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Why you shouldn’t be scared to raise your prices

October 11, 2022 -  By
Photo: ImagePixel/iStock / Getty Images/Getty Images Plus

Editor’s note: This is a preview of one of 11 educational sessions Landscape Management will present at the 2022 Equip Expo in Louisville, Ky., Oct. 19-21. To register for this and all Equip Expo educational sessions, you’ll first need to register to attend the show. Click here for 50 percent off your Equip Expo registrationDuring the registration process, you’ll be prompted to add educational sessions.

Rising fuel prices, labor costs and rampant inflation have forced the hand of landscaping companies countrywide.

That trifecta of circumstances is prompting companies to raise their prices. For many, it’s the first time in a long time.

“For years and years, nobody raised their prices,” says Phil Harwood, managing partner of Pro-Motion Consulting.

“They were afraid to raise their prices because even any incremental price could trigger potentially losing a contract.”

So, how do you raise prices without scaring away customers? That’s what industry experts will look to answer at “The Price Isn’t Right,” a seminar at the 2022 Equip Expo on Friday, Oct. 21, from 9:30 to 10:30 a.m.

Four landscape professionals will participate in the session moderated by LM Editor-in-Chief Seth Jones:

Attendees will learn the best practices for raising prices so customers don’t flee because of sticker shock.

Just the facts

Harwood says he has clients who have had to raise prices 30 percent from where they were a year ago. Instead of steadily increasing prices over the years, he says the industry has worked to become more efficient, but that’s not enough in the short term as the cost of business continues to rise.

“We’ve become better and faster, but it hasn’t meant that prices have gone up,” he says. “We’ve been able to hold prices and remain profitable as an industry.”

Harwood advises his clients on several approaches to increasing prices. Both center around a simple principle: be matter-of-fact about it.

“Everyone is expecting price increases, and anyone who is not is playing with you,” he says. “If you look at gas prices, they have doubled in the last two years; the cost of groceries, takeout food, lumber, clothing and a lot of things (also have gone up).”

Tough transition

Gembel, owner of Atlas Outdoor, who will speak on the panel at Equip, believes businesses who haven’t increased prices in a long time or those who pride themselves on being “value-driven” contractors might face the most pushback when raising prices.

“The companies that have built their brands on being more value-driven contractors, I feel like those are the ones experiencing the toughest transition because people are just not used to them coming and saying, ‘I need more of an increase,’” Gembel says.

Gembel’s company rewrote contracts and considered a fuel surcharge on invoices but ultimately decided against a surcharge. But, with the uncertainty surrounding gas prices, he foresees another potential price increase coming soon.

“At first, we weren’t thinking too deeply about doing a surcharge, whereas now we rewrote hundreds of contracts to increase pricing, and now it looks like it might happen again,” he says.

Like Harwood, Gembel is well aware that customers are also facing a squeeze with the increase in the price of gas and goods and how that makes it difficult for contractors to ask them to pay more.

“We’re just trying to be mindful about it,” Gembel says. “We don’t want to scare people into saying, ‘Do I want to work maintenance and fertilizer services out of my budget?’”

Atlas Outdoor has continued to try to find ways to be more efficient, Gembel says. Strategies include studying route density, tightening its service area and increasing daily revenue goals. Gembel hopes those practices will help keep his business on its upward trajectory throughout the ongoing squeeze.

Rob DiFranco

About the Author:

Rob DiFranco is Landscape Management's associate editor. A 2018 graduate of Kent State University, DiFranco holds a bachelor's degree in journalism. Prior to Landscape Management, DiFranco was a reporter for The Morning Journal in Lorain, Ohio.

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