We’ve all been there before. Your business is going swimmingly. You’re getting tons of work. Hiring on new temp contractors daily. Growing. Expanding. And then suddenly…
… It all grinds to a halt.
- New projects stop coming in.
- Your revenue growth slows down--or even reverses.
- You start calling up clients, hoping they might be in need of services.
- Perhaps you slash your prices a little, or offer a promotion.
If there is a ‘bane’ of the landscaping industry--especially landscaping business owners--it’s the “feast or famine” phenomenon described above. While some businesses are lucky enough to have a steady (and steadily growing) book of work, the fact is that most landscaping companies vary dramatically in their monthly and quarterly income--especially in down seasons like Winter.
This can make it difficult to plan key business decisions (e.g. hiring, vehicle and and input expenses), as you never know how much work you’re going to have--and how much revenue you’ll have coming in.
It’s at this point that many landscaping contractors throw up their hands and say, “I guess it’s just the nature of the business, I’ll have to deal with it!”
Because the truth is, it is entirely within your power to not only grow your revenue, but also make it more consistent.
The key is to improve something known as your close ratio.
The term ‘close ratio’ might sound intimidating, but actually, it’s pretty simple. In sales, your close ratio refers to the percentage of leads that actually turn into sales. It can be expressed in a simple formula:
Sales/leads x 100
So, for example, if you had 150 leads and closed 20 sales, you would do the calculation like this:
20/150 = 0.13
0.13 x 100 = 13
Close ratio = 13%.
Why do landscape companies want to improve their close ratio ?
For two major reasons:
- The more leads you close, the more your ROI for lead generation (advertising, cold calling, networking, etc) goes up.
- But perhaps most importantly, closing more sales helps you stabilize your monthly income over the long-term, keeping business coming in consistently so you never have to worry about the ‘feast or famine,’ ‘up and down income’ phenomenon.
If You Make Serious Steps and Improve Your Close Ratio, Your Business Will Benefit Immeasurably
Beyond the two key benefits listed above, you will also reap rewards such as:
- Increased OVERALL revenue (assuming lead gen rates stay the same, a better closing ratio means more sales).
- Higher growth (as you increase your close ratio over time, your increased profits can be re-invested to grow your business).
- Higher profit margins.
- Lower advertising costs.
- And most of all, the confidence that comes with knowing that your business development spending is paying off!!!
The bottom line is this:
You’re already spending money (or time) on lead generation. Whether you know it or not, you are investing resources at your business into generating new clients. Even if your methods are relatively passive--for example, informal networking--there is a cost that comes with generating new clients. Even referral leads come with the ‘opportunity cost’ of taking the time to speak with the new lead.
So naturally, taking proactive steps to improve your close ratio should be a top 3 priority for your business--if not priority #1.
One of the great things about the landscaping business is, once you do great work for a client, it can lead to a ton of referrals.
But to maximize, stabilize, and grow your income--WITHOUT massively upping advertising spending--remember your close ratio.
It is your ticket to stronger, better business.
Want To Start Improving Your Close Ratio NOW? Read This:
Improving your close ratio is one of the most important things you can do in any business. It’s doubly the case in a highly seasonal business like landscaping, where ‘feast and famine’ periods are common.
We wrote the Arborgold Ultimate Guide to help you identify, implement and track strategies that will improve your close ratio--along with virtually every other element of your sales process.
In this guide, you will discover ideas, processes and technologies that will help you improve your close ratio--without having to spend extra money on sales.
It’s in your power to build a better business.We have the tools to empower you.
Click here to download the Arborgold Ultimate Guide now.