Roots to Revenue

How to increase prices without loosing customers

• Robbie Lynn

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🚀 In this episode of the Roots to Revenue Podcast, Robbie and Jason are joined by lawn care expert Richard Salmonto to tackle one of the biggest challenges for small business owners—raising prices without losing customers! 💰

âś… Learn how to:

  • Use the ACID test to set the correct prices 🧪
  • Gradually increase prices without scaring customers away đź“Š
  • Conduct market research to stay competitive 🔍
  • Communicate price changes effectively đź’¬
  • Build customer loyalty while boosting revenue ❤️

đź’ˇ Plus, discover why networking with competitors can help your business grow and the best timing strategies for increasing prices!

⏱ Timestamps:
00:00 – Introduction to Pricing Strategies
00:37 – Welcome to Roots to Revenue Podcast
01:31 – Meet Richard Salmon
02:22 – Why Raising Prices is Essential
02:48 – Market Research & Competitive Pricing
07:16 – How to Communicate Price Increases
11:33 – Managing Cash Flow & Prepayments
18:31 – Handling Customer Pushback
22:18 – Strengthening Client Relationships
24:09 – Best Practices for Customer Interaction
27:07 – Adding Value to Justify Higher Prices
28:04 – Pricing Strategies for Customer Retention
30:11 – Competing on Service, Not Price
38:41 – Mastering Price Increases & Retention
44:02 – Training & Consultancy for Lawn Care
47:22 – Final Thoughts & Key Takeaways

Try out Jobber for FREE with a 14-day trial with your exclusive discount Root to Revenue https://go.getjobber.com/premierlawns

Richard:

The ACID test is, if you went out to do 10 quotes in whatever industry you're involved in, 10 people come back and say yes straight away, you're either really good at what you do, or you're possibly too cheap. If I was increasing your prices by, say, 3 percent each year, it's much better than waiting for the third year to put them up by 10%. Because then 10 percent is a big jump, whereas 3 percent each year, if they're paying on an annual basis for their year's worth of treatments, they are less likely to cancel and more likely to keep the customer for longer periods. It's that fear of doing something that you're uncomfortable with. and the fear that you're going to lose customers and your business is going to fail. If you want to make a successful business and be profitable, you've got to be 100 percent into it.

Robbie:

Welcome to Roots to Revenue podcast. In the workshop today we've got Richard Salmon back because Richard was one of the most successful podcasts we had last year and we wanted to bring him back to pick his brains. Today we're going to be talking about Something that most small businesses struggle with and that is raising prices without losing customers. Now before we get into the podcast, let me tell you about the sponsor. The podcast is sponsored by Jobber. Jobber is my go to scheduling, invoicing, and and coding software. Not only does it keep me paid faster and my customers love it. If you're a busy business owner and you're really struggling with time, then that's whenever Jobber comes in because there's so many things within your business that can be automated, can free up your time, because you can make more money.

Jason:

Don't forget to use the link in the description for your special Premier Lawns discount. It's premierlawns. link forward slash Jobber. Richard, would you like to introduce yourself? Thank you very much.

Richard:

Thank you for having me back, Robbie and Jason. It's a pleasure to be back here again. Uh, yeah, my name's Richard Salmon. Originally, or have been involved in agriculture and fine turf for many, many years now. Originally I trained at Ridley University College and then became an agronomist, which I was advising farmers on how to grow crops and how to grow grass. And in the last 25, 30 years, I've been involved in the lawn care industry and that's why I'm here now. to talk about my experiences to help people out there that are in other industries that, um, although I specifically talk about lawn care, it's the, the, the principles of what I'm talking about do relate to other industries as well. So apologize if I do lapse into lawn care mode, but it is very much sort of applicable to other industries as well. A hundred percent.

Robbie:

Cause I think a lot of small businesses, myself included, you always worry about raising prices and staying in control without losing too many customers. So that's what we want to really focus on. Of course. Yeah. Yeah. We want to focus on the right. Why is it necessary to raise prices periodically for

Richard:

businesses? It's a very good point and I think certainly you need to make sure you've got the right pricing structure in the first place. I think we can sort of take one step back from that. And if you're raising prices, are you happy with the pricing structure you've got at the moment? Or are you having to raise them too high? To get to where you should have been in the first place. So I think doing some sort of market research initially when you first set up by making sure you've got the right pricing structure and you are getting a number of customers that are saying yes to your pricing proposal. So I think you've got to be clear that you are, you've got the pricing matrix right in the first place.

Robbie:

Knowing,

Richard:

knowing where you are in the marketplace. Of course, yeah. Yeah. Knowing where your, knowing where your competition is, knowing where your competition is. But also we do, we do talk about competition, but we also know that there are other companies that we can talk to that are competition, but can be allies as well. So it's good to have a network of other people. within your industry that you can talk to. You're not necessarily competing with them. There's plenty, I'm sure there's plenty of business to go around. But just have a bit of a sort of a discussion with those other companies out there just to make sure that your prices are sort of similar ish to theirs and I'm sure people will be open about that.

Robbie:

And what would you think the best way, do you think trade associations would be the best way to Yes. Doesn't that work with other business owners to potentially find out what they charge or how they set their prices?

Richard:

Yeah, and not every company is going to be open and willing to share their pricing matrix with you, but you will find a lot of companies are. And once again, I'm talking about the, the, the, Lawn care association, i. e. the UK Lawn Care Association in particular. There's a lot of like minded individuals that would also apply to other industries as well. There might be trade associations where you'll get together for a conference, or you'll just have a little network of people you can talk to. Just to sort of sound out where, what are you charging for this particular service, or what you're charging for that service. Just so you've got an idea, you're not, you're not too far out.

