Customers complaining about price increase!

Discussion in 'Lawn Mowing' started by rider1000, Apr 13, 2002.

  1. rider1000

    rider1000 LawnSite Member
    Posts: 47

    I can't believe customers complaining about a minimal $1-2 price increase on their lawn service. The bad thing is, these are my higher end properties, $300-400,000 homes. I wanted to raise price last year, but I didn't. So with the price of fuel being so high this year, I had no choice. One person I kept below my minimum last year because I did a landscaping project for him, but this year I raised him $2 a mow and he called me this morning complaining that he couldn't afford $140 a month, but he can afford to take 3 trips a year with 4 family members to Hawaii? go figure. Part of the problem is other companies stopping, and quoting prices for mowing without even being called. I just tell them - they get what they pay for. You know the service I can give you, if that's what you want, then that's what you can expect. I know we've all ran in to this, just wanted to vent!!!
     
  2. AVRECON

    AVRECON LawnSite Senior Member
    Posts: 290

    Drop his A$$ like a bad habit. This is EXACTLY why this WILL be my last season in this biz. Tired of messing around with folks who want to negociate every price I give to them. I really want to just flat out tell them if they want quality then I'm their man if not then call the stupid a$$ who doesn't know s%$@ about what they are doing!
    Y'all Have a Nice Day!!!!!
     
  3. Twotoros

    Twotoros LawnSite Senior Member
    Posts: 494

    There is a lot of dumping going on here this year. My freinds in the biz (most in it for 10-20 years) are losing customers left and right for very small increases in the 1-2$ range. No losses for me as I did not raise $ because of this fear. On the other side of the coin the new guys and cheaters are gaining ground with their pre-1990 prices. I don't know if this will ever stop. It is certainly been a buyers market here for 7 years or more now. One buddy lost a customer he had for 20 years for 2.5% which is what he has raised for all his accounts each season for six years now. That is more than fair I would say. I myself live in fear that that job at 7/11 may soon be filled by me.:dizzy:
     
  4. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Regardless of what type of home a customer lives in - everyone is looking for value. More so today than in years past when their bill folds were fat from the stock market with paper gains.

    Customers are much quicker to jump on price issues. This means as contractors, professionals, and their service providers - we have to give them value for their dollars spent.

    How many people stop to think about the actual cost to the customer of hiring a contrator to do their work? A $10,000 install job will actually cost the customer closer to $15,000 in gross wages since they buy with post tax dollars.

    With rising costs (insurance, fuel, labor related costs) it will be difficult to pass this cost increase directly onto the customer. We will have to find ways to tighten our belts and become more efficient to keep our profit margins in tact.

    Is is frustrating to have a customer make an issue about pricing, but I think it's going to become more of a daily reality than anyone of us would want.
     
  5. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773

    I think this is just a bad year for increases. With the things that are looming, and the sluggish recovery in the economy, try to maintain the same pricing level as long as you can (particularly on customers that already meet your necessary profit levels). We all need to tighten our belts right now, even the customers, so keep that in mind.

    I know it's frustrating, but there's just a whole lot going on in the world right now and lawn care happens to be one of those things that are deemed 'luxury'. Stay the course as best you can.

    Avrecon -- ten years in the business and this is your last? What will you be moving on to?
     
  6. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    Lawn Lad nailed it....read his post again. As a business owner it is your responsibility to "go with the economic flow"...finding ways to be more efficient, cut costs, and still maintain a high quality level is just another chance to stick out from the rest....and stay in business. Sometimes frustrating, but true.

    Sean Adams
     
  7. proline32

    proline32 LawnSite Senior Member
    from 98383
    Posts: 278

    Lawn lad is correct on this issue, I've had a few dump me over $5.00 increases and cite "they can't afford it". I then try to remind them that it is only $20.00 per month total increase and that they really need to look at how much it will cost themselves to do the lawn themselves, I try to remind them that thier time is worth much more than $20.00 lousy bucks, And if they decide to look for other options that is fine.... But I try to stress the value that I offer them and try to get them off the $$ issue. It is funny though that some of these ladies will scoff at your price of $30.00, they go pay 25.00 to have thier nails done no problem.(Go Figure) We do need to find ways to keep cost down, recently I informed customers that I am discontinuing our cell phone service, to save about 1100 bucks a year in cost, they can call me at home instead. I moved to a cheaper shop to save rent, and I am doing a lot more of my own repair work instead of letting my small engine shop get the work. Also, I have decided to go strictly to mulching of lawns to reduce any time I can. It is funny how very wealthy people will scoff the loudest at a price. When someone tells you they will think it over you can pretty much tell you won't be seeing them again.
     
