2019 HIP 200: Business Builder
authors Patrick O'Toole | November 13, 2019
The biggest home improvement companies in the industry often don’t stay that way. Their revenues and profits rise and fall based on the individual energy and hard work of one or two owner-managers. Another common trait, they will find star salespeople who regularly contribute millions to top-line revenue and let them do their own thing rather than what the company wants them to do. The problem for many big firms is eventually those owners might get burned out or they will retire, or their coddled star players will move on. That’s when the inevitable occurs. The company falls back, sometimes never to recover.
“Most owners don’t run their business, their business runs them,” says Rodney Webb, the star sales and management consultant for some of the fastest growing and most dynamic home improvement companies in the business today. “Also, most owners work from a position of weakness. They let their top producers do whatever they want to do, and there’s no accountability because they don’t want to lose their spirit. They don’t want to lose their volume. What our system does is it allows you to be able to hire, train and replaced anybody. So you’re always working from a position of strength so you have more accountability.”
The truth in these words is echoed by a number of home improvement entrepreneurs who have hired Webb over the last decade, such as Andy Lindus of Lindus Construction, No. 58 on the 2019 HIP 200 list, or Ken Kelly of Kelly Roofing, a $48 million firm based in Naples, Florida. Both are second-generation owners who took the companies their parents built and have taken them to impressive new heights.
Lindus, who is COO of the family business, took over from Kevin and Emily Lindus in 2007 when the firm was billing approximately $7 million in revenue. In 2019, they will hit $39 million. The same is true with Ken Kelly, who took over a firm from his father at $5 million in revenue and, with Webb’s guidance, is now almost 10 times bigger.
Webb’s focus is to help companies develop a repeatable sales system that allows firms to not sell on traditional price drops, but rather to sell value and expertise so they can earn a good margin and generate profitable business.
“Most home improvement guys are generating revenue because their price is competitive or they’re the cheapest,” Webb explains. “We want to be the most expensive. We want price objections. We teach that if you sell it at the right price, your customers are happier because you can give them a better-quality job and you make more money. Everybody wins.”
From Basketball to Home Improvement
Today, hundreds of home improvement pros have heard Rodney Webb speak around the country in groups of all sizes, from small sales meetings to big events like Qualified Remodeler’s TOP 500 LIVE conference. One story he always tells is his personal journey from a basketball hero to become one of the top sales and management consultants in the industry.
A former college basketball standout who went on to play professionally in Europe, Webb later had a stint with the Cleveland Cavaliers where he played in exactly one NBA game, which happened to be against Michael Jordan’s Chicago Bulls. Webb, a talented storyteller, offers a memorable and amusing tale about guarding the greatest player of all time.
After basketball, Webb returned to his native Georgia and entered the home improvement industry as a telemarketer with the late, great Pacesetter Corporation. There he made cold calls and learned the fundamentals of setting appointments. He and a Pacesetter colleague eventually left to start their own exterior contracting business, but after a few years Webb took a chance on a side interest, playing blackjack professionally. He is not shy about telling others how, by the late 90s, he had lost everything.
Broke and owing money to casinos, he went back into home improvement and took a job canvassing and selling jobs in northeast Georgia with a perennial Top 500 company, Dixie Home Crafters; but he had to overcome his somewhat intimidating presence. At 6-foot-9, Webb is an imposing figure. He quickly found it necessary to develop a style that would put people at ease. He modeled his approach on the authority commanded by doctors. The house is a patient, so offer it a prescription.
Using hand-held video cameras and other technology, Webb’s needs-focused presentation succeeded spectacularly. Even today at one of his large conferences, held every other year, he and his Rodney Webb University faculty will wear lab coats to complete the doctor theme, which turns out to be very apt.
It turns out that showing prospects images of damage to their roofs and other parts of their home evokes emotional responses centered in the limbic portion of the brain, an area reserved for deeper feelings like those linked to critical basics such as shelter, family and food. In short, the reason his approach works so well is because it is based on brain biology.
