Strategy for Price Increases in 2022

How are you going about price increases for 2022 with the massive spikes in material costs? 

We're hearing that all materials related to the Green Industry are facing massive shortages and freight challenges from all over the country. The cost of phosphate, potassium, and insecticides is seeing 25% - 80% price increases. Equipment and even the packaging and shipping containers themselves face a 67% to 200% price increase. 

The question becomes - how are you rolling that increase to your customers?

Are you doing a flat percentage increase across the board?

Are you telling clients that there will be a mid-season price increase?

What about revisiting the price chart quarterly instead of annually? 

So - how are you handling this challenge? 



1 comment
  • Hi - I'll throw my 2 cents into this conversation.  We're on Long Island, NY, so we already face some higher wages and higher prices for materials, given our geography.  Our dumping expenses have increased 100% in the last 6 months and everyone knows what has been going on with fuel prices.  Since most of our maintenance proposals went out in January and February, by the time we really started feeling some heavy pressure from gas prices, we were already a couple of months into our maintenance contracts.  After much discussion and delaying as long as we could, we instituted an "Economic Impact Charge" of a flat dollar amount that was added onto every maintenance invoice.  It was met with much less push-back than I had expected.  We got "annoyed" emails from 1 or 2 customers, and a handful of others took an opportunity to remind our maintenance supervisor in-person that since they are paying more, they are expecting more, but that was it.  We actually got more "we get it" emails than complaints.  One customer even went so far as to write us a very complimentary email, outlining how she believes our services are far superior to her prior landscaper, so as long as we continue to perform to her expectations, she is fine with the additional charge. 

    We discussed the subject several times, trying to come up with a dollar figure that would be impactful in helping to off-set the many cost increases for us, but not so painful that it would drive customers to cancel service.  Along with increased dumping expenses (we fill a container in our yard with landscape waste that gets emptied 1-2 times per week), and significantly higher fuel prices, we also had a local village that contains a large number of maintenance customers vote to ban gas-powered blowers this season between Memorial Day and Labor Day.  With very little time to adapt, we had to lay out a good chunk of money for several battery-powered backpack blowers.  The simplest way for us to tack on a "fee" was for us to add the same fee onto all invoices.  Using a percentage would require someone to adjust each job individually, adjusting the amount of the fee based on location, size of property, etc. would require more work for us, so we went with a flat amount per invoice. 

    With other one-off work, we are factoring in the cost increases when we provide the price to the customer.  Those proposals/invoices do not have a specifically called-out surcharge. 

    We expect the Economic Impact Charge to remain on the invoices through at least August, which will be billed next week (our invoices go out on the 1st of each month).  We plan to discuss the issue during August to see if it may be appropriate to remove the surcharge.  Even though fuel has come down slightly, prices are still up over 50% from January and our yard waste contractor has indicated they do not plan on removing or reducing any of their fees.  If we are still facing increased costs, it most likely will not be feasible for us to remove the surcharges from the invoices. 

    Is anyone using a percentage method or otherwise breaking down the fees to different customers based on size of property, town, etc.? 


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