Monthly Package Pricing for Landscape Maintenance Clients

Discussion in 'General Industry Discussions' started by Sean Adams, Jan 14, 2013.

  1. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    I include a matrix show a time when items are going to be done. They know it is average billing.
    I also say we do not mow in the rain and services are provided based on growing and weather patterns not a calendar.

    The best way to make this successful is do as much as you can in the otherwise slow periods.

    Take off a month from December 20th to Jan 20th. Show up at these accounts there is almost always something to do. If their home does not have beds to be weeded or flowers to be dead headed then they are not a candidate for these services. I do not believe flat monthly accounts are suitable for just mow accounts.
  2. ed2hess

    ed2hess LawnSite Fanatic
    Messages: 14,592

    So why do you think commerical accepts monthly payments year round and your residential don't? Do they think they will be cheated?
  3. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    Good point! One I just made to a new residential client and they signed.
    A good contract is good for both party's
  4. cpllawncare

    cpllawncare LawnSite Silver Member
    Messages: 2,659

    That's a good idea, full service accounts only eligible for year round service.
  5. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    In my experience you always get some mission creep and clients expect more and more so you need to be prepared for it. IE, if you trim the hedges, clean the beds and treat the lawn then you will be expected to fertilize the beds and be responsible for any disease issues. You can say, we only treat insects as needed but you better be watching and advising.

    This is only right, they hired you as the expert. You need to either do the work on contract or tell them something additional is needed. This moves you out of the yard guy status to the landscape maintenance guy.

    I tried a 9 month program and each year the HO would say, you charged me for the whole month and all you did was mow and treat once. I do not think this was a whole month. Then they complain about when the service is supposed to stop. You can break out the agreement and prove them wrong but that does not develop a healthy relationship.

    Done with that.
    So now it will be a 12 month or nothing and I am good with nothing too. Most of my Residential clients are good people without contracts. They pay me and have been loyal for years.
  6. nozzy

    nozzy LawnSite Member
    Messages: 67

    I've offered two payment options for years. I have the normal, pay only for the services you received during the previous month, and I have a pro-rated plan based on the total work I expect to do in the year (28 mows, 6 fertilizes, aeration, etc.). I divide the total by 12 to give them the same monthly payments each month. I tell them right off the bat that if I don't mow 28 times they will receive a credit on their 12th month. As far as invoicing - the top line of services on the bill reads "Prorated monthly service" with the amount. Then below that I have the date and service for everything we did during that month with a $0.00 for the amount. That way customers can see what work was done that was included in their prorated monthly account. It is easy for them to go back and add things up to confirm in their heads they are getting what they are paying for. On my original contract I stat that the plan will automatically renew each year and they can cancel at any time which will result in a final bill OR credit based on the actual amount of work that has been performed during the contract and the exact amount of payments received. I added this after being burned once by a customer that signed up in the spring and then decided to cancel in the winter. Now I would just send him a final large bill with a copy of his contract highlighting the reason for the final bill. I have also found that offering to let them cancel any time takes away some of the reservations people have for agreeing to the prorated system. Lastly, I have been very successful in signing up new customers in the winter offering a free month of service. If a person signs up in the spring you weren't getting anything from them all winter anyway. If they sign up in the winter, you aren't actually starting the work yet so giving them a free month actually doesn't cost you anything. Their annual contract will be fulfilled a few months sooner but almost everyone just renews anyway. Having said all of this, my system is always evolving a bit. I'd be curious what others think...
  7. I am going to start implementing new pricing structures as I've been unsuccessful recently landing new bids. The problem I see down here is people have these very detailed landscapes, and what I do is give a monthly price to take care of the entire gamut regarding maintenance stuff. I have found that people love the idea, but when they get the proposal they have a seisure. I either don't hear back or get the whole it's too much. So what I'm going to do is offer 3 plans. All will be full maintenance so no mow blow and go. One plan will be a monthly rate to do everything but no detail work such as deadheading, pulling dead leaves off of tropicals, etc. the second plan will be to do everything the first plan does and the detail work. The third plan will be a flat monthly fee for lawn and formal hedges and then an hourly rate for detail work where the client can tell us how many hours to put in each month. I feel it gives the client more control and options and I can get more clients this way. I think the hourly plan is going to work well on larger estates or garden type landscapes where there is a lot to do so the client can see how much work goes in because that is where I think the problem lies. A lot of people just don't see how much time is invested in landscape heavy properties and the cheaper companies just neglect a lot of the work so they can give a lower bid.
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  8. ToddH

    ToddH LawnSite Silver Member
    Messages: 2,192

    One thing I do is send an estimate from QB's with a line item for each service.

    Line One is MOW BLOW and Go 36 times a year @ $$
    Line two is clean beds 4 times a year @$$
    so on and so forth covering all the items we discussed.

    I send the estimate for their review with a note that these are my recommendations for their review. Any and all can be bundled into a monthly agreement or as an add on. I also tell them we can increase of decrease the frequency based on their needs.

    I will often get an e-mail back looking kind of like this. This is a real response edit to protect the Innocent.

    1. On the invoice you stated that the lawn should be top dressed, aerated and treated with pre-emergent on the same day. So, that cost would be XXX, plus XXX.00, correct? I would want to pay for that part in one lump sum. I know we need to do this pretty soon. My front and backyard have a lot of weeds. Especially the back.

    2. The aeration would be done in both front and back, correct?

    3. Please reduce TRIM Shrubs to 2 times per year

    4. Also, reduce seasonal color change to 1 time per year (summer flowers)

    5. At time of summer flower plantings, will the new mulch also be put out at that time?

    6. Reduce Clean beds and General grooming to 4 times per year

    This comes to $$$ per month correct?

    I then change the estimate and resent with a note. If they agree then I draft up the agreement.
  9. spitfire3416

    spitfire3416 LawnSite Senior Member
    Messages: 554

    I'm not sure if someone explained this already but I'm going to ask it anyway. What happens when you mulch someones bed in April and you charge them $500? If that customer is on, let's say, a 10 month payment plan then that's only $50 extra a month your collecting for that particular job. If the mulch cost you $200 and the labor cost you a $100, it's going to take 6 months just to pay of materials and labor. You wouldn't even START seeing any profit until the final 4 months of the season.

    Now I know what somebody is going to say.. "well, it all evens out in the summer when you're servicing the lawn less." But I don't really see how that's true. There's roughly 8 weeks between July and August, right? Well, if you were coming every other week in those months, you're only talking 4 cuts less. I don't see how servicing a homeowners lawn 4 times less would make up for the $300 you had to dish out for a job you won't even see any profit on for 6 months.

    sorry ELS.. didn't mean to quote you on that..
  10. terrabites

    terrabites LawnSite Member
    Messages: 44

    Lets change the start date to you don't incur that $500 expense. Now does it make any more sense? My point is that you get the consistent payments and within some months you get money in than you put out. Depending on when you "start" the contract, you may be on the "short end" of that, but other times you will be on the good end of across your portfolio, you come out at least even.

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