It's All About Value
Pittsburgh's Eichenlaub partners with clients who appreciate quality
Eighty percent of Eichenlaub's revenues come from high-end residential clients and the other 20 percent from commercial, institutional and industrial.
Photos courtesy of Eichenlaub, Inc.
Dan Eichenlaub says when his customers are shown the value of his firm's property management services they usually stay with him for the full year. Because clients recognize the value, they pay a fair price for it. This results in increased profitability for his Pittsburgh, Pa.-based Eichenlaub, Inc.
"By selling landscape management as a bundle for the entire year, we reduce our overhead costs, and in many cases, save money on our material purchases since we negotiate for a larger guaranteed quantity," he explains. "The result is that the customer pays an appropriate amount for the value-added services, and with the savings, we earn a higher gross profit. Then, with lower overhead, we can bring a higher percentage of net profits to the bottom line."
Eichenlaub calls this strategy "smart growth," proactively seeking customers who value the services he sells at the margins necessary to achieve his goals. This can earn his company up to five times the average net profit of his peers.
"Our financial report projections and our resources (labor, equipment, and materials) planning are made easier because we know what each customer needs for the entire year," he explains. It also helps with bulk purchases by knowing what customers want for the entire season, for example mulch and seasonal annuals.
Owner: Dan Eichenlaub
Headquarters: Pittsburgh, Pa.
Market: Metro Pittsburgh
Services: Landscape design, installation, seasonal clean-up, maintenance, irrigation and lighting
Website: http://www.eichenlaub.com http://www.hewson-landscape.com
Eighty percent of Eichenlaub's revenues come from high-end residential clients; and the other 20 percent from commercial, institutional or industrial properties. For the past 15 years, the company has been moving away from less profitable commercial projects. Full-service maintenance is 40 percent of its current revenues; installation is 60 percent.
"Although our focus is residential, we will not turn down major commercial projects," adds Eichenlaub. These often include major installs such as rain gardens, water features, irrigation systems or re-covering athletic fields. The work is value/performance driven rather than by price.
Eichenlaub confesses that this smart growth strategy comes with its fair share of challenges. "This strategy takes time, needs carefully-constructed processes and systems developed over several years, and requires additional training to achieve such goals. Everyone, including the customer, employee and the business has to win for there to be success."
Creative Solutions team
The Eichenlaub system includes the formation of a Creative Solutions team headed by a business development manager and four landscape consultants. The consultants create the solutions proposed to the customer whether landscape construction or landscape maintenance. Three account managers and three project managers comprise the Operations Team that works with the field crews. Many members of the Operations Team are certified specialists in such areas as hardscape and irrigation. A registered landscape architect supports the consultants with designs and 3-D images.
Eichenlaub can set up a customer landscape management program for the year, everything from a simple seasonal pruning and yard clean up, to a monthly plan tending to water features and intricate irrigation and lighting systems, to weekly lawn mowing and fertilizing and pest management.
Dan Eichenlaub returned to his family business in 1980 and took over its leadership. He successfully grew its landscape services.
"We develop ongoing service agreements for each client," says Eichenlaub. "Clients might want to cut their own grass or plant their own flowers. Some don't care about their lawns but want their shrubbery to be perfect. We learn about all that up front."
Once the agreement is in place, account managers take ownership of the customer relationship, overseeing their landscape management needs. On at least a quarterly basis, the account managers perform a "Care Call" to ensure the company is meeting, if not exceeding, customers' expectations. The account managers will then get together with crew leaders to discuss any problems. Account managers tweak the service agreements over time allowing for client service flexibility in their annual contract.
Eichenlaub employs 55 people with crews working full time for nine months of the year "Most years we can keep our crews running 'til Christmas," says Eichenlaub. "Then we'll start them up again in March for spring cleaning."
