Wednesday, September 17, 2014

Chuck Bowen

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Stop peeing in the pool

Editor's Insight

September 1, 2014

Chuck Bowen

I get a lot of landscaping marketing at home. Most of the fliers and postcards are fine – very nice photos of manicured lawns, patios and the like. The ones that stick out most to me, though, are in bright colors with impossible-to-fulfill promises: “$20 a cut!” and “We will not be undersold!” and similar promotions.

A note to those of you who make these claims: Maybe it works for your company. Maybe you’ve figured out your numbers to such a degree that you can make a healthy profit on super-cheap services. If that’s the case, good for you. I hope it is. The rest of this doesn’t apply to you. Skip to the next page.

But, by and large, I don’t think that’s the case. I think many of these contractors are working just for cash flow, and are locked in a desperate hunt for market share. That’s a bad idea. Here’s why.

  1. It’s an untenable position. It’s a race to the bottom. There’s no way you can sustain that model of selling on price, because anyone else can come along and say $19. Then $18. This is the mindset of a 14-year-old who borrows his dad’s push mower. You may have started your business that way, but it’s no way to continue running the business.
     
  2. You’re doing yourself a disservice. You run a company. You are the owner and maybe even president of a firm that employs other people. You are a professional who creates jobs and helps manage the environment. Act like it.
     
  3. The work you sell today needs to pay dividends for your company and the industry for the long term. Undercutting just for marketshare doesn’t do that. You’re hurting yourself and thousands of other owners in the industry.
     

The same is true for anyone who operates without the proper insurance, or pays employees under the table. If you do that, you have no place in this industry. Find something else to do. You’re peeing in the pool. Get out.

I was talking with Chris Lee a while back about his approach to pricing and the highly competitive Dallas-Fort Worth market. He said the hardest thing he had to learn at Earthworks was that not all jobs were the same and that it was very possible that many jobs were bad for his company.

Not all revenue is good revenue, he said. The jobs his company accepts today need to serve them not just this season, but also in five or 10 years.

No one said this would be easy. Labor is expensive and it’s difficult to find employees who want to do the work. You might not have the resources to do all this at once. But you need to find some resources to do some of it now. You owe it to yourself, your employees and your industry. 


– Chuck Bowen

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