Worst case scenario, if I maintain 50 customers. Around $75.00/month
2011, if they all use there free mowing card... My schedule doesn't change which is a bonus, but that's negative $937.50 doing free mowing for all of them.
Though considering marketing often does cost around $1000.00 to begin with, it seems like a small & acceptable negative. I'll consider it marketing, that's all.
I have to remind myself that this loss is beneficial considering many of them will start up & stick with me long term because of it.
I would just hate for all of them to save up their cards for 10 years lol, negative $9375.00, that's really the worst case scenario.
So an expiration date would be wise to add.
For all of you who know what "Costco" is, the warehouse store that sells everything in bulk.
If you pay for a membership card, you get discounts. I'm trying to think of how I can put this towards my business.
Though I feel as if Costco is scammish/smart.
Like you pay what? $50.00/month for the card & you do groceries every week & spend $100.00 times 4 weeks = $400.00... How much are we saving vs giving them our money for this card every month?
Do they only profit when we decide not to go there? It seems silly, it's great for customer retention, though if they keep their customers they lose an arm & leg... Though I'm certain they overprice everything anyway & the discounts are phony...
I don't want to overcharge, then have my customers buy a membership card that gives them a discount a.k.a usual cost for my service. Not only does it feel wrong, competition would eat me up.
My thought on it is this. Most lawn care customers are going to want their lawn cut weekly throughout the year once they sign up with you. There for, giving them a free cut when they are already expecting to get this service from you and are willing to pay for it, may not help you.
I have seen pizzerias offer something like buy 10 pies and get your card stamped each time, then your 11th pizza is free.
This gets folks to buy 10 pizzas where they might not or gets them to buy all the pizzas from their pizzeria, where they might otherwise buy them from different pizzerias to mix things up a little.
Lawn care customers have no interest in having multiple lawn care companies, service them.
If the goal is to get the customer to pay on time, I would think there might be better ways to handle it. Why not have them prepay? We see many businesses here do this and it seems to work for them.
I like the 'bucks' idea if you could use them for upsells. Things like power washing or other services they may not ordinarily purchase. Now You probably don't want to give anything away for free. You could word it another way but I don't know if it would alter the effectiveness. What if you said the 'bucks' can be applied to additional services for up to 50% of the total cost?
Oh yea that is interesting. So you could create these 'bucks' for the customer to use on additional services!
I wouldn't worry so much about customers saving up, keep in mind they have to spend money to get the 2 or 3% Breeze cash you are talking about.
My concern is this has to be carried on your balance sheet as a liability which may be no big deal unless you are financing and the lender starts asking a pile of questions.
Canadian Tire money didn't work in Western Canada, I know this as I lived there for years for a host of reasons, they simply gave you a discount at cash if you paid cash.
I have to wonder down deep inside if discounts will grow a business...???
I do shop at Costco, our American friends know it as Sams I believe, Costco is actually an American owned company, I buy all our water and a host of stuff for the guys from there and some things for the house.
I prefer to give discounts for referrals that end up in a sale or contract, simple and done with, referral discount is equal to one free mow or spray up to the lesser of the value of your spray or the referral. All you are doing is expanding your network which is a good thing, it's free marketing and sales.
The problem for me when offering a discount to those who refer me. Is that the customer they refer me to is crap. They don't last long enough to make the discount I have given work.
It's a big mess, though I suppose the discount can be passed on the year after to assure the new customer actually stuck around the full season. I just don't wanna have my customers feel that I cheated them out of a discount as they did provide me with a customer & it's considered my job to keep them.
Actually, the discount can be per one month. Though I wouldn't give the discount until I have seen the new customer stick around for at least one month & make the proper payment. It's all tricky. It's all another thing that needs to be explained word for word on a flyer -$$$.
With my idea, I might not profit hardcore, & sink to the quantity over quality of customers for a little while. Though eventually when I grow, I wont have this deal & customers can either stay or leave. No deals, no nothing.
I didn't expect to profit last year, or this year, though next year is where my hopes are at.
1st year = preparation, trial & error (follow)
2nd year = fixing mistakes, better organization, adjust strategy (compete)
3rd year = do it right (lead)
Listen to this while we talk about business, it helps.
Do you have to worry about a referral where it is a one time mow or something relatively small? Or is that never an issue?
I don't know yet, in my case I have limited it to spraying as that is the side I want to go as we have ordered and received sprayers that will cut time on your lot by 60%+, so I want to increase that side of the business and with a169+ happy clients, if we can pick up another 100 which is the goal, then it's all good, there is a 300% profit in spraying overall in my case, so giving you one free spray knowing we will be back three or four more times this year, to me is a cheap cost of doing business.
I do not offer any type of discounts in any other service we provide as they do well on their own.
most of the discounts i offer are 1 free mowing when you sign a 2010 contract. i thought about the stamp idea. pay for 6 mowings, get the 7th free. its good and all. but what if they cash it in all at the same time. then you profit zero that week and that could make or break alot of us.
I am planning on sending out a welcome back letter to all existing clients who stayed on with me for this year from last. In the letter i am offering a new referral system. it is as follows:
If you refer Sparaco Lawn Care services to somebody within our current coverage area & they happen to hire us for the entire 2010 season, meaning for each consecutive month they pay for a month in advance and payment is received. The cost of your lawn service will decrease accordingly.
1 -5 Customers - $10.00 off
5-10 Customers - $15.00 off
10-15 Customers - $20.00 off
what do you think of this idea?
Another thing i am pondering is.... Should i have all my marketing flyers printed out black/white or done in color. color copying costs are usually triple vs plain black and white whether you have a professional printer or you do it yourself at home. I havent started my door to door distribution yet. its still way to early around here. I am thinking of passing out flyers in mid february to those who recieve it. wont just toss it in the trash cause its a service they dont need yet.
Another idea i have for marketing is this. If you went with the 6 stamp, get 1 free idea. Why not specify it can only be used during your busiest month like july or august. That way the customer saves and you aren't taking a kick in the butt with your profits.
I send out emails to EVERYONE I know (even folks who are not lawn mowing customers) and everyone gets the "3 FREE CUTS FOR A REFERRAL PROGRAM".
Anyone can refer a new customer to me. If the referral says "yep, cut my grass, I like your price, etc." the person who referred the new client to me gets 3 free cut "coupons" to use anytime they like. Could use them while they go on vacation, during the hot month of July, etc. It costs me nothing (gas and a little time) and I just picked up a new client worth another $1000+ a year and more exposure. It works.