Webb eventually left Dixie to start his own firm, primarily selling roofs. Not long after, the word got out about the quality and uniqueness of his presentation. Legendary home improvement trainer Phil Rea even asked him to speak at one of his conferences. Afterward, other contractors asked Webb to train their sales staffs. And not long after that, the Owens Corning roofing team asked if he would be willing to devote 50 days a year to training its dealers. When Webb said no on account of the demands of his roofing company, Owens Corning bought his firm. To this day, Webb continues his consulting work with the building products manufacturer.
In 2007, Andy Lindus was among those contractors who sought out Webb for sales training assistance. He had recently taken charge of his family’s $8 million full-service home improvement firm, Lindus Construction, in Baldwin, Wisconsin, part of the Minneapolis-St. Paul metropolitan area.
“I was a new sales manager, and the way Rodney did things just rang true to me,” Andy recalls. “At the time I just hadn’t figured out how to teach anything, or how to repeat what I was doing, and I was struggling in that part of it.”
Kevin and Emily Lindus, who co-founded the company, were initially concerned about the $5,000 expense plus airfare, Andy says. “My dad was upset that we had spent that kind of money, but that upset did not last long because of what it did for us really, really quickly.”
From Big to Very Big
Today, the Twin Cities operation of Lindus Construction is on track to bill $39 million in 2019. That does not include several additional locations that “the company has either started, or had a hand in starting,” in Rochester, Minnesota.; Milwaukee; Neenah, Wisconsin; Grand Rapids, Michigan, Tulsa, Iowa, Omaha and Oklahoma City. The locations share marketing overhead and back-end sales management services like Salesforce, along with regular consultations with Webb.
All together, the Lindus network represents a $120 million annual footprint, says Andy, who attributes much of their success to Webb’s sales guidance. Over the years, top Lindus managers have been backed by the company to form new startups. Each office is typically headed and owned by a Baldwin-location alumnus.
The details of Webb’s sales system could be the subject of many articles. There are many nuances. A typical Lindus demonstration can include a number of diagnostic tools: blower-door tests, smoke sticks, infrared imaging cameras, digital microscopes, moisture meters, black lights and a lot of video, Andy says.
That foundation of sales skill is the subject of monthly online sales meetings among the broader Lindus network hosted by Webb or one of his eight consultant colleagues. In addition, Webb meets in person with the Lindus sales team twice per year.
“When you work with Rodney, there are two overarching themes that come back to me every time. They are the acronyms TTS, for ‘trust the system’ and BITW for ‘best in the world.’ To this day I trust the system more than anything I have ever in my life. It really does drive us every day,” Andy explains.
These acronyms come directly from Webb’s own business lexicon. They come from his top-two influencers in business and life: Warren Buffet and Michael Jordan. Buffet attributes a trust-the-system credo to his business success, and Jordan is well known for being driven by the desire to be the ‘best in the world.’
“I had a chance to meet Michael Jordan many years ago, and I asked him what it feels like to be the best in the world,” Webb explains. “And he told me it was scary. He said he was driven by the fear of not being the best. That fear made him get up in the middle of the night and practice. From him I understand what it takes to be great.”
Over years of working with Webb, Andy says that trusting the system has translated to the development of a sophisticated real-time, reporting dashboard, tracking the performance of each salesperson and each city on key metrics established by Webb. Those metrics include percentage of projects financed and the ratio of full demonstrations to leads sold.
For example, by monitoring the percentage of projects financed, Andy can get a feel for the number of projects left on the table. According to Webb, if that percentage is not greater than 20 percent and pushing upward to 30 percent, it means the sales staff is not pushing hard enough to get the sale.
“This metric has really led us to talk more about financing among our various offices,” Andy says. “We know that if we are not at 20 percent or more, we are not being as good as we need to be in talking about financing; because if you’re only at 11 percent, you are probably leaving a big chunk of jobs out there.”
