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DFW Area Landscaper
09-11-2006, 05:06 PM
I got out my spreadsheet today and studied EVERY cancellation I took between April 1st and September 1st of this year.

During those four months, I took 65 cancellations from mowing clients.

The study confirmed what I was suspecting, but I didn't suspect it would be this big:

Of the 65 mowing clients who cancelled, 95% had taken less than 4 chemical treatments and the majority, 80%, only hired us to mow the lawn and never took any chemical treatments. Only 5% of those cancellations were clients who hired us to mow and do the chemical treatments AND had taken at least 4 treatments.

As of today, 48% of our mowing clients also take chemical treatments. The ratio of cancellations from mow-only clients, as compared with our client base, clearly indicates a much higher potential for mow-only clients to cancel service.

The chemical treatments appear to be a barrier to entry, at least in the client's mind. They are happy with the way their lawn looks and don't want to screw it up by making a switch on any facet of their lawn care.

I wish I knew what percentage of those 65 mowing clients cancelled because they hired someone with a lower price. My guess is, a lot of them cancelled for that reason, although I have NO way of knowing for sure.

My point is, the clients who have us do the chemical treatments and mow are not cancelling. It's the clients who just have us mow the lawn and possibly a clean-up...those are the clients who are churning, over and over again.

Sure, we like to have the chemical business, but the real ambition here is to have the mowing business. Just think about it: 34 cuts per year and only 6 chemical applications, many of which require a call-ahead the day before. Which revenue source would you focus on?

I guess the question is tree-fold:

1.) If a client is already with Trugreen or another provider of chemical service, if they don't switch to us for chemical and just hire us to mow, are we just as disposable? Or do these clients tend to hire and keep one lawn mowing company long term too?

2.) Is it possible to create a convert? In other words, a client orders weekly mowing but doesn't have a chemical service and they decline our chemical service. Is it worth it to give this client the first three apps for free just to get them to try it out and then see if they will pay for it, all in the hopes of getting a long term client who will be loyal?

3.) Would you dare consider, in the areas where the schedules are nearly full, REQUIRING clients who want lawn mowing to also take your chemical treatments too?

Later,
DFW Area Landscaper

evergreenedmond
09-11-2006, 05:38 PM
We do all or nothing, I think it helps weed out the people looking for the lowest bidder.

rodfather
09-11-2006, 05:59 PM
I'd like to know your cancellation % from moving people's mowing schedule around like you were worried about.

DFW Area Landscaper
09-11-2006, 09:02 PM
++++I'd like to know your cancellation % from moving people's mowing schedule around like you were worried about++++

We had to ask 122 clients to move at least 2 days earlier in the week. Some were weekly, some were bi-weekly.

We normally see around 4 cancellations per week. Over the last two weeks, we had 12 cancellations. At least two of the cancellations are suspected dissatisfaction from us mowing in the rain when the clients were home on Labor Day.

Additionally, we have another 6 clients who are allowing us to mow on the day we prefer for 2 ro 3 weeks and then we will see if there is enough time savings to accomodate their requests. We have already caved on one because she schedule her day off from work to be home when we mow and she is not far out of the way. The other five all have to be addressed and I don't know if we will cave or not.

The good news is, it has rained on three Mondays in a row and the lawns are growing, despite less sunlight. A year ago, the phone was ringing non-stop with skip & cancellation requests because it hadn't rained in 6 months.

I just found it amazing to see that only 48% of our mowing client base takes our fert & squirt, but 80% of our cancellations over the last 4 months were from mow-only clients.

I find it NEXT TO IMPOSSIBLE to get someone to take our fert/squirt program if they sign up for service after dandelion/poa annua/henbit season is over.

With applications costing next to nothing in November & January (no nitrogen) I wonder if it would be smart to offer 6 months of free fert/squirt to the mow-only clients as long as they remain on the mowing schedule? The cost is low and from what I can see, it keeps them on the mowing schedule.

