TruGreen shifts strategy amidst disappointing sales
MEMPHIS, Tenn. – TruGreen's new administration is adjusting the company's neighborhood sales strategy as it tries to improve its performance and customer experience.
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TruGreen updates Mullany announced the hire of Roger Cregg as ServiceMaster's CFO. He joins the company from PulteGroup where he was CFO. During ServiceMaster's second-quarter results call in late August, Mullany also said he hopes to announce a TruGreen president soon. Wells Fargo Capital Finance recently provided a $32.5 million senior secured credit facility for TruGreen LandCare. The facility was used to support the acquisition of TruGreen LandCare by Aurora Resurgence from ServiceMaster.TruGreen LandCare was bought in June for just shy of $38 million – a fraction of the $250 million ServiceMaster paid for it in 1999. |
The program, which was expanded in 2009 and involves field staff knocking on doors of potential clients, hasn't been a successful tactic, said Hank Mullany, CEO of TruGreen's parent company ServiceMaster.
"What we've found is neighborhood selling isn't as effective as it was in the past," Mullany said during the company's second-quarter earnings call. "As a result, we're going to rebalance our sales and marketing efforts and focus more on profitable sales. Although this will impact TruGreen's revenues in the short-term, in the long-term we believe this will be an opportunity to improve profitability, increase the average and lifetime value of a sale and drive higher customer retention."
Mullany said the company is reevaluating both its sales channels and marketing expenses to ensure its getting the most of its resources.
TruGreen's second-quarter revenue was $383 million, only a 1.2 percent increase compared to the same quarter a year ago. Its operating performance was $79.1 million compared to $81.5 million for the same quarter in 2010. TruGreen also showed a 5.2 percent decline in customer count with decrease in new unit sales, part of which was attributed to the shift away from the neighborhood sales strategies.
"TruGreen has struggled to consistently grow revenues over the past few years, and we're working hard to improve that," Mullany said. "But overall, TruGreen's performance in the second quarter simply did not meet our expectations."
TruGreen's revenue for 2010 was $1.3 billion, which included $238.5 million from the recently sold TruGreen LandCare division, according to Lawn & Landscape's Top 100.
Moving forward, TruGreen's growth strategy will focus on improving customer experience. In order to do that, it's launched a set of seven standards for service excellence.
"This isn't complicated stuff we're talking about here," Mullany said. "This is knocking on people's doors before we service their lawn to let them know that we're there. It's following up with a phone call to new customers after their first application. Just basic steps we can do to improve the customer experience." – Carolyn LaWell
Lipinski/R.E.I.T. merge to combine markets
MARLTON, N.J. – The September merger of Lipinski Outdoor Services and R.E.I.T./M&H Services will allow both companies to reach a more diverse client base, says Vince Willis, chairman of Lipinski Services. Growth will be spread across both national clients and property managers, rather than a specific focus on any market.
"Lipinski's primary client base has evolved into large national retail clients. R.E.I.T. has been innovative in working with property owners and other retail," Willis says. "We have two companies that do outdoor management services and we can think about how to make that work better for our customers."
The merger, facilitated by L2 Capital, also expands the services offered by both companies.
Lipinski is the third-largest snow removal company in the United States, according to Willis, and also provides commercial landscaping. R.E.I.T. covers these services, plus demolition and construction services, including a lot of disaster recovery work.
"Now we have these new services offerings that we can sell across our entire portfolio," he says. "Already the executives of both companies are coming to me and suggesting that we combine things. I have a healthy combination of management services vs. direct performance services."
The merger started with R.E.I.T., having built up to "a meaningful size," says Willis, and joining with Lipinski to reach the next step in the industry.
The entire management team for each company will remain in place with the merger, and though the details of the deal are undisclosed, the combined companies "will be in the upper mid-eight digits in revenue right out of the gate and will have several hundred employees in addition to a contractor network that goes into the thousands," says Willis.
The strength of each company going into this deal will help the transition, which should continue into the next few months, says Willis.
As the merger continues to build business for both companies, Lipinski Services isn't setting up any boundaries to growth yet, says Willis. "Not just through more customers and expanded volume, but through both our own development and where it makes sense to use capital to buy additional assets." – Kyle Brown
THE BOSS sponsors SnowCare for Troops
IRON MOUNTAIN, Mich. – Following a successful launch last year, THE BOSS Snowplow is underwriting a second year of Project EverGreen's SnowCare for Troops program and urging snow removal professionals to join the movement and double the volunteer base in year two. SnowCare for Troops provides free snow removal services for military families with a spouse or family member serving in the armed forces through a dedicated volunteer network.
