The ABCs of commission pay
ABC Home & Commercial Services compensates maintenance crews on a commission-based pay plan. Here’s how it works and why workers stay on board.
The more crews work, the more they get paid at ABC Home & Commercial Services, which targets the Austin, San Antonio and College Station, Texas, markets. That’s because maintenance employees get paid on commission rather than taking home a base salary – a system that owner Bobby Jenkins brought over from the pest control side of his business.
“In every analysis of business processes we do, I am trying to make sure that there are three entities that win: customers, employees and the company,” Jenkins says. “I firmly believe that commission-based pay is in the best interest of all three entities.”
To prove this to crewmembers before rolling out the system to all maintenance employees in all locations, Jenkins tested the pay model with just one crew. “We didn’t just ram it down everyone’s throat,” he says. “We ran the pay plans side by side, and we told them, ‘We’ll pay whichever one is better.’ After several pay periods of seeing the commission-based crew getting paid more, everyone else was happy to go on that plan.”
Gaining buy-in was critical for rolling out the commission-based pay model, Jenkins says. “You have to demonstrate that commission-based pay is better for everyone involved.”
Employees get paid more, and in return, the company gets focused, driven workers. Quality delivery is the real barometer of whether the system works, though. Commission-based pay isn’t all about rushing through a route to complete more jobs in a day. At ABC, hours are tracked and detailed route sheets are distributed that denote a production value for the day.
“There’s a fixed commission for the revenue generated per job, per day and at the end of the day, those commission revenues always prove to be higher than if employees were paid on an hourly rate, even with time-and-a-half,” Jenkins says.
Diversifying the core. ABC Home & Commercial Services was founded as a pest control company and began offering complementary lawn care services 12 years ago. Shortly after that, the firm branched out into lawn maintenance, landscaping and irrigation. “We saw that model of diversifying our service offering seemed to work well,” Jenkins says.
So ABC delved into the handyman business, then heating and air conditioning, plumbing and electrical. Now it also offers tree trimming, pool cleaning and other repair and maintenance services.
Read more about Jenkins and his commission culture and sign up for the A Cut Above newsletter at www.lawnandlandscape.com/newsletters.
Weathering the drought
Location is everything, and Bobby Jenkins is pretty proud to be based in central Texas, where the economy has been in a better position than most areas of the country. “We consider ourselves very fortunate to be in Texas, and even more so in central Texas,” says Jenkins, president of ABC Home & Commercial Services with offices Austin, San Antonio and College Station.
But weather is a different story. Central Texas was bone dry last year, and this had a “huge impact” on Jenkins’ business, he says. “We were so hot and dry, turfgrass just stopped growing,” he says. “People abandoned their yards because we were under such stringent water restrictions that they couldn’t keep their lawns alive. So we lost a lot of business.”
Clients cancelled lawn service contracts. “There was nothing growing,” Jenkins says.
This is where diversity worked to ABC Home & Commercial’s benefit. While water rationing was in full effect and the Dust Bowl went months without rain, wildlife went rampant. “The drought put a lot of wildlife under tremendous stress,” Jenkins says. “Our rodent and wildlife business went through the roof.”
While insect pressure wasn’t as great because of lack of moisture, the rodent and wildlife business made up for those losses. And the sweltering hot, dry conditions opened up opportunities to expand into new service lines.
“What a great year to go into the air conditioning business,” Jenkins says.
Overall, ABC Home & Commercial Services grew by 14 percent last year. And this year, the weather looks wetter. “We have had rain so far,” Jenkins reports. “Our business is up nicely right now, so I’m guardedly optimistic.”
Ahead of the game
Hunt Irrigation picked up clients from competitors who dropped the ball on water efficiency.
In 1997, Jeremy Hunt decided that he wanted to start his own business.
One of the catalysts was the fact that he really wanted to focus on water conservation before anything else.
“Back then it wasn’t something that people were talking about, and when I presented those ideas to the company I was working for, it wasn’t something they wanted to focus on,” says Hunt, owner of Hunt Irrigation in Lincoln, Neb.
Being ahead of the curve has worked out well for Hunt’s company. “Today water conservation is a very popular concept and we’ve been doing it longer than our competitors,” Hunt says.
“We’ve already examined our design and worked on modifications and changes to ensure our systems are as efficient as possible.”