Later,
DFW Area Landscaper

MMLawn
09-11-2006, 10:16 PM
Sounds like you are losing clients just as faster....or faster than you gain them.....normally to that I'd say you need to stand back, take a long hard look and re-evaluate how you are running your business and responding or more importantly failing to respond to your clients needs....

topsites
09-11-2006, 10:19 PM
Here, I'll summarize it for you:

It's always the people who want something for nothing who will skeedaddle the fastest.
As a rule, 9 out of 10 will do so.

////////////
Lawn service customers either get on board with me before spring is over, or they can find someone else.
I don't take on no more grass customers once the temps hit 90, and I sure as hale don't take them on after it cools off again, either.
That saves me a lot of headaches from the funny people who really just needed some slave boy to cut the grass in the worst heat (gee now it's nice and cool, why not cancel honey?) and also the funny people who like to come onboard right about now but their real reason is they need a slave boy to do their leaves. Oh yes, good times, good times.

dlm17
09-11-2006, 10:38 PM
How Do You Lose 65 Clients And Not Look To What You May Be Doing Wrong I Havent Lost 65 Clients In 10 Years

HOOLIE
09-11-2006, 11:14 PM
Do you track WHY they cancelled?? You won't always get the honest truth from a cancelling customer but never hurts to find the reason.

Precision
09-11-2006, 11:21 PM
How Do You Lose 65 Clients And Not Look To What You May Be Doing Wrong I Havent Lost 65 Clients In 10 Years
different business model. He is targeting mow and blow people at a set price point. There is gonna be churn and burn there. But carrying a load of 300+ accts helps to make up for that.

If you lose 4 but gain 5 and each is committed to a 6 cut minimum AND you aren't personally doing the labor, who cares. Its all about the net result. MONEY.

DFW Area Landscaper
09-12-2006, 12:29 AM
I have compared notes with justmowit and my churn is not alarming for the mow-only clients. What I would like to do, and have been doing, is get away from the mow-only clientelle and replace them with mow/fert/squirt clientelle. Believe it or not, it is a lot of work to sell the service, set them up in the schedules, print and mail the welcome letters, set them up in the billing system...only to see them cancel sooner rather than later.

And that is the whole point of this thread...when you just mow the lawn and perhaps trim the shrubs...you are totally disposable, and the numbers back that claim. ANYBODY CAN DO THAT, INCLUDING THE CLIENT. But when you make the weeds go away and the grass is green, they are far less likely to cancel.

What I can't figure out is, if you do a search on the word "churn", outside of my own threads, no one on LawnSite ever talks about it. Guys on here say they lose less than 10% of their clients per year...I simply don't believe those numbers unless they are servicing only the wealthiest of clientelle. I lose an average of 22% of my total client base every six months. I probably lose 10% of my clients to moving and that is but only one reason of many for client cancellations.

The truth of the matter is, most americans probably can't afford a lawn service for the long haul, but that doesn't stop them from signing up and becoming customers of the industry for a time...and I would guess those clients are mostly mow-only clients. I am not naive enough to think that when a client signs up for lawn mowing they are making a life long decision. Many clients tell us up front, when they sign up, it is only temporary...they just don't have time to mow the lawn due to business travel during the next few months or they have a new born or they have a mower in the shop or they just moved in and they haven't had time for the landscape yet.

The point of the thread was that I noticed a tremendous difference in cancellation rates with mow/fert/squirt clients vs mow-only clients.

Does it make sense to give away the fert/squirt for a few months in the hopes of keeping their long term mowing revenue?

As for the clients who already use a competitor for squirt/fert, are we any less disposable as a mow-only service to them than we would be if they didn't use a fert/squirt service? Phrased another way, how important is if for the lawn mowing company to steal the fert/squirt business from a competitor?

Later,
DFW Area Landscaper

HOOLIE
09-12-2006, 12:42 AM
I think in general your mow-only type customers don't place as much value on a nice lawn/landscape as full-service clients. So that there explains some of the churn...they just don't care as much. The full service client views the monthly lawn bill as a necessity in order to keep their property looking good.

If you think you can sell fert and squirt by offering some incentive then it might be worth a shot.

