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Raise prices, raise prices, raise prices...

Discussion in 'Lawn Mowing' started by 1MajorTom, Mar 12, 2007.

  1. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    that's all I hear. Now don't get me wrong, we are all for the almighty buck too. But tell me this. HOW MANY years in a row can you keep raising prices to the same old customers? A $30 lawn is still a $30 lawn unfortunately. And the longer you've been in business, the harder it is to keep consecutively raising prices. I know, we've been in business now NINE years. And that 4,000 sq ft lawn as an example that was $30 9 years ago... if we raise that 2 bucks each year, it now becomes a $48 lawn. Do you find that there is a point, where the customers price becomes maxed out?

    I hear it all the time on here how people raise prices year in and year out. Is it to the same customers, and if it is, is it just your internet keys doing the talking? I would like to hear from someone like T.J. Justice from Texas.
    How does someone like him handle his price increases when you have great customer retention?
    thank you,
  2. Lawn Tek

    Lawn Tek LawnSite Senior Member
    from u s a
    Posts: 457

    When I started buying gasoline it was .47 cents a gallon . Now its 2.50 should the oil companies not raise prices ?
  3. IN2MOWN

    IN2MOWN LawnSite Platinum Member
    Posts: 4,993

    The key is not so much raising prices but when you get new accounts price them accordingly to what the market bears NOW.
  4. Uranus

    Uranus LawnSite Bronze Member
    from Mass
    Posts: 1,624

    You hit the price limit on lawns very quick. So its hard to raise prices on mowings every year. If they are priced correctly then go up 1-3 bucks per year. If they are not priced correctly then raise it to where it should be.

    I raise my prices on the spring cleanups about 10%. If it was a $200 cleanup last, it is now a $220 cleanup. Nobody should complain about that.

    Leave the mowing prices alone if they are correct and raise you price on everything else. Mulch, cleanups, trimming, and seed work for example.
  5. cgland

    cgland LawnSite Bronze Member
    Posts: 1,929

    Jodi - We raise prices every other year. It gives the customers a break. We try to make more money by becoming more efficient. That coupled with a small price increase should help maintain profitability. Besides if you do good work some customers won't mind the increase.....SOME!

  6. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    It's not the same correlation though. I'll tell you why. GAS STATIONS stick together on pricing. Right now it's $2.55.9 a gallon here, and I can't find it anywhere cheaper in my vicinity. That's not how it works with lawncare.
    Gasoline you are stuck paying the price THEY DEMAND, otherwise you don't drive. Lawn care companies can't demand prices.... because there is always someone under some rock that will do it cheaper. Customer price increases EVENTUALLY max out for companies that have been in business for 6, 7, 8, 9+ years.
  7. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    Good post. We have close to 100 accounts, and after the first couple of years, we realized we couldn't continue raising the same prices year after year. So now we do our price increases in a rotation, about a third will be increased this year.
    Just getting a little antsy I guess, cause the price increase letters that we do have are going out this week, and I'll be cringing if the phone rings after they have been mailed. ;)
  8. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    btw, how old would that make you? (just kidding with you)... we can still remember when we first bought the dodge truck our first year in biz, it was 85 cents a gallon.
  9. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    That's another good tip, and something that we do too, especially with hedge trimming.
  10. VnDrWLawnCare

    VnDrWLawnCare LawnSite Member
    Posts: 208

    I couldn't agree more about increases. As much as you want to raise them a buck or two every year there comes a point that the customer may say forget you, and find someone else for cheaper. By the time you build your route to be tight and efficient, and then start raising the prices you may loose a couple of yards here and there, and then you are less efficient and looking for more work. And that work will probably come from a different area that you may not have much work in.

    It is an ongoing battle, and like someone said it is about being efficient, and that is what i strive for every season. I try and stay in the same subdivision all day. Usually 3 days of the week work out like this.

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