Hosted by Mark Bradley
We all worry about losing work on price. The industry works too cheap. Your competition works too cheap. Your customers are too cheap. In this industry, you hear it everyday.
The best advice, unless you’re really big and/or enjoy a major cost advantage, is not to compete on price. Cutting your profit margins in the landscape industry, where profit is rare, is a sure-fire recipe for disaster. So what do you do?
There are several ways to setup your business so that you don’t compete on price, but lets look at the one of the most important ways: differentiation. If you can differentiate yourself from your competitors, you don’t have to compete with them on price. You offer something more, but more importantly, something different. The following video is from Mike at Toilet Paper Entrepreneur and is one of the best quick explanations of what differentiation and how to apply it that we’ve seen. It’s definitely worth 7 minutes of your time:
Click here for more of Mike’s site, Toilet Paper Entrepreneur.
Assuming you’ve watched the video, remember the apples? Each type thinks they’re different, but they’re all apples. They are experts on what they are and what makes them different – they live and breathe apples! The customer does not. To a customer, especially a customer who was picking out apples for the first time, they’re all apples. It’s the same with landscape companies. Most consumers doing projects under $100,000 are looking for value, but can’t differentiate much between landscape companies. They all say they specialize in outdoor environments. They all have some history. Other than a building a rapport with the owner/salesperson – what other differentiators do you offer?
Which is how you need to look at your sales and marketing. You are an apple. If you’re in the design build industry, its very likely that your customer has never tasted an apple before. They’re standing in the grocery store aisle, looking at the colors and the prices. The nicest looking skin combined with the cheapest price is going to get the business. In the service industry, your customer is the husband sent to get apples for a pie. He needs a lot of apples, he doesn’t know what type of apple is best for pies, and they’re going to be cut up and peeled anyway, so he’s going to grab the cheapest one he can.
Differentiation is much more than your slogan. Differentiation is taking the small percentage of your company that differs from the rest of the industry and building a market around it.
A great book that takes you through a process of brainstorming and creating differentiation for your company is Blue Ocean Strategy. Not only does it walk you through a process, it’s filled with interesting examples of companies who’ve taken very competitive markets (wine, airlines, health gyms, lunch restaurants, and more) and created a market for their product/service through differentiation. Highly recommended. https://www.amazon.com/Blue-Ocean-Strategy-Uncontested-Competition/dp/1591396190
Read Blue Ocean Strategy and see if it doesn’t inspire you to redefine your company to fill an uncontested void in the market. And in the meantime, here are just a few other ways you can differentiate your landscape company…
- Lifestyle – your product/service will enhance your customers’ lifestyle. (check out the YouTube videos for Aquascape (https://www.youtube.com/user/Aquascape4) or Unilock (https://www.youtube.com/user/PavingstoneExpert#p/u/19/IxpNHwNsRNM))
- Innovation – your company does new and exciting things (think modern, fascinating landscape designs, or the recent wave of eco-friendly ideas in the service-type markets)
- Security – offer written specifications in your estimates, clear contracts that cover contingencies, and the best guarantees in your market. If you’re in the service industry, can you guarantee you were exactly where you said you were? (think GPS location tracking, the warranties and return policies offered by companies like Nordstroms, Sears, or Zappos’ 1 full year shoe return policy)
- Prestige – this is a hard one – it takes time and money to build up industry credibility and recognition, but combine a luxury-looking brand and website with a long list of awards and recognitions to develop a prestige brand (think Jaguar or Cartier)
- Education– educate your customers better than anyone else in your market. Take more time to teach of the possibilities, the expected results, and the potential problems – and how you’ll deal with them. “An educated consumer is our best customer.” (think design agreements, educating customers on proper installation specifications, post-installation maintenance requirements, teach them why your service is the best value – don’t rush through this thinking your customer will figure it out on their own)
- Speed and Efficiency – bigger crews and equipment can make shorter work. Can you offer your customers the least-intrusive solution on their regular day-to-day life (think shortest completion times, shortest service times, soonest start date)
- Convenience – better payment plans, better add-on services (think credit cards, online payments, seasonal maintenance packages, garden identification and care packages, service tracking)
