raising prices

Discussion in 'Lawn Mowing' started by B&B LAWN, Aug 13, 2003.

  1. B&B LAWN

    B&B LAWN LawnSite Senior Member
    Messages: 267

    need some help? ive got a few accounts that i want to raise the price on next year. do any of you have a sample letter that you might send to a customer? do you just call them?how do guys handle this situation
  2. SLS

    SLS LawnSite Bronze Member
    from Mars
    Messages: 1,540

    I increased the rates on some of my clients at the begining of the season.

    I did it when I personally called them on the telephone, thanking them for their business the previous year, and to confirm whether they wanted me to service their lawns this season or not.

    This will be the 4th season that I've had these particular accounts...so a raise was due.

    Fortunately, I did not lose a single client. WHEW! :D

    Good luck, B&B.
  3. tiedeman

    tiedeman LawnSite Fanatic
    from earth
    Messages: 8,745

    I would send out a letter and explain to them that due to the increase in insurance prices your rate will have to be raised....

    I tend to like letters more when breaking the bad news. But of course have on the letter, "Please contact me if you have any questions or comments."
  4. PeterA

    PeterA Sponsor
    Messages: 543

    B&B, you might want to do a small test to see what kind of cancellation rate you are going to get when you raise your prices. Pick a few clients you would not mind losing, and send them a price increase letter. If nobody cancels, you are probably safe in going for a more general increase of about the same percentage.
    once you decide you are going to go through with a price increase, you can minimize your odds of cancellations by doing them during peak season. Your customers may make an attempt to get another bid, and the guy may not even show up if it is high season. Even if he does, the bid will be higher than when people are hungry for work. In our area, April and May are just crazy.
    In regard to the method, I would definitely send a letter. Make it as nice as possible, but make it clear the price increase is going to start at some specific date in the near future (we usually gave people a few weeks). Often people will do the easiest thing, which in this case is nothing. If you call them on the phone, they may reflexively cancel. Good luck.
  5. Gr grass n Hi tides

    Gr grass n Hi tides LawnSite Bronze Member
    Messages: 1,020

    I have a couple "mistake" properties this year that I need to increase the rate on. I'm going the letter and telephone call route. There are some pretty good form letters (I bought them) available at the LS store so you can compare with what you've got on paper or in your mind.
  6. Jason Pallas

    Jason Pallas LawnSite Bronze Member
    Messages: 1,332

    Our approach to raising prices is pretty simple - we don't draw attention to the price increase. Downplay it as much as possible. We simply say in our spring introduction letter ..... Your price for weekly lawn service this year is ........ If you feel like you need to explain any price increases I'd just say - "in order to stay competitive and because of several increases in our cost of doing business (fuel, insurance, etc...) we have adjusted our service prices to more accurately reflect the market dynamics and better enable us to continue to provide you with the quality service that you've come to expect from us." or something to that effect. Hope that helps - good luck!
  7. GarPA

    GarPA LawnSite Silver Member
    from PA
    Messages: 2,585

    Some good advice the guys gave you above....as Jason said, I dont make a big deal out of a small increase in their annual contract(agreement)..please...lets not start the debate again on if a contract is a good or bad thing)

    We do mostly commercial but for residential, a number of them went from 40 to 42 this spring....and we got no calls or cancellations. For larger commercial, I sit down with the decision maker and go over his renewal and get him to sign it right there on the spot. In 2 years we have not lost a single customer because of 5% increases.

    My cost of doing business goes up every year as do my personal expenses therefore increases are appropriate assumung the account is not overpriced to begin with.

    Not raising prices is the reason many say here that our fees have not changed much in 10 years or more...no wonder if we're afraid to raise them . Nearly every home and business expense rises every year...not to mention insurance, fuel, etc.

    Will some customers drop you for $2 ?? Yep. Do I care?...nope. I'll just fill their spot with someone new.
  8. GLAN

    GLAN Banned
    Messages: 1,647

    We used to send letters informing of increases. Nothing but a hassle.

    I look at it this way........

    Does the gas station prenotify that gas is going up?
    Does the supermarket tell you in advance that milk is going up 20 cents a gal.? and so on................

    Our increases are small. Some are only for certain services though this year it was an across the board increase. No problems......
  9. B&B LAWN

    B&B LAWN LawnSite Senior Member
    Messages: 267

    thanks for all the helpful info. guys. my main concern was one residential that i have that i underbid last year. i bid $35 and i was wanting to raise to about $45. is that to much of an increase?

    DUSTYCEDAR LawnSite Fanatic
    from PA
    Messages: 5,134

    the people that understand what u do and appreciate you're work never have a problem with price increases but the cheap people that think all u do is mow grass and any body can do are the first to complain pay up or move on

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