How Landscaping Increases Property Value
|By RON CHEPESIUK|
“That’s a phenomenal return by any standard,” Mohns said. “It shows the huge impact grading can have on property values.” Mohn’s conclusion may seem obvious to the experienced professional landscape contractor, but it’s a fact that sometimes gets forgotten, overlooked and, worse yet, taken for granted in the landscape contracting industry. Lest we forget— decks, trees, patios, fountains and paths add value to property. “I believe the tendency in our industry is to focus not on the value of work, but on what we do really well: service,” said Vicki Bendure, a spokesperson for the Associated Landscape Contractors of America in Herndon, Virginia. Yet numerous studies dating back to the late 1980s conclusively show that landscaping can increase property values. In its June 1987 issue, California Landscape magazine cited a Society of Real Estate Appraisers Survey, which noted that 95 percent of the appraisers responding to the survey believed that landscaping adds to the dollar value of residential real estate. Moreover, 99 percent of them said landscaping enhanced the sales appeal of residential real estate. The article concluded: “A tremendous opportunity exists in the nursery and lawn garden industry in this country. It is one that will result in increased usage of the industry’s products. It is one that can be accomplished through working with other professionals to enhance and to establish the real value of landscaping.” Seven years later, a study by the Clemson University Department of Agriculture and Applied Economics reached a similar conclusion. Clemson, which did the study to provide homeowners with reliable information on landscaping investments, concluded that landscaping could increase the resale price of a home by as much as 10 percent, depending on its quality.
The report concluded that “homeowners selling to increase the value of their property will do well to consider the cost-effective, high return potential of quality landscaping, and to safeguard their investments by hiring licensed, professional landscape contractors to perform the work.”
Smart Money magazine published a special report in its March 2003 issue entitled “Add 15 Percent to Your Home’s Value.” The magazine told its readers, “one of your greatest assets may be your own backyard, literally. As the housing market turns softer, Americans are realizing that one of the best ways to increase a home’s resale value is to revamp the landscape.”
These studies and reports focus on residential property, but the formula, landscaping property = added value , can also be applied to our industry’s commercial scene. “It may not be a primary consideration for commercial owners, but they do want their buildings to look good,” Mohns said. “Otherwise, it can be tougher to attract clients.”
Peter Howe, Client Solutions Adviser at the Indianapolis-based Engledow Group, a landscape contractor focusing on commercial property, agreed, “Both property management and tenants are affected by how the business looks,” he explained. “If a building looks good, employees will feel great about coming to work. A landscape that looks ragged and neglected projects a bad image and gives the public the impression that the building’s owner doesn’t care about his property or customers.”
As ALCA explains at its web site, “A well designed landscape invites customers to the door, producing higher occupancy rates, increased rentals and lower vacancies.” According to Johnathan Guido, director of Landscape USA, “Landscaping not only can add as much as 14% to the resale value of a building, but it also speeds the sale of a building by as much as six weeks.”
These studies and reports should make our industry proud. But before we begin thumping our chests, remember that these conclusions won’t necessarily follow unless landscapers make an aggressive effort to use that information for the benefit of their businesses. Consumers don’t necessarily understand the landscaping property value connection and how it makes for a wise investment.
“I believe landscape contractor can’t lay back and expect the public to somehow figure out that landscaping can work for their economic best interest,” McGuire explained. “Landscapers need to look for creative ways to represent the message to them.”
Bendure believes that messages, no matter how aggressively and creatively presented, take a while to sink in. “Consumers are constantly being bombarded with messages, so many of them go in one ear and out the other unless they are reinforced,” she explained. “We should remember the old marketing concept: It will take five to seven passes (from the marketer) before the consumer begins to understand what you are talking about.”
One of the best ways to get a message across is to make it simple but highly visual and interesting. Contractors like Peter Howe and Rick Doesburg, CCLP president and owner of Thornton Landscape in Cincinnati, Ohio, use power point presentations to get their message across.
“I use my power point presentation as a conversation piece,” Howe explained. “That’s the greatest thing about it. I can sit in a room with a prospective customer for about 45 minutes to an hour just talking. Having something visual on the screen in front of me and the customer is a great way to get to know a customer, and for the customer to get to know our company in a relaxed environment.”
Howe’s power point presentation shows photos of properties that have been maintained and those that have been neglected. Statistics are strategically placed throughout the presentation. “I can slip in my references without using the hard sell,” Howe said.
On the subject of the hard sell, Howe does very little advertising and when he does, property values aren’t mentioned, preferring instead to use the one-on-one approach to market that selling point. “We have been in business for 73 years and are well known in Indianapolis,” Howe explained. “Our company gets most of its business by word of mouth, and by the good footwork of our sales people.
Rick Doesburg, whose company specializes in residential landscaping, also believes in using property values as a marketing tool via the power point presentation. “We bring all the customers who haven’t worked with us before to what we call our ‘ Idea Center,’” Doesburg explained. “We believe it’s important to educate prospective customers about the landscape industry because we are looking for a long-term relationship. Bringing them to the Idea Center gets them away from the kids, family or the office—that is, the distractions.”
Doesburg’s power point presentation, which he described as ‘graphic and colorful’, is about 45 minutes long. “Our presentation stresses that landscaping is an investment that can pay big returns,” he explained. “We use the 15 percent increase-in-value figure, but we stress that property must be maintained to gain that benefit. The end result, we point out, will be greater pride in ownership.”
Both Howe and Doesburg believe in reinforcing the message by giving printed material to the prospective client when they leave. Howe gives out an Indiana business magazine article that discusses how to choose a landscape contractor, along with some company marketing material.
Doesburg uses ALCA promotional material, as well as the 2003 Smart Money magazine article and information on some studies done by Weyerhaeuser Coporation. ‘The trick is to back up what you’ve shown on the screen with printed material people can take away with them,” Doesburg said.
Sources said it’s important to recognize that clients will do their homework, so you need more than just a good marketing strategy that talks about the property value blessings landscaping can bring. If you are in compliance with professional standards, you can act confidently like Howe and other industry professionals, who are not hesitant to hand out literature that discusses “how to choose a landscape contractor.”
“You can bring up the main points the client wants to discuss before he does and that will really impress them,” Howe said.
So what are the professional standards and what should you be prepared to discuss with prospective clients? Consider these steps the ACLA advises the public to follow in choosing a contractor:
* Decide how a landscape contractor can help.
One last important point to keep in mind. You have to understand the needs of your customers before you market your services. Scott Jamieson, president and CEO of the Care of Trees, Inc., in Wheeling, Illinois, which splits its business fifty-fifty between residential and commercial, said a contractor must be flexible when marketing. “If the customer seems to be focused on pride of ownership and how the place looks, focus your marketing strategy in that direction,” he explained. “Just talking about property values isn’t necessarily going to work.”
But any way you look at it, landscaping property = added value is the formula for success that no other industry has.