  8. SLS

    SLS LawnSite Bronze Member
    from Mars
    Posts: 1,540

    It may be because there is a SERIOUS increase of new people getting into the business???

    In my area there is a bunch of this going on.

    One 'newbie' ran an ad in the neighborhood papers that said:

    "We will beat anyone's price by 20% for cuts over $25.00". :eek:

    Another 'newbie' has a hand-scrawled sign up on the busiest intersection of our neighborhood that says:

    "We will beat anyone's prices...and a good job too!"
    (Will he beat the guy who has already knocked 20% off the going rate?)

    Hmmm, let's see...

    $40 an acre less 20% is $32.00. Now let's beat that '20% off 'guys price too...

    I can hear the homeowner now:
    "Oh boy! Last year I was paying $40 and now I'm paying $28! Only in America!"

    I was offered a bid on 3 residentials that are owned by the same lady [1 acre lots-all in a row]. She is related to one of my regular clients whom I have mowed her acre for 3 years now. Being that this is the case I shot her a bid of $37 per acre ($40-$50 an acre is common here). Even with a 'glowing recomendation' from her relative about my excellent work, dependability, insurance, etc,....she passed for someone who will do those 3 acres for $25 each....on an old Murray rider. This is not the first time I've encountered this and I have a feeling I haven't heard the last from her. If I do her quote will immediately increase. :D

    Most in this area are cutting at the same prices that were in effect 5-10 years ago (average) just to hang on to their clients and now some 'newbies' want to drive the prices back into the 1970's era.

    Fuel, food, housing, ect, have consistantly risen over the years and 'lawn care' is continually trapped in a "time machine"...going backwards. :cry:

    With this going on it is no wonder that people who get a 'price increase' balk!

    At this rate 'lawn care' will be FREE by the year 2020.

    In the future I see 80 year old women pushmowing their lawns in the 90 degree heat because LCO's went the way of the dinosaur...what's the point if you can't turn a profit?

    I can't wait. :rolleyes:
     
  9. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    Wealthy customers have money in their pockets because they watch their pennies. Particularly old money. I work in an old money neighborhood and it’s an interesting study of personalities and priorities from one customer to the next and from neighbor to neighbor. You really have to meet the needs of each individual customer.

    I have one customer who lives in a gorgeous Shaker Heights stone home built in the 1920’s ($650,000 plus home) with a beautiful creeping bent lawn. He loves the work we do on his lawn, but he won’t let us touch his beds because he says he can’t afford it. He’ll do the work. I almost dropped him since he wasn’t keeping up with the beds. We’ve reached an understanding and everything is okay now… but his priorities are different than what I might have expected from the get go.

    There are those residential customers that have landscape service as a line item in their budget (necessary to have) and those that pay for landscaping with discretionary dollars – considered a luxury item. With either approach to budgeting, or somewhere in between, everyone is cutting back. I have many customers that spend between $10,000 and $35,000 a year on landscape maintenance alone… and they are looking for ways to cut back. Landscape maintenance service is necessary, but they may cut back on mulching or flowers or pruning, etc.

    People who have money are those that generally delay gratification by not running out and buying all of today’s pleasures. They save money for tomorrow and a rainy day. I have to respect people who can set limits and know what their priorities are. I hope I can just convince them that I need to be in their budget since I give them value for their dollars spent/invested in their landscape.
     
  10. FrankenScagMachines

    FrankenScagMachines LawnSite Platinum Member
    from IN
    Posts: 4,739

    That's exactly it. I want to start into the biz part time this year, but it's not working because even though I have real low overhead, my reasonable prices (Just bid $60 for 2 acres) were still too high! LCO's around here are going for anywhere from $30 to $60 an acre. Big gap! I guess the $60 ones are just doing small stuff in town and never done an acre, and just averaging it I guess... but my $30 an acre is trimming every other time, which around here it's not too bad if you only trim once every other week, but it would break me before I even got started at this rate. I think I'll try to get lawns but probably just try to hire on with a local LCO. That way I don't have the overhead, and don't have to mess with F#$%$#% customers!
     

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