Robbie:

You should also know how cheap or expensive you are in your area by even how many quotes you're closing.

Richard:

The acid test is if you went out to do 10 quotes in whatever industry you're involved in, if 10 people come back and say yes straight away, You're either really good at what you do or you're possibly too cheap on the on the flip side to that. If only three or four out of the 10 say yes to your proposal, then you either may not be explaining it particularly well, or you've confused the customer with what you're offering is or your pricing's completely wrong and you're far too expensive or more than they thought it was going to cost. We haven't sold the benefits of why you're charging what you're charging. So, I think that's a good acid test. If you're getting 7 to 8 out of 10, that's probably about right. You're not going to win everything.

Robbie:

When do you think the best time to raise prices is in your business? I know, I'm going to, I'm just going to say the last couple of years. I think everyone's had price rises because inflation's been so high.

Richard:

But it's not just inflation, actually. I mean, in certain industries, a lot of the raw materials have gone up. So inflation is one thing, but if you're in an industry that specifically uses a product that has gone up an awful lot, whether you're in farming, for example, lawn care, the cost of fertilizers was 200 percent increase in price because of various wars going on around the world. And that had a big impact on growth. Companies that realized they would have to raise their prices not to stay in business But to make sure they were profitable so they could still deliver the service they want to deliver But in terms of when you do that, I think if you're if you're embarking upon a seasonal job and it's the start of the season. I think it would be honest of you to do that price rise at the start of the season rather than to get the customer on board with your particular treatment program or service that you're offering and then put the price that midway through the season.

Robbie:

I know from my own business, so I have a lawn care business and we always raise prices just before the spring and my thinking behind that is if customers are going to leave we want them out of the way so as we have room to bring on new customers on a higher rate. Yes. Yeah. And it's easier getting all that happening on a quieter time of year. Yeah. Than trying to raise your prices middle of the year. And then. It gets a bit messy. Yes. There's a lot of people coming and going or customers, there's a customer churn there. It's easier just to start the new year with more.

Richard:

Well, I think it's a lot easier for the customer to understand what they're, they're committed to for the year, rather than to do it midway through the season. And you might've done two or three visits to that particular customer and said, Oh, by the way, next time I'm going to be, my price is going to be 20 percent more or whatever. Then you'll probably got more chance of alienating them. And I don't think it's really fair on them. Well, they're saying that I know that during the season of 2022, I think because the fertilizer prices were kept going up, then I know certain companies did have to raise their prices during the season just because becoming far less profitable because the prices have gone up to far too much. But generally raise them ahead of the season so that the customer can then make an informed decision as to yes I want to carry on with this service or no I don't want to carry on with the service rather than leave them in a lurch halfway through What do you think the best way to communicate that to a customer is well? I think the best way I think verbally is a little bit It's a job for them to understand what you're or why you're raising your prices. But I think certainly via an email, and I don't know how many people send out like a seasonal newsletter, but I would certainly advise sending out some sort of quarterly, if not a seasonal newsletter to your customers, not just about pricing, but just generally about the services that you're offering. And I think within that, you've got a lot more scope to be able to sort of, to explain to the customer, um, for whatever reasons we are raising our prices because of. Um, and this is your program for the coming season and this is what the cost is going to be. So I think either via an emailed newsletter or even a letter that's sent in the post, which I know is a little bit old fashioned, but once again, sometimes that can actually work as well.

Robbie:

Do you think, um, cause it, again, just back to my own business, I would just say your price this year is X amount. I've never put a percentage to one year, put a percentage on it and had a big turn rate out of it. So I just say, thank you for your customer this year. Your price is X amount. I don't go any further than that. Yeah. Do you think you need to explain any more than that or do you think is there pros and cons?

Richard:

I personally would just so that you don't alienate somebody who thinks we'll, we'll Robby's putting your prices up. Why is he putting his prices up? I think if you can justify and be honest that you're putting your prices up because of a cost of materials have gone up or Like the cost of employing staff has gone up because of various sort of changes in tax and national insurance contributions, etc You can then almost like justify and the customer can say well I'm not now being robbed or they're not putting the price up for the sake of it There's a there's a very legitimate reason and it's not spin it, Say I'm putting prices up to be able to deliver the level of service that you've come to expect from us. We need to raise our prices by this amount to make sure that we can cover our costs and give you the high quality service you've been used to from us.

Robbie:

I think this year in particular because inflation has been so high the last couple of years and prices are still going up and inflation is still going up and as you say the changes to the tax and employers are going to be paying more. So I think this year there's going to be nearly an urgency for small businesses to to be able to raise their prices without losing too many customers.

Richard:

Yeah, I think the, the consumer has got used to price increases, whether it's your gas, your water, everything, everything seems to go up. And I think some companies profiteer from this by putting their prices up because everybody else says, Oh, everybody's used to putting the price up. Let's put our prices up, which is why I think it would be good to justify why you're putting the prices up, you know, not just jumping on the bandwagon, putting your price up for the sake of it. There is a legitimate reason why you're raising your prices. And it's important that you do that periodically, not during the year, but. It

Robbie:

never fails to amaze me to talk to some small business owners and they say, I haven't put my price up for years and now I'm having to put it up X amount. And do you think putting your prices up on a yearly basis is probably the best approach? As opposed to every other year, or once every six

Richard:

months, or Definitely. If I was increasing your prices by, say, 3 percent each year, it's much better than waiting for the third year to put them up by 10%. Because then 10 percent is a big jump, whereas 3 percent each year, if they're paying on an annual basis for their year's worth of treatments, then 20 or 30 pounds increase a year. It might only be, if they're paying by direct debit, it might be an extra pound a month direct debit. Which is, which is not a lot. Whereas if you start to sort of talk 10 to 15 percent increase, then that's a bit of a shock. Yeah. So you're, you're less likely to get people canceling if you're just, just keep moving the price up gradually each year.

