By Richard Lahren
Many landscape contractors today lose focus on what it takes to sell a landscape. It all starts with one question, what are you selling the customer? Are you selling them a paver patio, an outdoor kitchen, a fire pit? The list goes on. Primarily, you must sell yourself to the client. Once you’ve accomplished this, everything else is easy.
Understand what the customer needs, listen to his or her wants, and then properly prepare a design and estimate that is within the client’s budget. Consumers are not always looking for the best price; they need peace of mind in there purchase, a contractor that is credible, honest and experienced. Don’t be scared to ask the client what his or her budget is; it will save you a lot of time and energy. You may have to value engineer the project if necessary. Think of yourself as a problem solver. Sometimes all they want is a reputable company they can count on when they need something.
Think of five reasons a customer should choose you for their next project and write them down. Use them in your marketing materials, and stick to them. If you call the client back the day they called, you may be ahead of 80 percent of the competition. I hear it every year from customers that a contractor never gets back to them. The faster you get the design and bid back to them, the better the chances are of closing the sale.
Persistence pays off
All photos and charts courtesy of Richard LahrenPersistence and patience are needed when working with clients on projects, especially if it is a large dollar amount. They may need time to mull it over and think about it; other distractions may become a factor. Their career may be a challenge when trying to set up an appointment, scheduling a walk through, or closing the sale. Professionals are often difficult to contact. Determine which type of contact works best for your client — whether it is via phone, e-mail or face to face. Getting both husband and wife together can also be difficult. I always make sure every person involved in the decision making is going to be at the appointment when closing the sale. You may need to set a time and date for an appointment that is convenient for them, not you.
On larger construction projects, the general contractor or subcontractors may be more of a priority at the time than the landscape contractor. Don’t get frustrated and give up, you have invested a lot of time in the design, as well as the estimate. Industry statistics say that it may take up to 7 or more meetings with a client to close the deal. If you give up before the seventh contact, you may have just given the project to the next contractor. Communication is key — always keep in contact with the client from the project’s design to its completion. Following up with a client years later may even develop into a new additional project.
A client may call up to three landscape contractors to bid on the same project, and they usually receive two or three estimates that are all over the board. One or two may be within 15 percent of each other and one is 40 percent less or more. Why? The first answer is one contractor doesn’t have the overhead expense the other company does. Overhead is one factor in the spread of one bid against another, but it shouldn’t be. If one contractor is working out of his house and the other has a shop, doesn’t the one working out of his house want to have a shop someday?
Another reason is the landscape industry has yet to have a standard estimating system such as those used in other service industries. Take the insurance industry for example, you get into an accident with your vehicle, the insurance company wants you to get two or three estimates. Every estimate was within 10 percent of the other. This is because they have a standard system in place that estimates production hours for everything. The landscape industry does not do this very well. There a few programs available that are close, but we still need to see the estimating system that will revolutionize our industry and bring it up to par with insurance companies, electricians, mechanics, etc. Whether they are production hours, tasks or assemblies, most successful landscape companies use these every day in their estimating and goal setting.
Know your costs
We continue to see a vast majority of landscape contractors who do not know their costs. Ask yourself these questions: Do you know what your laborers cost you per hour directly and indirectly? What does your skid-steer loader cost you per hour to operate? What is your overhead cost per day? Can you properly forecast revenue for the upcoming year? Do you set daily, weekly and monthly revenue goals? Do you have benchmarks in place to see if you are meeting those goals? These are all important aspects that need to be addressed in able to be successful in the landscape contracting business.
If you cannot answer these, seek out someone to help you. State landscape associations, suppliers and manufacturers all offer seminars and training on various standard landscape business practices. And don’t be afraid to ask another contractor for advice.
Overhead recovery systems have been available in our industry for quite some time, and still many contractors don’t know of them or don’t use the right one for their business. The following are four systems used in our industry:
Single Overhead Recovery Systems (SORS)<BOLD]
Percentage added to cost of project
Dual Overhead Recovery Systems (DORS)<BOLD]
Percentage of overhead recovered by materials
Percentage of overhead recovered by labor
Multiple Overhead Recovery Systems (MORS)<BOLD]
Time-based Overhead Recovery Systems<BOLD]
Overhead Markup per Hour (OPH)
– Overhead markup per man hour
Overhead Markup per Crew (OPC)
– Overhead markup per crew day
I have studied them all, and they all can work depending on what type of contractor you are and how disciplined your operation is in implementing them. I use a combination of DORS and OPH as they work best for me. The most important thing is that you know what it costs you per day to be in business, only then you can estimate jobs correctly and make money.
Richard Lahren is the landscape division manager for Hebron Brick & Block Fargo N.D., past president of the North Dakota Nursery and Greenhouse Association, MNLA Certified Professional and industry speaker. He can be reached via e-mail at <ITAL] w:st="on" firstname.lastname@example.org