Ezra McCarthy
Hello and welcome back to Lawn Care Blueprint, the show built for lawn and landscaping business owners who are looking to grow. Today we got a great episode for you on an important topic that I don’t think we can talk about enough. And that topic is compounding. Wena is going to be with us here today. We’re going to explore this topic. So let’s just hop right in.
Wena
Hi Ezra, let’s start at the beginning because compounding can sound like a buzzword until you break it down. So in plain terms, what do you mean by don’t stop the compounding for a local service company?
Ezra McCarthy
What got me thinking along this line is I was listening to a podcast and this frame has really just been repeating over and over in my head. And I’ve tried to kind of make it my theme here. This thought of don’t stop the compounding. And what I mean by compounding is those small repeatable tasks that you can stack one upon another that really make a difference. Whether that be getting reviews for your business, whether that be getting referrals, content follow-ups, whether then route density.
Because a lot of times we kind of get this perception in our mind that winning is just kind of one big effort, one big sprint. When instead of that, winning really is just consistently every day doing those tasks that build trust and momentum. Because there’s this phrase half-life and momentum really is a half-life. Once you stop, once you pause, putting in the work, the flywheel stops. Whether that be referrals start to drive, whether your rankings start to go down. And so there’s three levers in compounding that we can use to keep the momentum going.
Think of it, if you ever tried to have a car that stopped and then you try to stop it again, the technical term is inertia. Getting it started is so much harder, but once you get that car rolling, it just goes a lot easier. And in business. There’s three levers that we can pull to really help build the momentum to keep our compounding going. That’s consistency, quality, and time. So keeping all of those engaged really helps momentum and our business compound in a positive direction.
Wena
So what’s that one moment in your journey where compounding became obvious when momentum showed up after months of consistency?
Ezra McCarthy
A great example of this is your Google Business Profile. You can put in the work day after day, job after job. And I remember looking back from the very beginning, we were consistently getting that, our online presence. And at first it can feel like, okay, are we getting any results? But I remember that time, that spring rush where you’re just getting call after call after call, it makes such a big difference. It’s really easy to think, okay, does this work?
Do referrals really work? Does building a business over time, that first year, that second year. Even as you get going, it can feel like, okay, is this work worth it? But you have to remember we’re building today for tomorrow.
Wena
If the listener remembers only one idea from today, what should it be and what’s the first action for this week?
Ezra McCarthy
The idea should be to never stop the inputs of that compound. Whether that be your reviews and realizing that that’s going to lead to referrals and that referral is going to lead to profits or that review is going to affect your ranking on Google and all of these things tie back to your profits which is going to help you buy back your time so you can have not only financial freedom but time freedom. Never stop consistently adding to that compounding because that’s what’s going to be important.
And we just did a podcast a little while ago. At this point, it’ll be released talking about non-negotiables, those simple small things that consistently stack and consistently build. I’ll give you an example. I remember right out of actually it was right before I went to college, we were building a grain silo. For those unfamiliar with that, I think everyone would know what that is. It’s put those large metal buildings and literally these buildings. I remember first we poured the foundation.
You talk about massive and all the rebar and that cement foundation well then it’s the oddest thing how you build them so this one was i think 90 or 110 feet that was the diameter so across one way to another.
And you actually, you go around what’s metal, you build one row. And then there were these jacks, special jacks all the way around. I forget how many there were. There was a bunch and they would lift it up six to eight feet. Literally the roof was built first and then they would jack it up one layer and we would install one layer of metal. Then we would jack it up one layer more and we would build it. Right. I’ve been back to that same place and you can drive by and see that at that point it’s 90, a hundred feet tall. Its tall grain silo can fit lots.
It was built by one level at a time. We would jack it up and put one more level and in business so many times we drive by these businesses or we see somebody or we hear about their story and we say, wow, they’re doing X amount of million. They’re doing X amount of profits. And we just feel like how do they do it? Forgetting that it was momentum and consistency that built it over time. It was that compounding that helped them grow. And so we don’t want to stop that compounding. So that’s what this is about today.
Wena
That’s a great example, Ezra. So why are referrals disproportionately powerful versus paid lease in lawn and landscape?
