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What percentage would you increase

Discussion in 'Commercial Snow Removal' started by Ne1, May 1, 2015.

  1. Ne1

    Ne1 Senior Member
    Messages: 370

    I have a three year commercial contract that is up for renewal. I was thinking of increasing the price by 10-12% and locking it in for an additional three years. Is this low, high, or about right.
  2. Mark Oomkes

    Mark Oomkes PlowSite Fanatic
    Messages: 13,237



    Could be
  3. Camden

    Camden PlowSite Fanatic
    Messages: 6,604

    Unless I really missed the mark on my initial bid, I generally leave my long term/loyal customers alone. It doesn't pay to give them a reason to start looking around.

    That isn't the case for clients who ask you to submit a new bid every season. Those typically see a bump of 3-5%.
  4. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    Maybe they'll ask for a reduction instead
  5. Ne1

    Ne1 Senior Member
    Messages: 370

    No, there aware the pricing is going up.
  6. ponyboy

    ponyboy PlowSite.com Addict
    Messages: 1,104

    If they accept a 10% increase sign them to a 5 year
  7. grandview

    grandview PlowSite Fanatic
    Messages: 14,609

    per year of course.
  8. ponyboy

    ponyboy PlowSite.com Addict
    Messages: 1,104

    Sorry 5 year contract
    Problem is every year people come in cheaper
    I try to raise 3% a year and also raised price on salt yearly
  9. Ne1

    Ne1 Senior Member
    Messages: 370

    That's why I'm thinking 10% increase will cover my for 3 years. With the skyrocketing prices of salt you never know.
  10. John_DeereGreen

    John_DeereGreen 2000 Club Member
    Messages: 2,908

    3 year contract...are your bases covered for materials/labor expenses? If they are, I wouldn't change my numbers. If you're low for current salt/fuel/labor costs, be up front with them. Raise your prices enough to cover your additional costs.

    I'm a big believer in not changing my pricing until I have to to cover additional costs. Does the margin get smaller sometimes to not change them, yes. But I'd rather make some on a lot, than nothing on nothing.
  11. Pristine PM ltd

    Pristine PM ltd PlowSite Veteran
    Messages: 3,891

    10 percent sounds crazy to me! Sorry!

    We will sometimes get away with 0 3 3 on a three year.
  12. Ne1

    Ne1 Senior Member
    Messages: 370

    My pricing was locked in for three years idiring the previous contract. So, raising it 10% and locking it for additional three sounds crazy? I didn't think roughly 3% a year to keep pace was that much.
  13. tbglandscape

    tbglandscape Junior Member
    Messages: 2

    I used to guess at all of my contracts too and it was such a pain...now I use LMN (golmn.com). You plug in your budget and it populates what you should be charging so you can make the profit you are looking for. You include all of your pricing, costs, overhead etc. check it out...I don't have to guess anymore.