Big properties, big profits

Summer may be the last time you’d want to start thinking about blizzards, ice storms and salt trucks, but now is the prime time to start locking in your snow removal business for 2013.

More and more often, snow professionals are making their money by going after the big targets, and you don’t take down the big targets without a plan. Here’s how several snow pros go about it in their section of the market.

Target #1
Commercial accounts
Doing the actual plowing isn’t what makes going after big accounts difficult, says Jerry Schill, president of Schill Grounds Management in Sheffield Village, Ohio. “The major secret to that is going to plow is the easy part,” says Schill. “It’s effectively listening and truly understanding their needs and their expectations that makes the difference.”

When his company was trying to break into larger accounts, the team was pushing hard to try to get noticed by property managers, but really saw results once they slowed down and started paying attention to what the clients were saying, he says.

“Initially, we were actively pursuing some of those big accounts through experimentation and trial and error, and we started listening to the client’s specific needs and wants,” says Schill. “Having the expectations for meeting those needs allowed us to really put together a program to service that property the way it needed to be serviced.”

And once they had shown one or two big names what they could do to reach those needs, others started taking notice. “As we became successful at achieving those needs, we were sought out,” he says. “We kind of developed a reputation in Cleveland west as the big commercial specialist.”

Communication starts with the pricing and services for commercial contracts, but it doesn’t just come in as a flat-rate service statement.

Knowing how to meet a client’s needs without unnecessary over-servicing takes creativity and a little bit of education for the client, he says. “Obviously, safety is the single most important thing that has to come into play,” he says. “But with technology, with equipment and chemicals, once you outline what they really want, there are options now in how you get there.

“It’s about changing their mindset and really trying to get them to understand that some of the upfront initial cost of an application of liquid, for example, will be higher when they compare the price, but you’re going to use 30 to 40 percent of the product. Really changing and educating the client is something we’ve been focusing on in the last few years.”

But having options doesn’t mean giving up profits just to get the client. A large commercial contract is tempting, but take a beating at the bottom line too often and not only will clients start to expect it, they’ll be surprised when prices need to go up to sustain business at that level.

“If you haven’t figured out how to do the job more effectively at a lower cost to maintain your margins, you’ve guaranteed a need to cut corners,” he says. “Somebody is going to get hurt when you cut corners in a snow and ice situation.”

Start out by figuring out a client’s tolerance – not just when they immediately say they want the entire parking lot black, but when they begin comparing the price to the services they can afford.

“Find out what exactly they want to achieve, and then help them to formulate a plan that can get them there with services that pair up with their expectations,” Schill says. “It’s about coming up with a realistic budget and executing that plan, and keeping an open dialogue throughout that process.

“When you’re going to be sending out $10,000 bills for an event, you have to manage their money like it’s your own.”

There’s lots of explaining of possible changes to services to make the overall price come down without cutting corners: maybe using more efficient deicers or box plows rather than a traditional plow. Other contractors and distributors might have even more ideas to try out.

“You have to be involved with others,” Schill says, “whether it’s a networking group, locals, manufacturers or distributors. There’s a million different ways you can do things more efficiently. If you’re really passionate about your work, you have to take the time to learn those. You have to ask questions. An educated industry is a better industry.”

Armed with creative solutions that meet a client’s expectations without doing too much, making a reasonable price that will land the contract is much easier.“If somebody just says ‘I want the snow gone instantly,’ the desired outcome at the end of the event is the same, but if I priced for those expectations, they couldn’t afford the rent,” says Schill.

“If they’re saying they want everything melted down, there’s a lot of shades of gray in there. You really need to dig into service levels with them.”

Once the contract is in place, communication has to continue, though it’s best to have a site manager familiar with the account to help the client feel more comfortable with the services being provided. A manager will also make sure that resources aren’t overextended or being used too often during an event, as well as explain the pros and cons of additional requested services to clients on the fly.

“A lot of our bigger sites have multiple managers, maybe someone to manage the sidewalks, someone to manage the equipment,” says Schill. “It’s really holding these guys’ hands and helping them understand so they’re not panicking during an event. We’ve found with that not only are people more happy or safe, we’re not having as much trouble after.”

Once that open dialogue is established and a fitting program is in place, the only thing left is for snow to fall.

“It’s not the delivery of the snowplowing, it’s the delivery of the way we go about getting to that point,” Schill says. “I think it makes the customer experience so much better.”

Target #2
Homeowners’ associations
A homeowner’s association is a client completely full of other service opportunities, at least for Jim Anderson of Troy Clogg Landscaping in Wixom, Mich. They’re large jobs in themselves, but more importantly, they can provide better job leads for the next season. “They’re certainly not our largest accounts,” he says. “But there’s a lot of potential with them. It gives us an in certainly with other residential, and if we’re doing a good job, the whole business will lead to other commercial and residential leads within the subdivision.

“In the springtime, while we’re finishing from winter, they’ll come out and realize we’re an irrigation outfit, too. We’ve certainly picked people up that way.”

Initially, they’ll extend deals to an association, as well as try to provide incentives to get the contract if the numbers work out for their bid, but the biggest thing Anderson does to get the work is pay a little attention.

“The key, really, is a relationship,” he says. “I’m always available to meet with the board to try to give them information on us. We want to try to let them know where the value is, and let them know we will go the extra mile to meet with them. If you don’t get in front of the board, you’re just a price. We’re normally not the cheapest, so my angle is to try to tell them the value of us versus somebody else.”

He starts out by asking about their previous service, and whether they were happy with their work. But the real work comes with proving that they’re more than just guys with trucks, which he does by listing his qualifications and certifications through the company.

