The Landscape Group: Keeping the Vision, The Morrell Group

This philosophy of utilizing the landscape group to develop "customers for life," as the company calls them, in maintenance customers is clearly well thought out, communicated throughout the organization and continues to be successful.

"Last year, we converted 95 percent of our installation jobs to maintenance contracts, and that is by design," explained Don Smith, president of the Atlanta, Ga.-based company. "A lot of companies can’t believe that we really convert that many installation projects, but our construction group typically does not go out and bid projects that are just construction projects. We look for construction projects that have maintenance contracts tied to the installation or that really fit our niche of construction work and have the potential for a maintenance contract."

In fact, Smith said some landscape companies in Atlanta with both a construction and a maintenance operation have called The Morrell Group and asked the company to bid for a maintenance contract along with their own construction bid.

"And they don’t even talk to their own maintenance division about submitting a bid – can you believe that?" he added.

While the construction group will likely continue to grow in size so long as the company continues to grow, Smith is happy keeping the sales from the group around 30 percent of the company’s overall revenues.

"Construction knows that if they’ve got 10 jobs to bid, there are a number of criteria they need to consider when determining the bidding order for those jobs," agreed George Morrell, chief executive officer. "What jobs have the most potential to create a customer for life? Those are the jobs we go after first. The job that has the highest profit potential may end up being tenth on that list to bid because our priority is creating a customer for life that every other group can then interact with. And that philosophy is what creates the high conversion ratio we have of installation jobs to maintenance jobs, and that philosophy is what creates our high customer retention rate.

"Many companies don’t track their conversions or they don’t think that number is important, but we think that the landscape construction group is the first line of the company," Morrell noted.

And Charles Tankersley, director of the landscape/design group, pointed out that while a lot of clients will hire the company that completed a landscape installation to provide maintenance for at least the first year to protect the plants via a warranty, The Morrell Group retains about 85 percent of its maintenance clients after that first year.

"Yes, the landscaping group brought in $4 million last year, but more importantly, we generated 36 new maintenance accounts from landscape projects last year," remarked Smith, estimating the company’s average landscape job at about $160,000. "That makes the landscape group function like an additional marketing division for the company. We figure that if we can break even in landscape work we’ll still end up in good shape because of the new maintenance customers we generate."

Bart Parker, director of sales and marketing, also pointed out that a key advantage of having the landscape grow as it has is the added capabilities the company now has for satisfying clients.

"Our landscape group provides a real important function to a lot of our maintenance clients because an important part of providing good maintenance services is improving the property as it matures and helping the property adapt over time," Parker explained. "If you have an area that gets installed and is in full sun initially, it can become a shaded area as the trees grow. That’s when you need to have some creative designers who understand the desires of the property management and design changes to the property that fit. Our landscape group really had to grow in order to support the design staff that we needed for maintenance because the revenues from just the upgrades wouldn’t support this kind of staff."

"We’ve really looked to the landscape construction work as a way to gain accounts through the relationships that we’ve built over the years with key general contractors and landscape architects," added Tankersley. "If a company is building its first building in our area and we know they’ve hired a property management firm that we’ve worked with in the past, then we’re really going to be competitive on that bid to land the construction project. If we get the contract, then we want to exceed our customer’s expectations on the installation to get the maintenance contract. And if we get the maintenance contract we want to again exceed our customer’s expectations so we can get our other groups on to the property."

While pursuing jobs for maintenance contracts is key, Tankersley and the sales personnel also keep in mind what type of projects the landscape group is best suited for.

"Our niche is the class A commercial installation in the price range of $100,000 to $250,000," recognized Tankersley. "The property is typically a building with a fairly nice foundation planting, some parking lot islands and some buffer plantings."

ENHANCING SALES. The mission at The Morrell Group is obviously to take care of maintenance customers and develop them into "customers for life." The company’s customers are exclusively commercial in nature, which can translate into some rather large properties at times. And, sometimes, large maintenance accounts require smaller landscape work, and doing that work profitably can be a challenge for any company.

"Our landscape group is not set up to handle smaller installation jobs for our maintenance customers, so we have a group designed to handle smaller installation jobs that can generally be taken care of in one day or less," explained Morrell. "This group works in situations where response time is most critical."

These enhancement operations are handled out of the landscape group, and there are generally one or two enhancement crews handling jobs, depending on the work flow. The work was previously handled out of the maintenance group, but the volume of enhancement work eventually made the enhancement group a better fit for the landscape group. The Morrell Group expects enhancement work to account for about 15 percent of the landscape group’s overall sales, or about $35,000 per month.

Enhancement jobs are generally sold by the regional maintenance manager responsible for a particular property as "every manager in the company works as a salesperson when they are walking the property and looking for areas that could use upgrading," according to Tankersley, who also said that the enhancement manager only gets involved once the client has approved the project. "Enhancement jobs may take a full day or a crew may handle three or four in a day if the jobs just require planting a few shrubs."

Tankersley noted, however, that while enhancement work delivers strong profits, contractors can get themselves in trouble by losing their focus.

"Enhancement work is good margin work if you do it right," he explained. "Prices are better because the job wasn’t sold in a bid situation, but you need to make sure you don’t deliver a Cadillac when the customer is only looking for a Buick.

"In bid work, you need to bid exactly what is asked for because everyone else may be making bids as well, and then you’re looking for the least expensive, highest quality plant material," Tankersley continued. "Whereas with upgrades, we can use our re-wholesalers in town or specifically pick one grower for a specific plant they are noted for and not be as price sensitive."

Brad Catanach, one of the company’s four regional maintenance managers, also warned against trying to sell enhancement work just to meet the enhancement budget.

"The key is to do what the property needs, which isn’t necessarily always going to meet the sales budget," he pointed out.

"But on the properties where we have good relationships, we actually become part of the budgeting process for our customers, and that has given us the opportunity to submit a number of proposals to clients giving them enhancement ideas to think about for next year," added Kirk Talgo, regional maintenance manager. "Submitting our cost projections to property managers ahead of time really helps them in their budgeting process.

"The other side of that coin is that customers oftentimes have budgeted money they need to spend at the end of the year, and that’s when our enhancement work can really take off," Talgo noted.

"In that case, you look for the areas where the dollars that are available can have the most impact for the customer and the property," commented Terrance O’Rourke, regional maintenance manager.

"Obviously, our best properties are the ones where we do walk-throughs and just discuss enhancements because there aren’t any problems," commented Catanach.