By Brandon M. Gallagher Watson
For years, there was a divide in our tree care company whether we were a science organization or a sales organization. The science camp asserted we were benevolent tree defenders, here to advance the field of arboriculture and educate the world about trees. The sales camp said we were first and foremost a business, and if we didn’t focus on profits, the rest of it didn’t matter. We finally put that debate to bed by realizing we were both, that we had to be both, in fact. No tree health sale ever saved a tree without a scientifically backed protocol, just as no science-based protocol ever saved a tree without a sale. The science of tree health cannot survive without the business of tree health, and vice versa.
We spend most of our time in this space each issue talking about the science of tree health. From diseases to insect pests to issues related to the planting site, the bulk of the talk here is how to diagnosis and take action for the longevity of our urban trees. However, an important step is missing between diagnosis and treatment here — getting the tree’s owner to agree to your plan and, perhaps even more important, getting them to agree to pay for it.
The most common roadblock we hear from arborists on the business of tree health care is the important part — getting someone to pay for it. Tree owners are often stuck with sticker shock when an arborist proposes a management plan. Whether the estimate is for a $100 or $1,000 service, tree health care can seem expensive to the tree’s owner. This sticker shock often results in the owner not taking action, worsening the condition for the tree or leaving them unprotected from whatever ailment you were trying to prevent. The adage is true that “price is clear, value is not,” so how do we get tree owners to see the value of the services we offer?
One way to contextualize the value of tree health care services is start with showing the value of the tree. There are a few facts you can arm yourself with before even showing up to the job site; or, if you don’t have all the facts beforehand, you can look them up on your phone or tablet when you arrive. If you know the species of tree, its size, and the ZIP code in which it resides, you can use the handy National Tree Benefit Calculator (NTBC), which is available online at [ital>www.treebenefits.com/calculator.<ITAL] a size P CO2.
The NTBC is a great place to start, but some of the values it presents may not be tangible for your clients. For example, according to the NTBC, a 35-inch-diameter elm tree in suburban Minnesota will provide a benefit of $11.05 in CO2, but what does that mean to a homeowner? If the tree is removed, does the homeowner now get a bill for $11.05 for carbon sequestration? Additionally, the calculation for property value benefit seems intuitively low. According to the NTBC, our 35-inch elm tree is only raising the property value $69 per year. This calculator does not take into account the other real estate factors such as value of the home, neighborhood, tree health, or aesthetic value of the tree. A “nice” looking mature tree on the property would obviously add more curb appeal and resale value to a home than a ratty-looking tree, but these factors are not accounted for here. Nonetheless, the NTBC is a resource that can and should be used by more arborists to communicate with tree owners. The website also contains all the citations used for calculating these benefits, which can be a great resource for answering questions on how these numbers came to be.
The property value benefit trees provide varies wildly from source to source. Although I believe the NTBC is low when saying a mature elm adds just $69 to the value of a suburban home, other numbers such as “Trees can add 20 to 30 percent to your home’s value” seem incredibly high to me. A $250,000 house doesn’t go up 30 percent to $325,000 with one tree, so how can we get a reasonable valuation? The number I use came from a study published in a real estate journal (Dombrow et al. 2000) where the researchers looked at 10 years worth of home sales data in an area and calculated the effect mature trees were having on the appraised value of single family homes. Their study showed trees had a 2-percent impact on the appraised market value. Thus if a house with mature trees is appraised at $275,000, the trees accounted for $5,500 of that value. The same house in the same neighborhood without trees would appraise at $269,500. As this number seems reasonable, it came from the Real Estate industry, and has a journal citation one can reference, I find it a useful figure. Rough home values can often be found just by Googling the address, or by using realtor websites such as [ital>www.Homes.com.<ITAL] P It needs.
So, we now have some numbers to show tree benefits, how do we use that for selling on value and not on price? We can frame our conversations showing what is positive about the situation, what would happen should they not opt for our services, and what solutions we offer. To be clearer, let’s follow a real example that our tree care company experienced this year. One of our arborists has a client with a 33-inch elm in front of their $330,000 suburban home. They are interested in protecting it from Dutch elm disease for the next three years with an Arbotect treatment, which we quoted them at $600. They are on the fence about the treatment, unsure if this is a high price or a good deal. Problem is, they only know the price, and they do not have a context for the value. Here’s how to have that conversation to show the value:
“You have a beautiful elm tree that is adding value to your home. In fact, your tree is providing $332 per year in benefits, and will give $996 in benefits over the next three years. Mature trees contribute 2 percent to the appraised value of your home, so your tree is adding $6,600 to you home price. Unfortunately, Dutch elm disease is still killing elms like this in our area. At about $100 per diameter inch for removal, your tree would cost about $3,300 to remove and replacement trees are generally around $400 to get planted. If you were to lose your elm to Dutch elm disease you are out the 80 years it took to grow a tree this size, and the emotional and aesthetic value it provided as well. You would lose $6,600 in appraised property value and the $996 in benefits it would have provided in the next three years. Out of pocket expenses for removal and replacement would be $3,700. All told, the loss of this elm tree would have an $11,296 economic impact on your property and pocketbook. Fortunately, we have a treatment that is 99.5 percent effective at protecting elms from this fatal disease. This service is $600, saving you $10,696 in dollar and value losses. Additionally, you will still have the emotional and aesthetic value of this 80-year-old tree. Would you like to go ahead with the treatment?”
You can see, with a few facts and a few quick Internet searches you can change the conversation from “Tree health care is expensive” to “Tree health care is a tremendous value.” It’s doesn’t cost $600, it saves $10,000. By presenting the service’s price within the context of the service’s value, tree owners are better able to make a decision, and, more often than not, are more likely to take action for their trees. The tree is protected and a sale is made. This makes the people in both our science camp and our sales camp very happy.
Brandon M. Gallagher Watson is director of communications at Rainbow Treecare Scientific Advancements, and is an ISA Certified Arborist (#MN-4086A).
J. Dombrow, M. Rodriguez, and C.F. Sirmans The Market Value of Mature Trees in Single-Family Housing Markets. 2000. Appraisal Journal. Vol. LXVIII, No. 1. 39-43