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How Marketing is Risk Management

How Marketing Is Risk Management

Written by Eric Petersen, CIC

Yes, you read that title correctly. The marketing your company is doing to attract new customers and employees is actually a form of risk management. In a previous article, Building a Risk Management Mindset, we discussed how a business intentionally creates opportunities and avoids problems by installing a risk management mindset. Those same principles are very true when looking at your marketing. 

Let’s first define what I mean by marketing. Marketing can be any outward action or impression of your company that is released into the world that will either attract customers or employees to your company. Most people think of marketing in an active sense only, where the sales flyer or social media post that is created is marketing; however, many times marketing happens in a passive way without the business owner truly knowing that it is occuring. The appearance of who you are sets the stage for the customers and employees that will be drawn to your company. 

We are going to explore marketing from a risk management perspective to help you intentionally create the business you desire by looking at both external marketing (for customers) and internal marketing (for employees). 

 

External Marketing – This is what most people think about when they use the word “marketing,” which is the action taken by a company to attract new customers or sell more products/services to existing customers. All too often we see tree services advertising or promoting a unique one-time job that they did for someone, that, while they are really proud of that job, chances are they won’t be doing it again for a long time. This could be a removal job on an island or large crane job or a project in a remote area. Whatever the job is, when the company advertises it, their potential customers begin to connect that unique job to the expertise of the tree service. 

Those unique jobs typically are not ones that you want to rely on as a business and more often than not don’t fit into your Sales Sweet Spot. Your Sales Sweet Spot is where your Specialty Service intersects with your Ideal Customer. (To learn more on the Sales Sweet Spot read our article here). When you are operating outside of your Sweet Spot, the risk to your company increases dramatically. 

Therefore, it is the goal of your marketing to showcase the type of work that you are truly experts in and the type of work that you want more of so you can continue to operate within your Sweet Spot. To help your marketing team utilize a risk management mindset, ask yourself these questions: 

  • Have you defined the Sales Sweet Spot? (For one-on-one help in developing this, enroll in our Thrive Sales & Marketing Package)
  • Does your entire team, including the marketing team, understand your Sales Sweet Spot?
  • What type of jobs are you attracting through your marketing materials? 
  • Do your social media posts talk about and show the type of work that you want more of? 
  • Does your website accurately depict what type of work you want more of?
  • Have you ever run a marketing campaign that focused on a product/service that was outside of your Sales Sweet Spot? If so, how did the results end up?

 

Internal Marketing – Internal Marketing is the action or inaction to get new, quality employees interested in your company. This can be more difficult than external marketing, because it often happens without your conscious thought, yet is one of the main drivers for whether or not you are actually attracting quality employees. It goes without saying, but the better, more professional employees you have, the lower the risk of injury and accidents happening within your company is. 

Therefore, by intentionally marketing to the type of employee that you want, you are practicing risk management. To subjectively look at the internal marketing that is happening within your company today, ask yourself these questions:

  • Have you defined what your ideal employee’s characteristics are? (For one-on-one help in developing this, enroll in our Thrive Hiring & Recruiting Package)
  • What type of employee are you attracting through your external marketing? The adrenaline junkie or a professional arborist? 
  • Are all of your marketing pictures and messages focusing on projects or jobs outside of your Sales Sweet Spot? 
  • Does your messaging align with your staffing needs, today and into the future? 
  • What do your trucks, equipment and uniforms say about the professionalism of your team?
  • Do you promote employee appreciation in your social posts and on your website? 

 

Simply put, marketing, both external and internal, is happening every day within your company. How intentional you are about getting your desired customer and employee is what separates the good companies from the great ones. Employ a risk management mindset when thinking about your marketing and your company will be miles ahead of others in your area. 


If you’re struggling trying to implement a risk management mindset within your marketing, reach out to an ArboRisk team member today or enroll directly into our Thrive Sales and Marketing Package for one-on-one help.

