Whats the Best way to raise your customers price without loosing their business?

Discussion in 'Lawn Mowing' started by Pro-Lawn, May 31, 2001.

  1. Pro-Lawn

    Pro-Lawn LawnSite Member
    Posts: 74

    I have 60 residential and 10 commercial customers and 30 part time customers. And i need to raise the rate or grass cuttings say 10% each customer. What is the best way to go about this? Do i go door to door and talk with them or call them one by one or just surprize them with a bill , or maybe a newsletter? Just wanting other ideas on how to get more money without loosing business.
  2. Mitchell

    Mitchell LawnSite Member
    Posts: 28

    I would send a bill w the notice at the bottom saying that prices are being raised xxx of dollars. If this is going to be a problem for you please contact me, otherwise I will continue to provide dependable quality service Thank you
  3. well might i ask what 10 percent of a cutting is? if it is 3 dollars i dont think people are gonna mind. however you should probably do it by talking with them and explaining the mid season raise. if the 10 percent is 15 dollars, 20, 30, or anywhere larger you are gonna want to reconsider that over a longer period of time maybe?

    MATTHEW LawnSite Senior Member
    from NE OHIO
    Posts: 665

    I agree. It might seem a little strange to them if
    you approach them face to face. You'll probably have
    that nervous look or a groveling tone. Hey, everything
    is going up. Even though 25% gas hikes don't hurt all
    that much, they seem to think it does. That alone should
    warrant an increase. Just simply state it in writing
    (in a subtle,minor,seemingly insignificant note) that
    the price will now be "x" dollars.
  5. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    Unfortunately you are going to find that the Commercial/Industrial accounts will probably go by the wayside if you change your pricing structure at this point.

    They have budgets and have adjusted other budgets according to the increase or decrease associated with the costs of doing business with your company. If you cannot maintain these clients for the prices you offered you should have planned better ahead of time is going to be their way of thinking more than likely.

    As far as the Residential end of the business is concerned, just bite the bullet politely and send them a letter prior to the end of the billing cycle giving them 30 days to either accept or cancel.

    If you send out the letter within the next week, make the new pricing structure effective 1 August. If you cannot survive for 30 days under the current structure you need to seriously evaluate if 10% is going to be enough.

    My other reccomendation is that you come to a price that you can lock yourself into for say the next 2-3 seasons.

    Good Luck!
  6. smburgess

    smburgess LawnSite Senior Member
    Posts: 469

    I have found it depends on the client. Some I'll call and let them know I have to raise the rate, some I just raise it.
    It IS better to lose the client than to continue to provide service at low or no profit.
  7. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    last month we sent letters stating we r increasing the prices . some were $3 per cut, others were $5. this will go into effect on july 1st. we havnt had any cancelations nor has anyone even questioned it, YET. but it isnt july 1st yet. the letter stated that its been our pleasure serving u thruout the years, there has been a substantial increase in operating costs( fuel, dumping fees, state permits, etc) in order to provide u with the best possible service we must increase our service fee by....... if u have any questions feel free to call, etc... even a small increase gives u a decent raise. at only say $3 per customer, 30 customers, u got a $90 a week raise. i had a friend who wanted to increase prices, the way he went about it was a little odd, he called and kinda "suggested" an increase, they said no, he said ok. make sure u let them know u r raising your prices, this is not an optional thing. hope this helps
  8. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    oh yea, we also added that if we need to miss a cut because of rain, and it is neccesary to double or triple cut on the next visit, there will be a $10 extra charge.
  9. Pro-Lawn

    Pro-Lawn LawnSite Member
    Posts: 74

    We sent out a little add on to their bill , notifying them that to continue a high quality service i was going to halft to raise them.
    Most of the customers was 1$ some were 3$ , it all depended on their size of lawn . I havent raised 90%of my customers in 4 years. None of them were my commercial accounts . Everything worked out great. Had a few groans at first , but when they looked at other companies and the job they did , they decided my service was worth their money. So alls well ! :=)

    pro-lawncare.com :D
  10. CMerLand

    CMerLand LawnSite Senior Member
    Posts: 393


    While I dont disagree with the idea of raising prices, how you go about doing it is very important. We raised most of our clients costs before the season started, and didnt lose a single client. In fact the high cost of gas is much easier to explain away to them then an insurance increase or payroll increases or whatever.

    However, before you raise all clients by 10% you need to know which clients really need a price increase and which ones are the gooses laying the golden eggs.

    Most companies have about 60% of them bid properly, 20% over bid and 20% are real money losers. By raising prices on those accounts your already making a killing you may lose some of your most profitable customers, while retaining all of you money losers as the 10% increase doesnt still doesnt make them profitable.

    Review your accounts carefully, as some may need no increase while others will need 20 or 30% increases to get them to your desired profit goals. Of course this is much easier if youve tracked all your work history and know exactly how long each of your services takes for each particular client vs how much you want to earn per hour.


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