The number 13 has a reputation for being unlucky. Jesus was the 13th participant at the Last Supper, the Knights Templar were arrested in France on Friday the 13th and many tall buildings omit the 13th floor. But there’s no need to be afraid of the number 13 in this blog post. In fact, if you tackle all 13 of the tasks outlined below, you’re almost guaranteed to have a leg up on your competition.
Before we dive into the 13 insights we gleaned from the 2015 Green Industry Benchmark Report, let’s discuss how the benchmark report was created. Every year at HindSite we release a Green Industry Benchmark Report based on a comprehensive survey of hundreds of green industry business owners and managers. We crunch the numbers and deliver a 30+ page report highlighting our findings.
What did we learn that can help you get a leg up on the competition, grow your revenue, and make you more profitable? Well, there’s no magic elixir, but the 13 suggestions below should help you distance your business from the average green industry service provider:
1. Invest in Field Service Software
At HindSite, we sell field service software, so we’re intimately familiar with how beneficial green industry software can be to the typical business. But we were surprised by just how much of a difference our software can make. About 25% of the Green Industry Benchmark Report respondents were HindSite customers, and they were much more likely to have experienced strong revenue growth in 2014 than the non-customers that took the survey. Consider:
- 67% of HindSite customers who completed the survey saw revenue growth in excess of 10% in 2014, compared to 35% of non-customers.
- 30% of our customers saw revenue increase by more than 20% in 2014, compared to just 16% of non-customers
The results were less impressive among those respondents who used field service software other than HindSite, but they still performed better than those not using software. We cross-referenced a lot of questions to see which impacted revenue growth, and installing field service software - specifically HindSite - was clearly the best way to predict high year-over-year revenue growth.
If you need help evaluating software, we’ve got a number of guides that can help you:
- Irrigation Software Buyers Guide
- Lawn Maintenance Software Buyers Guide
- Snow Removal Software Buyers Guide.
2. Invest in Training
Want another way to improve revenue growth? Schedule recurring training. Not only does it help you improve the consistency and accuracy of your business, but it can help you grow your revenue. According to the Green Industry Benchmark Report, just 32% of those that don’t offer formal staff training said they’d grown by more than 10%, compared to 47% of those that do offer formal staff training.
So where do you begin? A great way to begin is to schedule an annual day-long training meeting. In many green industry businesses, there’s a significant amount of new employees every year. Throw in new equipment and new customers, and you’ve probably got a lot of things to talk about at your annual training meeting.
But great companies take it a step further. Companies I’ve talked with have implemented customer satisfaction surveys and quality control assessments to try to gather data that tells them where their employees are succeeding and where they are failing. Then, they hold a weekly 15 to 30 minute meeting to discuss those results. It’s a great way to incorporate real-world feedback into your training program.
Need help implementing a customer satisfaction survey? Check out our free eBook, Measuring Customer Satisfaction: The Ultimate Guide for Service Businesses.
3. Get Creative When Hiring
Now that the economy has improved, attracting and retaining employees has overtaken marketing as the number one area most in need of improvement for a green industry business. Interestingly, the vast majority of green industry businesses use the same methods when hiring: 66% say they get their best applicants through word of mouth, followed by Craigslist (9%) and online job boards (8%).
Finding good employees - especially in the green industry - is difficult. Which is why you need to get creative when you hire. Here are a couple tips to help you think outside the box:
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Create a passive candidate pool. A passive applicant is someone not looking for a job. They are a lot more plentiful than people looking for jobs. How do you develop a passive list? It’s all about branding. Put employment ads on social media sites, take out ads in local papers, attend local networking events. Passive candidates aren’t going to help you fill immediate openings, but if you can build up a large enough passive candidate pool over time, you can leverage them for future job openings.
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Hire for attitude, train for skill. If you’re requiring your new irrigation technician have 5 years of experience, you’re probably finding a very narrow pool of applicants. Develop a great training program (see above) and hire for attitude. There are a ton of assessment tools available that help you benchmark the traits your great employees have, and then assess whether potential applicants have them. We’ve used these with great success at HindSite and have talked to other business owners who have also successfully found great employees thanks to an assessment. It might take your new hire a little longer to get to 100% productivity, but you’ll have a much bigger tool to choose from.
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If you're near to a local trade school or veterans organization, work with them. Those organizations are always looking to place those that they serve into positions and often they are a great fit for a green industry business. Hiring is very similar to marketing - you need to build brand awareness and connections that will foster applicants to want to work at your business.
Want more hiring tips? Check out our free eBook, How to Hire the Best Employees for your Green Industry Business.
4. Increase your Revenue per Customer
Just 11% of respondents indicated that their revenue growth in 2014 was mostly due to increasing revenue from existing customers, though 59% said their growth was the result of a mix of new customers and revenue growth from existing customers. Yet, 40% of respondents expect to sell services/products that they didn’t sell in 2014, and on average the typical green industry business offers at least 4 green industry services.
