If you grow your landscape company from the ground up, chances are you're going to reach a point where you're maxed out. Either you or your team are going to have too many customers. Quality will suffer. And even though you're working a million hours a week, your profit margins and mental health are simply unsustainable. In today's podcast, Andy McDuff from Landscape America shares how he reached a point where he needed to let nearly 200 customers go. Check out today's conversation to hear how Andy did that respectfully. Plus, how to double your client's average annual spend without necessarily doubling your prices, how to let clients go without being a jerk, and the answer to an interesting question about how sales training can impact your operations team, not just your sales team.
Hey everyone. Jack Jostes is here, and welcome to the Landscapers Guide. This podcast is all about growing the snow and landscape industry through sales, leadership, and marketing ideas. Today, we have a conversation that all small business owners need to hear, and we have a lot of other really cool people on the show, too. If you're new here, make sure you subscribe at landscapersguide.com/podcast so you never miss an episode. And if you're getting value from the show and you're already subscribed, leave us a rating on Spotify or Apple Podcast, wherever you're listening to this or like this video on YouTube. Those likes and reviews help more people discover the show, which ultimately helps us grow the green industry together. Many small business owners, myself included, enjoy the relationship side of running the business. I enjoy the customer relationship and taking care of people, and I know that many of you do too, and it's a key part of your success.
There's also a point in your business where some customers may not be the fit for your company anymore, and it can actually be a disservice to try and keep them. But when it comes to letting customers go, especially the ones who were your first customers when you were just starting out, who've been loyal to you and you've been loyal to them, there are a lot of feelings that can come up of fear that you're going to ruin your reputation, anxiety, just general fear that they're going to be really angry at you. But, check out today's interview to hear how many of Andy's clients, out of nearly 200 that he let go, how many of them were grumpy and mean and rude, versus how many were accepting and even grateful that he called them to tell them. That might give you some confidence when you need to make this decision. Let's get into the interview. All right, everyone, welcome back to the Landscapers Guide. Today I'm excited to interview Andy McDuff. He's the Director of Operations from Landscape America. Andy, welcome to the show.
Andy McDuff:
Thanks for having me. Glad to be here.
What Is Landscape America?
Jack Jostes:
Andy, tell us a little bit about Landscape America. What kind of services do you offer? Where are you and about how big is your company?
Andy McDuff:
Sure. Landscape America, we're located in Renton, Massachusetts. We are a commercial maintenance and snow plow company. This year we're looking to do right around the eight million mark, collectively snow and landscape combined.
Jack Jostes:
That's awesome. You co-own the company with your brother.
Andy McDuff:
Yeah.
Jack Jostes:
Tell me a little bit. How did you guys get started?
Andy McDuff:
My brother wanted to be a salesperson. That's how this came about. It was 2006, so it's been 16 years. We were both working for a company, a tree company that did some landscaping, as well. We were two of the landscape foremen. My brother knew he wanted to be a salesman and he asked for the opportunity and they didn't give it to him. He said, "I'm going to go start my own thing." And then about two weeks later I said, "I'm 20 years old and if I'm going to do it, I better do it now." It's like, "Sure, let's do this thing." We started up in 2006 when the economy plummeted and that was fun and we learned a lot really quickly. And here we are.
Jack Jostes:
Today I wanted to chat with you about some of the big decisions that you've made to get to where you are now, specifically around pricing and the type of customer that you serve. I started my company in 2009, similar timeframe. What I'm doing now is very different from what I was doing in 2009. I'm really grateful for all of the experiences I've had. Along the way I needed to learn some hard lessons around not charging enough, working with everyone. I know that we've had dinner at SIMA, the SIMA symposium. That was so much fun in Milwaukee. I've gotten to know you a bit. Share with the audience a little bit around what were you doing before and some of the chaos that it caused? How did you end it?
How He Reached A Point Where He Needed To Let Nearly 200 Customers
Andy McDuff:
Like I said, when we first started out, it was literally flyers. If we didn't have work, we were walking through neighborhoods, knocking on doors, taking anything that we could get. I think that still happens a lot. I see a lot of smaller companies around us that they'll take everything. Any call they get in their office, they're going to go run out there and try to grab that job. Two years in or something around that timeframe, we realized that this isn't sustainable. We can't just keep doing every little tiny thing. We have to start focusing in on something, start gearing it in some direction. That's when we realized that we probably had too many clients. That was the first time, I think at the time, he wasn't our coach. Dan Foley is our business coach, but I believe that's the first person that told us to double our price and do it for half your clients. We ran with that and followed that process to whittle down.
Jack Jostes:
At that time you had around 375 maintenance clients, right?
