We, in this industry, have to be thankful that during slow economic times, people stay closer to home, and are more aware of their homes and their landscapes. They will still spend money to keep up their number-one investment: their homes.
They may skip that night out for dinner and barbeque in the backyard instead. The more time they spend in their surroundings, the more aware they are of their landscape. This leads to spending on maintenance and improvements.
Times have changed and advertising in the green industry has changed along with it. In the past, trying to get the biggest ad in the Yellow Pages or changing your name to AAA something was the way to go, so that you could get listed first in your category.
Now, with Internet advertising, websites and social media, the advertising plans for your business are different than they were 15 years ago. Although newspaper, direct mail, TV and radio are still available, in the past five to ten years there has been a mass migration to these new advertising choices.
Telemarketing, which was the choice of the most aggressive marketers, was curtailed because of the extensive no-call lists. So planning and developing your marketing strategies can be very complex and confusing, as you are in search of the best return for your advertising dollars. I have talked to numerous business owners with varied advertising programs who still cannot swear by any one medium. However, one common denominator for every company was a great website.
You really need to track your new leads to ascertain where they are coming from, and determine the price it costs you to generate that lead for each advertising medium you’re implementing. If you are not tracking your leads, you will never be able to truly judge the value or success of the different advertising tools you’re using.
The companies I’ve spoken with that seemed to have the most success in growth all seem to have the same philosophy. If you service and satisfy your customers and take care of your employees, the growth will be there. Keep in mind that growth is an equation, which is: new sales minus cancels equals growth.
Managing your customer retention to avoid cancels may be as important as developing your successful advertising campaign. You have to take a hard look at why a customer cancels. If the cancel is because of moving or death or financial hardship, then that is unavoidable. But in most cases, it is because of customer dissatisfaction, either with poor product results, or usually just plain poor customer service. For example, not calling when you said you would, or not showing up when you promised, with no phone call made to advise of the change.
The companies that are growing the most are the companies that put customer service first and do not ignore a customer who needs a phone call or a service call. Remember, every service call is an opportunity to solve a problem by upselling additional services like aeration and seeding, or tree and shrub treatments. Maybe the customer’s problem is just poor cultural practices.
This should be viewed as an opportunity for your service people to then spend the time with the customer to teach him proper mowing or watering techniques.
Satisfying your customers and communicating with them during adverse weather conditions, such as droughts, will reduce the cancels for your business, which ultimately affects your growth. There is no better advertising than a satisfied customer. When your customers are referring your service, you know you’re doing things right.
Growing your business through acquisitions is another alternative means for growth. This has been a main source of growth for many of the larger national firms. Recently, I have seen more and more small independent companies acquiring other companies to increase their revenue.
If you’re doing a good job tracking your sales and the sources they came from, you should be able to calculate what your costs-per-dollar of new sales are. This should give you an idea of what to spend when buying a smaller company. If it costs you 80 percent of revenue to get a new sale, then why not spend 80 percent to acquire the revenue? You must be sure that the culture of the company you are buying is similar to your company’s culture, so the integration of the clients into your program is simple and painless.
Acquisitions are a quick way to grow. This can be especially true if your growth is taking you into a new geographic area. Starting from scratch can be a risky venture, and can be very expensive when opening up in a new area. It takes a lot of advertising dollars to get your name and the information about your services out to the marketplace.
If you buy an existing company in that new area, then you are starting with an existing customer base, which comes with goodwill for you to grow on. If the company you are buying has been established for a long time, then their name could be valuable and you may want to keep it for that market, or slowly morph your name into the picture so you have only one brand to sell. Growing your business is a challenge, and the tools you use to achieve that must be tried and proven as you track the progress.
The last area of growth I want to mention is the offering of additional services. I have seen a lot of lawn care operators expand into pest control and holiday lighting. I have seen landscape maintenance companies expand into irrigation. Some irrigation companies have expanded into outdoor lighting and mosquito control. Obviously, the more services you can sell to your existing customer base, the more revenue growth you will have.
Be sure to do your homework before you enter into these add-on services, to make certain you have the ability to offer quality workmanship to your existing customers. To improperly implement a new service to an existing satisfied client can result in a dissatisfied client who may cancel for both services, although many customers like dealing with one company for all their needs. This may be another avenue to grow your company.
In conclusion, you have many alternatives to build your company.
Select the ones that you think will work best for your company, implement them, track them and learn from the numbers. This is a sure way to grow your business.
EDITOR’S NOTE: Bryan Clayton is a landscape industry exited entrepreneur, and co-founder of GreenPal.