Robbie:

And how far in advance did you communicate?

Richard:

It's a very difficult question to answer. It depends on what industry we're talking about, but certainly ahead of any proposed, if it's a service based business, at least a month before, so you can give the customer an opportunity to consider what you're suggesting. But also you've got an opportunity then to soften that blow by potentially offering the customer a chance to prepay in advance of the season. One thing I used to do, for example, let's say the lawn care season started on the 1st of March. I would, we would write to the customers in December to give them a chance to beat the price increase for the, for the following season. So, um, they can, they can buy it at 20, 24 prices rather than 20, 25 prices, saving you 3%. Plus, if you do pray prepay in advance, we're going to give you a 5 percent discount. So almost like the headline figure could be it's an 8 percent saving. And that gives the customer a real incentive to carry on with you. The price has gone up or is going to go up, but you're giving them an opportunity to prepay in advance before the price goes up, which is good for you as a business owner, because you're great for cashflow, good for loyalty, because they've committed for the whole season and you haven't got to keep invoicing them after each treatment, but also provides you a really good opportunity. Let's say for example, uh, I will refer to lawn care here. Let's say for example you got really behind on some of your workload and you'd had a very big autumn renovation market and you'd done a lot of lawn scarifications and then all of a sudden you've now got to drop into your regular customers and do an autumn treatment and then the week later you've got to do an aeration, it would make a lot more sense. If that customer had prepaid, you could do their autumn fertilizer treatment and the aeration on the same day. And you're not saying, here's an invoice of 50 for the, for the treatment, here's an invoice for 100 for the aeration. Because it's, the customer isn't so concerned about the cost of it because it's already taken care of in the background.

Robbie:

Yes, customers that have prepaid are less worried about When exactly you come to do the job,

Richard:

the less worry when you come to do the job and less worried about how little time you spend there. If that, if that makes sense. So if I come to do a treatment to your house and as you know, we're very professionally set up in terms of the equipment we've got. So we're quite efficient in how we can actually apply the product in a timely fashion. So if we are there for half an hour, but we're presenting the customer with a, Bill, then they've got, they've got a tangible sort of, you, you've been here for half an hour. I've got a hundred pound pill, but that, wow, that's 200 pounds an hour you're charging me. Whereas if you're not presenting a bill, you're doing the treatment. Um, the customer doesn't really, or can't remember what the cost was, but you still carried out the treatment that you wanted to, and you still improve that customer's loan. I

Robbie:

have some of my customers on a monthly payment and it gives me a lot of flexibility as a business owner, we can come and go as we please. Thank you. And a lot of times they actually, they're getting very good value for money. If we're a bit quieter than usual, we'll go and spend a bit longer there. And then the rest of the time we'll spend the same amount of time as we had planned. But it just means we can work for longer in our garden. And then it gives you a lot of flexibility for the,

Richard:

the

Robbie:

quieter times. I

Richard:

think it's a, it's a massive plus for both parties, for the customer. If you're, if they're, if they're spreading their treatments over 12 monthly payments, it's basically like an interest free loan. Good for you for cash flow, because you've got a certain amount of money flowing in each month. And also, it's good for the business. Let's say, for example, we had a drought in sort of June July time, and you phoned up to say, I'm now come to apply a fertilizer treatment to your lawn, and the customer says, well, lawn's brown, come back in the autumn. at least if they are a prepaid customer or a direct debit customer, you're still going to turn up and do something that's going to benefit their loan.

Robbie:

Most of the loan money now is on prepaid or on, so on the monthly, occasionally if there's a drought and you miss a cut, then they don't mind. But on the other side, the last few years, it's been a lot milder. So they've got a cut at the end of the season. So I've said to them, look, if there's a cut either side, you'll not get charged and we'll not discount it. And then it just means that it flows really well and the customer doesn't mind, you know, so occasionally if you miss a cut, it's not the end of the world, but at the end of the year, if it's mild, it works, it works itself just sort of on swings and roundabouts. And then it works really well for me as a business owner, because we do it through Jobber, we hold a card and file. So some of the customers. They're not on the, on the monthly, but whenever Jason goes and does the job, he wants the job complete and the system automatically takes payment for everyone else. They're on. They're on the monthly plan. And it works. So I think

Richard:

for a lot of businesses, spreading somebody's cost of service over a 12 month period is a lot more beneficial for the customer, a lot more beneficial for you as a business, but also they are less likely to cancel and are more likely to keep the customer for longer periods. I think

Robbie:

that's key as well, convenience. Whenever I started asking for a card on file from customers, I thought people will be a bit dubious, but whenever they get into it, they're like, Robbie, this is brilliant because it's one less thing they need to worry about and the convenience, the convenience for them. Yes.

Richard:

Yeah. And when your price increases only 1 per month or 1. 50 per month, once again, that's not really going to set the alarm bell saying, Oh, I need to cancel this. It's getting too expensive now. Whereas if you were doing it over the course of the year, then it would, it would be a larger figure. You're saying the price is going up by, but when you're talking about price per month going up, that's what they're looking at. My lawn care or my treatment for this particular service is costing me X pounds per month, and it's going to go up by one pound a month.

Robbie:

Just to go back to your, your prepayment and you offer a discount, but then the following year, whenever you offer the prepayment, do you offer an additional discount or do you just say, look, it's going to be X amount to do your lawn? This year, if you want, maybe if you don't want to do the prepayment, then it's going to be X amount.