Since 1997, a lot has changed that has made focusing on water conservation even easier.
Hunt says that the advent of smart controllers has really changed the game.
“When smart controllers came on to the market, it made our job easier to do,” he says.
“Every system we install has a smart controller on the residential side. Obviously with commercial work you need to abide by the specification.
“But we always bring it to the project manager’s attention that we can save the owner money by making changes or modifications to the spec.” While new construction has slumped off, Hunt says that he’s found a niche in making poorly designed sprinkler systems more efficient for customers.
The company does about 60 percent residential work on average.
“A large majority of the new clients we pick up are systems we didn’t originally install but for whatever reason the original company doesn’t want to or isn’t following up on service,” he says.
“This works out well because 90 percent of the time those systems weren’t the best installation in the first place so that creates an opportunity to offer the client a more efficient system.”
Whether an area is receiving poor coverage or is being over-watered, Hunt says that these situations create opportunities to modify the original design and bring the system up to a higher standard. “We come in and incorporate some water conservation features like pressure regulated sprays or maybe converting a zone of aerial-delivered landscape to a drip zone,” Hunt says. “Instead of installing a brand new system, we take an existing system and upgrade it to something more efficient. That’s been a nice little niche for us.”
Learn how Hunt stays ahead of trends and sign up for the Water Works e-newsletter at www.lawnandlandscape.com/newsletters.
Owning his business for nearly 15 years, Jeremy Hunt says that, at times, he may micro-manage. But he says it’s difficult not to have his hands in everything.
As owner, he likes being out in the field, which is why he stuck with the industry in the first place. And, as the owner, he’s very hands on. “I wore a lot of hats when I started this company and I still do today,” he says. “I not only do the invoicing and pay the bills, but I spend long days in the field. When I went into this line of work it wasn’t because the APs and ARs excited me – it was because I enjoyed doing the construction of the sprinkler systems and truly like the service end. I enjoy the diagnostic work – trying to figure out why something doesn’t work and coming up with a solution. That’s where I find the most enjoyment within this company, so I tend to do the majority of my work with the installation crew and service techs.” Still, Hunt says that this is the first year in business that he’s started to back off on his involvement with the field operations and concentrate more on management. It’s largely because business has grown and made this a necessity.
“I’ll admit I am still a much bigger fan of being out in the field. In fact, sometimes the office manager has to hit me over the head with a big pile of paperwork to remind me it’s time to get back to the office,” he laughs.
And while Hunt says he’s making an attempt to be in the office a bit more, he also says it makes a difference to his clients when they see him in the field.
“Clients tend to like seeing the owner take a hands-on approach and being involved throughout the process,” he says.
Moving into maintenance
Thornton Landscape celebrates 50 years in business and shares how the firm has evolved to meet market demands.
People make a business. That’s why in 2007, when Thornton Landscape in Cincinnati decided to add maintenance to the design/build firm’s services, the owners purchased a small maintenance firm and brought on its energetic leader.
“He gave us the foundation of what we have today,” says Rick Doesburg, company owner. “We weren’t buying the (business) portfolio as much as his expertise.”
Timing couldn’t have been better for starting a maintenance division, though Rick doesn’t take credit for that.
“We didn’t know in 2007 what was going to happen in 2008, 2009 and 2010,” he says.
“We like to think we (started this division) because we saw the economic downturn coming, but that would be a lie. We made the right decision at the right time.”
Transitioning the design/build firm into a full-service company that offers maintenance went smoothly because of the company’s processes, which had been passed down from the Thornton family – and because of the dedicated staff members, who take ownership in the across the business.
The company added one full-time manager, and over time, hired 10 crewmembers. But running a maintenance business wasn’t all that easy. It’s quite a different animal to tame than operating a design/build firm, the Doesburgs learned.
“It’s down and dirty competition in commercial maintenance,” Rick says bluntly.
“A lot of times, it’s about price.” Thornton Landscape leverages its ability to deliver a positive customer experience to win new maintenance contracts.
Crews do more than get in, get out. “We have been successful by doing a cut above what others might be doing, using our expertise in design as needed and treating customers like we want to be treated ourselves,” Rick says.
The maintenance division is relatively humble in size: three crews in a small market, Rick says. But those crews produce $1 million in revenue for Thornton Landscape, and the landscape design crews stay busier during slower winter times because of extra maintenance jobs like spring cleanup and mulching.
