5 Easy Tips for Maximum Profit - How and When to Price Your Landscaping Services

As a business owner, you know that price increases are sometimes necessary in order to maintain profitability, stay afloat during tough economic times, and continue to develop and grow. But before you implement any price hikes, it’s important to do your research first and make sure you’re making the right decision for your business.

This is especially true in the landscaping world. Raising prices for your landscaping customers on an annual basis isn’t necessarily good for your business, so this can be a challenging decision. You need to be strategic about when and how much you raise your rates. Here are a few key things to keep in mind that can make the process easier.

1. Make Sure You Have a Good Reason for Raising Your Prices

This may seem obvious, but a rate increase shouldn’t be an arbitrary decision. Anytime you ask a customer to pay more, you’re taking the risk of losing a customer. Or at the very least, it can feel like a risky move. The truth is, pricing fears weigh more heavily in the mind of the seller than in the mind of the customer, especially if you provide valuable quality, service, and convenience. And as consumers, we all expect reasonable, periodic price increases on goods and services.

However, price increases should be based on genuine and realistic changes in market conditions that your customers can understand. We are all very aware of the effects of inflation, supply chain delays, increasing fuel prices, labor shortages and costs, and increases in demand. Keeping an eye on balancing a realistic profit margin with consideration for your customers is essential. If you have a solid justification for asking your customers to pay more, they are less likely to be turned off.

2. Be Transparent About Why You’re Increasing Prices

When it comes to raising your prices, transparency is key. Customers appreciate honesty, and if you’re upfront about the practical reasons behind your price increase, they’re more likely to understand and accept it. There’s no need to overshare with emotional, “Woe is me,” explanations. Just reassure your customers that the change is to provide them with the best service possible which is something they can appreciate. They may be even more likely to stick with you when they understand the logic behind your decision.

3. What Is the Best Strategy for Raising Your Prices?

How you frame your price increase and communicate it to your customers can make a world of difference.

Transition slowly and prepare your customers for the increase

Surprising your customers with an immediate price increase won’t go over very well. A few explanatory emails to your current customers well in advance of the increase can give you some time to gather feedback from them, especially resistance. It’s a good idea to start with your best and most profitable clients. They’ll be the best sources to gauge the response to your decision. Make sure current clients know that their contracts will be honored for an extended period of time as a thank-you for their business. This can soften the blow of an increase.

Prepare some options to make the increase more appetizing

Maybe you could offer a discount on annual vs. monthly billing. That’s a common pricing option that many of us take advantage of. Consider marketing bundles of compatible services at a package price. This can be a discount on some services and an advantageous upsell for others, especially any new services you may be adding. Emphasize any upgrades to improved customer communication like text updates, chatbots, or DM options. Be prepared to articulate the benefits that the rate increase will have for your customers if you are asked directly. Reassuring them that this was a well thought out decision gives you credibility.

4. So When Is the Best Time to Raise Your Prices?

In addition to the practical concerns of managing rising operating costs, there are also savvy business decisions to consider when raising your prices.

You can’t keep up with an increase in demand for your services

If you aren’t able to, or interested in, staying in constant hiring mode, it’s time to raise your prices. Working yourself and your employees to exhaustion and burnout instead of raising your rates only creates additional problems.

Your closing rates are well above average Closing the majority of your proposals is an entrepreneurial dream. It signals that your business is flourishing and considered a go-to brand. It’s also an indication that it’s time to raise your prices. Volume isn’t the goal. Clearly, your expertise and reputation is working in your favor. Oftentimes, your pricing can reflect the perception of your quality, so take advantage of this opportunity. You’ve got some customers that aren’t particularly enjoyable or profitable to work with

This may seem a bit harsh, but it’s a truth about doing business. Raising your prices will either push them to leave, opening up time and space for better customers. Or, the working relationship doesn’t change at all, but you get to make more money from them. Losing customers always sounds scary. However, if you lose a handful of clients that are actually costing you money, your business will be better for it in the long run.

5. And When Is the Worst Time to Raise Your Prices?

The market is weak and/or demand is low

Common sense would tell us that if you raise your prices during a recession or when people are struggling financially, they may be less likely to do business with you. And this can often be quite true.

But have you done your research?

Did you know that during the pandemic, the landscaping industry grew 6.6% annually? Kentley Insights

And that 32% of landscaping businesses say landscape maintenance is their fastest-growing service offering. Statista

Industry and local research as well as strategic planning should guide your decision making. You may realize that you’re not able to charge more for your services at a certain period of time and will have to wait until the market rebounds before increasing your rates.

But you may also gain some insight into how you can distinguish your business from the average lawn care provider by adding more profitable, in demand services to what you offer customers.

The Bottom Line …

Deciding to raise the prices for your landscaping business can be challenging. But it’s a part of operating a profitable business, and there’s no reason to suffer over it.

Be sure you’re making well informed, strategic decisions that are in the best interest of both you and your customers. Carefully consider the timing of your increase and be transparent and upfront with your clients. This will go a long way to building a strong foundation of trust and respectability.

You’re in business to provide your customers with the very best landscaping services. And that requires your business to be successful and profitable. With these easy tips, the inevitable task of raising your prices should go a lot more smoothly.

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