Richard:

Oh, yeah. If, if they don't want to do the prepayment, then they would then go to the 2025 prices, for example, they, they missed the opportunity. Um, and of course we, you, you would be flexible around that as well. Although there will be a closing date, this offer closed on a certain day. There's always a period where people say, Oh, is that offer still open? And it would be a hard person to say, well, no, that's closed now. Of course, you, of course, you'd like to given the opportunity to, to, to, prepay to save money and to become a good loyal customer going forward for the next season and beyond.

Jason:

On the, um, the payment when you're saying, um, like sending out for the, for the year, if they get paid per treatment, would it be worth saying on that, if the price is going up, this is what it'll cost. It'll then pay monthly. This is what it would cost you a month. Would that be a better way to. Yeah, absolutely. Yeah. The way I

Richard:

would

Jason:

do

Richard:

it, if you're, if you're promoting a increase, then give the customer an opportunity to. Either prepay or pay per direct debit, promote it in that, in that letter. It almost like softens a blow cause they may have been a pay as you go customer to that point, they may not have been aware that you offer a prepay or, or payment by monthly. And this is an opportunity for them to say, okay, well, if our price is going up by so much per treatment, Oh yes, I'd rather go into your direct debit scheme that seems a lot more cost effective for me.

Robbie:

The prepaid system works really well for. Whenever you want to bring in cash flow, so if you're wanting to set it up, you obviously want that in your quiet time, you want that money coming in your quiet time. The money comes in,

Richard:

yeah, but, but remember, if it comes in now, it doesn't come in later on, don't spend it. I've had people that have been absolutely thinking about it, they've bought lots of equipment, and then realised that they, the money's already coming in, it's not going to come in twice. Yeah. Cashflow is king. Cashflow is king. Yeah.

Robbie:

It's easier and it's not so easy holding on to it. Yeah. Yeah. Yeah.

Jason:

Absolutely. If, uh, with the price increase, if you get pushback from the customer, what's the best way to approach that? You've got to,

Richard:

you've got to

Jason:

ask

Richard:

questions. If, if they, if it is a three or 4 percent increase, is that the end of the world? Is there, is there another reason why there's pushback? So you've got to start to explore and find out why they're questioning the price increase. So as long as you've done the right thing in justifying why you think you've got to put the pricing up, ask the customer, are there any other issues? Are you, are you not happy with the lawn care? What, what, you're, you're happy paying, let's say for example, 30 a treatment, you're now going to get charged 33 a treatment, is that, is that, is that a deal breaker? And you might find, they might say something, oh, my, my neighbour only has four treatments a year from another company and they are going to get charged so much, there might, there might be some other undertow, undercurrent of, of, of dissatisfaction that this pricing has brought it to the surface.

Jason:

Would it be worth, Say, like you said, the neighbour gets four treatments instead of the five, would it be worth offering them that, or even though you don't offer that as a business, would it be worth, if they're a loyal customer, offering it as a, to try and keep them, or? I,

Richard:

I don't think so. And the reason I say that, because you, you've built your reputation based upon your treatment programme. If you suddenly start to say, Oh, I'm going to now drop back to a competitor who may not be quite as good as you, then you're sort of, you're coming down to, you're bearing down to price, whereas you, you back, back yourself. In fact, we are a reputable company. We're offering really good service and we're, we are delivering a really good product and that you're, and you're really happy with your lawn in this state, you're really happy with your lawn. Um, so yeah, just back yourself.

Robbie:

If a customer says that's too much, what do you think the best response would be if somebody says the. Is that just again, just finally say why is it too much?

Yeah.

Robbie:

Why is it too much? What makes you say it's

Richard:

too much? Um, and you can justify why you're charging what you're charging. And it's, and it's all to do with the whole business brand, the whole, the service you're providing is a high quality service. And we charge this because it's not just a case of us turning up one day and applying a product and giving you a nice green lawn. or, uh, whatever other service you're offering. It's about the years of experience and the research that's gone into choosing the right products to give you the best possible lawn. And to give our technicians the best possible training to give you the best possible service.

Robbie:

I think another, another good way is to say, well look, if this place is too much, what can we drop out? What can we remove from the quote? So again, back to lawn care, never fails to amaze me the amount of people that will only treat their front lawn. Because people see that, so if you go to do, if you go to do a quote and somebody says, that's too much, or really want to use your service, that's too much, but look, what can we do? What can we remove from the quote to get this over the line? It's a very good

Richard:

point and certain things you can remove but the problem is if you remove something which is part and parcel of getting the best possible lawn, they'll remove something and then the lawn won't perform as well as it could do. And that's, that's always it. That's a very, very difficult one. I think if you can somehow discount One of the treatments may be, or, or offer, offer something extra for less money. It's a, it's a, I'm never, it never ceases to amaze me that somebody many years ago. They were going to cancel because the price had gone up and it was too much. But then you start to offer another service. I see, by the way, you don't have your lawn aerated each year. What about if we offered you a special price for aeration? The customer was going to cancel because the price had gone up. You've now then said, well, you can have your lawn aerated, but we're going to do the aeration at half price. So they're saving themselves 40 on aeration, but they're now spending 370 a year. So they're spending more. They just, they just wanted a deal.

Robbie:

The old, the old classic as well. Whenever somebody asks, can you do it for less? Well. I can always do it for more.

Jason:

Yeah, yeah. So how can building a strong client relationship help with price rising?

