How do increasing interest rates impact the green industry? Who is your "Hell yes!" customer in 2023? Does that need to change from who you were targeting in the past couple years? In today's podcast, I interview Jim Westover from LandOpt, who shares how changes in the economy are impacting the green industry and how to prepare.
Hey, everyone. Jack Jostes here and welcome to The Landscaper's Guide. This show helps snow and landscape contractors grow your business through sales, marketing, and leadership ideas. I'm excited to announce that I'll be presenting the Landscaper's Guide to Sales and Marketing in a Recession at Rock On!, LandOpt's prospective members' workshop in February in Phoenix, Arizona. I've never been to Phoenix, should be fun, and today I interview LandOpt's President, Jim Westover, who shares a wealth of information, current information that we just recorded last week about what's going on in the recession, how do you adapt, and how does it impact your sales and marketing, plus some tips for retaining and upselling your current clients. I hope to see you, if possible, in Phoenix. I'll have a link in the description and also on landscapersguide.com/events where I list the other workshops and events we've got coming up. Hope to see you there. Let's dive into today's interview with Jim Westover.
All right, everyone, welcome back to The Landscaper's Guide. Today I'm excited to interview Jim Westover. He's the President of LandOpt. Jim, welcome to the show.
Jim Westover:
Thanks, Jack, for having me. I appreciate it.
Jack Jostes:
For people who are new, maybe haven't heard of you, who are you? What's some of your background and what is LandOpt?
What Is LandOpt?
Jim Westover:
Yeah, so my background, I just took over as a President about a year ago from LandOpt, so I've got one year in the green industry. My prior life was 15 years of franchising, which is very similar to the LandOpt model. The LandOpt model is really about as close to a franchise as you can be. There's protected territories, there's service agreements. My prior life, if you will, it was actually with Jellystone Parks, so I've been in beautiful green spaces for close to a decade now, and I've held titles from Vice President of Operations to VP of Sales.
A lot of what I do and rely on is analytics because in essence you're using data and information to try to get operational change, and then of course, you're going back and measuring for that operational change, so it's been a big part of who I am and what I do. One of the reasons I like numbers because they don't have any feelings and I think that's where everybody gets the phrase "It is what it is," because it is what it is. You can look at it in any way you want, but if the answer's four, the answer's four, so to speak.
As far as LandOpt goes, they have been around since 2004. They are a continuing education consulting-type business. We help you at all facets, whether it's HR, coaching, we do coaching, we do onsite, so very similar to a regional operations team that you would experience in a franchise. One of our big things is end-of-year financial planning. I love it. Everybody gets together, they exchange ideas. We discuss pricing strategies for the upcoming year. We go over economic data, we put your information on the board, and we actually even review it with our peers.
They're higher-end, I'll say, landscape companies. Our average unit volume's five million. We have over 20 in the network currently. We're really just hoping to keep focusing and taking them to growth and getting them to the next level and meeting whatever their strategy is, even if that eventually becomes an extra strategy, 'cause eventually you want to build value in your brand and there is a point where you go, "This might be a good spot for me to take the next step," and we know we're able to help with that as well, too, so we're a one-stop-shop for a lot of things. It's just a matter of what services fit your need.
Jack Jostes:
One of the cool things that we'll talk about a little bit later, but I wanted to let listeners know that you have an event on February 22nd and 23rd in Phoenix, Arizona. It's the Rock On! prospective members workshop. I love the benchmarking that you do with people, so I'm going to ask you about that later. I'm super excited to be speaking at that event about marketing in a recession. My talk is the Landscaper's Guide to Sales and Marketing in a Recession. That's really the topic I wanted to talk with you about today is, what are you seeing? How does the recession impact the green industry? It's a moving target in some ways. Today it's Thursday, January 19th, 2023. I'm going to have this come out next Friday. What are you seeing today? You were just talking to me today about some of the things that you were sharing with your clients.
How Does The Recession Impact The Green Industry?
Jim Westover:
Yeah, it's very much a moving target because of basically all the economic levers that the government's pulling right now. We knew this was coming. We told our folks, "Look." 8.2% was the inflation rate in November when I spoke with them during our planning meeting. I said, "They are going to start polling the lever and the lever's going to be higher interest rates." The higher interest rates are designed to do a couple things, it's to slow down discretionary spendings because it's inflating everything. Typically, that leads to a tighter job market as well.
