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Features - Irrigation

IRRIGATION: High Maintenance

6/24/2008

Irrigation system maintenance creates well-rounded businesses and generates extra profit for three companies.

There are a number of solid reasons for landscape contractors to include irrigation maintenance in their service lineups. Some contractors add it to round out their full-service offerings. Others offer it in response to the need for water conservation. Still others offer it to prevent their clients from needing to go anywhere else.

A successful full-service company attracts new clients and retains the old ones. Routine maintenance visits keep the lines of communication open between contractors and clients long after a system is installed. And the recurring revenue this service generates isn’t half bad either. “We add 50 to 60 new clients to our database each year just by offering irrigation system maintenance because there are some companies that just don’t offer it,” says Bryan Mours, irrigation division manager of the Mukwonago, Wis.,-based Bret Achtenhagen’s Seasonal Services. “About 85 percent of our clients opt for the maintenance package, and its benefits are so obvious it typically sells itself.”

Three irrigation contractors share why system maintenance is an important addition to their business and how they made it profitable.

Case Study No. 1

Company: Bret Achtenhagen’s Seasonal Services
Location: Mukwonago, Wis.
Year Irrigation Maintenance Added: 2000
Number of Maintenance Clients: 315
Client Breakdown: 100 percent residential
Profit Margin: 75 percent

ADDING ON. Bret Achtenhagen’s Seasonal Services implemented its irrigation system maintenance program eight years ago, primarily as a strategic ploy to best the competition. But the company also wanted to cater to all of its clients’ landscape and irrigation needs. “We wanted to not only install the systems but also service them as best we could,” Mours says. “Being able to provide all the services – updates, startups, shutdowns – keeps our customers happy and prevents them from calling our competitors.”

The company offers two irrigation maintenance programs, which comprise about 20 percent of the company’s total irrigation services. The first program is geared toward its residential customers, and the other to its lake system customers, whose irrigation systems operate with water drawn from one of the area’s many lakes. Two different proposals are sent to the appropriate customers each spring, with residential customers comprising 80 percent and lake system customers 20 percent of the company’s client base. Three one-man crews tend to most irrigation maintenance jobs; however two technicians usually address more complex problems like adding heads to a system or repairing major leaks.

The standard maintenance proposal begins with a spring start up, at which time an irrigation technician turns on the water, sets the controller and checks the system for any necessary adjustments and/or replacements. During the fall shutdown, a technician blows out the system with an air compressor, which can take from one to two hours, depending on the system’s size. The tech also checks the valves to make sure they are clean and dry, prior to turning off the water.

The lake system maintenance package is more involved because of the lake water debris – particularly zebra muscles – that can clog an irrigation system, Mours says. This package entails monthly visits from June to September so technicians can check the system’s pump, suction and discharge lines for debris impeding proper flow. The techs also change the system’s algae basket screen.

About 85 percent of the company’s irrigation clients opt for the maintenance services, with a 100 percent retention rate, Mours says. A portion of the remaining 15 percent is “handymen” who enjoy tinkering with their systems in the spring and fall. The other portion is homeowners who don’t realize how complicated irrigation system maintenance is until they try to do it themselves and usually call for a fall blowout. “Regardless, if we don’t hear from them we’ll follow up before winter to ensure the system is maintained properly,” Mours says.

While irrigation maintenance typically sells itself to the company’s existing customers, the service is more of an upsell to new clients, most of who have been jaded by their previous irrigation company. Bret Achtenhagen’s Seasonal Services promises all clients service within two days of making the call, a guarantee that serves as a great selling tool. “With these clients, it’s a matter of explaining to them we actually have good customer service and do plan to follow up with them in a timely fashion,” Mours says. “Most of them are floored when we actually get out there in two days.”

The cost of irrigation system maintenance depends on the number of zones and whether it’s a standard or lake system package, Mours says. A standard base price of $193 covers everything up to nine zones, and larger systems are priced with a $25 three-zone upcharge (systems with nine to 12 zones, 12 to 15 zones, etc.). The company charges a $35 trip fee for simple maintenance visits that take place beyond the standard package, like resetting a clock or making simple head adjustments. More complex problems are priced an hourly rate of $54.95 plus time and materials. “We rely strongly on our irrigation maintenance services because they’re so lucrative,” Mours says. “It’s key to being a full-service firm. If we just did the installation and didn’t back it up with service we’d fall short.”

Case Study No. 2

Company: Cagwin & Dorward
Location: Novato, Calif.
Year Irrigation Maintenance Added: 1955
Number of Maintenance Clients: more than 1,000
Client Breakdown: 100 percent commercial
Profit Margin: 15 to 20 percent

BACK IN THE HABIT. To Steve Glennon, contractors who aren’t proactively looking to improve water management practices are going to be surpassed by their competitors who are. “The companies that offer an enhanced, proactive water management practice are able to use it as a significant market differentiator,” says the treasurer and landscape maintenance division manager for full-service landscape firm Cagwin & Dorward, Novato, Calif.

