS

    LAWNS AND MOWER
     

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