Raising Prices

[nick11380]

How do you guy go about raising your prices?

For most of my jobs I give estimates so raising the price isn't an issue. But some people I've been charging by the hour. Do you notify everybody that your raising your prices or just bill them at the higher rate?

I've been charging $25 per hour for hourly work. But there have been a few times when I got a new customer that I was too busy to fit in. Not having the time for the exra work I told them $35 per hour and nobody has had a problem with that price. So I found a way to get them done. Now I would like to raise everybody that I do hourly work for to $35 per hour. How do you go about increasing your prices?

[katisan]

Some people will advise you to not disclose your hourly rate because this issue is just one of the problems you'll run across. Increasing your pricing from $25 to $35 is a big jump but if your customers value your service they won't mind paying the new rate.

[boazcat]

I've picked up business from customers who had their bill raised with no advanced notice. I ended up charging them the same rate, but they were so mad at the other ones that they stayed with me.

Michael

[TNGLC]

Think about this: we go to the gas pump now and we see prices here spiking 10 to 15 cents daily. It angers me when it makes that big jump up. It calms me when it goes down even a little. Our customers know this too and the last thing they want to hear about is how we need more money due to the cost of business, but we can't seem to win either way. Here's my method and opinion on the matter.

Things to consider in your price raise would be:

Do you really want to raise it across the board for all customers?

Do you have some you would like to keep as they have been faithful to your services? If so, inform them that you are having a price increase that is effecting everyone, and let them know since they are a valued customer, you are not increasing their rate as much as your regular rate will become for new work and other customers. Maybe raise them half or three quarters of your across the board. New work is your choice of definitions, but I suggest anything they haven't had done before or neglect to have done on any regular basis. Your business, your terms right?

Our customers keep us with money in our pocket. Especially the ones who stick with us year after year. So rationally speaking, would raising a constant customers cost up by ten dollars be worth losing them over to replace with "in demand" business that may not last?

[steve-o]

quit feeling sorry for your customers..................

Think about this: we go to the gas pump now and we see prices here spiking 10 to 15 cents daily. It angers me when it makes that big jump up. It calms me when it goes down even a little. Our customers know this too and the last thing they want to hear about is how we need more money due to the cost of business, but we can't seem to win either way. Here's my method and opinion on the matter.

Things to consider in your price raise would be:

Do you really want to raise it across the board for all customers?

Do you have some you would like to keep as they have been faithful to your services? If so, inform them that you are having a price increase that is effecting everyone, and let them know since they are a valued customer, you are not increasing their rate as much as your regular rate will become for new work and other customers. Maybe raise them half or three quarters of your across the board. New work is your choice of definitions, but I suggest anything they haven't had done before or neglect to have done on any regular basis. Your business, your terms right?

Our customers keep us with money in our pocket. Especially the ones who stick with us year after year. So rationally speaking, would raising a constant customers cost up by ten dollars be worth losing them over to replace with "in demand" business that may not last?

you are a lawn boy in their minds. they could care less......raise your prices. they don't like it, screw them. $10.00, where did you come up with that #? i'd drop you too for that, although, i had one that i went up $10.00. she didn't drop me, but then, she knows better.......

steve-o

[Stephen M.]

I respectfully disagree with GrassMaster and most of you on notification. This notion that notification is "prosessional" and to not is "unprofessional" is pure bunk/garbage/crappola/etc.

I used to notify my customers, but its like going out to the street corner with a cup in hand or taking a dog and a child out to the corner of a freeway offramp begging for spare change. I quit doing it when a customer, a retired businessman, pointed that out: "Never beg for your money. Most customers will know a fair price when they see one. If a cistomer cancels, go out a find a better customer".

I have my taxes done every year by my CPA who I have had for as long as I've been in business, 22 years. He doesn't beg for his money by telling me what his service will cost when I get the tax prep package. I just know that his services will cost me about $50-$75 more than the previous year. Last year his professional services cost me $550. This year its $610.