Before, there was basically two jobs for every one unemployed person out there. That number is what they're trying to shrink and they're doing it through the Fed rate. Now, everything through it today we are starting to see it. It's at 6.5 currently as we do this podcast. A lot of the economic indicators that we spoke about since then are down. They're still going to be another Fed rate hike, potentially here in the next week. Really, where you're going, "Okay, what does that mean for me as a landscape company?" Well, depending on who your consumer is, and this is why we love having Jack involved with our event, is where we got to teach people to hunt and fish, right?
Jack Jostes:
Mm-hmm.
Jim Westover:
You really got to hone in on what is your "Hell Yes!" customer, as you would say. I've listened to your audiobook, so I know.
Jack Jostes:
Thank you.
Jim Westover:
That's what we want to make sure our guys have not forgotten to do. The phone is not just going to ring off the hook like it's done in the past because those dollars are drying up. There's some people that were doing home equity line of credits, new cash-out refis because you had high home values and you had cheap money. Well, the money's no longer cheap, the money's now expensive, so now you are looking for a more refined consumer, probably a higher-income consumer than you have in the past, or have been marketing to, you just didn't know it.
I just had a discussion with probably 10 of our licensees and the backlog's still there. Everybody has the backlog to sit back on, but what they're not finding is their bookings were as strong going forward as they've had in the past. That's really what we're starting to see. We did a survey that we had out there and the two things that they were worried most or commented most on is like, "Hey, we have a strong backlog," but number two was economic uncertainty. Jack, I don't know what you're seeing out there from the sales and marketing perspective, but maybe you can shed some light on it a little bit.
Jack Jostes:
Well, yeah, and I definitely would love to, Jim, but I'm curious, though, before we move on to sales and marketing, though, you mentioned the tighter job market and how there were two positions open per one. How are you seeing that impact the green industry? Because for the past, I mean, I've been working, I've had my company for about fourteen years now this coming summer, and a solid eight of them have been really focused in the green industry. Ever since I started working in the industry, there's always been a challenge for getting labor. The past few years, it got even harder, it seemed. Is that going to ease up, or is it not going to ease up? What do you think is going to happen specifically to labor for the green industry?
The Future Of Labor For The Green Industry
Jim Westover:
I think it depends on how you structure yourself in the past. There's still a strong contingency that's really, they depend on H-2B, or they depend on other means of H-2B-type programs. What we're starting to see in some of our, I'll say, larger cities in the suburbs where some of these are located is we are seeing them having the employees now that they haven't had in the past. It's just because there's not as many options out there.
We've also coached our folks to be more refined with your process. At some point, it was almost like the law of large numbers, "I'm going to put in ten and let's hope three work out perfectly." What we've been doing is more of a screening process, if you will, in order to do that, so we've been putting them through three days of onsite coaching and even making sure that this is even for them, so we're being more efficient in that process as well because we're not wasting times with folks that aren't going to be there for a while.
Jack Jostes:
Right, so your new hires are going through a three-day coaching period to see if they can make it. Is this an obstacle course? Or how do you eliminate these people?
Jim Westover:
Yeah, no, I mean, there's no-
Jack Jostes:
How do you find out who's going to make it?
Jim Westover:
... As part of one of the things you do get with LandOpt is we do an AVA assessment, so right away we know what your kind of personality is. We try to use that on how to coach to you. Then, of course, we also do an HR inventory when LandOpt comes on. Now, our coaches are constantly doing an inventory when they're visiting these guys, but we're setting them up and taking them through the process of like, "Hey, this is the tools you're going to be working with. Are you comfortable with that? Are you comfortable with doing this job?" You may go ahead and shadow somebody for a day and they go, "No, this isn't going to be it." It's better to find that out ahead of time opposed to two weeks down the road as dragged out of the process. For us, it's led to more quality folks and efficiency and being very productive.
But to get to back to your question, the job market itself, I think eventually the smaller businesses out there that depended on those dollars in the past, those jobs won't be there because that discretionary spending won't be there as much. That's really what we got to worry about. Those are more, I would say, probably at quick-service restaurants and things like that. I think the running joke on the internet right now is cost of eggs, poultry. People have already seen it in retail. In December, retail was down more than they expected because they're not spending as much, so if you're not spending much on retail, you're not spending much over here on, let's say, quick-service restaurants, or going out to eat, those jobs are going to be naturally forced out to avenues that have the business, and landscaping, for the most part, is rather recession-proof, whereas there's always a need, and there's also, especially if you build your clientele properly, as you know, that need will remain there because they're not as impacted as, say, other consumers.
