<b>Tree Care Guide:</b> Adding tree care

This service can be a profit center for lawn care companies - if they do it right.

“Why should I add tree and shrub care to my lawn care service?” It’s a common question lawn care owners ask themselves. Do you do it just because everyone else is doing it? If so how do you compete with the big companies in the market?

There are many reasons to do it, including increased revenue, enhanced profitability, employee retention, increased customer convenience, satisfaction and loyalty, and referrals, just to name a few.

But doing it the right way and for the right reasons is critical to avoid taking time away from and your eye off your lawn care business. Too often, a lawn care company will attempt to add tree and shrub care without thinking about the number of lawn care customers it will take to support a standard multi-treatment full tree and shrub care service. Historical data indicate that you should have at least 2,500 to 3,000 lawn care customers to afford a tree shrub truck and a dedicated tree shrub person. At best, 10 percent of your lawn care base will buy a full program tree and shrub care service within the first two years. That’s only 300 tree and shrub care customers.

If you have fewer than 2,500 customers or if you cover a very large geographical area, then you need to start thinking beyond traditional tree and shrub care service and begin offering options that both you and your customers can live with.

Program Options
Here are some options to the traditional tree and shrub care service that you might consider when marketing to your lawn care customers:

  • Offer two ornamental fertilizations (three in the South/Pacific Northwest);
  • Two fertilizations (three in the South/Pacific Northwest) and one major targeted pest; or
  • Offer two fertilizations (three in the South/Pacific Northwest) plus perimeter pest control.
Full Program Assumptions
If you believe the only way to expand is to add the traditional tree and shrub care service (four to eight visits per year) then there are a few time-tested assumptions that need to be believed:
  • A minimum of 3,000 lawn care customers
  • First year tree/shrub customer count 200-300
  • Average $300 annual revenue per customer
  • First year gross sales revenue of $60,000-$90,000
  • First year net revenue of $35,000-$60,000
  • First year expenses deg; Payroll   30%-35% 
      ° Truck  10%
      ° Chemicals   5%-10%
      ° Advertising   2%-10%
  • First year direct margin of about 35%-40% (Based on incremental revenues and existing overhead)
  • New tree/shrub sales will be about 5%-10% of your existing lawn care customer base
  • Close Rates (to your lawn care base);   
      ° 40%-50% on direct mail
      ° 17%-25% on telemarketing leads
      ° 12%-15% on unsolicited estimates to existing lawn care customers
  • Stops per day, predicated on density:   
      ° Fertilization 13-15   
      ° Leads run 15-25
      ° Foliar sprays 15-18

The advantages of offering just ornamental fertilization are that it’s not complicated, very easy to sell, no licensing required, no expertise required, no capital expenditure plus the ease of scheduling around your lawn care treatments. You must, however, communicate to your lawn care customers that no pest protection is offered and no ornamental diagnosis is offered.

In parts of the country where you have an obvious awareness for an insect pest you can take advantage of the “ick” factor and add a foliar spray (or maybe a soil injection/drench) to the ornamental fertilization. The “ick” factor includes pests like Japanese beetles, bagworms and tent caterpillars.

The advantages of adding a targeted pest with high awareness to the ornamental fertilization are; it’s not complicated, very easy to sell, no real expertise required, no capital expenditure, however licensing is required.

More and more lawn care companies have added perimeter pest control to their service offerings. Another tree and shrub idea is to include adding fertilization of the foundation plants to your perimeter pest control program.

If you are already doing perimeter pest control, then why not offer to fertilize the foundation plants at the same time or as a separate visit? This gives you the potential for greater long-term profitability tied in with a more easily understood pest service.

Other Options
There are a whole host of other service options that can be offered as stand-alone treatments or as part of any tree and shrub care package. These include micro trunk injections to large trees for insect, disease or nutrient problems anti-desiccant sprays, deer repellants, dormant oils, chemical “sucker” control, ornamental bed weed control, vertical mulching/aeration, pruning of small ornamentals or compost tea treatments.

Other Requirements
Recognize also that there is potential for greater long term profitability with a full program tree and shrub care service, and it also affords the customer the best ornamental pest protection. However, you will need a person “knowledgeable” in tree and shrub care. You will have to purchase a tree and shrub vehicle, invest in additional training and, most importantly, manage the tree and shrub care service in such a way that it does not divert your attention as an owner away from your core lawn care business. The larger your lawn care customer base the quicker your tree and shrub care service can reach a critical mass.

Marketing Your Service
Marketing tree and shrub care services must be only to your lawn care base. But be careful not to market to your entire lawn care base, especially if it is for full program tree and shrub care. Density is the key to profitability. Also, focus on the areas with the highest incomes unless it is just a one- or two-visit option like fertilization.

Consider doing your marketing outside your traditional lawn care windows so as not to take attention away from your lawn care business. Surveys have shown that you can generate half of your tree and shrub care inquires January to June and half from July to November.

Consider a summer or fall launch of your tree and shrub care services. Use your office personnel to generate leads when customers call in during the season. Be certain to have plenty of sandwich bags in the trucks to leave the “ick insects” with the customers. Advertise your tree and shrub offerings on your return envelopes. 
 

Risks and Recommendations
Here are some things to consider carefully when thinking about adding tree care services:
  • Set proper expectations. Customers often think they are getting a gardener.
  • Have a knowledgeable tree/shrub account representative.
  • It is a consultative service – you need to work in partnership with your customers.
  • Leave good reports and landscape tips.
  • Focus on actual replacement costs (average landscape value is $15,000 to $30,000).
  • Don’t spread too thin; take one opportunity at a time.
  • Set realistic goals for your new service.
  • Measure the results and capture information.
  • Remain committed.
  • Most importantly, your lawn care business must be fundamentally sound before you start a new tree/shrub division.


 

The author is president of Environmental Horticultural Services in Dublin, Ohio. He can be reached at eschaffer@gie.net.
 

March 2010
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