One of the keys to Eichenlaub's 98 percent employee retention rate is offering employees a formalized enrichment-training program to enhance their trade skills. Eichenlaub develops and offers this "hands-on" training at different times throughout the year. "Our employees know they will increase their value at the company with pay raises and more responsibility when they want to train for various certifications," says Eichenlaub.
In 2005, Eichenlaub started a relationship with LandOpt business systems to develop its management processes. "LandOpt has helped us to better understand the profile of a successful salesperson and other positions as well," says Eichenlaub. "We have worked hard to hire the best person for each position. In fact, we have been so successful that we have had the top salesperson in the network of LandOpt Contractors (approximately 30 members) for the last several years."
The Eichenlaub company was formed in 1972 with simple systems set up by a humble crew of six brothers who assisted their neighbors with the massive clean up needed after Hurricane Agnes swept through western Pennsylvania. After the storm clean up was over, the brothers continued to service enough yards in their Fox Chapel neighborhood to put them all through college.
Eichenlaub, who had been working in building construction since his college graduation, returned to the family business in 1980 when the company where he was working closed its doors. He took over the company's leadership, moved it out of the family's garage into commercial office space, hired additional employees outside of the family, and grew the landscape construction service part of the business to include hardscapes.
Nine years later, the company built a new 12-acre facility that now includes a 3,500-square-foot office and a 4,000-square-foot operations facility incorporating a mechanic shop. The company owns all of its equipment from excavators and mowers to trimmers and blowers. "We buy our equipment based on functionality and not price, although we do always look for the best deal," says Eichenlaub.
Eichenlaub, together with two of his brothers, Paul and Tom, work at the business day-to-day. Eichenlaub is president; Paul is CFO and Tom is a project manager of operations.
The Eichenlaub system includes a Creative Solutions Team is headed by a business development manager and four creative landscape consultants.
"Each one of us brothers has a unique role that doesn't overlap," says Eichenlaub. "Although we carry the name of Eichenlaub on the job day-to-day, we are employees like everyone else. At the board level, however, it's a different story."
Giving back to the industry
Eichenlaub stays busy outside of his landscaping company's borders, recognizing that networking is key to growing his business. He chairs the Board of Directors' of the Pennsylvania Landscape & Nursery Association (PLNA). Since 2004, his company has earned at least one PLNA Award for Excellence in Landscape Maintenance every year. He is also on the Board of Directors of the Pittsburgh Botanic Garden, overseeing western Pennsylvania's first comprehensive botanical garden, currently in its first phase. Additionally, he serves on the Building and Grounds Committee for the Carnegie Museums of Pittsburgh.
In 2009, Eichenlaub was appointed as one of two industry representatives to the Pennsylvania State University Council for Agricultural Research, Extension and Teaching Association of Public and Land Grant Universities (APLU) as an external stakeholder advocate for Land Grants. The Pennsylvania Secretary of Agriculture has appointed him to a committee responsible for updating Pennsylvania's fertilizer and soil amendment laws. With a passion for working towards continuous improvement in government, Eichenlaub has worked with local, state and federal legislators, from informal meetings to testifying before congressional committees.
Eichenlaub's direct involvement and leadership with landscaping-related professional associations and government entities has given him a positive perspective on the future of the landscaping industry.
"Our industry is very robust again for professionally-operated businesses," he observes. "There are a lot of opportunities to build a rewarding career in this industry. Unfortunately, the average student choosing a landscaping career doesn't realize the potential. I don't think our industry is doing a very good job of getting the word out about this."
Eichenlaub adds, "I am fortunate to have my landscaping business located in Pittsburgh, now one of the top five economically viable cities in the U.S. This new economic reality is driving the workforce, including landscapers, to new all-time highs over the past year leading with demand from new residential condo and single family home developments both in the city proper and the surrounding suburbs."
For the past 20 years, Tom Crain, based in Akron, Ohio, has been a regular contributor to B2B publications, including many in the green industry. Contact him at email@example.com.