Source: www.TurfMagazine.com
Position yourself for recovery
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At a time when the economy seems ready to resume some normal activities, this might be a good opportunity for the sod industry to look at some ideas for marketing. According to Alan Hodges, it is a good idea for a company, and the industry as a whole, to position itself for the recovery.
Hodges, an extension scientist and economist with the University of Florida food and resource economics department, says the sod industry is still suffering from the effects of the recession and the harsh housing market. In fact, he doesn’t expect the industry to get back to normal until at least 2013. A conversation with a contact in the Florida sod industry was indicative of the strain.
“A lot of his producer-members are really hurting. Some of them could even go out of business,” Hodges says. Still, the housing market is picking up a bit, and things won’t be this bad forever. “The signs are starting to look more positive.”
All the more reason to take Hodges back to a series of reports that he and his then-colleague John Haydu wrote a while ago. They looked at market expansion strategies for turfgrass producers in eastern, central and western regions of the U.S. The reports, initially funded by the International Turfgrass Producers’ Foundation, outlined some problems facing sod producers who want to sell more product, and came up with suggestions for overcoming them. Those are important now, because a company that positions itself for an expansion in sales and operations at this time may be able to take advantage of the recovery.
The surveys conducted for those reports, the conclusions of which are still relevant today, indicate that sod is an unusual product. A high percentage of it is sold directly to the end user, without passing through a wholesale or retail outlet, and it is a highly seasonal business with most sales in the spring and summer. Surveys of buyers indicated that the most important qualities of the product were, in order from most important, quality of the sod, price, availability of supply and ability to deliver to the site. The features liked least about sod were the high initial cost, high labor requirements and that it is a heavy and dirty product.
Interviews with buyers indicated that the major gripes about sod were its availability and cost. They also complained that delivery was a problem in that large orders were necessary to bring per-unit costs down. Finally, quality was an issue. Consistency of quality, both within one company’s deliveries and within the industry, was low, with complaints about issues such as immature harvest and sod purity being common. Buyers also wanted producers to reduce contamination from weeds and diseases, as well as make the product less perishable.
“We heard lots of complaints from the buyers that they weren’t sure what they would be getting,” Hodges says. Weedy or dried-out sod discourages purchases.
With that feedback in mind, Hodges and Haydu came up with some suggestions on how to better market sod. Those ideas are still relevant today, Hodges says, and may be even more important as the industry prepares for an economic recovery. In general, they are valid for every region of the country.
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One suggestion was for sod producers to partner with landscape architects, designers and developers to form better lines of communication and promotion. Simple education strategies aimed at showing those users what sod is all about, comparing costs with seeding operations, and educating them about new and different types of turfgrasses could influence designers to use sod more in their plans as well as encourage developers to buy more of it.
“Get to know some of the leaders in your market area and develop a relationship with them,” Hodges says. Pry them with facts about the benefits of sod. A developer may not know, for example, that sod is a miniscule percentage of a house’s total cost, but good landscaping can contribute from 7 to 11 percent of the resale value of a home. Additionally, sod cuts down on the dirt and mud that aggravate owners of new homes.
Another suggestion is to diversify the distribution of sod. Find more ways and locations to make it available to a wider range of customers and meet what is deemed to be a “large unmet demand for sod.” A specific example would be to partner with a garden center or retail nursery, and find out what closer cooperation and communication between producer and retailer can do.
As the reports indicate, and Hodges emphasizes, more sod could be sold if access to sale sites were more available to buyers. Specifically, buyers from homeowners to contractors would buy more sod if they could buy it in smaller amounts and be able to pop in and purchase it locally. And, the owners of garden centers and nurseries would sell more at retail prices if they could order less at a time and sell it in smaller lots.
“They can’t sell a whole truckload of sod in a week,” Hodges points out, and they won’t buy it if they have to buy large amounts. Sod is a perishable commodity that diminishes in quality over a period of days, and retail centers would like smaller orders they could sell while it is still high-quality. “Some garden center managers tell us that some customers want to come in and buy one piece of sod.”
Those kinds of sales are difficult, logistically, but a turfgrass producer who could find a way to accommodate retailers could reap the additional benefit of higher prices for his product. More landscape contractors would buy sod over seed for small jobs if they could find it at the convenient local garden center. Collectively, many small orders can add up to significantly higher sales, and overall sod buying habits can be changed. This is the kind of innovation that is needed for the movement of more sod.
Advertising is another element, along with general education, that could help expand overall sod marketing. Hodges says many sod producers don’t do a good job of advertising their product, but if contractors, developers and homeowners could see advertising that talked about sod as a convenience, and explained the different turf types and uses, they might buy more of it. Sod installation often costs no more than seeding when long-term costs are analyzed, and that can be a selling point along with convenience.
He says that, unfortunately, advertising costs are often cut when not much sod is moving due to economic circumstances. “I think that’s absolutely the wrong strategy,” Hodges notes. There are markets out there for sod, and hiding its assets is not the way to encourage sales. Market analysis, either on a local or regional level, would be a good way for a sod producer to discover new sales opportunities. Such an analysis could be expensive if conducted with a marketing consultant over a wide area, but more simple analyses can be done by the producers themselves.
For example, a short evaluation form surveying existing customers on problems and needs is cheap and has proven effective with growers in the state of Florida. Incentives, such as a 5 percent discount on a future order, is helpful in getting surveys returned. Producers should also find a way to determine the customers or potential customers who will be “quality” customers and contribute to the producer’s bottom line.
“Use the information to develop a realistic marketing plan,” he suggests. This could also be a simple, target-specific plan developed within the company, and would become more valuable over the years as it was monitored and changed according to results of surveys and marketing success or failure.
One goal of any new marketing plan should include the targeting of sales during off-season periods, Hodges says. His reports indicated that there was pent-up demand from consumers during the early and late parts of the normal sod growing season, especially in northern states. There could be solid sales increases in these “shoulder seasons” if producers grew more sod for availability during those periods and marketed it accordingly, and this would have the added benefit of maximizing the use of growers’ land and other resources by expanding the growing season.
Hodges says that it has been years since these studies were conducted (all three can be accessed at http://economicimpact.ifas.ufl.edu), but there is no reason to think that there have been massive improvements in market expansion efforts in the sod industry to date. In fact, as the economy improves in the near future, all indications are that those old ideas are not only sound, but they also offer opportune advice on how to ride the next wave of expansion as it opens up.
Don Dale resides in Altadena, Calif., and is a frequent contributor to Turf. He has covered the green industry for more than 10 years.