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View Full Version : What is more important: Reputation or Advertising Budgets?


DFW Area Landscaper
05-17-2005, 11:25 AM
I know some guys on here insist that word of mouth advertising is by far their number one method of gaining new clients.

I would guess that over 95% of my clients are finding me via a paid advertising source...door hangers, truck signage and yellow pages. If I were relying on word of mouth to gain new clients, I would have failed at this business a long, long time ago. It just doesn't generate new clients for me.

So my question is this: Does reputation even matter? It's a given that if you do **** work and provide ****customer service, the customers won't tolerate it and they will cancel. It's impossible for an LCO to stay in business and do schitty work.

When a customer finds an LCO via a paid advertising source, they have no idea what your reputation is. Since 95%+ of my clients have found me via a paid advertising source, should I conlude that reputation does not matter?

Two questions:
1.) If you have to choose between one and the other, and I'm not saying you do, but if you had to choose between a good reputation or a good advertising budget, which would you choose? And why?

2.) What percentage of your clients found you via a paid advertising source? What percentage were word of mouth? (Note: I don't count a neighbor who sees you working and asks for a quote to be a word of mouth client.)

Later,
DFW Area Landscaper

language

GreenUtah
05-17-2005, 12:17 PM
I'm guessing that would depend on your client type. Large corporate and governmental clients will not hold much value in your marketing pitch if there is not experience and references to go along with it. The masses? The example set by the largest US lawn company says marketing counts more than reputation..and you should thank them for creating the market and leaving giant holes in customer satisfaction to be filled by the companies willing to put their service first.

Pro-Scapes
05-17-2005, 12:34 PM
I think there is a lot of factors. Some of us don't wanna outgrow a small operation.
A lot of it depends on where your from too. 90% of my business comes from word of mouth or refferals from the landscape materials center. I put a nice ad in the paper. Got a bunch of calls but seemed to be just price shoppers.

If your happy with size of your business and your running near full why would you pay to advertise?? If you need more customers and the phone aint ringing you better spend all you can advertising. My truck signs have worked a bit. Got a few off people seeing me work. Most just call and say well so and so reffered me. I may go for the yellow page ad next year when I'm ready to go full time.

Bottom linne is no matter what you spend getting customers the only thing that's gonna keep em is good work and a good rep. Why spend money getting customers if your not going to work to keep em? Seems stupid

Markf
05-17-2005, 01:04 PM
The question, both parts are inter-related and, in my opinion cannot be separated. If you are small or just starting out, marketing and advertising are a must. How else will you generate the revenue to keep your company and yourself afloat. However, part of your marketing should ALWAYS be that you do quality work regardless if you are big or small. (what constitutes the difference between big and small , I do not know. Any suggestions? Is it $ or # of employees. That is another thread.) Once your business starts to grow though advertising, it stands to reason that a number of clients that you picked up through advertising, if your quality is good, will give out the referrals. You get enough of that over time, you will not need to advertise. Although I would never stop to advertise and market yourself. I hope this helps.
Mark

DFW Area Landscaper
05-17-2005, 01:05 PM
Pro-scapes,

I have found very little correlation to happy customers and them staying on the schedule long term. The number one reason a customer cancels service in my area is because they want to start doing it themselves...they've decided to spend the money elsewhere. The number two reason I lose customers is because they have sold their home.

I always ask customers when they cancel if they are cancelling because of a quality issue. I lose very few customers to that reason.

Some customers will cancel because they're not happy with the service, but it's not a quality issue. Example: Some cancel because they can't stand the thought of the lawn being mowed every week in April. They want to dictate the mowing schedule. I've lost a customer because she thought lawn mowing should have included cleaning up enormous amounts of leaves for free. Some cancel because they think our lawn applications are making their dogs sick. Some cancel because they think our applications are causing asthma with their kids. Some cancel because they think all the poa annua, fescue and dallisgrass should be killed with the very first application. Some cancel because we charge too much to trim shrubs and clean beds. But far and away, the number one reason people cancel service is because they want to spend the money differently. Maybe they just got laid off. Maybe they have a big wedding to pay for. Whatever. The number one reason I lose customers is out of my control.

Bottom line is, if you are in business, you are going to get cancellations. There is just no getting around it. You have to have a way to replace those cancellations or the business will die.

I have found that reputation pales in comparison to advertising budgets. And when customers find you via a paid advertisement, your reputation doesn't even matter. They aren't calling you because they've heard about you. They are calling because you have offered your service and they are interested.

Later,
DFW Area Landscaper

BCSteel
05-17-2005, 08:44 PM
My advertising budget...$0 My work schedule...Full, 7 years running. Customer turnover not under my control... less than 10%. WOM is my only form of advertising and I turn down enough work to hire someone on full time every year. Why you may ask, I like being the small guy.

jbell113
05-17-2005, 08:51 PM
Im with you on this DFW I have had very little luck by word of mouth and run solely on yellow page ads. The people in my area want someone dependable....I dont think many of them care about quality but when you say your going to be there on a certain day you better be there......reliable and dependable is where its at in my neck of the woods.