Andy McDuff:
Yeah, yep. That's residential maintenance accounts. Yeah, we ended a season. I remember coming to the end of the season and hearing that number. I was like, "Oh, that's kind of daunting. No wonder why I don't want to answer my phone right now." It was 375 people. I could not keep up as one person. That was my job, at the time, was to be the accounts manager for all residential clients and I was not doing a good job. I tell that to our accounts managers now. I can tell you a lot of what not to do probably by learning from those lessons.
Coming to the end of that year we had 375 clients. We decided to follow exactly what we had heard that might work. We took 175 of them or to 200, I can't remember the exact number, and we found other landscapers around us that would service those clients. For the remaining clients, we suggested that they sign up for a set group of services, that was five services distinctly, to make sure. The theory that we were running with was that we would want to work on someone's property from start to finish, in a landscape season. Spring clean up, fall clean up, everything in between.
That was the criteria that we used to guide us in doing that. When I say double the price, it's not that we went from charging $45 a man hour of labor straight to $90 a man hour in labor. It was a lot of scope change. It was more about revenue per client trying to increase that amount of revenue that we're producing per client in order to service them better.
How To Let Clients Go Without Being A Jerk
Jack Jostes:
I really like that. The revenue per client and the opportunity to upsell a lawn mowing client to a full landscape maintenance package for the year. How did you do that? How did you know which ones to upgrade to the full plan and which ones to let go?
Andy McDuff:
We just looked at the clients and who was signed up for what. If somebody was signed up for, let's say spring cleanup and mowing services, but hadn't signed up for fall cleanup, two out of the five services. We just literally evaluated our clients. I think the first time we did it felt a little funny to start talking about A versus B clients or C clients. I was like, "We have relationships with all these people. I don't want to talk to them about that. I love Mrs. Jones, but she only does one service with us. She's technically a D client."
Jack Jostes:
Right. Mrs. Jones has got to go. She either needs to buy more or she's out. We're going to send her hate mail. No, I'm kidding. A lot of times when I talk through this with people, they have that reaction because they have relationships. Especially when you've grown from, literally, going door to door with flyers saying, "Will you please work with me?" People who have given you a chance to, now you're thinking of moving on, it can feel hard. One of the podcasts that I've done, I learned a system called STACK, which is an acronym for stars, advancers, cruisers, and killers. The killers are profit killers. These are accounts that are actually a net loss. For some companies they can be the highest paying from a revenue standpoint, but they're super needy and they're under scoped and you start saying, "They're our highest paying client, we're going to do all this extra stuff for them." But, it's actually not profitable.
Grading your clients, whether it's A, B, C, and D. I like the STACK method because the killers, you should just cut. You should graduate them. You should move on from them. You might have cruisers though that are great. They're just in a maintenance mode. They're bread and butter.
Then there are advancers, and these are people who, if they were offered more services, they could advance to a star level. The star level, this is your top 20% of your clients who are spending the most. You enjoy working with them. They're referring you to other people like that. That's one of the ways that I have personally done it and how I recommend clients to do it. It sounds like you made up some way of doing that. How did you actually communicate with them? Did you send them letters? Did you call them? Did you email them? How did you work through the list to get Mrs. Jones from the D list to the C list?
Andy McDuff:
We called them, to be honest. I think it was a good practice to do. Reach out and tell them in person. I think that's a lost art a little bit as everyone goes straight to the email and text message. Before we called, we had everything prepped up, ready to go. We had a script that we wanted to make sure we stayed on track with because it's a tough conversation. We had already vetted out other service providers that could help them out.
I remember we had a good list of three or four people to give them the names for. We'd already talked to these people to make sure that they had room in their book of business to take them on for the following year. We made sure to tell them that the reasons are we're doing a set scope of work, you fall outside that scope of work. Unfortunately, we only have a finite amount of resources. We're not going to be able to provide services for you next year. This person would be able to help you out and you'd be better served by X.
Jack Jostes:
I love that. Did you work out, I'm just curious, a commission or a referral, anything with those people when you sent these clients?
Andy McDuff:
We didn't. Maybe it was missed opportunity. But, I looked at it as more of, again, we're emotionally attached to these clients.
Jack Jostes:
Sure.
Andy McDuff:
This is how we started our company. It's not the easiest thing to just go and do. We were looking at it more of they're helping us out of the situation so that we can morally walk away making sure it's like, "I left them in good hands. Everything's fine. It's going to work out better for them. Just for what we want." There was definitely a couple people that were not happy. I remember, distinctly, there's two people I see around town and I know they still don't like me. What can I do?
Jack Jostes:
Why? You called. Why? What's the problem?
Andy McDuff:
I'm not going to take a guess at why somebody would... It's not my place to decide what they're thinking. I remember it being something along the lines of, "Stick with your first clients. You should never let them go. We were here at the beginning." Business changes.
