Opinions needed for going monthly flat rate.

Discussion in 'Business Operations' started by Blink74, Jan 21, 2008.

  1. Blink74

    Blink74 LawnSite Member
    Posts: 138

    I'm still up in the air about going to monthly flate rate billing. The time to send out notices is getting near and I need to decide. I would like to hear from other who have contemplated it. What are the ups and downs? What response did you get from your clients. Do you regret it or wish you had done it sooner?

    Thanx
     
  2. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    I just finished (finally) doing this, sending out the letters tomorrow.

    I offered several options and hope that will lessen the shock of the conversion. Really, if I lose half the customers, I don't care. I can build it back up then the way I want.

    But I really have no idea what to expect. I did mention it to a lot of customers at the end of the season, and most of them seemed fine with it.
     
  3. Blink74

    Blink74 LawnSite Member
    Posts: 138

    Ya, I too have been surveying customers and they seem fine with it. However, I don't want to offer a lot of options. I'm doing this to streamline billing not create more head ache. I plan to go X amount per month for eight months period. For fert only customers it will be X amount per ap.
     
  4. RickR1818

    RickR1818 LawnSite Senior Member
    Posts: 342

    I am also implementing this billing system this year. I am anxious to hear others experience. Do you offer a credit or cash back at the end of the year if you dont cut enough and charge extra if you cut more?
     
  5. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    I offered 8, 10, or 12 month options, plus two different 'pay in full' options. Also, all customers will have to pay by credit card, but many do already.
     
  6. Blink74

    Blink74 LawnSite Member
    Posts: 138

    No credit or extra. The way I see it there is some risk on both sides. Plus, even if a yard doesn't need cut I still have to make the trip to check it. However, If a good customer complained I would prolly make an adjustment.

    My biggest concern is: people may be fine with it now, but if there is a drought and I only mow twice a month they may start jumping ship even though I mowed it 5 times in may.

    Here in Central OH we average 28 mows per season. That works out to 3.5 per month over 8 months. So: If a customer pays $100 per mow, the flat rate would be $350 per mo.
     
  7. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    For those customers that already pay this way, this system has worked really well. I think some of the success is related to paying by credit card. I don't send these customers statements unless they want one. So they don't get a bill in their face for $175 for 2 cuts.
     
  8. RickR1818

    RickR1818 LawnSite Senior Member
    Posts: 342

    I was planning on sending them a bill for the monthly amount but not including the number of mows. Basically, I will bill them for the upcoming month. For example they have to pay by the third of the month for that month.
     
  9. ed2hess

    ed2hess LawnSite Fanatic
    Posts: 13,328

    Not sure it will work without showing them how many mows in each month...that way they have an idea what to expect. And I would never just spread across 8 months, you want monthly to be a low amount. You want these people to start paying by the month and essentially forget the idea of per mow. I am not sure I would convert people in mid stream, just do this with new people coming on board. And old people just don't get it.
     
  10. radracer

    radracer LawnSite Member
    Posts: 53

    Everyone that I know in Florida does it this way. I wouldn't do it any other way. The average in my area is 42 cuts per year, so we go price per cut x 42 / 12 = price per month. I wouldn't spread it over 12 months because the cost looks higher. And another reason is that you get a check every month. I also let them know that they will get approximately 42 cuts that way if its a couple less or more they understand. Hope this helps.

    Rad
     

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