This time, the group talks about competing with lowballers and closing contracts.
Last October, Lawn & Landscape sat down with owners and executives from top companies across the country to get a pulse on the opportunities and challenges facing the industry in 2012. We talked sales, pricing, closing contracts, labor and regulations.
All year Lawn & Landscape will be running excerpts of that conversation. Here, we pick up where the conversation left off in our February issue – competing with lowballers and closing contracts.
Frank Mariani: I’m not smart enough to compete on that low-cost basis – I just don’t know how to crack that nut. But, some big companies have figured that out, and God bless them. I just don’t play in that arena.
So we all have to find out what we do well. And here again, I think at these types of events, there needs to be more discussion about how to figure out what’s your mission and ... how do you take advantage of your particular segment of the industry? Instead of focusing on, “This is the low price provider, and if you want to play, you have to play in that.” I just think that it shows how unsophisticated we are as an industry when all you talk about is, “bottom line, bottom line, bottom line.”
The problem with our country right now is that there’s too many McDonald’s, there’s too many Walmarts, there’s too many Home Depots, too many landscapers ... there’s too much of everything.
In the same token, there are so many dollars being spent in those segments, and all we want is a piece of that. And if we can figure out how to be smarter than our competitors, there’s a lot of dollars out there.
Bob Grover: Some of the stuff that we’ve worked on is that pricing is down and you have to figure out how to do it cheaper, constantly inventing new ways to improve our productivity. But one of the things is, “What are we good at? What do we want to sell? What does the customer want to buy?”
For a long time we were thinking, “We’re good.” We can define good as, great quality, and all this stuff. But now it’s, “What do you want, Mr. Customer?” And we’ve done a lot of work on metrics of our surveys and talking to clients. And what we’re finding out is that what’s important to us isn’t always as important to our customers.
Trying to define the service that we want to provide has to be in line with what they want. We get really proud about quality, and we’re pulling stuff out of our services and people aren’t even noticing it.
What people want is for us to manage the property. They don’t have the staff; commercial property owners are managing twice the number of properties. They want a low-cost offer. But really, they want somebody that’s going to take their landscape dollars, and manage it throughout the year and never have to call us.
Chris Kujawa: Our property managers that we’re working for used to manage five or six buildings. Now they’re managing 12, 13. They can’t do it with knuckleheads, because they have to answer to whomever. Now the reporting is even more. Now they’re spending more time reporting and rating this, and looking at the budgets, instead of watching what’s going on. And you have to babysit some people, but some people you don’t. Time is tight, but talent is tighter.
L&L: George you play in that space. What do you think?
George Gaumer: It’s a little different when you’re dealing with different markets and different people.
Some of the markets out there, as Dale well knows, are a little more price sensitive, they’re all price sensitive, but Florida has always been very tight.
Dale Elkins: But now they’re looking deeper and cutting deeper due to the external pressures from, again, from personal income of people going away, from foreclosures, people not paying their dues, it goes on and on and on.
GG: All of the customers out there, or a majority of them, are dealing with that situation; the vacancy rates have never been higher. They were projected to be 17 or 18 percent but ended up being 20 percent in 2010. This year (2011) they were projected to go up by 10 percent, and last I checked it was already up 11 percent by the end of the third quarter.
So, our customers are being faced with real challenges. They’re not just hammering landscapers, they’re hammering everybody: plumbers, heating, everything.
Everybody is having to nip it down. We really had a struggle for awhile dealing with the fact that somebody hands you a scope of work – and you want to bid that scope of work, you want to play above the board – and you bid the scope of work, and the job goes for 75 percent of your bidding number. It takes awhile to figure out that we’re not on an even playing field.
It’s really hard to explain to young managers, who you’ve brought along and cultured to do things right, to say to them, “Don’t worry about the scope, just figure out what you can do cheap.” That’s just the way that they hear it.
They say, “You told me before, ‘We’re going to take care of our customers’ and now it’s OK not to do that?”
That’s a really hard transition to make when you’re dealing with groups of managers of various levels of expertise and skill.
The author is editor and associate publisher of Lawn & Landscape. He can be reached at firstname.lastname@example.org.