Jack Jostes:
Yeah, I mean, the grass is going to grow, and it's going to snow. We don't know exactly how much, but landscaping will need to be done, and people are still spending money on it. It is an interesting question to see, how much will they spend? Maybe they just spend less. The past two years are also unprecedented because the whole shutdown of the economy and travel and the whole move to work from home and stimulus money and PPE loans and all this funny money was just pushed into the economy for people who couldn't travel and they're at home and they're spending it on landscaping, so I feel like it artificially stimulated demand for landscaping. Some people who may have gotten landscaping a couple of years from now, three or four years from now, maybe they moved that timeline up and they got it done last year and the year before. I don't know. We'll see.
One of the trends, one of the things that I look at is Google trends. If we look at landscaping and we look at it over since 2004, really, there's pretty consistent demand and searches for landscaping and it peaks every, typically, May nationally. Now, the peak the last two years, I mean, was significantly higher than the peak of all of the years prior. Then this year, though, May 2022, it didn't go down to zero, it just normalized. It went back to the normal level of demand, so there's a lot to be seen, I think, about what does this spring actually look like. We'll just have to see where the cards fall later this summer.
During times where people's budgets are even more strained, I think you need to increase your advertising, and also your reviews. When people have less money to spend, they're going to be more cautious about where they spend it. That's where online reviews, I believe, become even more important. One of your greatest assets going into a recession is your existing customer base. It's much easier to retain a customer in good times than it is to acquire one and it's definitely true during a recession. If you have maintenance clients, retaining them should be a priority, upselling them. They're probably high-profit margins, small projects that you can get existing customers to do while you're doing maintenance for them.
One of the strategies that I recommend is to collect feedback from customers. At Ramblin Jackson, we use this software, our own software, Ramblin Reviews, where we ask customers for feedback, "On a scale of zero to ten, how likely are you to recommend Ramblin Jackson?" I actually use it myself and we use it with our clients. This is key to retaining clients and finding out what operational problems you have, because when you send that out, maybe quarterly to a maintenance client and you start getting six out of ten, five out of ten, four out of ten, you're starting to get negative feedback. You can identify, "Well, which crew is this?" You can call those customers and find out what's going on. By doing that, you can nip a problem in the bud and listen to that customer and retain them, and retaining that client is very profitable compared to losing them and trying to replace them.
Taking care of our current customers, marketing to them, and getting reviews from them can help us then get new customers because if we have a bunch of angry customers and we don't even know about it, they're going to spread negative word of mouth to their neighbors. "Hey, I noticed you get your lawn mowed by Bob's Landscaping. How's that going?" "Oh, it's awful. They left the gate open and my dog escaped. They leave cigarette butts on the lawn," whatever horror stories.
That was one of them, an emphasis on reviews, on search. Then also for outbound marketing, we're advising clients to do direct mail. Direct mail is something I do personally. I'm increasing my own direct mail budget this year. Postcards are a great way you can pinpoint specific neighborhoods. As far as getting into "Hell Yes!" customer, if you know that you have certain customers in a certain part of town with a certain home value, all of that information is available, and you can easily broker a list for houses in whatever zip code that are north of $500,000 in value, or whatever your "Hell Yes!" customer is, and send them offers proactively with direct mail. That's one of the things that I'll be sharing at your event, too, is how to get started with that.
Jim Westover:
We used to know with Jellystone, first off, they all got a survey. We're all inviting them back. We wanted to create fans. You got to understand the lifetime value of a customer, right?
Jack Jostes:
Yes.
Jim Westover:
It's not just that one job. They might come back two, three times. That was the same thing with Jellystone. I know you're going to come back two or three more times with your family, but if you know create that negative review and they have the negative experience, they're not coming back. I think that's what folks got to understand.
