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  • late fees upsetting customers

    i have issued late fees, and skipped a week's service because of late payments (and still made them pay for the week anyhow) to 7 clients, each month, for the last 2 months. as a result, i do anticipate losing them. four have cancelled thier lawn renovations after being upset about the late fees and skipped service. three others havn't said anything, but you know what they're thinking. these 7 should be easy to replace, as we are averaging 4-6 new calls a day at this point. how can you enforce late fees, without losing the client? or can it even be done?
    bobbygedd - voted most likely to succeed by lsforum members

  • #2
    Which lasts longer, "Timex" or Bobbygedd"....They "both" keep taking a "licking", but is BG still ticking????

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    • #3
      Mo matter what it always will be the wrong answer?

      Originally posted by Bobbygedd
      these 7 should be easy to replace, as we are averaging 4-6 new calls a day at this point. how can you enforce late fees, without losing the client? or can it even be done?
      It would get old very quick constantly replacing old clients over a little pocket change, the pocket change was figured into the cost of doing business & set aside for the chosen few.

      It's no different than starting to accept charge cards, you figure in the extra time involved processing the charge cards, looking over the batch report daily, add that in to the labor rate then slap a 3% to 5% in there for cc fees & you come out smelling like a rose. The big boys do it & I do it too!

      What do you figure into your cost of doing business by man hour rate for all the extra time you spend obtaining all those new clients every month? There's a lot involved with you there, talk time, bid time, windshield time, training time & BLA Bla bla?
      GrassMaster, LSF Administrator!
      LawnPro - Lawn Care Business Software:
      www.lawnbook.com --- www.lawnservicing.com

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      • #4
        "pocket change", hardly, i'll tell you why late payers cost you alot more than a late fee: when a customer owes me , say $150 for a maint fee, and it was due on the 1st, and it is now the 15th, which means thier next maint fee of $150 will be due in two short weeks.......then, said customer asks for additional work (like maybe installing 5 ton of stone = $675) i am now very reluctant to do the stone. cus when the stone is done, they will now owe- the past due maint fee, the $675 for the stone, and the next maint fee for $150. REMEMBER, they couldn't even pay the maint fee of $150 that was due two weeks ago? lose lose. fk em, can't pay on time, hire pee on pete
        bobbygedd - voted most likely to succeed by lsforum members

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        • #5
          BG - For all the time you spend on these forums complaining about late fees and acting like you're a professional, you could be out mowing a couple more lawns and making more $$$. As GM said, all the time and $ spent bidding new accounts, fielding the calls, advertising to get them, complaining on the forums, etc.... You could just hold on to your prior customer by telling them you can't lay the $675 worth of stone until they pay their past due account and pay in advance for half of the landscaping. If they wont do that, then dont do the stone. I highly doubt that it's less work and time involved to accept a payment a week late than it is to cancel their agreement and replace the customer. Im not talking about people that are months late or even more than a couple weeks...They HAVE to be replaced...but 1-2 weeks late paying once a year or so?!?! Give the people a break! If they're late on a regular basis, then YOURE doing something wrong. Ive never had people hold payments past their due date for any reasons other than forgetfullness (happens once in a great while with elderly customers) or anger (not happy because ____ wasn't done up to their standards or they dont trust that you will do what you said and wont pay you till it's completed). It sure seems to me like you have a bunch of customers coming and going due to late payments......An old saying goes that if you continue to have the same problem with different customers on a continual basis, it's probably not the customer's fault. (If it's not the customer's fault, than it can only be one other person's...) Think about it......
          - Your home for Gator Tailgating and Gator Sports News and Forums.

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          • #6
            You purport to get paid up front for maintenance, do you not get paid up front for extra work too?

            Why wouldn't you use the opportunity to get them to pay arrears in full plus the front money on the "extras"?

            It doesn't add up, you get them to pony up in advance for maint, will front the whole five yards and labor for add-ons....
            GEEVEE®, Pat.Pend. TM, UL

            If you're gonna be dumb, you better be tough

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            • #7
              rusty, i have thought about it. i've thought long and hard. i asked myself, "could this be my fault?" then i thought about it: arty has 135 customers. he runs his route like a regiment. if they are scheduled for 1:45 on wednesday, then you can bet your buttocks, they will be cut, every wednesday at 1:45. chuck has 65 clients, been in business 22 years. he does a perfect job every week. mike has 9 employees, 200 lawns. brand new shiny trucks, uniformed workers. guess what, THEY GET SCREWED AROUND ALOT MORE THAN I DO!!!!! arty sold his business, cus he couldn't raise a family wondering when/if his customers were going to pay thier bills. chuck is a companionless loser, who has no one to care for but himself and his dog, so if the money comes in late, who cares , but i have, on numerous occasions, been at his house when he checks his mailbox, and when the checks don't come, he throws a fut and kicks the mailbox. mike throws up his arms and says, "i'm done trying to make them pay on time. i'm glad i have other forms of income." so rusty, no, it aint me. my main question is, does anyone add the late fee every month, and still keep the client?
              bobbygedd - voted most likely to succeed by lsforum members

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              • #8
                Replacing a customer costs more than a late fee.
                a.k.a.---> Erich

                www.avalawnlandscaping.com


                Build a man a fire, he'll be warm for a day.
                Set a man on fire, he'll be warm for the rest of his life.