DFW Area Landscaper
05-17-2005, 09:34 PM
JBELL,

When these customers find you in the yellow pages, they have no idea if you are reliable or not. A company in the yellow pages is assumed to be reliable by most consumers, but it's not like they heard about you from someone who knows you are reliable.

When I first got into the business, this old man told me succes in this industry was very simple: Just show up when you say you are going to. I wish succes in the lawn mowing business were that easy.

Later,
DFW Area Landscaper

DennisF
05-17-2005, 09:43 PM
Your work is your calling card. No other form of advertising will produce better results than your reputation. Unfortunately...the opposite is true if your reputation isn't top drawer.

Kelly's Landscaping
05-17-2005, 09:54 PM
Advertising budget helps the only thing that drives me nutts its there is not enough time to grab up all the fish you catch with the ad blitz. I run into times when I got 40 people wanting estimates as soon as possible and I have to get the work done so I have to let them slip away. Rep is a good thing but I think Rep means different things to different landscapers. To me I do the best job I can and after May we are usually pretty reliable with the same cutting day week after week. We charge a fair price and we are polite too most people we are very knowledgeable and it shows when we are asked all sorts of questions about their lawns and shrubs. I like that Rep the Rep I could not care less about is with pitas I fire a few every year I get backed up and some jobs cancel before they will let us get there or I get someone try to stiff me and they do not like my collections methods. We try to call people back but some call you 2 dozen times for nothing and you have to make a judgment call sometimes are they worth this.

Does Rep matter yes is it important when they are looking for a landscaper, not really most do not even know you. If you see the industry leader in this trade their Rep is awful yet they do like 1.5 billion a year. McDonalds does not make the best hamburgers yet they have been #1 for as long as I have been alive. Clearly advertising can go a long way to overcoming a bad Rep. I think if I was happy where I was I would still spend 3 k a year just to maintain our size as with house sales and competition we do lose 10-20 accounts per season.

Fantasy Lawns
05-17-2005, 09:58 PM
hee .. he ..... nice post Dennis

Been reading this thread .... with no real good input .... except that I'd have to agree that ADVO is at the top

always lived by the thought "if your not adverting to succeed your adverting to fail"

BUT I'm also firm on Reputation, Word of Mouth n other general positive Business Foundations ....

Suppose I can ONLY say .... when it comes to ADVO the ONLY Advantage I may have is when I say "Serving Brevard County Since 1995"

lawnman_scott
05-17-2005, 10:20 PM
It depends on your location. DFW, if you are actually in the DFW area, I would say reputation is irrelevant. If you have 200 customers that love you, absolutly love you, and 40 ex customers that want to see you crash and burn, they hate you with a passion, then what do those 200 or 40 people represent in terms of the population of your area? Nothing!!! The effect they will have on you, good or bad, is miniscule. Now if your in a town of 3000 people, and the next town 5 miles away has 4000, well dont tell mr jones to go.................. otherwise the whole town will know by daybreak at the little coffee shop they go to every morning.

Kelly's Landscaping
05-17-2005, 10:32 PM
It depends on your location. DFW, if you are actually in the DFW area, I would say reputation is irrelevant. If you have 200 customers that love you, absolutly love you, and 40 ex customers that want to see you crash and burn, they hate you with a passion, then what do those 200 or 40 people represent in terms of the population of your area? Nothing!!! The effect they will have on you, good or bad, is miniscule. Now if your in a town of 3000 people, and the next town 5 miles away has 4000, well dont tell mr jones to go.................. otherwise the whole town will know by daybreak at the little coffee shop they go to every morning.

That is so true I live in a small city I bought the grand list from Milford this spring there were 27000 properties on that list I bought Orange next door only 5500 properties. I work out of 6 main towns I have done work in 4 other towns. I probably have 500,000 people living with in a 30 mile radius of my home so negative Rep would not even matter. I still do not want one but you get the point if I want 200-400 accounts I will have no trouble finding fresh accounts till the day I retire and that is the point I was making. And I think that is what DFW is saying as well heís in a area where price is the major concern and some guys work for nothing Rep means little when Joe Scrub will cut the lawn for 10 dollars and give them free spring and fall clean ups.

DFW Area Landscaper
05-17-2005, 10:33 PM
Lawnman_Scott,

I suspect a lot of the reason I get virtually no growth through word of mouth is because of the demographics. People in the DFW suburbs simply don't know their neighbors. In fact, I had a lady sign up for service yesterday. I realized while I had her on the phone that we were servicing the house right next door. I asked if they knew Jackie & David. They didn't know who I was talking about...their friggin' next door neighbor.

