Contract Renewals and Client Retention

Maintenance contract renewals along with client retention rates are typically a tough subject around most landscape companies’ offices, but especially with the mayhem that has already been the year 2020 this renewal season will be challenging. Goals were set when the budget was built out, and now the long list of questions remains:

  • How many of our goals did we meet or miss, and how many could we still meet?
  • Does changing our client portfolio and our services, either for the rest of the year or for next year, improve our situation?
  • Can I still achieve the percent increase we had targeted?
  • Will we make the percent retention rate we aimed for?
  • Are our competitors keeping their price flat just to try to ride out the storm, thinking low margin work will get them through?
  • Are we accounting for 2020’s unusually low fuel prices in looking at 2021 overhead?
  • Do we know with confidence which clients are profitable and not so that we can know which ones to price aggressively?

It’s easy to feel like we can ask more good questions than we can find good answers. Ultimately, these questions break down into two groups: a budgeting strategy, for your overall financial projections and master operating budgeting, and a renewals strategy for this particular renewals season on approach. (BOSS provides excellent tools for both, as well as recommended industry consulting relationships if you need well-seasoned advice alongside your leadership team for this run; contact us to learn more!)

On the account management renewals strategy side, business management software should allow you to start tackling these questions, including making some assumptions and running multiple scenarios to come up with options. Knowing that renewals will be a particularly “case-by-case basis” this year, it’s a good idea to have several options in your pocket so that when you get pitched a curve ball you don’t strike out swinging.

Some customers will still be in good financial health; some have high expectations and know that having those delivered will only come at a premium price; some have received outstanding service value from your team this year and after years of bad contractors are happy to not treat you like a commodity; some are long-standing partners or in connected relationships with your team. These are more likely to renew well as-is with little issue.

Others will have been hit hard by the crisis and be looking for options. Good business management software will let you run multiple scenarios so that instead of walking the plank of customer need, forced to agree or jump, you can offer multiple options and let the customer pick from what works best for their top need. The important thing is for you to know what is and is not healthy to agree to so that you know when to say no and when to let a bad client walk away – or when to fight extra hard for a good client to make it work.