Rate increases for 2008?

Discussion in 'Pesticide & Herbicide Application' started by lawn king, Nov 4, 2007.

  1. lawn king

    lawn king LawnSite Silver Member
    Posts: 2,281

    Doe's anyone care to share this information for next year? We can't increase next year as we had a 5% this year, and we were already charging a premium.
     
  2. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,072


    I will wait until I see what fuel, fert, chem and seed prices do over the winter.
    I see a 2-3% increase probably for sure. I think fert will go through the roof this winter. I have already bought a lot of my fert for next year just to cover my butt. Hope it pays me to store it for 6 months. Was afraid not to buy cheap fert now from what I am seeing on the Ag side.
     
  3. americanlawn

    americanlawn LawnSite Fanatic
    from midwest
    Posts: 5,860

    We're like rcreech. Before we send out our 2008 sign-up letters, we will already know what our 'early spring' product will cost. I'll probably compare 3 differrent fert companies for the best price. We go through 70 tons of fert during our 1st app, so a few cents per bag really adds up.

    We have been apdating "difficulty factors" on most lawns this year so we know how long it takes and how tough each lawn is to treat (both liquid & dry). We also look at which customers who call in for free service calls, as well as how often. More than 2 service calls per year usually indicates a customer that does not follow good horticultural practices -- typically short mowing, especially along the edges.

    Bottom line: we will probably only raise prices for 2008 on customers with the lowest profitability.....keeping others at the 2007 price.

    We will definitely raise our grubworm app's a little, and we'll substantially raise our aeration prices for sure.
     
  4. J&T Kiev

    J&T Kiev LawnSite Senior Member
    from N.W In.
    Posts: 416

    I'm seeing at least a 3% increase..I am in agreement with the previous poster-In that Fert goes through the ceiling in 2008.
     
  5. MStine315

    MStine315 LawnSite Senior Member
    Posts: 789

    Last year was 4% for me. I was thinking 2-3% for '08, but if a new service tax passes in MI (6%) I will look at 4% plus the 6% for a total of 10%. I locked in my fert. and weed control for '08 at at least the same price as '07, in some cases lower, which was nice. I may do like American and go customer by customer and get them where they need to be individually.
     
  6. philk17088

    philk17088 LawnSite Fanatic
    Posts: 17,386

    Urea just jumped another $40 per ton last week a lone. Potash is going up also.
    Fuel cost will add up on the fert too.
    I am looking for 5-7% increase. I'm tired of eating cost increases.
    If the y don't like it they can leave.
    I think 2008 will weed out a lot of scrubs doing $29 applications.:hammerhead:
     
  7. OSJ

    OSJ LawnSite Member
    Posts: 8

    I made a promise to existing customers several years ago, and all new sales when I make a sale, that I will never raise their prices as long as they stay a full treatment customer ( 6apps ) Ive had great luck with this, my cancel rate is less than 3%

    Ive changed a few things like Lime & grup control. It use to be included in my program but now is a add on service and billed separately. 99% of my customers take these 2 options so in a sense it was a way to raise prices without really saying I was. :clapping:

    Each year I go up on my prices for new customers. Usually 5-8 % and I seem to be adding extra services every year that increase my customer avg costs.
     
  8. OSJ

    OSJ LawnSite Member
    Posts: 8


    A few years ago I doubled my Aeration prices, and started charging a flat rate for seed per lb. Sales never changed and I still cant get everything Ive sold done.
     
  9. philk17088

    philk17088 LawnSite Fanatic
    Posts: 17,386

    I am glad that works for you but I have a 3% cancel rate also and I raise prices regularly. I don't think I could make that new vs old tactic work. I would have a tough time convincing next door neighbor that they have to pay more for the same size lawn.
     
  10. rcreech

    rcreech Sponsor
    Male, from OHIO
    Posts: 6,072

    Same here!

    Been in lawn care business for three years and have only lost 2 customers (out of 230 customers) total.

    I would hate to have my customers "LOCKED IN" on a price with the volatility in the N and fuel market!
     

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