Irrigation Service Contracts: A Benefit for Your Customers, A Profit Center for You
In a cutthroat environment where companies vie for each other’s business all the time, close your eyes and imagine this sweet dream: you garner a new customer, and have a great chance of keeping that customer for life.
You might think this is a pipe dream, but it’s reality for the growing number of landscape contractors and irrigation specialists who also provide seasonal care for their customers’ irrigation systems. These firms do it with a formal or informal Irrigation Service Contract (ISC) that seals a season-long—and, hopefully, lifelong—agreement.
The ISC is simple at its heart. In exchange for a yearly fee, the contractor gets the irrigation system up and running in the spring, keeps it running through the watering months, and then shuts it down for the winter (depending on local conditions.) Some contractors bill at the beginning of the season, some at the end, and some every month. The principle is the same. The contractor gets a steady gig with good cash flow, and the customer gets a properly maintained and functioning system. If there’s any problem, the customer knows whom to call.
Greg McLaughlin, owner of McLaughlin Landscaping in Hermiston, Oregon, offers a popular Irrigation Service Contract for his customers. He says that ISC customers are better customers than average. “We’ve looked at the numbers,” he confides, “and tracked sales carefully since before the recession. Our overall revenue in 2009 was 24 percent below those for 2007, but our irrigation service business slipped down only 10 percent. Since 2009, we’ve gained back half of our overall revenue, but our irrigation service business is right back to where it was. Thank goodness for our ISC business. The numbers don’t lie; it’s a bigger piece of our pie.”
Other green industry professionals echo McLaughlin’s sentiments. Bill Rose, of Suburban Lawn Sprinkler in Framingham, Massachusetts, reckons that he has 98 percent retention of irrigation service customers for up to 20 years, if he did the initial installation of the system. Rose does not work with a formal written agreement, but instead maintains informal seasonal service arrangements with his customers.
Warren Collis, at KT Irrigation in Chantilly, Virginia, has been doing formal irrigation service contract agreements for years. A longtime industry veteran, he spun off KT Irrigation from a larger landscape service firm five years ago because of how the business has grown and specialized.
“At the peak of our season, we have 200 commercial accounts and more than 1,000 residential accounts,” Collis relates. “All those people are on irrigation service contracts. The business is so robust that if you have a problem with your system or you call us for winterization, and you’re not one of our service contract customers, you’re going to go to the bottom of our list. Come autumn, when we have to shut down 1,200 systems in about six weeks, there may not be time for you.”
ISCs, whether formal or informal, always start with winterization and spring startup (assuming you’re in an area where freeze is a danger). Included in winterization is the cessation of the water supply to the system, which usually means inspecting and then closing the ball joint. Then, you purge all the water from the irrigation components—including pipes, heads and valves—by blasting compressed air through the system. This prevents freeze damage. Finally, you shut down the controller to prevent it from from sending commands to the system, no matter whether that controller is “smart” or mechanical.
Many states require that irrigation systems have backflow preventers that will stop water in the system from leaking back into the main water supply. If there’s a backflow prevention device, you have to make sure the unit is winterized, otherwise when the water freezes, the backflow device will crack.
Come springtime—again, assuming you’re someplace where sprinklers shouldn’t run year ’round—you’ll start up the customer’s system, once the danger of a freeze is over. (In some parts of the country, like in the mountains, this can be as late as May.)
As part of that startup, you’ll re-inspect and open the valves, and then pressurize the system. Once pressurized, you’ll check each zone for leaks and damage and inspect every sprinkler head for function and angle. Finally, you would repower and set the controller.
One additional service you can offer as part of spring startup—or at any time that the system is functioning—is backflow device certification. Most towns and cities require annual testing of backflow devices. Testing and certification can be part of the ISC, or performed for an additional fee.
Winterization and spring startup should be in every irrigation service contract. Clients, even in the warmer areas, need a fall checkup. Beyond that, you can offer the customer varying levels of attention and service, with the price varying on the number of inspection visits made during the watering season.
For each inspection, you would test for leaks, check out the rain sensor—if there is one—and verify that all sprinkler heads are working properly and are in good shape. Inspections are also the the perfect time to adjust the customer’s controller for local weather and soil conditions.
“Every yard has its own personality,” says Collis.
“When the yard is on a service contract, we know that yard, and can adjust the controller so the customer isn’t spending more money on watering than necessary.”
Some companies offer a number of options for their clients. One company offers a “Platinum” plan, which will service from seven to nine watering zones, costs $750 for startup, shut down, and service visits every month between May and October. Backflow prevention certification is $50 extra. Their “Silver” plan, which includes startup, shut down, and a single mid-season service inspection in July, is $295 for the same number of watering zones. McLaughlin’s version of the silver plan is $190 annually, while KT Irrigation charges $360, but includes two mid-season inspections.
Different contractors add different bells and whistles. KT Irrigation, for example, offers an extended lifetime warranty at the “Gold” and “Platinum” level of service for systems that it has installed, as long as the customer has an ISC with the company to do the maintenance on it. Collis’ theory is that if the system is properly in- stalled and maintained, he’s not going to have to do a lot of extended warranty work. “We have a fair deductible on the extended warranties,” he explains, “which means that the customer will pay for broken sprinkler heads and the like. Other than that, I don’t mind being on the hook for systems that I know are well-maintained.” McLaughlin also offers a version of a guarantee. “We don’t say that we give a 100-percent guarantee for our work, but as a practical matter, we do. We’re a service-oriented com- pany. One thing that we do as a matter of course is offer a discounted service contract whenever we make an installation. This is one way to bring in even more customers.”
The ISC also provides an opening to sell customers on system improvements.
Nick Del Conte, of Del Conte’s Landscaping in Fremont, California, does what he calls an “Initial Irrigation System Inspection” when he brings on a new ISC customer. This inspection serves two purposes. First, it lets Del Conte document all the customer’s components and brands, and creates a map of the system for future use by visiting technicians. Second, Del Conte can create a list of system maladies and present them to the customer for possible correction.
“We rank these system problems like an auto mechanic might with your car—from urgent to semi-urgent to would-improve-efficiency,” Del Conte says. “Customers really appreciate it, and we end up making a lot of needed repairs and improvements.”
If there is any drawback to the ISC, it is in the operational details of keeping track of your customers, and managing their particular configuration. Customers have different systems, different controllers, different sprinkler heads, and different terrain. To eliminate wasted time, you need to keep careful track of who has what.
McLaughlin minds the details in two ways. He has a database at his office, but also a simple three-by-five index card for each property, that serves as his main tracking sheet. “The card tells us where the clock is, where the valves are located, where to find the main turn-on, where to locate the hose bed, and even warns my guys whether they should beware of a dog.”
KT Irrigation uses a sophisticated database that not only keeps details about each customer and their property, but also does scheduling and route planning.
“When you’re doing as many setups and shut-downs as we are, you want to be ultra-efficient,” Callis declares. “There’s no sense in driving all over town when you can set appointments in the same geographic area.”
ISCs are contracts between you and your customer, which means they have legal implications. Los Angeles attorney Bruce Rudman, a construction law expert, discusses some of these in “The Fine Print” sidebar.
That said, they’re a win-win in so many ways for so many irrigation professionals, landscape contractors, and their customers. Let this be the season they’re a win-win for you and yours.