Its been 3 years since I've raised prices

Discussion in 'Business Operations' started by green_thumb, Apr 1, 2014.

  1. green_thumb

    green_thumb LawnSite Member
    Posts: 120

    OK, so its has been 3 years since I've raised lawn mowing prices. My mowing operation costs have gone up each year. I'd like to raise all my clients rates about 2%. Which is basically pennies.... $40.00+tx lawn goes to $40.80+tx. I don't see anyone having a problem with this.
    Since we still have snow on the ground up here, i haven't been in a big rush to mail out renewal agreements. They'll be going out tomorrow.

    Do you think I should include a letter of explanation for the increase? Or just tack on the 80cents in my "This years rate" section of my agreement and be done with it?
    I don't want people to think I'm pulling a fast one on them, but it just seems easier with no explanation and just assume that they expect an increase.
    Thanks
     
  2. JDGlandscape

    JDGlandscape LawnSite Senior Member
    Posts: 511

    i would just make it easier and bump it up $1 instead of 80 cents. but is hiking the price even a dollar worth it? if you send out contracts for everyone to sign it is not "pulling a fast one". by signing the contract they agree to the price, who signs a contract without looking at the price?
    Posted via Mobile Device
     
  3. Locqus

    Locqus LawnSite Senior Member
    from Detroit
    Posts: 708

    That should not be too bad at all. I raise mine every 2-4 years depending on current year factors. I would raise a full dollar as well, not $.80. You could go either way explaining it or not. I usually know which ones on my route will raise a tiff over anything changing so I try to explain it to them. The majority, I would think would just roll with the new pricing, knowing it has been the same for so long.
     
  4. PamlicoLawnCare

    PamlicoLawnCare LawnSite Member
    Posts: 80

    I'm sorry...my eyes aren't what they used to be....but I thought I read that you were considering raising prices 0.80.

    An 80 cents increase is not worth the headache of explaining to the customer...and neither is a dollar in my opinion.

    Adjust your prices (up/down) in $5.00 increments.

    Rod
    Pamlico Lawn Care, LLC
    Oriental, NC
     
  5. green_thumb

    green_thumb LawnSite Member
    Posts: 120

    I was using a 40$ lawn as an example with a 2% increase. It's not .80¢ across the board... More like 2-3% on each acct.
    If your saying 5$ for each, that would be about 12%-16% per acct. I would most certainly lose all my business if I did that.
    Posted via Mobile Device
     
  6. B-2 Lawncare

    B-2 Lawncare LawnSite Senior Member
    Posts: 263

    :confused:
     
  7. ringahding

    ringahding LawnSite Senior Member
    Posts: 612

    When we are going to increase rates we usually send something like this to the customer:

    Hi John, here are your rates for weekly lawn mowing.

    Current Mowing rate - $39.50 per week. To retain this rate, please prepay $200 before March 31st & you can avoid the new mowing rate of $44.50 per week.

    This is part of an actual email, but as you can imagine their rate was actually $39.50 last year. We will run this special giving customers the opportunity to lock-in last years rate.

    But we have also run similar offers in the past that indicated a rate hike.

    Let's say John's rate was $37.50 last year, we would run an offer like this:

    Hi John, here are your new rates for weekly lawn mowing:

    Current Mowing rate - $40 per week. To retain this rate, please prepay $200 before March 31st & you can avoid the new mowing rate of $42.50 per week.

    What I have not mentioned is that I would attach a link of explanation from a previous email about the $200, which states:

    Weekly Lawn Mowing rates will be increasing this year.
    Send $200 for early Weekly Lawn Mowing sign on and keep same rate as last year. (OR instead of last years rate, you can substitute "Get the discounted rate")
    Your $200 will be applied to your Weekly Lawn Mowing invoice until it runs out. Deadline is March 31st, 2014.

    The $200 could be used for cash flow & help you get started in the Spring.
     
  8. green_thumb

    green_thumb LawnSite Member
    Posts: 120

     
  9. Locqus

    Locqus LawnSite Senior Member
    from Detroit
    Posts: 708

    ^^ True but there is always someone out there willing to pay what you are asking as well. Try not to undersell yourself if you can, your time and work are worth it. The fear of losing a few should not keep you from offering a better service at a little higher price.
     

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