LCOs report an improving – but not yet thriving – market.
For those focused on the lawn care segment, the road has surely been rocky at times. For a long while, many customers were only opting for the bare bone services and perhaps forgoing some of the upsells that were once big revenue drivers for this market. While things appear to be turning around, most lawn care businesses report that they still have some concerns and aren’t ready to say they’re in the clear just yet. Many customers still aren’t spending what they used to, though business does seem to be taking a better turn.
“It’s finally starting to pick up more,” says Mark Utendorf, owner of Emerald Lawn Care, in Arlington Heights, located in the northwest suburbs of Chicago. “Business had been flat for a while.”
Emerald Lawn Care focuses on fertilization, weed control, pest control, aeration and tree and shrub care. Utendorf says that because they’re a small business, focused almost entirely (95 percent) on residential customers, they’ve still been able to grow during the recession. But even so, it’s been slow growth. Utendorf says it’s largely the steep competition. “The Chicago lawn care market is extremely competitive and it seems like companies just keep coming,” he says. “We’re pretty saturated with competition and that’s definitely a big challenge. Most of our competition is quite capable as well — it’s not just the one-man-and-a-truck type of competition.”
Kevin Igoe, co-owner of Your Green Team, a lawn and landscape company in Plant City, Fla., that specializes in fertilization, plant and tree care, and pest control, says that the Florida market has been saturated by competition as well—but in his area it’s a lot of low-ballers. “There are so many companies going out and doing work so cheap that nobody can make money,” he says. “We’re losing good customers over pricing. And then when they invest in bad service and get poor work done, it hurts the industry’s reputation. That’s one of our biggest challenges right now.”
The company focuses almost entirely on the residential market in this post-recession period. Igoe says that the downturn in the economy really hurt their commercial segment. While he previously worked with a lot of Homeowner’s Associations, Igoe has found the HOAs are now saving money by not investing in fertilization plans and just mowing whatever grass still grows. He says the company is focusing on holding its own with its residential customer base as a result. “We’re trying to get more aggressive,” he says. “We’re targeting specific areas as opposed to blanketing the whole area like we used to. We’re really getting strategic about our game plan and trying to figure out who to put our time into selling to—and who not to worry about.”
In upstate New York, Laurie Broccolo, owner of Broccolo Tree and Lawn Care in Rochester, offering lawn care and maintenance, design/build, integrated pest management, and environmental consulting services, says that the economy has been relatively stable the last few years. “It has not affected lawn care fertilizing programs,” she says. “It did affect landscape design/build projects but those are starting to come back. What has suffered is our tree care segment. People are not making that a top priority and are a little more willing to wait and see how things go.”
While some areas have seen a better turn, many report that their regions are still struggling. Customers are anxious about spending and companies have to work harder than ever to maintain and build a customer base. “I don’t see any meaningful improvement in the economy,” admits Jon Parry, general manager for Bemus Landscape in San Clemente, Calif. “Our sales have picked up, but that’s more from our stronger sales efforts and not any major improvement in the economy. While home sales have picked up a bit here in Southern California, that’s only a short-term positive sign. Until we see some sustained increased, we will remain only cautiously optimistic.”
Targeting the Customer. In New Jersey, Mike Haskell, owner of Plant Solutions Tree & Lawn Care Specialists based in Warren and Short Hills, says they’ve been targeting the high-end residential consumer who is still willing to invest. Haskell says that in the market where he’s located, customers are willing to spend the money if they see the value. “We try not to get caught up with the guys that are low-balling and we aren’t willing to get involved in any price wars,” Haskell says. “”Honestly, that’s what sells our industry short. We are aiming for the customers who are spending money the right way, for a superior service, because they’ve learned what happens when you spend it the wrong way. Instead of paying twice; they pay once and get it done the right way.”
Tim Jenkerson, co-owner of St. Louis Lawn Care in St. Louis, says that he’s also held steady on price. He recognizes that there will always be businesses that go out there and undercut his charges, but most customers are willing to pay for customer service, professionalism, and knowledge.
“Some people just want their yard cut for a cheap price and that’s fine — there’s always someone that will do that,” he says. “But we don’t let that affect us. That’s not the customer we’re going for anyhow. We just try to be as reliable as possible and put a major emphasis on customer service and we’ve found there’s always going to be a customer base that appreciates those efforts.”
In Southern California, Parry says that Bemus is raising its prices for the first time in five years. “We’re raising it just slightly and that’s due to rising costs,” he says. “Despite the economic situation, I think that customers are being receptive. The raises are very limited and also targeted increases. Customers do understand that five years without any increase is very generous and that we still have to run a business.”
Parry says the company will target their customers with more emphasis on their tree care division. While new installation work is down and the company has turned away from putting a lot of effort into those sales, they see potential growth in tree care. The economic situation has certainly caused many to re-evaluate their offerings.
In the Chicago area, Utendorf says that a big change for him will be getting out of snow. “It’s just too hard on the equipment and it doesn’t generate enough money to justify the wear and tear on the trucks and the people,” he says. “I’ve looked at other services but just feel they’re a distraction from our target. We’re going to stay laser-focused on providing the best quality turf care we can.”
Looking Ahead. With a new year around the corner and many possible changes on the horizon, it seems most in the lawn care segment are remaining cautiously optimistic. Many hope that some of the green industry’s challenges will be faced, but recognize there are still obstacles to overcome. Looking toward the future, Haskell has some concerns about the lack of education. He feels it hurts the industry’s reputation. “A lot of technicians we’re seeing have a serious lack of training,” he says. “There also isn’t a lot of education given to the client and we’re huge on that. We love to educate the client so that they can understand why things cost what they do. Once they understand why soil biology is so important, they understand the value behind our knowledge and experience—and they’re more willing to pay for that quality service.”
In Illinois, Utendorf says that his biggest concerns for the future center on finding quality workers. “Finding good people that you can rely on is always a challenge in this industry,” he says. “We need good technicians that are really focused on quality and customer service. With the saturation of competition that makes it even more challenging.”
But Utendorf says he has some hope for the future. “On the positive side, I am excited about the economy potentially turning around even further,” he says. “It definitely seems like there’s a chance we may finally turn a corner.”