assessing your business strategy

Discussion in 'Business Operations' started by tonygreek, Dec 4, 2004.

  1. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,479

    i referenced this article in a thread a month or so ago, but thought i'd throw out a link to the whole thing. it relates to "What are we willing to do that our competition won't do?". lawn service is a commodity, like it or not, and as such, this quote really captures the essence of differentiating yourself from your competitors. I call it the "Small Backyard Gate That Other LCO's Won't Hassle With Theory" :) :

    "Extraordinary companies transcend commodity by offering more than just a product (or service). They defy comparison by doing what their competitors can't or won't do." - Heather McCune for Professional Builder Magazine, 10/2004

    while the article is geared towards the home construction market, the above quote is more than enough food for thought for any field.

    http://www.housingzone.com/topics/pb/management/pb04ja001.asp

    tony
     
  2. Mark McC

    Mark McC LawnSite Bronze Member
    Posts: 1,565

    It's an interesting notion, differentiating oneself from the competition. Sometimes, all you have to do is call people back promptly.

    I wouldn't debunk the theme of McCune's article, but information on the competition in our business is not easy for customers to obtain. You can look at homes built by a number of homebuilders in a day, but most won't drive around looking at mowing crews at work or asking people how they feel about Smith&Jones Lawn Care.

    For the bargain hunter, price is the most important feature, at least at the beginning. Once a customer gets fed up with lousy service, the price issue slips into secondary status behind reliability and quality of service.

    How do I intend to differentiate myself from the competition next year? Tough to say because I cannot really evaluate the service other companies offer the way a homebuilder can. Getting a feel for the competition is dependent on second-hand information from clients, which is notoriously unreliable. That's why we tend to get stuck in the price competition mode: We have little other information about the competition's service.

    Regarding "small backyard gates," it's tempting to turn down work because of obstacles, but the smart operator sticks with the hourly rate and quotes accordingly. I try to avoid having to drag every last piece of equipment off the trailer, but if they're willing to pay, it's no biggie.

    To my way of thinking, it's best to market like crazy, price aggressively, keep the service top shelf, and offer more services over time. Anyone who can offer "one-stop shopping" will usually thrive, all else being equal.

    On the other hand, communicating like a business owner will put you above a lot of the competition because this industry draws a fair number of people with the social skills of a bagel. Still, I don't have any gee-whiz notions of creating my own category. Beyond what I've already discussed, I'm not sure what I'd do to create a category of my own.
     
  3. Dman1214

    Dman1214 Banned
    Posts: 118

    Tony excellent thread. It cuts to the heart of the matter. Our business is not about your agronomic program or what mower you use, rather it is about the business of business. First, I absolutely agree that we have allowed our industry to become a commodity (I am a lawn fertilization guy - so I'll stick to what i know). I refer to it as the "Trugreen effect". they sell on price and only price - when is the last time any of there sales monkies talked about the products they use or their response time to service calls, etc? Because of their marketing machine, the customers become conditioned to talk only about price. then the competion (most of us), get sucked into the trap of comfirming the preconcieved notion that we're all the same with the customer, ourselves matching TG and selling price not service- thus your commodity theory is proven. (obviously a commodity is bought mostly/all on price.) I for one, firmly believe that a service like ours, with the many intangiles and opportunities we to be unique, should NEVER BE A COMMODITY BASED BUSINESS. You can, without question, postion yourself to be a company based on PREFERENCE. You do this through differentiation. Got to go will post more later.
     
  4. Littleriver1

    Littleriver1 LawnSite Senior Member
    Posts: 811

    Reliability is how I intend to differentiate myself from the competition every year. Most new customers in the mid season come from 2 places. New home owners and unreliable LCO's. People will pay more for reliability.
     
  5. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,479

    Dman, as you pointed out regarding commodity, the initial parallel i drew when i read this article is the infinite number of times i've read on this site "i won't drop the gate on my trailer for less than 35", which seems to be the benchmark price i've seen in my area for a "standard" size yard. same price from most everyone, so what's the differentiator and drawing point beyond "you returned my call", which btw, is sad that it really is a differentiator. isn't it amazing how many people are actually thankful of a return call, Mark McC?
     
  6. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    I think you need to focus not so much on what your competition is doing so much as you need to think "What do my customers want/need". I service what you would consider "average" lawns (even though they are often $500k homes and up- that's average for NoVA). I always hear customers say "I just don't want to think about my lawn". That's why they hired someone to do it.

    Most customers like this, their primary goal is to keep their property looking nice. You can sell them additional services beyond the basic mowing, but they often balk when confronted with a quote for a $400 mulch job. What I'd like to offer for next year is a package deal, where they get the mowing, fert, hedge trimming, bed maintenance/mulching, leaf removal, etc., on a 10 or 12 month contract basis. I plan on sending each customer a proposal of "what they need" for the year to keep it looking nice. This way they don't have to think or worry about certain aspects of their property being neglected.

    I'll be trying to stress the "convenience" factor as a reason to have a package service. Customers like convenience, even if they end up spending more money in the long run.
     
  7. Mark McC

    Mark McC LawnSite Bronze Member
    Posts: 1,565

    isn't it amazing how many people are actually thankful of a return call, Mark McC? Tony, it is, and that backs what I mentioned about social skills. On the other hand, this is something that helps me out. As MicroSoft might say of Apple, one of the best ways to succeed is to have knuckleheads for competition.

    Hoolie, it's funny how small the lots are in some places and how little lawn is left after building the 5,000 sf house, which will be inhabited by what, three people? My grandparents would just flip out if they were alive to see this.

    On the package proposal, Hoolie, I like the idea but will give them a check-off of services they want. The flip side of that coin is that if I can't get them to sign up for the whole enchilada right away, I can try to sell them again later in the year on hedge tirmming, fertilization and so on. I don't see any reason to lose a sale because I pushed a comprehensive package too hard. I'm sure that's how you handle it, too, but we don't often discuss our approach to a sales call here on lawnsite.
     
  8. HOOLIE

    HOOLIE LawnSite Gold Member
    Posts: 3,981

    Yeah, I don't plan on making it an all-or-nothing package. Really would like to push the fert plans, hedge trimming. I don't really like doing mulch very much...LOL, so I don't push that service as much. The customer could assemble a package any way they want. I figure if you give the customer the prices and monthly cost and put in right in front of their face, you should get a better response. So many busy people around here, if it doesn't hit them upside the head they don't think about it.
     
  9. Mark McC

    Mark McC LawnSite Bronze Member
    Posts: 1,565

    I think of mulching as a source of income at the beginning and the end of the season. Yeah, it is a drag, no argument there. Makes my back feel about ten years older than it really is.

    Interesting comment about people not thinking about these landscape maintenance issues unless we remind them. I didn't push that at all this first season, so it'll be interesting to see how they respond when I put that sort of thing in estimates next year. Hoolie, what percentage of your 2004 customers had just straight lawn care?
     
  10. tonygreek

    tonygreek LawnSite Gold Member
    Posts: 3,479

    speaking of reminding people of what they need, and what you offer, i'm currently working on mock-ups of restaurant-style menus of all of our services and products. i'm a hobbyist chef, with friends who own several restaurants, and thought this would be a fun way to tie-in my hobby. prior to naming my new umbrella company "Curb Appeal: The Exteriors Company", the other finalist was "Gourmet Exteriors". gourmet lost for the reason of having to explain the esoteric reason that we actually aren't an outdoor kitchen company.

    i guess this would fall under the "differentiator" between myself and my competition as we do fixed-pricing for our windows, gutters, siding, etc. so laying it out in menu-style may be an interesting way to present it.

    tony
     

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