Budgets on a diet

Should I stay or should I go? When clients approach their renewal ending period with that tune in mind, the next hit is usually price. Everyone's feeling the crunch. With pressure from clients stretching budgets to maintaining service levels, landscape contractors are finding creative ways to keep customers happy while protecting their bottom lines. It's not easy.

The key is to look, listen and be flexible. Lawn & Landscape spoke to three firms with retention rates in the 80-95-percent range to learn how they retain clients with dwindling budgets.
 

Selling flexibility

When a budget-crunched client wants more curb appeal but doesn't have the dollars to spend, Zech Strauser focuses on swapping services in the agreement to make ends meet.

Sometimes that means not mowing low-profile areas and instead adding more color to the beds. Other times, that means skipping a fertilizer treatment to concentrate on weed control during a high-pressure year.

The answer is not to raise prices, but to earn renewals by tweaking contracts to give clients the service they expect from Strauser Nature's Helpers in East Stroudsburg, Pa. Being flexible is especially important to homeowners' association clients. "They go out to bid every time our contract is up for renewal, and (keeping that business) can be a challenge," Strauser says.

That's why Strauser reviews those commercial accounts annually to determine if the contract is producing profitable work for his company. If he has any wiggle room to please clients with same pricing and more service, he'll make adjustments by swapping out services.

"We are basically looking at the budget and asking, 'What does the landscape really need?'" Strauser says, noting that the company's retention rate is 85-90 percent. All residential contracts are automatic renewal, which makes it difficult to raise prices, but that's not Strauser's focus these days. He just wants to keep his loyal clients happy and on board year after year.

Commercial contracts are one, three and five-year contracts, depending on the client. "We usually start with a one-year relationship builder contract, and then we go for multiple three- and five-year contracts after the first year so we can change and tweak (services) if necessary," Strauser says.

As for snow, a seasonal fixed rate appeals to 70 percent of clients who purchase this service. This generally works better than charging per snow event, because clients' ideas about when and how often they want their properties cleared are quite different. Strauser learned this when a client terminated a contract because of too frequent clearing. Strauser's crews were on site as immediate responders, but the company didn't want to pay for that sort of attention.

"The flat-rate pricing adds value (for customers)," he says.

Pricing has remained steady for the last few years at Strauser Nature's Helpers, and the company's main goal now is to identify and deliver on its Unique Selling Points (USPs for short). Those are high-level service and great communication, based on feedback from a customer and employee survey. "If we give them more service, they are more likely to stay with us," Strauser says, tying those USPs to retention.

From these USPs, the company developed a new tagline, "More service," and it is focused on getting more business from existing clients, dedicating $5,000 marketing dollars toward direct mail for this population.

"We think the key is to focus on customers' needs," Strauser says. "Retention is all about following up."
 

Retaining the right clients

Luke-warm customers who could take you or leave you – those are the ones that shop around come renewal time, says Mark Lay, president and CEO of AA Tex Lawn Co. in the greater Charlotte, N.C., area.

"It's better to talk to customers when they are not having a problem than to wait until renewal time," he says. And speaking to clients in person is the only way to get a real gauge on their satisfaction with your services. "When you go out and walk the property with them, it's a great opportunity for clients to be outside, feel good about what is being accomplished on their landscapes and gain some peace of mind," he says.

Once you develop a level of trust with customers, they will be more likely to call if they need to discuss a matter that could ultimately affect their decision to renew services. "Twenty percent of customers call and need this or that, and they take up 80 percent of your time," Lay says. "The other 80 percent could be having problems and they aren't telling you, so it's a balancing act."

Lay has also learned in recent years, especially, some customers will never be satisfied. Not if you lower prices for them. Not if you give them more service for less money. Not ever. And those customers aren't worth keeping on the roster.

