Turf Magazine - September, 2012
Contractors' Corner: How to Work with Cash-Strapped Clients
6 Tips to Help Cash-Strapped Clients
1. Acknowledge the challenges clients are facing.
2. Evaluate and appraise your operation and people.
3. Suggest improvements to their enhance properties.
4. Develop partner programs to solidify client relationships.
5. Get inside clients' heads. Know what clients are thinking.
6. Become the low price leader in your area.
As fall approaches and the landscape maintenance season draws to a close in many areas of the country, it's time to begin planning for next year. As a maintenance service provider, you're challenged in many ways, especially with clients operating in a crisis mode. That sounds bad, but it's the way business is conducted in the new economy.
Property managers are seemingly working with ever-decreasing budgets due to many reasons, including vacancies and cash-strapped tenants. Many are operating in crisis mode, so find ways to use it to your advantage. Yes, it can be done, but you have to adopt the mindset that operating this way can help you manage business more efficiently, and even more profitability.
The importance of evaluations
One of the most beneficial things you can do this fall is evaluate your operation. Start with yourself, and go right on down the line from executives to managers to crew chiefs. In your self-evaluation, be honest. Recognize those areas within your management or leadership roles that could stand improvement. (Sometimes I start thinking I'm a pretty smart guy until my wife points out my areas for improvement.)
Consider asking a trusted associate outside the company such as your banker or business advisor for their advice and counsel where you could do better as a businessperson and, also, an associate. If you truly want to improve, you won't take their comments the wrong way. True friends and associates will be frank - and kind. They will have your best interests at heart.
Also, your business plan should include annual evaluations and appraisals of your managers; if you aren't performing written evaluations, start now. There are business and legal reasons to perform yearly employee evaluations. Ask employees where they want to be in three to five years; their response will help in your long-term personnel planning.
The most successful companies ask their managers to provide documented evaluation of all their subordinates, and these should include employee self-appraisals. Try to complete all evaluations by the end of the year.
Clients need your ideas
Clients like service providers that know their businesses, appreciate their particular concerns, and can see the challenges they face from their perspective. Make it easy for them to know that you're working on their behalf. Share ideas for improvements to their properties using photographs and technology, such as computer design layouts.
Don't assume clients will not want to spend additional funds to improve their property. Even if they don't immediately approve your suggestions, they will appreciate you thinking about their properties. This will often lead to additional services and increased future billing.
Become a trusted partner
Look for ways to partner with your clients. Employee activities like sports programs or charity events offer great ways to work with clients without busting the budget. Community involvement projects like landscape beautification campaigns are another way to grow business relationships and build good will with little cost. Today's business is partnership driven, so look for ways to partner with your clients.
Get inside your client's mind
Your account managers should know what your company's clients are thinking. They're your first responders in customer relationships. Get account managers in the habit of reporting everything that affects your business with clients, both good and bad, including recommendations for resolution of issues.
Make sure your managers know that they shouldn't report a problem without offering a possible solution at the same time. The last thing you want to hear at renewal time is that the client has concerns that could have been handled earlier. Clients don't want a lost lease or termination, and you're no different.
Account managers should have a season-ending meeting with clients to determine what they liked and what they didn't like about your services. This should be in advance of the contract renewal meeting. You'll know what's on the client's mind earlier and be better prepared to eliminate a concern or address a price issue. Account managers have to know the best time to schedule this meeting for each of the properties in their book of business.
Have a "Plan B" ready
A property owner or property manager facing serious budget issues often feels the only solution is to cut cost, either temporarily or permanently. Before you let a client cancel, let them know you can adjust your services to meet their budgets. Don't look at this as simply lowering your price under stress, but that you have a solution to help them over their budget crisis.
By letting them know you can reduce your services to meet their needs, you'll get the renewal with a good possibility the client will sign on again to the original contract.
Obviously, in today's economy, you're doing all that you can to increase productivity and reduce operating costs that are vital to your success. Don't be hesitant to share this with those clients who are suddenly tasked with maintaining properties with smaller budgets. They'll appreciate that you're working smarter to lower overall cost to them. Don't let a client's request to drop your prices frustrate you; get creative instead.
As long as you can turn an acceptable profit and perform services at a level that meets clients' expectations, being known as a low-price service provider is not a bad thing.
What client doesn't appreciate the fact that you're managing the business efficiently and at the lowest operating cost?
Rick Cuddihe is president of Lafayette Consulting Co., a PLANET Trailblazer, and he works with landscape contractors to improve their businesses. Contact him at firstname.lastname@example.org.