In 2009, Novato, Calif.-based Cagwin & Dorward was down around 14% in lost revenue.
Like so many other companies, they were hit hard by the economy, and experienced lost accounts and lots of scaling back. Since then, the company has rebounded greatly and is currently looking at a little more than 4% growth for 2010.
What that difficult year has allowed the company to do, says Steve Glennon, vice president and COO, is to become more competitive on pricing. “We were a little slow to react to the economic situation,” he says. “We’ve never typically been a company with a reputation of being a low-price leader. In fact, we have a reputation of being on the higher side. However, we do provide a lot of value with that price. But in this economy we’re finding people are no longer looking for the ‘Mercedes Benz’ level of service anymore. They want good work, but price has become critical. So we’ve gotten a lot more competitive.”
This solution was born out of one of the company’s biggest challenges — losing customers solely on price. “We were getting termination letters in which they told us we’d done an outstanding job for a decade or more, but they were hiring someone who charged much less,” Glennon says. “It’s difficult to lose a contract when we were doing a good job — they just couldn’t afford us anymore. So we’re working closer with our customers on pricing now.”
In addition to scaling back pricing, the company, whose two biggest areas are maintenance (61.5%) and installation (23.2%), has also put more emphasis on what they call “customer centricity.” “It’s about staying connected to the customer,” Glennon says. “Customer retention is probably one of the most important elements of our business and we put a lot of emphasis on it. One of the things we implemented last year was going out to our top 25 customers and just talking with them. Asking how the economy is affecting their business and letting them know that we understand.”
Of the company’s growing areas, tree care (which accounts for about 8.8% of overall services) has been strong with about 25% growth over last year’s numbers. Glennon says that’s one area where customers are willing to spend their dollars — particularly when it comes to safety and liability issues — so he’s put some more focus there. “We are making more of an effort to address safety issues and hazards with our clients,” he says. “When you bring those types of things to the client’s attention, they’re willing to spend the money.”
The company has also put an emphasis on water conservation education, which is a growing need for Northern California, an area that’s dealt with many drought issues. “We pulled a lot of new contracts simply based on the premise that we felt confident we could reduce their water consumption and their overall cost,” Glennon says.
The combination of several key strategies — namely competitive pricing, customer centricity, and a focus on growth areas like water conservation — has helped grow Cagwin & Dorward in 2010. “We knew when we were budgeting that this would be another tough year,” says Glennon, who originally put growth around 6%. “We felt if we could have a conservative goal and grow despite the economy that we’d be happy with that success.”