Maintenance provides Thornton Landscape with a service cushion for times when design/build business is lean.
Thornton Landscape is a 50-year-old company. Learn more about its best practices and sign up for the Business Builder e-newsletter at www.lawnandlandscape.com/newsletters.
Considering adding a maintenance division to your design/build firm? Andy Doesburg, who heads up the department at Thornton Landscape in Cincinnati, shares some of his lessons learned in the trenches.
Cross-train. Thornton Landscape brought on new field labor to manage mowing, but the company relied on its landscape crews to pick up spring services, such as mulching and pruning. “Cross-training is a good way to keep everyone busy,” he says.
Expect a different pace. A focus on efficiency is critical when operating a maintenance division because jobs are short-term compared to longer-term design/build endeavors. “With maintenance, you must deliver everything quickly while still delivering quality,” Doesburg says.
Know the politics. Especially when working with homeowners associations (HOAs), remember who’s signing the contract. That’s not always easy because a housing development with a hundred clients can mean a hundred different opinions.
Chris Kozol uses video blogs to educate and communicate with customers.
The days when Chris Kozol was able to personally meet with every customer to educate them on lawn care treatment options and discuss their service plans are long gone. Since founding Forest Green Lawn and Landscape in Omaha, Neb., nearly 15 years ago, Kozol has hired a team of salespeople to interface with his loyal customers.
Nonetheless, in the past few years, he has begun using a low cost, tech-savvy marketing tool to reach out to customers – at least, in a virtual sense. Through creating video blogs that he emails out to every customer in his database, Kozol is able to provide lawn care tips, company updates and, of course, sell his services.
“It’s impossible for me to be out on every yard, so this is another way of touching my customers,” he says. “Video blogs are becoming increasingly popular. This is a nice way for my customers to see from the owner of the company, to hear from me.”
To create the short, 2-3 minute videos, Kozol hired a local Omaha blogger. He decided not to hire a professional marketing firm after noticing that some of the most popular content on Internet sites like YouTube is shot and edited by amateurs.
“I knew that I didn’t need to hire a production company,” Kozol says. “People get bombarded with stuff every day, so I wanted the videos to be quick and easy – something to brighten their day, give them knowledge and let them know we’re here.”
As he began to develop the videos, Kozol jotted down a list of topics that he wanted to address throughout the course of the year. He took his cues from frequently asked questions and seasonal topics such as shoveling a driveway in the winter.
“It just started snowing here, so we had a little blog on snow safety,” Kozol says. “When it’s time for pre-emergent in the spring, then we’ll do something on that.”
Forest Green’s video blogs are delivered in an engaging, off-the-cuff style, yet Kozol still devotes time beforehand to developing ideas and listing what he wants to say. “The person that films me throws in his two cents, and we work on it together,” he says. “I think the most we’ve ever done is three takes, and they’re quick. I will say a lot of different things – they don’t have to be in the perfect order – and he’ll edit it.”
To read more about the investment Kozol made and how he reaches customers, visit www.lawnandlandscape.com/newsletters. While there, you can also sign up for the Growing Green e-newsletter.
Over the past 15 years, Chris Kozol has grown Forest Green Lawn and Landscaping in Omaha, Neb., into a full-service maintenance, design and installation company. During that time, he has also nurtured his customer base, added new, loyal clients and built a roster of 28 full-time and seasonal employees. Now, as he retraces his path to success, he can point to a core strategy that’s kept Forest Green growing.
“Above all, we really believe in taking care of our foundation first,” says the entrepreneur. “If we can’t take care of the customers we already have, how can we take care of somebody new? Over time, we’ve grown our services based on that.”
Kozol’s strategy of layering new services atop a solid foundation of content customers may sound simple enough. Yet when he decided to add landscape design and installation to his list of services five years ago, the transition was complex.
“There have definitely been ups and downs,” he says. “I already knew the mowing, maintenance and fertilization business, yet there was a learning curve for landscape design and installation. A lot more things need to go correctly to be successful.”
Although the initial investments of time and money to add these new services was quite substantial, Kozol says that it’s paid off and allowed Forest Green to enjoy another growth spurt. “We had a good client base to build off of, and they already trust us,” he says. “So we let them know we’d added these services, and we grew from there.”