Easiest way to raise rates

Discussion in 'Lawn Mowing' started by olderthandirt, Sep 24, 2005.

  1. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

    The easiest way to raise rates with out much if any backlash from your customers is to raise them the same as the governments cola raise for SS benefits. Do it around the 1st of the yr and just tie the price increase in with the cola raise the government figures. And send the letter with that reason and maybe a small article about how much it will be. I think its around 2.9 % this yr. Most people won't argue with the logic as they know that cost have gone up. And seniors would have just received there raise at that time so in essence your price would stay the same. But at least your not losing more money by not raising prices.
  2. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    That's a fine idea except for the fact that the CPI-W (SS bennies are based on this) doesn't rise as fast as the Rate Of Inflation. Also the CPI-W and the ROI are based on national averages and are not indicative of local forces such as sky rocketing housing costs as reported by OFHEO.

    For example if you compare where I live (the Washington DC metro area) to Dayton OH you would see that a cutter in Dayton only needs to make $34,080 to maintain the same buying power as a cutter from my area who is making $40,000.

    Using the SS COLA is fine as long as you live just below the ROI in Averagetown, USA but bear in mind that the SS COLA is not intended to keep up with the ROI, it is intended to keep beneficiaries quiet and you will loose buying power over time if you tie your increases to it.

  3. rodfather

    rodfather LawnSite Fanatic
    Messages: 9,501

    Good points from 2 of our respected members here.

    I myself also like to use the winter months to review my prices by each client individually. I have never just thrown out a X% increase across the board to everyone based on inflation, cost of living, etc. The important thing is though to review not only where your income is coming from and how much, but how much you are spending in expenses as well.

    It isn't so much how much you make...but how much you get to keep IMO.
  4. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

    I agree completely with what your saying, but there are to many cutters worried about loosing customers if they raise there prices up. I found that this was a very simple way to raise them and if anyone ever asked I could explain it fast and simple with the explanation I gave.

    Also using the SS cola or any cola does not give you a raise its only allowing you to gross the same as the previous yr.
  5. nelbuts

    nelbuts LawnSite Bronze Member
    from SW, FL
    Messages: 1,053

    I just sent out a note this month. Told them what the price would be and left it at that. Seems pretty easy to me.
  6. daveintoledo

    daveintoledo LawnSite Silver Member
    Messages: 2,587

    you guys are something, else, i really love it.... :)

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