Richard:

It's a very good question and something which I'm back strongly is that people need to deal with, well people deal with people. And it's really important that a, you've got the right pricing structure in the first place to ensure that you can spend long enough for your clients. So let's say for example, I wanted my van to achieve 500 pound revenue per day. If I was charging 25 pound per treatment, I've got to do 20 lawns a day and I probably can't deliver a very good service. If I'm charging 50 pounds of treatment, I can do 10 lawns a day and I can spend more time with customers. And I think if you're, if the customer's dealing with you, rather than Not, not overseeing you cause you're in and out too quickly. Then it's easier for a customer to cancel a business rather than a cancel a person that makes sense. If they get to know you. And you're spending time with them. So you're not just doing the treatment. You're accepting the cup of tea or cup of coffee. If it's been offered to you, you'll, you get to know things like them with their dog, little things like this, honestly, those things are so important because then you become a friend of the family rather than just a company calling in to do treatments and for that customer to then cancel Tom, who's the technician. It would become very personal. Whereas if the person never saw anybody for that company, we're just dealing with a, with a, a newsletter or, or just a, uh, an email, then it's a lot easier than to say, Oh, thanks very much. I don't want you to come any further. But if you've got to say it to Tom's face, then that would be more difficult for the customer. So building that loyalty by making sure you're spending enough time and getting to know your customers.

Jason:

In the lawn treatment business, there's a lot of customers that you'd go to and you wouldn't see the customer. Would it be worth like before the treatment or once you finish the treatment, just knocking the door, say that's the treatment done. Would it be worth doing that just to try and get that face to face? Absolutely. Yeah.

Richard:

Because there are certain times of the year where not only are you doing treatments, but you want to obviously explain to them, firstly, you knock on the door and say, Hey, Here I am today. I'm going to, I'm going to apply this to your lawn. This is what you should do before and after the, I've done the treatment. Do the treatment, knock on the door. I mean, a lot of people are working at home now, so not everybody wants to be sort of disturbed. You have to get that feel for, are they a busy person who's working from home on a conference call or something? But if you get the sense that they don't mind you sort of knocking on the door again and explaining that, what you've done, leave them with a bit of paper or, or whatever you do as far as, um, Confirming what they should do, don't let the dog on the lawn for an hour after, etc, etc. But that's a really good opportunity to promote things like, oh, don't forget to leave us a google review or Don't forget we've got a special offer this month for a refer a friend So if you refer a friend you'll get an extra treatment or a Marks and Spencer's effect or something like that I suppose it's better doing that face to face rather than just It is, yeah. Once you get home and email, yeah. There's so many different things that you have got to talk to the customer about. For example, you might be recommending an additional treatment in their lawn. You've noticed that it might be in need of a scarification or it might be in need of some other treatment. To have that conversation at the time you've inspected the lawn is much better than maybe a follow up letter. It's got more sort of clarity to it because you can then go and explain or, or show them a sample of that lawn to justify why you're recommending that particular treatment. Bit more personal as well. Yeah, yeah, definitely.

Robbie:

Yeah. You think as companies start to scale and grow their vans, let's say, we'll go back to our lawn treatments, Do you think then it would be worthwhile for a technician to have that's his lawn instead of, you know, for a technician to have it around as opposed to different teams going there? Absolutely, yeah. Whatever trade

Richard:

you're in, if you were offering a service and somebody else had done the previous service before you'd gone to do it and whatever the situation, it wasn't looking its best, then what ownership is there? You're going to blame the previous person who's been there. Whereas if, if you were the previous person. Wow, what's that? This lawn isn't looking very good, or, wow, this lawn is looking really good. But you, you, you, you've got more ownership if you are responsible for your own round of, of customers rather than everybody sort of dipping in and, and changing customers from a on a week by week basis. I

Robbie:

think as well, another way you could probably raise places and then control again, is by kind of a loan survey report and saying, look, this is, this is what I recommend for your loan next year. And just sort of back it up a little. And

Richard:

that's, that's all part of the service. That's what sets you apart from other companies who may not be doing that sort of thing. You're just not going in, applying a bit of fertilizer, and accepting that's it, that's my, that's 30 well spent by the customer. You've got to go a bit above and beyond. You've got to get ownership of that lawn, you've got to get your hands on these and the customer's got to see that, wow, he's really invested in, look he's on his hands, he's sniffing the soil, I mean, he's really interested in my lawn, and you, yeah.

Robbie:

That nearly ties into adding value, so if you're, even if you're increasing your prices, you're giving the customer something extra for free, like a lawn report, or if that's in any business, and you're having to do, I suppose, if you're looking to, you know, Raise your prices at all and you're scared about losing customers. That would be a really good way added value. Is there, is there any other tips you could give to add in value to increase prices to keep? Yeah, certainly

Richard:

we don't give the customer any reason to want to cancel you to do everything that you should do. And that, that comes down to making sure you've got some really good software that is, is able to schedule your treatment. So the customer's aware when you're going to be coming, whether it's a morning or afternoon, because, um, some people may be staying in. Just to receive you, to, to, to show you the lawn or show you some issues they've got. So don't say you're going to come in the morning and then turn up in the afternoon. If you say you're going to go in the morning, go in the morning. And if you can't go in the morning, let the customer know, I'm ever so sorry, we've been delayed. It won't be till the afternoon. Is that still convenient for you?