How to get involved
More info can be found at www.projectevergreen.com/scft. |
"The response to SnowCare for Troops from caring professionals and military families has been tremendous and we are challenging our supporters to double the participation for the 2011-12 snow season," said Mark Klossner, marketing manager for THE BOSS Snowplow. "We want to thank everyone who gave countless hours in heavy snow, sleet and ice to back up our country's selfless military families this past winter. As the brand that backs up snow removal professionals, we're asking for their help to spread the word and expand participation this year. We know they'll get back tenfold what they put into it."
The program is open to anyone with a plow or other snow removal equipment who wants to lend a hand. Through its active backing and participation, BOSS provides funding support and helps build awareness for SnowCare for Troops to encourage grassroots involvement.
"SnowCare for Troops got off to a roaring start, and we want to thank BOSS Snowplow for backing up military families once again through its integral support," said Project EverGreen Executive Director Cindy Code. "When a loved one is serving overseas in the armed forces, having the added burden of snow removal lifted from the shoulders of the one left behind is a priceless gift."
Project EverGreen has 12,000 military families in its database, more than 3,500 green industry participants and nearly 1,000 snow care professionals and volunteers.
Kawasaki clarifies horsepower ratings
GRAND RAPIDS, Mich. – Kawasaki Motors Engine and Power Products Division will begin rating its engines in accordance with SAE J2723. The change will give landscapers a more accurate horsepower rating, which will alleviate end user confusion over horsepower labeling and "usable" power.
Kawasaki powered lawn care and other maintenance equipment will produce at least 98 percent of their rated values, not the 15 percent potential variable permitted under SAE J1940. Thus, an engine advertised at 100HP, would be able to deliver as little as 85HP under SAE J1940, whereas it would have to deliver at least 98HP in accordance with the strict SAE J2723.
"We haven't actually changed the engines, just the systems we rate them by," said Laura Holtrop, Kawasaki's OEM sales manager. "From that sense, (landscapers) won't notice it on performance, but what they will notice is a closer representation of the power that they see labeled on the equipment versus what they can actually use."
The new move to Critical Power ratings will not reflect the wide tolerance that is currently permitted by SAE J1940, which has been the generally applied industry standard.
"We do recognize that this is a significant departure from the norm but we feel this is a great opportunity for Kawasaki to take yet another leadership position in the market and influence the market," said Greg Knott, applications engineering and government relations manager. "Hopefully our competition will follow suit, but we don't know that right now."
Company officials said that end users of original equipment products using engines from various manufacturers have suffered from uncertainty and confusion when comparing and making purchase decisions based on claimed horsepower ratings.
"Kawasaki has, and will continue to work with OEMs during their product development to ensure that the right engine and the right performance are being applied to each application," Knott said.
SAE J2723 rating methodology, in combination with SAE J1995 Gross Power testing procedures witnessed by global testing agency, TÜV Rheinland Group, provides an accurate assessment for real world equipment applications for the engines. – Brian Horn
Insurance program, association launched for snow industry
CLEVELAND – Snow Magazine, in partnership with Shamong, N.J.-based Mills Insurance, announced the creation of a contractor-friendly insurance program for snow and ice professionals, as well as the formation of the Accredited Snow Contractors Association (ASCA). The new association will govern over the program as well as advance and promote the role of the professional snow and ice management industry in performing high-risk services.
For the past six months, Mills Insurance and Snow Magazine, analyzed data, identified snow contractors' exposures and developed controls for those exposures. Now the organizations are ready to implement and monitor this insurance program going forward.
"The insurance program we have developed with Mills Insurance takes into account factors such as having proper operational procedures, sufficient employee training, correct contract language and access to available technology," said Kevin Gilbride, former Snow Magazine publisher, who will serve as the ASCA's executive director. "If we are going to drive down insurance claims, we will need to control the risk associated with our business."
Many snow fighters already follow all or most of these procedures, Gilbride said. However, standards must be integrated across the professional snow removal community to establish a greater level of professionalism.
To solidify this new insurance program, GIE Media, the owner and publisher of Snow Magazine and Lawn & Landscape, formed the Accredited Snow Contractors Association (ASCA). To be eligible for the insurance program, Mills Insurance will require membership in good standing in the ASCA. This means contractors will have fulfilled the educational requirements, their business practices are in accordance with the industry standards listed above and their nominal dues are up to date.
The ASCA will provide proper education to the industry on an annual basis, represent snow contractors to the insurance industry and represent the industry on the local, state and federal level. ASCA is setting aside 10 percent of all membership dues to be used in the hiring of lobbyists.
"The snow industry has been through a lot of growth and changes in the last 15 years. But it's an industry still in its infancy," Gilbride said. "The insurance program is the next big step to impact this industry. We are privileged to be a part of it, and look forward to leading the industry through the next phase of its growth."