To compete, you need to increase your revenue per customer. You can do that in a number of ways - like charging more (65% expect to in 2015) or adding complementary services. It’s typically easier to sell new products and services to existing customers, with the added benefit that you’re keeping a competitor off their property.
The other issue we’ve heard from green industry businesses is that their customers don't know what services they offer. They hired a contractor to mow their lawn, but don’t realize they can also fertilize or aerate or even install an irrigation system. That’s where service business marketing solutions like HindSite Connect can help. HindSite Connect’s Basic tier includes a number of transactional emails - appointment confirmations, appointment reminders, appointment completion notifications - that you can embed cross-promotional marketing messages in. It’s an easy way to build awareness about what you do.
5. Focus on Profitability
For the most part, green industry business have small profit margins. As reported in the Green Industry Benchmark Report, 49% of respondents had profits of less than 10% in 2014.
So how do you improve profitability? It’s really about understanding your business and trimming the fat, so it’s not surprising that just 4% of those businesses that use field service management software weren’t profitable in 2014, compared to 10% of those who don’t use field service management software. So software can certainly deliver the information you need to better understand and manage your business.
Though it may sound counter intuitive, another way to improve your profitability is to downsize your customer list and business. According to a recent article in Turf Magazine, Rob Scott found that when he terminated his least profitable customers, he reduced his monthly revenue by $80,000, but has $100,000 more in profit. It can be hard for entrepreneurs to make that decision, but in many cases it can improve a business.
It’s also important to examine the services you offer. According to the Green Industry Benchmark Report, irrigation service and installation and snow removal were neck and neck as far as profitability, while pest control was the least profitable service.
6. Act on Customer Feedback
Most green industry businesses are hyper-focused on their customer. In fact, 94% said they would rather satisfy a customer than achieve the margin they expected on a job. Plus, those customers are the lifeblood of a green industry business. Most green industry businesses gain new customers as a result of word of mouth.
Yet few measure their customer satisfaction. And fewer still act on that feedback. I talked to a green industry business owner who did have a customer satisfaction survey and asked him what he did with the results. He said he didn’t even know how to access them.
Be better than your competition. Start by surveying your customers after every service. Sure, only a small percentage of them will respond, but you’ll typically get either the really angry customers or the really happy customers.
Once you’ve received survey results, act on them. Call the people who rated you negatively for more information and to improve your relationship. Then, use their feedback to improve your training. But don’t stop there. You also need to act on your positive feedback. Because the majority of new business is from customer referrals, why not send your happy customers an email thanking them for the feedback and referring them to Yelp or Angie’s List or Google to leave a review? Or, send them more information about your referral program if you have one. It’s a great way to leverage customer feedback to grow your business.
And you can do it all with HindSite Connect’s Pro tier.
7. Consider Your Health Benefits
As the economy improves and more green industry businesses ramp up their hiring, one way to differentiate your green industry business from the competition is by improving your employee benefits. According to the Green Industry Benchmark Report, 60% of businesses say they offer no benefits. Less than 30% offer individual health insurance, while less than 20% offer family coverage.
Offering health insurance benefits can be cost prohibitive for a small business. But there are other perks you can offer to make your business a better place to work. Some respondents indicated they offer life insurance or self-funded dental, flex time, and IRA. Some even offer discounted or free cell phone plans.
Think outside the box. Silicon Valley companies like Google are notorious for the lunches they offer. Maybe you give all your employees a gym membership. Whatever you do, have some type of perk that distinguishes your business from your competitors.
8. Evaluate your Prices
For the second year in a row, the Green Industry Benchmark Report indicates that businesses plan to raise their prices in 2015. For many (38%), rising labor costs are the main driver, though many (29%) are looking to improve their profitability by raising prices.
Because so many of your peers plan to raise prices, it’s a good time to consider whether you should as well. Examine what impact you think a price increase will have on your profitability. Determine the impact on your sales. Then determine what your new prices will be.
9. Examine Your Sales Pipeline/Process
One of the most intriguing things about the Green Industry Benchmark Report results was just how different close rates were among green industry businesses.There were five options, and four of them were within 6% of each other, and they ranged wildly. For example, 17% say they have a close rate between 11 and 25%, while 20% say their close rate exceeds 70%. To me, that probably indicates that most green industry businesses aren’t tracking their close rate and they were just guessing.
The other interesting phenomenon was the perceived biggest sales issue: Green industry businesses don’t have enough time to follow up on leads, which may be impacting their close rates.
So it’s important that you examine your sales pipeline and process to ensure that none of your leads are falling through the cracks. It’s also important that you understand where each lead stands in your sales pipeline (Are they still a prospect? Have you sent them an estimate? Are you in the negotiation stage), how long they’ve been in each stage of your pipeline, and the likelihood of closing the sale. If you at least know that information, you can prioritize your follow-up and spend more time on those leads that are closest to a sale, and less time on those that are less likely to sell.