Robbie:

We would only ever schedule treatments for a day. We would never schedule treatments for a morning or an afternoon. Because you never really know with traffic. You don't, no. You can jump into the van in the morning, you can have a lovely route scheduled, and all of a sudden

Richard:

Yeah, I think with software sort of moving on as well in terms of people in the office can see exactly where various technicians are to sort of give people a sort of a heads up as to whether, whether we're behind schedule, whether we're on schedule. But the key here is don't give the customer reason to cancel you do everything that you should to make them friends. On that note,

Robbie:

even changing your bank account can have a. I'm trying to get people to pay into a new account because all of a sudden then that's a, it's a hassle. It's something they have to, another, another step. So,

Richard:

so I think, yeah, I think,

Robbie:

so for

Richard:

buyers in a way, don't give them a reason to cancel, give them every reason to want to stay with you and give them every reason to want to promote you to their friends and family. What a good job you're doing in looking after my property, whatever industry you're involved in. And that's about being courteous, being, well dressed, so making sure you're representing the brand, so all your vans are kept as clean as they possibly can. Okay, certain times of the year it's quite difficult, but making sure the van is clean, making sure you're in the in the correct uniform, and you are representing the business, whether you're, if you're not the business owner, you, the person who's representing the business should act like the business owner, and make sure that you're delivering the best possible service, and you're being really, really courteous, because politeness doesn't cost anything. And there's so many people that are, who, who I've got their earphones in, uh, they're, they're listening to podcasts, um, this one, this one, hopefully, when that, and there's a time to listen to podcasts and there's a time not to, and that's when you're sort of, I think when you're sort of, when you're working with customers and, and give, give them 100 percent of your time and that, and that's about sort of the, the brand, um, the customer care, um, the, the, you mentioned the lawn report. Cool. You're not just say, turning up, doing, doing a treatment. You are, you are doing a treatment, but you are also recommending something else you think could actually make the lawn look even better. And people have different buying motives. Some people just want to not, not, not everyone buys in price. No,

Robbie:

most customers don't. Do you wanna talk a wee bit about that, Richard?

Richard:

Yes. It's incredible how when I get a lot of people that come to me that want to start a lawn care business and they say, I've, I've gotta compete with so and so on price. And, and I say, well, just stop, stop you right there. You are one man in a van operation. You can blow the opposition out of the water because you can deliver a much better service. So sell yourself and the service that you can offer. Don't try and compete on price. Because if you can think about some of the, say, like a national business, they've got much more cost efficient operation. That means they can possibly buy their raw materials at a lesser price. Um, they've got sort of massive, um, sort of central, um, scheduling. So they are, they've got a much better cost base than you, but they can't react in the way you can. They can't react in terms of changing the treatment program in season according to the weather. Whereas maybe a large national business is committed to X tons of a certain product, so they can't change their program.

Robbie:

On that note, if you were a new business and you were charging more than your local competition, and, uh, But how do you communicate that to the customer? How do you communicate that, look, we're more expensive because

Richard:

I certainly wouldn't say you're more expensive, only if it comes up. Don't sort of, don't alert them to the fact that, oh, I didn't know they're more expensive than the competition. It's amazing in certain industries how people haven't got a perception as to what price you're going to charge.

Robbie:

I think most people these days don't really, don't, don't, don't appreciate it. Honestly, and in

Richard:

a new way, well, I would say this is, lawn care is still quite a new industry. And I, and I'm sure that. only three or four out of out of ten lawns receive a treatment from a lawn care business. It's a very, very low percentage. People, it's not like a commodity, everybody knows what the price is going to be. So, I think the key to it is you go and assess the situation, the customer's lawn, you devise a program which is suitable for their lawn, they nod and they agree, you tell them what you think you're going to do for them, and I think always, if you can, for the first treatment offer, maybe two for the price of one or three for the price of one, some sort of introductory. That gets you over the fact that you might be more expensive than somebody else they've heard of and, and that they would focus on this one off price you're going to give them. Thereafter, it reverts back to your normal price after that. I used

Robbie:

to offer 20 percent off my first treatment, but they, so we would, on a typical quote, it would be, Lawn treatment areas and scarification areas and the lawn treatment was the cheapest thing on that and I was offering a 20 percent discount on the first one. Yeah,

Richard:

exactly. Just if you are going to be more expensive and I certainly wouldn't highlight the fact that you are more expensive only if they bring it up. Why are you more expensive than the previous company I used to have? I said, oh, so then you ask, well, why have you still not got that previous company servicing your lawn? Oh, they were very unreliable. Um, they're only here for five minutes. Okay, well, that's why we, we charge a little bit more than them because we are more reliable. Um, we'll turn up when you want us to turn up and we'll make sure your lawn is really good and you won't want to move away from us. Yep,

Robbie:

we'll give you the support you need.

Richard:

Absolutely, if that's what you want, you've chosen the right business but, but it comes at a slightly higher cost than your previous business, which is why we're doing so well and why our lawns that we look after look so good.

Jason:

Try and spin off as a more of a premium service. Yeah,

Richard:

yeah

Jason:

And there

Richard:

are always gonna be people that shop at a supermarket that sells cheaper goods than a supermarket that sells More expensive goods and something the perception is the more you pay that the better service you're gonna get. Not everybody buys on price What do you think their motive is behind that? Well, I guess depending on what service they're buying but it's obviously something that they need and Price isn't always at the forefront of that You that buying process. It's the end product is their motive. So if they want the best looking patio or the best looking lawn or the best looking house frontage, whatever it's, it's not the cost of the issue. It's the end product. I want this to look its best. Um, I don't think it's, I don't care what it costs, but in some respects, sometimes the more it is that the perception is they're going to get a better job. By the trust that you can deliver. Absolutely. And they got to have confidence in you as a person that you are talking from some degree of authority, you have some knowledge and they have trust in you.

Robbie:

And if you're targeting a higher amount than what people may perceive, or if you're targeting a well off customer. There's a perception that you're going to do a job to a certain level, there's, there is that there, but on the other side of the coin, if you're not charging enough, you often find that customers that are used to paying a high ticket price, want a really high service. So, I know in the past I've done bigger lawns and I haven't charged enough. And then a customer can be quite demanding and all of a sudden you're like this. I'm not making any money. I'm not making any money being here knowing that the two go hand in hand.

Richard:

Yeah.

