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Listening to clients prompted this contractor to start an irrigation warranty company.

Lindsey Getz | September 12, 2011

Back in the late 1990s, CBS Services, a Houston-based landscape and irrigation company, was experiencing a high volume of residential installations. “We were doing upwards of 600 each year,” says Wade Martinez, president. “What we realized was that our success was based on our guarantee of fixing any problems. When you put that many systems in, you’re bound to get a number of people calling with complaints – even just because the dog chewed it up. So we decided to let customers know that if anything happens to the system within the first year, we’ll take care of it – no questions asked.”

The huge success of that first-year, anything goes guarantee got Martinez thinking. If it was the guarantee that people really wanted, then how could he start bringing that to the masses? He began to ponder a warranty service program. Out of that idea came Smarter Warranty America (SWA). “SWA works like a virtual business assistant for contractors around the country,” Martinez says. “How it works is if a contractor is our partner, we handle his warranty.”

Martinez says it’s a win-win situation. Customers get the peace of mind throughout the ownership of their sprinkler system and contractors wind up with happy customers. Since SWA is basically a third-party back-up, Martinez says that even if the contractor who installed the irrigation systems goes out to business, the homeowner knows they still have someone to call. Are most customers willing to pay for the warranty? “Yes,” Martinez says. “Customers are certainly more than willing to pay a premium for the ease of mind that an extended warranty offers.”

Of course, the model of having an outside company administer warranties isn’t specific to SWA. Martinez says they studied the way Best Buy operates and built the idea from that model. “Their extended warranty program is very profitable,” he says. “About half of Best Buy’s profit is merchandise sales and the other half is just selling the warranties. So, we know that people like buying warranties. And it’s definitely true of sprinklers as well. About half of homeowners end up buying a warranty for their sprinkler system.”

Offering it all

Since starting to handle the warranties for fellow contractors, Martinez began to think about other ways he could help boost their business. “I thought, ‘If we’re handling the warranties, can we also take over some of the other back-end duties?’” says Martinez. “Many in the residential irrigation industry just don’t have time to send out the thank you cards or do the follow-ups, but that’s a huge source of future income and referrals they’re missing out on. So that’s something we’ve now taken over handling through SWA. As soon as company XYZ sells a sprinkler, we do the follow up.”

Actually, Martinez says the process includes a whole series of follow-ups, ensuring that company XYZ stays fresh in the client’s mind. “After the initial follow-up and thank you, we send what we call a ‘love letter’ to make sure the customer is still happy with their new sprinkler,” says Martinez. “Soon after, we’ll send another, just to make sure the customer is still a fan. Once we’re sure he or she is happy, we then ask for referrals. It’s something that contractors don’t always do, but it’s a great way to get new business.”

But Martinez says that’s only the beginning, if contractors want to truly link up with SWA, they’ll help work to get them new leads and build a stronger customer base with customizable plans. Contractors get access to some of the best marketing and graphic experts in the business that might otherwise be unaffordable. But Martinez says it’s inexpensive to get started working with SWA’s virtual business system. “They get leads from us and produce higher closing rates and if they do sell a job, we get a one-time fee of $49,” he says. “With that one-time fee we also handle all of the follow-up. If they get a job from customer X, we also send letters out to all of X’s neighbors. And we handle the cross-marketing as well – letting customer X and their neighbors know that in addition to irrigation, the company also handles lighting.”

Since starting these types of services, Martinez says it’s been incredibly rewarding for him to witness other contractors’ success. “Hearing the testimonials has definitely been a rewarding part,” he says. “Forty-three percent of additional growth in one year can be attributed to us. That’s something that I feel pretty good about.”

 

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