How to raise maintenance prices.

Hey Mike Callahan here, with a question submitted last night: how to go about raising mid season maintenance prices for lawn care or any service industry really for that matter. First thing, you want to look at before we go out and raise prices- one of the things we always see on these Facebook groups is when people are asking how they should raise their prices, they’re talking about how they’re actually raising prices. They’re doing it maybe three dollars across the board or five dollars across the board in my opinion that’s probably the craziest thing you could do or a lot of people say they’re raising their prices as a percentage up and beyond (I want to say what’s up to Brian watching) basically as you’re going out to raise your mid-season pricing the first thing to do is lay a foundation. We want to have the start and stop times there every job we’ve done for the whole entire year and hopefully the non-billable drive time associated with it. What we’re gonna do is probably export that or put that into an Excel or Google sheet and let’s just say our desired dollar per man-hour revenue goal is 55 dollars an hour what we’re gonna do is that she is average all the jobs we’ve done for the landscape maintenance package or landscape maintenance job. Anything that is below the threshold of our goal of $50 per hour in this example we are gonna raise it up to hit the threshold of $50 an hour. So we’re not gonna go mid-season to raise our prices across the board, whether it’s an increase of labor or an increase of gas as long as we’re hitting our hourly goal with any of the increased prices that we’ve seen that we didn’t project, we are gonna go in and raise the prices on all the jobs that aren’t hitting the hourly threshold so this is a non-emotional way to do it so if your goal is say $50 an hour and you’re making $100 an hour well we’re not going to touch those jobs obviously because we’re double what we want . So now to answer the question at hand we’ve got the foundational information to make a non-emotional price raise on these jobs- we’re gonna go out and either write an email or a personal letter or if it’s just a few people maybe even a personal phone call.  The consumer is not going to care that your internal prices have raised they’re not gonna care that you miss bid a job and are not making the money that you should be. The key to this at least we found in my lawn care company when we did this mid-season or even a beginning of the year is we focused on what was in it for the potential consumer. So one of the few things that we touched on is we don’t over booked our schedules, we’re focused on quality and we make sure that each customer has and a lot of time for the job to be done in order to hit our goals revenue wise to be able to have the time and justify the time on their property there was some price increase. Now we may mention some ancillary things of fuel or maybe increased labor but at the end of the day we really need to focus on why your business is different and how its providing value to the customer and hopefully overcome any of the price objections or sales objections to that increase. Now this is going to vary in each and every other service that you’re doing but maybe it’s the way you notify people maybe you have a before and after service text notification to alert that when you’re coming and when you’re leaving. So you want to highlight all the things that that extra money is bringing for them in, the value that you bring and differentiate yourself from your competition to avoid them going out to price shop you. Foundationally we really want to go out and get a baseline of what our hourly goal is budget vs actual for an average of all the jobs up to the season, we’re gonna raise the prices on only the jobs that don’t hit our hourly threshold and then when we go out rather email, phone call or text we want to concentrate on the reasons why the consumer is getting a better benefit with your service than the competitors and why that small price increase is bringing them value. They don’t care about the gas prices for you or your labor cost what are they getting in up and above and an extra value and make it about a higher perceived value to overcome them going out and shopping you. Hopefully that is a way of doing it but that’s something we did mid-season around July every year in the company and we also did it at the end of each year before we went out and renewed those contracts. But first make it a non-emotional thing so if Mrs.Smith’s lawn you’ve been cutting since you’re 16 years old she ended up planting 20 trees in the backyard it’s taken twice as long that would be a good reason to tell her why the price went up on her specific property but we also want to let her know that the benefit in there for her is we’re gonna take the extra time to weed whack and not scalp the grass around all those new trees and make sure the property looks nice the way it has since you were 16 years old. Hopefully that’s helpful but we want to concentrate on what’s in it for the consumer and basically take that price increase out of the equation. The main thing is we’re not doing a percentage increase across the board or $5 a cut that is the craziest thing that we continue to see in the landscape industry. If you’re my competitor in the local market, I hope you’re doing that because we’re gonna come right behind you and clean up. We want to run those job costing reports so if you’re not tracking your start and stop times whether using a CRM such as Service Autopilot or any other ones out there even if you’re not doing that your pen and paper either pen and paper or even like a Google sheet or excel sheet track your start and stop times for everything you do that’s gonna allow you have a non-emotional benchmark how much money you’re making per hour and if you’re hitting your goals. I also recommend measuring the turf square footage, landscape square footage, linear length of landscape bed  and maybe small, medium and large shrubs while you’re doing that it’s gonna be a double effect for a far as positivity because then you can take that data on an average across the whole entire year and create production rate based estimating so how long does it take your crew to mulch about or how long does it take your crew to mow blow and edge a property with your equipment and your guys so no longer do we have to go out to Facebook or read a book on industry averages we know exactly how long it takes your crew to do the work without any guessing we’re basing our prices on our internal price structure and not the guy or girl down the street or in a magazine or on Facebook so we have clear definitions of what our costs are what our production rates are internally and then an average of what we average per man-hour per guy with drive time per account we can not emotionally raise those prices on those jobs and when we go to raise those prices we’re just raising the ones that don’t hit our financial goal and we are highlighting what for the consumer and basically reaffirming the job inequality and taking price out of the equation and that’s gonna vary on each different property while you’re raising the price but if it’s only a handful and you’re doing your job right that’s how we would tackle it. Any comments questions drop blow want to say what’s up to Rob, Trent, Todd and David as well, hope you guys are doing well just here day number two if the Strath Hotel in the executive boardroom just about to start up with another two-day deep dive here in upstate New York for Simple Growth but keep the questions coming in I’m happy to answer them and hopefully overcome some of the things that we weren’t lucky enough to get right in our business the first time around and some of them well we were lucky enough to get right and happy to share those wins and losses with you. Big news coming up – if you’re still watching we’ve got the 20/20 lawn in landscape magazine technology conference gonna be in Orlando Florida in February this year I’m gonna be doing one of the talks on how to automate your lawn care business and take your life back from your business. I’m gonna be sharing some heartfelt stories of how my business originally took over my life and causes the divorce and how we went through and used technology and leveraged automated systems and processes to grow and scale a pretty successful business and eventually become an absentee owner of not having to be in the business for several weeks or a month at a time so be announcing the dates for that but it’s gonna be a belief February 19th through the 20th and then we’re gonna be in Savannah Georgia or following that at the QDs conference in the full-day event. I’m gonna have an event full two days in Rochester New York upstate as well sometime in August we’re gonna be announcing those dates and then we’ve got dates for snow magazine gonna be doing about an hour and a half to two hour talk in Boston, Philly and Buffalo New York also going over automating your lawn care and snow removal companies specifically obviously for snow magazine we’re going to talk about how we did it in our snow removal company six hundred driveways and about 70 or 80 parking lots of this is what we automated and had going. Hopefully if we don’t see on Facebook we’ll see you live at one of our live events that would be talking at throughout the United States this year.