Customer wants lower price cuz fert prices went down

Discussion in 'Pesticide & Herbicide Application' started by americanlawn, Jan 18, 2009.

  1. americanlawn

    americanlawn LawnSite Fanatic
    from midwest
    Messages: 5,954

    We're getting our renewal letters in now for the 2009 season. One customer said "fert prices decreased during the past 90 days", so now expects us to lower his price. What do you think?

    rscvp, thanks
  2. punt66

    punt66 LawnSite Fanatic
    Messages: 8,536

    I think they are not stable. How much was the increase?
  3. mrkosar

    mrkosar LawnSite Senior Member
    from Ohio
    Messages: 680

    did you increase prices last year relative to fert prices? explain that the cost of doing business has went up and material costs are only a portion of the price they are getting. you are also factoring in inflation and possible volatile fert prices later in 2009.

    on the other hand it sounds like a customer who is well educated which is always a plus in my opinion. maybe a little picky, but work with them and keep all customers you can in this economy.
  4. phasthound

    phasthound LawnSite Fanatic
    Messages: 5,121

    Explain to your client that your cost for fert & fuel skyrocketed last year and you did not pass those increases on to him.
  5. ted putnam

    ted putnam LawnSite Platinum Member
    Messages: 4,709

    Explain to your customer that they don't pay for fert, they pay for SERVICE. If fert is so cheap and that's all they think they get, they can train a monkey to push a spreader... Surely you've had this come up before...
  6. SpreadNSpray

    SpreadNSpray LawnSite Senior Member
    from MN
    Messages: 363

    I don't give my customers that type of info. If they get a price increase it's a simple note that has their new price for the following year. I don't get into why. The list would be too long.
    Good thing your customer doesn't know about your increased production from your ride on. They would really expect a break in the price.
  7. whoopassonthebluegrass

    whoopassonthebluegrass LawnSite Platinum Member
    Messages: 4,305

    Screw the cheapskates, Larry. Tell them that because you value 'em as a customer, you'll knock a dollar off the season total.
  8. JDUtah

    JDUtah LawnSite Silver Member
    from UT
    Messages: 2,636

    Dear customer,

    I hope our history has proven that American Lawns cares about you, your lawn, and your economic welfare. An example of this took place last year. The world urea fertilizer markets tripled in price. We worked to obtain product at a reasonable price so you did not have to see a similar increase. We cut into normal margins to do so. Fertilizer prices may have dropped within the last three months but not to the point they were at before they skyrocketed.

    Please understand that we are still concerned about you and your economic position, especially in an economy like this. Maintaining your current price by cutting into our margins is just one example. We appreciate your business and hope to continue serving you. Our goal is to always provide you with value and professionalism.

    Larry (owner)
    American Lawn

    Just an idea...
    Last edited: Jan 18, 2009
  9. Ric

    Ric LawnSite Fanatic
    Messages: 11,969


    I am not so sure some companies don't use trained Monkeys or are trained monkeys. But my customer pay me what I know, more than for what I do. I sell Fine Yards not Fertilizer. I will admit when Diesel went to almost $ 5.00 a gallon some customer either tipped me or ask when was I going to raise prices. I told them then that while I knew they would except a price increase not all of their neighbors would. I couldn't charge a different price for the same service. So I ate the margin and kept my quality and reputation. What goes around comes around and those companies that slacked off on products are now losing customers while I am picking them up. BTW Now that diesel is $ 2.25 a gallon those customers are no longer tipping me that extra $ 10 or 20 that they once did. While I didn't turn the tips down I sure didn't ask for the Tips either. I have no problems with them no longer Tipping me.

    Spread N Spray

    When ask by my customers, I told them the fact of life and world economy. Part of China and India living better is they are eating better. Fertilizer is a global product produced all over the world and subject to world economic prices. While both Gas and Fertilizer prices has come down, don't look for them to stay down. Gas in my area is back up from $ 1.55 to $ 1.85 and I don't think it will stop there.


    When a Customer tries to beat up on my price, I tell them This must be a bad time to tell them I am raising prices. I go on the offensive not defensive. Sure I might lose them, but they are worth keeping if they are being a PITA about prices.
  10. whoopassonthebluegrass

    whoopassonthebluegrass LawnSite Platinum Member
    Messages: 4,305

    Glad we still see eye to eye on SOMETHING. :laugh: I have no tolerance for bargain hunters.

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