Price Increase for customers

Discussion in 'Lawn Mowing' started by Evan528, Aug 3, 2000.

  1. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    also if you send a letter dedicated and just about a price increase it drawls a whole lot of attention to your price increase. Dont tell them why because that leaves room for argument. If you insist on raising the price mid season just right on the bottom of this months bill " you price per mowing efective blah blah is $30.00. most will not even notice or will not be a huge attention drawer.
     
  2. TGCummings

    TGCummings LawnSite Senior Member
    Posts: 773

    I sent out 19 specifically-targeted price increases in July, with an effective starting date of August 1st on all of them. These increases were targeted at the properties that I found were generating little or no substantial income to me and it was time to change that or let them go. These aren't the last changes I need to make, but it was more an emergency "stop the bleeding" issue after doing a complete business audit. Here's the update on what's happened:

    1) 7 of the 19 have dropped service, and I couldn't be happier about that. Mostly, the excuse returned was that they found a gardener that cuts for less than I did before. I was losing money before, so I know their new gardener is earning nothing. Still, customers who want to pay nothing are worth nothing to me. No loss there.

    2) One of the customers who stayed with me told me she timed me the last time I mowed and doesn't think I raised my price enough. ;)

    3) In another part of town, a neighbor of one of the customers who dropped called to ask me why I didn't do the lawn next door anymore. She said the new guy does a lousy job and she preferred me. A *neighbor* called to tell me this!

    Anyway, things are rolling along well. Depending on how you want to handle it, and how severe your increases are, be prepared for some losses. I raise prices when I think I need to lose some lower end customers anyway. I've raised three times in 6 years. Twice in an August and once in an October. However, where I am in California mowing is a year-around business, so that should be a factor.

    Good luck, and keep those minimums rising!

    -TGC
     
  3. River Hill

    River Hill LawnSite Member
    Posts: 122

    I want to send a letter to my customers letting know I am raising their prices. Does anyone have any sample letters they have used, or any letter for renewals?
     
  4. Guido

    Guido LawnSite Silver Member
    Posts: 2,085

    Brian, its usually a sensitive subject with customers so I wouldn't use a generic letter. write something yourself that you can customize to the customer and your needs and reasons for this increase. Make sure you make examples of the cost of living increase, gas prices, etc. Hope it works!<p><p>----------<br>&lt;a href=&quot;http://communities.msn.com/guidosequipmentpics/&quot;&gt;&quot;Guido&quot;&lt;/a&gt;<br>David M. Famiglietti
     
  5. Evan528

    Evan528 LawnSite Silver Member
    Posts: 2,144

    I wouldnt change prices in the middle of the year. What i did this spring was send out a spring letter to each costomer remiding them of my complete list of services. On the bottom of the flyer i simply put &quot;your 2000 price per mowing is --. I only raised all my prices 3-4 dollars so no one even said anything. they probly didnt even notice.
     
  6. Scraper

    Scraper LawnSite Bronze Member
    Posts: 1,656

    I agree with Evan...changing prices mid-season is not something I have done. Best results are in the beginning of the season. For me at least. I think most people come to expect it.
     
  7. bill phagan

    bill phagan Guest
    Posts: 0

    I would start by identifying those accounts that are marginally profitable and the losers. They need to be raised NOW or get rid of them......you are either just exchanging or losing money on these.....next depending on where you are located and seasonality, look at the over the course of your season for profitabily. If not, dump them.<p>Bill Phagan<br>Green Ind Consulting<br>bphagan@tampabay.rr.com
     
  8. TurfMan

    TurfMan LawnSite Member
    Posts: 68

    I would agree with the rest, I wouldn't raise them this late in the year.
     
  9. yardsmith

    yardsmith LawnSite Senior Member
    from Ohio
    Posts: 627

    If at all possible, wait until next spring. If you do it mid stream, it will seem like an afterthought, or that you're trying to make up for fewer mowings. Nothing drastic has happened in the economy, so it will look like you bid too low & are trying to gouge your customers-not all will think like this, but it's alot harder justifying it mid season.
    A better solution would be to raise next year- people expect raises in the new year, but during this year ask around & find additional work from your customers-edging, more landscaping, walkways or pavers, gutters, tree trimming, shrub pruning, etc. etc. etc. Get more work to offset the slow period.
     

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