Inevitably, your business costs will continue rising every year, and you’ll sometimes have to increase snow removal prices to remain profitable.
Although, it’s important not to allow your fear of losing clients to keep you from increasing snow removal prices.
Remember, as your costs go up, your prices must also increase.
Unfortunately, some clients will leave when their price increases. However, there are several ways you can reduce the chance of them leaving for the competition.
This article will explore some of the top ways you can reduce the chances of losing clients when you increase snow removal prices.
The cost of doing business inevitably rises with each passing year.
For example, more recently, the cost of steel has soared upwards of 200% - drastically increasing the cost of snow plows.
Inflated costs in equipment, materials, labor, transportation rates, and more are the cause of these inflated costs.
In addition, these increased costs are also partnered with a labor shortage. For this reason, many businesses just like yours have been forced into increasing snow removal prices.
Which means, more than ever, now is the time to prioritize consistent price evaluations.
Plus, doing continuous price evaluations will help to calculate your current break-even point, which helps to ensure profit goals are met.
However, it’s important not to get carried away with copying the competition’s pricing. After all, the wide variances in snow pricing depends on local and state costs and averages.
A great way to ensure you lose as little clients as possible to the competition during the price increase process is by properly timing the increase.
Similar to other field service industries, the snow removal industry has a busy and slow season based on the location.
As a result, the worst time to raise prices is during the busy selling season, which is typically the months leading up to snow season.
Remember, the competition is aching to take the opportunity to poach your clients.
In fact, the competition will often directly seek out your clients with flyers, targeted ads, and any other tactic under the sun in an attempt to steal your client base.
Although, there are times where a price increase during this time is unavoidable. For instance, if you’re hemorrhaging profits on an unprofitable client, you might need to raise their price.
However, in this case, it may actually help the business if an unprofitable leaves for the competition.
While it’s important not to raise prices during the top selling season, there are a few ideal times for a price increase:
Keep in mind, it’s best to increase snow removal prices when the competition is likely too busy to poach your clients.
Plus, many clients will forget all about the price increase when it happens at the end of the busy season.
Prior to increasing everyone’s prices, it’s best to increase prices on your least profitable clients first.
This way, you can test out the price increase process by perfecting the process on unprofitable clients.
As a result, if you lose clients while solidifying your price increase process, then it won’t hurt the business as much as losing profitable ones.
First, re-evaluate your snow removal accounts to calculate their profitability.
Next, compare your accounts’ with your profit goals to see how your new prices match up to your least profitable clients.
By the way, you can streamline this account evaluation process using Service Autopilot.
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A major part of keeping as many clients as possible during a price increase is by sending a letter to affected clients explaining the newly adjusted prices.
For instance, if you have repeat or recurring clients receiving routine snow removal (i.e. driveway plowing, sidewalk clearing, etc.), then a letter must be sent to them.
Plus, a price increase letter gives you a chance to explain why prices are going up and reassure clients this change ensures their continued high-quality services.
[insert snow removal business logo]
Dear [Client Name],
Due to rising economic factors, [snow removal business name] will be adjusting our prices soon.
Our billing reflects the labor, equipment, maintenance, fuel, office/billing expenses, and other various costs, which make up the cost of our services.
In order to continue providing you with the highest-quality snow removal services you deserve, our snow removal service price for [insert client’s snow removal service/agreement/contract] will increase to $XXX.XX on Month, Day, Year.
We will continue to invest in the best materials, equipment, and training available to us. This will allow us to send the best snow removal experts to your property.
We’re continuing our commitment to a complete satisfaction guarantee. If you’re not 100% satisfied with your snow removal services, then we will return, free of charge to resolve the issue.
As always, call our office at XXX-XXX-XXXX with any questions, comments, concerns, or updates to your scheduled services.
Sincerely,
[snow removal business owner name]
[snow removal business owner signature]
Once you send the price increase letter to your least profitable clients first, then you’re ready to test the improved process on profitable ones.
Determine the success of your price increase by sending out a survey through email or text. In turn, use this feedback to improve the process for more profitable clients.
Also, using Service Autopilot, you can easily send automated surveys via email or text and track their feedback.
Always remember, it’s essential to continuously re-evaluate your snow removal prices to ensure weekly and monthly profit goals are met.
Never shy away from increasing snow removal prices on unprofitable or minimally profitable clients.
Keep in mind, it’s always better to lose unprofitable clients than to waste valuable time and money that could’ve been spent on new, profitable clients.
Price increases don’t have to be intimidating or overly complex. Start using these top strategies today to begin successfully increasing snow removal prices without losing clients!
Related: How Much to Charge for Snow Removal
Originally published Dec 9, 2021 7:00 AM
Tags: Business Operation, Featured Post
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