Similarly, the ratio of demonstrations to closings can point to important potential improvements. If 90 percent of meetings get a full demonstration and 50 percent of those buy, that translates to a figure of 140. These are the numbers of a very high-performing salesperson, almost too good, Andy says. This kind of ratio might mean that the average price of the job is lower. When that happens, Webb has coached them how to consistently sell at the ‘best,’ higher-priced solution.
“If your average sale is $1,000 less than someone else, then we can talk about that too,” Andy notes. “When you offer a good, better and best solution to the homeowner, most people are going to pick the middle one. Now, if you we train our reps to go in presenting the best options and have conviction in those best options, the warranties are better, the materials are better, everything is better. If you are installing the best-of-the-best manufacturers, homeowners benefit, the salesperson makes more money, the installer makes more money, the manufacturer makes more money. Everyone benefits.”
The Rise of Kelly Roofing
Kelly Roofing’s rise from a $5 million firm to one that billed $48 million in 2018 is highly correlated with its collaboration with Rodney Webb, says its owner, Ken Kelly. He was initially exposed to Webb via training sessions offered by Owens Corning roofing that featured Webb. The house-as-a-patient system made sense to Kelly, and in 2012 his team soon found themselves traveling the country to hear Webb speak. They would pick up new ideas with each successive interaction. Then, in November 2016, Kelly says they decided to hire Webb and work with him directly.
“Prior to Rodney’s trainings, we could never really get past two full-time salespeople, maybe three,” Kelly says. “I mean we kind of had a third that was somewhat rotating. I had two solid individuals, but we couldn’t get past that because salespeople take a tremendous amount of time on a lot of trainings to get them where they’re producing. And you know, to really manage a sales team effectively without having a tremendous amount of one-on-one input was tough without having a system. And so up until we took on and started adapting Rodney’s principles, we couldn’t get past that two or three person sales team and then, you know, boom, all of a sudden we’re up to four individuals on our sales team as we continue to implement more and more of his processes.”
In tracking Kelly’s growth, the bulk of it came from hurricane work, in particular Hurricane Irma, which struck Southwest Florida on Sept. 10, 2017. In 2012 the company billed $5.8 million. At the end of 2016, the firm took in $11.5 million. A year later they hit $15 million. But in 2018, on account of Irma, they were able to sell $48 million of mostly residential work related to the storm.
“We had storms in 2004 and 2005, but we were never able to crack $13 million,” Kelly explains. “And here we had a storm with less widespread damage, and we were able to do significantly more.”
Kelly’s reps in 2018 were handling between $10 million and $11 million each after the storm, and they were closing a very high percentage of jobs because of Webb’s system, which allowed them to be seen as experts with no second opinion required. “After the hurricane our win rate was in the 80 percent to 90 percent range for certain job types, specifically tile replacements. That’s almost unheard of. Now in that time frame, pricing was regulated by insurance companies because most of the work we were doing was insurance-related, so we couldn’t adjust pricing; however, those are very, very impressive numbers.”
The biggest factor for Kelly is the sales management system. It quickly identifies reps who are losing their technique, and it enables their manager to get them back on track without loss of too much confidence. Webb, in his visits, sets the tone in sales training and does not allow anything to slip. That is the way Kelly now operates.
“One thing that strikes me about Rodney is he comes off as a scary individual, right?” Kelly explains. “And when you’re in his training sessions, you realize that he doesn’t let anything slide. You cannot fake it with him. You’re not going to get away with a mistake in a role-playing session. He’s going to catch it. He does it because of his time playing in the NBA; he knows what it’s like to play at that professional level. He really wants to see everyone in our industry come up to that level.”
Andy Lindus and Ken Kelly will be speaking at TOP 500 LIVE (TOP500LIVE.com) in New Orleans on March 18. Rodney Webb is hosting his 2020 Experience on Feb. 24 in Hollywood, Florida (rodneywebb2020.com). QR