How much is great customer service worth to you?
This is a question that I asked one of our large clients just last week. I’ve been thinking about our pricing model being more expensive than the competition you are comparing us against, and whilst musing on this I thought I’d have a play around to see the potential cost savings of great customer service. Ensuring that plants are delivered ‘on time and in full’ is crucial to your business and below explains why and how poor customer service begins to add up.
On a total project value of plants of say £30,000 for a small to medium sized development, I guess that there are around 20 deliveries over a period to complete the plot work. Should there be delays getting stock to site (let’s say up to half a day waiting for a third of these orders) because of late deliveries, waiting on pallets from couriers, missing or incorrect lines from orders, will set you back 3 x half days for the team on site:
3 men @ £100 plus costs = £350 per time x 8 = £2900
These half days have not only cost at the time of late delivery, but it also means that teams are then delayed going to other sites incurring missed revenue: lets say £1500 of missed revenue each time –
£500 profit for 8 deliveries = £4000
Additionally, half of those – 4 deliveries mean site work can’t be completed that day so require another travel to site –
Average 150 miles at £0.50 = £75.00 x 4 = £300
That would make costs both in opportunity cost and actual cost around £7200, equating to 24% of the total plant value in costs due to one third of deliveries arriving to site late, so if someone is charging 10% more but will deliver what is required when it is required, you are probably making a saving of nearly 15%…
And that’s just the monetary cost before we even start talking about prestige, reputation and your company brand! That’s why it is our mission to make life straight forward for our clients by providing the complete sustainable landscape package.
Greenwood – The Landscapers Friend