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VOL. 7 | NO. 23 | Saturday, May 31, 2014

New Path

TruGreen charts different course as ServiceMaster spinoff

By Bill Dries

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A lot has changed for Memphis-based TruGreen lawn care in the last six months.

TruGreen is charting a new course with some lessons learned at ServiceMaster and some older lessons brought back from its status as an independent brand.

(Memphis News/Andrew J. Breig)

The company behind one of the best known brands in lawn care became its own independent company at the start of 2014, spinning off from The ServiceMaster Co. in a move that meant changes for both companies.

ServiceMaster underwent its own restructuring in February on its side of the spinoff yet remains a collection of residential and commercial services that includes Terminix pest control and Merry Maids.

David Alexander remains as TruGreen CEO, seeing the company through its first months as a standalone entity, just as he did in the months leading up to the spinoff when the company was part of ServiceMaster.

“We have a 40-year history in the lawn care business with much of that time spent as an independent company,” Alexander said by email. “The change in our status doesn’t change our objective – we will give our customers a lawn they love from a company they trust.”

It was that objective that ServiceMaster sought to enhance over several years that saw three different CEOs for ServiceMaster and bringing in leadership from the Terminix division to apply some of its practices to TruGreen.

In a ServiceMaster earnings call this past November – the last one that included TruGreen results – Alexander called the spinoff “the best possible move for both ServiceMaster and TruGreen.”

“We’re in charge of our own destiny,” he added at the time.

Alexander said recently that some of the Terminix practices and those from ServiceMaster as a whole worked well.

“From an operational and agronomic standpoint, however, our best practices have been developed within TruGreen,” Alexander said, pointing to training designed by agronomic PhDs to the TruGreen specialists.

Alexander said the company remains rooted in Memphis despite the change in its status.

“We plan to remain headquartered in the Memphis metropolitan area,” he said. “TruGreen is a part of the fabric of the community.”

Alexander added that he is spending more time these days in TruGreen branches across the country. The company has 250 branch and satellite operations with 10,000 associates working for them and serving more than 1.8 million customers.

“Being an independent company again with the ability to make the right decisions for ourselves and our customers has created great excitement with our associates,” Alexander said. “There is a renewed sense of pride, accountability and optimism that comes with forging our own way.”

Alexander’s attention appears to be on the same area ServiceMaster had focused – sales, service and customer retention.

And TruGreen had showed its first year-over-year increase in revenue in more than two years just before the spinoff, although the revenue bump didn’t make a dent in a customer count that dropped 300,000 in two years.

Alexander, who began running TruGreen in December 2012, said the company has customer service and productivity capabilities it didn’t have before, “such as sales and service mobility, real time productivity tracking and new planning tools.”

Alexander came to TruGreen from being the former CEO of Citi Trends, an urban retailer, and before that as the president and chief executive officer of Family Dollar. He was recruited by then-ServiceMaster CEO Hank Mullany.

Alexander marked the departure in TruGreen’s turnaround strategy from bringing over Terminix executives to help right the TruGreen ship. For a time, he worked with the previous plan to change out the operating systems at TruGreen, acknowledging last summer that the turnaround would take “longer than previously expected.”

But that approach ended a quarter later when the new and current ServiceMaster CEO Rob Gillette said TruGreen’s problems were “largely self inflicted.”

Alexander is touting the company’s new approach and branding of itself as the “official sponsor of spring” through direct mail and social media campaigns that began recently.

“Luckily, we have a strong identity as a standalone brand,” he said. “And our position as America’s No. 1 lawn care company has begun to play a more prominent role in our marketing.”

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