While Cagwin & Dorward has always offered some type of commercial irrigation system maintenance program, the company refined the service over the last 15 years to create a more inclusive, proactive program, which makes up about 15 percent of the company’s total irrigation services. “We recognized we were falling behind on irrigation system management,” Glennon says. “We would visit sites and see problems like over- and under watering and realized we needed to become better at managing our clients’ water. That’s what they expect us to do.”

Through the company’s revised system maintenance program, designated irrigation specialists conduct two to four complete system checks per year, depending on the system’s size. The first round of system checks typically begins at the start of the growing season, mid-January, and wraps up by the end of March. The second round takes place from June through July. Technicians note any necessary repairs, like broken sprinkler heads or clogged nozzles, then create a repair proposal to submit to the client. One technician conducts most irrigation maintenance visits, accompanied by one or two laborers for more extensive repair work.

With new clients, an irrigation specialist will conduct a walk-through with the property manger within 30 days of signing the contract to determine the state of the system and to create a site map documenting zone locations, valves and controllers to better keep track of any system deficiencies.

In addition to water conservation, Cagwin & Dorward markets the potential return on investment when selling irrigation system maintenance. Some of the company’s research shows year-end water savings of 16 to 48 percent after system upgrades and maintenance. With the cost of water in California rising at about 10 percent per year, Glennon predicts water management will just get easier to sell. “Most people are concerned about the cost of water and how it impacts them,” Glennon says. “It helps when you can apply a dollar value to this cost and potential savings.”

Depending on the size of the system, the client is charged $10 to $40 for each maintenance visit, and the service yields an annual profit margin of about 15 to 20 percent. Glennon says contractors should hire trained, experienced personnel and shouldn’t hesitate to charge a premium for this valued service. “A certain degree of expertise is required to offer this service, and the overhead is much higher than on services like mowing,” he says. “The annual revenue generated from one great irrigation specialist is usually around $115,000 per year.”

Irrigation maintenance will continue to be a valuable service as water shortages become pressing issues around the country. Glennon estimates contractors can add the service to their lineup for a $30,000 to $40,000 investment in vehicles, equipment and materials, and should market themselves as water management experts who provide solutions to their clients struggling with less water at higher prices. “Contractors need to anticipate where the industry is going and where their customers will be five years from now if they want to remain a viable service provider,” Glennon says.

Case Study No. 3

Company: Westturf Landscape Maintenance
Location: Vista, Calif.
Year Irrigation Maintenance Added: 1972
Number of Maintenance Clients: 60
Client Breakdown: 30 percent commercial,
30 percent municipality, 40 percent homeowner
associations
Profit Margin: 40 percent

SERVICE STAPLE. At Westturf Landscape Maintenance, irrigation system maintenance has always been part of the daily routine. In the water-conscious area of Vista, Calif., it is imperative that irrigation systems run as efficiently as possible day in and day out, so irrigation maintenance is part of every client’s contract, says Dave Hill, branch manager. “When we take on a brand new account one of the first things we do is go through the system to make sure it’s in working order.”

During this first visit, one of the company’s three irrigation technicians creates a color-coded map of the property indicating the number of zones, valve locations and other information like watering days and times. The system is then divided into four sections, and landscape maintenance crews check one section during weekly routine visits and make minor repairs like head or nozzle replacements. By the end of four weeks, the entire system has been checked for any problems. Because these repairs take place during routine landscape maintenance visits, the client is charged for the cost of parts plus a markup and a handling fee.

If larger problems arise, like leaks or noticeably wet or dry areas, the landscape maintenance crews submit a work order for an irrigation technician to visit the site and address the problem. This service is charged an hourly rate of $40 plus the price of parts. Regardless, a certified irrigation technician visits each property about every six months to perform a walkthrough with the property manager.

Westturf Landscape Maintenance’s irrigation maintenance services make up about 90 percent of the company’s irrigation offerings, and grow 20 percent each year. The company doesn’t market the service; rather, it markets total landscape maintenance, and the irrigation services come with it. But, irrigation system repairs are fairly easy to sell because of the high demand for water efficiency in California, Hill says. In fact, within the last year, at least 50 to 75 percent of the company’s irrigation installs were sold on the message of water conservation.

Selling system upgrades can be more of a challenge due to the public’s lack of education on this issue, Hill says. “It’s a challenge to educate customers about spending the money now to better their systems in the long run,” Hill says. “Water conservation is the No. 1 thing we discuss with our clients, but not enough contractors are talking about it.” LL

By: Emily Mullins

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IRRIGATION: High Maintenance