SUCCESSFULLY COMPETING IN TODAY’S MARKET
HOW TO BEAT AN OLD ADVERSARY By Rod Dickens T
he adage is old but its meaning is as relevant as ever: “Don’t compete if you don’t have a competitive advan-
tage.” Unfortunately, what was a competitive advantage 10 years ago has changed thanks to an economic reshuffling of the deck and new technologies. The great recession not only caused company owners to revamp their business models, but it also changed the mindset of customers. Not to be outdone, the Internet and social media have created a network where potential customers are only a mouse click away from hundreds of service providers competing for the same piece of the pie. So how does one compete successfully today?
IT’S BOTTOM UP FOR STARTERS According to industry veterans (and survivors of the re- cession) competing successfully begins by knowing your numbers. “Competition in the maintenance market for us hasn’t changed as dramatically as it has in installation,” re- ported Joseph Barnes, marketing manager for Yellowstone Landscape in Bunnell, Florida. “The installation market has definitely become more intense and more price driven. Customers have money in their budget for projects, but since the recession they’ve become more cautious and price sensitive. To compete you have to know your cost of doing business and be willing to walk away if a customer’s focus is primarily on price.” Bill Leidecker, Landscape Industry Certified, owner of
Five Seasons Landscape Management in Reynoldsburg, Ohio, finds himself in a similar situation, although his com- pany offers maintenance to HOA’s and condominiums . “Columbus reportedly has more landscape contractors per capita than any other part of the country,” said Leideck- er. “Customers are buying more on price than ever before and there always seems to be companies in a position to take advantage of that. Most, I suspect, are not even cover- ing their expenses and don’t know it.
“Competition is increasing, but so, too, is overhead. For ex- ample, direct labor costs for us have gone up 16 percent over
the last three years, and that line item amounts to 35 to 40 percent of our cost of doing business.” Like Barnes, he said you need to be willing to walk away if the price is too low. Both Leidecker and Barnes emphasize how important it is to have a good match between you and the customer. “Don’t compete in a commodity market if you don’t offer a commodity product and price,” added Leidecker. “Offer something of real value to customers who appreciate value. Find out what is important to them and offer that as a solution.” To keep potential competitors at bay, he encourages cli- ents and prospects to commit to a three-year contract. As he put it, the board can budget more accurately and be less inclined to look elsewhere. “Qualify, qualify, qualify,” Barnes added. “We want cus- tomers who want quality work. Then we focus on their needs and give them what they expect from us.”
THREE’S A CROWD
Mark Halla owns The Mustard Seed Landscaping & Garden Center in Chaska, Minnesota, a southwest suburb of Min- neapolis. “In our landscaping business, the Great Reces- sion thinned out competitors who couldn’t sustain their business operation. In reality, the downturn created more opportunities for us,” said Halla. “Retail is a different story. Big box stores are still our biggest competition. They say customers can only have two of the following three, but not all three: price, quality, and service. Our experience is if people want price, they won’t be loyal. So we concentrate on quality and service in both our landscaping and retail businesses. “A big part of offering top quality and service is the em- ployee on the front line. We’ve found that hiring people based on their personality and their fit with our company culture weighs more than a resume and actual job qualifi- cations. Again, that’s applies to both sides of our company, landscaping and retail.”
NATIONAL ASSOCIATION OF LANDSCAPE PROFESSIONALS 17
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