Pricing is a subject that should be embraced and planned for each year in your company. If you run a good company then you deserve to make pricing part of your planning each year. Don’t fear it – embrace it.
Let’s talk small irrigation parts for example. We just reviewed the 7 steps to carry and distribute a small irrigation part. We didn’t even mention the additional labor it takes to install the part. Sure I know‚ the crew is there anyway‚ but you most likely estimated the client price of service based on grooming and mowing hours needed. Not the additional time required for system checks and small repairs. So if you take the 7 steps just to supply your crew with parts and you add the additional labor required to install them – then you can easily place a well deserved mark up on your parts.
For example I charge clients $3.25 to replace an emitter that cost me $.28. Why? Because we deserve it. Look at all the 7 steps we had to go through and the costs involved just to make sure our crews have the parts stocked and are trained and ready to make the repair. Now let’s just imagine the client had to take their time and drive to the store, get the part and then make the repair (if they can). After all that, I am sure $3.25 to replace the part sounds very, very reasonable. As landscapers we must not shy away from offsetting our costs to make a profit. Running a business is not cheap. Providing consistent, professional service is not cheap. Our client’s expectations are high and so is our delivery.
My Painful Past with Irrigation Parts
I operate a commercial landscape services company with approximately 110 fantastic employees. We used to have a very painful approach to recording what parts were used by crews at what properties. Each crew would get a large sheet of paper which listed all of the small repair parts we typically carry (including nozzles, emitters, goof plugs, heads, salco emitter caps, drip connectors, filters, 6″ round covers to name a few). During each service visit, the crews would mark what parts were used at the properties they serviced each day on this giant list and then they would turn in their irrigation parts‚ sheets at the end of the month. I thought I was doing ok but, only later, realized that my team was only accurately accounting for about 10-20% of actual parts used. Unfortunately, we were also way too busy to count what parts were used, not used, lost or stolen. We simply did not know we were doing a lousy job and missing out on high margin income from small parts. You cannot effectively manage a business and miss out on high margin irrigation parts – it is a terrible combination and a tough lesson that I learned.
Welcome: A Field Irrigation App called Cappsure It
I saw my landscape crews buying and using smart phones and various apps and decided that they were perfectly capable of solving problems in the field using technology. The Cappsure Landscaping App has an irrigation module that utilizes a picture based inventory of irrigation parts. Users select the photo of the part they replaced, drop a GPS marker on a map of the property and the part is accurately recorded. Cappsure’s back office system has the price of parts and creates automatic billing reports for each client – based on the actual parts used. The result is a paperless, and remarkably accurate, report of parts used by each crew at each property. For my own business, income from small parts is more than 7x greater and now I know which parts were used by which specific crew and for which specific clients.
The Courage to Change!
I use the term courage because it takes bold steps and conviction to make important changes – especially since most businesses get comfortable and will do anything to avoid change. My two most courageous steps were:
- Recognizing that I deserved to make a profit for parts used‚ and increasing my mark up to reflect it on all small parts.
- Taking a bold step to implement mobile technology to help me make money by empowering my crews‚ who it turns out, were more than capable of using Cappsure.