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Dynamic mix

Features - Formulas for Success

Tapping into a different customer base or testing other services can ignite new business.

Lawn & Landscape Staff | September 11, 2012

What’s the magic mix for gaining more business in your region? That’s what Lawn & Landscape asked landscape contractors this month to learn how you’ve changed your service offerings during the last several years to attract new customers, grow deeper relationships with existing clients and stoke growth.

By analyzing the markets – watching what kind of real estate is selling – listening to customers, and keeping a close eye on properties to determine what needs are unmet, these landscape professionals have tapped into new business.


Cultivating commercial business

When Matthew Johnson and his partner Kevin Robinson purchased Asset Landscaping in 2005, the bulk of the company’s business was servicing multi-family properties. But the problem with this kind of business is that buildings sell and management companies change and bring in different vendors. “The consistency of the revenue was a concern,” says Johnson, co-owner and vice president of the Phoenix-based firm.

Quickly, the company moved into the homeowners association market, and there is a plentiful base of customers in the area, where planned communities are packed with several thousand homes and hundreds of acres of common area that require maintenance. Some of those contracts are worth $1 million a year, Johnson says. Asset Landscaping’s average HOA accounts range from $2,500 to the largest, $20,000. And today, 85 percent of the business is HOA clients.

“HOAs are more consistent than multi-family and residential because they must have maintenance,” Johnson says. “And because they are professionally managed by HOA management companies, the payments are consistently on time.”

The tough part is those 30-day contracts. “You’re only as good as your previous month,” Johnson says, noting that HOAs are relationship-intensive and emotionally charged – stakeholders include a board, a management company and residents. But the work can be very profitable.

Plus, the business comes in larger revenue chunks than other commercial business, such as retail centers or office parks, Johnson says.

Meanwhile, Johnson sees the benefit of building the commercial side of his operation, which is currently about 15 percent of the business.

To forward this mission to build the commercial side, Johnson hired a business development manager with deep contacts in the commercial space.

Now, Asset Landscaping is on the “elite 8” list, giving the firm an opportunity to bid on accounts at the top businesses in Phoenix.

“Through his contacts, we have been able to get in the door in places that we were having problems getting in before,” Johnson says.
 

Quick Tips

Analyze the market. Johnson applies his realtor skills to analyze the market and determine who will invest in maintenance and landscape enhancement services. “We look at who is doing well,” he says. “Is it single-family homes or HOAs?” He studies rental rates, home sales and commercial real estate movement. Then, he plans for growth in the thriving area.

Work to diversify. There are HOA accounts in greater Phoenix that are worth $1 million. But to focus the majority of your manpower on one account – and especially a potentially turbulent HOA with a 30-day contract and a board of managers – is a very dangerous thing. “We have what we call a weekly score, and we track different segments of our business,” Johnson says. “If we are getting too lopsided in one area, we make adjustments.”

Consider your resources. Do you have the expertise to reach into that new market? Do you have the labor to do the work? Seriously think through personnel requirements before selling to a new audience.

 


 

Enhancing the business

The margins on maintenance work aren’t what they used to be. Professional Grounds in Lorton, Va., generally earns about a 3-percent profit on its commercial contracts.

But just because there’s less of a profit cushion doesn’t mean there aren’t ways to earn more on every property. In the last several years, Professional Grounds has focused on selling enhancement work to existing clients and reaching new prospects by finding extras that the property’s vendors aren’t catching.

“The maintenance industry has become somewhat of a commodity, and even though we differentiate ourselves from the competition like everyone says they do, the margins are so much lower on the contracts that we really try to push enhancement sales,” says Jon Zalewski, business development manager.

Finding extra work on properties is easy if you look for it, he adds. The key is to go deeper with client relationships and be present on properties. “Our mission is to create valued relationships with our clients through service and personal attention, and we do that by getting out there and meeting our customers, talking to them and finding out about their needs,” Zalewski says.

Sounds like Customer Service 101, but Zalewski says many maintenance firms drop the ball. And Professional Grounds is ready to pick up that work. “I do a lot of prospecting on properties that are not properly maintained and bid on those as new contract work,” he says.

“There is so much work sitting on properties that other companies don’t see, don’t have time to do or just don’t do. Someone is just doing the contract work and missing out on all of the enhancement work.”

