Why have service contracts???

Discussion in 'Landscape Lighting' started by perfectlawncare, Mar 4, 2007.

  1. perfectlawncare

    perfectlawncare LawnSite Member
    Posts: 120

    Hey guys I was wondering why my customers should pay me $50 or even $100 a month to make sure there lights are working correctly? Doesn't it make more sense to let them call you if the need the bushes trimmed back or a light needs to be replaced? When you do make that $75 service call why not check the connections then and trim back the bushes ect ect and charge for it when it needs it. I just think when your in a contract someone always losses. Like take my lawn care company for instance, if I charge you for 32 cuts a year and you only need 28. The customers loses that money and they will let you know about it. On the other hand when I charge for 28 cuts and they need 32 I lose. All I am saying why not pay as you go that way everybody wins? Please help me understand the reasoning behind this.

    Thanks for your input.
     
  2. terrapro

    terrapro LawnSite Bronze Member
    Posts: 1,234

    my service AGREEMENT basically only states that i get paid for the work i perform. i give them a general idea of when i will be there and what i will be doing while im there. if i show up to a job and nothing needs to be done i will leave and not charge my customer for that visit. i feel i do need some form of written agreement to make this work though
     
  3. Grn Mtn

    Grn Mtn LawnSite Senior Member
    Posts: 863

    People love to pay for only the services provided but they hate it if it is an exceptionally heavy year, it is those times that the one price service contract is enviable to the customer. Many commercial customers prefer consistent invoices so they can budget accordingly.

    The best thing to do is to mix it up. Have some season contracts and have some per trip, this way your customer has what they want and you won't be on the losing end if the season ends up being heavy.
     
  4. High Performance Lighting

    High Performance Lighting LawnSite Senior Member
    from So Cal
    Posts: 326

    It's important as a business person to understand that you are not in business to save your customer money. You provide a good value and charge accordingly but you have no fiduciary responsibility to make sure that your customer gets product and service at rock bottom prices. Until you get past that misconception you will have a hard time doing well with outdoor lighting. Going to a jobsite kicking a couple of pebbles around because there's nothing to do and then not charging for it is a waste of time. One should never leave a jobsite without leaving a bill unless it's warranty work. There are real costs involved everytime you step foot in your truck and turn the ignition over. Fax or e-mail something to your lawyer as innocent or innocuous as it seems. You will be charged in 15 minute increments for their time just to read what you sent. They haven't left their office and have no travel cost and Most lawyers will get between $350-$450 per hr for their time and expertise. Professional service providers collect money for providing professional service.
     
  5. nobagger

    nobagger LawnSite Gold Member
    from Pa
    Posts: 3,065

    We only do yearly contracts with commercial props. too many what if's with residential accounts, one of the biggest reason you already stated. At least with commercial props. there is always something to clean up or trim back. We do how ever only work with "agreements" for all of our customer's and this is basically for payments, price and a few other stipulations. We do seasonal contracts with plowing though and thats a chance you both take. We started off this season WAY ahead, we didnt start plowing until Jan. and have been idle since the 1st week of Feb. Some how it seems to equal itself out in the end.
     
  6. perfectlawncare

    perfectlawncare LawnSite Member
    Posts: 120

    High Performance (It's important as a business person to understand that you are not in business to save your customer money. You provide a good value and charge accordingly but you have no fiduciary responsibility to make sure that your customer gets product and service at rock bottom prices. Until you get past that misconception you will have a hard time doing well with outdoor lighting. Going to a jobsite kicking a couple of pebbles around because there's nothing to do and then not charging for it is a waste of time. One should never leave a jobsite without leaving a bill unless it's warranty work. There are real costs involved everytime you step foot in your truck and turn the ignition over. Fax or e-mail something to your lawyer as innocent or innocuous as it seems. You will be charged in 15 minute increments for their time just to read what you sent. They haven't left their office and have no travel cost and Most lawyers will get between $350-$450 per hr for their time and expertise. Professional service providers collect money for providing professional service.)


    I understand what you are saying but I run a lawn care company that does over $1 million a year in business and my customers seem to like the honesty that we give them and how we treat them the way we would like to be treated. Services is the name of the game and if you nickle and dime your customers to death they will find someone else. Lawyers don't have a great name for that reason alone. Plus they only see you once in a while and I see my customers very often so I want to keep a great relationship with them. If we get a service call we will charge for that and try to take care of everything on one trip. My business grows 30% a year by word of mouth so I think we might be doing something right. But if that system works for you than thats great.
     
  7. High Performance Lighting

    High Performance Lighting LawnSite Senior Member
    from So Cal
    Posts: 326

    This is a landscape lighting thread and not a lawn maintenance one. If it were than perhaps my advice would be different. The dynamics are quite a bit different when you are visiting clients on a weekly basis. For landscape lighting clients only you may only be seeing a clients property 2 or 3 timer per yr.
    If you think leaving a bill after warranty period has expired is nickel and diming then I disagree.
     
  8. bumper

    bumper LawnSite Member
    from So. Cal
    Posts: 187

    Would also agree, after an install and the warrantly period expires, easy as pie to find things that need attention in low voltage lighting not because its an easy charge but because as already stated, it protects your interests as well as the clients investment.
     
  9. KEVINTLC

    KEVINTLC LawnSite Member
    from MD
    Posts: 1

    You might want to think about it (for those that do it) like an irrigation service contract. I am in Maryland so we offer three services a year: start-up, mid-season and winterization and typically like to do the lighting service at the same time and doing two services at the same time can be profitable. We offer three stops a year and bulb replacement as necessary within those three stops/yr, adjusting fixtures and 10% off parts and labor for anything above and beyond bulb replacement and we charge accordingly so that the three stops are profitable for us. I have no problem selling service contracts for lighting and if you show the value you shouldn't either.
     
  10. NightScenes

    NightScenes LawnSite Silver Member
    Posts: 2,209

    My maintenance. agreement covers 2 scheduled visits per year and covers anything that goes wrong during the year, if it's something in our control ( burned out lamp, connection issue and so on). If it's a cut wire, varmint issues or something else beyond our control , it's a service call. These are paid in full up front so it's money in the bank. These contracts look very good when it comes time to sell the business as well.
     

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