Is the price right?

May 2, 2013 -  By

Lawn care companies carefully consider charging more. 

Though many lawn care businesses say the time is right for a price bump (46 percent), just more than half say they’ll hold steady and won’t raise prices this year, according to Landscape Management’s Lawn Care Market Report survey. Only 2 percent say they’ll decrease lawn care prices this year (see chart).

Profits & Prices

Source: Landscape Management 2013 Lawn Care Market Report

Those who plan to increase prices will do so about 5 percent, while those who plan to decrease prices will do so less than a percent, according to the survey.

Price increases or not, companies report the lawn care application business remains profitable—with respondents to LM’s Lawn Care Market Report survey reporting a 25 percent profit margin on lawn care services.

North Chicago, Ill.-based Chalet raised lawn care prices 5 percent for 2013—its first increase in nine years.

“We’ve done a slight price increase and we haven’t had a huge cancellation like we might normally get from an increase,” says Bill Leuenberger, soil and turf management department manager. “Cancellations have been about the same as a normal year—and most of those are people who are moving, so we’ll follow up on those and the people who move in.”

Likewise, Lawn Dawg, based in Nashua, N.H., instituted its first price increase in a decade—a 5 percent bump.

“My customer service team has had minimal push back,” says owner Jim Campanella. “When they do get push back, we’re not going to lose a customer over $20 a year; keeping the business is more important. But people understand. They see the price of fuel going up every day and that we haven’t had an increase in so long. They’ve been expecting it.”

In the Florida panhandle, Banfield’s Lawn Care & Landscaping has not raised prices yet in its three years in business.

“I don’t really have a need to do it,” says Kelly Banfield, president and CEO. “I don’t believe price increases are important as long as the business itself is growing. Of course, if the product prices really jumped you’d have to.”

Lee Kral, lawn service manager for Mountain High Tree, Lawn & Landscape Co., in Lakewood, Colo., also didn’t raise prices this season.

“There’s definitely a lot of competition on price,” he says. “A couple years ago we had to raise prices because of fertilizer costs, but I’m going to keep it steady this year, get more clients on board and then look at it next year.”

Some companies find ways to selectively raise prices, like MRW Lawns in La Plata, Md. “We didn’t do an across-the-board price increase this year because we did a select price increase last year,” says Rick LaNore, MRW’s co-owner and technical director. “But we did raise prices on our new customers—we couldn’t afford to give everyone the old prices because of fluctuating fertilizer prices.”

Andrew Ziehler, president of Ziehler Lawn and Tree Care in Centerville, Ohio, typically raises prices 2 percent to 4 percent per year, and he did so this year.

“There was one year we didn’t raise prices because our product costs actually went down,” he says, noting that’s not the case this year. His protocol is to let customers know in a letter at the end of the season if prices will rise the next year. “They have a payment option that lets them avoid the price increase if they want to. Otherwise, the increase takes effect.”

About the Author:

Marisa Palmieri is an experienced Green Industry editor who's won numerous awards for her coverage of the landscape and golf course markets from the Turf & Ornamental Communicators Association (TOCA), the Press Club of Cleveland and the American Society of Business Publication Editors (ASBPE). In 2007, ASBPE named her a Young Leader. She graduated with a Bachelor of Science in Journalism, cum laude, from Ohio University’s Scripps School of Journalism.

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