those of you that send yearly renewals or svc contracts

Discussion in 'Pesticide & Herbicide Application' started by jbturf, Mar 1, 2008.

  1. jbturf

    jbturf LawnSite Bronze Member
    Posts: 1,440

    Assuming that the large majority of of LCO's have increased
    \prices this year (myself 6-8%)
    how has your response been so far?
    i was a little late getting my estimates (read contracts but worded estimate)
    out this year- due to crazy winter weather here in MA, and trying
    to nail down some accurate product pricing. I thought long and hard about
    pricing this year, in the end decided on increasing prices just enough
    to cover the rising cost of product. obviosly, all of our business related
    costs have gone up across the board not to even get into our personal
    cost of living. I kinda feel the fragile economy and effects upon my
    own check book as of late. I think to myself, if i was paying for lawncare
    i might have to cut it back or cancel it this year-there are priorities
    like heating oil and mortgage that come 1st. I have felt fairly financialy comfortable the past many years until the past 4-6 months.

    keeping those thoughts in mind, i hope to keep about 90%of previous
    customers and make a few cutbacks to keep the bottom line about the
    same.

    sorry for the long wind
    Josh
     
  2. MStine315

    MStine315 LawnSite Senior Member
    Posts: 789

    I don't have a % for you, but I was in the same boat with the winter we've had. I mailed mine on Saturday and started getting checks already on Tues. So far I've lost 4 customers, have had 4 "ok's" without prepay, and have gotten about 12 checks, out of about 250 letters sentI am encouraged. I was nervous with a 8% increase, but I'd rather lose a few than do them for little or no profit.
     
  3. tlg

    tlg LawnSite Senior Member
    Posts: 647

    Customer retention seems to be about normal at this point. Renewal letters went out Feb 1 and we are close to our usual number for pre-paid services. We average about 65% pre-pay each year. We have adjusted pricing to offset rising cost about 5% for our average customer. Would have liked to have doubled that but felt our customers, like everyone else are facing rising cost from food to fuel. This economy is beating everyone up with no end in sight.The bottom line is we MUST raise prices to make money. Unless you can tell the future you don't have much choice no matter how tough the decision to increase prices. Making our customers see the value in what we do for them is all we can really do at this point. What do you think?????
     
  4. Tscape

    Tscape LawnSite Bronze Member
    Posts: 1,370

    Mine are going out on Monday with an increase that is closer to COLA than actual rise in costs. But I figured it was the most I could afford to do. I wanted to get them out earlier, but this winter has been kicking me in the butt. If I'm not plowing or salting, I'm wrenching on a plow or salter, or I'm nursing bloody knuckles and frostbite (no garage). That doesn't even take into account my wacked out sleep schedule, a bout of the flu, and a scosche of seasonal affective disorder. I should stop whining now.
     
  5. turfmann

    turfmann LawnSite Platinum Member
    from PRM
    Posts: 4,536

    I feel for ya buddy. That's why I bought 2 wheel drive trucks and swore that I would never do snow removal again. That's why the bride let me back in the house!

    As to the retention of customers during economic down times, I think you'll be surprised how resilient the lawn care market is. I've been through them all going back to '85 and there has never been a market where customers fell off in any significant way.
     
  6. MStine315

    MStine315 LawnSite Senior Member
    Posts: 789

    Thanks for the encouragment!
     
  7. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    As to the retention of customers during economic down times, I think you'll be surprised how resilient the lawn care market is. I've been through them all going back to '85 and there has never been a market where customers fell off in any significant way.[/QUOTE]

    I had a substantial price increase this year. I sent out my renewal letters the first of Jan. My increase was twice as much as many have stated on here. I'm 50% done with Round one and I've lost about 4% of customers due to increase. We've had a beautiful weekend and my phone has been ringing. As long as material costs remain fairly consistent, I think all in all it will be another good year!
     
  8. jbturf

    jbturf LawnSite Bronze Member
    Posts: 1,440

    well, recieved about 25/350 so far, kinda slow responce this year
    typicall have about 60 % customers who opt for prepay, it may be a little
    early to judge but im at 30% prepays now.
    also noticed core aeration sign ups are way down.

    do you guys sell aeration as part of a program/package or as an add on
    service?
    ive always done it as add on, but never have really had great response.
    except for last year did about 100 outa 350 customers.
    but i sent out 10%off coupons for aeration.
    any thoughts on this?
    i hate doing the aeration, but its hard to deny the benefits to the turf and the
    profit margin is unbeatable (for me )
    thanks
    Josh
     
  9. RigglePLC

    RigglePLC LawnSite Fanatic
    Posts: 12,355

    I had about 2 percent say that they lost job or could not afford lawn service.
     
  10. ted putnam

    ted putnam LawnSite Platinum Member
    Posts: 4,541

    Riggle, Check your PM when you get a chance.
     

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