Ezra McCarthy
This is important. We always want better leads. We’ve all had those customers where we’re having to sell, we’re having to sell hard and we’re trying to show our value to them because they don’t understand it. We would rather these, I like to call them hot leads. People that come in and they’re not like, hey, can you come give us a quote? They’re just, hey, put us on the schedule and whatever it costs. That’s what we want. Referrals are a great way to get that or building trust online with your reviews, with your website.
We’re going to have a higher close rate with these hot leads because there’s trust there. And what that is going to do is that that’s going to compound to better profits. You’ll have a lower customer acquisition cost, and you’re going to have a better lifetime value with that customer because they trust you better and they’re not price shopping. Because if someone’s price shopping and they chose you, you know what’s going to happen when that cheap person down the street or they get another quote that’s lower, they’re going to go with you. But if they like you, they trust you, they want your business. When someone comes with a lower price, it doesn’t matter. Also, referrals tend to be in a closer geographic area. So route density, your profit per hour is going to be better and you can begin to stack them.
One happy client leads to another maybe an HOA or all these things maintenance upsells landscaping they’re all gonna come together it comes back to the simple thought of compounding are we helping to compound and there’s some services that are a little bit more referable, over time delivering on that maintenance clients, et cetera, is really going to be helped. There may be a time where you may even ask for a referral. may say, when can we do that? Well, after a peak experience, say you just did a landscaping project for them at the very end, that’s the perfect time to ask them, hey, do you have anyone that might need our services? After they left that five star review hopefully you’re asking for that. Or maybe you can even tell them this little script and say, we appreciate the opportunity to serve you. Do you have one neighbor who might appreciate the opportunity for us to serve them as well? Give them your business card and then follow up with the text and say, Hey, here is a link to our website. Do you mind sending this to five neighbors or simple things like that?
Or here’s another option that you can do. You may say, who are some top referrers? Instead of selling one to one, selling one to many. So you can say, okay, HOAs, property owners. You may think about people that are not your competitors like a fencing company or an irrigation company. If you don’t do that, vendors and start to think about how can I sell one to many rather than just one to one? We can begin to compound our business and that’s why it’s really powerful our business especially because we can sell once and we can serve that customer for could be 60 90 100 services or more if we have them longer.
I was talking to someone the other day and they’ve had a client they’ve had clients for 15 plus years you got to think how many times have they had the opportunity to service them and then if we keep them year over year over year and our business compounds if we’re keeping their prices right then that’s how we can really begin to see our business grow as we begin to realize compounding is the key not necessarily more with high churn but as we can build a compounding engine.
Wena
That’s a really good point Ezra. Consistency will really lead to quality, really good quality and having people like the Homeowners Association are number one and the neighbors will talk about it for sure. So the last piece here, how do you track referrals without drowning in spreadsheets?
Ezra McCarthy
This is really good. And that’s why something called a CRM or customer relationship manager is really important. We recommend jobber. There’s a link in the show notes if you want. Whatever you do, you need something. And hopefully if you’re listening to this, you have one. If not, I’m amazed. You need one. Keep track of who sent this over. And that’s something simple to do. If someone’s sending a lot of referral your way, send them a thank you. You don’t even need to tell them, surprise them. That’s the best way to do it. Then you can say, okay, who’s sending over the most? Keep notes in it.
Keep notes of where they’re coming from, and then you can track it. Keep track of your customers, where they came from, of course, the little rant here on the CRM. Keep track of their email, their phone number, all of that details. It’s really, really helpful.
So just real quick, it’s really important not to stop the compounding here. There’s some sneaky ways that you can kind of kill the compounding in your business. Some of those things are inconsistent follow up. Are we just sending a quote and not following up at least two or three times? Or are we sending them too many emails or offers? Or are we just having so much churn in our business that we’re just looking for new customers and cheaper customers instead of saying, okay, how can I get and keep the most quality and best customers? That’s some really important things because we don’t want to stop the compounding. And I’d recommend that as you think about compounding and thinking about that flywheel, keeping things going is to think about daily things that you can do. Think about weekly things you can do and then think about monthly things that you can do because compounding really is the key in our business and also as we grow.
That probably wraps it up for today guys. Thank you so much for tuning into this episode of the lawn care blueprint. Be sure to hit that subscribe button, leave a rating and review and don’t forget compounding is small, consistent effort adding up over time and we’ll catch you on the next one.