When it comes to commercial snow removal, which is better, self-performing or working with trade partners? If you go the trade partner route, how do you recruit new subcontractors to your company when nearly everyone with that business model is trying to find them? Check out today's episode to hear directly from the co-founder of a now $25 million commercial snow and landscape company about how they've grown and an interesting mindset around competition that he believes has been a key to his success.
Hey everyone. Jack Jostes here and welcome to The Landscaper's Guide. This show is all about helping the snow and landscape industry grow through sales, marketing, and leadership ideas. Today I'm excited to interview Rafael Diaz from the Diaz Group LLC. He has a lot of interesting ideas about how to use Instagram to recruit subcontractors. He's got a remote office in Mexico that some of his competitors even hire. It's really fascinating. So, whether you're in the self-performing camp or the trade partner camp, check out today's interview to just hear some interesting business ideas.
Also, watch to the end to see what Rafael said was a million-dollar commercial landscape marketing idea that I gave him. And I'll give you a hint. It's about getting reviews and speaking of reviews, if you're getting value from The Landscaper's Guide, be sure to leave a review wherever you're listening to this or like the video on YouTube if you're watching it there. It helps more people discover the show and make sure you subscribe at landscapersguide.com/podcast so you never miss an episode.
And with that, let's get into today's conversation. All right everyone, welcome to The Landscaper's Guide. Today I'm excited to interview Rafael Diaz, who is the President and one of three founders of Diaz Group, LLC. He has over 20 years of experience in the landscape industry and helped build the company from a four person operation to a $25 million business. And none of that happened by accident. He's made some key decisions that we're going to talk about today. One of them was around company-wide training and education to really help everyone in the company move the company forward. And Rafael, thanks so much for coming on the show. What else should we know about you that I didn't already mention?
Who’s Rafael Diaz?
How To Grow With Outsourced Office Staff
Rafael Diaz:
It's funny you say that. So, when we started the business, it was me and my brother. I was 21 and my brother was 19. And we started just snow plowing. That was our only work. We worked for my dad during the day and then in the winter we'll have our own small accounts, but we didn't have enough money to buy more equipment to service bigger contracts. So, what we will do is we'll just contact the family members, the friends, whoever we found that wanted to team up with us in a contract and we'll split the revenue, whatever we had to. And we figured that they needed the work, we needed the help, the customer needed the service. So, if we could figure out how to work together, then we could have a good product, it's a win-win.
So, we started like that. But then over the years we just started figuring out how it's hard to compete with the bigger companies. If you go out and invest all this money and all this equipment, especially when it comes to snow, it's just too much hiring. I mean, it's too much investment, too much liability on people's PNLs. And if people already have it and they're having a hard time finding these customers, then why can't we be that? Why can't we team up and do these projects together as a big team? And that's our motto we followed since day one.
So, we've been in business for 15 years and since probably the second year we already started having our first, we call them vendor partners. That was our, it's always been a vendor partner for us. And we figured out how to work with them in a way that we're a resource. We're a resource for the contractor. We're not only a GC. We're a broker, we're a resource. If they need buying power for de-icers, we help them.
We give them our discounts that we get from the companies. If equipment we get at our discounts and on fleet prices, we also pass along those prices to our vendors. So, just becoming that one as a team and be able to compete with the big guys.
Jack Jostes:
So, how... Let's pretend that you're selling a commercial snow account and they're interviewing you and they're interviewing a self-performing company. Why would they choose you? And are you honest with them? Are you transparent about, "Hey, we use trade partners for this." or how do you approach that from a sales standpoint?
Rafael Diaz:
So, our model is pretty simple. We tell our customers all the time, and our customers are mostly big box stores, Jewel-Osco, Targets, that's the customer that we're pretty much closing. So, they know that anybody that service them is not going to be self-perform. They need to outsource to other companies that could reach those properties where they need to, but we just explain to them that we are 25% self-perform and that we are 75% outsourced. But we tell our model how we work with them and the communication we have with our vendors and how we help them be successful to take care of their accounts. And honestly, our customers say, "You know what? As long as our snow is taken care of the way it needs to, we're fine with it." But the one responsible for the job, at the end of the day, it's Diaz Group.
Jack Jostes:
So, they're okay with it. Do you ever find that some people see it as a disadvantage or they're not comfortable with it?
