New Idea on Landing Maintenance Accounts

Ok, I've always been innovative. I try to think outside the bun. Things that are a little unconventional like encorporating AutoPay and NOT doing contracts, have just seemed to work very well for us. Not that any of the stuff I do are my own unique ideas. It's just that I don't always follow the crowd. And in that line of thinking.....

I was thinking about how big companies market these days. And how I might encorporate their ideas into my own business. For instance, did you know that Hewlett-Packard on $100-$200 for every printer they sell? "Why would they make printers, then?", you ask. Good question. It's a marketing ploy. They lose money on the printers knowing that they will make it back many times over on their overpriced printer cartridges!

Same with Microsoft MSN internet service. Ever see those deals at computer stores where you get an instant $400 rebate on any electronics device just for signing up for MSN? Why would they do that? Because they make bind you into using their overpriced service for 2 years - and make their money back that way.

Now ask yourself this question: Why do people fall for this kind of stuff??? Are they stupid? Ignorant? Or is there another reason? I'd say some of them are stupid or ignorant, sure. They just see a deal and hop on it without considering the ramifications of what they're committing to. But I'd venture to say that more people know JUST what they are getting themselves into and don't really mind! They'd rather pay a little bit more month-by-month than they would pay all of it up front. They'd rather save money now and pay a little more along the way than to pay it all now.

So some people just LIKE that idea - of buying now and paying later. Fine. That's the kind of society we live in. And it's obviously making some people very wealthy by capitalizing on it. So how can I encorporate that idea?

Well, what if when I installed a new landscape or irrigation system, I offered the client a super deal! That is, they could get their $3500 irrigation system for only $2500 if they'd sign up for my [albiet overpriced] landscape maintenance package at $195 per month, for the next 2 years. Maybe I'd normally only charge $125 for maintenance there. So $195 is overpriced, but I am now making $75 per month, for at least 2 years and possibly much longer! So I am knocking off $1000 from their install, but making at least $1680 off of maintenance (over 2 years).

AND - here's the kicker - I am picking up a new maintenance account too!

Now, I'd probably only do this with a firm 2 year contract and make it AutoPay only. And if they sold their home or whatever, then the remaining balance would be due immediately (which is just how MSN does it if you cancel before the 2 years).

And the great thing is it's only an option. People don't HAVE to do it. They are still free to pay the $3500 on their install. But for those who chose to take the $1000 off deal (which is a lot of money and BIG incentive!), then I stand to profit even more!

One more potential benefit I just thought of - this option now makes you potentially the lowest bidder on the install job. Say the client gets 3 estimates. One for $3,200, one for $3,900 and you'rs for $3,500. BUT with the $1000 off option - yours is now the cheapest bid! Maybe this would result in landing more install bids.

I dunno. Just something I've been thinking of. I don't really see a downside to just making this optional offer. What do y'all think?

 

... but then you pointed out that you would now be the lowest bid on the install job.

Not being able to come up with that kind of stuff is why I am pushing 40 and still have no idea what I want to be when I grow up.

 

Yah! Except again, it's a marketing ploy. At a total cost of $4150 ($2500 plus the extra $70 per month you make for the next 2 years) - I'd actually be the HIGHEST bid. But in terms of what they'd pay TODAY - I am the lowest bid. It works out great for everyone!

 

i think you'd have limited success with such a plan. there are some that would go for the lower out of pocket (up front). but there are others that can get the loan to pay the cost out of a home equity loan or similar. $1680 difference is quite substantial and i think a few would see it if they did some simple calc's.

try it out on a few accounts if you can, let us know, i'd be interested in the results, and i'll eat my words

 

Yah, that's kind of what I'd expect too. But then again $195 isn't all that much more than many companies charge around here for maintenance anyway. So the client has no way of knowing I'd really have done the maintenance for $125. For all they know, I am just one of the expensive guys in town like the others who charge around $195 per month.

Who knows what will happen? I don't expect everyone to go for it. But for those who did - wow! What a deal!

 

Jim,

Sounds like a good idea to me. Anytime you can get a client to sign up for more services = more money. Money is the whole idea.

I imagine lots of people will still say "Oh, my husband does the lawn" or "we have a lawn service already".

I think a $1000.00 off a sprinkler job will get lots of peoples attention.

Is it really fair to charge them for the full contract if they move though?

I read and agree with your posts, and checked out your website. Looks great.

Go for it. What have you got to lose?

 

I think it's a great idea. I will have to try that. Keep us informed.

 

Jim, how does your auto pay work? Sounds good.

 

the only downside I see, is if the client defaults on the two year contract. I know here in NY we can not have actual binding contracts in lawncare, just service agreements. If I was out to make a buck dis-honestly, I'd take the irragtion system at reduced price and after it was completed, cancel the two year contract. Know most small companies can not afford collection agencies or lawyer fees to enforce .

Just always look at the flip side - only because I've been burned way too many times.

I do want to hear more about the auto-pay though. That sounds like many less phone calls at month end after bills have been out there for two or three weeks.

John

 

I think its a great idea. The problem I have is I get my landscape jobs from my maintenance accounts. This should change over time. Keep us posted on how it works!