The five letter word no one ever talks about here

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Feb 25, 2010.

  1. DFW Area Landscaper

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

    CHURN

    For those who don't understand, it's cancellations. It's driving me nuts.

    I'm starting my 8th year in the business, and today, my mood is petty rotten. I just took 3 client cancellations this afternoon. It's too cold out to begin advertising, so I'm just sitting here watching my total customer count drop week after week when it should be increasing this time of year.

    Anyway, I'd give anything, do anything, to reduce this churn.

    I just pulled a report of my lawn mowing clients who have cancelled service since Labor Day of last year. As of today, 71 lawn mowing clients have canceled service during that time (just a little over 4 months). How long were these clients on my lawn mowing schedule before they canceled service??? A couple only stayed with me a couple of months. The most veteran client was with me for 78 months. The AVERAGE stay was 24.7 months. That's the overall average.

    Experience tells me I'll never hear from 99% of those clients again. Those homes are off limits until they move out and a new prospect moves in. I just think it's a psychology of the sale thing. I liken this to a barber you patronized for a long time. He never did anything wrong, but then you switch to another barber for a year or so. No reason, really, you had McDonalds barber shop and you wanted to try the new Burger King Barber shop. How would you feel walking back into the McDonald's barber shop later on after you esentially fired him...especially if there are DOZENS of other barber shops to choose from? Same thing kinda applies to us.

    At any rate, I'd give ANYTHING, do ANYTHING, to reduce my churn.

    So here's what I'm thinking: I am the most expensive in my area. I advertise $26.50 for most lawns. After sales tax, I'm banging their credit cards for $28.69 per mow. Most of my competitors don't bother with the sales tax, so when they advertise $25.00, that's the actual cost. When you compare $28.69 to $25.00, it's enough for some to consider canceling.

    But what if the client got a postcard advertising $26.50. Called to sign up, and was quoted $26.50 over the phone. Then received a welcome letter that also says the price is $26.50, plus sales tax. But then, when the credit card statement posts, the lawn company only charged $23.27 per mow. Do you call them to ask about the oddity? Do you complain about mowing in the rain? Do you complain about anything? Would you cancel unless you absolutely had to??? Would you even call them at all, for any reason, unless you absolutely had to???

    You see, I can afford to reduce my price by $5 per mow, but ONLY if my churn gets reduced, and I, in turn, get to spend less on advertising and less of my time answering the phone to deal with cancellations and new sign ups and complaints and I want Th/Fr instead of Tuesday and all the other bull***t that I deal with every day. These phone calls eat a LOT of my time.

    What do you guys think? Do you think this covert "accidental" underpricing would reduce churn???? It would take years to conduct a measurable study of cancellations on these clients, and between now and then, I'm taking a huge pay cut and a huge gamble, but I'm probably gonna try it, at least on a few dozen new clients this spring.

    Any thoughts appreciated.
     
  2. FryDaddy

    FryDaddy LawnSite Member
    Posts: 145

    Only you know if you can live with $5 less per yard cut. If you can, then go ahead, but remember someone else having a hard time can/will come in and cut if for cheaper. On another note, gas is constantly going back up again, just something to keep in your head. Don't give up & good luck on which way you go.
     
  3. yardguy28

    yardguy28 LawnSite Platinum Member
    Posts: 4,464

    i don't think advertising one price and charging a lower price will help matters at all.

    i'm not really sure why you bother with sales tax. most of the lawn maintenance businesses i know don't have sales tax or if they do, it's advertised to the client. kind of like you don't reveal your hourly rate to a client.

    if your gonna charge $28 bucks don't advertise $26.50 plus tax. just advertise $28 bucks.

    it's unfortunate your loosing clients but i really don't think quoting one price and charging them less will impress them to the point of them staying with you or not complaining about a single thing.

    in my opinion the key to client retention is great customer service. do a great job and a reasonable (not necessarly the lowest or highest) price and the one's worth working for will stay with you.

    i've heard it over and over and over again from lawn maintenance owners, they don't want the price shoppers because there is no loyality in price shoppers. as soon as someone is cheaper which there will always be, they will drop you like a hot potatoe.......
     
  4. Turf Dawg

    Turf Dawg LawnSite Gold Member
    Posts: 3,719

    I think is just a fact of life with your type of business, the large unpersonal type, in your area. I'm not saying that it is right or wrong, just the way it goes. This year will be my 15th and out of those I have been fired twice. One res and one com. I do loose some non private owned commercial accounts and some that have moved or passed away. I downsized in 08 and stopped doing some people that had been with me for 11 years and it was very hard for me to tell some of these folks, I even had one clinet call and told me they understood but it felt like they had lost a family member.
    So I guess what I am saying is that if you are small and personal then you retain your customers even when people come in cheaper, and if you are large by volume then turnaround will always be a big factor.

