Landscape Management, October 2010

PACIFIC LANDSCAPE MANAGEMENT PULSE PROFILE I DONT WANT TO BE WALMART FIGHTING THE DOLLAR STORE about 80 companies and really only about four of them are actual reputable companies the rest are fl y by night guys says the president of Prime Lawn Prime Design in Kingwood TX For instance we bid 21000 on a job and someone comes in and bids 13000 How is that even possible So our biggest challenge this year was how to keep our quality up but still compete with those guys You dont want anyone thinking your quality is poor How does Griffi n prove quality Past history We can tell them all we want that theyre wasting money on going with the cheap product or the cheap company but you have to back that up he explains When you pull out 12 to 15 pages of references you know nobody will call them all maybe not even one But we do pride ourselves on having that list and that knowledge LM TOP SUCCESS BLOCKERS 1 Prolonged recession 2 Lowball underpricing competition 3 Rising taxes 4 Rising fuel prices 5 Rising health care costs 6 Continued housing market challenges 7 Poor consumer confi dence Bob Grover OCTOBER 2010 LANDSCAPEMANAGEMENT NET S15 PRICE TAGS 2009 2010 Residential mowing 3798 3753 price visit 120 drop in residential mowing price Commercial mowing 21349 20340 price visit 473 drop in commercial mowing price Irrigation maintenance 6785 6762 price hour 034 drop in irrigation maintenance price SOURCE LANDSCAPE MANAGEMENT In Bob Grovers eyes the industry is teetering on the edge of becoming a commodity We fi ght hard not to act like were becoming a commodity says the president of Hillsboro ORs 6 million Pacifi c Landscape Management I see our customer base acting that way though just thinking theyll bid out the work every year and see who is most aggressive For Grover this is discouraging as pricing for his 100 commercial client base has decreased 5 to 10 The day this industry becomes a total commodity I dont want to be involved he says I dont want to be Walmart fi ghting the Dollar Store Instead of whining though Grover is looking for ways to improve effi ciencies so he can cut prices in a smart way A question he asks himself everyday Can we resist becoming a commodity His fi rst step In our effort to cut our cost structure so we can stay competitive we need to learn how to do so intelligently so we arent cutting it so close that we are just becoming a low cost operator that cant perform he says Thats our biggest challenge Its easy to say lets cut cut cut but we need to learn to do it the right way For instance not assuming what the customer wants but having a conversation with them and asking them specifi cs so we can understand their investment perspective Instead of following what the low cost operator model in his area tends to do which is bring in maintenance at a low cost and make their margins on enhancements Grover is looking at services in which he can create market supremacy offering something other companies dont Sustainability is a good example People want to be green but there arent enough people who want to be green just for greens sake that touchy feely feeling doesnt last very long Grover says It has to relate to solving a problem or saving money And weve been a leader in sustainable practices in our area Weather based irrigation has also been a successful add on service for Pacifi c Landscape as a means of helping customers save money on water In the whole price reduction equation Grover says the interesting part is nobody is saying theyre willing to put up with less work so were doing the same work for less pay Luckily Pacifi c Landscape is fi nding some commercial clients who are tired of the bid thing he says We have had some success in picking up work that went to a commodity and is coming back out of it because they do have an expectation of quality That has given us some encouragement