Founder and consultant,
Bruce Wilson & Company
Ten-to-fifteen percent annual growth is not a stretch for most landscape companies. It’s a bit above average, but it can be done if you do one thing exceptionally well — generate high quality referrals by regularly exceeding expectations on quality work and excellent service.
I have used and recommended referrals as a growth strategy throughout my career. It’s a win-win. You deliver a return on value to your clients by way of exceeding expectations and providing great service. Your customers know what to expect, your teams are practiced and aligned in the best and smartest ways to solve problems, and your customers reward you with referrals for new business. Sounds obvious, right?
Adopting a referral program takes a complete shift in the way your team thinks about customers. They require almost no financial investment but can generate positive growth if you’re relentless about the big picture and avoid three common pitfalls.
No bench strength
Having a deep bench gives leaders the ability to respond quickly to new opportunities. They can also shed poor-producing, low-margin customers, especially if they also don’t generate enhancements, and they can shift crews to higher margin work. Even if reassigning crews doesn’t generate immediate growth, it often turns out to be a better book of business and a better strategic move overall.
Building a good bench for new work is essential to consistent growth. You can build a bench of job candidates, regardless of position, by nurturing relationships with schools and universities. Be aware of what the right candidate is going to offer and hire people who fit your culture. I hired interns and new college horticulture grads every year, got them into the system and familiarized them with our business even when there were no immediate openings. I went the university route because the graduates offered two distinct advantages: they were interested in a career, liked plants and landscaping in general, and, as a result of their education, they had the ability to learn more quickly and move into a management position. This helped minimize the limit to growth problem of not having enough people.
No financial flexibility
One of the biggest reasons companies can’t take advantage of opportunities is lacking sufficient financial resources or access to funding. And there are a number of reasons, from economic downturns, market volatility or actions that lead to reduced access to capital. Some owners take too much money out of the company, which limits cash resources for growth and capital expenditures, such as the ability to invest in new technologies and stay competitive. Equipment is the biggest drain on financial resources. Difficulty managing cash flow is a common issue as businesses struggle to maintain necessary liquidity for the day-to-day. Financial management consists of conservative spending and use of financing instruments, loans and leases to allow financial flexibility. Done right, it limits the limit to growth due to better financial management.
No discipline
While getting new customers through referrals is a great way to boost revenue, learning to say no is equally important as a way to solve capacity problems. Referrals aren’t density-friendly and it can limit your customer base. Be disciplined in your due diligence and value assessment, and keep density in mind as you grow. This might mean passing on some leads or dropping out-of-range jobs and replacing them with opportunities that are a better fit.
It's far easier and more cost-effective to retain customers than acquire new ones. Accelerating quality and personal service to ever higher levels of excellence will always result in a high percentage retention and renewal rate. Invest in customer surveys and understand the net promoter (NPS) score, an effective metric that measures customer satisfaction and loyalty by asking one key question: “How likely are you to recommend our company to a friend or colleague?”
Referrals can be a real growth engine. They can provide a steady stream of pre-qualified leads at a fraction of the cost, be harder for your competition to replicate and the capital efficiency you gain allows you to continually optimize your resources. If you’re serious about growing at 10-15% annually and scaling your business in a sustainable manner, a successful referral program is hard to beat.
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