Want more info?
Contractors interested in finding out more about the ASCA can do so at www.ascaonline.org.
Industry mourns loss of McGinty
LONG GROVE, Ill. – Last winter, in the mountains of Keystone, Colo., Charlie McGinty told his friends it might be his final ski trip. A group of members from the Illinois Landscape Contractors Association had been taking the trip for years – competitors at home in the Chicago market, friends on the slopes nearly a 1,000 miles west.
"Of course I said, 'Oh no,'" Tyler Smith recalls of his brushed-off reaction to McGinty's comment. "But as it turns out," he said. "It was."
McGinty, founder and CEO of McGinty Brothers, a tireless advocate for the industry and a fixture in Illinois' circles, passed away Aug. 25 of a heart attack. He was 73.
"I said at his memorial service he figured he'd either die on the slopes or die at his desk," said Smith, president and owner of Tyler's Landscaping in Rockford, Ill.
That's a tribute to the fact that McGinty was known for his magnetic personality – a person everyone liked being around – and his commitment to his company and the industry, Smith said.
McGinty established the lawn and tree care company with his late brother, John, in 1955. The company has grown to 60 full-time employees, which reaches 90 during the peak season. McGinty previously said his greatest accomplishment was the "McGinty team."
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But McGinty's presence was felt beyond his company's walls. He served as president of the Illinois Arborists Association and on the board of directors of the ILCA, Illinois Turf Grass Foundation and The Professional Lawn Care Association of America.
In March, ILCA presented him the 2010 Man of the Year award.
"He was always striving for professionalism amongst our industry and trying to elevate the level of professionalism amongst members, encouraging people to join the association to learn more, to become better contractors and better members of the industry," Smith said. – Carolyn LaWell
Tree exhibit opens
WASHINGTON – The Cultural Landscape Foundation's 2010 Landslide: Every Tree Tells a Story traveling photography exhibition features 26 images of trees in 12 different locations in the United States and Puerto Rico.
The exhibition runs from Sept. 16-Jan. 8, 2012 at the 21c Museum in Louisville, Ky. An outdoor signboard exhibition based on the photography will also be open at the Yew Dell Gardens in Crestwood, Ky.
Landslide, which was first issued in 2003, is TCLF's annual compendium of significant at-risk parks, gardens, horticultural features and working landscapes. The 2010 Landslide focuses on the irreplaceable trees and tree groupings often associated with historically important people and events that have shaped the development of communities and cultures.
The Davey Tree Expert Co. is the exhibitions presenting sponsor this year.
"These aren't just pretty picture of old trees," said Russell Hart, former executive editor at American Photo magazine and commissioner of the photography. "They are important photographers' studies of unique specimens in context, from parklands to roadsides. Each of the 12 trees or groups of trees is seen through the lens of an artist's sensibility, in spectacular prints – and the images are as different as they could be."
The traveling exhibition features sentinel and specimen trees, allées and boulevards, urban forests, formal and vernacular.
If you go
The exhibition will be open when the green industry descends on Louisville, Ky., for the GIE+EXPO this month. The 21c Museum is open 24/7 and is located downtown at 700 W. Main St. The Yew Dell Gardens are open Monday-Saturday 10 a.m. to 4 p.m. and Sunday noon to 4 p.m.
Deere dealers set to sell Honda snow blowers and mowers
MOLINE, Ill. – John Deere walk-behind equipment will continue to be serviced by dealerships even though the company will no longer sell John Deere walk-behind snow blowers or lawn mowers for the residential market after 2012.
"We will continue to stand behind all the products purchased at John Deere dealerships," says Maureen McCormack, segment manager, media relations. "There should be no concerns along those lines."
In 2012, dealers will move through their existing remaining inventory of walk-behind mowers, blowers, tillers and generators, after which they will start integrating Honda Power Equipment inventory.
Under the terms of the agreement, participating John Deere dealers will offer Honda's walk-behind lawn mowers, generators, tillers, water pumps and snow blowers.
"Walk-behind products like snow blowers and tillers, those have never been core products of John Deere," says McCormack. "With this agreement with Honda, it allows us to continue focusing on our quality ride-on products. John Deere is pleased about this agreement with Honda."
John Deere dealerships are independently owned and the company said all active dealers will be offered the opportunity to sell the Honda product line during a sign-up period beginning in late 2011. Deere said it may also consider the agreement for Canadian dealers in the future.
Customers who want to purchase a new Honda power product, or service an existing product, at a John Deere dealership will be able to do so at participating Deere dealers after the dealer is added to the Honda sales network.
Deere said the program could take through 2013 to be completely phased in. – Kyle Brown
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