Retaining High-Margin Customers

Cool temperatures in some areas and drought in others have slowed business for many landscape contractors across the country. Meanwhile, the growing prosumer market has caused many dealers to shift their emphasis toward these target customers.

Nevertheless, landscape contractors represent a steady customer base and profit margins that are too large for yard and garden dealers to ignore. As we work through the fall season, opportunities remain to capture business from landscape contractors. Winning these customers will require fostering stronger, lasting relationships.

Marketing Both Offline and Online

Before you can develop a relationship with a landscape contractor, you first have to get them through the dealership door. Dealers today are using a mix of marketing tactics and incentives designed to lure customers into the shop.

Direct and email marketing remain particularly effective, and many dealers take advantage of direct mail programs through service providers that help them more efficiently and effectively target customers.

“We see a great return from our investments in mail pieces,” says Pat Lyons, owner of Pat’s Power Equipment in Charleston, RI. “We purchase mailing lists that target our campaign down to our ideal prospective customer. On one of our new products, we sent out a mailer and sold two units worth over $50,000.”

In the future, dealerships including Pat’s Power are looking toward doing more email campaigns managed through web-based lead management programs, which have become the cornerstone of business development for many successful dealerships.

These technology-enabled applications have helped dealers become more sophisticated in targeting and pursuing prospects. The best lead management software offers dealers an efficient way to capture, segment and assign leads to the sales team.

“We use Footsteps and it has really helped us to continuously touch the customer with promotions and incentives,” said Lyons. “Plus, it’s easy to use and everything can be customized to the way you organize your sales team and business.”

Discounting and Other Enticements

In the midst of a tough year, many dealers are turning to discounting online and in store as an attempt to entice landscape contractors. This approach may be hard to stomach in the moment, but dealers should consider fall closeout sales as a means to an end, and an opportunity to build relationships with customers, encouraging them to return for parts and service.

“Dealers must look at business holistically, not by individual wholegood purchases,” says Greg Olson, owner of Olson’s Outdoor Power in Muskego, WI. “In the short term, dealers may lose profit on fall discounts, but the fruit of a good business relationship will allow dealers to make money long term off of service and parts.”

Some dealers are also promoting the deductions for new equipment purchases offered in Section 179 of the tax code as a way to lure customers, but Lyons and others said they don’t see the tax advantage as being a big draw for landscape contractors (except for much larger purchases such as trucks).

Faster Service Facilitated by Technology

Perhaps nothing is more important to commercial landscape contractors than getting great service on the back end of a purchase.

At Olson’s Outdoor Power, the ability to provide prompt service is what keeps landscape contractor customers coming back. Electronic parts catalogs, which help employees find the right parts fast, are vital in this effort.

“It’s really important that everyone in the shop has access to and looks at the same parts and inventory system. PartSmart, our online parts catalog system, quickly gives me access to OEM parts and prices,” says Olson. “Dealerships who do not use a system like this may want to reconsider.”

Pat’s Power also uses electronic parts lookup catalogs, incorporating them into his WebsiteSmart Pro website—producing significant gains in web traffic. Many landscape contractors purchase parts after hours and then pick up their purchases in person first thing in the morning. This way, they can eliminate downtime.

“A smart landscaper is buying a lot of products online. People are looking for the best deal and it’s become very important for them to have the ability to go online and purchase a part,” says Lyons. “Our service both online and in our dealership is what continues to drive landscape customer business and loyalty.”

Service Packages and Loyalty Programs

In addition to faster response time, many dealers strive to go the extra mile in the service they deliver to landscape contractor customers.

Olson’s Outdoor Power offers landscape contractors immediate service for a nominal fee on broken pieces of equipment. The dealership’s service branch has an advanced machine shop with tool and die and welding capabilities.

Southland Engine of Lafayette, LA, takes a different approach. Owner Lynn Pesson (2004 Yard & Garden Dealers in Excellence Award winner) offers landscape contractors a value-added package ensuring assistance on the back end. For quick service for all of his customers, he breaks his team into divisions: contractor technicians, homeowner technicians and 2-cycle technicians. For equipment that cannot be fixed in a day, Pesson offers loaner equipment and pays for next-day airmailed parts.

Pat’s Power hosts a Landscaper Appreciation Night where he honors the top landscape contractor with a plaque, prizes, and adds their company name to his “Landscaper Hall of Fame”.

“We base the program not only on sales, but customer loyalty,” says Lyons. “It’s a great way to build relationships with landscape contractors and let them know how much you appreciate their business, work and friendship.”

That’s an important lesson for all yard and garden dealers to keep in mind with high-margin landscape contractor customers. Stay close and provide great service to them in as many ways as you can, and landscape contractors will keep coming back whether their business is booming or not.