I get a cut rate from my lawyer because I get his services as a member of a professional trade association. However, I don't hear him begging for business because he has to charge me for all of the incidentals, including his staff's time. If I wasn't getting a cut rate, I'd be paying full price of $370/hour, and yes, he's worth every penny of it.

My customers understand that they will see prices increases up to 5% per year; but up to 11% on occassion like in the past 1-2 years. I've gotten few cancellations. When I do, its because they are the bottom feeders in my accounts but we're at the top range of what they can afford.

This year I've had 3 cancellations due to the economy and 1 that I quit because they owed me for 3 months of work. I told them I was suspending service untill I got paid. I got the check on Wednesday, and cancelled them for good. In return, I've picked up a high end customer from CA with a 2nd home here, and business from a customer I cancelled last year for being a slow payer. She has a credit card and I'm using it.

In one sense GM is right about notification if you are the new kid on the block without a track history and reputation. Most of my customers have been with me 1 year to 20 years. Therein is the difference between notification or not. If a customer complains and goes elsewhere its because they are my bottom feeders.

[Stephen M.]

Well, I can say that for the yards I am doing ($35-75 wkly) that $10 increase without saying anything would be a HUGE mistake. For my customers that is a 15%-35% increase without notification. Bottom feeders or not it is about respect for your customer base. Maybe if all those top feeders in WA worried about how they spent their $$$ those Sonics wouldn't be coming to OKC

OKC gets the franchise, not the name; but I SAY WHO CARES! The only reason the Sonics franchise is leaving is because the taxpayers of Seattle and WA as a whole are flat out tired of paying tax money to support the expensive habits of billionaires who have enough assets to build their own stadiums. This so called public-private "partnership" is pure gargage and the taxpayer gets nothing out of the deal, except bragging rights of a pro team. If OKC wants to believe the lie, then you guys are far more stupid than you look!

The WA Legislature overturned a vote of the people to keep the Mariners here; Paul Allen paid for an election and the Legislature again ignored a vote of the people to keep the Seahawks here. 10 years ago, the Key Arena was renovated to the specs of the Sonics to keep them here. The city of Seattle wanted a dual use stadium that could have given Seattle a pro hockey team, but THE SONICS said NO, they wanted a single use stadium all for themselves. Now 10 years later, they are WHINNING about their stupid choice and the taxpayers are saying SCREW YOU. So, Clay Bennet and his Sonics can shove it.

If you read what I said smarta$$, I said that I go up 5% a year. That's about $1-$5 depending upon the charge. Very few complain about paying that much more. One of my long term customers (10+years) had a 5% increase last year and a 9% increase this year. She has been a loyal customer and has refused to dump my company for the cheaper company servicing her neighbors because "they don't know anything". She's happy to pay the money.

Of course, most will scream if you are talking about 20% or more. The problem for you is explaining why you were so darn cheap in your pricing to start with. If I were you, I'd plan on getting all new customers or take smaller increases.

[Ric]

you are a lawn boy in their minds. they could care less......raise your prices. they don't like it, screw them. $10.00, where did you come up with that #? i'd drop you too for that, although, i had one that i went up $10.00. she didn't drop me, but then, she knows better.......

steve-o

Steve O

Watch your self. I have had 3 posts to this thread deleted.

[jrservices]

Steve O

Watch your self. I have had 3 posts to this thread deleted.

That's cause you need to be kept under control.......:laughing::laughing::laughing:

[steve-o]

Delete............................

Steve O

Watch your self. I have had 3 posts to this thread deleted.

i ain't worried about GM. he knows i love his forum.

That's cause you need to be kept under control.......:laughing::laughing::laughing:

lay off jr. he is just an old horny old man................

steve-o

[Stephen M.]

[QUOTE=rhodesx6;196666...If I could I would love to raise my prices,...I'll start firing my current customers when you replace them with customers who don't mind being overcharged. [/QUOTE]

For the longest time I beotched about not being able to collect higher fees than what was charged in neighboring counties/cities with a comparable median income. I was my own worse enemy. I started charging higher fees on new customers and when some of them compare me with their old outfit I tell them its apples to oranges. If I'm too expensive for them, screw it, because another will see the same price as a reasonable charge.

