Has it been years since you increased the price of your lawn care and landscape services?
In This Video Learn The 4 Keys to “How To Raise Prices”
The question is, how do I tell a client that I need to raise the price? How do I tell them that I need to charge more for the spring clean-up or for the initial mowing? How do I explain it to them without them getting mad?
I’m going to give you the four things to consider.
Remember how much or how little you knew when you got started. You think about this business every single day. When you wake up, you’re thinking about it. When you go to sleep, you’re thinking about it. You live it seven days a week. You think about it constantly. But, when you first got started, remember how little you knew about the business, how little you knew about the industry. Now think about how little your clients know. It’s so easy to assume that they understand. They don’t think about any of this stuff that you deal with.
Now, why did I say all of that? That’s the key to everything when it comes to explaining to a client why you need to charge more. They don’t know your business. They don’t understand it. They don’t know the challenges and the cost involved. As far as they’re concerned, if you’re in the lawn-mowing business, anybody can get a mower out and mow a lawn. If it’s tree-trimming, all he’s got to do is get up there and cut that limb off.
Basically, that’s how a lot of people think. They have no comprehension of what goes into this. They don’t understand all the costs behind the scenes. They don’t realize how much it costs just to get the truck to their house. So, when you say, “I need to charge this,” that means nothing to them. They don’t know why you arrived at that number.
Here’s how you’ve have to think about raising prices and explaining it to a client.
First, you have to educate your clients. You have to tell them some of this stuff. If you want to sell something, it’s about education. If you want to raise a price, you’ve got to educate them on why. Why is to their advantage? Why does it matter? Why are you doing this? You need to tell them that. Education is key. They know very little. You know a lot.
You need to teach them a little bit about what you know so that when you ask for something, it’s meaningful. They understand why you have to raise the prices or why it takes extra time to complete a job. A lot of times when you explain to them, you’ll find out people aren’t upset. They get it. They work, they have jobs, they do things, they understand when things take a lot of time. So, education is key.
Second, you’ve just got to be honest. I think that’s the absolute best approach in business in general. Lay out your case. Be honest. If you screw it up, come clean and just tell them. If you’re running behind, tell them why. Be honest. If you try to cover it, or if you try to make stuff up, your team sees you doing that. Then they do it. If you are dishonest with your clients, your people will be dishonest, and then you will be a dishonest company. Your company and your people mimic you. You need to be honest. Your need to be forthright. Tell people the truth.
When I say to be honest, it’s not always being honest about a screw-up or mistake. Sometimes it’s just being honest and saying, “Look, the reason we’ve got to raise the price is we thought it was going to take three hours but it takes five. For the last four times we’ve been eating the extra cost, but I’ve got to tell you we’re losing money every time we’re out here. We really love working with you. I really want to keep you as a client, but is there any way you can help me work this out? We need to make a price adjustment for this to make sense.” I’m not saying to say it that way, but it’s that kind of an attitude of just tell them the truth. Tell them exactly what’s going on. Explain your case. Educate them. Be honest about the situation and then propose a solution. You’ll be surprised how often that it will work out for you.
Third, explain it. That’s part of being honest. Just lay out your case. Tell them what’s up. Tell them why. Explain exactly why you’re asking for more money. It’s not because, “My wife and I decided we want to buy a Ferrari, and we figured out that if we charge every customer two extra dollars, we could do it.” You tell them the truth. “Look, we’re not making a ton of profit here. The reason we’re doing this is gas prices have gone up. The reason we’re doing this is because now that you’re having us mow the backyard, it costs us more time and money. The reason is because we originally came out and looked at your irrigation system and there was only one zone, but that was broken. Now when we come back, you have a second zone that’s no longer working. We didn’t anticipate this. We need to charge extra.” It’s all about explanation, education, and honestly explaining what’s up.
Finally, when you’re doing a massive price increase across a lot of clients, test it. Let’s say you have three hundred clients you want to raise the price on. You don’t just go out and raise the price on three hundred clients. You call up a couple of clients and you explain your case. Education, honesty, and explanation. If all three clients decide to cancel, you’ve got a problem. You don’t want to go to four hundred clients. If all three clients say, “Cool, I get it. No problem.” Go to all four hundred clients. If a couple of clients say, “Wait a second. Why now are you raising my price, because you just raised prices last year, and I can go down the street and get somebody else?” You listen to their concerns. You take those concerns, and then you go approach three more clients and tell them that you need to raise prices. But, now you know how to answer the concerns when you’re talking about why you’re raising the price. If you’re writing a letter, you can address the concerns you heard in the letter telling your clients why you’re raising the price.
These are your four tips when you consider adjusting prices or making changes. When you do this, especially when you test it and try it, it’s not so intimidating. Your clients will be far more understanding than you think they’ll be. Just remember, it all starts with explaining to them and educating them on your reasoning.