How would you handle this?

[tiedeman]

I have had this one lady as a customer for the last 6 years. *She is a great customer, and is right next door to two other commercial account customers. *She has me do lawn maintenance, spring and fall clean up, and once in a while some other odd work such as fertilization.

Well, the last two years she has kind of got on my nerves. *She has been very tight with money. *It all kind of started last fall. *She wanted me to do clean ups for her as usual. *But when she received her bill, which had the first clean up on it, she complained that it was too much. *I always charge people a minimum of $72 for fall clean up, at $72 per hour. *Sometimes yes I will give someone a break if it only takes me like 15 to 20 mins. *

Well, she claimed that she had most of the leaves picked up and it shouldn't be that much. *In a nutshell I told her sorry this is going to be the price. *She wasn't happy about it, and tried to bargain with me on the price for just one final one at the end of the year, instead of two more (most customers I do between 3 to 4 clean ups during the fall months). *So we agreed at $100 for the last one, which would save her $44. *So I did it no big deal.

Ok, now fast forward to this year. *So far I have done three clean ups on her property, and she only really probably needs one more before the end of the month. *So I knew her situation from last year so I thought that I would give her a break. *The first clean up I only charged her $18, second on $36, and third one $36. *It didnt really bother me that much because I was charging her for mowing the lawn ( I charge all customers for mowing with their clean ups until the first week of November) at the same time, and I was doing the two commercial accounts next beside her that day too.

So her bill was sent out. *What happens, I get a phone call tonight complaining about the bill. *She again said that I was charging too much, and she already had most of the leaves picked up. *

So I told her, "sorry, but I am not moving on the price this year. *Normally I charge $72, and I am giving you already a 50% to 75% discount because I know last year you were not happy with the prices."

She said, "Well, I can't afford to have anymore done the rest of the year, so just cancel the rest for me."

I said, "Not a problem, have a good night."

You could hear a pin drop. *She honestly thought that I was going to drop my prices again, but this year I held my guns.

What would you guys have done in this situation?

[Steve]

That's a very interesting situation. She seemed to get used to the price break when she complained. I would go along with what you did. How much more should you have to drop your price to please her?

The only thing I was wondering is, does she know in advance the billing policy? Does she then agree to it only to complain later?

[tiedeman]

This is the situation. When they sign the contract, the only price that is stated is the lawn maintenance. It clearly states right below the lawn maintenance price in big 14pt font bold, "Prices for additional services such as clean ups, fertilization, and landscaping maintenance will be granted apon request". But flat monthly rate customers, the clean ups and any additional services that they want are already figured into the flat monthly rate.

The main reason that I do this is because the customers main concern is just the lawn maintenance price. They really don't care about the clean ups. During the fall or spring clean up time, I am lucky to have 1% of the customer base complain about the price. Most are happy with it. Heck, I have a 95% return rate of renewing customers so they must be fine with it.

Since I have been in business, I have never had my renewal rate drop below 95%.

[Steve]

I am sorry about this situation but maybe we can file this in the 'you can't make everyone happy' file folder.

It's just not possible to make everyone happy.

[tiedeman]

Of all the years in business, this year I have given the most discounts to customers, but in turn, I have been very hard cracking down on late payers as well this year.

[Steve]

How much money do you think the average lco is owed from overdue bills at the end of the year?

[tiedeman]

I know of one local lco here about 3 years ago he was due around $25,000. He grossed around $250,000 for the year.

To me, that is a big chunk of money.

[tiedeman]

The most that I have ever had remaining at the end of the season was $40...but I did eventually get paid in February from that

[Steve]

I think this is one of the things that puts businesses under. When people owe you money, you become a bank lending money to your customers.

A little while back I was talking to an lco who had decided to open a retail mower shop. He was only open for a short time. The reason was that he let so many customers take their equipment back without paying on the spot. The customers would tell him, they would pay when they got paid, or whatever.

Ultimately he didn't have enough cash flow and was forced to close. It's too bad.

[tiedeman]

I am usually pretty good on taking of customers that I know will pay. Just like the one lady that owes my $168, I had a bad feeling about her at the time. But I thought that she would be perfect because she was only about 1/2 mile from another one of my customers. Little did I know though

[Steve]

Would you ever like to run a mower shop?

[tiedeman]

Probably not. Too many headaches I feel

[myrlin]

Did you ever think of adding clean up to your contract, then they can pay a little in their monthly mowing contract. That way they won't be hit with a big bill in the Spring or Fall. You don't have to cut your prices when they complain.

Barry

[tiedeman]

Customers have options of either doing the flat monthly rate or pay as you go service. She didn't want to do the monthly rate thing

[myrlin]

her lost

[tiedeman]

I totally agree.

I try to explain to some particular customers that are always on a tight budget that it is better doing the flat monthly rate thing, but usually they don't want to have to pay for services during the winter months due to their heating costs.

[myrlin]

well i can see that. but you can work for nothing man.

barry