In a mature industry, how will you as a lawn care company owner continue to add to your customer count? Also, how will you deal with the increasing number of regulations to restrict the scope of your services and reduce your revenue stream?
These are the biggest questions facing you and the professional lawn application industry as a whole. How you respond to them will largely define not only whether you will be a winner or loser in tomorrow’s lawn care market, but also the size and vitality of the industry itself.
To this point in the industry’s half-century-plus history, most small, tightly run lawn care companies have fared well in their local and regional markets. This is the truth even against national companies — first ChemLawn and then TruGreen, which acquired ChemLawn in 1991 and has gobbled up many much smaller operations since then. (If you can’t beat ’em, buy ’em?)
But, as Bob Dylan reminds us, “The times they are a-changin.” It’s as true today as when he first warbled that anthem in 1964. This is especially true in regards to demographics.
Scott Frith, CEO of Lawn Doctor based in Holmdel, New Jersey, sees “an emerging trend” that suggests millennials are less interested in homeownership than their predecessors and increasingly favoring city dwellings to mortgage commitments.
“Engagement with this customer segment is critical to the long-term vitality of the industry,” says Frith. “The industry needs to fully embrace the current customer while also looking for unique ways to develop brand relationships with the buyer of the future.”
“Millennials have different values and see the world as a much more delicate place that needs protecting,” adds Harold Enger, director of training for Illinois-based Spring-Green Lawn Care. “We need to be more sustainable in our program offerings and in which products we use.”
Increase the purse
This past April 13, in announcing the completion of his company’s merger with Scotts LawnService, TruGreen CEO David Alexander said the new combined company will service about 2.3 million properties, giving it about 33 percent of the market. He then spoke optimistically about TruGreen’s (and the industry’s) chances of attracting some of the remaining 70 to 75 million property owners who do not yet receive professional lawn care, according to comments he made to the Memphis Business Journal, based in the same city as TruGreen’s headquarters.
Even acknowledging the American homeowner’s love affair with their lawns, how realistic is Alexander’s assessment of the industry’s growth prospects? How likely is it that the industry will return to its glory days, or anything approaching them, given the slow growth it has experienced this past generation?
In 1991, Lawn Care Industry magazine pegged the lawn care market at $2.8 billion, meaning the industry grew about $1.1 billion since then, referencing TruGreen‘s estimate of the size of today’s market. This pace is less than half as fast as it grew in revenue the previous 26 years. And that’s not accounting for inflation’s pernicious effects. Today’s dollars buy far less than 1991 dollars.
Long gone are the days when property owners, envying their neighbors’ beautiful green lawns, would dash out into the street to request treatment from an application company. Yes, that frequently happened in the 1970s and early 1980s when ChemLawn spread like wildfire from its southwest Ohio roots to become the industry’s first national brand, recall lawn care veterans.
“The 1980s are part of the Wild West days of lawn care,” says industry veteran Robert Mann, training director at The Lawn Dawg, which offers services throughout New England. “Don’t get me wrong, it was loads of fun, but it was unsustainable.”
Sustain the punching power
That the industry has sustained itself for more than a half century and continued to grow (albeit more slowly) says a lot about its ability to overcome adversity, including recessions and unfavorable regulations. But can the same be said about its future?
“I believe as an industry we are in fact approaching (or have reached) our senior moment in time, all while our industry continues to thrive,” says William “Bill” Hildebolt, founder and operator of Nature’s Select Premium Turf Services Inc., Winston-Salem, North Carolina.
While Jennifer Lemcke, COO, Weed Man USA, also acknowledges that lawn care “has tapped into a large percentage of the marketplace,” she remains confident that conditions favor the industry into the foreseeable future.
“As the baby boomers get older and the availability of disposable income becomes more prevalent, we could see an upswing in the market size. Our industry is chasing the ‘do-it-yourselfer,’ and if marketed correctly, the industry could capitalize on the aging trend,” she says.
From its beginnings until now, the foundation of the lawn care industry has been the thousands of small businesses run by entrepreneurial individuals with the ability to adjust to changing conditions and still meet customers’ demands.
Maintain a winner’s stance
The dynamism of the industry has allowed lawn care companies to increase revenue in spite of stagnant customer growth by providing a number of turf-related services along with fertilization and weed control. These services may include lawn aeration, insect and disease control, tree and shrub care, irrigation maintenance and, increasingly, tick and mosquito control.