Robbie:

If you

Richard:

charge commensurate with what the job that you can't take the Mickey, you can't be extortion going to extortion. But, but if you are delivering a really high quality service, you're that comes at a cost, but you've got to make sure you can deliver. And if you're not delivering, then you're, you're not, you're not achieving their objective. The cost was not an issue to that particular customer. Their buying motive was, I want this to look its best.

Robbie:

I want this to look at the best. I want it done right. I want the staff to turn up. Yeah. I want a professional outfit and all that comes with a certain cost. So if you're looking to scale your business up to. Those higher paying customers, everything has to go up with everything has to go up with it.

Richard:

Correct. And it's not just about delivering the service on the day, it's the backup and the back office and the communication with, with everybody in accounts or whatever else in the background, who's, who's, who's dealing with that customer. And also one thing that's really overlooked is that if there's ever any problem, you'll go and deal with it. The problem might not be a real problem. It might be some confusion. The customer's got like a lawn Isn't looking as good as it could do what have you done to it never used to look like this until you decided to treat it and you might go there and find there's some other issue or Somebody else has been in and cleaned a patio and some and some product has moved on to lawn and it killed the lawn which is Nothing to do with what we've done, but it's just it's just dealing and being very reactive to any issue that the customer brings up and, and, and make it easy to deal with because nothing is a problem and we'll put it right.

Robbie:

I always believe good customer service, good customer service is really whenever something goes wrong. That's what you're, that's what you're, and those customers

Richard:

will stay with you for longer than any other customer because they don't expect you to put it right. And you do put it right. And they're like, Oh, I'm sorry. I complained, but that's fine. It was just a bit of confusion. There was not an issue with that situation, but we've dealt with it and it's all, it's all okay now.

Jason:

On the, uh, not everybody buys on price. Yeah. Recently we've been looking at extending, uh, our house and obviously it's nothing to do with gardening, but the difference between people that offer service at a lower price to a higher price, like, People that just come out and say, Oh, it's going to cost roughly this much. And then somebody that's considerably more, they have then gone off, done like drawings and then sent, you sent them through to us. So you can sort of see in that, like the price difference, you can sort of see where you get in. They, they, they would

Richard:

justify, we charge X compared to the lower company, but we deliver X.

Jason:

Yeah. Even, even if, even though we're not going to have gone through with anything of it, like what they've done in the background.

Richard:

And you can relate to that as a, as a consumer, you mentally think That's a good company. I can deal with them. I see why they're charging that much. They're very professional. Whereas some people aren't bothered by that side of it, and that comes down to the buying motive. And some people want the cheapest possible price, but then they don't necessarily get the right service. And you will find that the people who are buying cheap don't stay as long with their provider as people who are spending more money because the people who are buying cheap don't get the service. And they don't maybe get the end results either.

Robbie:

And then they're always looking for the next tip. They're always looking for someone to replace you. They're always looking for And then the

Richard:

next offer, the postcard that comes to the door, they go to the next company for that offer. And they're just offer takers, sort of like low hanging fruit, as it were. So, uh, and, and there's always a mix of those with any customer base that any, any business has got. But you really want the people that you can deliver good service to, that appreciate good service. And that's where the loyalty will come. And when you do have to raise prices, as you will continue to have to raise prices, even though they're, they're spending good money anyway, then they will accept that you're delivering a good service and you've, yes, of course you've got to put your prices up.

Robbie:

For someone that's watching this and they said, I haven't been priced up in years and I'm really struggling with going to lose customers. We talk about a lot on the podcast, having a mindset or a mindset change. And for those customers or for those viewers watching the show at the minute and they're really struggling with either one of them crazy places, a lot of it comes down to just confidence and just saying, as I say, just have confidence that you

Richard:

are a good business, you're providing a really good service and most people are really happy with your service, you've just got to back yourself and, and, and if somebody As you mentioned earlier, Jason decides, Oh, I don't want to carry on now because you priced it too much and you put them up by a very, very small percentage, then you, you've got to question yourself, how is this customer really invested in my service and do they really want my service or value my service?

Jason:

But what we're saying that like, if somebody hasn't put the prices up consistently, Then they have to do a big increase and they get quite a bit of pushback. Could they, would it be worth them swallowing some of that initial rise and just doing it steadily for the next, like every six months instead of yearly? For

Richard:

example, you could say, okay, look, we do have to put a price up by 10 percent but I'll tell you what I'll do, I'll just make one of those treatments at half price or we'll soften the blood a little bit, knowing that it's not going to cost you the end of the world. But you've, but you've kept them. And then, but say, but for next year, you will have to go into this next price tier, or had you consider paying monthly by direct debit, that would really make things a lot easier for you. And that'd be a good opportunity to get them onto that. Um, but it also just reignited another thought as well. There's one classic situation where some companies do have to go through when they get to a certain turnover and that you start to introduce VAT. And it's amazing the pain or the, the, the, the, the worry that the companies go through when they get to, I think the threshold is now 90, 000. So if you're generating 90, 000 pounds worth of revenue in any 12 month period, you will have to start charging VAT. Now that's 20 percent increase. And it's interesting that. A lot of people are worried what the customer comeback will be when you're going to charge 20 percent more on what you were previously charging. And it's amazing how few people cancel, because you're not profiteering or increasing your prices by 20 percent for the sake of it. You have now got to charge 20 percent more. And most customers accept it. You're, obviously your business is doing well, you've got to a certain level, and now you've got a charge in VAT. I accept that.

Jason:

I suppose because they see where it's going. They know where it's going. But it

Richard:

relates, when you say you've got to put your price up, it does actually relate to the fact that when you are putting your prices up, as long as you can justify why you're putting your prices up, you're not just putting the price up for the sake of it. It shows that customers can sort of buy into that. Oh yeah. And I understand why Robbie's put his price up by 3 percent this year. And I can understand why 20 percent because you're a VAT registered. Yeah, of course we'll back you. We'll carry on with you, but it just shows that people can, can take that sort of blow of paying 20 percent more. even though they weren't expecting to pay 20 percent more when they first signed up with you.

