By Kaitlyn Ersek on Dec 19, 2018 11:02:30 AM
Are you looking to grow your lawn and landscape business this year? “I would urge all lawn and landscape companies to review three crucial levers to their business in order to maximize growth - People, Sales and Marketing, and Cash”.
People - If you don’t get “people” right, your lawn care business with suffer
Watch the 16-minute video above or read the synopsis below. If you're reading this blog via email, click here to access the video.
“56% of lawn and landscape companies said that quality labor was their NUMBER ONE concern going into the new year,” according to Lawn and Landscape Magazine’s State of the Industry Report. Quality labor consistently is a chief concern for lawn and landscape company owners over the past several years. It doesn’t matter which state you are located in, it is hard to not only locate quality labor but also to pay for quality labor.
People are one of the most important foundations for running a successful business. It doesn't matter how well you sell or how immaculate your services are, if you don’t get “people” right, business growth often stalls.
While we can’t solve all of our labor problems in a video or blog like this, we can talk about two ways to increase what we get out of our labor: (1) Empowering employees, and (2) Increasing employee efficiency by measuring success.
Happy Lawn of America
In a previous business, Holganix CEO and Founder, Barrett Ersek was building a fast growth lawn care company called Happy Lawn in the Mid-Atlantic Region. “We had big growth goals and you can see in the picture above that this was about mid-way through that growth. The problem was that if our team wasn’t working towards a common vision, it was really easy to steer off course… wasting company resources.”
That’s when Happy Lawn introduced its Dream On initiative. “To really empower our team, we helped them set personal goals and plans to reach those goals. We brought in a goal-setting consultant who ran seminars each month. Managers knew the personal goals of each direct report. We then helped them understand that by striving to reach the company’s growth goal, they could earn bonuses and commissions that would directly fund their personal goals.”
For example, one employee - a college dropout, wanted to purchase a BMW M3, and another employee - a new immigrant to the U.S. - wanted to purchase a home for his family. In both instances, they reached their goals.
“We got a much higher level of commitment and engagement out of our employees by helping them realize their personal goals and helping them to understand that their personal goals and our company goals were tied together.”
GrowinGreen Lawn Care
In another example, Jonathan Rigsbee, CEO, and Founder of GrowinGreen Lawn Care describes how he empowered technicians to make decisions about their routes. “We are all facing the same challenges with a tight labor market and that’s not going to change anytime soon,” explains Jonathan. “A few years ago, we changed our mindset to how can we get more out of what we have?”
For Jonathan that meant investing in the people (specifically his technicians) to empower them to make decisions about their route. As a result, most technicians have been with GrowinGreen for over 5 years. It also meant organizing better routing, investing in better trucks and equipment, and working on educating his technicians.
In addition to lowering tech turnover, Jonathan says he’s reduced his customer cancel rate from 19% to 15%, while increasing his revenue per truck by 60%.
Measuring Employee Effectiveness
If we don’t measure our employee’s output, we can’t manage or direct them to do better. Each employee should have a KPI - Key Performance Indicator, that measures whether they had a successful day and week.
For example, a production technician might have a KPI around how much revenue they can do in a day, or the cancel rate on their route. A salesperson might have a KPI around the revenue they book, their cancel rate or the profitability of their sales.
You can utilize the FACe exercise listed below to help you visualize how to measure and get accountability for each function of the business. The FACe exercise comes directly from Scaling Up - a model for fast growth companies by Verne Harnish.
Sales and Marketing - How Do You Target The Appropriate Customers?
Watch the 6-minute video above or read the synopsis below. If you're reading this blog via email, click here to access the video.
If you want to grow your lawn and landscape business you have to set growth goals and track those goals. Ultimately though, growth comes from creating the appropriate lead list. There are five sources you should consider to create your lists.
Cancelled Customers - If you listen to your cancelled customers and generally look to solve their problems, you can close about 20% of your cancelled customers.
Estimates - Even if a lead received an estimate from you and decided to go with another business, these leads are an excellent source for your sales and marketing campaigns. You never know why or when a lead might decide it is time to try a new lawn and landscape company.
Current Customers - Find services that your customers need and upsell them. Doing such, provides extra value for your customers and increasing your margin on each customers.
Partnering Companies - For example, if you only do lawn fertilization, you can partner with a mow-only company and refer each other business.
Referrals - And, of course referrals from your customers are often the easiest sale you can make!
If you look at your lists, also consider that not all leads are equally valued. Some leads are worth more than others… not just because they have a larger property, but also because of their proximity to current customers.
As you think about maximizing the efficiency of your marketing - consider the Golden Street Strategy. The Golden Street Strategy asks the question, Which one-to-four neighborhoods do I want to “own”. Consider which neighborhoods or subdivisions that have over 100+ homes, have a higher value homes, and are newer (usually 10 years or younger). Your goal is to reach a 20% saturation point that provides high customer density, increasing production efficiency and driving your profit per truck.
Cash - The Limiting Factor To Growth
Watch the 7.5-minute video above or read the synopsis below. If you're reading this blog via email, click here to access the video.
Many people want to grow their businesses, but are concerned they don’t have the cash to invest in marketing and sales. One way to fund your business is to get your customers to prepay. Offer customers a small discount to prepay upfront and then deploy that cash into marketing.
When you do decide to invest cash into marketing and sales, it is important to measure your marketing ROI. Your marketing ROI tells you how long it takes you to recoup marketing costs.
Marketing ROI = Gross Margin / Cost Per Sale
Another important metric is your cost per lead and specifically your cost per lead by the marketing campaign. This will help you measure which marketing and sales campaigns produce the best results.
Cost Per Lead By Marketing Campaign = Total Number Of leads Generated/ Money spent on a marketing campaign