I'm a lot more cautious with established customers even though my previous posts are not so enlightening. A mass exodus would not be good. But i just don't send notices anymore when its just a 3-5% increase.

Its the time a year that I get alot of looky-lous because THEIR service gave notice of increases and when they see my price, they decide to keep their scrub. I'm not in the "Wal-Mart" market. I have a loyal customer base and the properties we add on have to meet certain criteria; I can afford to be chosey on the type of customer I want to take on. This is the reward of being an established maintenance contractor. I also have good relationships w/ several other competitors and we refer work to each other.

I'd be lying if I said I didn't lose a customer due to a 25-50% increase, but it wasn't a big loss. Last year I loss 3 field mowing customers because I decided that I wanted $150/mowing instead of $99/mow. This is for 1x/year jobs. The "loss" was more than made up by my spray and fertilizing service or by hydro seeding.

The point is when have you gone to any other retailer to be greeted at the door with a flier announcing that all the pricing in the store has changed and here is your new price list; and oh, by the way, if you don't like our pricing, the store like us down the road wants your business?

My small engine dealers never send me a notice that shop time is going from $70 up to $88.50 with a minimum charge of $44.25. I just see the new sign posted on the wall and decided to stay and pay the new rate because I have a relationship with the shop owner and I get deals from them in other areas, like 10% off new equipment.

Like I told a manager of a HOA we used to take care of and bailed after being there 12 years, "you can always find somebody cheaper. The problem for you is are they any good?"

[greenC]

i just raised all of my customers that i have had for over a year, not the newer ones, but they too will be raised in a few months when gas goes even higher. if a few cancel, the price increase on the others will most likely make up the difference. this is my first increase in the allmost three years i've been in bussiness.

here is my letter that went out;

Dear Customer,

Due to the rising cost of doing business, we have had to make a small increase in all monthly maintenance fees. Even with this small increase we believe our rates are still extremely competitive. You will notice the new rate on the enclosed statement. As always, we would like to thank you for being a valued customer and look forward to many years of continued service.


Sincerely,

.....................


everyone paid and no cancelations so far. hopefully it stays that way. i raised my rates by 10% but i was on the low side anyway compared to most. my first year or so i bid the few commercial properties way lower than the competion just because i didnt know. same with a few large estate props. plus, gas jumped 20 cents here today, most customers understand. (mobil by my house 3.79 for reg and 4.09 for 93)

[john doran]

i am in the same boat

hi I am having the same problem you are i am not totaly shure how to do this my self however i have been studying this page for help for a month now. my situation is a little different than yours, but i am in the same boat. my partner Andrew and I run a small Lawn Service and Repair Shop. Most of my cliants are at a set price i have been trying to wright a profecional letter to tell them that we have to raise the price by 3 -4 dolars to make up for the cost of gas that is our only problem i have a Ford F-150 extended cab and a chevy 2500 3/4 ton truck and gas is 3.65 a gallon i can tell you this i reacently talked to a small busines owner and he told me that you can't do favors for people any more even if it is your best friend. if i were you i would raise your price. i look at it this way it is not worth it to make enough to pay the bills you have to make a porfit. i have about 5 cliants weekly that i make it their homes look so nice that when i send my 30 day notice out i hope not too lose them. however i charge any where form 35-55 dollars an hour mulchings and plantings they are 35 tree cleanup and reamoval and hardscaping is 45 -55 dollars an hour that is my prices for now i hope this will help you

[leftovers]

I just raised our prices %15 with the price of gas rocking it had to be done. I sent out a letter the month prior saying thanks for being a loyal customer and we appreciate there business and all that stuff then explained with the rising costs of all our tools and supplies it was regretful we had to rise our costs and finished up with a way for them to recoup some of the raise by offering a referral incentive. It worked out of the 60 regulars we have we only lost 3 to the raise and they were bad payers so nothing lost.