From Software Engineer to Agency Owner

Tony started learning coding and programming when he was about 10 years old in the early 90s. After graduating high school, he got a formal degree in software engineering and worked for marketing agencies doing the software side of the business.

After deciding to go out on his own, he started Ricketts Web Design, a mixture between a SaaS company and a marketing agency. Companies would come to them and want them to build custom software to run their businesses, then promote that software and their businesses.

Tony ran that business for about 10 years before deciding it was very difficult to scale. They would work with anybody, had to relearn every industry, build software from scratch. It was chasing projects, didn't have recurring revenue. And growing a software business is expensive.

"I was once told a saying that stuck with me forever. And that is if your business requires specialists to scale, it will never scale."

The first business required specialists in every aspect, from software engineers to senior ad buyers. It was very difficult to scale.

They decided they needed to find a niche where they could put together a systematic approach to all marketing services and build that into a prepackaged program they can resell and re-execute at scale.

That's how LawnLine was born.

Why the Real Estate Niche Failed

Tony knew he needed to niche down. His first niche was not actually lawn and landscape. It was his second niche. His first niche was real estate.

And he failed miserably in real estate.

"I'm happy to talk about failures because failures are what push you forward and how you learn."

When he first started niching down, he chose real estate. One thing he learned from there was when they would generate a lead for them, it could be a long time before they actually saw money from that lead.

These were real estate agents they were working with. Whether they got them a buyer or a seller lead, people spend months looking for houses. You go and click on one of their realtor's ads and you reach out to the realtor and you start looking for a home, but it may be six months before they ever make a dollar off of you.

"That made it very difficult to keep the clients long term. The churn would come very quickly after just a couple of months and not seeing real dollars coming into the bank account, regardless of how many leads are generated."

One of the things he learned from that was he needed a niche where they could put money in the bank for the client right away. That was one of his number one things he looked at when he decided this is not working.

They'd spent six months trying to build the real estate side and made thousands of dollars. And when he means thousands, like not 10, like a couple thousand bucks over six months. Obviously that's not going to work and they needed to shift.

Why Lawn and Landscape

There were a couple of things they looked at. Number one, they had to be able to get the client dollars in their bank account right away.

Another thing is Tony wanted a niche with an abundance of companies. With lawn and landscape between the US and Canada, there's like 600,000 companies. Huge pool of potential customers.

The final thing was when Tony was in college getting his software engineering degree, he spent two years working on a landscaping crew doing installations and maintenance. Knowing a little bit about the industry, he decided this would be a good fit.

One other thing they looked at, which Tony would not recommend today, was which niche didn't have tons of agencies already going after it. At this time there were hardly any going after lawn and landscape.

But Tony would not use that as an indicator today. "Just because there's other agencies going after a specific niche doesn't mean there's not plenty of room for everybody."

LawnLine is the largest multimillion dollar agency focusing on this space and they have less than 1% of the industry.

If you want to do plumbing and HVAC, don't worry that there's 300 other agencies going after it. "If that's the industry you know and you feel like you can be successful in, then go for it."

Being the Best Known vs Being the Best

I asked Tony how they win over other agencies competing in the same space.

"One of the things that I've always focused on is I do want to be the best. That's never out of sight. We always want to be the best. But it's not about being the best. It's about being the best known."

That's what's going to help you grow and beat some of these other places. People like comfort. If they've seen a name over and over and over many times over the years, they feel comfortable in that name.

Let's take something like handling your payroll for your business, a very important aspect. Same thing with your marketing. It's an entire department of your business. There's big names out there like Paychex and companies like that that handle payroll for companies.

"They may not be the best, but they're the best known. And as a business owner, I'm going to be terrified to give them something so important and pay so much money when I know that this company over here will at least get the job done."

Will they be as good as this company over here? Maybe not, but they're going to get the job done. Otherwise they wouldn't be where they are today.

Having that being the best known helps comfort the buyers when they come to you.

In the marketing industry, "I always say we're looked at like a mechanic." Every time you go to the mechanic and you need your windshield wipers changed, you come back with a list of $5,000 of stuff that needs done to your car. They make you feel like you wouldn't drive it away if you were them.

Everybody we deal with has a horror story working with a marketing agency and they don't trust them. They don't like them.

"Being the best known is that's not a wall that we have to break down when we start our sales process with potential clients to convince them that we're not going to rip them off and run away with their money."

They're beyond that level because of the reputation they've built in this space.

How Trade Shows Built Trust and Authority

How do you beat out other agencies? Being the best known is one of the biggest things. Social proof is another big thing. When they see you're working with other people they know in the industry and look up to and see that you've helped them get there, that's going to help you close more clients.

Also being consistent is another big thing. When Tony first brought salespeople into the agency, he always wanted to ensure that when somebody would ask a question, they didn't get that salesperson's answer. They got LawnLine's answer.

"Every salesperson that comes into our company, they have to go through a six month training process that's very long and deals with shadowing and training."

One of the key ways he built the systems to train that is they built a list of every single question they were ever asked. This is before AI. They had a human listen to every single sales call they had over the years and they notated down every question that was asked and the answer they gave to that question.

Their salespeople study that like a server would a menu working in a restaurant. So whenever you ask a server a question about what's on this dish or how to get it cooked, they all give the same answer. That's what they wanted to put in place with their sales team.

Tony mentioned their pricing. A lot of people will shop on price. They're the most expensive agency out there compared to everybody else. They have an entry level program that small companies just getting started can get on, but outside of that, "Your minimal investment in our fees is $50,000 a year and that's where we start in pricing. That's our base level price point which puts us higher than 99% of all the other agencies."

