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Opinion on Prepay options

Discussion in 'Business Operations' started by gkell88, Aug 5, 2002.

  1. gkell88

    gkell88 LawnSite Member
    Posts: 55

    I was wondering about giving current customers the option to renew at current year prices if they prepay for the next season. I would make this offer on the last service of the season.

    Would this be appropriate in your opinion? I don't really anticipate a price increase next season, but can't absolutely rule it out either.

    Do you think it would be ethical to raise prices on those who choose not to prepay, as long as I make that option available to everyone?

    Traditionally we have sent our prepay letters out in February, but I don't see why we can't start that process earlier. Am I missing something here?

    I welcome all opinions,

    Gary
     
  2. I think it is a great idea.....I have a hundred or so service contract customers that I plan to do the same thing to....we do not mow, just irrigation.

    I would like to get their money in the bank....and their name on the dotted line before Jan 1st.
     
  3. HBFOXJr

    HBFOXJr LawnSite Bronze Member
    Posts: 1,706

    I want a price increase no matter what. Everything is going up. Interest rates are low. You'd be giving up a lot.

    It's just bad business not to boost prices. If you wanna cut a break after a price hike fine, just don't give it all back.

    I had a few small lawns for fert, I bought this springs with substandard pricing. Last time out I wrote on the invoice the price would go up to $30 next app if they continued. I've lost them all (2 or 3??) This spring guys here ripped me about not notifying people of price increases. I do, but only if a written contract and or pre-payment is involved. I haven't lost one on a price increase where I didn't notify them.
     
  4. wayne volz

    wayne volz LawnSite Member
    Posts: 49

    :D

    We offer a pre-pay option to all of our customers' every year. This goes for our fert. customers as well as our mowing customers'.

    If we have the need for a price increase, the customer is given the option to pre-pay. I would suggest that you offer your pre-payment option to all of your customers' and not as a way for them to avoid a price increase. Even if you need the money, don't ever let the customer know it. If you can operate your business without a price increase so be it. But normally your operating expenses will increase from year to year and allowing your business to absorb this increase in expense will not work in the long haul for your business. We offer a 5% discount to our customers' who pay in advance.

    This is my two cents worth.

    Wayne Volz
     

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