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Selling Contracts

Discussion in 'Lawn Mowing' started by o-so-n-so, Jan 21, 2003.

  1. o-so-n-so

    o-so-n-so LawnSite Bronze Member
    from Alabama
    Posts: 1,218

    Hello lawn pros,
    Here's the deal. I have about 5 seasonal accounts that I want to convert to yearly contracts. What are some selling points that I can present to my customers that will asure them that a contract or agreement is the best for them. 1..Do you offer a cheeper price? 2..give a part of your service for free? (dethatching,fert,hedge trim, etc.) 3..1 free mowing?
    What works for you guys? Thanks for the reply's.
  2. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Posts: 8,745

    One of the first things that you don't want to do is offer something free. Maybe give them a discount, but nothing free.

    I would just sell the major points of a contract:
    1. They are always guaranteed someone to do their lawn
    2. If anything happens basically you are liable for the service
    3. Offer them maybe a 5% discount if they sign up for the contract
    4. Give me an out way though, like 30 day notice to you, or that you have to give them a notice
    5. The price won't change throughout the season if under a contract
    6. The quality is guaranteed

    I know there are some other points, but I am too tired to think of anymore.........
  3. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    If you have done service work for them in the past, it shouldnt be a problem getting them to sign an agreement with you.

    I would simply state that what you are doing is cutting back on as much paperwork as possible, so that you can concentrate your efforts for field time.

    Let them know the cutting schedule will be the same as it was in the past. All you are doing is balancing out the invoicing so that you have constant cashflow/operating capital during the year, which passes along the savings to their pursestrings during the busier months. (thats your discount IMHO)

    If they havent been with you very long continue to service their accounts as you have in the past, and then this summer when the grass is growing rampantly beyond belief -- let them know with a letter following your invoice (seperate envelope) this month you are changing to monthly invoicing, and if they wish to discontinue service please speak DIRECTLY with you -- otherwise you will continue to service their accts, and submit your bill towards months end.
  4. o-so-n-so

    o-so-n-so LawnSite Bronze Member
    from Alabama
    Posts: 1,218

    Thanks for the input.
    Yes, I have had these accounts for a while. They are my "cream of the crop" accounts. No complaints ever, money always on time, come when you want, do what you want,( "just make my lawn look better than anyone else's in the neiborhood/area at any cost"), type of accounts.
    We have a 33 to 35 service per year( just mowing ) on weekly accounts in my area. Would you advise to factor in all cost ( mowing, fert, dethatch, aerate, hedges, you know, the works.) for services and have equal payments over a 12 month period?

    I think it will be an easy sell. I just want to have my ducks in a row before I approach very laid back customers.

    Any more input from you other guys would be helpfull as well.

    Gotta go for now, got stumps to grind today. Thank You....Sherrill
  5. bruces

    bruces LawnSite Senior Member
    Posts: 648

    I would include normal services only.

    I wouldn't include things you might do one year but not the next.

    Add those in when done. Note in your contract that additional services will be billed at agreed on rates or a set hourly rate or something like that.
  6. Gravely_Man

    Gravely_Man LawnSite Silver Member
    Posts: 2,076

    Kutnkru, nailed it on the head. Don't give anything away for free. You are doing this after all to make things better for the customer!;)

  7. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    I would suggest that you take the 33 visits for your services, and divide that fig by 12 mo’s to calc say a Basic Service Plan. I would present them with an estimate for the other services (Chems/Renovations/Grounds Mgmt/etc.) but keep them billed as needed in addition to their monthly agreement.

    I would then take the 35 visits for your services, add in the chems/fert, and divide that fig by 12 mo’s to calc say a Full Service Plan. I would also present them with an estimate for the other services (Renovations/Grounds Mgmt/etc.) but keep these billed as needed in addition to their monthly agreement.

    If your maintaining the lawn its ok IMHO to give them two options:
    a.) for say a basic svce low end quote and
    b.)full svce fert/lawn package for a higher end quote.
    However, I think its best to keep pruning & shearing, aerations & power rakings, mulching, etc. as separate services which are above and beyond the “Lawn” agreement.

    I only had a handful of resi. clients who were around long enough to know that each season they were going to get for ex: 28 cuts, 5 yds of mulch, sheared every 6 weeks, 2 fert/3 chems/and a lime app, spring/fall c-ups & aeration, etc. so they were put into a monthly package based on the TOTAL cost of maintaining their mini-estates (lol) and unless I was hit by a car the door to bidders was closed.
  8. Randy Scott

    Randy Scott LawnSite Bronze Member
    Posts: 1,915

    You might want to tack something on there for interest, because now you are a finance company. Although nice to have steady income, they are now using their money more wisely than you are. I don't know how much you do in the winter where you're at, but 99% of my income is in summer. I want my money when my work is done so I can do with it what I think is right and beneficial to me and the company. The commercials I have that are full-season accounts, maintenance with plowing/salting, are 12 month contracts and you better believe I've got something buried in there to carry their financial load. Again, a huge portion of those accounts are money generated from summer and if I have to carry those costs until winter payments, they are getting charged.

    If you are having financial trouble in winter, I suggest a better budget for the off-season and stick to it.

    Also, as stated before, never ever give something away for free. I attended a sales seminar and they said to never discount or give something away for the original work proposal. If you want to discount something to earn their business, upsell a service that you can figure in, or work off a slight discount percentage for something that's in addition. This way, YOU can do some quick math in your head, and figure a price on something that may be a little inflated and then discount back to an original price, thus still actually getting full price, yet they feel good because they received a discount for some service. You following me? There just isn't enough margin to give services away and when guys get panicky about getting a job from potential clients, they bring the market down to just barely breakeven numbers with free mowings or free apps. You need to know in advance your net profit percentage, and your breakeven percentages to accurately bid your work and find avenues where a possible discount can be applied. Our work is service and labor oriented, that's where we make the money. We can't make up money on extra products sold, or volume discounts. We have very limited amounts of time to get our work done and our money made. By lowering or giving away services, we have just taken from our bottom line that you will most likely never have the opportunity to get back, ever. Unless you know how to lenghten our days to more than 24 hours. :)
  9. o-so-n-so

    o-so-n-so LawnSite Bronze Member
    from Alabama
    Posts: 1,218

    OK..... I really don't have the off season financial problems. I manage about 20 seasonal accounts that keeps me busy about 2.5 days a week during the on season. I manage my stump removal business the rest of the time while holding down a full time job (6 hrs a night). I do work alot. $$$$$
    I here everyone talk about contracts,contracts so I thought I might be missing out on something. Rethink....Might just keep on keepin on. Really works OK for me.
    I never did like the sound of giving away a service. Never know til you ask.


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