Understanding Your Customers

How many times have you spent hours drawing up a landscape design customized to your clients specifications only to have them gasp when you showed them the estimate and give you that “Oh, we weren’t planning on spending that much money” routine? If your like me, it has happened to your more times than you care to admit to.

For the most part, people under estimate the cost involved with a landscape job, and certainly do not understand the amount of back breaking labor that is involved with the installation process. Landscaping is a tough job, if it weren’t then the homeowner would be out doing it themselves. This is where the landscape professional comes into the picture.

With the experience and knowledge from doing several or even hundreds of landscape jobs, you the contractor already know most of the tricks to making the job a little easiers. Generally this boils down to having the right equipment available to make the job easier, but it also encompasses on the job training and knowledge as well.


Closing More Sales

In looking at that design that took you a couple of hours to draw out, and hopefully you are drawing out your designs, what if once you had completed your masterpiece and presented it to the customer you could relax and wait for the “Oh, we weren’t planning on spending that much” routine. Or even the, “Oh, we don’t have that kind of cash to spend right now” routine.

Then what if your come back could be something like “Oh really, well we do offering financing for your landscaping and irrigation projects”. That one little statement sent our company from a 40% close ratio to over a 90% close ratio. And to make it even sweeter, it didn’t cost us a nickle. Believe it or not there are some customer financing options out there that can increase your close ratio as well. The problem is, there just aren’t many green industry contractors out there that know about it.

Customer Financing Options

There are a couple of financing options out there for your customers, and yourself too for that matter. The one that I am the most familiar with is John Deere Credit. No, your not trying to get a tractor financed for your customers, your using the John Deere Partnership Program to it’s full potential.

The other financing option is through Rain Bird irrigation. Rain Bird offers a contractor financing program similar to the John Deere Partnership Program, to enable your potential customer to finance their irrigation installations. And perhaps a little more if your good with a pencil.

But for this discussion, we will talk solely on the John Deere Partnership Program. Namely because that is the one that I used the most.


John Deere Credit


John Deere Credit

Hopefully you have a John Deere Landscapes store in your local area. If not, you may want to contact John Deere Credit directly an inquire about how to sign up for their Partner Program when there isn’t a branch in your local area. But for the sake of this discussion, let’s assume that there is a local branch nearby. The first thing you need to do is visit your local John Deere Landscapes store and fill out there contractor enrollment application. This gets you an account set up with John Deere. And don’t worry if you don’t have perfect credit because you can pay for your materials and supplies as you go without having to have an open account. We had an open account and still paid as we went because it kept all the accounts payables easier.

Once your account has been created and set up, which generally takes a few days to make it through all their accounting departments before completion, you can inquire about their Partnership Program. This is a seperate application you will have to fill out. This is a basic application requesting information pertaining to your company and banking information. Again, this will take a little while to complete.

Eventually you will receive in the mail a contractor starter kit. This kit contains credit applications for your customers, initial job assessment forms detailing the project and cost, and instructions on how to fill out the forms and how to call in their credit applications. Also included in this packet will be your John Deere Landscapes contractor number which you will include on the application forms. This tells John Deere Credit where to send the money once the job has been completed

The whole process in a nut shell is, you give your landscaping or irrigation proposal to your customer. Once they have recovered from their fainting spell, you inform them that you offer financing on their landscape job and that they have a couple of different options to choose from.

Options Include:

180 Days Same As Cash

Just as the name implies, if you customer pays their amount owned on their landscaping job prior to the end of the 180 days, then the interest accrued is waived and they only owe the principal amount financed. This is convient sometimes for homebuilders who are waiting on their next draw or waiting to close on a house. They can defer their payment for a full 180 days and avoid owing interest payments. If the customer does not payoff their balance within the 180 days though, then the interest is accrued at 19.8%. Thus, make sure your potential customer understands that if they do not pay their balance off in full prior to the lapse of the 180 day same as cash period, then they will not only owe all accrued interest but a higher interest rate as well.

Low 9.9% Rate Financing

The 9.9% low rate financing option is the term almost all of our customers opted for. This option allows your customer to pay whatever amount you request down and then finance the rest at 9.9% interest financing. The good part is that you get to determine how much the customer must put down. We generally required between 15-20% down payment, and then would finance the rest. This gives you money up front to cover labor and some material cost so that your really not out of pocket for these fixed expenses. I always considered this to be a perk since normally we didn’t get paid for a job until it was completed. So if bad weather drug a project out an extra couple of weeks, and we have had that happen before, your not sitting on plants and materials that you can’t get paid for. And the monthly amount your customer will pay is pretty simple to calculate as well. It is equivalent to $20 per $1000 financed. Thus if you bid your customer a $10,000 landscape project and you decide you will require 10% down payment, then the amount financed would be $9,000. And their monthly payment would be just $180.00 per month.

Quick Payouts

Regardless of the financing method your customer opts for, the rest of the process is pretty much the same. You have the customer fill out the credit application. Once completed, you take that credit application and head to your truck. Crank the truck up and blast the A/C because it’s probably hot outside. You complete the contractor form detailing the financed amount and the terms the customer is requesting, plus a project code from John Deere’s list of project codes. Call the financing department and give them your contractor number and the customer information from the credit application. They will run the numbers and give you back a credit amount the customer is able to finance. If this number is higher than your proposed landscape job then your good to go. If this number is less than your quoted landscape project bid is for, then you will either need to get additional money down to cover the difference or go back to the drawing board and scale the project back some to get the price below the customers credit line.

Once this process has been completed, you get your down payment from the customer, set an installation appointment and complete the assigned work. Once the project has been completed, you walk the customer through the project and let them do an inspection of the work. Once satisfied that the work has been completed to specifications, you have the customer sign the contractor form you initially filled out signifying that they are satisfied with the project. You take this form to the local John Deere Landscapes branch and turn it in to them. They will fax the form on to the appropriate department and generally a day later your customer will receive a phone call confirming that they are satisfied with the job you’ve performed. Once satisfied that the customer is happy, John Deere Credit will deposit the money directly into your checking account. It generally takes 48 hours from the time you turn your form into the local branch til you’re bank account receives it’s deposit.

Now what can be sweeter than that? Increase you close ratio on landscape bids without it costing you one red cent. Your happy, your customer is happy, and your sales start to go through the roof.

Good luck, and happy bidding!

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