We got very granular with our data. We said, "Okay, we want median household income of a hundred-thousand-plus with kids. Okay, in this area, 10% of the population owns a trailer. Guess what? We want to market to mom, 35 to 53-year-old females, because if mama ain't happy, nobody's happy." That's how we marketed. I think there's ways that you can do the same applications here in this green space as well. If you're sharp with your customer data, and there's systems out there like an Aspire and some of these other ones that can do these things, you just got to be smart about how you set it up, and it'll really set you up for long-term success. You keep building and building that brand. Our guys, one of the first mentions, "Wow, word of mouth. Word of mouth is what gets me." But you need to have more in your arsenal than just word of mouth, and that's where the SEO and some of the other items come into play.
Jack Jostes:
Well, to me, there's a distinction between referrals and word of mouth. The distinction is that referrals are something that you proactively work for getting. Word of mouth is just going to happen, "Hey, I noticed this. Hey, who do you use for this?" That's where your reputation should become word of mouth, but you can't really control it, whereas a referral strategy could be something like the cloverleaf strategy, which is where you imagine a cloverleaf and you give a print handout to the four houses that are right near the property that you're servicing.
Or you could have an incentive, you could have gifts that you give your clients, and let them know, "Hey, Jim, one of the ways that we grow our client base is, and we really like having clients like you, is through our referral program. All we're looking for is to give this postcard to three of your friends. Is it okay if we give you a few postcards?" Now, you're making it easy for them to proactively refer you, and you could pay people money. You could say, "Hey, if so-and-so mentions you, we're going to give you 500 bucks," depending. I mean, now, you'd have to have a pretty high lifetime value for it to be worth $500, but it could be as simple as a handwritten thank-you card, or a Starbucks gift card, or a gift card to the local coffee shop, or whatever it is.
Well, Jim, I can't wait to see you in Phoenix. Tell us a little bit about your event, Rock On!, and in particular, the assessment, the benchmark benchmarking assessment you'll be doing for people. Do we have to be a LandOpt client currently to come to this event?
Jim Westover:
You do not have to be a LandOpt member currently. We're opening it for basically $500 per, I think, two people, so you can bring yourself and maybe your GM. We are asking you really ahead of time, submit your PNLs. Let us take a look at it. Let's take an assessment, see if we can find something there for you. We'll benchmark you versus our numbers. We are going to run you through the full gamut. You're going to get to meet our coaches. They'll present to you and they'll talk to you as well so you can get to learn their style and they'll teach you some of their tactics and techniques. You're also going to meet our HR specialist as well and she'll walk you through some hiring techniques, some things we're going through, and she also does hiring as well à la carte as well for our members. Of course, there'll be some fun afterwards.
Then the next day, Jack, we got you on stage, so we have jam-packed full of information in a very concise two days, but it gives you the whole bandwidth of what our network offers, and it gives you a look at a bunch of different ideas. Our network is our strongest marketing tool. These guys are tremendous. They're some of the leaders in the industry and they're just looking to get better and they're just looking to keep improving their bottom line and building their brand and building their business up.
Jack Jostes:
Cool. I love it. Yeah, I can't wait. At 500 bucks, that's a steal because, I mean, you guys include lunch, there are meals included, and with inflation right now, I mean, you could spend that on lunch easily.
Jim Westover:
Yeah, no. For sure, for sure. Yeah, chicken wings are getting up there.
Jack Jostes:
Okay, the chicken wings, there was actually a shortage of chicken wings. You remember that? That was-
Jim Westover:
Yeah. Well, in my prior life, Jack, we worked with a brand called The Chilly's Pizza, and every Super Bowl year, there would be a shortage. Every year, the Super Bowl, there would be a shortage, and the wings would get smaller in size. Just a little tip, if you want to eat your wings, eat them after the Super Bowl. They get bigger.
Jack Jostes:
... All right, well, we'll have to get wings in Phoenix if we can. Jim, thanks so much for coming on the show. I'll put a link to that event in the show notes for this. For those of you listening, I'd love to see you in Phoenix at the LandOpt event. You can also register on their website, landopt.com. Jim Westover, President of LandOpt, thanks so much for coming on the show today.
Jim Westover:
I appreciate you, Jack, for having me.
Jack Jostes:
Thanks so much for checking out today's interview. Now, after we stopped recording, Jim and I had a quick chat about how much we love chicken wings, so if you know where we should try chicken wings in Phoenix, Arizona, let me know. Send me an email, jack@ramblinjackson.com, or hit me up on social media. I hope to see you at this event or some others, so again, check out landscapersguide.com/events. I look forward to talking with you next week on The Landscaper's Guide.