The business side of irrigation

After a rocky start, Bob and Tom Schaefer have made it more than 30 years in the industry.

February 19, 2013

After working for a sprinkler contractor for several years, brothers Tom (right) and Bob Schaefer decided it was something they wanted to do on their own. They had mastered the installations and knew they liked the work. What began back in March of 1980 as their small sprinkler operation has evolved into a well-established business. But one thing that’s never changed is the company’s sole focus on irrigation.

Although they’ve been asked to do all kinds of other services over the years – particularly lawn care and snow removal – the brothers have held firm on offering only irrigation services through their Lakewood, Colo.-based company, Schaefer Lawn Sprinklers. In a post-recession period where so many companies are diversifying to drive more revenue, they talk about why staying the course has been the most successful strategy for their business and what the company has learned in its three decades of doing business.

An uncertain start. When the brothers first opened shop 33 years ago, they were good at what they did. They knew the work well. But what they didn’t know was the business side. Both readily admit looking back that they didn’t have the “business sense” to make their early years profitable.

“We were getting a lot of jobs but the truth was we didn’t have the business expertise,” Tom said. “We’re ditch diggers – not businessmen. So we had to be honest with ourselves and admit that we needed help.”
That help came in the form of an irrigation business consultant. “Back then it was around $750 for a two-day intensive seminar,” Bob said. “We learned so much in those two days it was incredible. He left us saying that if we followed the business model and plans he had laid out that we’d have $10,000 in the bank by spring. We were shocked because we had been living hand-to-mouth up until that point and had built some debt.

"But we did follow the business model and began to become profitable. We were already very good at the work we did and as we came to understand the business side, we started seeing a lot of success. But it required us to admit we needed to lean on resources and someone else’s business expertise to get things going.”

Building business. One of the key ways that the brothers started building an account list was by offering no down payment. Most of their competition required at least some money down for sprinkler services. “We understood that we were two young guys who were just starting their business and we simply couldn’t give our customers a lot of reason to trust us,” Tom said. “We didn’t have a long list of references.

"So we worked with payment upon completion and told our customers they didn’t have to pay us a penny until we were done. That worked really well.”

Tom says that also offering a five-year parts and labor warranty also helped differentiate them from the competition. Most were offering a one-year warranty and didn’t always offer both parts and labor. These early strategies really paid off in building a loyal customer base.

"Today the company has approximately 9,500 customers in their database. Both brothers attribute much of their success to the fact that they continue to cater to existing clientele instead of constantly going after new jobs. “Even when so many others were just hungry for those new installs, we’ve always paid attention to our existing customer base,” Tom says.

“That served us well in the recession period because there were no new install jobs around and yet we continued to get work because we have a loyal base that bring us back to the property year after year for maintenance jobs.”

Getting involved with retrofits has also become a niche for the company, made successful by their strong base of existing customers to “go back to.” “As the technology has evolved, we’ve had more and more opportunity to offer retrofits,” Bob said. “We’ve gone back to some of our oldest accounts and raised up all the heads and retrofitted the new Toro Precision Nozzles and it’s like their system is brand new again. Customers have been so happy with that retrofit service and each year we’re doing more and more.”

Both brothers say that without the support of the team they’ve built, they wouldn’t be as successful as they are today. They say that hardworking and loyal employees are just as instrumental to the company’s success as strong ownership.

Customer loyalty. Both brothers say that building strong relationships with clients has always been a top priority. Customers come to trust them and use their services again and again. Now when they go to see a new client they have a list of references with happy and still-loyal customers dating back to the 80s. This strong reputation has also allowed the company to not only hold their prices firm in a market of low-ballers but to almost always be the highest bid – and still consistently get work.

“In the Denver Metro area, I’m able to bid my jobs higher than other contractors because of the ways we’ve differentiated ourselves from the competition,” Bob said.

“And even in these tough times, we’re still getting those jobs. The difference is that we’re going out and spending time with the client. We’re not just looking to put in the lowest price. One of my specialties with the business is meeting with the clients and I’ll go out and measure the yard and show them an actual blueprint drawing. I’ll also get together all the rebate information so they’ll know exactly how much they can get back and will use our historic data to show them how much water they’ll save over time. All of that extra effort pays off and allows us to charge more.”

The strong tie with customers has also lead to a number of requests over the years. Customers who have grown to really like and trust the company are constantly asking for additional services. “We get a lot of questions about whether we can mow a lawn or do some plowing,” Bob says. “We’ve had a lot of opportunity but we’ve never felt it was right for us. I think one of the biggest mistakes that businesses make these days is becoming a jack of all trades but a master of none. We didn’t want that to happen to us. We never wanted to lose sight of what we’re truly good at which is sprinklers.”

Tom agrees, adding that they always felt there was room for improvement in what they already offered, instead of deviating from that specialty to offer something new. “We have always focused our effort on becoming even better at what we already do instead of putting our attention elsewhere,” Tom said. “We want to be the very best at doing sprinklers instead of branching out so much that we are no longer focused on our specialty. We’ve seen other companies become bigger and bigger by continually adding services but in the end they become so spread out that they’re not really focused on the core company any longer. My feeling is that the sooner you can find your specific niche, the better off you are because then you can start becoming a true expert at it.”

In this post-recession marketplace Tom said he thinks a lot of companies feel pressured to do a little of everything. Nobody wants to turn away work and everyone is looking for opportunities to grow or become more profitable. But he thinks that too much diversification can really hurt a business. “If you get into a service solely to expand your business, you run the risk of hurting your reputation if you’re not really an expert in that service,” he warns. “While you may truly be an expert in one area, your poor work in another area could ruin your entire reputation.”

That just hasn’t been a risk the company is willing to take. Nor do they want to get into other services when they’ve always enjoyed sprinklers. Staying abreast of the latest technology in irrigation these days is enough work in itself and the brothers are committed to being true experts in the field. But as much as they aim to stay on top of the very latest trends, both brothers say that it all comes back to good old customer service in the end. “We’ve had a really loyal base of customers in our 33 years and we are absolutely committed to continuing to maintain and build those relationships,” Bob said.

“We say it all the time, but our customers have become like family. They know us and trust us. There’s nothing more valuable than that kind of loyalty – and that was obvious when times got tough and we still continued to do well in business. We owe that to our strong customer relationships.”