Another thing with the DFW metromess is that customers go to work, usually in Dallas or another town, like Irving or Addison or whatever. The co-workers, who they might refer us to, might live in Arlington or Euless or another town. We service three towns and for the first two years, we only serviced a portion of two towns. I suspect that has a lot to do with the poor results from word of mouth. Word of mouth is almost non-existent as a source of new customers.

So even if a customer is mad as hell or extremely happy, it doesn't really matter in my market. They won't mention it to the neighbors because they don't know them or speak to them and the co-workers that will hear about it likely live miles away from our service area, have never heard of our company and couldn't hire us if they wanted to.

Perhaps reputation is meaningless in a large market like the DFW suburbs, but of paramount importance in smaller communities.

Later,
DFW Area Landscaper

HOOLIE
05-17-2005, 10:53 PM
I'd have to agree, in a large metropolitan area, your reputation means little in the scheme of things.

I think to make any sort of rapid expansion, you have to rely on advertising. You're just not going to get that many referrals in a relatively short period of time to facilitate rapid growth. If you want to stay pretty small, you could probably get by forever with no advertising budget.

Precision
05-17-2005, 11:08 PM
I have a great reputation and it has gotten me exactly 3 new accounts and 3 other recommendations to people who where obvious PITA's.

Advertising budget is definately the key.

Look at the continued existence of True Green. 90% of my clients used them at one time or another and almost none would ever use them again. 1 had a chemically burned lawn (complete death) 2 had complete overgrowth of weeds 1 year after brand new sod and service from day one. But their neighbors called them for service. The biggest add in the paper and the continued mailings and flyers put the name in their head.

It is a fact, especially with the dim. I see him everywhere, he must be good.

jgtxusa
05-17-2005, 11:30 PM
Word of mouth is the only way to go. I get too many shoppers and people calling for small services. That might be a good deal deal for a solo fellow, but we are set up more for weekly service. I dont take one time cust any more just for the fact of scheduling.

Texas Mowem
05-18-2005, 08:00 AM
DFW in your case I believe a huge marketing budget is much more important than word of mouth.

Tn Lawn Man
05-18-2005, 09:15 AM
DFW

Good Thread

We are talking marketing here. And, ask any marketing expert your same question and you will get many different answers.

This is what I found out:


Know your target audience?

Once you know this then you can determine how to market to them and conduct your business.


Possible target audiences and my findings:

1. Older people

- older people tend to be much more loyal. They cannot do the work anymore and they are not going anywhere soon unless it is a retirement home or death. They are hard customers to gain but, if they like you then, they are hard customers to lose.
- as far as marketing to them, once you have a few they do all of the work. Older people talk to everyone!!!! So this is where word of mouth comes in.

2. Younger people

- This includes a few different types but are mostly, 30 somethings with kids, two jobs and they move every 3 to 5 years.
- they get lawn care because they are too busy working to spare their off time doing yard work.
- because they are so busy they never really talk to anyone so word of mouth does not work. You must advertise with them more than once. They can have your advertisement sitting on their dining room table and still not realize you do work in the area.
- you are also most likely to lose these customers because they move so often and also because of their general mindset of constantly changing and being on the go.
- however, they have bigger bank accounts and don't mind spending it
-advertise advertise advertise

3. Everyone else

- most everyone else fits somewhere in between. For example, sometimes single parents can be like older people and sometimes they are like the younger people.

And of course this is only addressing residentials. Commercial accounts are a totally different approach.


DFW

I know the metroplex fairly well, spent a lot of time there. I would say you have a lot of "group 2" type people there.

DFW Area Landscaper
05-18-2005, 09:56 AM
TN Lawn Man,

Interesting read. I agree with your "group 2" assessment of my area.

Sad as it is, I think I could provide the worst service on the planet and as long as I'm advertising, I could still get new customers. Keeping them would be a different story, but I could at least get them to try me out.

Later,
DFW Area Landscaper

Tn Lawn Man
05-18-2005, 03:28 PM
Keeping them really is the trick. So many people from group 2 have a "change" mindset. There is very little loyalty. It is "whatever works at the moment" type of attitude that they live by that really drives a businessman crazy.

A little tip that I have found works great. For the group 2 type of people try to spend a lot of money making your advertising look GOOD.

A cheap flyer does not work for these types.

I have a professionally designed (very costly) advertisement to use as with either door hangers or direct mail flyers and post cards. This worked the best for that group.

Group one want a bargain pure and simple.

If you are interested in the guy I used let me know. But, know this. He is not cheap, just good.

Furthermore, make sure you get professional stationary, uniforms and all of that jazz. This group loves it.

So far this year, of all of the new accounts that I have picked up in this category about 95% of them have bought more than just mowing. They have bought fert programs, hedge work, mulch and complete high dollar (for the area) landscape jobs. And, only 2 to 3% have cancelled.

So I would say my approach has been successful thus far.