    Just my thoughts
     
  5. Landscraper1

    Landscraper1 LawnSite Senior Member
    Male, from Southeastern Ma.
    Posts: 755

    For you to be losing customers that fast, there is something wrong. Is it all about the price or is it the service your giving them?
     
  6. grassman177

    grassman177 LawnSite Fanatic
    Posts: 9,795

    i kind of agree, that is pretty huge, i am crying over three so far this year, but they are very large ones.
     
  7. lawnlandscape

    lawnlandscape LawnSite Senior Member
    from Midwest
    Posts: 780

    Its never to cold out to start advertising.

    We advertise when its 10 degrees outside up here in wisconsin! :)

    $26.50!! I hope those are some small lawns! My minimum charge is $35, even for a 2,000 sq. ft. lawn.
     
  8. Darryl G

    Darryl G LawnSite Fanatic
    Posts: 8,033

    Does this sound familiar?

    "I just can't understand why an LCO would reduce prices to obtain customers".

    That's a quote from you DFW, from probably a few years back...I have a photographic memory.

    I'm not bringing that up to bust your stones, just to get you to think about what you're saying. I think you'd be better off giving your customers a greater value or at least a greater perceived value than lowering your prices. Is there something you do that other's don't...like blowing off all hard surfaces, not just the ones you get debris on? Moving objects in the lawn rather than just mowing around them. Try to find a way to differentiate yourself..mowing is a service business, not a commodity. Or has your quality slipped somehow resulting in a lot of cancellations? What made you special and able to charge more to begin with? Have you gotten complacent about your accounts? I don't know..but the DFW guy I know would not be lowering his prices.

    Just trying to help...good luck
     
  9. DFW Area Landscaper

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

    ++++For you to be losing customers that fast, there is something wrong. Is it all about the price or is it the service your giving them?++++

    No, there is nothing wrong with our service. I drive around and I look at the lawns we service. Right now, the clients with our chem program have nothing in terms of weeds. They are pretty spotless and I'm proud of our work in that area.

    Of course, it's impossible to keep all the people happy all the time. I've driven out on some complaints over the years, and usually, the complaint is just ridiculous. I've learned over the years that those who can barely afford the service are way more inclined to complain. I think they feel that if they're going to pay so much for lawn care, it ought to be to whatever standard they dream up in their mind.

    I always ask clients, when they call to cancel, if they have found the service to be satisfactory and by and large, the answer is always yes. It always amazes me that the same crew, the same service, can generate complaints from some clients yet get rave reviews from others.

    Consumers are just fickle. That's about all there is to it. With 600 clients, I have very little rapport with most of them. That's about the only thing missing. But what I can tell you, is, from experience, back in '03 & 04, when I started, and I was the one on the truck doing the labor, of course I was polite to clients if I saw them on the property and there was lot more in terms of rapport...and of course, the quality of the work was fine. But churn then wasn't much different than it is now.

    Maybe it's just part of the big city DFW metroplex mentality. In a smaller community, you might bump into the poor landscaper schmuck you fired at the bank or church or whatever...but in the DFW metroplex, it's highly unlikely.

    I'm inclined to try the covert "accidental" $5 discount on a couple dozen clients just to see if it helps. 24 clients X 32 mows X $5 = $3,840 per year pay cut just to try it out. But if it keeps them on the schedule until they move or die, it's worth it. I kinda doubt it'll help much. But it might be worth trying.
     
  10. DFW Area Landscaper

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

    +++ Its never to cold out to start advertising.++++

    Yes, I dropped 5,000 post card in the mail on Feb 5th and got a total of TWO clients from that. My cost per client was $500 each. It snowed, record snowfall, 7", the day after they were delivered.

    ++++$26.50!! I hope those are some small lawns! My minimum charge is $35, even for a 2,000 sq. ft. lawn++++

    $25 is the going rate here in the DFW metroplex. It hasn't gone up a cent since I entered the business in 2003. I just got an ad from a guy via Valpak the other day, $20 small lawns, $23 medium sized and $25 normal sized. This is 8 years later.

    I don't know if my little plan will work or not. I swear I was convinced a while back, a few years ago, that being cheap didn't keep them on the schedule any longer. I was guilty of under pricing some lawns when I first started out. Consumers are just fickle.

    I'll let you guys know if I try the covert "accidental" discount or not.
     

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