The consumer recovery

Consumers will spend again… but not excessively.

Some people described it as gluttony.

Others called it obnoxious.

It was consumers’ “I have to have it” mentality. Anything was attainable to people who wanted it. If they didn’t have the money, they borrowed it. Today, that has clearly changed.

Contractors now use words like “cautious,” “careful” and “conservative” to describe customer spending. Clients seek information before they make any decisions and are more frequently asking about deals and discounts.  Instead of making instant purchasing decisions, they hesitate. They consider. They ponder. In the Landscape Management survey, 36% of lawn care and landscape professionals say customers are taking more time to make decisions.

And, in today’s depressed economy, “bad news travels too fast,” says Joe DiRoma, owner, DiRoma Landscaping, Lisbon, CT. “People are sitting on the fence not spending money until they see what other people are doing,” he says. “I think they hear so much about the economy and that makes them more cautious. They hear other people are struggling and they’re worried about spending their own money.”

Instead of neighbors one-upping each other, gushing about new furniture or their bigger and better televisions, the water cooler battle is who has the saddest story to tell. According to Gallup.com’s latest consumer confidence survey, 47% of Americans rate current economic conditions as poor and 63% say economic conditions are worsening.

Though unemployment is tough and home values are not at their best, “my impression from surveys we get back from customers is their reasons for discontinuing service is not that they lost their job or home value has gone down,” shares Chris Senske, president of Kennewick, WA’s Senske Lawn & Tree Care. “It’s just that they’re uneasy and hanging on to money. People are unsure.”

“We do have customers telling us they want to scale back and we did lose customers who told us it was because of the economy,” admits Giuseppe Baldi, landscape maintenance manager for Baldi Gardens in Arlington, TX. Though he feels this was worse in 2009 compared to this year.

What has changed? There’s been “a profound shift in client needs and expectations,” says Kirk Brown, business manager, Joanne Kostecky Garden Design, Allentown, PA. “As with the terrible demise of the easy flow of money in the residential housing market, landscape budgets have contracted and clients — if they are looking to do any work at all — are scaling back their wishes and ramping up their demands/requirements.”

“Customers are definitely getting more picky,” Baldi confirms. “There’s still that hesitation. They are still spending but hesitant to do too much.”

In an August survey, The National Gardening Association found one in five households spent more time caring for their lawns and gardens last year — a good sign. However, they are spending 16% less money total than in previous years.

Todd Dilley’s biggest fear is the recession will continue to worsen and play on customer psychology to the point where “even if they have money, they will be scared to spend it,” says the general manager of The Lawn Ranger, Minneapolis, MN.

Yet, optimism prevails, but it grows in “baby steps,” Baldi says. When asked which one customer segment holds the most opportunity for business growth, a clear majority of contractors (51%) chose residential.

“I do believe that people will continue to see the value of our industry in 2011,” Dilley says. “So I’m hopeful about that. In a funny way, the recession has made people look less at material things and get back to taking good care of their homes and buildings. That starts with the outside. People want to make their house look good again. I’m looking forward to that continuing to be a trend — people valuing what we do.”

“It will happen,” Senske agrees. “But I think it will be awhile before we see anything like the early 21st century. We’re not going to have that obnoxious consumerism again for awhile.”