retention rates???

Discussion in 'Lawn Mowing' started by Brianslawn, Jan 18, 2006.

  1. Brianslawn

    Brianslawn LawnSite Silver Member
    Posts: 2,004

    ive heard countless lawn professionals on here bragging about 100%, or close too it, customer retention rates from year to year. then when they say how many customers they have... its like 10 or 20. ive seen some online computer/parts bizs that have 100% positive feedback on the major ratings websites. how hard is it for a lawn company to achieve this and what kind of a retention rate should they expect from year to year? how much does it vary depending on size? is it possible to have over 1000 clients and a 100% retention rate, or close to it? i know people move, and on occasion some of the customers pass away, but what is best case scenerio for over 1000 clients?

    what rate at 50 customers?
    what rate at 100 customers?
    what rate at 500 customers?
    what rate at 1000+ customers?

    we have a large # get transferred in and out of town through walmart and its vendors from year to year. we are also one of the higher priced lcos and since most work for walmart and are on a tight budget, often leave for the $5/yard kid or unemployed 37 year old down the street. we have nowhere near a 100% rate, but always have plenty of new calls.

    i respect the opinions of mmlawn, mbella, bill, mac, and dozens of others on here. what are your guys's thoughts and the thoughts of everyone else?
     
  2. crzymow

    crzymow LawnSite Senior Member
    from Pa
    Posts: 378

    i have about 75 customers, id say my retention rate for the past 5 years has been around 95%
     
  3. lqmustang

    lqmustang LawnSite Senior Member
    Posts: 620

    While I am presently solo and don't run the large customer base others have, my retention rate runs about 90%. A good part of the loss is generally from those moving out of my service area, but I do lose one here and there due to the customers unrealistic expectations, if you know what I mean.
     
  4. Flex-Deck

    Flex-Deck LawnSite Silver Member
    Posts: 2,846

    Heck - I have no problem with retention. I just bid it so dang cheap they can't get rid of me. Then I go into the job and do a A+ mowing and trimming deal, and they are happy (no stress here). Why I just need more big commercials around here to keep me busy enough. LOL< LOL - I am just kidding, except for the A+ job of mowing and trimming. :blob4: :blob4: :blob4:
     
  5. Jpocket

    Jpocket LawnSite Silver Member
    Posts: 2,278

    I have around 60 accounts and normally have a 98% retention rate. Should be about 95% this year.

    I think the bigger you get the more you lose, also as you grow bigger it doesn't affect you as much. Unless it's large commercial.

    If Valleycrest loses 50 account this Spring it won't matter b/c they have 700-800 accounts, and will have 50 more businesses and homeowners calling them in a week.
     
  6. DFW Area Landscaper

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

    Less than 10% will get rid of you because they aren't happy. The vast majority will get rid of you because their financial situation has changed or because they sold the house.

    The average 10 year old home in my area has had 3.5 owners.

    You can bend over backwards to please them but if they cancel service because of a lay off you still lose the revenue stream from that customer. It effects you the same either way, whether they are unhappy and hire someone else or if they get canned at work or sell the house. Either way, you are out a client.

    The way I monitor it is this: I pull a report from quickbooks that shows all the customers who contributed lawn mowing revenues during the 1H (01/01 thru 06/30) and then I see how many of those customers contributed lawn mowing revenues in 2H (07/01 thru 12/31). Then I compare the 2H of year one to the 1H of year two. And so on and so on.

    On average, I lose about 20% of my mowing clients every six months. Since I ended '05 with 244 clients, I have to sign 49 clients before 06/30/06 just to maintain where I left off. Everything above 49 is growth. I have signed 2 new customers this year so I need another 47 just to maintain where I left off.

    Later,
    DFW Area Landscaper
     
  7. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Initially in the spring of 2005, we started off 9% lower. Over the course of the year, we got the 9% back and an additional 13% in total number. The number of lost accounts means nothing to me...% of total revenue is what I look at.
     
  8. dfor

    dfor LawnSite Senior Member
    Posts: 824

    I have about 65 customers, and retain about 95% year to year. Whether it be them moving, passing away, etc.
     
  9. BSDeality

    BSDeality LawnSite Silver Member
    Posts: 2,850

    90%+ retention rate is what I would feel is an acceptable rate for a LCO with >50 accounts. As that number of clients gets smaller you need to increase your RR or you're in $$ trouble.
     
  10. impactlandscaping

    impactlandscaping LawnSite Silver Member
    Posts: 2,332

    Exactamundo!!:cool:
     

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