letters for price hikes

Discussion in 'Business Operations' started by jsf343, Feb 8, 2007.

  1. jsf343

    jsf343 LawnSite Bronze Member
    Posts: 1,767

    Anyone have a letter that you send to customers that you want to raise prices on? would you be willing to share it with me?

    thank you in advance,:waving:

    Jeff
     
  2. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    here is one of mine from a few years ago. Now I just call or set up a meeting and talk to them but at the time I needed to do mass increases.

    As most of you may know “the money part” is the part of the business that I enjoy least, so I have delayed this letter/action for as long as possible.

    We are approaching our 3-yr anniversary and my base hourly rate has remained the same at $30.00 per hour, although everything from gasoline to insurance rates have increased dramatically. Some clients are still paying the same monthly rate that was proposed by my previous partner over five years ago. Unfortunately the fact is, I cannot continue to provide service at this hourly rate for all customers. I should have made smaller incremental increases through the years. Instead I only addressed the properties that were significantly underbid. Like everyone else, I do not like change, and especially do not like the thought of loosing any clients.

    The reasons your monthly rate would increase besides inflation are

    1. Your landscape has matured or been renovated so it requires more time.
    2. I did a poor job bidding the first time around.
    3. Perhaps the hours bid at your home are the same or off just a little, but I need to charge a higher hourly rate because of the total hours spent at your home.
    4. A combination of any or all of the above

    That third reason listed above may be a little hard to understand at first so, let me explain. Everything is cheaper in bulk and hours are no different. The hours we spend in a day that are not billable because we are traveling, significantly decreases our daily income. Also, less travel is less liability on the road, and less vehicle expense. Keep in mind that when I inspect your home those are not billable hours so, my expense is figured into the hourly rate as well.
    My new hourly rates are listed below

    6 or more Hours per visit $30.00 per hour
    4.1-5.9 Hours per visit $35.00 per hour
    2.1-4. Hours per visit $38.00 per hour
    Less than 2 Hours per visit $42.00 per hour

    Enclosed you will find a spreadsheet with the hours consumed at your home in the past year on a month by month basis. This is what we are basing your new rate on, past hours consumed. So, if you think your home has not been up to the standard that you like we should talk about additional hours. Rarely do I do an inspection and the crew says, “We didn’t see that.” It is usually “We know, we just did not have enough time.” The new rates will be in effect for the April billing cycle.

    I realize everyone has a budget and for some this increase will not be acceptable, and I am sorry for that. For those of you who are able to accept my increase, I promise you many years of continued high quality service that you have come to expect.

    Sincerely,
     

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