The New Business Model

The contractors who’ll continue to survive are the ones who are finding ways to deliver more for less.

Jeff Bowen: “Our clients want to do business with one company that does many things.”
Jeff Bowen: “Our clients want to do business with one company that does many things.”

Over the past three years, less fortunate Green Industry service providers have gone out of business while others have either completely changed their service offering or found other industry niches. Others have heavily tweaked their operations to accommodate the New Normal: an environment in which customer service expectations have gone up and the price consumers are willing to pay for services has gone down. One might refer to these business owners as industry survivors, each of whom share a common bond: the ability to adapt to a very challenging marketplace.

Customer value

“There’s no question that our clients are more conservative about how they spend their money,” relates Glenn Jacobsen, Landscape Industry Certified Manager, owner of Jacobsen Landscape Design & Construction in Midland Park, NJ. “Customers want more value for their dollar and they want an even higher level of service.”

Jacobsen has met the challenge in part by restructuring his service offering to include a property management department that combines what was once a separate irrigation/sprinkler service. “The idea is to be even more proactive when it comes to taking care of clients’ properties,” he explains. “The move creates a better line of communication between our irrigation staff and maintenance crews who are on site weekly and in a position to observe watering issues.”

To fill in the gap caused by the falloff in the housing market, Jacobsen also created a combined department strictly for residential maintenance called Property Management Group (PMG).

In Albuquerque, NM, Heads Up Landscaping faced a similar challenge in the housing market. “Ours has been a ‘take away’ market for a few years now,” explains Eric Spalsbury, Landscape Industry Certified Manager, vice president/maintenance business development. “There have been relatively few new properties being built so new work has to come from competitors. This has driven prices down to levels we have not seen for 20 years. Customers have become wise to this and are shopping around for the best price.”

Heads Up has since been right-sized, accentuated points of difference in its service offering to the customer, and pursued work in new markets. Says Spalsbury, “We have become more aggressive in areas we previously ignored in healthier economic times, such as residential irrigation, multifamily housing and public work. Our biggest push has been in residential irrigation, and despite the temptation to be conservative we’ve increased our marketing efforts there with billboards, TV and radio time, vinyl wraps on city buses and company cars, and through social media vehicles, including Facebook.”

Jeff Bowen, Landscape Industry Certified Manager, owner of Images of Green in Florida, started revising his company game plan three years ago. The plan included wrapping his arms even tighter around 700 customers and providing some of the services he had previously subcontracted out.

“Over the last three years, we’ve added irrigation, pest control and lawn care services,” says Bowen. “We’re even considering offering tree care and possibly pool cleaning. Our clients want to do business with one company that does many things, and it’s imperative for us to be that company.” By bringing additional services in house, the Images of Green owner is not only getting closer to his customers, he’s also adding a few margin points to his bottom line and making his service offerings more competitive.

Bowen has also become more vigilant about staying in touch with customers via his company Facebook page, email and a quarterly newsletter. Heads Up, too, has placed an emphasis on communication through a monthly e-newsletter and by rolling out a web-based help desk that gives clients access to the company’s work order system. “The program allows them to enter, track and close the loop on requests, something clients really love,” says Spalsbury.

Offering a la carte services

Oregon-based Willamette Landscape Services (WLS) has always prided itself in delivering a complete horticulture package to customers, most of which are HOAs. With the state’s unemployment hovering over 10% in recent years, clients have asked for some relief. Neither wanting nor willing to cut back on quality, or pursue other markets, WLS chose to offer an a la carte service, giving customers the option to select a modified pruning or aeration schedule, or to cut back in areas where curb appeal is not an issue.

Company vice president Matt Triplett explains, “Our goal is to maintain both the pricing on individual services and our high standards. Just because times are tough doesn’t mean you have to sell your horticultural soul, perform cut-rate work, or give up washing your equipment like we’ve seen in other places.” Triplett is a Landscape Industry Certified Manager and Technician.

Breaking out the company’s service offering, Triplett says, empowers HOAs to save money at a time when foreclosures of individual condo units have gone up. But as he points out, there are other ways to help customers save money without cutting out technical services such as pruning. Upgrading irrigation systems is a prime example, something that can dramatically reduce water bills during the state’s long, dry summers

Paying dividends

All the hard work and revisiting business and marketing plans will likely deliver returns for the “survivors” of the Great Recession, according to Tom Fochtman, Landscape Industry Certified Manager and a former partner with Denver-based CoCal Landscape. A survivor himself, he sees plenty of room for optimism this year. “I think 2012 holds a lot of promise for those companies that took the necessary measures to navigate this economy,” says Fochtman, who is now a consultant. “Design/build/install companies that downsized or right-sized in time, or found other market niches, should be in good shape by now.

“This economy has demanded extraordinary measures to remain in business,” Fochtman continues. “But for those that responded, especially those with a strong maintenance footprint, 2012 should be a bit of a breakout year.”