Join us in this three-part series as David Merriman, owner of ArborScape Services shares his experience in marketing his tree care business. Missed the first stage? Read it here.
Second stage
Ah the second stage of building my tree business. I entered that stage in 2005. This was the stage where I would sometimes secretly yearn to be back with my truck and a chainsaw. This was the stage that you find out you have the worst boss in the world: yourself!
The thing about this stage is there is a huge urge to do everything like you’re still in the first stage. I’ve been there – my friend Rob is in the midst of being there this season – and you likely will be too. This is the stage where you can go out of business – not because of money problems, but you’re just too tired and overwhelmed to go on.
I want you to know that it gets better – a whole lot better – if you let it. Because if you continue to grow in the second stage with a first stage mentality, that tired and overwhelmed feeling will turn into money problems. I can almost guarantee this.
This is a more complicated stage because I didn’t want to get caught in the trap that I could just grow my business relying on word-of-mouth and referrals. Classic first stage thinking! It wasn’t until I added a second truck that I started getting serious about a website. It didn’t hurt that by 2005 the good ‘ol Yellow Pages were looking, well, kind of old and dried-up. I knew that a steady stream of new customers would be necessary to keep things going.
The trap in our business is that our customers may only buy from me every two or three years. It’s not like a lawn business or landscape maintenance business where happy customers come back month after month, year after year.
At the beginning, most tree services go through a hard sophomore slump as it’s in the second year of business where you learn the hard way that you are not going to have enough word-of-mouth business to keep two or three crews busy. At this point your business is so fragile I can’t overstate the fact: if you don’t let go of the word-of mouth mentality, the business will fail. Growing through repeat business is the end goal. But what you need in this stage is new customers.
Even if you realize quickly the facts, then there is the other hard part. The confusion and learning curve of developing a marketing system; it can tear your heart right out of your body!
It’s important to emphasize leads (not branding) and to track where leads are coming from. The numbers game is likely the best strategy for this stage because you will need to develop some idea of:
- what your close ratio is
- what areas you really want to serve
- what services you really want to add as you grow
At this stage I had a guess but no real certainty of any of the above.
I started reaching out for help in optimizing my website, running paid search and other ads, buying direct leads from places like Tree Service Direct or HomeAdvisors. Once they called or emailed, I had my secretary ask how people had heard about us.
While I always wondered if more actual customers came one way or another I really didn’t worry about it too much because I wouldn’t know for another year or what my closing ratio or percentage was. That became another long-term goal.
But it’s important to focus on leads at this stage. I started budgeting based on tree service industry benchmarks of what companies typically spent, as a percentage of total sales, on marketing. Measuring total leads I got out of that defined budget and focusing on keeping the costs about the same but growing the total volume of leads, became the game. This approach is simple (no long meetings about the particulars of your logo design) and helps you become more profitable.
As you switch from a pure referral model to a lead-generating model, your closing percentage, which is the percentage of jobs accepted divided by total leads, may go down. You are attracting more people who don’t know about your company so that is natural. At this stage, your closing ratio should be roughly 20%.
You may decide to focus on appointments with homeowners, which is desirable because your closing percentage goes up, if you can meet with the prospect face-to-face.
I actually decided to, you guessed it, play the numbers game, and not insist on a face-to-face meeting.
I noticed that 1 in 3 appointments would be a no-show and it felt more efficient to just leave a quote on the door (not in the mailbox – that’s illegal). I was wearing a lot of hats and even one missed appointment hurt.
If they called in to schedule, so be it. I could do 10 bids more quickly than trying to arrange face-to-face meetings and get on with the actual trimming, operations, accounting and marketing.
So we ended up with a 20 percent close ratio with that system. That approach really carried me through stage two. The business grew.