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Mowing Pricing - "Odd Numbers" and Price Increases

Discussion in 'Business Operations' started by OakNut, Oct 7, 2012.

  1. OakNut

    OakNut LawnSite Platinum Member
    Posts: 4,077

    When quoting prices for mowing I have been setting my prices in $5 increments.

    I'm curious if that is a "standard", or if it's just as "normal" to set a price such as $32, or $38?

    I ask for a few reasons, but mainly because I'd like to raise my prices on some of my lawns next season, but either (a) don't feel a $5 increase is warranted on some of them and (b) not sure some people would be agreeable with a $5 increase. While some may grumble about $5, they may not take issue with a $2/$3 increase.

    A few random bits of info:
    I'm a solo operator finishing up my second full season at this.
    I use a 36" walk behind and a 21" mower. I have no high-end clients with large lawns requiring a ZTR - most of my lawns are smaller based on the fact that I started with only the 21" mower and took jobs initially that were suited for that type of mower.
    I would say my average price is $30/$35 - some are $25 and some are $40/$50 with most falling in at the $30 mark.
    (I just picked up the walk behind this season, so now I'm focusing on only accepting new jobs that pay $35 or more)

    I don't do billing at this point.
    I have two main payment options - pre-pay, or pay at time of service.
    I do send a "bill" (an email with amount due) to a few, but the vast majority pay at time of service. (payment is waiting in predetermined spot - this seems to be standard operating procedure here because 90% of new clients tell me where they will leave payment before I even bring it up)

    I don't particularly care what method people pay me - cash or check - but many do pay cash, and I'm also wondering if having an "odd" amount would make collecting more complicated. "Oh, I'm sorry, I didn't have any "ones" on me, here's $35, can I pay you the extra $3 next week?"

    Thanks in advance for your input. :)
  2. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Posts: 7,961

    If you think a $2.00 increase is correct then increase $2.00.

    If you are at 35 now and increase 2 that is 5.7%
  3. acculawnsystems

    acculawnsystems LawnSite Member
    Posts: 163

    I have recently sold my lawn care company, but for the last 16 years we increased our prices in accordance to the inflation index plus1 percent. Most years, I would get little resistance to the price increase because most understand inflation. If you would like to set up pricing, a good site to go to is acculawnsystems.com. Also, see what the customer sees at Acculawncare.com. I hope this helps.
  4. Jelp2

    Jelp2 LawnSite Member
    Posts: 3

    I don't think I have one single lawn that is rounded off.
  5. TCW

    TCW LawnSite Member
    Posts: 35

    Its called "grocery store pricing." Walmart ends their prices in .88, because people see $1.88 as $1 instead of $2. You are on the right track with a $2 or $3 increase, it will be accepted a lot more than a $5 increase because $38 is psychologically more appealing than $40.

    Do you have to accept payment immediately after service? I understand doing this for new customers, but you probably have a feel for which customers will always pay on time and the ones who always have an excuse. The only time we require any payment before or immediately after completion is for customers we have not done business with in the past. I think that lends your company a ton of credibility, and conveys professionalism, when you operate just like the electric company or other home service business. Since its a recurring service, would they enjoy the convenience of having to only write 1 check per month instead of remembering to leave cash under the mat every Tuesday?

    If your cash flow can handle it, it may be beneficial to implement some sort of invoicing system, whether it be weekly or monthly. People pay with a check or you charge their credit card, and you eliminate anyone possibly taking advantage of the fact they may not have exact cash.

    But, if all else fails, start carrying some petty cash ($10-20 in 1's and 5's) so you avoid the "can I make up the difference later" crowd.
  6. OakNut

    OakNut LawnSite Platinum Member
    Posts: 4,077

    What do you mean by that exactly?
  7. grandview (2006)

    grandview (2006) LawnSite Gold Member
    Posts: 3,466

    I raise my prices every year mostly a buck or two. You need to keep up with price increases that you get stuck with. But at the same time some of my oldest customers ( not age) have lower prices then the new ones I get for the same size lawn. I still have a few lawns from when I started 12 years ago when I charged them 20 bucks a cut ,now they pay 35 a cut. It cost less to keep a customer then find new ones.
  8. OakNut

    OakNut LawnSite Platinum Member
    Posts: 4,077

    I don't "have" to collect at time of service, but by doing so, I don't need to send out invoices and such. I assume that at some point I may find it more desirable to go that route, but currently it works quite well.
    It's actually not very often that someone forgets to leave payment "under the mat" either. Many write a check every week - makes no sense to me. I'd just pay for the whole month if I were the one writing checks, but that's me.

    As for writing "one check a month", I think there are always customers who are OK with spending $35/week, but when they see $140, they start to think "Hmmm... maybe I will just cut it myself?"
    It obviously depends on the market you're in and I can say that I work in a mix of areas from semi-wealthy, to dirt-poor, so it's something I have to consider. I always give people the option of paying for the month, and a few do, but most pay weekly.

    As for "making change", I rarely take payment in person. Most people are working when I am there to cut.

    Thanks for your input! I'm not opposed to rethinking the way I do things and it's always helpful to hear from those who have experience in such things.
  9. larryinalabama

    larryinalabama LawnSite Fanatic
    Posts: 16,977

    It might be eaisest to use increments of 2.50$, when I was doning small lawns in So Calfornia that how I did it. Its gonna be hard to remember this yard is 36$ and then the nest is 38$, but if bothe are 37.50$ you should remember that.

    Most of my yards here in Bamaland are around 90$ and I keep everything on 5$ increments, however I havent raised rates sinci I started 5 years ago.
  10. 123hotdog

    123hotdog LawnSite Senior Member
    Posts: 482

    From day one, I have billed on the 15th due on the 30th late on the 5th. With the late fee being $5 or 5% whichever is greater. The late fee started three years later and was one of the best things I ever done. When I first started everything was on the 5 but I quickly learned to go on the eight and the three. Just works good for me. I raise my prices at least $1 every other year.

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