The cost of a new customer?

Discussion in 'Business Operations' started by LawnLad, Feb 8, 2002.

  1. Nebraska

    Nebraska LawnSite Senior Member
    Posts: 525


    I would be interested in hearing your take on pre-payment discounts. My feeling is 10% is excessive, yet a bunch in our area do this.
  2. B. Phagan

    B. Phagan LawnSite Member
    Posts: 95


    Let me say pre-paid customers are a god send!. Now, pre-payment discounts depend:

    1. How much profit are you giving away?
    2. Are they paying by cash, check or CC
    3. For what period are they paying? Qtrly, 6 months, one year?

    This can present problems for our industry when the "lawndogs" are doing the collecting up front and not doing their job or maybe go bellyup prior to finishing out the term.

    I always suggest they pay upfront to elimate the "paperwork" and would not offer a discount..........if they pay cash (and of course, I would declare that income to the IRS!) and I'm giving up too much profit, that would be my preference.

    I much prefer to use my customers money rather than my own with the above considerations.

    Good luck.

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