The easiest way into the landscape maintenance market segment is also the least likely to help you sustain your business in the long run, says Joel Korte.
Korte, CEO of Moore Landscapes in Chicago, says lining up jobs with HOAs or in other residential areas can help you get started with landscape maintenance service. But expecting those clients to stick around for the long run is a mistake.
“They tend to be the least loyal, meaning they’re probably going to turn over their contractor every year because they tend to be more price sensitive,” Korte says. “If you don’t have a reputation to fall back on, you’re going to pretty much have to penetrate that market based on price.”
This is just one of the lessons Korte has learned in the roughly 30 years he’s amassed in various leadership roles in the landscaping industry. Though he’s been with Moore Landscapes since May 2017, he also worked as the president of New Growth Strategies in Columbus, Ohio. He worked 11 years as founder and CEO of Urban Environments before spending another 11 years as a vice president with The Brickman Group, which combined with ValleyCrest in 2014 to form BrightView.
From figuring out how much to charge clients to upselling your additional services, here’s what else Korte has discovered in landscape maintenance.
SELLING THE SERVICE.
Before Korte even finalizes a sale, he’s mentally determining what type of client they’ll be. He categorizes all customers into A, B or C categories, prioritizing the A clients because they’ll be most likely to stick with him and aren’t sticklers on price. They prefer to build a strong relationship over just going with the cheapest option available, like the C clients who are either always looking to spend less or just aren’t big enough to keep reupping Korte’s services.
He tries to determine how much the base contract amount will be worth and how many extra sales he’ll be able to squeeze out of the account later. An ideal client is one that’s going to emphasize the quality of work over the price, such as large-scale commercial accounts, office parks and owner-occupied locations.
Of course, Korte also recognizes it takes time to land some of these accounts.
“If the building has a company’s name on it, that’s attractive to me because they’re more likely to take pride in how the landscape looks because their image is represented,” Korte says. “For newbies though, that can be a challenge to penetrate that market because naturally, that type of client is looking for some type of reputation.”
Korte says most companies begin selling maintenance services in the middle of the summer and go through March, though he adds that it’s important to continue marketing your services year-round. A telltale sign that you’re landing an attractive account is how early they enter the sale cycle. Korte says those who try to buy early are probably a bit more sophisticated in their decision-making process. Meanwhile, anyone who buys at last minute in the late winter or early spring probably won’t stick around long. They’re likely basing their decision solely on price because landscaping is a commodity to them.
“They’re not looking for a partner, they’re looking for a vendor, and that’s a very different type of experience,” Korte says. “A lot of your apartments and HOAs will make their decisions in that window of time.”
Korte says not too long ago, the only methodology to figure out how to price out a job was to physically go to the area with a measuring wheel. After deciding how much square footage of turf and beds would need to be worked on, he’d also look at the shrubs and trees on the site to see how long it might take to complete the jobs clients requested.
Korte recommends getting acclimated with software systems to help you price jobs out. He also recommends reading industry books, magazines and articles, especially if you’re just launching your maintenance services.
Korte says contractors who aren’t familiar with pricing maintenance jobs should hire a consultant to help them figure it out. These experts can help you gauge exactly how much to charge clients because overcharging – or undercharging – can be a waste of time. Talking with others in the industry at National Association of Landscape Professionals events or seminars can also help you find an industry standard.
“The worst thing you can do is develop a bad estimate, lose money and lose time,” Korte says.
“Too many contractors find out the hard way that they weren’t keeping their customer happy.” Joel Korte, CEO, Moore Landscapes
GETTING MORE FOR YOUR WORK.
Once you’ve secured a client and you’ve agreed on a base package, upselling additional services is largely possible in landscape maintenance. Korte says most base packages include agreements to cut lawns, weed flower beds, prune shrubs and fertilize lawns. But what happens if a customer wants those beds mulched or flowers planted throughout the property?
When you’re meeting with prospects for the first time, Korte says understanding how those potential clients budget for their property is vital. He gives his clients the base agreement with an additional “menu” of add-on services attached to the back.
He includes how much extra it might cost for the customers, and he explains that at least for his company, most of the base package is paid for in increments over eight to 12 months.
For any additional service he’s trying to upsell, that price is paid on the day of completion. Some contractors, however, will add the extras directly into the base package if a client says they’ll want it done during the initial agreement.
Korte says there’s one easy test to determine how well your company is doing with landscape maintenance: Review how many contracts you annually renew. He says an excellent company returns roughly 90 percent of their clients. Being in the 80th percentile isn’t bad, either, but dipping into the 70s or lower shows you that you either have service issues or that you’re working with the wrong type of client, he says.
Korte says it’s all about doing good work and developing relationships with customers. If your company is hitting both of those objectives, there shouldn’t be a reason why your clients aren’t coming back for more.
“The whole reason to be in maintenance in the first place is because it’s a renewable stream of revenue,” Korte says. “When you’re doing landscape construction, you’ve got to invent the sale every year. In maintenance, the beauty is if you get a contract and you do good work, you keep that work and it renews year in and year out. It’s a predictable revenue stream.”
Korte advises not waiting until contracts come up for renewal to see how you’re doing. An effective way of keeping track of your service is to send out periodic customer surveys throughout the season, whether it’s in the mail or online.
“Too many contractors find out the hard way that they weren’t keeping their customer happy and they never knew about it,” he says.
Explore the March 2019 Issue
Check out more from this issue and find you next story to read.