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                • #9
                  Originally posted by Scaper-S2k
                  Replacing a customer costs more than a late fee.
                  scaper, THAT'S EXACTLY what i keep telling my credit card company when they ring, ring, ring the phone off the hook. but, they don't seem to care. i even told them you said so, and they STILL don't care
                  bobbygedd - voted most likely to succeed by lsforum members

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                  • #10
                    I've never heard of a credit card company dropping a customer because they were a little late on a payment.
                    a.k.a.---> Erich

                    www.avalawnlandscaping.com


                    Build a man a fire, he'll be warm for a day.
                    Set a man on fire, he'll be warm for the rest of his life.

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                    • #11
                      Originally posted by Scaper-S2k
                      I've never heard of a credit card company dropping a customer because they were a little late on a payment.
                      nope, but they do enforce the late fee. and i told them, "hey, if u make me pay the late fee, i am cancelling, and scaper says it's gonna cost you more than $29 to replace me." they didn't care
                      bobbygedd - voted most likely to succeed by lsforum members

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                      • #12
                        I'm not really sure if anyone here can compare the number of customers we have versus Mastercard. They probably get 10,000 new customers each day, which is probably more than all the long term customers everyone on this board has had combined. Let alone our new clients.

                        Now back when Mastercard had 1000 customers? Sure, they would let those fees slide. Matter of fact, call up Mastercard, don't ask for waved fees, actually ask for a lower rate or you will switch. They will lower their rates!




                        But regardless, it's not much of a comparison anyway.



                        If you drop someone because they are 5 days late on a payment, it's going to cost you more to get a new client. And we're talking about only being a little late, not "I'm never gonna pay."





                        P.S. - Even big industries have grace periods on their bills.
                        a.k.a.---> Erich

                        www.avalawnlandscaping.com


                        Build a man a fire, he'll be warm for a day.
                        Set a man on fire, he'll be warm for the rest of his life.

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                        • #13
                          Bobby - you arent a credit card company. You own a lawn service. There is a HUGE difference. Credit cards have millions of customers, make more $ per customer per year, have less cost per new customer that they gain, etc. We make less per customer and it costs more for us to get new ones in our industry. Run your business how you want. That's why its YOUR business. If you want to charge every customer that's 1 day late a $25 charge for being late, do it. But, dont expect everyone else in the industy to follow suit just because you think we're wrong and youre right.

                          Ive continuously read your rants about late payments, losing customers, replacing customers, fees, etc where you continue to cut everyone else down that doesnt see it your way. I offer you this bit of advice.....Even Capital One refunds late payment fees twice when you call before they make you pay them. My bank, Compass Bank, does the same exact thing. Overdraft charges are forgiven twice if you ask, but after that...oh well. These are ways of showing grace to the customer for making a mistake once or twice. After that, it's worth it to drop them if theyre continually late and problematic. But, in the end, you just have to run the business the way you want to. Whether it's charging $100 late fee for every day that the bill isn't paid or never making anyone pay a late fee or interest even if they're 2 years overdue, those are your decisions. I choose to be gracious with my customers the first couple times, but after that, they know late fees will be applied as stated in the agreement. The late fees are only $15 and aren't enough to make money on or to make anyone mad, but enough to encourage them to pay their bill on time. That's my personal decision with my business. You have to make yours. Good luck deciding on how to be stern and also keep customers happy. It's a hard decision to make. If youre too stern, you lose customers. Too lenient, and you wont have the cash flow to see your business grow. I chose a nice middle ground that shows forgiveness but also lets people know that late payments aren't acceptable after the 1st or 2nd time.
                          - Your home for Gator Tailgating and Gator Sports News and Forums.

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                          • #14
                            Late fee payments are 50/50. I certainly don't want to fire 50% of my customers because they fail to pay a late fee. However, it does get them to pay their bill more timely in the future.

                            The 50% who do pay late fees don't pay late very often. Even though my invoices say that I bill a late fee, i only started to do it on a regular basis this past year. A late client (RIP) insistented that I didn't cut him any slack just because of his illness.

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