Avoiding Profit Busters

I’ve traveled all over the country examining landscape and tree services. The most successful companies always had systems to avoid and to capitalize on their industries’ most common mistakes:

Six mistakes:
1) Spending too much time with the wrong people
2) Not giving enough information to your current clients and prospects
3) Not charging enough for work
4) Mainly going after the low-profit stuff
5) Writing estimates out on blank sheets
6) Complacency – not seeking to improve all that you do

Solutions to these six mistakes:
1) Most companies spend too much time with unworthy clients who irrationally complain and generally bust your chops for no reason (the squeaky wheel gets the grease). Meanwhile, your best clients don’t bother you, so you don’t to them as much as your low-budget people. That’s backward. Normally, 80 percent of your profits come from 20 percent of your clients; and 80 percent of your problems come from a different 20 percent of your clients. Lose the dregs and spend more time with your better clients. Make a conscious effort to build more rapport and serve these top clients to a higher level. They will send you their friends if they get exemplary service from you.

2) If you just give clients and prospects the generic view of your work and not the details of your excellence, they will not appreciate or pay for the difference. Let them know every little detail of what separates your firm from your competition and how it greatly benefits them. For example, if you don’t tell them why you use certain equipment; how your teams are so caring; and what your vision is for their property in two years, you have done them and yourself a great injustice. Remind them of these details in letter and in person. By the way, try giving all this information out when you are doing an estimate and what your closing ratio for better jobs skyrocket.

3) Suffice it to say, build in value, educate your client to recognize that value and charge well for it. If it turns out that you charged too much, give them a credit, refund check or just throw in extra no-charge work. (But make sure you let them know that they got a freebee, plus describe the work and its value.)

4) Many companies will trip over each other trying to underbid low-profit work like lawn cutting and cleanups. I don’t agree with this, but if you feel you need to do this to get the client, at least sign them up for other, more profitable services at the same time. Stay focused on what gives you your best hourly returns. You need to make a profit – and if you can do other services that add value and serve the client to a higher level, then why not? I personally have eliminated all of my low-profit services. I give this type of work away to other companies. Now I can stay focused and specialize in what we do best. The client is happy and we can give exemplary service.

5) Want to double the amount of work confirmed from each of your sales calls? This concept is simple yet very effective. Hal all your services listed on one estimate form. This way, your clients scan the different services with you that they may want now or in the future (while you explain in more depth). It also makes you look very professional, organized and authoritative. They feel like they are getting a customized program – and they are. Plus, when you write them up with what they need, they won’t feel that you sold them the kitchen sink because they can see how many services on the sheet you did not recommend. The best part is that you’ll have a way to introduce, explain and easily sell your highly profitable, annually self-renewing services – the gift that keeps on giving. If you want to look unprofessional, to confuse your client or just turn them off, use the one blank sheet estimate technique.

6) Complacency. Just because you stayed in business for X amount of years doesn’t mean that you don’t need to improve on your work and business structure. You may wake up one day with no business at all or at least realize that you could be doing much better with less strain if you had applied yourself or had gotten some professional guidance. You need to always seek to improve all that you do in business. You need to learn about using organic products.

I could write 20 pages on each of these solutions, but I’ve given you enough to get started. How you do in business has a major effect on how you do in life. Make some changes. You can live really well, so why not?

The author, Roger Feit, Treewise, The Organic Experts, can be reached at Treewise@optonline.net.