Case Study

Organic’s for Today’s Lawn Care Service
“It’s about the Money, Stupid.”

What happens when a very large group of people, who have similar interests and back grounds begin to spend time together? Generally speaking they talk about themselves. What they do for work, what they like to eat, they talk about their families, what kind of vehicles they drive etc. Over the course of time groups begin to form and people with the same interests begin to understand that they have certain things in common and when these things are socially topical or of a seemingly important subject to the greater good momentum is gained, leaders emerge and sometimes “organization” is realized. Beliefs are standardized and all of a sudden the phrase, “wouldn’t it be great if” becomes “why don’t we” followed by “if you don’t you are not as good as we are.”

There is actually a recognized psychological phenomenon called “Group Think” whereas a desire for harmony and conformity begins to result in irrational decision making. When one looks at the organic lawn care industry over the previous decade and thinks about the concept of “Group Think” one can truly begin to understand exactly why all the organic lawn care services have not taken over all the chemical lawn care services in terms of customer count revenue and general success. The phrase “wouldn’t it be great if…” was shouted all over the country for many years by advocates, educators and a select group of successful providers but the “if” part of that never really came true. Feel free to form your own judgments as to why this is the case.

Organic Lawn Care on its surface is not about saving the planet. It isn’t about preventing phosphorus from leaching into the water. Organic lawn care isn’t about saving bees or eliminating Glyphosate and 2, 4-D and it certainly isn’t about getting a group of people together to stand around and say the words “Wouldn’t it be great if.” Organic lawn care isn’t about looking down at people and companies who don’t practice it and it’s not about being able to tell your kids that you are better than their friends’ moms and dads.
Here comes the part that’s going to make all the “group thinkers” mad. Organic lawn care isn’t special. Organic lawn care isn’t something most people care about. Preaching about organic lawn care isn’t going to save the planet, the bees, the children or the weak and elderly.
Organic lawn care is just lawn care.
And if you are considering adding organic lawn care to your business do not do it for any of the reasons mentioned above.
Organic isn’t about pie in the sky and rainbows, it’s about the money stupid.

There is no Demand for Organic Lawn Care.

As much as the “Group Thinkers” will tell you that if you don’t start doing organic lawn care right this very minute you will soon be going out of business that is not the case. They will refer you to the grocery store and the produce section where the organic selection has tripled in the last ten years and say that all the people who buy organic lettuce also want organics for their lawn. However the biggest difference here is that you don’t eat your lawn. The truth of the matter is that consumers don’t think about organics in their yard the same way they do about organics in their mouths. Unfortunately for the “Group Thinkers” we have proof of that.
The best way to measure the demand for something is to do keyword research on Google. In the previous twelve months the phrase “Lawn Care” was entered into Google as a search, in the United States a total of 322,800 times. “Lawn fertilizer” was searched 59,600 times, “Crabgrass Control” 18,920 and “Grub Control” 26,400 times. Let’s get back to “Lawn Care” for a moment. It’s estimated that there are 125 million houses in the United States. Obviously, not all of them have occupants that care about lawns or even have a lawn at all. In fact if you do the math less than one half of one percent of the homes searched for “lawn care.” When you look at it like that 322,800 searches for lawn care doesn’t seem like many.
During the same time period there were 25,840 searches for “Organic Lawn Care.”
During the same time period there were 3.5 million searches for “Gout Relief.”
During the same time period there were 8.5 million searches for “Big Boobs.”
It is these statistics specifically that form the mission of BeeSafe Lawns. Unless your company is firmly trenched in the desire to serve a very small niche market (which is absolutely okay and admirable) we strongly suggest that you present your business as a “Lawn Service Company” that has an organic program and NOT an “Organic Lawn Service Company.”
With all this being said, implementing an organic program into your business is the absolute smartest thing you could ever do right now in today’s consumer climate. Just because consumers are not searching for organic lawn care or in need of finding a contractor that can provide an organic lawn care program it doesn’t mean that they are not willing to pay more for it when it is presented to them. In fact a majority of them will choose the organic program when given that option even if it does cost a little bit more. It only makes sense right? Reduce chemicals, keep kids and pets safer and have a nice lawn all at the same time? The vast majority of consumers will make that choice.

