In today’s business environment—Inflation, increased labor and fuel costs, a lack of labor—most landscape contractors know it’s inevitable that they must increase their prices if they want their businesses to survive. Talking about money can be uncomfortable, especially when it means telling someone they’re going to pay more, but it has to be done.
Once you decide to raise your prices, it’s important to notify your clients about your new pricing structure as soon as possible to avoid surprises at invoice time. Most people are well aware that prices of most goods and services have gone up the past few years, so it shouldn’t come as a shock that their landscaper needs to adjust prices. The key is to inform them without upsetting them.
7 Tips for Sharing the News That an Increase is Coming
Consider these seven essentials for letting your clients know that a price increase is coming:
- Nail down the details. Before you can let clients know what’s happening, you need to know what’s happening. First, determine your new pricing—let’s say a 10% increase—then decide how and when you’re going to implement it. Will it be a one-time-only increase or will it be implemented in phases?
Each method has its pros and cons. A larger, one-time number may initially shock some clients, but many business experts recommend it because it gives people the ability to plan their expenditures, and it doesn’t remind them about rising prices every few months. Jill Odom of the National Association of Landscape Professionals discusses what to consider and why you need to keep on top of costs in her blog, Business Smarts: The Importance of Conducting Regular Price Reviews.
- Make sure the message is clear. When you draft your letter to clients stating that prices are going up, include the reason for the increase, the date it will go into effect and that it’s necessary for you to continue providing quality service. Conclude by thanking clients for their business and for their understanding, and include your contact information
Here’s an example: “Due to the rising cost of wages, fuel, materials and supplies, Company XYZ is raising our prices 10%, effective May 1, 2024. This will ensure that we can continue to provide our valued customers with the highest-quality service, and invest in the best materials, equipment and training available. We appreciate your business and your understanding. If you have questions or concerns, please call 000-000-0000 or email name@businessname.com.” Before printing or emailing your letter, have someone proofread it to ensure that the message is clear, and that everything is spelled correctly.
For more information on setting up a business letter, visit the Purdue Online Writing Lab’s sample business letters page. TemplateLab also offers 50 free, downloadable price increase letter templates that you can tailor to fit your communication needs.
- Determine how you’ll get the message out. Do you normally communicate with clients through email, regular mail, phone calls or with face-to-face conversations while you’re working at their homes or businesses? Does your onsite manager or crew leader handle face-to-face communications with clients? Stick with your usual method of communication for consistency. When communicating face-to-face, give your client a printed copy of the letter. When talking to clients on the phone, ask if you can email a copy or give it to them the next time you’re onsite.
Be prepared to answer their questions, and be transparent. If you’ve had to increase employee wages, lead with that information so your clients have a clear understanding of what’s behind your price hike. They know that while the price of fuel, materials and supplies regularly fluctuates, people’s pay does not.
- Don’t procrastinate. As soon as you’ve made the decision to change your rates, begin letting clients know, especially those whose contracts are coming up for renewal. Give at least 30 days’ notice of the change, longer if possible. That will help your clients plan their budgets, and give you time to answer questions and offer other service options before the increase goes into effect.
- Start small to test the waters. If you’re worried about how clients will react to the increase, reach out first to a small group either face-to-face or by telephone so you can hear their responses firsthand. That should give you an idea of the kind of questions you may receive and how to best answer them.
- Be prepared for pushback. While business experts predict that most of your clients will accept that you need to increase prices to stay in business, some may object, so be prepared. Don’t apologize, don’t feel guilty and don’t cancel their increase. Instead, thank the client for their response, thank them for their business and reaffirm your commitment to providing quality work. If your client is open to a lower-level service package or an add-on that doesn’t cost you extra but increases the value of the service you provide, offer it. For some ideas, check out our blog, How to Create a Recurring Revenue Model that Appeals to Your Customers.
- Know when to say goodbye. No matter how prepared you are for pushback or what you offer to keep a client’s business, there may be some who won’t stay after a price increase. That might not be a bad thing. Analyze their account. Is the job profitable or does the client send a lot of business your way? If the answer to those questions is “no,” you have your answer, and it may be time to let them go if they aren’t willing to accept a price increase.
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