Is it out of order to raise a new customers Price???????

Discussion in 'Lawn Mowing' started by Jpocket, Jun 19, 2006.

  1. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,281

    I have come to the conclusion that in order for my business to grow and prosper, I need to raise 90% of my customers rates. If I continue with the current rates my company is not gonna make it in the long run. In order to continue to do everything in the right way WC, taxes, ins. etc. I have got to get $3-$5 more per cut and thats only a step in the right direction. Im charging currently what everyones else is $27-30 in average nehborhoods 1/4 acre I guess. It seems that even the "big dogs" are charging those rates. My salary has taken a major cut this year due to my employees, and more fuel etc.

    I plannning on raising about 90 of my 100 accounts $3-$5 per cut. Is it okay to raise a newly acquired customers rate? I have to do it anyways im just wondering how you guys feel.
  2. lawnmaniac883

    lawnmaniac883 LawnSite Silver Member
    Messages: 2,613

    Do it all the time. Just make sure they arent friends with your current customers or a neighbor of your current customer. Wouldnt want to be caught in the act incase they talk and compare their rates then call and b!tch up a storm for no reason. Infact, on properties that you dont really need overprice it ridiculously and see what happens. As for raising 90% thats gonna be a toughie but just explain to your customers what is going on, etc. Either they will understand or be a PITA and get dropped.
  3. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,281

    If I lose 20 accts. it won't be a big deal....I will just have 1 employee instead of 2. I will net more with 85 accts, than with 100 anyway. Right now I need to get my business on the right track, or "save it" so to speak. The low priced 'volume' bit is catching up to me real quick. We are running the equioment into the dirt, and if we keep going ther won't be a dime to replace and motor or buy a new one. Also I don't enjoy working 70 hrs a week to net $15,000 less than what I make last year solo. I would be OKAY with that If I knew I was going in the right direction.
  4. Sandgropher

    Sandgropher LawnSite Senior Member
    Messages: 903

    Raise them in 3rd s worsts ones first, see how that goes get a feel of the response it that goes ok try the next batch and so forth, if you get largely neg feed back to start with you may have to consider $3- increase instead of $5- , by 3rds i mean divide then up in batches worst 30% and so forth, if you raise them all at the same time you won't get that vital feed back and may lose a lot, oh and get a good letter head (price increase to customers)and explain in detail why you have to increase your price good luck :usflag:
  5. HenryB

    HenryB LawnSite Bronze Member
    Messages: 1,844

    I raised mine by as much as 35% two years ago lost 8% and life got a lot better fast. Raise them, you can and you should. The ones you loose are not worth your time, just write an honest letter stating you are not going to make it at the current rates.
    Good luck and be strong.
  6. hillndale

    hillndale LawnSite Member
    from Maine
    Messages: 214

    Ideally, you should have sent out a rate increase letter at the beginning of this season. Fuel costs are an easy and ligitimate reason and just general costs increase for everything generally. Rate increases should be applied to all NEW customers at time of service agreement, not after you have gotten them. Good luck :clapping:

  7. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Messages: 4,899

    Just read what you posted and you have your answer :waving:
  8. Jpocket

    Jpocket LawnSite Silver Member
    Messages: 2,281

    Yea thats what im thinkin, I figure the sooner I do it the better off I will be. I was gonna o it next year, but I NEED some $$$$$ to fund The snow Plowing season...Plan on buyhing some new snow equip.
  9. Quail Creek LC

    Quail Creek LC LawnSite Member
    from IOWA
    Messages: 155

    I just dont understand how you are making less than what you were last year being solo. If thats the case, go back to being solo and make more $$$$.
  10. Splicer

    Splicer LawnSite Senior Member
    Messages: 992

    You answered yourself...Why do you not just drop 15 accounts and be done with it???

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