TLS
09-12-2006, 07:48 AM
DFW,

Why are you so big?

Or are they all small postage stamp yards?

Your talking huge numbers here. There comes a point where you can get too big. Not knowing your cutomers first names is well beyond where you should stop growing.

MarcSmith
09-12-2006, 08:21 AM
DFW,

Why are you so big?

Or are they all small postage stamp yards?

Your talking huge numbers here. There comes a point where you can get too big. Not knowing your cutomers first names is well beyond where you should stop growing.

He's big so he can make money...We all start out with one lawn, but its not enough. you have to grow. Some people don't want to grow beyond a one man operation and some do.

Can you get too big...I don't think so, provided you have the right people working for you. Did I know the names of all my clients. Nope, But I guarantee you that my crew leaders knew all there was to know about the properties they serviced. When i was at TG my branch manager had zero desire to know all the clients, he did want to know the select few highrollers though, but thats why you have good people working for you.

As you grow, you stop becoming a landscaper and move more into the business side of things, again hoping that you hired the right people to take your place.


I never forced full maintence contracts, but for those that selected the full service I felt like I had a customer who cared more about their landscape and was not just shopping around to get the lowest price on each service. Having one copmany do everything is such a WIN/WIN for both the client and the provider. From the clients perspective, you have one point of contact, one finger to point if something isn't right, and as the provider, if you do it all, that means you are on the property more times and thus are able to see problems before the client.

Full service is the way to go, but I don't how successful you'll be in forcing the issue. If youre schedules are full, then maye its time to add another crew. or another manager....

TLS
09-12-2006, 09:13 AM
He's big so he can make money...

I've been in this business for 26 years...not long compared to some. But there is ONE thing EVERY guy that became "BIG" told me...... STAY SMALL!

They tell me they made MORE money as a small operation. So not only have I considered going bigger, even to the point of crunching the numbers, It really never added up for me. I also took a realistic/pessimistic view on that research, as too many guys dont do.

DFW Area Landscaper
09-12-2006, 09:47 AM
Occassionally, some clients will rant and rave about how wonderful our service was when they call to cancel.

Going forward, I will start keeping a spreadsheet to track this. My hunch is that most of them were mow/fert/squirt clients and very few were mow-only clients.

Just going by memory, all the clients who bragged on us when they cancelled took fert/squirt in addition to mowing.

Later,
DFW Area Landscaper

MarcSmith
09-12-2006, 09:51 AM
I've been in this business for 26 years...not long compared to some. But there is ONE thing EVERY guy that became "BIG" told me...... STAY SMALL!

They tell me they made MORE money as a small operation. So not only have I considered going bigger, even to the point of crunching the numbers, It really never added up for me. I also took a realistic/pessimistic view on that research, as too many guys dont do.

TLS
you are correct that a small operation will have a higher percentage of profit(i most cases), but a small operation can only make so much money. IMO A mid size(1/2 dozen crews with one area manager) company is about the worst by means of profit. You have to get through that mid size stage to get in to the money. It sound like DFW is beyond that stage... DFW might be at the point were he is netting 2-300K per year, and a small one man operation is not going to net that kind of money. Heck even in DFW is netting 100K and he is taking a nice salary, he's still doing better than a small operation.

The key is his net may only be 20% of his gross whereas your net is 40% of gross. Yup your making 40% but his 20% will be more cash in the bank when its all said an done... You think valley Crest would still bein business if they were not making any money....

If the market will bear the large company and you can find the right people to work you can make all the money you want and you'd never had ride a mower again...

Pro-Scapes
09-12-2006, 09:57 AM
I think your right with the reasons they are dropping. They are not doing applications and thier lawn looks crappy your the lawn guy. They can get the same results from the lowballer or kid down the street cheaper.

Now on the lawns your applying chems to look better so the clients are happier with the results so why change... They are happy with your modest price.. Happy they dont have to jack around with a bill because your next day cc.

Keep in mind on the CC thing your going to lose some because idiots max out thier CC's

As long as your thriving and not seeing a decline in your bottom line I wouldnt sweat it.

