When you establish a business, current and prospective clients are bound to talk. The hope is that they share positive news about your company and your services with others. Inevitably, these conversations will lead to how much your company charges for its services.
Sometimes, as busy business owners, you make pricing mistakes; other times customers are just looking to get a deal. A LawnSite user was recently confronted by an angry customer because of his price increase. Here’s how other users suggested he handle the situation:
mccloskeylandscaping: So here’s the deal: This year my overhead increased, and I increased prices across the board. Almost everyone has been fine with it, and one person even offered to pay more. But one of our clients just sent an email that wasn’t so nice. I have been working for them for three years now. The first year was at their old house that was probably about 12,000 square feet. They got us five to six new jobs just by recommending us that year. Next year, they move into a new house, about 25,000 square feet. I, [probably against my better judgment], agreed to cut their lawn for the same price.
Well now that I am running this business more seriously and not just for fun, I need to increase prices by more than what I increased the other properties by. The client then went to another client, discussed how much they pay and asked how much their increase was and then sent me a somewhat rude email about how they’re not being treated fairly. Then they offered to increase by a very small percentage. I feel like I should drop them, but they are in a neighborhood I really want to get into and they need a lot of work this year, so it’s big money. Also, she pays for her dad’s property and his is next door to two others that I mow, so it keeps the route tight. What do you guys think?
BK502: I would work with them. If you are doing more work for them, then make your money back on that.
Patriot Services: If every customer I had brought five to six more with them plus extra work, I would cut them a break. Look at the big picture. How much would you spend to get five good customers? I have always passed on the increases to new customers and rewarded loyalty.
jc1: Offer a prepay discount.
BigJlittleC: Best to be upfront with the customer. Let them know their new house is a new price this year. Take into account referrals and extra work when deciding on their new price.
easy-lift guy: Stand firm on your pricing or drop these accounts. Because your customers are emailing one another, you can either let them have their way with your business or drop them and regain control. Just because these accounts are all in one location does not give them the right to gang up on you. Stay firm on your pricing or sack them for another sucker to play their game. You should have better things to do.
PTP: This is usually the time for the polite but firm discussion. I have had these conversations several times over the years with my customers. It helps to back up your claims with some sort of data. I keep records of all the time that it takes us to mow our lawns. When you politely explain to them why the increase is justified, most of the time people are willing pay— especially when you do good work to back it up.
Be upfront with them and tell them exactly what is going on and why. If they pay, you win. If they cancel, you win. Don’t back them into a corner with your words. Be polite and be firm. Let them know that you appreciate them as a customer. Let them know that you made a mistake earlier and that you really can’t afford to do business at the previous prices.
The real bonus here is that no matter what they say, if you follow my advice you will feel like a competent, professional businessman who is in charge of his own business. That’s worth way more than one customer.
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