Robbie:

I think as well, a lot of businesses don't appreciate the money that comes back into the business after you go back registered, you can claim an awful lot of money back.

Yeah. Yeah. As a business owner, absolutely.

Robbie:

And the offsets. There's something that I'm going to go back to, and you'd said about reducing some of your prices down, so you're reducing some of your prices down. Let's say, for example, you haven't increased your prices. The last three or four years and you're really struggling now, cash flows are a real issue. And you're thinking, well, if I increase my pricing, I'm going to lose a lot of customers. Another way to look at it is if say you put your prices up 10 percent and a few customers cancel, you might find that you're working less hours, but you're earning the same.

Yeah.

Robbie:

And then any new customers that are coming in, they're going to be on that new rate. And all of a sudden, before you know it, You've raided the ship. You've taken a small bump and you've raided the ship.

Richard:

It's that fear of doing something that you're uncomfortable with and the fear that you're going to lose customers in your business is going to fail. And this is where I think it's really important to have some sort of network of other companies in the same industry or even other industries that have gone through a similar process who can give you assurance and confidence that, yeah, go ahead with it, you'll be fine, but you'll be much better off than being a busy fool. And and not putting your price up and still hoping you're going to sort of keep keep your business afloat Move move your prices up by a certain percentage So the new new customers coming in are going to be on a new pricing structure the ones you've lost Maybe they weren't interested anyway and and we're going to cancel at some point in the future regardless of whether you put your prices up where you Look at the bottom and

Robbie:

know they're going to the next one If you're not charging enough to begin with and you don't have the money to invest in your business and that might even just be to increase your website presence and how you look and your van and invest in it and even invest in advertising to find those.

Richard:

And also, there's another way of justifying a price increase. If the customer says, look, why are you, why are you putting a price on it? I say, well, I'm putting a price on it because we have to keep investing in the best possible staff and the best possible training and the best possible sort of back office so that we can deliver the best service to you. If we don't put our prices up, something's going to, it's going to be sacrificed and it might be the quality of your lawn care. What we have to do to keep the price of moving up, to keep our business, to be able to offer you the best possible service.

Robbie:

So I've been grilling Richard now for a little while. Richard, you run a very successful consultancy firm, and you not only train people starting up, but you also help people improve their business. and scale. Would you like to tell us a little bit?

Richard:

Yeah. Yeah. I mean, there's several people that come to me that need assistance in, in, in starting a business. So it might be somebody who's completely green when it comes to lawn care by they've been in a job in the city, or they've been made redundant, or they just want the idea of resetting. And we saw a lot of this during COVID where people had a lot of time. either off or they were furloughed or whatever, and they wanted a complete change of career. So I've had to train a lot of people from no knowledge of lawn care to running and starting and running a successful lawn care business. And there's several that have done really well, that were my sort of my COVID starters, as it were. I get a lot of people that are in maybe the garden maintenance business or landscaping that it's getting hard work. And they're not getting any younger, and they see lawn care companies coming in on properties they're working on, spin a bit of fertilizer on, and, and then disappear off and charge X pound for it. So some people in that industry thought, um, I'd like a little bit of that action, which is quite easy to train people, because they're, they've already got a business, they're used to running a business, they're used to being outside, and lawn care is something which, there's a lot of technical sides to it, but it can be trained.

Robbie:

Especially to, we'll say, especially for lawn care workers. Anybody that gets their lawn or their garden landscape, they're probably going to be happy to pay for a lawn care service.

Richard:

Yeah, because a patio doesn't come cheap. So lawn care in comparison is very, very cheap. So is that something that they could tie onto their business as well? Yeah, absolutely. You can, but I find that where people try and do landscaping and lawn care or gardening and lawn care, it's a compromise. I think if you want to make a successful lawn care business and be profitable, you've got to be 100 percent into it. And, and the other side of it, like I train, I train, um, companies, employees. So if a company employs a new technician and they want them to be trained externally on the agronomy of soil science, grasses, fertilizers, how to apply, how to spray, then they'll come to me for a couple of days for training in that respect. And then the one that's really sort of increased in the last two or three years is, is business owners that have maybe been in business a few years and they're going through the same thing. Pains that we've just discussed now raising prices or how can it be become more profitable and And I do a one to one consultancy with companies where we can look at everything we can go through the books We can look at their offering and in particular People's lawn care treatment programs I think there's a lot a lot has changed in terms of the inputs that we're putting into lawns and the seasons are forever Changing and I think we just got to look at and not assume that we're approaching it in the correct manner and that the fertilizer or the treatment program may need tweaking slightly to make sure that the lawns that you look after are the best. And there's a lot of soil science that we need to sort of go into to make sure that's right. So it's, it's new startups, gardeners, landscapers looking for a change in industry. Training technicians for lawn care companies and, and business owner consultancy days where we can sort of look at completely overhaul their business and Increase the cost that that particular company that I consult their turnover and more importantly their profitability, okay?

Robbie:

Where have you traveled from today?

Richard:

I've traveled from Cambridge today Frosty Cambridge flew into a foggy Belfast, but then since beautiful scenery along the way You only invite me over here when it's cold. I wanna see it in the summer. Next time.

Robbie:

Yeah. Away. I've diversified my business. Yeah.

Richard:

Brilliant.

Robbie:

Film the podcast in the, in January and February, so probably days. Thank you very much. Thank you again.

Richard:

Thank

Robbie:

you, Robbie. Thank you, Jason. Thank you. Thank you, Rick.