Adjusting to demand

In 2009, South Texas Growers grew 50,000 native Texas grasses for the City of San Antonio. Today the company still grows most of its plants but has started purchasing some from larger wholesalers due to growing demand.
Adaptability has helped South Texas Growers not only survive, but grow in a tough economy.

The projected revenue for the small, seven-employee landscape company is $500,000 for 2010 – that’s up $150,000 from last year. Joanne Hall, vice president of the Bulverde, Texas-based company, says that she and her husband Michael (the president) have seen new installation and irrigation jobs drop off this year. But by focusing on their retail plant sales, an area that was never a big seller in the past, they’ve been able to grow their business.

The company is pretty much equally split between their landscape and irrigation services (50 percent) and their nursery sales (35 percent retail plant sales and 15 percent wholesale plant sales) on the 3-acre nursery. By keeping their retail plant customers happy, they’ve found a great opportunity to cross-market their other services, keeping those divisions going strong.

The pair has been in business about 15 years, eight of which have been in their present location, a small community that’s considered Texas Hill Country just north of San Antonio. In their previous location, the nursery side of the business had been wholesale-only. “Looking back, that definitely limited us,” says Joanne Hall. “When we moved to the new location, we decided to add a retail division as well.”

Still, for a long time it was the wholesale side of the nursery that always brought in the money. But last year everything changed. With new construction coming to a halt and other local landscape companies failing to secure those big jobs, wholesale sales took a plunge. Fortunately, retail sales took off. At press time, retail plant sales from the first two quarters of 2010 were up 55 percent from 2009.

Sales Boom
Hall’s theory for the increase in retail plant sales is that homeowners who are unable to sell their homes are instead investing their money into their existing landscapes. “If they’re going to stay there, they want to spruce it up and enjoy the property more,” she says. “Or maybe they’re planning to put it on the market down the road, when things improve, and they’re working on better curb appeal now.”

South Texas Growers competes with a large home improvement store that’s just down the road. But what sets them apart, and why they’ve been so successful, says Hall, is that they really promote their expertise. “We’re in an area where we have a lot of deer, so we make sure our customers know that we specialize in deer-resistant plants,” she says. “Even though we have a large competitor nearby, they just don’t have the knowledge that we can offer.”

Though the plants at the large home improvement store are often cheaper, Hall says customers are willing to pay extra for their knowledge, especially because of the climate and landscape of the region. “We live in an area where you can’t just plant whatever you want,” she says. “It won’t work and you’ll waste your money. We have extreme temperatures here. It can get as low as 15 degrees and as high as 115. And on top of that, there is the deer problem. We have really built up a good reputation for knowing what kind of plants will work in this area.”

Hall also says that their willingness to work with the do-it-yourselfers out there has really paid off. Many landscape businesses are obviously discouraged to see so many homeowners wanting to do their own landscape work, but Hall says that they’ve adapted their business to work closer with these customers. “We’ve heard a lot of people say they’re just not able to afford to have a landscaper do their installation, so we don’t get that install job, but they do come to us to buy the plants and rely on our expertise to get the right ones,” she says.

That has also led to greater interest in a consultation design service that the company offers. “We charge a fee to go out and meet with the client and create a design for them,” Hall says. “They get to keep that design and can come buy the plants from us for 15 percent off – a discount that’s good for one year.” While they’re not getting the installation job, the company does make money off the consultation and it’s become a great opportunity to market their plant sales. On the flipside, when customers come in to buy plants, the sales team takes the opportunity to market the consultation service.

Whenever possible, Hall says that the company seeks out ways to cross-market their other divisions. That, along with being willing to take on smaller jobs and adapt their services, has led to some success. For instance, Hall says that for an upcoming tree sale, the company would look for ways to market installation services. “There’s a lot of rock in our regional landscape and it can be difficult for homeowners to dig themselves,” she says. “We’ll definitely market our installation service when homeowners come out to buy trees. That in turn will bring in business for our landscape division.” Michael and Joanne Hall, when they were first developing their new location.

Adapting their service offerings has also meant working side-by-side with customers. “They want to do what they can themselves,” Hall says. “But we don’t turn our noses up at smaller jobs. We offer to do parts of the job, even if it’s not the whole job.

Looking Ahead
In the past, Hall says that they’ve always grown their own plants. But with the increase in retail sales, they’ve started buying more plant material from large wholesale growers. “That’s something I’ve never done before, but I decided we needed to bring more in and it’s worked for us,” she says. “We mark it up and it does turn, since there’s a lot of demand. And it’s simple because you don’t have to grow it or mess with it – you just have to water it. So that’s been a big change this year and it’s been successful and something I’ll likely do again.”

Looking ahead to 2011, Hall says they’ll continue to do what has worked this year, including building a relationship with their customers and getting their name out there through involvement in the local Chamber of Commerce. She says it really comes down to good customer service to keep your clients coming back. “In these times you do need to have more patience, and be willing to work with what’s out there,” she says.

The author is a frequent contributor to Lawn & Landscape.