| CUSTOMERS |
CALLING
Landscape contractors who are trying to improve or maintain their companies' reliable reputations will be pleased to learn that 67.4 percent of consumers choose landscape, lawn or tree care professionals based solely on a good reputation. Slightly less than 40 percent of consumers choose a contractor who provides guaranteed satisfaction, and 33.8 percent search for one who provides free estimates. The number of years a contractor has been in business also scored high at 32.9 percent, just .5 percentage points above the importance of a company being locally owned and operated. Unfortunately, winning many design and maintenance awards alone isn't enough to score points with homeowners – only 3 percent choose a landscape contractor solely based on honors it has received. Below are results from The Gallup Organization and the American Nursery & Landscape Association poll of landscape, lawn and tree care professionals: |
BUSINESS TRENDS
Avoiding The Killer Curve
Despite rising sales figures, impressive bottom line results and promising prospects, businesses do stall and stagnate.
This happens to businesses large and small. At first, an owner thinks there is a "minor glitch" when the numbers appear on the computer screen. When the downward slide continues, owners tend to get more frightened.
This predictable phenomenon is called The Killer Curve (see graphic below). In most cases, it appears to be a bell curve with a period of growth that is sometimes slow (A) but many times quite rapid and generally driven by "goodwill capital." This is followed by slower growth (B) that is often explained by changes in the market and/or the entrance of new competitors.
The next phase is sales stagnation (C), a time when business plateaus. This leveling off is often viewed with some concern but is generally seen as a temporary situation.
Finally, the curve turns downward (D) in terms of sales or profitability. Once decline sets in, it is hard for companies to solve problems, mainly because they have difficulty identifying them.
There are a number of relevant implications that can be learned from The Killer Curve scenario. Following are several common possibilities:
- In itself, entrepreneurial drive isn’t enough to sustain a business. It has only been recently that corporate America seems to have discovered the value of entrepreneurship and is now encouraging it. But sometimes the drive, talent and experience required to start an enterprise is not enough to keep it going.
- There’s a tendency to be seduced by growth. Without an understanding of what is fueling company sales, there’s a tendency to believe that a magic sales formula has been discovered. Preoccupation with growth can serve to mask what lies ahead. There is often a failure to recognize what drives initial business growth, whether it’s goodwill capital earned by company founders, a relationship with a particular manufacturer or supplier, or partnering with an organization whose job it is to feed sales.
- Short-term thinking becomes long-term strategy. A company can be so focused on making sales that it fails to develop a strategy for integrating the various units. The short term can be so appealing and exciting that management neglects the next phase.
- There’s no marketing strategy. The entrepreneurial attitude dominating organizations can reach a point where their total emphasis is on making sales. There is no recognition of a need to create a brand identity that differentiates the company and establishes in the customer’s mind the benefits of doing business with one particular firm.
- A failure to factor in change. A company’s ability to deliver extraordinary service gives it a brand identity.
The Killer Curve is a dramatic portrayal of both success and failure. There are many times when a rising growth curve is the right time to sell.
Start-up companies aren’t the only ones that fall victim to The Killer Curve. Companies that have been in business for decades can experience its effects, particularly:
Can any business inevitably be cast down by The Killer Curve? Only if marketing is missing from its entrepreneurial plan. Leave marketing out and chances are the killer will strike. – John Graham
The author is president of Graham Communications, a marketing services and sales consulting firm. He can be reached at 617/328-0069 or j_graham@grahamcomm.com.
INDUSTRY NEWS
Erosion Control Defined
The International Erosion Control Association (IECA) recently released the results of a market research study defining economic aspects of the erosion control industry.
The initial survey involved 50 U.S. manufacturers of erosion control products. Among the study’s findings:
This IECA study is intended to be just the first in a series of periodic economic surveys defining the erosion control industry.
According to IECA director Gayle Mitchell, this continued research can benefit the erosion control industry in many ways. "This information can provide public policy makers with the information needed to improve erosion control efforts, increase public awareness of the importance of the erosion control industry and lead to improved erosion control products and services," Mitchell said. "All of which can mean improved quality of land and water resources."
INDUSTRY NEWS
A Growth Year for Hand-held Power Equipment
The hand-held power equipment industry can thank the strong U.S. economy and continued growth in home sales and ownership for another year of solid growth.
In 1999, industry shipments of gasoline-powered chain saws increased by 10 percent to more than 2 million units, and shipments of trimmers and brushcutters increased by 9 percent to more than 4 million units.
Gasoline-powered backpack blower and edger shipments each increased by 15 percent in 1999, while hand-held blowers increased by only 2 percent. Shipments of cut-off saws and hedge trimmers also grew by 19 percent and 8 percent respectively.
Industry shipments for the year 2000 are also expected to increase, but at a lesser percentage than in 1999. Backpack blowers are forecasted to enjoy the greatest shipment growth – 10 percent – in the year 2000. Cut-off saws are next in line at an 8 percent increase in shipments; then edgers at 6 percent; hand-held blowers at 5 percent; brushcutters at 3 percent and chain saw shipments at only 1 percent.
INDUSTRY NEWS
Bruce Wilson Leaves ECI
CALABASAS, CALIF. – Environmental Industries Inc. (EII) made key management transitions while the company is experiencing its most significant growth to date.
EII appointed its Senior Vice President and Chief Operating Officer, Richard Sperber, to president of Environmental Care Inc. (ECI), EII’s landscape maintenance company. Sperber replaces Bruce Wilson, who will continue to assume a leadership role with an e-commerce company in which EII has an equity interest. Sperber will also retain his responsibilities as president of EII’s Valley Crest division.
INDUSTRY NEWS
Novartis Required to Sell Off New Fungicide
BASEL, Switzerland – The merger of Novartis Agribusiness’ and AstraZeneca PLC’s agricultural chemical businesses cost Novartis one of its more exciting new technologies.
The United States Federal Trade Commission (FTC) ruled that the company must sell its FLINT® business, which is the line of fungicide products sold in the golf, landscape and ornamental markets worldwide, including the new turf product Compass™.
To move the merger forward, Novartis announced that it has initiated the divestment of its FLINT business. However, this divestment will not take place until the shareholders of Novartis and AstraZeneca, and antitrust authorities, approve the Syngenta merger.
The FLINT products are second-generation strobilurin with a broad spectrum of applications, and the FTC has apparently balked at allowing the merged companies to own this technology as well as the strobilurin products owned by AstraZeneca.
The planned sale includes the entire FLINT business, including all property rights – patents and trademarks – as well as the production facilities in Muttenz, Switzerland. Novartis expects the buyer to employ all of the approximately 90 employees at the Muttenz facility.
Announced Dec. 2, 1999, the proposed merger to create Syngenta AG involves combining Novartis’ Crop Protection and Seeds businesses and AstraZeneca’s Zeneca Agrochemicals business. The companies are still awaiting final merger approval from the U.S. and European antitrust authorities. A shareholder vote on the deal has been scheduled for Oct. 11.
Explore the July 2000 Issue
Check out more from this issue and find your next story to read.
Latest from Lawn & Landscape
- Get more leads with Coalmarch
- The right questions
- Envu adds new Green Solutions team member
- Quigley to lead LMC Landscape Partners' M&A efforts
- LawnPro Partners acquires Highest Quality Lawn & Pest
- 4 fast fixes to your marketing strategy
- Seamless shift: Ensuring business continuity when switching from gas to cordless technology
- What you might've missed this week
