raise prices EVERY YEAR?

Discussion in 'Lawn Mowing' started by bobbygedd, Nov 16, 2004.

  1. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    does anyone raise prices every single year? i met a nice fella the other day. very knowledgable, good established business. he claims he raises prices 2-3% a year, every year. i don't think it's possible for me to do this. anyone?
     
  2. brentsawyer

    brentsawyer LawnSite Senior Member
    Posts: 663

    Anything is possilble. Put yourself in a customers shoes. They pretty much know how much there prices will be raised each year and since it is only 2-3%, it's minor, unlike how alot of people raise prices by $5 increments, 2-3% on a $40 account is $.80-1.20 each year.
     
  3. geogunn

    geogunn LawnSite Gold Member
    from TN
    Posts: 3,010

    I don't. for the people that started with me they pay the same.

    I am faster now than I was when I started so I figure it evens out.

    for new customers, they start with a "current" price.

    GEO :waving:
     
  4. cward

    cward LawnSite Member
    Posts: 190

    BobbyG,
    I have had good luck with raising prices 2-3%/yr. The sad part is, if you are at the top of the price range for a particular yard or area, you could price yourself out of a job. I believe most people realize how expensive equipment and GAS have become. Most people expect a 3-5% cost of living increase out of their jobs, aren't we entitled to the same? I just tell my clients that I am going to do it and no one has fired me yet. By telling them ahead of time, I have time to figure out how they are handling the increase. It gives me time to adjust the increase or change my mind. However, I don't care how nice the yard is, I'm not mowing it for free. For my customers, it averages 0.97 cent increase per mowing.
     
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    what makes this hard for me to believe is that @3% increases, over 5, 6, 7 yrs, the competition will devour you eventually. it seems easy enough to do a nice job, and get $30 for what the competition is charging $22, $25 for. but, the competition will remain at $22,$25. after 5-7 yrs, with regular increases, my $30 fee goes to like $35-$37, and puts me right out of it.
     
  6. PaulJ

    PaulJ LawnSite Bronze Member
    Posts: 1,776

    I've raised some prices every year. But the accounts I took over 4 years ago were way under priced by the former lco. Now I know better and I have a better handle on my expences. But with gas, insurance, and repair prices going up all the time, we have to raise too.
     
  7. Lawn-Scapes

    Lawn-Scapes LawnSite Silver Member
    Posts: 2,810

    Seems as though you've answered your own question.. however, I think you could get away with a .50-1.00 raise per year.. with superior service.
     
  8. chevyman1

    chevyman1 LawnSite Senior Member
    Posts: 852

    I began a plan this year (my first as a company) where half of my customers got a 2-year price guarentee, meaning no increase during that time if they stay with us (except in the event of gas, glad my Dad said write that in)...the other half of the customers will be raised n 2005. This way, 50% of my accounts get raised in 2005, the others in 2006 and no one feels like we keep jacking up the dollar figures..
     
  9. fga

    fga LawnSite Silver Member
    Posts: 2,449

    I never looked at it percentage wise, but i raise them every couple of years, maybe every 2 years, it will go up 1.50, 2.50 dollars per cut. with my given 80 accounts, it comes out roughly to an extra $7-800 a month. i'm not too concerned with the competition, my prices are right im the middle. some guys are way on top, others work for half of what i charge.

    there are several factors i try to use.

    1) is that house underbid? sometimes i'll get a comment from the customer saying, "are you sure with that price, my old guy was alot more." I answer with that's my price, ans slowly raise them up the following year.

    2)How did I leave off the season? Honestly, sometimes i leave off the season on top of everything. not a singlr request goes undone, i've exhausted my work tasks. Other years, similar to this one, i feel like i'm limping into the off season. most customers are 100% satisfied, others are upset i didn't get certain things done yet, due to my own reasons. Those are the customers where i may not raise next year, in hope of keeping them.

    3) Is it an acount i don't care if i lose or keep? those i will try to raise 10 bucks for the month or so. win win situation.
     
  10. JFGLN

    JFGLN LawnSite Senior Member
    Posts: 963

    I raise my mowing prices every other year and haven't ever had any complaints.
     

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