Disadvantages Of Outsourced Office Staff
Rafael Diaz:
They are, and it's okay. We say, "You know what, then we're probably not the company for you." And I'm sure there's other companies that claim they're 100% self-perform, the bigger ones. But I don't believe it. It's hard, especially when you're in different regions. But it's okay, if it doesn't make the customer comfortable, then it's correct to go find another, a contractor that's going to give them what they need. But for us, we give them our guarantee on a lot of firepower, because we have a lot of teams that could work at any property. Plus we have our own equipment that could be there in an hour's notice too. So, 25% of $25 million is a lot of... It's still a big operation.
Jack Jostes:
Yes. Yes it is. So, with that, when there's a snow event, if you're working with these subcontractors, aren't they subbing for other snow companies as well? And when there's a big snow event, how do you prioritize? Or how do, more importantly, how does your sub prioritize who they're going to go and do the work for first?
Rafael Diaz:
And that's an important factor, that you have to be their partner. If they're working for another big or regional or a nationwide company, you're going to have to take care of them, it's like an employee. You have to take care of them the best way you can. Paying them on time. If you're able to pay them faster, pay them faster. If you're able to help them with their materials, help them with your materials. If you can help them with the equipment, help them with the equipment, and that puts you on the top of their priority. And usually most of our vendors work, I'm going to say probably 80% for us. We try to keep them, because our motto is we want to make them grow, that's our motto. Even our big 10 year BHAG is to have 100 companies that generate $1 million of work for us, that's our BHAG. For us, that's like, okay, once we reach that limit, we're going to be at a 100 million plus. But it's based on growing these companies to $1 million.
Jack Jostes:
I love it. I love it. $100 million. So, what's your timeline for getting there? How long is it going to take to get to a 100 million?
Rafael Diaz:
You know what? With our model, it was a 10 year BHAG in 2020. But I think we're going to get there sooner, I believe so. We've grown most of our company. It's set for scalability. Everything we do is based on scalability.
Win The Spring
Jack Jostes:
Hey, I hope you're enjoying this conversation with Rafael and I want to invite you to join me on Thursday, March 9th at Win The Spring. It's our half day virtual workshop where we're going to share with you proven strategies to shorten your sales process, help you automate your sales process so you're closing deals faster and freeing up time for your office staff. The second thing we're going to help you with is increasing communication with your employees to improve your retention. Talking with your people more often, finding out how they're doing. We're going to share with you ways to do that even if you have an enormous team of over 100 people. And we're going to share new technology, new ways of procuring plant materials. So, check it out at winthespring.com and I hope to see you there.
So, many of our listeners, and many of my clients work with trade partners for snow. So, I love what you're saying. Once you have them, you're treating them almost like employees. You're thinking of ways to make their life easier, make their business easier so they are prioritizing you. How are you finding them? What are you doing to recruit them and establish new relationships with them?
Instagram for Recruiting Trade Partners
Rafael Diaz:
So, one of our biggest tool is social media. Our Instagram is all designed to attract vendor partners. I mean, everything we do is, if you see our content, everything's about the machines we buy, about the partnerships we have with the suppliers, about the way we work with other companies. So, everything's to create this so people could see what's really going on in our company and say, "You know what? I think I want to go work with them. It seems like it's cool. We could be partners and do something with it." So, most of our vendor partners sign up through Instagram or Facebook, to be honest with you. So, our Facebook and Instagram are more designed towards the employee and the vendor to attract them.
Jack Jostes:
I'm so glad that you said that, because I really believe that recruiting is a marketing activity and social media is a key way to do that, of showing people your culture. You could repurpose this interview into your social media, things like that. And people are like, "Oh, interesting. Rafael, I want to go talk to him." So, and snow removal is cool, right?
Rafael Diaz:
Yeah.
Jack Jostes:
It can be done really well on social media. So, right now, tell us where in the world are you doing this interview from? And tell us a little bit about your operation down there.
Remote Office From Mexico
Rafael Diaz:
Oh my God. So, I'm in Mexico. I'm in a small town, oh actually a city called Durango from the state of Durango, Durango City, which is a capital of the state. And growing our business, we had a little bit of a challenge, because we didn't have enough time to measure and do the takeoffs for all the proposals we were sending out. We wanted to experience a high growth spurt, but we wanted to do it smartly. So, we wanted to have the right measurements, the right information for every customer. But it was becoming too time-consuming and too costly to do it in the states, in Chicago. So, one day we had this crazy idea, my business partner, my brother Ruben and myself have always been these outside the box thinkers. So, we're thinking one day we're like, "What if we could hire people from Mexico and they could work from their laptops and measure the properties for us using either Google Earth or GoiLawn, whatever we could use, right? We could just get onto the screen and they could do it from their homes.