The Results Of This Within A Year From A Profit Standpoint
Jack Jostes:
I think it's important to share that because a lot of people have this fear that they're going to blow up their reputation and never work again. Everyone's going to hate them. But the reality is, and I've done this myself and I've worked with many businesses, even outside of the green industry. Typically, when you go about it intentionally like you did, and you went above and beyond to even find another company that had capacity, 198 out of 200 are going to be like, "Cool. Thanks. I appreciate it, Andy. Thank you." Two of them are going to be grumpy. What were some of the results of this within a year, from a profit standpoint? We're not filing taxes here, but in round numbers, what was the profit like? What was the stress relief like? What were the results of this on the company and for you personally?
Andy McDuff:
I can answer the question best about my stress levels and speaking on revenue. I can't remember off the top of my head if profit dipped, if it stayed the same. Either on net or gross levels, I can't remember off the top of my head. But, revenue basically stayed the same, which was our goal. We were happy we succeeded with that through scope change and the ability that I could then upsell during the year.
Because that's one thing, with at 375 clients that year, I had that many, there was no chance I was upselling any enhancements. I distinctly remember the crews coming back and saying stuff like, "Mrs. Smith has a dead shrub. We should rip that out and replace it with something else." And I'm just going, "Who's got time. You guys have your hands full of what everything you got going on. I don't have time to call her. I don't have time to go sell that job. We don't even have the people that I can go do that job. I appreciate you guys bringing me the feedback, but I'm going to table this potential sale." Which is terrible.
Jack Jostes:
I have personally had that same experience, and then also with my staff where they're like, "Oh crap, the customer wants to buy more stuff." And we're like, "We're at 105%." I think that's a clear sign that you're either, probably you're probably not charging enough. Also, that you don't have enough people on your team. I interviewed one of my clients, Tory Chlanda from Better View Landscape, and he used the 80/20 rule. He changed the pricing model for 80% of his clients to unlimited. It's unlimited snow removal for residential. The top 20% are still a pay per push model. The reason is they just had more snow to clear.
That model worked really well for him. I think he lost 30% of his customers, but his profit went way up. Most importantly, he was able to get the same amount of work done with more profit, with the same number of people. It was just this relief on the current people. This was all residential focused with this customer shift. Now, you're really focusing on growing as a commercial snow and landscape company. How did you end up? It sounds like your roots, their origin was mainly on the residential side. You had some commercial and now it's really focusing on commercial. How did you end up there? Why is that the direction of the company now?
Andy McDuff:
We are not set up for residential plowing. We weren't. We moved away from residential plowing. For us, plowing, marrying our snow service accounts with our landscape accounts together, that's the goal. Stability of the marketplace for us. Again in our area, everything we've seen since we've been in business it affects the residential market before it affects the commercial market around us. And the competitions. There's less competition in the commercial space, harder to break into. We've had a hard time with it. We're working on it still. But, the competition on the residential side, there's a lot of service providers around us. That's why we steer towards the commercial market now.
How Often Are You Revisiting Your Client List And Grading Them And Adjusting Your Pricing And Things
Jack Jostes:
Andy, it's been super fun talking with you about that. I'm curious before we wrap up, how often are you eliminating 200 of your clients? Maybe you don't need to eliminate 200 every year. How often are you revisiting your client list and grading them and adjusting your pricing and things?
Andy McDuff:
Great point. When you mentioned the 80/20 earlier, it stuck in my head as that's something that we do every single year. Right now actually, that the sales team is going through both commercially and residential and talking about top 20%, bottom 20%. The 80/20 rule in both directions. Why are they there? Should they be there again next year? Every year we look at the bottom 20%. Is it right to move them on? Is our pricing in line? I don't want to say that we double our price every single year. That's not true. But, we got to be keeping up with the economy. Raising prices every year is something we do.
Jack Jostes:
Andy, thanks so much for coming on the Landscapers Guide. For people listening who might want to network with you, how can we connect?
Andy McDuff:
Thanks for having me. If anybody wants to connect with me, they can reach me. My email is AMcDuff, my last name, M-C-D-U-F-F, @landscapeamerica.com. If I can be of any help to anybody, be happy to do it.
Jack Jostes:
All right, everyone, thanks so much for checking out that conversation. It's an interesting question. How many of your clients are the right ones now? How many of them are the right fit for where you're heading? What decisions could you make from marketing and from account retention? Remember, not every client needs to be your client this year or next year.
I hope you enjoyed today's conversation. I certainly did. If I haven't already sent you beef jerky in the mail, I bet you didn't know that I would do that. I would love to send you some beef jerky and the landscaper's marketing field guide. It's a short booklet that'll help you figure out which marketing to focus on first to get lasting results quickly for attracting your hell yes customers to your snow and landscape company. Go to landscapersguide.com/toolbox and we will ship you the Landscapers Marketing toolbox. Has lots of goodies in there. Check out our show notes for a quick link. I'm Jack Jostes, and I look forward to seeing you next week on The Landscaper's Guide.
First time, talking today.