Insight from a client

[gardenbarber]

Cost is only an issue when budgets are tight - so location will affect some more than others. As general locations that house similar bands of the workforce experience similar financial circumstances so gardeners will come under pressure. But there will always be some who will pay for the service. The trick is to make sure you are that service. So you have to run tighter and cleaner and keep in business while the less productive gardeners give up. Make sure you get all the pie.....

[willshome]

Lawn care business tips

I think it is great you are thinking about what your customers think. what % of costomers have you lost and what does you bottom line look like over the last few years how much % has it dropped? Any time you rase prices you will lose customers but does the new price cover that. the higher your prices the more you will have to spend on advertising.

[TiedemanLLC]

Originally Posted by willshome

I think it is great you are thinking about what your customers think. what % of costomers have you lost and what does you bottom line look like over the last few years how much % has it dropped? Any time you rase prices you will lose customers but does the new price cover that. the higher your prices the more you will have to spend on advertising.

We have noticed a slow in revenue ever since around 2005 (that is the time that Michigan started our recession). We have had some good years here and there. In 2010 we actually had our best year ever. So we took that great year thinking that the economy was starting to come around and decided to finally raise our prices up, especially our fertilization prices. Right away we lost around a dozen of clients due to the price increase letter, and then throughout the season we were losing around 3-5 clients a month because of prices. Even though we raised the prices, we lost around 20+ client during the season and our revenue was down greatly.

I think another thing that happened to us is we got a big head about the 2010 season. We took a lot of things for granted, and concentrated on just the money, not the client.

[Steve]

When that kind of situation happens, is there anything you can do to back pedal and save those clients? Even now or no?

If another lawn care business owner found that happening, would you suggest they do anything to counter it?

[TiedemanLLC]

Originally Posted by Steve

When that kind of situation happens, is there anything you can do to back pedal and save those clients? Even now or no?

If another lawn care business owner found that happening, would you suggest they do anything to counter it?

We tried a little bit of everything. Offering them reduce packages, payment options, and even going back and telling them "Ok, we will keep you price the same or perhaps even reduce it" but nothing worked. They pretty much had it made up in their mind that the lawn expenses was one luxury that they had to cut.

[Steve]

This is a really interesting situation and it makes one pause to think about raising their prices. Maybe it would work better to slowly roll out a price increase after testing it with a few customers at a time?

Also I do wonder if there is a certain time that is better than others to raise prices.

[TiedemanLLC]

Originally Posted by Steve

This is a really interesting situation and it makes one pause to think about raising their prices. Maybe it would work better to slowly roll out a price increase after testing it with a few customers at a time?

Also I do wonder if there is a certain time that is better than others to raise prices.

What we did was reviewed everyones prices. We found that some were perfectly fine and we didn't raise them, while others we had to increase the price. We sent out the price increase notice in April of last year. So not all of the clients actually received a price increase. Probably around 80% of them did.

I think if we had to do it over again, we would have only raised the prices of those clients where the profit margin was extremely low, and left the other clients alone. Went through the year, and evaluated it again during the off season. Then perhaps did a price increase with the other clients the following year. So almost like a stepped effect.

[gardenbarber]

How come I get a great big ad block in some of my posts - is this a forum setup - if so don't mind. Have to pay the rent somehow. But if it's a setup thing from my side I'd like to know how to control it.