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legendlawn
11-16-2008, 02:27 AM
After my first year in business, it is clear to me that I will need to raise some of my customers prices. Although this was my first year I inherited some of my customers from the previous company I worked for, and have taken care of their properties for several seasons now. These are primarily the customers who are underpriced. The previous business owner low balled alot of his clients and many of them have had the same price for a number of years. However, I am a little sure how to go about raising their prices and am afraid of losing some clientele. Does anybody have advice on this? Also, is there a template on here that address this issue? I briefly browsed through the templates and did not see one. I want to bring this news to the customer in a gentle, non-offensive manner...explaining the economy, rising costs etc etc etc. Please help.

Team Gopher
11-17-2008, 07:23 AM
Very interesting!

How would you say the yard prices compare with others in your are? What percentage are you looking to raise the prices?

I think there is a price increase letter in the free letter section.

Also, are your customers on annual contracts or no?

Let me know how this works out.

mhoward92
11-17-2008, 01:26 PM
Me personally....I would not send a client a letter no matter how many clients you may have. It's like breaking up with your girlfriend over a text message. It's kind of cheap to me. I would personally go around and speak with all of my clients personally and just have a chat with them. My clients like me for being like that. most businesses just send a letter in the mail. I go right up to their front door and talk with them personally. To me that is more respectful as a business owner.

as steve asked..."how much are you thinking on raising the prices" you should figure that out. How you word it is up to you. If you know your customers personally it will obviously be easier to confront them about this. If you don't your main goal is to "complete" things in a polite fashionable manner. (even if they get pissed and you lose them). Keep a professional attitude, apologize and offer them a business card and a free service so they have time to find another company to suite their needs. you have to be upfront....not strict ....but upfront ... and polite.

legendlawn
11-18-2008, 03:18 PM
My prices are competitive and in many cases cheaper than the competition. While alot of the prices need to be raised $5 to $7.50 a mow, I don't plan on raising anybodys price more than $2.50 per mow. Some of the customers I speak with on a regular basis, have been forewarned that they are going up. Others, who are always at work when I am at their property will probably just get the letter.

Steve
11-19-2008, 10:29 AM
Once you raise the prices, keep us posted on how that goes over with your customers. It will be interesting to see if any leave and if any do leave, if they are more the problem customers.

legendlawn
11-19-2008, 09:24 PM
Absolutely. Also, I'm very interested to see how it works too. A couple of them are problem customers. I had one lady who was getting her 35 dollar yard mowed for $27.50 and also always took at least 30 days to get me her payment, and was very demanding. We gave her an estimate on some other work and she didn't like the price. I told her that next year we were raising prices and instituting late fees. She dropped me a week later. I haven't missed her.

Steve
11-20-2008, 09:19 AM
Isn't it amazing how the cheap customers are also the pain in the butt customers? It almost never fails!

legendlawn
11-20-2008, 11:28 AM
haha! yep. We'll let you know how it goes.

mhoward92
11-21-2008, 12:55 PM
Isn't it amazing how the cheap customers are also the pain in the butt customers? It almost never fails!

yup it is amazing how much they can complain. I had a guy that i only charged 25 bux for a full leaf removal service. He had a 2 acre yard. I did this because he was a friend of my dads. so i gave him a deal. every time he would come out and pick these odd places that he wanted leafs removed from. He came up to me and said that i was not doing a good job. (Note: the leafs were still falling as i was cleaning them up) I told him that i got everything cleaned up but since the leafs were still falling they were covering his yard back up again. He wanted me to keep cleaning them up until they were done falling. I said "ok.... give me $150 a week until leafs stop falling and I can do that for you" he threw a fit and I got so pissed i terminated the service after i was done with the job. he calls my dad complaining about things and my dad basically said "its his business, i have no control over his choice" haha i was deffinately glad to get rid of him.

StartALawnCareBusiness
11-21-2008, 02:45 PM
My prices are competitive and in many cases cheaper than the competition. While alot of the prices need to be raised $5 to $7.50 a mow, I don't plan on raising anybodys price more than $2.50 per mow. Some of the customers I speak with on a regular basis, have been forewarned that they are going up. Others, who are always at work when I am at their property will probably just get the letter.


This is an eternal question that is asked this time of year.

Personally, I think you are doing yourself a disservice by not raising the prices to the current going rate or at least close to it.

If you admit a lawn's price should be raised by $7.50 and you only raise it $2.50, you are leaving $5.00 on the table per mow. At 40 cuts per year that's $200 per customer.

$7.50 is a big chunk but customers are aware that prices rise occasionally and your customers probably will not balk at $5.00. They still won't like it but if you give quality service they will likely agree. Quality service is the key here. If they have no complaints with your work and dependability, $5.00 alone will not make them drop.

$5.00 in 2009 and $2.50 in 2010 will bring your lowest priced customers up to speed with the rest of your client base.

I've always found personalized letters with personal follow-ups a few days later work great.

Good luck:
Keith
Start A Lawn Care Business (http://www.StartALawnCareBusiness.com)

legendlawn
11-22-2008, 09:23 AM
Here is the situation. Many of the customers who are undrcharged. were customers from the old business. While I would love to raise their prices 7.50 a lawn, I feel they would balk. My Business is too young to lose alot of customers. Another problem I am having is that alot of these customers still perceive me as the previous business. This guy did alot of messed up things and did not treat his customers well. I am having trouble getting out from this identity. Not sure what to do about it.

Steve
11-22-2008, 09:43 AM
Do you think you can experiment and see how the customers react to the partial price raise this year then another one next year to get them in line with your other prices?

legendlawn
11-22-2008, 07:55 PM
Thats my plan. Raise them $2.50 this year then $2.50 again next. I just don't feel comftorable at this point in my business to raise them $5 or $7 a mow at once. In the future I see some of these customers leaving due to the price increases, and that will be fine, but I need to have a couple years under my belt and a more solid customer base established, before I can allow that to happen. I do plan on continuing to raise the prices until they are right. I'm starting to take a stand against doing underpriced work. Being on here has helped alot with that. When I first started my business my motto was to turn no money down, but now that I'm going I can't continue with that philosophy.

Steve
11-24-2008, 04:32 PM
Well you are learning and growing. Keep us posted on how it all goes.

mhoward92
11-25-2008, 12:30 PM
Thats my plan. Raise them $2.50 this year then $2.50 again next. I just don't feel comftorable at this point in my business to raise them $5 or $7 a mow at once. In the future I see some of these customers leaving due to the price increases, and that will be fine, but I need to have a couple years under my belt and a more solid customer base established, before I can allow that to happen. I do plan on continuing to raise the prices until they are right. I'm starting to take a stand against doing underpriced work. Being on here has helped alot with that. When I first started my business my motto was to turn no money down, but now that I'm going I can't continue with that philosophy.

could i ask you this...How much are you carging....minimum? and what is your maximum price at the moment?

legendlawn
11-28-2008, 09:19 AM
My minimum charge is $35 per mow. Most of these customers were grandfathered in from the old business and are getting mowed for 27.50-32.50. My goal by doing this is to get ALL my customers at or closer to that $35 mark. My largest mow is a property I do for 150

mhoward92
11-30-2008, 07:29 PM
My minimum charge is $35 per mow. Most of these customers were grandfathered in from the old business and are getting mowed for 27.50-32.50. My goal by doing this is to get ALL my customers at or closer to that $35 mark. My largest mow is a property I do for 150

ok i was just wondering. i didn't know how much you were charging. if it was closer to 20 bux or 40 bux. the more your charging now (which isnt that bad) the harder it will be to raise the prices.