Have you offered a special package as an incentive to get the mow only people to try your applications ? problem I see is people expect IMEDIATE results. WHile you can green it up quick with an application of N dont sacrafice your proper applications to do this... Maybe get an outside sales rep to upsell your program or send out a mailer with before and after pics.

All too many homeowners are dropping weed and feed. A whole bag no matter what size thier yard. I would have my guys make note of what yards could really use fert and send them a mailer.

Pro-Scapes
09-12-2006, 09:59 AM
TLS
Heck even in DFW is netting 100K and he is taking a nice salary, he's still doing better than a small operation.




Who said a small company cant do 100k net ?

TLS
09-12-2006, 10:22 AM
My point being....if you KNOW your customers...by name....see them in "town"....at restaurants....etc. You are MUCH less likely to loose them "just because".

Big operations loose that personal feel. It's that personal feel that got many big guys where they are today. With only 4 years in the business though, DFW may never have established this "feel", and never had a chance to build upon it.

DFW Area Landscaper
09-12-2006, 10:23 AM
++++I think in general your mow-only type customers don't place as much value on a nice lawn/landscape as full-service clients. So that there explains some of the churn...they just don't care as much. The full service client views the monthly lawn bill as a necessity in order to keep their property looking good.

If you think you can sell fert and squirt by offering some incentive then it might be worth a shot.++++

Back in 2003, when I was doing the labor myself, I had three clients on weekly service who did not use anyone's fert/squirt plans. All three lawns were full of weeds and looked horrible.

I left a note on their doors and told each client that I wanted them to see what our fert/squirt plan could do for their lawns and we gave away the service for 6 months (3 apps each). One cancelled the following spring because she wanted to start paying by check. Another one cancelled the following spring because she lost her job but then came back in the spring of '06. Two out of three are both with us today, taking weekly mowing and fert/squirt.

I know it is a small experiment, but I am thinking this may not be a bad idea. Maybe when they call to order service, I offer it at full price and if they decline, I ask if they have a sprinkler system. If they have a sprinkler system, I think I will start telling them the service is free for six months and then they can cancel the fert/squirt if they feel it's not worth it.

Honestly, I don't think the added expense will turn out to be a poor investment in the long run.

Perhaps I can get some help from the LawnSite community with the wording of a letter or e-mail to send to weekly mowing clients to tell them they are going to start getting free fert/squirt for 6 months.

Later,
DFW Area Landscaper

MarcSmith
09-12-2006, 11:19 AM
My point being....if you KNOW your customers...by name....see them in "town"....at restaurants....etc. You are MUCH less likely to loose them "just because".

Big operations loose that personal feel. It's that personal feel that got many big guys where they are today. With only 4 years in the business though, DFW may never have established this "feel", and never had a chance to build upon it.

Its much easier to fire a number and than a face. I agree. If a big operation is done right you never have to loose the personal touch. Again it comes down to the people you have working for you.

Pro,

If as a solo operator I could net 100K plus a salary, and still only work 40-50 hours I'd be on that like white on rice.... Lets say you net 100K and you get a 50K salary, so in essence your are "netting" 150K. if that 150 is 40% of your gross profits, means you are grossing 375K. if youre average cut is $50.00 that means you are cutting 7500 times a year divided by 30 cuts means 250 customers each week which means you are spending 9.6 minutes on each lawn for a 40 hour week or 12 minutes for a 50 hour week. wich means it woudl be even less time as you still have to do your billing, equipment maintence, ect.

A solo or a small operation still has the ability to work out of the home/garage and do some of the mundane tasks on the weekend or at night(hours which usually get forgotten when crunching numbers)

when you get bigger you loose that home base option and you end up with a "storefront" storage space, ect which means that you are still chargingt he same amount but now you have actually money going out the door to pay rent and such...Something most home basers dont really do.

if you could work 40 hours and make 150K net or work 40 hours and make 300K net for essentially the same job which would you choose? Personally I'd be the greedy SOB and take the 300.

brucec32
09-12-2006, 11:34 AM
About 10-15% turnover here. Causes are:

1. The vast majority. Me ditching the customer because of slow paying, difficult lawn conditions (continually swampy spots, new fences put in with narrow gates, etc), or other PITA factors.

