Devil's Advocate: New Year, Same Stuff

The annual Jones family New Year’s extravaganza was fabulous as always. It was a strictly black-tie affair – just a few hundred of our dearest friends – and the caviar and Dom Perignon were stacked to the ceiling.

Or not.

It is, in fact, early December here in sub-arctic Cleveland. I’m desperately trying to finish stories in time to go enjoy some time with my family. And right now, I’m just hoping the old Jeep will fire up and carry me home. So, as usual, it’s easier to procrastinate, lapse into a daydream and start playing Devil’s Advocate with myself…

Self: By the time everyone reads this, Christmas and New Year’s Eve will be history and we’ll be grinding away on 2009. I wonder what the next 365 days will bring?

Devil’s Advocate: That’s easy – heartache, misery, unemployment, bankruptcy, disaster…

Self: Wait a second, Joe Sunshine. Why the attitude?

DA: It’s tough out there for everyone and no amount of government bailout is going to fix it. People are losing businesses, jobs, market share and hope.

Self: Look, I was just talking to a former golf course superintendent who’s moved over to the lawn and grounds care business. He’s damn happy to be in control of his own fate as opposed to waiting around for some fat-cat green committee to approve a budget and beat the crap out of him about every dollar he spends.

DA: That’s just what we need…a bunch of former Carl Spacklers invading our industry and taking clients away from people who’ve been in the market for years.

Self: Actually, this guy knows what he’s doing and he’s working for a reputable major company. The one thing that shocked him about our business was the low-balling. The churn-and-burn rate for his territory was close to 40 percent last year.

DA: So, he should quit whining and do something about it.

Self: He has. First, he’s proactively calling customers quarterly to make sure they aren’t thinking about dumping him. He also keeps in touch with other reputable guys in the area to compare notes on ways they can maintain value in the market. So, they’re doing the best they can to keep rates where they should be instead of undercutting.

DA: “Maintain value” sounds like secret code for price fixing. Isn’t that illegal?

Self: Price fixing is bad – and if anyone from the FTC is reading this – I’d certainly never advocate anything like that. But, maintaining the value of services is good. Once good companies in your market start discounting to compete with low-ballers, everyone loses. It’s a guaranteed death spiral. Pretty soon, you’re just another commodity like generic aspirin or bottled water.

DA: But you have to discount to compete with these slimeballs who will do anything for $10 less than you could possibly charge and still be profitable.

Self: No you don’t. You have to offer value.

DA: I do offer value…I give customers the service they need for a fair price.

Self: Value means more than price. Instead of lowering your rates, why not figure out what low-cost additional services you can bring to the table? Why not offer free hedge trimming in addition to mow-and-blow? Why not provide discounted gutter cleaning for monthly customers who pay at the full rate? Why not find out what really matters to your clients and figure out a way to build that in as a value-add to their program and PROMOTE it to them?

DA: But you’re just giving things away. This ain’t charity work.

Self: Maybe you sacrifice a little on the bottom line, but you keep your top line where it needs to be and you keep price integrity. Once you start lowering prices to compete, it’s too difficult to bring it back up later.

DA: So you’re saying I should eat some margin but keep the customers?

Self: Yup. The cost to acquire a new customer is way higher than the cost to keep an existing one.

DA: Everybody knows that.

Self: But not everybody manages with that thought in mind. Given the way things look for 2009, it’s time to start thinking differently. This year, the top line has to be top of mind, because without that, there won’t be a bottom line.

Pat Jones is a veteran journalist and marketing communications consultant in the turf/golf industry. He can be reached at psjhawk@cox.net.