“The lawn care industry is in full maturity, a phase of the lifecycle that requires real innovation to sustain the growth curve,” says Lawn Doctor’s Frith. “This innovation needs to be focused on relevance as consumer needs evolve.”
Mann of Lawn Dawg agrees: “Growth today comes from recognizing the changing demands of our customers and developing programs to meet those demands. An example of this are programs to counter disease vectors such as ticks and mosquitoes, something I never thought I would be doing when I started.”
And many companies are improving their margins by adopting technology — geo-measuring, GPS routing, ride-on production equipment, sophisticated business software, etc. — to market, sell and deliver their services more efficiently.
But, in the end, all companies — indeed, all industries — must continually add new customers to grow.
Learn to bob and weave online
Weed Man’s Lemcke is encouraged by what she is seeing in terms of customer engagement on the internet.
“We have seen a tremendous upswing in online purchases. Our industry needs to understand the trends and prepare to change and adapt to some of the new technologies that are available,” she says. But this new world of online buying brings its own set of hazards with it, including the risk of “commoditizing” lawn care services by promoting lowest price.
“We need to figure out ways to have customers understand the value of services offered online. This can be a challenge,” she says. “The relationship is hard to build on when done online.”
Similarly, Hildebolt sees both the upside and downside of the digital world. “Successful operators must be savvy in the electronic arenas,” he says. “Social media is having a major impact in all aspects of the marketplace.”
“The internet has allowed the industry to expand its marketing efforts beyond direct mail and door hangers,” adds Phil Catron, president of NaturaLawn of America, Frederick, Maryland. “Websites have allowed the industry to provide large amounts of company and educational details to the information-seeking public.”
Apart from slow growth, the industry continues to be dogged by business-hampering regulations. In fact, every experienced company executive we interviewed put that at the top of his or her concerns.
In 1962, Rachel Carson published “Silent Spring,” which quickly became a best-seller. Carson, a talented writer, in her book documented the detrimental effects on the environment of the widespread use of pesticides. Carson accused the chemical industry of spreading disinformation and public officials of accepting industry claims unquestioningly.
The book’s appearance coincided with the establishment of some of the first regional lawn care companies, such as Lawn-A-Mat on Long Island, New York, which, at its peak, had several hundred franchises in and around the East Coast.
From “Silent Spring” to today, the industry’s use of chemical products (first pesticides, now pesticides and fertilizers) has been under constant fire from segments of the “environmental” community. Far from lessening their attacks — in spite of significant breakthroughs in lawn care chemistry, more stringent EPA testing and approval requirements, and more advanced and targeted application practices — activists continue to actively campaign against the industry.
In recent years, local and regional agencies in the Southwest, Florida and other regions of the U.S. have also begun implementing programs to convince property owners to rip out their turfgrass lawns and replace them with desert and native plants, artificial turf and stones. This has had a harmful impact on the lawn care companies in those areas.
“The greatest roadblock to our industry is virulent environmental activism,” says Mann. “As we speak, municipalities and states are imposing onerous regulations on lawn care companies based completely on false accusations and emotional arguments.” He points to the National Association of Landscape Professional‘s reaffirmed “relentless advocacy” effort as a significant step in addressing misguided activism aimed at lawn care.
“The industry cannot just rely on, as important as it is, lob bying,” says Hildebolt. “It must also be responsive to environmental concerns. We should get ahead of the curve on these issues and ensure that all our operating procedures are environmentally sound and sustainable. Urban landscapes, when done correctly, have major environmental benefits. We should promote this.”
Catron agrees with Hildebolt that legislation unfavorable to the delivery of services is blunting the industry’s growth. But he also believes in some instances it’s the industry’s actions that ignite regulatory scrutiny.
“Our industry has been its own worst enemy on many occasions when dealing with legislation, and in some cases has actually been the impetus that caused legislation,” says Catron, referencing mandatory sign posting as an example. “Had the larger lawn care companies been professionally responsive to the polite requests from non-customers to notify them when the company was going to treat their neighbor’s lawns, sign posting would never have been an issue.”
What can the industry do to combat efforts to take away its use of effective and proven chemical products and restrict water for lawns?
It’s big challenge, but one the industry must face, believes Mann. “We know, without fear of contradiction, that science is on our side, but it’s exceedingly difficult to overcome an emotional argument offered up by people who don’t know what they’re talking about and are unwilling to even listen to rational explanations.”
“It is critical our industry stays united in any and all legislative issues,” Lemcke adds. “Living in a bubble and allowing emotions to dictate our reaction will hurt us in the end.”