Margaret Hebert

Building a Risk Management Mindset

Building a Risk Management Mindset

Written by Eric Petersen, CIC

I’m sure you’ve heard the phrase, “safety pays” before. In fact, the Occupational Safety and Health Administration (OSHA) has a website, with that very name, that allows you to calculate how much an injury will cost your company. While figuring out the cost of an injury can be a great addition to an internal safety meeting, the larger message here is that when everyone within your company possesses a risk management mindset, your organization can truly reach new heights. 

So what does it mean to build a risk management mindset within your company?

Simply put, it means to be intentional with any decision you make by contemplating the potential outcome(s) before you act and how that outcome will affect the company at large. 

It could be from an injury/accident standpoint, where taking a moment to think about what could happen to you or others if you follow through with your decision. It also could be from a sales or marketing view as well. How many times have your salespeople sold a job that was out of your comfort zone and now your production crew has to find creative ways to get the job done without the proper equipment, experience or workforce?

Thinking through the potential outcomes before a decision is made can also help you take reasonable or calculated risks for your company that move everything forward. Just by starting your business or joining the leadership team where you are right now, you utilized a risk management mindset to decide to embark on your new professional journey in hopes that you would find a better opportunity for yourself and your family. You intentionally made that decision as you felt it was the best chance to improve your situation. The intentionality of your decision, the fact you thought about the outcome of your career switch before you made your decision, is how you use a risk management mindset for the positive. 

Being intentional in your decision making also creates an opportunity to have meaningful conversations with your team based on your thought process before acting – and we all know the power of open conversations between team members. Good tree services become great when communication has been encouraged amongst every person within the company.

To begin installing a risk management mindset within your company, start your next safety meeting by explaining something that you did without much thought that led to a near miss. Then talk through with your team how, if you took a few extra moments to think through the outcomes of your action (both positive and negative), it could have changed your decision. Ask for participation from your team so they become involved in the conversation and begin to understand the topic. Don’t forget to bring in the larger picture at play as well. If your decision led to an injury or accident, how does that affect the entire organization? What do others need to do to help overcome that injury? 

Then use a positive example to illustrate the opposite effect of a risk management mindset. Discuss the latest business decision that may have seemed risky (starting a PHC division, opening up a new location, buying a larger piece of equipment) and how you strategically thought through the risk of that decision by understanding the outcomes to arrive ultimately at your decision to move ahead with it. 

Getting your team to begin to think just a little bit into the future by using a risk management mindset can dramatically shift the experience your company faces from having things happen to you, to making them happen for you. 

We all have a risk management mindset at times when making decisions for ourselves and company, however, the companies that grow the fastest and are the most profitable have been able to consciously replicate that mindset within everyone inside of their organization. If you are struggling with this concept, our Thrive New Heights Package and Thrive Safety Package will help you realize the potential of a risk management mindset within your organization.

Margaret Hebert

Lower Auto Insurance with Fleet Telematics

Lower Auto Insurance with Fleet Telematics

Written by: Eric Petersen, CIC

We all know that in today’s world, data is king.

Fortunately, tree services have access to so much more data now than they ever did before. This data can help business owners make sound decisions to improve their company. By using a fleet telematics system, a tree care company can gather vital statistics and data on their vehicles and their drivers thereby improving their bottom line in a number of ways, especially by lowering their auto insurance. 

With auto insurance costs on a steady rise, I want to look at three key ways a strong fleet telematics system can help lower your business auto insurance cost.

1. GPS Tracking

The more data an insurance company has, the more confident they feel in the prices that they offer to their customers. Tree care companies that install Global Positioning System (GPS) tracking software can summarize their data and give it to the insurance company to show how they manage their fleet and how they deserve lower auto insurance pricing. 

