While fluctuating prices for fertilizer, fuel and other supplies has impacted the lawn care industry, Chris Eggen, of K&B Tree and Lawn Care in Wisconsin, says there are a few constants that help him head up the company’s lawn care and plant division.
The first constant is labor wages — something he now knows to expect an increase in year-to-year.
“The last few years, with the amount of jobs available and the workforce out there, there are plenty of jobs and everybody’s offering them anything and everything,” he says of prospective employees. “They come, they get their sign-on bonuses and then they walk away after three months because they don’t really like it.”
Fortunately, K&B hasn’t experienced too much turnover.
“Retaining employees is huge,” Eggen says. “Most of our employees have been with us long-term, so five years or more. But, of course, we always have a little turnover here and there, but we haven’t had a huge amount or a revolving door of new employees.”
Eggen says he knows payroll is always one of the major expenses for any company, so that’s why it plays such a pivotal role in determining prices for services like lawn care.
“Gone are the days that you can start people out at minimum wage. Just to get them in the door, your wages are so much more than they used to be five or 10 years ago,” he says. “But if you pay your employees well, they stick around and want to come to work. There’s two sides to every coin.”
Eggen says to avoid sticker shock among clients, the company does utilize yearly prices increases. However, those price increases may go up more than normal if needed.
“A lot of the time we’ve stuck with a 3% increase for lawn care,” he says. “On average, that’s been a good, stable number. It’s not too much that you’re turning off people, but they realize prices are going up.
“Last year, we did go up more because of the price volatility,” Eggen adds.
Despite the increases, Eggen says the company also gives incentives to those who pay early. To encourage this, K&B will send out pre-season letters to all its customers.
“We do a pre-pay letter to all existing customers whether they do just one service or multiple throughout the year,” he notes. “We offer them a pre-paid discount option and, in the letter, it shows a detailed list of everything they had done last year and what this year’s price will be. Sometimes we’ll include a suggestion of an additional service they could benefit from.”
Eggen adds that ever since the onset of the COVID-19 pandemic, people are much more accustomed to pre-paying online.
The pre-pay system also allows Eggen to better gauge what kind of season it’s going to be.
“You also get a feel for how our area is willing to pre-pay,” he says. “If the numbers are looking really good it shows it’s going to be a good year. It shows they have money in hand they are willing to go without and pre-pay with rather than paying throughout the season.”
And, it allows him to get a jump start on securing supplies and materials.
“It helps us influx money into the company right away,” he says. “So, we can start ordering fertilizer, herbicides and other products for the lawn season.”