It doesn’t take an accountant, controller or book keeper to tell you that you will make more money if what you charge goes up and what you spend goes down. This is exactly the scenario we are presenting in regards to the implementation of an organic lawn care program. There are two ways that you will do so when you begin the journey. The first is to begin to sell the organic program as an option or alternative to your standard program. The second is to ask your existing customers to convert to that organic program. In both cases you will increase the cost of the program by as much as twenty five percent while the cost to implement will only go up by ten to fifteen percent. Over the course of time that fifteen percent discrepancy can really add up and increase your profits drastically. This is specifically why we are saying that implementing an organic program is not about saving the children, the dogs and the planet but is all about driving profitability. The side effect however is that you are legitimately doing something that the “Group Thinkers” have only dreamed about.
Let’s take a look at the two scenarios.

1. Organics and New Customers – A real life example.

The following study is based on real life numbers by an actual BeeSafe Applicator. Using our marketing principles, guidance and sources a small lawn service company in New England launched a small marketing campaign in the spring of 2014. The goal was not to make a thousand new sales but to make enough to justify implementing the BeeSafe Organic Program. Based on our advice they did not focus solely on the organic program but offered two programs to potential customers. The first one was a standard or traditional program and the second one was an organic program. (The BeeSafe Program) Neither program was not touted against the other nor did neither receive any more attention than the other. The leads were derived from an email marketing campaign, Facebook advertising, Home Advisor, Pay Per Click and Video SEO. Every time a lead was received the company would send out pricing for both the organic program and the standard program with no bias to either.
Pricing
Before we get into analyzing the number of sales made it is important to take a hard look at the actual pricing structure of the two programs. It’s also important to note that the traditional program includes six visits to the home and the organic program includes seven visits to the home. The abbreviated pricing is as follows.

Traditional Program
Square Feet App Cost Annual Revenue
5 $43 $258
10 $71 $426
15 $84 $504
20 $98 $588

BeeSafe Organic Program
Square Feet App Cost Annual Revenue
5 $50 $350
10 $88 $616
15 $115 $805
20 $143 $994

It’s important to note here that the increase in the price from one program to the next is not only reflected in the application cost but more importantly in the annual cost because the company added an extra visit with the organic program. (As this paper is not about agronomics we will not get into why this is the case but it should be stated that it is a combination of the need for more nitrogen via more visits and the fact that if you simply can do it you should.)
The increases go from 26% at the smaller square footage all the way up to 44% at the higher levels. These are significant increases.
New Customers
The company was able to make a total of 188 new sales via the sources we mentioned above.
Traditional Program 76
BeeSafe Organic Program 112
The average lawn size is 10K.
Revenue generated by organic program: $69,992
Revenue generated by traditional program: $32,376
As you can see the organic program is generating an exceptionally higher amount of revenue than the traditional program.
So what’s the takeaway here? We started this study by literally shattering the dreams of a thousand “Group Thinkers” who had set out to save the world. Even though we proved that the demand for organic lawn care was insignificant we have also proved that when given the choice between a chemical program and an organic program the consumer will choose the organic program 60% of the time even though the cost is moderately higher. The leads generated to make these sales were generated under the premise that the person who requested the lead was requesting an estimate from a lawn care fertilization service and NOT an organic lawn care fertilization service.

