Reactions To Brickman Group Expansion Into Selected Markets

The acquisition referred to is the Aug. 1 announcement that The Brickman Group, Ltd. - No. 5 on Lawn & Landscape’s 2000 Top 100 List - purchased Duke-Weeks Landscaping - No. 22 on the 2000 Top 100 List (see The Brickman Group Acquires Duke-Weeks Landscaping). The result is the addition of a professional, well-known commercial landscape company in Nashville, Tenn.; Minneapolis, Minn.; Cincinnati and Columbus, Ohio; and Greenville, S.C.; as well as an increased presence in markets that the company already has branches, including Indianapolis, Ind.; Atlanta, Ga.; Raleigh, N.C.; Chicago, Ill.; St. Louis, Mo.; Dallas, Texas; and Cleveland, Ohio.

MARKET PRICE FLUCTUATION? The pickup of the Duke-Weeks Landscaping business gives The Brickman Group, Langhorne, Pa., a varying degree of presence in the new markets it has entered. For instance, Lee Greathouse, president, Greathouse Landscape Co. Inc., Nashville, Tenn., said Duke-Weeks had a small presence in his market, while the company’s presence in Cincinnati is much greater, according to Mike Rorie, president, Groundmasters Inc., Cincinnati, Ohio - No. 98 on the 2000 Top 100 List. Regardless of the varying market sizes, The Brickman Group’s reputation as a low-cost provider of commercial landscape maintenance precedes itself.

"Going on reputation, it’s not a good day for the Cincinnati market. If I go by reputation - obviously we have no first-hand knowledge of them - [Brickman’s entrance] will mean that the pricing in our market will come down," explained Rorie. "They represent themselves as a low-cost provider; and anything I’ve ever heard from anybody is that they lower the pricing in the market."

Rorie continued, stating that he would be able to better determine the impact after cycling through a year with The Brickman Group against his landscape maintenance company that targets high-end commercial projects. "Hopefully, their work will be equivocal to their pricing, and they’ll be going after the type of work that would command that level of pricing. But if they represent themselves as a class ‘A’ provider at a class ‘C’ price, that’s discouraging," he said.

Greathouse also said his new Nashville competitor has a reputation for offering contracts at lower prices and, thereby, lowers market pricing, but he said that has happened before in Nashville without hurting his commercial landscape maintenance business. "We’ve had companies come in from out of state for the last 10 to 15 years, and every time someone does, it’s like doom and gloom. But we’re still here, so that hasn’t really happened to us," he related.

Greathouse noted that the Nashville market is already saturated and cutthroat, making it tougher to develop a market presence through lower pricing. "Somebody coming in that wants to buy their way into the market - which is usually what companies do when they first come into a market - will have to price stuff at well below any kind of margins where I think anybody trying to show any kind of decent bottom line would be smart enough to want to do," he explained.

The pricing in the Columbus market has followed similar suit to Nashville, said Bill Leidecker, president, Five Seasons Landscape Management Inc., Columbus, Ohio. Leidecker related that the economy’s downturn last fall forced many design/build contractors and landscape construction companies into the maintenance market due to high payrolls from excess employee capacities. This influx of maintenance contractors drove the pricing down to levels Leidecker said would be nearly impossible to make a profit on.

"Brickman isn’t going to be the low-cost leader in Columbus," explained Leidecker. "They may have some more savvy sales approaches, but they aren’t going to be the low-cost leader, so Brickman is not going to come in here and lower the pricing field."

In an interview last fall with Lawn & Landscape (see Conversation Series: Scott Brickman, The Brickman Group), Scott Brickman, president, The Brickman Group, defended the perception that his company wins bids on low price and makes the money back by upselling options later. I think our price on add-ons is usually competitive or lower than other companies’ because we work very hard at looking at our profits," said Brickman. "Our focus is not selling add-ons. Our focus is listening to our customers and providing good service."

KEEPING CUSTOMERS. To protect themselves from losing business to The Brickman Group, company owners said they would continue to provide service at or above their current levels and reinforce the fact that they are locally-owned companies, as opposed to local-based companies owned under a national firm.

"Our customer base tends to pretty loyal," said Leidecker. "As long as you’re in the face of your customers, and you listen to what they want and what they need and you’re delivering to that, I think you’re going to be okay. That doesn’t mean that you’re not going to have some short-term blips or be attacked on a competitive front by Brickman."

"We’ll continue to service the hell out of [our customers] and let them know that we’re independently-owned and operated," said Rorie. "We just have to hope that someone can’t come in and perform at the level we can for less money, and that’ll be [Brickman’s] challenge.

"If people want to buy less, we can always sell them less, but in terms of somebody being able to meet our performance day in and day out for substantially less money, you’re going to have to prove that to me and to the client, because they are used to a level of service," he continued. "There’s plenty of work to go get. It’s a matter of how often we’ll run into [Brickman], and we’re certain that will be frequent once they’re established. We’ll just have to learn how [Brickman] solicits and markets and its strengths and weaknesses and educate our customers to make sure they know what they’re buying."

"I don’t look at it as a doom and gloom for us," said Greathouse. "We’re going to be doing what we have been doing, and that’s provide service at a reasonable price and keep our clients happy and go on. The most successful companies are either the Brickman types, or they’re just in huge markets. We’ve purposely not tried to make ourselves so large - the bigness wasn’t the main thing - the main thing was providing a good product, making some money and being happy."

"While ultimately all of [the Columbus market] will be impacted to a greater or lesser degree, I think that in terms of our business, we’ll be impacted on a lesser degree," said Leidecker, explaining that Five Seasons is a smaller company targeting a middle- to high-end customer base. "I think the bigger companies in town provide a bigger target for Brickman. They’ve got a bigger bulls eye on their back.

"I think it’s just a matter of keeping a focus on the day to day and what you do well. Make sure your crews are out giving excellent service, you stay in touch with your customers and you’re selling value," he continued.

Despite creating branches under one name, Brickman said the company overall is made up of several small businesses. "We do that because as a small business you can serve your customers better," he explained. "We want to stay close to the customer with the guy making the decisions leading the branch, talking to the customers and the people serving the customers every day. That’s our success. The smaller operator is doing that."

BRICKMAN’S PREDICTED SUCCESS. "I think there are a lot of providers out there that are cheaper than us that don’t provide the same level of service, and they might enjoy the switch to Brickman because the pricing will be the same, and [Brickman] may prove to be a little more competent than a lot of poorly run small businesses," related Rorie.

"I would like to believe that they’re an industry builder, not somebody that’s going to drag the industry towards commodity mentality," he continued. "My concern is that The Brickman Group will reduce commercial ground maintenance in our market from an up and coming service that people are beginning to develop respect for to a commodity."

"I know that Brickman has been trying to get into Columbus for some time and they’ve not been able to find the right vehicle. I think this is obviously the vehicle to do that," said Leidecker. "Columbus is a homegrown market - they like to do business with principals of the companies. With Brickman, you’re getting a large national company, and that isn’t always attractive to companies here.

"But [Brickman is] a proven competitor on a very large scale," continued Leidecker. "They will certainly be able to come in and be successful in Columbus."

"I kind of wonder if Nashville is really big enough for somebody like [Brickman] to come in and really want to try to make a presence," noted Greathouse. "There have been some other smaller, more regional type companies that have come in and have tried to literally buy their way into the market and have been really unsuccessful and pretty much just screwed things up by driving the price down.

"[Brickman will] have to have deep pockets, which they probably do. That, or just be patient because it would take a while for them to make any in roads," he concluded.