raising prices
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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!
Good luck, B&B.
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!
Good luck, B&B.
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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."
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."
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.
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.
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2,894 Posts
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.
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1,346 Posts
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!
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.
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.
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......
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......
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5,778 Posts
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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9,695 Posts
I don't agree.
Yes, the gas station notifies me when the price increases because they hang a sign outside of their establishment. I have the choice to purchase my gas there, or, I don't like the price, I can move on down the road.
Same with the milk. No, they don't notify me thru the mail, but the price tag is listed in cooler so I can see it when I pick up the milk.
So with your service, if you don't notify your clients by mail, by phone, or before you perform the service, how is this the same as buying gas and milk?
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9,695 Posts
Forgot to add,
We notify by mail before the season starts when we send out our newsletter.
Your 2003 price has stayed the same, or, your 2003 price has increased to ......
I like to let the customers know if their price stayed the same. This way, the idea is put into their head that prices and costs are considered each and every year.
We notify by mail before the season starts when we send out our newsletter.
Your 2003 price has stayed the same, or, your 2003 price has increased to ......
I like to let the customers know if their price stayed the same. This way, the idea is put into their head that prices and costs are considered each and every year.
I understand what your saying Jodi
I have not lost one customer in the last 10 years doing the way I do it. If they call and ask I explain that way. And I ask them to go over the previous years invoices if they have them. If they don't I offer to send them copies.
I have gone as far as providing records for 5 previous seasons showing them. None can find fault with what I do.
When I used to send notice of an increase I did lose customers.
I have not lost one customer in the last 10 years doing the way I do it. If they call and ask I explain that way. And I ask them to go over the previous years invoices if they have them. If they don't I offer to send them copies.
I have gone as far as providing records for 5 previous seasons showing them. None can find fault with what I do.
When I used to send notice of an increase I did lose customers.
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2,894 Posts
Agree. That is professional and considerate.
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