Professional Grounds is no longer missing out. The company’s goal is to increase enhancements to 40 percent of the business, and the firm is already there. That’s because managers are responsible for meeting with clients regularly and walking their properties. “They provide customers proposals based on their needs,” Zalewski says.

And those needs run the gamut, including tree removal, drainage work, pond management, turf renovation and storm cleanup. Professional Grounds subs about 30 percent of “extra” work to companies with whom the firm has built relationships with over the years.

The profit from enhancement work helps Professional Grounds maintain a strong firm, even in tough times, and compete in the tough commercial maintenance market.

“Basically, we are just helping customers with what they want,” Zalewski says.
 

Quick Tips

Seek extra work. Maintenance margins are down, but there are plenty of opportunities to earn more revenues from existing accounts. You just have to look for them. “There is a lot of enhancement work sitting out there on customers’ properties,” Zalewski says. “You need to get out there and make yourself available to customers to sell the work and bring details to their attention – things they may not see.”

Be a help. After a big storm, who’s on your clients’ properties cleaning up the mess? The answer should be you. After a large storm in the area, the Professional Grounds crews were making phone calls to customers. “We were ready to go on their properties and sell tree work,” Zalewski says. “Customers appreciate that because we are looking out for them and we are available all the time.”

Know your strengths. Professional Grounds has built trusting relationships with subcontractors in their area so they can rely on these vendors to provide services such as large tree removal. That way, Professional Grounds can sell the work without swallowing the overhead expenses associated with acquiring more equipment and specialized labor.

 




Extreme diversification

Keeping the service mix diverse at Rising Sun is a way of doing business, and it always has been. The Dorset, Vt.-based landscape maintenance firm is nestled in a bucolic vacation area where many of the firm’s clients own second homes. Since they spend only a portion of the year in Vermont, they rely on Rising Sun to be a full-service property management firm, and the company delivers.

Rising Sun even offers package shipping and delivery, essentially serving as a P.O. box by collecting and sending out boxes for its clients. Why? “It’s easier for our customers,” says Dave Lawrence, who started the firm about 30 years ago.

While one could argue that such extreme diversification would dilute quality or focus, it works at Rising Sun. “We cover all the bases,” Lawrence says. “I look at it as, what if I were the one who owned the property? I would want a company like ours taking care of it.”

Rising Sun has earned a reputation as the go-to property maintenance company in town, and the population in the Dorset/Manchester area is only about 10,000. Rising Sun’s service offerings may be diverse, but its service radius is only about 12 miles. And while Rising Sun truly will “be everything to everyone” in terms of helping out customers, the firm doesn’t take on every single customer that calls.

He’d rather do more work for fewer people. Rising Sun offers a house checking service, where trusted members of the Rising Sun team make sure properties are safe and sound while clients are living elsewhere.

As for coordinating the extra services, Rising Sun has an office staff that mans the phones and e-mails go directly to Lawrence’s mobile device and the office.

All requests are printed and filed with the crew that will handle the request that day.

Schedules made the night before often change the next morning because of the nature of client requests. All this requires careful communication, and Lawrence says staying organized is the only way to get all of the work done. Most of the time, employees can handle service requests, but if a subcontractor is necessary, Lawrence has relationships with vendors in town.

Maintaining a broad service mix has solidified Rising Sun’s business over the years. “We are busy all the time,” Lawrence says.
 

Quick Tips

Cater to clients. Rising Sun is a more diversified business than most landscape firms, but that’s because Lawrence listens to his unique customer base and delivers what they need. “Basically, anything you can think of having to do with the property, we handle,” he says.

Train mindfulness. While Rising Sun has landscape crews and those dedicated to caring for garden spaces, no one is pigeonholed up into a job description. The company expects every worker to keep a watchful eye on properties and note any changes or concerns. That’s part of providing trustworthy services to clients who are often away from their homes, Lawrence says. And that way, Rising Sun can tend to any additional service needs that crop up on the property.

Be flexible. Diversification at Rising Sun requires being available and proactive. When customers call or e-mail a request, that communication immediately turns into a work order and is taken care of by a team member. “There is constant communication between all employees in all departments – there has to be,” Lawrence says.

 
 

The author is a frequent contributor to Lawn & Landscape.

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