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Customer Problems

Discussion in 'Business Fundamentals' started by dmjr77, Jan 17, 2005.

  1. dmjr77

    dmjr77 Senior Member
    Messages: 225

    Hello all. Well this morning I got a call from one of my new plow customers who lives out of state. He called me to tell me that he was putting a check in the mail for the last 4 storms that I plowed for and also to let me know that he does not want me to plow anymore since he wants a freind of his to take of the driveway. This is the first time that this has happened to me and I was wondering if I should put in a early termination clause in next years contracts for my other customers and any new customers I sign up. Is this a good idea? Since I have been I still have customers that still owe me for storms back in December should I also enclose in the contract some grounds rules on when payments should be made and deadlines. I am lost here since I have never had this problem before.
    Thank You
  2. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    I've had both of those things happen fairly often. About the early termination clause, I'd say "Don't bother". About the payment guidelines, I do that. On my bills I put "Please pay by the 10th (of the following month)". Then, if payment is not recieved by the 12th or 13th (to allow time for the mail), I send a "reminder" and that I will stop plowing if payment is not received by the 20th. Then I usually stop on the last day of the month (again to allow for the mail). Sending followup bills is up to you. I see it as a waste of postage. I also put a clause in the letter that if they'd like to discuss payment, please call me - sometimes bills get bigger than they realize.

    With the early termination clause, be prepared to back up the penalty. Is it worth going to court to the amount of the "penalty"? As far as I'm concerned - I see it as "If they don't want me plowing, I don't want them". I've had people cancel service because they lost their job or a relative would plow for them etc. Why spend energy forcing something like that? Put that time and energy into getting another customer.

    A commercial contract for several thousand a month is a different matter. I'm referring to residential.
  3. fans

    fans Junior Member
    Messages: 22

    Another take on "early cancelation"

    You can always put the "early cancelation" clause in your contract using the words "...may be charged..." instead of "...will be charged...". Then if the customer is just having a hard time due to other bills, etc - you look like a good guy by giving them a break. If the customer is a jerk you can always invoke the clause. Again - it might not be worth your while to go after it, but it's there.

    Since this is a unilateral contract - made by you, offered by you, with the customer not getting any real input into the conditions you can pretty much do what the market will allow.

    Still, you don't want to hose someone who's down, and when things pickup your being a "good guy" might get around and get you more business.
  4. cet

    cet PlowSite Fanatic
    Messages: 7,257

    Residential customers are going to do what they want. Even with a good contract there is not to much you can do. Legal options are more then your bill in most cases.I had a new customer last year that I billed at the end of the year. After waiting a month for the cheque I sent a new invoice. She phoned to let me know that she had paid me and that the cheque had cleared her bank. I told her that I did not remember getting the cheque but if that was the case I am sorry for the second invoice. 2 weeks later I got a cheque in the mail with a note saying she checked her bank account and I had not been paid. I was not going to argue over $300. I thought if she had made up her mind not to pay me so be it. She might have gotten up one morning to find a very clean street and a lot of snow in her driveway though. Its funny how the wind blows at night.
  5. dmjr77

    dmjr77 Senior Member
    Messages: 225

    Ok, I just want to let you know were I am coming from. I am very understanding when it comes to someone not being able to pay. What I meant by my thread from before is that where this individual had signed a contract with me and then did some shopping around and found someone else cheaper. I then offered to plow the driveway at the rate that my compition had offered to plow it for and he said no. I guess where I have worked hard to build up my customer base, it makes me upset that something like that happens.
  6. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Why did you offer to lower your price? To me, that's just saying you think you were too high to begin with.

    Just take it as a lesson learned. No use trying to make him stick to it. It'll cost you more than it already has.

    Not trying to beat on you. I lost one like that earlier this year. I know what I charge for what she wanted. If she found somebody to do it for less after she'd agreed to my price, that's fine. What's the use of having a bad relationship with a customer over a two or three hundred dollars that you can replace with another account anyway?
    Last edited: Jan 18, 2005
  7. dmjr77

    dmjr77 Senior Member
    Messages: 225

    The reason why I offered to lower the price is so that I could keep the customer. As for my price, I felt it was fair considering it would take me 25 minutes to make a complete circle with 3 passes, clean up in front of 3 garage doors and shovel 3 paths to walk in doors.
  8. johntwist

    johntwist Senior Member
    Messages: 415

    I agree with Mick all the way here.

    People complain all the time about the early temination fees with cell phones, I don't think they're going to want them in plowing contracts either. Like Mick said, it's easier to let them go and find new customers.
    I don't have a huge base of them yet, but the ones I do have play it straight with me. One lady even mails me her check before I send her the bill! But there's always going to be someone who "moves on" whether it be because a friend/relative will do it for them free, they're out of work and money's tight, or any one of a thousand other reasons. To me, it doesn't seem practical to try and fight over it, just move on yourself.

    There's always going to be someone else who needs plowing done.
  9. drplow

    drplow Senior Member
    Messages: 174

    i would charge them for each time that i was there then. and take your per-plow price, example 30.00 and charge them that for the first 4 inches. than at six inches charge them 45.00 and so on. when you add up what they owe you, this system works the best if you have a contract cancel. if someone told me that they wanted to cancel in mid season i would charge them like a per-plow client. if i knew that they only wanted it done for a month to start with then i wouldn't have even put them on my list.
  10. Ken1zk

    Ken1zk Senior Member
    Messages: 192

    In my contract, for my customers who pay a flat rate for the entire seasons services the fee is clearly stated as "Due at the time of signing the agreement" and is "Non Refundable", for those who pay per push they may cancel at any time. And for those who refer a new prospect to me who signs on as a customer, well I give then a $25.00 credit for each. I advertise very little and find those who are refered to me are a less Price conscious, service orientated customer and they tend to stay longer as a customer so the $25.00 is in my mind money well spent.