I do want to mention that, there is often a misconception that installing GPS tracking software within your fleet signifies a lack of trust between you and your employees. To quickly dispel any negative feelings about GPS tracking software, explain to your entire team the reasons for using the technology and how it will benefit them. Knowing where your vehicles are will help you provide more accurate information to clients regarding estimated arrivals to job sites, thereby increasing customer satisfaction. If a crew gets a job done faster than planned and has time to do another (more hours=more money for the crew), GPS can identify which vehicle to send to the next job based on current locations. Lastly, this will help you ensure vehicles are being used within company guidelines (which of course are described in the vehicle use section of your employee handbook, right?) limiting the liability to the company and helping to avoid an unsafe situation. 

2. Vehicle Maintenance

A strong fleet maintenance program shows the insurance company how serious the business takes preventative maintenance by attempting to avoid issues with their vehicles. This obviously will lessen the number of accidents and therefore claims an insurance company needs to pay out. 

Of course, the benefits of improving your fleet maintenance stretches beyond just lowering your business auto insurance. Limiting vehicle downtime maximizes your crew’s efficiency. A good telematics program will monitor things like engine hours, total mileage, as well as potential faults within the vehicle that your employees may not be able to see during the pre/post-trip inspections. Speaking of which, these inspections should be done as well as logged for DOT compliance. Check out this article for more information on DOT COMPLIANCE.

3. Driver Behavior

Distracted driving has destroyed the auto insurance results for insurance companies in recent years. There are so many small fender benders today that insurance companies are raising their prices to keep up with it and distracted driving is the main culprit. Simply put, if a tree service can monitor the driver’s behavior the chances of an accident get reduced dramatically. 

When your drivers know they are being monitored, they are more likely to drive with increased awareness and limit their distractions (texting or eating). This intentional focus on better driving is actually a good thing for them as no one wants to get in a car accident, but we all get over-confident in our driving abilities and take unnecessary risks while driving. Consider different ways to reward your drivers for strong driving habits to show them you support their safety. A good telematics system will also provide you with more data to show how/why accidents are happening, giving you the data to help prevent future accidents from occuring.

 

It is without a doubt that fleet telematics is here to stay and will have a significant impact on your bottom line, especially with your business auto insurance. Telematics provides the proof to the insurance company that a tree service will be a profitable risk for them and highlights reasons why that individual tree service should get lower auto insurance rates. I should also mention that as far as I’ve seen, tree services are not being penalized by insurance companies for poor driving habits.

I encourage you to check with your insurance agency and see if there are any options available directly with your insurance provider. If not, I encourage you to reach out to an ArboRisk team member to discuss how we can help you set up a telematics program free of charge.

Hiring an In-House Mechanic

Hiring an In-House Mechanic?

If you’re contemplating hiring an in-house mechanic, you already know the decision is not an easy one. So many factors go into it that it often paralyzes the owner from making a decision.

While there is no magic number that fits every tree service perfectly, we typically do not see companies hiring a full-time mechanic until they have at least…

10 vehicles. That does not include trailers and mobile equipment, although definitely factors into the workload of the mechanic. 

So, how do you determine if your company is ready to hire a full time mechanic? Ask yourself and your leadership team these questions to guide your decision making. 

Future of Your Fleet 

This is often the starting point for deciding whether or not to hire a full-time mechanic. Depending on where you see the size of your company and fleet going in the future should determine when to hire an in-house mechanic. 

  • Do you plan on growing your company and adding more vehicles or equipment? 
  • Are you planning on getting more tech-heavy vehicles or equipment? 
  • Would your production crews become more efficient with newer vehicles or equipment?
  • Are you considering using fleet management software? 

Current Cost of Repairs

Many tree services do not pay close attention to the cost of mechanical repairs, though knowing this or at the very least having an idea of the cost to your business for repairs can quickly justify the extra expense of an in-house mechanic. 

  • How much did you spend on vehicular repairs last year?
  • How much production downtime have you suffered from a vehicle or piece equipment that needed repairs? 
  • How many jobs did you lose because of an out-of-service vehicle or piece of equipment?
  • Could any of that downtime or lost jobs have been prevented with regular maintenance?

In-House Mechanic Logistics

Assessing whether or not your company has the capacity for an in-house mechanic is another important factor to consider.