But then we started thinking, "Well, why don't we do this? Why don't we see if we could start an office there and hire some people and see how it works out?" So, we opened the office, we rented a space and we bought a bunch of desks, we bought computers, and we opened our office and we recruited everybody through Facebook and whatever we could. Wow, the talent here, it's amazing. People want opportunities. So, maybe doing a map in Chicago or the States is something boring, but here it's a career. So, people here are hungry to make those maps, they make their maps like they were Picasso, because for them it's a really important job. It's a career. So, we decided to say, "You know what? We should invest in this community." So, we started helping the local schools. We went to the universities and said, "Hey, could you send us your smartest kids or your kids that you see have a more of a technology kind of base?"
And they did. The school said, "You know what, that's a great opportunity. They can learn different things in English." And it became that, we called it a data collection center. But in that process, since our growth, we needed somebody, we needed a lot of people to answer our calls from snow. Because in a snowstorm, believe me, we service about 1600 commercial sites, big commercial sites.
So, you got to think about it, at least half of them are going to call you at one point in time to tell you, "Hey, your ETA." Or "What's the plan for today?" So, we needed people to answer our phones, but again, it was going to be too pricey for us to do it in the States because I mean, it's a big overhead to carry.
So, we figured out how to do our backend work here in Mexico. So, then we started talking to our friends about it, our other contractor friends in Chicago and a bunch of other states, and we told them what we did and they said, "Hey, could you help us too?" And we said, "You know what? Why not?" So, we ended up helping them get their data, do their takeoffs from here, and also answer their phones.
How To Build Relationships “Competition”
Jack Jostes:
Wow. So, do you assist competitors? Are some of the people potentially competitors to you or? I mean they're in the area with you, right?
Rafael Diaz:
Hey boy, they're my customer. They're a customer. For me, competitors are just an opportunity to do work together. We could always figure out a way to help each other out. They are competitors. I'm not going to say no, but hey, if we could work together, the better. It's easier to just figure out how to collaborate instead of being into, I'm not going to help him grow his company. No, let's do it. Why not? That's our philosophy at the end of the day.
Jack Jostes:
Yeah. And they may even become a trade partner with you for snow removal, right?
Rafael Diaz:
So, our philosophy is pretty simple. We're going to add a value to everybody, to our customer, to our employees, to our community, to our vendor partners, and then also to our competitors. Why not? Let's help them. Some of them they're going to get a little tricky, but at the end of the day, we all work together somehow.
Jack Jostes:
Yeah. I love it. And I've heard so many stories in the snow industry of people who have these good relationships with their competitors. I had one person tell me a story of how their trucks, their alternators were stolen. And so during a snow event, they weren't able to start their trucks and they were able to call somebody that they had a good relationship with that was technically a competitor that ended up bailing them out during that snow event.
Rafael Diaz:
And that's not a singular event. That happens all the time.
Jack Jostes:
It does.
Rafael Diaz:
I remember back probably 10 years ago when we were still trying to figure out how to grow and survive our company, we ended up salting properties with our friends' trucks. They'll let us borrow them at the end of the event and we'll just work together. They let us borrow the trucks. They didn't even charge us for them. Just take them, bring them back when you're done. Oh, wow. That was, if they wouldn't help us, we would've never survived. So, I feel like this is a way that we could pay it forward and help people keep on growing their businesses, because we will not be here. I would not be talking to you here if it wasn't for all the people that helped us, all the other contractors that helped us grow our company.
Jack Jostes:
Right on. Well, Rafael, well there's definitely a lot of ways to network with you, and I'm looking forward to seeing you at iLandscape, and that'll be a good show. Did you have any sales and marketing questions for me?
Rafael Diaz:
Yes. I mean, I've been reading your book and hearing your podcast, and I've seen it's very concentrated on the people that... A lot of design build, a lot of maintenance, a lot of maintenance in residential, some commercial. But there's companies like me out there that we focus 100% on commercial and big box customers that we will love to interact with you more on how do we attract those customers through marketing, digital marketing and stuff like that.
