More clients are demanding that you lower or at least maintain their current prices, but still provide quality service. “This is especially true in the commercial bidding market,” says Bill Horn of Terracare Associates in Martinez, CA. Horn says that if you draw a line in the sand and say, “This is our price and we will not go lower,” you’ll probably get left behind. You have to adjust to the market.
Cut Costs, Not Corners
Find ways to cut costs so you can hold prices in line without watching your margins erode too severely. By reducing their own costs and lowering prices where possible, Texas-based Native Land Design has been able to hang onto most of its customers. “I strongly believe that we know our cost structure and manage our expenses with the best of them,” says CEO Ben Collinsworth.
Get more productive in the field. Horn says his company is evaluating crew performance on each and every jobsite—from the time employees jump out of the truck until they jump back in.
“Don’t let your crews fall into ruts,” Horn says. “One guy grabs this while the other grabs that, and off they go, whether the property needs it or not. That’s not good enough anymore. We’re altering schedules and identifying what clients want done month to month, week to week—then using our personnel in the right places.”
Employees with less experience could do the mowing, for example. Horn says it’s often the guy with the most seniority who operates the zero-turn. But it should be the other way around. “The lesser-experienced employee should do the mowing so the foreman can spend his time touring around the property doing detail work, identifying what else needs to be done,” Horn suggests. (Note: Ensure that employees receive proper mower operation training.)
Smaller crews have helped many contractors improve productivity. “We stick with two- or three-man crews,” Horn shares. Bigger crews can result in higher levels of lost time due to confusion and reduced personal accountability. Small crews, on the other hand, must find a way to be super-efficient.
If it doesn’t add value for the customer, see if you can eliminate it. Take a look at every single aspect of how you conduct business, Horn advises, from the time you open the doors in the morning until you and your crews go home at night. “If we’re doing things that don’t add value for our clients, we’re seeking to eliminate them,” he relates.
Don’t Assume Anything
Treat each bid situation and/or client as if it were the only one you’ve ever had. Just because you’ve always done something a certain way does not mean you need to continue doing it that way—especially if a given client doesn’t care.
Find out exactly what the client wants. If you include something in your proposal that the client doesn’t really want, your prices are probably going to exceed what the client is looking to spend.
Pruning is a good example. “If we’re pruning all the shrubs on a property six times a year because that’s what we’ve always done, we must find out if the client would be just as happy with three times a year,” Horn explains.
Stay True to Your Core Values
Quality is still important, so as a company you’ll have to decide which concessions you’ll be willing to make. While it’s important to find out exactly what the customer wants, it’s also important to guard against seeing your reputation head south for doing less than spectacular work. “Sit down as a company and define your expectations up front,” Horn advises.
Your portfolio and customer referrals will still work overtime for you, even in a tough economy. Back down in Texas, this has been the case for Native Land Design. “Price has seemed to be king in many negotiations lately, but in those instances where price has been relatively flat among bidders, our book of work and client recommendations have meant much more than a slick presentation,” Collinsworth relates.
There may be work you do not want to pursue—especially in those instances where price clearly is king and quality has seemingly gone out the window. For Doug Robbins of Robbins Landscaping in Richmond, VA, a narrow focus has been key to his maintenance division’s growth.
“We work mainly in high-end residential,” tells Robbins, a 2008 Pros in Excellence Award winner. “We install a homeowner’s landscape, then handle the ongoing property management. We’re strong in certain neighborhoods where our trucks are seen all the time. Sure, we’ve had some customers who’ve lost their jobs and subsequently cancelled or cut back on their service, but it hasn’t been too bad.”
Offering options has also been key for Robbins Landscaping. “We don’t separate our property management services and allow customers to choose one by one,” Robbins points out. “But we do offer three different options. That said, we typically shy away from customers who just want basic mowing. We take a holistic approach to property management—and most of our clients want the full-service package, which includes mowing, leaf cleanup, irrigation service and turf care.”
Become a Star Salesman
Targeting the right customers, offering options, listening to client needs and wants … all marks of a great salesman. And that’s exactly what landscape contractors need to be in the new economy.
“We’ve invested heavily in business development,” Horn says. “You have to in order to set yourself apart and grow. Five years ago we didn’t have any business development personnel; our supervisors and account managers did all the selling.
“We create sophisticated presentations tailored to the individual client’s specific needs,” Horn continues. “Large corporate clients definitely need a good PowerPoint presentation and glossy brochure. A $300/month client probably doesn’t need all that, but still needs a professional presentation, and certainly the time to sit down and talk about their expectations.”
“Listening to what the client is saying and turning it into what they want is key,” Robbins reminds. “After that initial meeting and presentation, if we can come back with what they asked for, and give them a few options, we’re almost there.”
Be Honest, Remain Patient
Honesty is still more important than anything—even in today’s cutthroat marketplace.
“We simply try to be genuine in our presentations,” Collinsworth relates. “We don’t want to promise something we can’t deliver, and we want to be honest about our own imperfections. This approach is difficult; it takes a great deal of belief in your own body of work. But when done well, this approach can inspire clients to really think about what they’re looking for in a long-term vendor.”
It’s also important to remain patient. “Our clients are getting smarter every year, and are tired of the over-promising and under-delivering that is rampant in our commercial industry,” Collinsworth tells. “Anyone can promise something, but only a few can actually deliver. Our clients are seeing through those promising the world by checking references, driving properties of similar scope, and having conversations with existing clients to see if the company can really do what it says it’s going to do.”
When the economy comes back, customer expectations likely will, too. “Contractors who’ve been blowing below the cost of quality work to make up for lost revenue are creating a recipe for disaster,” Collinsworth says. “Many of these same contracts will be up for bid again soon. I don’t think these contractors stand much of a chance in the renewal process when clients value experience and quality work over minor increases in service fees.”
Robbins sees things the same way, which is why he’s toying with the idea of pursuing more commercial maintenance business in coming years. “We’re looking at smaller commercial properties that are closely held, such as doctor’s offices and apartment buildings,” Robbins explains. “We’re hearing customers talk about how tired they are of the poor work their current contractor has been providing. They’re willing to pay a little bit more for better service again.”
“We bid work to make a fair margin—and give the property what it deserves and the client what he or she expects,” Collinsworth offers as a parting thought. “This is the best approach in any economy.”
CALLING OUT COMPETITORS
The first thing to do is walk the property with the prospect, pointing out the deviations to spec.
Ask if the prospect would like you to bid the services the way they are currently being provided by your competitor, or according to the specs provided in the RFP.
Make sure to point out that performing the services according to spec will be considerably more expensive, but also state that should the prospect have a budget limitation, you would be happy to design a program specifically to his/her needs.
If a site walk with the prospect isn’t possible, go ahead and walk the site yourself. Bring a camera so you can photograph the deviations from spec.
Point out the discrepancies (with photos) in your proposal. Include a price for duplicating the current service level, plus a proposed price for the specified service level. Include a reminder that should budget be an issue, you would be happy to work with the client.
Never criticize a competitor because there is always collateral damage. Simply present you own attributes. When done well, you will always outsell the competition.
Special thanks to consultant Frank Ross for offering this insight. For more information, email email@example.com or call (847) 381-8939.