Notification of price increase

Discussion in 'Business Operations' started by dfor, Apr 28, 2002.

  1. dfor

    dfor LawnSite Senior Member
    Posts: 815

    Do you always let the customer know of a price increase while talking to them or do you ever just add the increase to the first bill of the season. I use no contracts and my first bills will be going out on 4-30-02. Some I have told over the phone. I mean, the grocery store, gas station, coffee shop, etc. doesn't call me before an increase.
     
  2. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    Yes we notify them in February when we send out our newsletter.
    This way they have the option and enough time to find someone else if they don't like the increase.
    I don't feel comfortable just springing it on them.
    Just my opinion.
     
  3. LawnLad

    LawnLad LawnSite Senior Member
    Posts: 738

    The grocery store, gas station and coffee shop do not send an invoice after work has been performed without prices already being posted. Each time you make a purchase, it is a choice to buy.

    I believe you should notify your customers before a price increase - so it's their choice as to whether they want to buy. We send out our renewal/update letters (our contracts are continously renewing) each February, letting customers know that effective March 1, prices will be xx.
     
  4. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,712

    Since you don't have a contract I don't see the need for notification. I've found that the less it is talked about the less fuss there is.

    Since so much focus here is on being a professional and not making low prices a selling feature, the industry would be better served by just putting the numbers on the table whether there is a contract or not.
     
  5. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    What does being a professional have to do with giving the customer the courtesy of knowing about a price increase?

    When the gas company raises their rates, ever notice that there is an extra piece of paper detailing their new rates in the bill a few months before the new rate takes affect?
    Why do they do this?

    If we're not supposed to talk about price, then why when we go on new estimates after we give our sales pitch, do we then give the price? I guess customers should just agree to hire us without knowing the price? :confused:
     
  6. perfection lawn care

    perfection lawn care LawnSite Member
    Posts: 30

    I have always let my customers know by telling them in person, it seems to work best that way for me. Along with the fact I do not have a extremely large customer base either, telling them in person would tough with alot of accounts.
     
  7. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,712

    What does being a professional have to do with giving the customer the courtesy of knowing about a price increase?

    If there is NO contract for services provided AND the price increase is something in line with cost of living percentages I simply don't feel it is necesary and I don't do it. I would notify them IF the increase was beyond a cost of living approximate percentage OR the job parameters have changes for any reason causing the price to escalate. I wouldn't want an ugly surprise.

    When the gas company raises their rates, ever notice that there is an extra piece of paper detailing their new rates in the bill a few months before the new rate takes affect?

    A gas company is a regulated public utility. All regulated industries have different rules than the rest of us.

    Maybe the problem here is in the perception of a price hike and how often it is done. If you cut a lawn for $30 for 5 years then bump it to $37.50 which is a 25% increase, you may want to notify so there is not sticker shock. If you bump the cost $1.50 every year, I personally wouldn't sweat it.

    For every example someone cites of posted prices or notification there are an equal number of examples where increases just are made. Even when prices are posted for us they are the standard prices, not an increase. You wouldn't be aware of an increase unless you bought the item regularly or it was an item of importance where the price is filed to memory. When we do see posted price increase on something we need, do we not buy? Most of the time we do. The increase most likely would only deter a discretionary purchase that could be delayed.
     
  8. Always Green

    Always Green LawnSite Member
    Posts: 48

    Wow Harold,
    If you did that to me I would pay you last years price , and tell you to never service my account again!
    The customer is expecting that if you didn't tell him of a change in the price that it's still the same, I would feel like a theif if I misrepersented my prices and billed after the work was done more than the agreeded ( you both must know the price to agree)price its bait and switch and should get your busines lic. revoked.
     
  9. Fantasy Lawns

    Fantasy Lawns LawnSite Bronze Member
    Posts: 1,913

    every wonder why our services are sometimes not considered as a "professional" service or industry ?

    you sell a service to a consumer ..... they pay "the price"

    you sell the same service a 2nd time ..... send this invoice .... for the same previous service but at a greater prices (even if only $1.00)

    and did not give them any notice of the increase ...before serviced ???

    this should not even be a question .... not that it is not valid for one to ask .....the answer is YES send notice BEFORE

    treat the customer ..... no less than we expect to be treated when we are the consumer

    say you go to buy a sub .... evey week for months .... same sub ....same price .... it's $5.00 with tax .....today you only have $5 n are hungry ....I'm getting a sub .... I order ....have my $5 in hand .... she comes up ....n bingo she is $6 with tax ....who is going home hungry today ?
     
  10. Just seems like the right thing to do-let a customer know of a price increase before you start the work.
     

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