BUSINESS OPPORTUNITIES: Shake the Money Tree

Tim Doppel says adding tree and shrub care to Atwood LawnCare just made good business sense. “Customers are looking for a company that can offer the full range of services,” says the president of the Sterling Heights, Mich.-based company.

He added tree care to his lawn care business in 1992, mainly because he saw a market for it. “We saw ourselves as having an expertise with pesticide applications so we saw tree and shrub care as a natural fit with our product mix,” he says.

Doppel operates his tree and shrub care service two ways. He has dedicated tree and shrub technicians, as well as a couple of crewmembers capable of performing both lawn care and ornamental service. He runs the service this way in order to meet his customers’ full needs. Some of his customers want the same technician to take care of their lawn and their trees. Doppel says they like to have one contact person who can answer all of their questions. “But in other parts of the market, the customers don’t care. And we can be more efficient and focus in on specific issues, whether it involves trees or the lawn.” 

With an estimated 20 to 25 percent gross profit margin annually, the service brings in dollars Doppel wouldn’t consider giving up. “Because of the profitability and value of the service, it has become a very important part of our product mix. I wouldn’t want to do without it.”

GETTING STARTED. The first step in adding tree care was to find an expert who could identify plant materials and pest problems. “Because we were lawn care technicians, we didn’t know a lot about the specific pests of trees and shrubs, and we were particularly poor on tree and shrub identification,” he says.

Finding someone with the necessary diagnostic skills was not easy. Because of his location, Doppel was able to turn to Michigan State University’s horticultural program to recruit candidates. He says the ideal person for the job has to possess a strong ability to identify the plant material commonly used in his market, as well as identify pest problems on those plants. “While a college background is always good, experience in the field will also give a person that knowledge base,” Doppel says. “Regardless of how a person got the experience, without those two capabilities, a start-up tree and shrub service is going to suffer.”

Once that person was onboard, equipment purchases came next. It was critical to buy a separate tank to mix and apply the materials, as well as a separate hose. “Lawn care materials and tree care materials cannot be intermixed in the same tank because lawn care materials – weed controls in particular – will damage ornamentals,” Doppel says. In addition, specific types of spray guns and pumps are needed to properly make the applications. Doppel estimates the maximum investment in equipment ranges from $2,000 to $3,000, not including a vehicle.

To keep up-to-date, he and his crew regularly attend seminars, which he considers a professional requirement. “Without regular learning opportunities, we wouldn’t be able to stay current with new pest problems and their controls. Each year, his technicians attend three to four seminars hosted by various local trade associations, which usually cost about $50 per person, as well as two to three in-house training sessions.

TREE TROUBLES. When he began offering the service, Doppel says his biggest mistake was pricing things too low. “It’s not that we lost any money on the deal, it’s just that we left a lot of money on the table,” he says.

He thinks lawn care operators have a tendency to price everything about the same. “If the lawn application is $30, we’ll make the tree application $30.” But Doppel says the price should be higher in order to reflect the higher value of the service.

The main reason for the higher value is the length of time it takes for an ornamental to mature. For example, if a customer’s 10-foot crabapple tree dies, it is expensive to replace the tree. “The customer would have to buy a 5-foot tree and wait many years for it to grow into what was once in that spot,” Doppel says. “Now extrapolate that to a large street tree, and think of the value of a 40- to 60-foot ash tree.”

He also prices applications by how long they take. “Fertilizing a tree, for example, takes longer than a foliar application, so we charge more for it,” he says. “There’s also a higher value to fertilizing a tree. It’s really a matter of not only knowing what your costs are, but what the value to the customer is going to be.”

Understanding tree and shrub products and how they’re different from lawn care products was another learning curve. “You use chemicals differently in a tree and shrub care approach then you do in a lawn care approach as far as the overall tank mix is concerned.”

With lawn care, he knew how many thousands of square feet of turf he was going to treat, and it was easy to calculate how much product to put down per square foot. Tree and shrub products, on the other hand, are based on the gallons of mix in the tank. “We didn’t know how much of that mix goes on one tree,” Doppel says. “Some labels say to use this much based on the diameter of the trunk. Other labels say to spray until wet. It doesn’t specify 5 gallons or 20.” Only by doing applications do you learn how far a tank of material will go.

Doppel also says he didn’t have a good understanding of what kind of application schedule was required for all the different plants in his area. “Since we had never made tree and shrub applications before, we were unsure of when the pests would be present,” he says. “In our case, we underestimated the requirements of ornamentals. It took a lot of research to find out what would need to be applied when to get the best results for our customers.”

He found the answers through trial-and-error and by talking with sales representatives and product distributors, as well as networking with other tree care companies in the area. Once he figured out how much material to use and when, he was able to price the service accurately and to its full value.

SALES TACTICS. Doppel says about 20 percent of his lawn care customers opt for the tree and shrub care. He may not get 100 percent penetration into his lawn care base, but the service represents about 15 percent of his company’s total revenue and maintains a steady growth of 10 percent each year.

Overall, he says customer reaction to the service has been positive. Customers want their lawn care company to handle their ornamental pests. Getting customers to call when they have a problem is not the issue – it’s getting customers to buy into preventive care programs early on.

“The hardest thing with trees and shrubs is that customers assume that trees live forever – that they don’t need any care,” he says. “They’re not real receptive at first to preventive measures. A lot of times they’ll wait until there is a problem on the tree, and then expect us to clean it all up. That’s sometimes possible, and sometimes it’s not.”

In Doppel’s Metro-Detroit location, emerald ash borer is one of the biggest problems. “Emerald ash borer is a situation where if customers get in on preventive basis, we can save the tree. If they wait until they see damage, the tree is dead and there is nothing we can do,” he says. “But it’s hard to convince people that they have to do preventive care, particularly with trees and shrubs.” 

He says that although he promotes the ornamental service to all new prospects, around 80 percent of customers start as a result of taking care of a specific problem. “Then they see the value of the service and become continuing service customers.”

In fact, the big sales for tree and shrub care usually come in late spring and early summer because that’s when customers start to see problems. “People just don’t think about the fact that their trees and shrubs might have a problem this year and to get in on a program early on,” Doppel says. “Once the trees leaf out and start growing – or not growing – then we get more calls.”

So how does he convince customers to buy into preventive care? “We haven’t figured that out yet,” he says with a laugh. “Customers just don’t want to think in terms of preventive care. They just think trees live forever, but we know they don’t.”

Although it seems having a pest problem is the best marketing tool, Doppel tries to educate customers on the importance of tree and shrub care before it gets to that point. One strategy he has found effective is leaving behind information sheets, which he calls Tech Sheets, (see example, left) when potential trouble is spotted. “When we do a lawn application, the technicians will look at the landscape. If they see something that needs attention or that will need attention, they’ll leave a little fact sheet letting the customer know they need to do something.”

Tech Sheets provide information on the potential pest damage, divided into sections by what symptoms customers will see, the reason for the problem, what customers should do about it and how Atwood LawnCare can help. The last part includes a blank space for technicians to fill in the number of visits the treatment would entail and the cost. The sheet also includes the technician’s name, company phone number and Web site address for clients to get more information.

Doppel has developed more than 40 Tech Sheets. To keep costs down, he prints them on standard paper using an in-house laser printer. Doppel himself wrote several, but this past winter, one of his veteran employees took the initiative to put together a committee with the purpose of updating existing sheets and writing new ones. “We got all of our employees involved,” Doppel says. “It turned into a great learning experience for the team.”