Contractor Pricing Strategy
Most operators lose more money by waiting too long to raise prices than by raising them too aggressively. The fear of losing customers is real but consistently overestimated.
Most operators lose more money by waiting too long to raise prices than by raising them too aggressively. The fear of losing customers is real but consistently overestimated.
Most operators lose more money by waiting too long to raise prices than by raising them too aggressively. The fear of losing customers is real but consistently overestimated.
For the full pricing strategy framework, see The Lawn Care Pricing Playbook.
Clear triggers: Input costs increased (fuel, labor, insurance). You're turning away work. Annual season start (3-5% minimum keeps pace with inflation). Route structure changed. Service level improved.
Don't raise because: A competitor did. You had a bad month. You want to charge for extras you never defined.
| Context | Typical Increase |
|---|---|
| Annual inflation adjustment | 3-5% |
| Input cost increase | 5-10% |
| Below-market correction | 10-20% (phase if large) |
| Service upgrade | 10-25% |
For below-market corrections over 10%, phase over two seasons.
Four rules: Give 30+ days notice. Be direct — state the new rate, date, and one reason. Time it at a natural break (season start, renewal). Personalize for your top accounts.
Example message:
> Hi [Name], our service rate for your property will adjust to [$X/visit] starting [date]. This reflects increased operating costs. Same crew, same schedule, same quality. Let me know if you have questions.
No apologies. No over-justification. No invitation to negotiate.
If you raise 10% and lose 5% of accounts, you're still ahead:
| Before | After 10% Raise + 5% Loss |
|---|---|
| 50 accounts @ $50 = $2,500/wk | 47 accounts @ $55 = $2,585/wk |
| Plus: fewer stops = less drive time, lower fuel cost, better margin per account |
The customers you lose are almost always the most price-sensitive, lowest-margin accounts. The ones who stay are higher-value.
"Your competitor charges less." — "Different companies, different cost structures. Our rate reflects [specific value]. If price is the priority, I can refer you."
"Can you keep my old rate?" — "The increase applies across all accounts. New rate starts [date]."
"I'll find someone else." — "I understand. Happy to finish the current cycle."
Don't argue, don't discount, don't get emotional. Some customers leave. That's fine.
When customers compare to marketplace apps: those operators give up 15-20% commission per job. A $50 marketplace mow nets the operator $40-42.50. Your $55 direct price, without commission, delivers better economics for both of you.
How often should I raise? Annually minimum. More often if input costs shift or you're correcting a below-market position.
Should I grandfather existing customers? No. Grandfathering creates a two-tier system that penalizes loyalty. Apply increases across the board with notice.
What if I lose more than 10%? Audit your service quality first. If the service justifies the price, the market will correct. Dropping prices after raising damages credibility.