Watch Jonathan’s video to learn why you should raise lawn care prices 10% and how to get your clients to agree to pay it.
If I’ve been guilty of anything in business, it’s been under-pricing, not asking for enough money, and questioning the prices that I’m asking for even after I think through how much I need to charge.
I’d recommend that you take a look at, or do a few Google searches, around the topics of if you can raise prices by X and lose X number of customers. For example, you might Google something like, raise prices 10% and lose customers. Just look around and do some reading.
Several years ago, I read some books on pricing and so I raised prices in my business. I had done some price increases before but generally I had been scared to do that. I’ll tell you right now, I’m still under-priced in everything we do.
A lot of times the reason we’re under-priced is because we don’t have the confidence to raise prices. Or, we are not communicating correctly to explain to our client exactly why the price that we’re charging is the price that we should be charging and why it delivers to them tremendous value. I think most of us make that mistake so you might check yourself and see if you have that same mindset as well.
Here’s the concept, and this number that I’m about to state will change so your profit margin will affect what I’m about to say.
If you raise lawn care prices 10%, you could theoretically lose 25% of all your customers and make the same amount of money at the end of the year in terms of take-home profits. Remember, take-home profits is all that matters. There’s been some studies in the service industry that say if you raise prices 10%, you can lose up to about 37% of your customers. That’s huge.
I am positive that if I raise my prices 10%, I would not lose 25% of my clients. If I lost 5%, think about how much additional profit that would make me in my business and think about how it would affect your business. If you could raise prices 10%, only lose 5% of your clients, how much more money would you make?
The point here isn’t to give you the exact answer. It’s to give you a concept that proves to be true every single time you dig into it. Do some Google searches to research this and it will give you additional confidence to price your services correctly.