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Reducing churn with fees

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Dec 3, 2004.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    This thread is for those who don't have their customers on annual contracts.

    Anyone have a start up or discontinuation fee to help reduce churn?

    The reason I ask is that the fitness clubs have this conecept down perfectly. When you get the bug to join a fitness club, you can't just walk in and start paying $30 per month. There's always a start up fee of $150 or $300 or whatever. Then, when you get lazy and realize you haven't worked out in two months, instead of cancelling, you tell yourself that you'll turn a new leaf on the first of next month. If you cancel, you'll have to pay another $150 start up fee in another month or so when you get that itch again. Its cheaper to just keep paying the $30/month.

    This is beautiful, in my opinion. It really makes a subscriber say "Do I really want to cancel this service? For the fitness club, instead of collecting two months worth of dues before a customer cancels, they collect the front end fee (equal to five months or so) and they have a big deterant to cancellation.

    I read in another thread this morning that one of the landscapers is charging a discontinuation fee when a customer cancels service. This sounds like a good idea too.

    I know most aren't doing anything like this. But does anyone have any thoughts on this? I doubt it would ever work, but if you were to try something like this, how would you market it?

    DFW Area Landscaper
  2. work_it

    work_it LawnSite Senior Member
    Posts: 976

    I haven't tried it yet, and don't think it would work unless it's a nominal fee. When a customer cancels service and then returns I have charged extra for an initial clean-up fee when someone comes back, and have even used it as an opportunity to raise their prices. If you don't charge a fee for having to re-establish the edges or extra growth they'll use you like a revolving door.
  3. 1MajorTom

    1MajorTom Senior Moderator
    Posts: 6,074

    Your example of the fitness center and hiring a service are two different things. A person can go to the fitness center, check out all the equipment, look at the shower room, see the people that are there, and decide if they like the atmosphere. They know in advance what to expect at the fitness center. However, with a service, you expect a customer to hire you and maybe get stuck with a crappy service (not insinuating that you are, just talking in general)..... Why would anyone hire a service that they've never tested out with the chance of getting an early cancellation fee if they are unhappy?
    Aren't you the guy who wants a credit card number before providfing service? Seems like you really want to lock your customers in. That's great, but it also seems you may really be scaring good honest customers away. I know I wouldn't hire a service that was going to tell me I would be penalized if I cancelled their service.
  4. Steve9

    Steve9 LawnSite Member
    from Texas
    Posts: 228

    There's T & A at the fitness club too! :rolleyes:
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    dfw, i love the way you think. always looking for a loophole or a glitch. i do that too. big problem though, BIG BIG PROBLEM. it won't work, none of it. wanna know why? because lawnboys are nuckleheads!!! one works for $10, another the same job for $35. lawnboys don't stick together. they havn't created a standard. no, wait, they have. the standard is......that there is no standard. lawnboys as a whole could accomplish great things, with a union. until then, i hate to say it dfw, your hands are tied. you try and incorporate a startup fee, they just grab the next monkey they see who will work without one, work cheap, give free stuff, and extend credit for 364 days.
  6. mtdman

    mtdman LawnSite Gold Member
    Posts: 3,137

    I think you are asking way to much from your customers with cc numbers, charges, etc. If the next guy did the same thing, you might get away with it. But he doesn't, and I'm not sure why I would do all that with you when the next guy doesn't ask for it.

    You gotta remember, it's a lawn care business, not rocket science. People don't want to have to worry about a million regulations, rules, fees, etc with retaining your service. They just want their lawn taken care of. Trying to control the business relationship too tightly is going to result in making your service less desirable.

    I can understand your desire to reduce uncertainty that comes with business and the hassels that result. There are many practices that are used in other types of businesses that will not fly with such an unregulated, service based business like lawn care.

  7. Mueller Landscape Inc

    Mueller Landscape Inc LawnSite Senior Member
    Posts: 489

    The trick is to adapt to your market, not try and make your market adapt to you.
  8. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Posts: 2,116

    One thing Justmowit does, that makes good sense to me, is he requires a six cut minimum in order to get the low price ($19.95 or $24.95). Otherwise, the one time fee ($40) will apply. This is pretty cool, because the customer knows that they have to keep the service for a month and a half if they're weekly, 3 months if they're every other week.

    Its easy to forget when something happened. For example, when did I go see Shrek II in the theatre? It seems like it was maybe two months ago, but it was actually last May...SEVEN months ago. I know because I saw it the first weekend it came out and it opened on May 19th.

    Another example: How long has it been since Jim Lewis started the "Horrible service from Magna-matic" thread?

    My guess was that it was started within the last seven days, but I did a search and that thread was started on November 21st...12 days ago. This is how the mind works when it comes to remembering how long its been since an event took place.

    This is a good deterent to cancellation, whether Justmowit has realized it or not.

    DFW Area Landscaper
  9. dishboy

    dishboy LawnSite Platinum Member
    from zone 6
    Posts: 4,232

    I understand your area is different than mine, but the only clients I seem to lose either die or move away. Does every gardner in your area have this problem?

    I used to throw work at a acquaintance who seemed to need new accounts every year to keep his schedule full, the reason for his problem was mediocre work. I would check with gardners in your are who you consider to do the best work and see what's up with them, what's their turnover rate, what's their pricing.

    In regards to a fee, absolutily not, you want to make it easy to do business with you not hard.
  10. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    that's like saying, "it's easier to learn to speak russian, than to fight communism."

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