Having a diverse service portfolio often allows for more profit and more room to grow. But how do you breach the topic with your customers?
According to our research, 89 percent of consumers don’t use contractors for applying fertilizers, insect and weed control – they either do it themselves, or they don’t do it at all. However, 75 percent say that they are likely to buy more than just basic treatments from a contractor to make their lawns and plants healthier or more attractive if it’s recommended by their contractor.
A full 67 percent of homeowners use the same contractor for chemical treatment, mulching, aerating, planting, etc., as they use for mowing, trimming and edging.
So all you have to do is ask?
Well, almost. All you have to do is ask the right customers.
John Richter, owner of Richter Landscape Company in Birmingham, Ala., emphasizes the importance of maintaining strong, trusting relationships with your customers, and suggesting added services when you see it is appropriate for a particular situation.
“We try to really get people to buy-in to the relationship of business, which helps us with some of these add-on services,” Richter says. “I’ve told our guys that I really want 2013 to be a focused effort on catering to the existing customers we have. They’ve already selected us to be their service provider, so we’ve gotten their trust.”
Jason Fawcett, president of Elizabeth River Lawn and Landscape, Suffolk, Va., agrees. “A lot of it has to do with creating that culture with the customer in the incipient stage of the relationship,” he says. Avoid suggesting just your latest-and-greatest, and really get to know your customers and their landscapes to figure out what may be their best solutions, Fawcett says. Then, put everything in one comprehensive package up front. This will help to give a full scope of your ideas rather than piecing the projects out and risking sticker shock or hesitation for individual services.
“We’ve got a wide spectrum of which customers really give us free rein and then which customers want to approve every single dollar spent in their yard, and that’s just the nature of the business,” Richter says.
A lucrative effort. Training your team on additional service applications and offering these enhancements to customers can translate to big earnings. Fawcett says his company’s add-on services make up a substantial amount of their $6 million yearly revenue.
“The upsells really clean house,” Fawcett says. “Your average maintenance agreement with the customer is a foot in the door, but the upsells are really what separate the men from the boys or the girls from the women – that’s what really brings it home. I would say that the upsells make up at least 35 to 40 percent of what we do.”
Irrigation, landscape lighting, snow removal, hardscaping, turf management and tree care are all possible additions to a typical maintenance program. Fawcett says his company tries to be a one-stop-shop for the customer, taking care of everything that the customer needs that has to do with the exterior of the home, except pools, ponds and decks. His most profitable upsell services are irrigation and landscape lighting, with about 50 to 60 percent margins, he says.
Richter’s company offers design build, landscape management, lawn care, tree and shrub care, irrigation, lighting, hardscaping and color change-out. He says his add-on services make up about 15 percent of his $1.4 million-plus annual revenue. Richter has also picked up some jobs that aren’t typically in his portfolio, such as drainage solutions.
He says it’s easy to sell a customer on his company providing drainage solutions rather than a plumber because plumbers don’t tend to be as sensitive to the landscape.
“We’ve had several of those cases that we’ve done that have been really good upsells,” he says. “If (the homeowner) hires a plumber, he’s going to show up with a track hoe, and just destroy and mangle the landscape. He doesn’t know how to transplant a plant or move across turf sensitively with a piece of equipment.”
Get the word out. Marketing your additional services to your customers without giving the impression that you’re just pushing for more money can be a fine line. But it is important to let your customers know that you’re there for more than just their basic needs. When you recognize a service enhancement that would benefit your customer, make sure to mention it to them.
For general marketing, having an up-to-date, user-friendly website is vital. Richter has taken it a step further by offering his customers a professional, monthly e-newsletter highlighting services that fit each month. This keeps his company in the forefront of his customers’ minds, shows his level of customer service and puts the spotlight on enhancements the customers may not have known about.
Finally, have fun with it. Fawcett has internal contests with his sales team to motivate them. “I put out a bounty within my organization that said, ‘Hey, if anybody can outsell me, I’ll give you $1,000 cash out of my personal money,’” he says. “I make it a healthy competition, because who wouldn’t want to beat their boss in sales?”