“I try to sell them on the value of that, being educated and involved in the regional and national associations,” he says. “We’re professional, and we can distinguish ourselves from our competition using that.”

But what really makes a difference in getting a board to discuss a bid that’s not the lowest price is getting the board on your side, and what does that best is connecting with a board member.

“A homeowners’ association can be made up with a salesman or lawyer or engineer, people who want to change the world for their area,” Anderson says. “And with boards that have already hired us, we know who likes us and who doesn’t. Whoever they hire, there’s going to be pressure from someone, and it’s good to be able to say ‘Oh, she likes us. She knows what we’re all about and she’s active on the board.’ It’s important to have that relationship with the board because they ultimately do make the decision most of the time.”

Once the relationship is established, Anderson can put work into making his deal the best one on the table. He comes prepared to outline the whole job so he’s able to talk specifically to their needs.

“I bring a copy of their specs with me, and I’ll point out where they might have a cost savings,” Anderson says. “I’m prepared by knowing what they want, and I try to give them comparisons and reasons to use us.”

Sometimes showing where a savings can be recognized is enough, but sometimes what he thinks they want and what the different board members say they want can upset the balance.

“Everyone’s got a different point of view. There’s dynamics within a board sometimes that change the way you have to discuss these things,” he says. “There you’ve got to compromise. It’s really identifying the different people in that board and making each of them happy. But if you can make the one that squeaks the loudest happy, you can make everybody happy. That person will then be your best salesman, if you can make them happy.”

And meeting that person’s needs can come in the form of a slightly altered service, or it can come in the form of a concession on a price to make some good job leads through the season, especially when the only hang-up is a slight change in price.

“Making a concession can go a long way,” says Anderson. “I’m always willing to make one, when it’s just a numbers thing. When I’m building this relationship with somebody, when I know they’re backing us up, I will look to see where I can give them something that will help them seal the deal. It doesn’t have to be a lot either.

“It can come in the form of a scheduling change in lawn service as the season changes, or in a few free containers of deicer dropped off without charge to be used on the sidewalks. Showing appreciation for the work cements a relationship for when the next year comes around and cheaper companies try to get the job – but without giving as much back.

“Get involved with the board,” says Anderson. “You should both have the same interest. You want to perform a service and you want to know where their problem areas are so you can take care of them. If the numbers are good, then, you can do that.”

Target #3
Residential accounts
The problem for residential accounts is that they seem too small to make a profit, according to Paul Vanderzon of Amenagements Paysagers Vanderzon of Quebec, Canada. “I think the biggest mistake most people make is they start out and then they panic because they’re not picking up enough clients, so they expand their area immediately,” he says.

“They pick up 15 clients in one square mile when they were hoping for 50, so they make it two square miles and get maybe 30. So when the snow does come, they’re too spread apart and their cycle time ends up being six or eight hours where ours is four. When the prices are the same, that’s just unacceptable to most people.”

A bigger account in a residential market is more about penetration into a small area and services offered to those clients. Not just more expensive service, but more reliable service overall.

“If I’ve only got 30 in this area, let me really focus on those 30,” Vanderzon says. “I just cannot compete with 50 in the larger service area.”

Client saturation is what makes residential accounts work, especially when competitors want to focus on what they perceive as a slight edge by doing the first run earlier. But even though their first run comes earlier than Vanderzon’s, he’s able to keep his clients cleared, which keeps them coming back every season.

“People sometimes look at the residential market like it’s a race,” he says. “We never change the first pass because it’s planned with the city plows. But we’re so saturated it’s very easy for me to stay on top of the game.”

Being conscious of where the competition is closing in can help determine where some extra attention is needed during an event.

Residential accounts can be unforgiving for a slightly slower time, but making sure each account is handled properly or even sending a truck around one more time makes the difference. “If I’ve got just a couple people complaining about the time, I’m not going to change the route just for that,” he says. “But I’ve got one area where I’m in competition with three other companies.

“There, I might send an extra tractor, and I’ll put a little more equipment in that area. You’re going to have to work really hard to make me look bad there. I’m going to make sure he cannot give them as good of service as I’m giving them.”

Since saturation is the goal for residential clients, taking the time to handle each property can bring more business through neighbors. But even a clean driveway isn’t going to make everyone happy.

“A lot of this industry is how it looks,” Vanderzon says. “It’s a luxury that I’m selling. I think sometimes we have to be careful not to get caught up in thinking we have to satisfy everyone. It’s just not possible and you’ll lose your margin trying.

“We try to listen to what the client has to say. It’s a really strict volume and it starts to get a little dicey when you’re losing customers.

Making things work efficiently for the route is one of the biggest keys for handling a larger volume of residential clients.

Without a quick route, saturation is difficult to hold onto. Checking a route against client comments and complaints shows where attention needs to be given in the next season, but Vanderzon also tries to keep the same drivers on the same routes year after year.

Not only are drivers more familiar with the clients and their needs, the clients start to think of them as their own drivers.

“The longer the driver has been servicing the client, the better that connection is,” Vanderzon says.

But the best advice Vanderzon has for expanding residential service is to do the very opposite, for just a little while, at least. “The best way to go is to take one sector and you take care of those people and you make that work really well for your area,” he says.

“Then you take that and you repeat it every single time because that’s what’s working for you. Then repeat that for the next city blocks.

“When you’ve got 100 accounts to handle, you don’t have much time to deviate from your routes to see where you can change and improve. When you’ve got just 50, you’re able to take the time to really pay attention to those 50.”

The author is editor of Green Industry Supply Chain Management.