2. Customer dying

3. Customer moves

4. Customer loses a job or retires and wants to do it themselves.

5. Customer has a child come of age to the point they can do the job.

6. Virtually none are quality or price related.

I'd take a look at my pricing, quality, and possibly too-onerous terms and conditions for a solution. But it'd be easier to just call them up and ask.

Customers who go for the fert/squirt/mow option are perhaps less price motivated, and hence won't cancel for that reason. And by price, that also means things like having to pay for cuts in drought conditions, paying for cuts early/late when the lawn may just not be growing, and paying weekly when their lawn/grass type doesn't require it.

That statistic you gave is valuable. It tells me that perhaps anyone who is price sensitive doesn't like the value they're getting. So you can either concentrate only on the full service customers, or you can modify your price/terms to better serve the lower end ones. The one-size-fits-all approach may not be the way to go. Why not modify the terms/prices based on the customers' needs? For example. If they balk at signing an annual contract, let them. Just charge 10% more. Or rather, offer a "discount" for a contract.

I have found that you can force a square peg customer into your round hole business plan through a hard sell or charm, but they will immediately start looking for a square hole LCO and will replace you when they find one. One reason I don't toss out high bids to PITA people is that I know that even if they take it, they'll eventually become a mid-season cancellation. I think trying to find mutually agreeable price/terms will make customers long term ones.

In business school they told us to first identify the demand, then determine how to fullfill it. Not the other way around.

Btw, I am not sure on your policy, but I make far more per season on a biweekly customer than a weekly one. The key, of course, is to do it only when appropriate, and not try to maintain a really nice lawn cutting every other week. I know many scorn them. But weedpatches and sparse lawns, why not? Two customers filling a weekly "slot" that each gets 20 cuts a season is the same as one weekly customer getting 40 cuts. While a weekly customer here may only need cutting 32 times. So I'm way up with the biweeklies. And since I charge about 25-35% more per cut I cover my additional time on-site. I also find that most bi-weekies are not very quality oriented, and you may find that a better match for employees. I like getting to a lawn and not having to work so tediously. Gouge a spot with a ZTR? Big deal. They don't even notice. Also, this type of lawn can be done faster with big mowers, saving labor costs. The downside of big mowers, quality problems, is removed since they usually don't care about minor flaws in the cut. Crummy thin lawns are also easier to mow when wet. So I find having them in the mix helps me have lawns to mow on wet mornings. Of course you may not have big rectangles of weeds like we do here. The smaller the lawn, the better quality people expect, biweekly or not.

I do have slightly more cancellations with them, since they are sometimes marginal financially, but it is still low and the higher profitibility makes up for it. But some of my biggest deadbeats have driven bmws and mercedes and live in the fanciest houses.

Az Gardener
09-12-2006, 11:39 AM
DFW, I think the freebie to get started is a good idea. I might start off by limiting it to the clients that are owners-vs-renters or at least track it that way. I think you will have more success from the owners. The other thing that may come into play that you wont see from a spreadsheet is how do your lawns compare to others in the neighborhood. If your client is the only one on the street fertilizing and suddenly he has the best looking lawn that may be hard to stop. If its a mixed neighborhood he might be the only one to notice so whats the point. Whatever the results I hope you will share them with us.

Tharrell
09-12-2006, 02:08 PM
April 1st, May, June, July, August-Sept 1st. That's 5 months, you're not doing as bad as you think!

dlm17
09-14-2006, 09:01 PM
After Reading All These Responses It Seems To Come Down To How You Feel Comfortable In Your Buisness I Only Do 50 Accts All Acres Fully Landscaped Approx 40 Cuts Per Year. Fert, Irrigation, Mulching And Landscaping I Keep A Crew Of Five Busy Year Round And I Would Be Upset If I Lost Ten Percent A Year