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tiedeman
05-19-2006, 09:54 PM
Why is it that whenever my gut tells me that I am going to have problems with new customers, that it always happens like 99.9% of the thing?

Perfect example. Picked up a new customer about a month ago. Did some overseeding in their lawn and a weed/feed application. Came out to around $170. I still have not received payment from them yet and it was due on the 15th. When I met them I just had this feeling that they would try to stiff me or be late payers. I sent out a past due notice tomorrow, and if I don't get payment by next Wednesday, they are done.

Steve
05-19-2006, 10:05 PM
What kind of signs made you worried about this customer?

tiedeman
05-19-2006, 10:13 PM
Little things:
1. *The appearence of the inside of the house (whether there are dirty dishes, clothes scattered about, dust on bookshelves and stands, etc.
2. *The appearance of the outside of the house (whether it has been mowed rently, how much pet damage is done outside)
3. *Toys. *Now from my opinion, the more toys someone has, the harder it will be to get payment from them. *I mean like snowmobiles, four wheelers, etc.

Steve
05-19-2006, 10:22 PM
Very interesting.

So maybe the more toys they have, the less money they have to pay for services?

tiedeman
05-19-2006, 10:54 PM
I think so. I think that they are so far in debt that they have problems paying bills. Now not everybody is like this though. Some people have lots of toys, lots of money, and makes the payments on time, but from just "my" experience, it's the other way around

Steve
05-19-2006, 11:42 PM
I am sorry about this happening.

How will you handle it if the customer doesn't follow through with payment?

tiedeman
05-20-2006, 02:10 AM
I will usually send them one past due notice, and give them 30 days. If I haven't received anything in the mail, then I send another past due notice with a letter stating that I will turn it over to a collections agency and/or small claims court

Steve
05-21-2006, 07:46 PM
Let us know how this turns out.

I am sure others reading this can learn from it.

tiedeman
05-22-2006, 06:23 PM
Anymore this is a reason that I want people to place a credit card on file

Steve
05-22-2006, 06:25 PM
That is not a bad idea at all. In fact what if you instituted a policy where if a job was over $X then a customer had to give a credit card number?

Howard Roark
05-27-2006, 10:05 PM
I'm fully with you on the "gut feeling" thing. Everytime I feel a red flag one always seems to come up. Last year I wasn't as good at it, but this year I'm turning them away if I feel things aren't right.

Good luck!

Steve
05-30-2006, 02:01 PM
Hi Howard,

If you sense there is something wrong with a potential client, how do you go about turning them away without upsetting them? Or turning it into a problem?

tiedeman
05-30-2006, 09:14 PM
By the way, update on this story..still have not received payment from them

Howard Roark
05-30-2006, 10:49 PM
Quote[/b] (Team Gopher @ May 30 2006,2:01)]Hi Howard,

If you sense there is something wrong with a potential client, how do you go about turning them away without upsetting them? Or turning it into a problem?
One example of this happened just last week. A gentleman called me and the first words out of his mouth were how "Picky they were about their yard..". This attitude is fine, but doesn't work well with my business plan. The customers I never hear from or never see are my best ones.

Well, I made every attempt to either sign him up for weekly or even bi-weekly service, and he kept replying "We'll determine that after the first mow..". I honestly should have told him it didn't look like we would be the company to service his lawn, but because I had 2 other lawns in his cul-de-sac, I let myself get greedy and go along. Big mistake.

When I arrived, he proceeded to show me every nook and cranny of what they wanted in the yard, and the backyard had more unprotected plants and flowers in the lawn than I could count. Who the heck plants a banana tree in the middle of their yard??

I should have stopped 2 steps ago, but we got to talking about him on weekly service and I upped the rate due to a corner lot and massive trimming duty. Sure enough I clipped a Lilly with the trimmer, and I should have walked then!
I got done with the lawn and he told me he would be right back just as I was going to collect. (not leaving payment first, another red flag for me). Well, I waited 10 minutes and took off. When I got home I immediately sent an invoice with a due date 5 days later, and had I not heard from him I was ready to file a claim.

A check showed up today finally, but had I followed my gut on the phone call I wouldn't have gone through the mess. I'm also done with people paying by check at all. I only have about 5 % doing this, but now everyone I sign up will be on Credit card only.

Steve
05-31-2006, 05:50 PM
Very interesting story.

From the many LCOs I have talked with, you are one of the few I know who has gone to accepting as many credit card only customers as possible. I know it is tough with the % the card company takes, but it's nice to get paid as you go and be sure you will get paid.

Do you find the rates you charge are higher than other lcos in your area? Do you have to charge more to accept credit card payments?

Would you advise other lcos to go with as many credit card paying customers as possible?

Howard Roark
05-31-2006, 09:25 PM
My rates are about the same as most in my area, although I'm sure there are a few higher and a few less. For instance, when I started my business 2 years ago I got a quote from a company for my lawn for $35 mowing only. I thought that was absolutely ridiculous, considering it took me about 25 minutes to trim, edge, mow and blow it myself. This actually is what prompted me to start my business. Today, my helper and I knock out my lawn in about 10 minutes. So I started to think what if I had a few lawns like mine, just in my subdivision. Then what if I had about 30...40...50..? All at about 10-15 minutes each with little drive time. Then what about all the other subdivisions I know of that are close by...and the ones I don't even know of, and the ones that are being built...!
So this is how I started my business. Took one working element and duplicated it.

As for the credit cards, that's a trick I learned from Justmowit and it's a golden one. What one may lose in fees, you make up in so many other ways that it's very much worth it. Last year my only method of payment was a check taped to the door the day of the mow. This worked well as it was instant capital, however there were many snags, such as people calling and signing up for bi-weekly, and going back in two weeks and there's no check. You can have, and I do, a 6 trip minimum, but people who give their credit card upon signing up are usually in it for the long haul, and I don't have to worry about that.
Also our sheer volume makes up for any fees. If we were only doing 6-8 lawns per day that's one thing. But when you sit down and you're charging 24 cards in a row for the previous day, it's not so much an issue. I look at it as one lawn that we do in 9 minutes pretty much takes care of the fees for about 2 1/2 days of charges. Times 2 for the 5 day work week and you're looking at 18 minutes worth of work roughly to pay for your fees, added to the help pay which is another $10. I could easily spend well over 18 minutes printing and stuffing envelopes with invoices, and well over $10 in postage to mail them all out.

Much like most of the details of this type of operation, I firmly believe it depends on the area you are in as to whether *credit card only billing is best for you. I think for most LCO's these days they need to at least offer it, as credit and now debit cards are so widely used. However, in some older parts of the U.S., many people still like the good ole' check by mail and they don't even use bill pay on computers. I guess I'm pretty spoiled here in Tech Central, TX.






As far as other LCO's going with credit card

Steve
06-01-2006, 02:43 PM
Well this is a great case study others reading I hope can learn from and consider!

I do appreciate your insights.