How do you do that? Field service software like HindSite can help. Later this spring we’ll have sales management functionality that enables you see where each lead stands in your sales pipeline, how much they’re worth, how long they’ve been at a particular stage, and how likely they are to turn into a sale. Plus, you can set annual goals for each sales rep and see how you’re progressing toward those goals.
10. Consider Hiring a Sales Rep
As mentioned in the previous item, the biggest sales issue cited by green industry businesses is not having enough time to follow-up on leads. Considering that most respondents (57%) have their owner perform the sales role, the simple solution to solving the sales problem in the business is to hire a part-time or full-time sales rep.
Interestingly, those that do have a full or part-time sales rep saw impressive revenue growth in 2014. Roughly 30% of those with a part-time, full-time or multiple sales reps saw revenue growth in excess of 20% in 2014. Just 17% of those whose owner was their sales rep saw revenue growth in excess of 20%.
So it might be time to hire a dedicated sales rep. Even if your business is small, it might be worth the investment considering that 23% of businesses with 1 to 5 employees indicated they have a dedicated sales rep. Need some tips on how to compensate that new sales rep? Check out this blog post, Small Business Growth Tips: How to Compensate Your Sales Staff for some tips.
11. Try a New Marketing Initiative
For the first time in the three years we’ve conducted this survey, the number one area in need of improvement was not marketing. But that doesn’t mean green industry business have figured out marketing - it came in a close second.
When analyzing the data, it became obvious why - green industry businesses just aren’t investing a lot of time and effort into their marketing program. Sure, they all have a website, and roughly half use social media, but only around ⅓ have a referral program, a search engine strategy or use door hangers, while about ¼ have an email newsletter, use bulk direct mail, online advertising or transactional emails.
As a marketer myself, I know there are no quick fixes. You have to try things and see what works. What might work for one green industry business won’t work for another. So it’s important that you try different tactics and do more of what works.
For a green industry business, I think one of the best things you can do is have a local search engine strategy. If you struggle generating enough leads, a local search strategy can significantly help. A great way to start is by creating or improving your Google My Business page. HubSpot released a great guide to doing so in this blog post - Free Advertising on Google - that explains how to setup your Google My Business site. It’s a great way for your business to show up - free! - when someone does a local search for the services you provide.
12. Attend a Trade Show or Educational Conference
One Green Industry Benchmark Report result that surprised me: It appears that green industry businesses were less active in trade shows and educational conferences in 2015. It may be that businesses were so busy in 2014 that they simply didn’t have time to attend shows. But, given the typical revenue growth in a green business, I expected more to attend because they had more cash in their bank accounts after a fairly successful year.
So why should you attend a trade show or educational conference? It seems to correlate to increased revenue growth. Generally speaking, businesses that saw 20+% revenue growth in 2014 were much more likely to have attended a trade show in the past year. Just 10% of those who saw revenue growth in excess of 20% didn’t attend a trade show in the past year, compared to 15% of those whose revenue stayed the same or declined.
It makes sense that those who attend trade shows generate more revenue than those who don’t. They’re exposed to more equipment and software that helps them better serve their customers. They attend educational sessions that help them work on their business. Most importantly, they have conversations with non-competing peers that deliver ideas that help them grow their business.
Want to know what events to attend? We recommend GIE+EXPO, the SIMA Snow and Ice Symposium if you do snow, and if you’re in Canada, check out the Landscape Ontario Congress. Lawn and Landscape magazine also has a list of trade shows for green industry businesses.
13. Set Long-term Goals
According to the Green Industry Benchmark Report, short-term goal setting is fairly common among green industry businesses, with nearly 70% setting annual goals. Yet, long-term goals are often neglected, with around 10% setting a three-year goal, 8% setting a five-year goal, and 5% setting a ten-year goal. Interestingly, those that set 3, 5 and 10 year goals were slightly more likely to have experienced revenue growth in 2014 than those that don’t.
How do long-term goals lead to short-term growth? I’m not sure they do, but those businesses that set long-term goals are more likely to focus their decision-making not only on the short-term impact, but also on the long-term implication. For example, at HindSite we’ve set a pretty aggressive long-term goal of achieving 10,000 customers in 10 years. When we make decisions today, we not only consider the short-term ramifications, but also ask ourselves how easy what we’re proposing scales. If it can’t scale to meet the needs of 10,000 customers, it’s not the best solution.
So set long-term goals. They can be anything - revenue focused, customer focused, profitability focused. Whatever they are, set them, communicate them and make decisions based on them.
Whew. That’s a lot of information to process from the 2015 Green Industry Benchmark Report. Guess what? There is a newer version available! Check out your free copy of the 2016 Green Industry Benchmark Report!