"We have been more ready to let customers go – the customers who are not satisfiable," Lay says, following a busi ness development rule of thumb to drop the bottom 10 percent of customers who are not profitable to make room for more A-listers. "We have been more diligent about this. In the past, we might have felt obligated to work with certain clients, but we now (consider cutting loose) those who call us with unrealistic expectations."

What's unrealistic? Creating a grand-scale landscape on a peanuts budget, or spending an inordinate amount of administrative time on a client that does not appreciate the final results.

Meanwhile, Lay and the crews focus on giving their all to customers who purchase all levels of service. And if there's ever a problem, "'Make it right whatever it takes' is our motto around here," Lay says.

This attitude pays off come renewal time. Year after year, Lay says AA Tex Lawn Co., generally loses just 5 percent of its customers. And the company bends to work with clients who are dealing with tighter budgets. "They need a different plan to adjust to difficult times," Lay says of working out a plan. Paying those in-person visits helps him and other managers understand when clients need a Plan B so they can feel comfortable renewing an annual contract.

"The (program) has to make sense, and customers have to feel good about the money they are spending," Lay says.
 

Providing service above self

You're dining out at a restaurant and have an exceptional experience. The waiter is efficient and friendly. The food is delivered and you get exactly what the menu promised. The atmosphere is warm, the prices are right. And to top it off, the server completes your meal by giving you a free dessert. "That is the type of service we deliver to clients, except for rather than food that makes their tummies happy, we deliver beautification: flowers, color, detail," says Dean Carpenter, president and CEO, Houston Landscapes Unlimited, Sugar Land, Texas.

As for the free dessert? That's the personal touch that Carpenter provides in the form of a personal visit to each client's property. And that's also what drives customer retention at Houston Landscapes.

"We have a lot of layers of people in the organization who oversee the work we do," Carpenter says, noting how supervisors, account managers, foremen and the operations manager are responsible for quality control and a stringent inspection involving a checklist ensures that each property meets Houston Landscapes Unlimited standards.

"When clients see me come out to the job, or I got into their office to say hello, they are like, 'I can't believe you are here.'" Carpenter says. Customers just aren't used to the personal touch the company provides. "In this world we live in with email and Twitter and everything else, customers want the human element. They want to know that someone really cares about them."

That's why Carpenter applies his Rotary Club motto to his landscaping business: Service Above Self. "The way I operate my business is to show my customers that we are going beyond the call of duty for them, and everything else falls into place," he says.

Exceeding expectations means understanding what clients really want. And getting that look, hearing the tone of someone's voice – these non-verbal and attitude cues can tell an entirely different story than feedback in an email or conversation by phone.

Carpenter shares how one client visit resulted in a complete color changeout. "I said to the property manager, 'Don't those flowers look great?'" he says. "And she said, 'Yeah, if you like yellow. I don't like that color, and no one asked me.'"

Carpenter asked her what color she preferred, and she wanted hot pink. "I said, 'OK, we'll have those replaced,'" he says. "The next day, we went out and replaced them and when I called back to ask her how she liked her flowers, she said, 'You are great.'"

This type of customer service goes a long way toward securing long-term contracts – especially when clients are in price shopping mode. Most of Carpenter's contracts are annual, and they renew at different times throughout the 12-month season. (Landscaping is always "in season" in Houston, Carpenter notes.)

Because Carpenter stays close to his clients, he knows if they are under budgetary stress. And a lot of commercial clients these days are. "We look back at our records to see from a labor and expense standpoint how much we spent on the account," Carpenter says on finding a way to meet clients' financial expectations. Sometimes, he can afford to give a client a discount. In the meantime, however, he and his team focus on educating clients about the value of continuing their investment in landscaping.

Houston Landscapes Unlimited has built its reputation on caring about customers, and that, Carpenter says, is what makes the difference come renewal time. Retention rate is 80-90 percent. "Word is getting out that we take care of our clients better than our competitors, so it is getting easier for us to retain clients," he says.

The author is a frequent contributor to Lawn & Landscape.