customers questioning payment methods

Discussion in 'Business Operations' started by Expert Lawns, Mar 15, 2004.

  1. Expert Lawns

    Expert Lawns LawnSite Silver Member
    Posts: 2,660

    A few of my customers have called back with questions about my new Service Agreement. I have 3 methods they can choose to pay with. 7, 9, or 12 equal monthly payments. Their concerns were "well what if it rains and you skip a week? What if it is dry and doesn't need it. What if you don't mow all 28 times?"

    I put a clause in the agreement that says something to the affect that if I do not meet all 28 scheduled mowing, they will be reinbursed with money, or in the form of credit towards other services. They seem to just want to pay monthly as services are performed.

    Should I add an option in there that says "Pay monthly as services are performed" or should I stick to the monly payment plans?
  2. Expert Lawns

    Expert Lawns LawnSite Silver Member
    Posts: 2,660

    oops, meant to post this in the "Elements of Business" forum. Can one of you important people move it? Thanks
  3. nova385

    nova385 LawnSite Member
    from Mid MI
    Posts: 69

    I get the same thing - must be the people around (in Davison) here do not trust anyone-

    I only offer by the month or Pre-pay based on 25 visits, and even offer a discount for pre pay.
  4. Westbrooklawn

    Westbrooklawn LawnSite Senior Member
    Posts: 414

    I explain to my customers that the monthly rate is based on averages........number of cuts, droughts, rain, etc. These are all factored into the price. If it rains more than usual and I have to bag more frequently because of it, then they benefit. If we have a real dry year, I still make a visit each week, but might not have to mow one week. If December, January, and February are especially mild I may end up mowing a few times over the winter. Bottom line is I calculate the "average" number of cuts and the "average" time it is going to take based on my years of experience.

    If the customer doesn't like that arrangement (which by the way is a very fair way to do it), then I simply won't take their business, or if I do want the business on a "per cut" basis, then they pay a premium price per cut.
  5. sgrprincees

    sgrprincees LawnSite Member
    Posts: 59

    Maybe it isn't just a matter of trust of you, but what would happen if you went bankrupt? If you went bankrupt they would have almost no hope of either getting their lawn mowed or their money back.
  6. hole in one lco

    hole in one lco LawnSite Bronze Member
    Posts: 1,793

    I go month to month on my contract whether im their or not. They get one skip me card in the beginning of the year . I have a budget to meet if 10 people say skip me at $ 30.00 a cut thats 300.00. you are not responsible for mother nature.
  7. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    I say stick the extra option in there. People like options
  8. TJLC

    TJLC LawnSite Bronze Member
    Posts: 1,308

    I started Jan 1st, 2004 with everyone on monthly agreements. I lost a few due to this because they just didn't understand how it works no matter how hard I tried to explain it to them. I base my agreements on 38 cuts per year. I do agree with Expert Lawns that if for some reason they don't receive their estimated # of cuts, they should be compensated in some way. This is my first year doing this so I'm sure I will have to tweak it a bit one way or the other. I'll look at each account at the end of the year and see if I need to make any changes or not.
  9. charlies

    charlies LawnSite Senior Member
    from earth
    Posts: 587

    your kidding, right? if you were cutting my lawn and you didn't meet the estimated number of cuts, you had better pro-rate the service and refund my money for the unused mows.

    most of our customers like to be billed at the end of the month for the service they recieved during the month. two years ago, we began offering the possibility of paying up front. so far, zero have opted for that.
  10. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    I did the same thing as Expert this year, but I have yet to have anyone complain about the payment plan. I set my payments at 7, May through November. I thought for sure there would be people complaining about this method, but so far nothing. Maybe it's how I explained it, maybe they don't care. I dunno. I scheduled 26 mowings for the year, in a 32 week period, which gives me plenty of time to make up for any missed services. In the event something didn't get done, I will give a credit, a refund, or a swap for services.

    I didn't make it an option to pay by the month as services are performed, the way I've operated up to this point so far. But I did write in a line that said anyone with concerns about the payment schedule should call to discuss it with me, and that I'm flexible in setting up payment schedules. Kind of left the door open for me.

    I have had about 15 people so far either Prepay or sign up to Prepay the season this year. On average I get about 20 per year to do it that way.

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