Best Practices When Raising Rates

How lawn care and landscape companies can go about raising prices when needed without losing customers.

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With the lawn care and landscape industry being faced with major price increases on materials across the board (and rising every day), you may be thinking it’s time to evaluate costs and start implementing a price increase, but how do you go about raising prices without losing customers?

Rising prices may always mean that you are going to lose a few customers here and there, but in truth, a price increase should not just take place during inflation and rising costs. It’s something you should be doing routinely in order to stay profitable.

Evaluating services and expenses

The first step to any price increase is evaluating each service and seeing where you are profitable and where you are not. Once you take inventory on that information, then you’ll know where to start increasing prices and/or where to make a pivot in your business. Don’t keep offering mowing if it’s not profitable in your business. If landscaping is leading the way, expand upon it. Add design work such as custom fountains. No matter what your evaluation reveals, either raise your prices or pivot.

Put a plan in place

No one likes a price increase, not even you. So, in order to best serve your existing and potential customers, you’re going to need to put a plan in place to deliver your updated services and pricing. Some things you can do:

  • Offer a customer loyalty discount: This can look like a promotional discount, additional benefits for renewing a contract or a client specific discount for years of loyalty.
  • Provide a warranty: If you are doing a job that comes with a warranty, make sure your customer understands what is included and how to use it if needed.
  • Set up affordable payment plan options: If a customer is booking a larger job, offer them a way to set up autopay installments.
  • Explain the increase in a broad overview: Sometimes a customer needs more than “we’ve updated our pricing.” Offer them a broad overview so they can better understand your pricing (and/or services updates).

By taking the time to put a plan in place for how you are going to tell your customers about a price increase, you’re giving yourself a way to showcase how you are going to continue to provide high-quality lawn care and landscaping services.

Communicate the changes

Honest, straightforward and timely communication is going to be the key to success here. Start by giving everyone enough notice to make the shift in their budget. Everyone has a household budget, so make sure you are notifying them of the change in a timely manner. We recommend no less than a 90-day notice.

Then choose your method of communication. You’re going to want to customize this communication with each client in a personal and professional way. If they are used to face-to-face communication, choose that method. If they are used to email, use that method. Whatever your primary method of communication has been with your customers, use that form of communication.

For potential clients and/or followers, we’d recommend spreading the word via your website and social media accounts, posting all services and pricing with the effective date.

Pro Tip: Don’t go public until your current clients are informed. Nothing hits a customer harder than being the last to know. Always make them feel important by being the first to know of any changes to services and/or price increases.

Implement and prepare to evaluate 

You’ve evaluated your services and expenses, made a plan of action and communicated the changes. Now it’s time to go public. Here’s some ways to do that:

  • Update all services and pricing on your website with an “effective as of date."
  • Check your Google My Business listing and make applicable updates.
  • Review contracts and invoices in your green industry software.
  • Post about the changes on all social media platforms.

Once you go public, it’s all about preparing for what’s to come and re-evaluating the business financials regularly. If you see an increase in revenue, or if customers are willing to pay the new rate, then you’ll know you made the right decision. By staying on top of this kind of data, you’ll be able to make better and more informed price increase (or service pivots) decisions in the future.

Your business is going to continue to grow and evolve. Stay proactive by regularly reviewing and evaluating what your company is offering and the pricing behind each service. And if you find yourself struggling to make the big decisions, seek guidance…every successful business owner has a coach or mentor.