Jack Jostes:
Yeah. Well, at Ramblin Jackson, we work with snow and landscape companies who do residential and commercial. But we're seeing that the digital side of things is a key part for commercial sales, in particular, online reviews. So, a lot of people, the reason they're looking for a new commercial snow and landscape company is because their current company blew it. They're going to be more cautious about who and how they hire somebody next time. So, we're seeing a lot of the things that work on the residential side, like reviews, having strong reviews is a key part of it. One of my commercial clients said that it got down to the wire. They got I think 10 companies to bid on this maintenance account. They got down to three that they were going to interview, and one of them who was a referral was totally eliminated from the final running, because they had a three star review average on Google.
Right? And so my client actually ended up winning that account and he shared that they reviewed every page of his website, they read every review, and they followed him on social media. So, a lot of the things that you mentioned around Instagram and LinkedIn in particular for commercial, right? Any person that you're interacting with that's a client, you should connect with them on LinkedIn and you should be posting content from your personal LinkedIn, because those people are going to see it. And when your colleagues interact with it on LinkedIn, it gets more visibility to the connections of the person commenting.
So, if you have a property manager who likes your little photo on LinkedIn, chances are they're connected with another property manager and maybe they're buddies from a conference or a peer group or something. And in your case, four different states, right? So, interacting with your current clients on LinkedIn can get a lot of visibility, but at the end of the day, they're going to Google you. If they get a referral, they're going to Google you, and that's where your website, your reviews, your photos really need to be dialed in.
Rafael Diaz:
Wow, that makes a lot of sense. I can really see how it works. You know what, I'm hiring a big, let's say a big customer and all they have to do is just look for a review online and it's going to be there some either negative or positive, if you have a review there, it's going to be there.
Jack Jostes:
Yeah, and so you have your call center, you have your data collection people, right? You have them. So, one of them could own a follow-up call that's like, "Hey, Rafael, it's Larry from the Diaz group. We're just calling to make sure that we're meeting all of your expectations. How are things going?" And if that call goes well, "Hey, things are doing really... You're great. You guys are great." "Hey, great. It would mean so much to us. Could you do me a favor?" "Sure. Larry, I'll do you a favor." "Could you write a review for us on Google? I'm going to send you a link. Will you do that?" "Yeah." And if you call them and they say, "Hey, things are going poorly." Well, great. Now we can maybe send that back to their account manager or whatever.
Rafael Diaz:
You just got my gears turning in my mind. I'm like, "Wow, that's... Wow, that's..." I got to tell you, that's going to really work. I'm really excited about it.
Jack Jostes:
Well, good. Well, Rafael, it's been so much fun talking to you. For people listening who want to connect with you and learn more about the Diaz Group and also assist, you may be able to assist people, how can we get in touch with you?
Rafael Diaz:
You can reach out to me via email. My email is rafael@diazgroupllc.com. I mean, that's the best way to do it, send me an email. Also, through LinkedIn. If you find me on LinkedIn, you could go to my page, Rafael Diaz and just go send me a message through there, or Instagram or Facebook. I'm really on social media most of the time too, so feel free to send me a message. And I would love to interact with anybody and give them my piece of mind on what I have accomplished in this time. And I'd love to hear from other people too, some ideas. I mean, at the end of the day, like I said, I never... Wow, you just gave me a million-dollar idea right now with calling everybody and asking for a review. Thank you.
Jack Jostes:
Yeah, my pleasure. Thanks so much for coming on the show. Well, thanks so much for listening. I really enjoyed that conversation. In particular, his mindset around competition and how he is helping the industry and helping his competitors grow and then working with them in different capacities. It's just fascinating and interesting and much healthier than the mindset of, "Well, there's only so much work to do and I have to take advantage of everybody." Right? Some people really have an unhealthy focus on competition, whereas Rafael is building relationships with people and it's clearly paying off for him.
Now, on the topic of self-performing versus trade partners, I'm going to interview somebody with a vehemently opposing viewpoint on this show in the future. So, make sure that you subscribe to landscapersguide.com/podcast so you don't miss out on that. I personally don't have a dog in the fight either way, I think different models can work for different people, but I want to invite people who disagree with some of my guests on the show so we can hear from them directly. So, if you know anyone who might be an interesting guest, you can also suggest them to be on the show landscapersguide.com. So, with that, thank you again for listening. My name's Jack Jostes, and I look forward to talking with you next week on The Landscaper's Guide.