  • Do you have enough physical space for a mechanic to operate fully within your current shop?
  • What additional tools (hand tools, diagnostic tools, lifts, etc.) are needed to allow the mechanic to perform the work needed?
  • Do you have the management team in place to support an in-house mechanic? 
  • Are you able to comply with the environmental regulations that come with operating a repair facility?

Additional Items to Consider

  • How are you currently ensuring compliance with your state and federal DOT? 
  • Do you currently have vehicles and or any specialized equipment that cannot be serviced by an in-house mechanic and need to be worked on by certified technicians?
  • Do you have a recruiting strategy set up to find the best mechanic possible? 
  • What employee benefits are you able to provide to the mechanic?

While these questions are by no means an exhaustive list of all that needs to factor into the decision making process, they will help you begin to answer the question for your tree care company. 

If you are struggling with this part of your business, contact an ArboRisk team member today to learn about how our Thrive program can help your business Become Extraordinary!

Written by: Eric Petersen

4 Keys to Driver Management

4 Keys to Driver Management

“Oh yeah, I’m a good driver”.

How many times have you told yourself that? I bet you’re laughing at yourself right now, because everyone thinks that they are a good driver. Reality is, if everyone was good at driving, there wouldn’t be as many accidents as there are. 

Finding ways to manage your drivers is of utmost importance when attempting to reduce the risk to your company. Plus as Malcolm Jeffris pointed out in his article 4 Ways to Lower Business Auto Insurance Costs, proper driver management is a key component of lowering your business’ auto insurance cost. 

Here are my 4 Keys to Driver Management.

  1. Hiring Good Drivers – Obviously it’s much easier to be confident with your drivers when you start with good drivers, but how do you get there? It’s not a simple solution that we can cover in one paragraph, however, you must intentionally create a recruiting process to attract enough potential employees to your company. From there use keys #2 and 3 below to hire the best drivers. If you want help in creating a hiring and recruiting process register for our Hiring & Recruiting Masterclass.
  2. Motor Vehicle Records (MVR’s) – Looking at an employee or potential employee’s driving record is a good way to start to understand their driving skills. Create a simple procedure within your company to ensure you analyze these records on an annual basis using an eligibility guideline to determine what an acceptable driving record looks like. For more information on how to create a MVR review process read our article Driver Risk Management
  3. Driving Test – Once a driver has passed the MVR review, it is now time to actually see what they are capable of within your vehicle(s). Creating and administering a driving test is the truest way to determine whether or not an employee should be driving one of your vehicles. From our experience, too many companies skip this step and send drivers onto the road operating vehicles they are not familiar with. Remember, we all think we are good drivers! This article will help you create a simple driver test for your tree care company.
  4. Dash Cams and Telematics – My final tip to managing your drivers may make some people uncomfortable; the use of technology in the form of dashboard cameras and telematics software. Using technology within the vehicle gives you the ability to get data and information on your drivers and vehicles in real time as well as helps resolve any incident or accident that vehicle is involved in. Dashboard cameras have the option to not only look out in front of the vehicle, but also scan the interior of the cab to monitor the driver and passengers’ behavior. With telematics software, a tree service can gather so much data about the vehicle and how it is being operated. From knowing where the vehicle is, to how long it has been idling, to fluid levels, using a software system to understand your vehicles can go a long way in keeping your drivers safe. Installing technology into your vehicles might feel like you are spying on your drivers, but if you truly want to keep your team and others safe on the road, knowing real data about the driving tendencies and vehicle performance is critical. 

Simply put, proactively managing your drivers will help you minimize accidents and injuries while increasing your company’s profitability. For help managing your drivers or other risk management processes, contact an ArboRisk team member today. 

