The Importance of Customer Growth
If you’re in business, you probably have the desire to put on new customers. Even if you’re not looking to grow you need to at least replace the ones you lost. In the lawn and landscape industry, it is not uncommon to lose between 5% and even up to 20% of your customers from year to year. That means you need to add on at least that many back to be where you were the year before. Whatever situation you’re in, figuring out how to grow your customer base is important to you. There are two basic thoughts when it comes to growing your customer base and that is quantity (numbers) and quality (niche). Choosing a strategy will dictate many aspects of your business, so think about it before you jump in! It’s crucial to understand that the strategy you choose will significantly impact your business operations, customer relationships, and overall success.
Quantity Growth: A Short-Term Boost
Going after quantity to grow is great for your business in the short term. When you grow based on quantity you don’t necessarily concern yourself with the type of customer you go after or where they are located. Quantity means you will put on more customers at first but it will probably lose some of them because they do not fit your business. This is the problem with quantity growth; great for the short term, more complicated in the long term. It means that every year you will lose more customers and have to make a large effort in your marketing and advertising every year. While this approach can provide a quick boost to your customer numbers, it may lead to higher customer turnover and less stability in the long run.
In the lawn and landscape industry, we provide a service, We’re not just shipping out products. That means, when you add on a ton of new work, you need more employees. That is, unless you don’t intend to service your customers adequately. When you need more employees you also need more trucks, trailers, mowers, etc which means when you do lose those customers, you better be on top of replacing them or those employees will be complaining about not getting enough hours and eventually have to quit to find work elsewhere. THEN, when you do put those 20% of customers back on again by the beginning of the next season, you’ll be running around looking for new employees again. It’s a cycle that isn’t worth the headache. In my opinion, quantity is not the way to go about it and it doesn’t really lead to longterm growth, just a lot of headaches and uncertainty.
Quality Growth: Long-Term Sustainability
Quality growth can be a little tougher in the short term but is more sustainable in the long term. You can target fewer people, which allows you to spend more money on fewer potential customers which typically turns into customers. Quality customers means finding a niche that fits your business. For us, we go after people who have some expendable income, not the little old lady on social security or the person who wants a mow and blow. We target people who value professionalism, consistent service, showing up each week, solid communication, and trust between each party. These people DO exist in your market, you just have to know where to look. Believe it or not, it’s not always in the high dollar neighborhoods. These neighborhoods are usually flooded with contractors and high school kids mowing for $20 a lawn. For other services like landscaping, hardscaping, or landscape lighting, these neighborhoods may be a better place to look because these services aren’t as saturated as mowing.
Your sales skills will have to be a little higher for growing with quality customers but once you can add the perceived value to your business, you can target that niche customer base that fits your business. This strategy requires more effort and investment upfront, but it can lead to more loyal customers and sustainable growth. Not to mention, it’s also nice to not lose a huge chunk of your customer base each year because they value you for your service, not your price.
Choosing Your Growth Strategy
So which one will it be for you: quantity or quality? It’s not right or wrong, it’s simply how you choose to set up and run your business. Now, keep in mind, if you set it up one way but begin chasing the opposite, your business will have big problems. The model you choose will have a better chance of surviving when it matches the type of customer you go after.
Both strategies have their pro’s and con’s, so before you choose, simply think about which direction you want your business to go and make an informed decision and remember Profit is Not a Dirty Word! Ultimately, the choice between quantity and quality growth depends on your business goals, resources, and industry. It’s important to carefully consider your options and make an informed decision that aligns with your long-term vision.
How can I replace lost customers in my lawn and landscape business?
Customer growth is crucial in this industry due to the annual loss of 5% to 20% of customers. Strategies for customer growth are essential to replace or exceed this number each year.
What strategies can I use to grow my customer base in the lawn and landscape industry?
The two basic strategies are quantity growth, which focuses on increasing customer numbers, and quality growth, which targets a specific niche of customers that align well with your business.
What are the pros and cons of focusing on quantity growth in my lawn and landscape business?
Quantity growth can provide a short-term boost to customer numbers, but it may lead to higher customer turnover and less stability in the long run. It also requires more resources, such as employees and equipment, to service the increased workload.
Why am I losing customers in my lawn and landscape business when I focus on quantity growth?
The downsides of a quantity growth strategy include a higher rate of customer loss, the need for constant marketing and advertising efforts, and the potential for resource and staffing issues due to fluctuating customer numbers.
How can I achieve quality growth in my lawn and landscape business?
Quality growth involves targeting a specific niche of customers that fit well with your business. This strategy requires more effort and investment upfront but can lead to more loyal customers and sustainable growth.
What are the benefits of focusing on quality growth in my lawn and landscape business?
The benefits include a more stable and loyal customer base, less customer turnover, and long-term sustainability. It also allows for better resource planning and management.
How do I choose between a quantity and quality growth strategy for my lawn and landscape business?
The choice depends on your business goals, resources, and industry. It’s important to align your growth strategy with your long-term vision and the type of customers you want to attract.
What happens if I change my growth strategy in my lawn and landscape business?
If you set up your business for one type of growth but chase the opposite, your business could face significant problems. It’s crucial to ensure that your business model matches the type of customers you target.