2. Organics and Existing Customers – The Up sell to Increase Profitability.

Nobody would ever argue the fact that it COSTS more to implement an organic program. The products themselves are generally more expensive and as we demonstrated in the previous study we suggest that you add an additional visit to the program. An organic program is much more complicated and if you are still of the thought that organics are bags of corn gluten, chicken manure or soy you should know that things have changed drastically. Successful organic applicators follow an approach that includes beneficial microorganisms, bio-stimulants, organic fertilizers and organically acceptable control products to take care of weeds and insects. Plainly stated, these products are more expensive. Generally speaking if you are implementing an organic program on a significant amount of square footage the products to implement an organic program will cost about 15% more than a chemical program. Obviously this represents a serious problem because typically we operate on margins that can be anywhere from 10% to 25%. Taking out 15% is a real problem……unless you can increase your gross revenue by 25%!
We are currently in the midst of a long term case study that documents the profitability impact on a large lawn care service provider who has begun to offer the BeeSafe program to their existing customer base as an option. They are doing so mainly in the off season via renewal campaigns. They also offer the program choice to new customers. Although we are only in the first year of the study we are exactly on pace regarding our projections. The company currently does just over $1.1 million in gross sales with a customer count of just over 2,700. They are profitable and the year prior to the study beginning they had a net profit of $158,000 which represents 14%. (Good thing they didn’t increase their product costs by 15%!)
Our goal here is to increase profitability by 24% over a five year period and we’ve got the detailed projections and numbers to prove that we can do it. It’s important also to note that this increase is very gradual and designed to not cause any stress whatsoever to the operations of the business.
The goal is to offer the “organic option” to existing customers while continuing to bring on new organic customers via sales. It is our intention to have one third of the customer base switch to the organic program by the end of the fifth year. As a result of this switch profit will increase by 24% from $158,000 at the onset to $209,045 at the conclusion of the fifth year. This represents an increase of 24% and more than $50,000! Again, we do not need our accountant, controller or book keeper to tell us how this works. The concept is very simple. Increase the amount that you charge for your services by more than you increase what it costs for the adjustment!!!
This study has been implemented and we have detailed projections to show how it will work but for the sake of brevity here are the key numbers over the course of the five year period.
Year Gross Sales % organic customers Product Costs Net Profit
0 $1.12 ml 0% $215K $159K
1 $1.15 ml 10% $220K $174K
3 $1.17 ml 20% $225K $189K
5 $1.20 ml 33% $231K $209K
Now obviously there are several assumptions here. The first is that customer growth is relatively stagnant. These numbers use the assumption that there is not a significant increase in customer count over the five year period, only that the percent of organic and traditional begins to change. It also makes the assumption that one third of the customer count will make the decision to pay a little bit more in order to have the organic program.
One thing stands out however with an absolute glaring brightness, the more customers you have paying you more money for your service the more money you make! In a very complicated and detailed Profit and Loss statement the more on the top line the more on the bottom line. This increase on the bottom line however is amplified drastically by the fact that the only thing that changes in regards to get the top line increase is the product line item. You will still be performing the service with the same people, with the same equipment, in the same trucks with the same administrative support and costs. GROSS SALES INCREASE WHILE THE VAST MAJORITY OF COSTS STAY THE SAME which allows for an incredible amount of growth in profit. (24% or $50K in this case)

Conclusion

Lawn care is changing, we know that. However it’s not changing as fast as the “Group Think” wants it to. In the end, the consumer wants a healthy, weed free and green lawn. But they also want to feel comfortable in that they are not acting recklessly. In a way, today’s customer wants to have their cake and eat it too. How many times have you heard, “please don’t use dangerous chemicals on my lawn” only to be followed three months later by “I don’t care what you have to do, make that crabgrass go away or you are fired.” It’s a quandary that we have to embrace because if you get fired you don’t make money. And if you don’t make money you know what happens.
While we’ve determined that the demand for organic lawn care doesn’t seem to be as strong as many would think (In fact it is shockingly low) it’s very obvious and proven that when given an option a majority of consumers would choose the organic option even if the cost is a little bit higher. No matter how you look at it the fact remains that hiring a certain lawn service, especially one that only does organics, just isn’t that important to most people.

Make it a point to begin to make small changes in your business with the goal of improving profitability. One thing that is said around the BeeSafe office often is that you should never EVER lose a customer based on advocacy. Do what your customer demands of you but get the most out of them for what you do. Implementing an organic program isn’t about saving the world; it’s about making more money. But the side effect is that you just may be playing a very small part in doing something good. No matter how you look at chemical lawn care products there are very few that can admit that applying less can be a bad thing. Your business is under a lot of scrutiny and even though the demand may not be there the political climate is such that regulations are most likely imminent no matter where you are. Fertilizer restrictions are popping up annually all across the country and anti-pesticide legislation continues to grow almost everywhere. It is the business that rises above some of this that gets the most attention and the business getting the most attention almost always wins.
Tom Kelly is the Founder of BeeSafe Organic Lawn Care.
With more than 100 locations, BeeSafe is the leading “Alternative Lawn Care” brand in the USA.
To get more information on how you can become a “Certified BeeSafe Applicator” please visit www.beesafelawns.com.