Written by: Eric Petersen

Take Control of Your X-Mod

Take Control of Your X-Mod

The Experience Modification(x-mod). Without a doubt one of the most significant impacts you can have on your overall insurance costs and often one of the most overlooked pieces as well. Year after year insureds will look forward to the tree care class code(0106) going down due to the industry getting safer. For example, over the last few years, the rate in Wisconsin has decreased from around 12% of total payroll to just under 10%. That is almost a 20% decrease! Sorry to the folks in other states dealing with higher rates, BUT, there is a way you can impact your worker’s compensation cost by more than 20% and that is by taking control of the experience modification.

What is it? 

 The experience modification looks back at your last 4 years of worker’s compensation experience and disregards the most recent year to allow time for claims to develop/close out. See example below for 2021 experience modification:

 

The rating, which is typically below, at, or above 1, is essentially a comparison of your business versus the insurance industry’s expectations for a business in your class code. If you’re below one, you’re doing better than the average tree care company and if you’re above one, you’re doing worse than expected. That number is then multiplied by your overall premium to calculate your worker’s compensation cost.

What does it look at?

We must first understand what the experience modification looks at in order to take control of it. In short, the mod looks at three major areas:

  1. Company Size and Class Code

Larger companies will have more payroll and therefore more potential for lower x-mods. If your company has $2 million in payroll and only has 1 $5,000 claim, your experience modification will be lower than a company who has $200,000 in payroll and also has 1 $5,000 claim with the same class code.

2. Frequency Vs. Severity

Per the National Council on Compensation Insurance(NCCI), the x-mod calculation recognizes that the cost of an accident is much less predictable than the fact that an accident happened in the first place so frequency impacts the x-mod more than severity. I.E. 10 small claims of $5,000 would impact your x-mod more heavily than 1 big claim of $50,000. 

3. Claim Status

In the past you may have heard us reiterate the importance of getting your employees back to work as soon as possible. I encourage you to check your state’s specific rules, but oftentimes you can get your employee back to work on light duty to avoid the claim becoming a “lost time claim”. The x-mod reduces medical only claims, a claim where the employee does not receive lost wages and only has medical bills paid for, by 70% in comparison to a lost time claim. 

It also looks to see whether a claim is still open or not. Open claims will impact your x-mod at a higher rate than closed claims. Be sure to follow up with your work comp carrier to ensure that claims are getting closed out on time.

What Can You Do?

Managing your x-mod can obviously be a very detailed task. Work closely with your agent to ensure you’re doing the best you can based on your claim history. Below are a few quick pieces you can look at to control your x-mod as best as possible.

  1. Implement a safety program, including regular safety meetings.
  2. Start a safety committee
    • It may be helpful to have specific members of your business responsible for the x-mod rating. An x-mod rating is a good way to measure the effectiveness of your safety committee.
  3. Injury Reporting/Return to Work Program
    • Claims don’t always happen often. Your company NEEDS to have an injury reporting program so employees and staff know what to do in the case of an injury. On top of that, you should have a light duty program to give to the doctor detailing what kind of work is available to the employee if they are on restrictions.
  4. Accident Investigation
    • Having an accident investigation program is particularly helpful for mitigating the number of claims. Make sure your staff is reviewing the what and why for accidents so you can prevent them from happening in the future.
  5. Claim Management
    • Have someone in your office responsible for managing injuries after they happen. Make sure all the information is shared with your work comp company and that the employee is back to work as soon as possible. Again, make sure the claim gets closed out once everything is settled.
  6. Annual Review
    • Especially if you are a larger company, make sure you are reviewing your x-mod with your agent at the end of the year. This is a good way to make sure you’re on top of any claims that did occur and nothing slipped through the cracks. 

Some of the best experience modifications I’ve seen are as low as .70. As you can probably tell, the companies with lower x-mods also get better rates and potential for better dividends. That means you’re looking at more than a 30% discount on your overall worker’s compensation costs! If you have any questions on how the experience modification works, or questions regarding your rating specifically, feel free to reach out to an ArboRisk team member. There are also some good resources detailing the experience modification calculation on the NCCI website. Thanks for reading and good luck getting control of your x-mod!

Written by: Malcolm Jeffris, CTSP