VOL. 128 | NO. 225 | Monday, November 18, 2013
TruGreen’s Issue was Keeping Customers
By Bill Dries
The ServiceMaster Co.’s TruGreen lawn-service division has at least 300,000 fewer customers than it did two years ago, just before the Memphis-based commercial- and residential-services provider began seeing a decline in TruGreen’s numbers.
That’s what TruGreen President David Alexander told investors and analysts Thursday, Nov. 14, in what should be TruGreen’s last participation in a ServiceMaster earnings statement.
ServiceMaster CEO Rob Gillette announced Thursday that the company will spin off TruGreen by the end of the calendar year as an independent company.
“I believe that this is the best possible move for both ServiceMaster and TruGreen,” Alexander told investors and analysts on the quarterly conference call. “We’re in charge of our own destiny.”
It’s a destiny in which TruGreen hit one key goal in the quarter that ended Sept. 30, showing the first signs of a turnaround.
“Albeit by a small amount, our third-quarter revenues increased versus 2012,” Alexander said. “It’s the first year-over-year increase in over two years. But we are well down from where our customer counts have been historically. … We’re just not on the same timeline as the rest of ServiceMaster.”
TruGreen has been retaining its base of existing customers during the last two years. Its problem – and ServiceMaster’s problem – has been TruGreen hasn’t been retaining new customers during that timeframe.
“This has been very directly a result of issue with our systems,” Alexander said, referring to customer calls and door-to-door marketing methods. “If you’re a new customer, we’ve had to do what we call a ‘best fit.’ We had a lot of systems issues around that. It will take several years to recover the number of customers we’ve lost in the last two years.”
The “best fit” method is where new customers were fit or placed into an existing schedule with longtime customers.