Let's not even discuss the $100,000 plus programs they have. "It's all about how you frame it, present it, who you are as an agency and all those things put together. It's no one individual thing."

How they started getting that recognition in the industry is by attending industry events and conferences. They got their very first customer through the Equip Expo back in October 2016. That's where they got their first client because they had a booth at a big industry event.

When businesses go to these industry events and conferences, they come with an open mind. They're there to learn. They're there to see what new vendors may be out there, what products are coming out.

"So they come open and ready to be sold, not necessarily closed off like you're a cold person approaching them. And then when you're there, they just automatically assume that you're a semi-large company because you're there as a vendor."

Tony went to Walmart and bought a rug to put down because he didn't even have a carpet. It looked hideous. He didn't have any money to actually pay for a booth so he bought tables at Walmart, bought computers at Office Depot, and then when he was done he returned all of it because he couldn't even afford to be there.

After one more year in that small booth, they realized the value of these conferences. That's where they started to upgrade and start doing the big booths. They would invest $20,000 to $30,000 going to these events and it really started to pay off.

"When you have a big booth and you're right next to these big players that they recognize, these are staples, Fortune 500 companies, they put you at that same level. When they walk past and here's John Deere and then here's LawnLine right next to them, they're like, well, LawnLine's got to be somebody if they're sitting here next to John Deere with this big ass booth."

That just gives you instant credibility versus somebody who is just running general Facebook ads, sending out cold emails, doing cold calling with their VAs. Those don't have that trust factor. You're a cold person reaching out to them versus setting up a big display in a place they feel only reputable vendors are at and they come approach you.

"It's a completely different mindset, mind shape. You're going to close those people at that conference much better, much easier."

The Seven Year Deal That Changed Everything

Tony mentioned vendor partnerships. They made a huge deal with SiteOne. SiteOne is the largest landscape supplier in the country, almost 800 locations across the United States. They do a few billion dollars in revenue. They're a Fortune 500.

LawnLine is their recommended marketing agency for all of their landscape companies.

Tony spent almost seven years building that relationship to get that deal. Connecting with executives of a Fortune 500 when you're some broke kid from Lafayette, Indiana is very difficult to do.

The way they did it was they strategically placed their booths next to theirs at every show they went to. Even today at the Equip Expo, when you go to their booth, it is directly across the aisle from SiteOne.

"That's how I got that in is we made friends with them."

The vendors have the same people at all their booths at every show. So when they would do these five, six shows a year, the people who are working the SiteOne booth are the same people at every show. They would see them over and over. They would joke with them that this is the circuit because they're all the same people just going to these different locations setting up their booths.

One of the ladies they became friends with that worked in the SiteOne booth ended up getting promoted and became the director of trade shows, which gave her a seat at the executives table. She ended up telling them, "Hey, you guys really need to talk to these guys. They've been following them around for seven years and I think we could really make a good partnership with them."

The person who would make that happen was at the table. They had a conversation and a couple months later they signed a formal agreement.

"That was seven years in the making, but how it happened was being present at these industry events and getting to know the industry."

It had nothing to do with the landscapers that were there. It actually had to do with connecting with the other vendors that are serving the same customers. "We're all serving the same customers. So let's find ways that we can work together and partner together."

Crystal Insights: The AI That Analyzes 40,000 Leads Per Month

Crystal Insights is actually an afterthought. It originally started because their clients demanded better reporting. They use call tracking software like every other marketing agency, but those systems will tell you how many phone calls came in, how many forms.

"But as we all know, those aren't actual representation of lead counts."

Clients complained that they're saying we got 600 leads this month and we only see 300 in our CRM. When they would audit, there's a lot of spam or people that were already customers calling in about their service.

Their response was to hire people to listen to phone calls, review forms, and dictate what they are. That helped, but it wasn't great. Maybe 80, 90% accurate.

The problem is with the humans. They do 40,000 leads a month aggregated between all clients. That's 40,000 phone calls and form submissions. At best, their reporting data was three or four days behind, usually like a week.

When AI came about, they decided how can we use AI to get more instant, faster, more accurate results?

They built it into their WhatConverts system, connected into their API, pulled down the leads and recordings. Sent that to AI. Let AI analyze everything. Then pushed it back up.

"And it worked really, really well."

It could pick up extra things like how much money was quoted for this service and other data points their call listeners never did.

They showed a couple other agencies. They're like, oh gosh, we need that bad. Josh Nelson said he was trying to do something like this.

Tony was like, you know what? We should build this into a software. "We had no intentions of building this into a software. We needed to solve a problem for LawnLine."

They can now pull out things like what are call answer rates? What percentage of qualified leads are existing customers versus brand new? What questions do people get asked? What complaints? What competitors?

"These are important business decision data that everybody flies blind on."

It also evaluates all the representatives. Confidence level, knowledge of products, weaknesses, strengths, missed opportunities. You can click on an employee and see all that data. The AI pulls out 51 different data points from that phone call for both the agent and the customer.

The 30% of Leads That Get Wasted

Tony shared a shocking statistic. "I hate to say this number and it's actually better than every agency that I've seen use our software so far, but during business hours only about 70 to 72% of our phone calls get answered."

LawnLine is 100%. That's one thing he's always pushed. But when you look at their clients, they only answer about 70% of the phone calls that come in during business hours.

When they go to talk to their clients and they tell them, "Okay, our budget this month for ads is going to be $3,000," Tony responds, "Well, why don't you just take $1,000 of it and wad it up and throw it out the window because you're not even going to answer the leads for that money as it sits right now?"

But they never had those insights before. There was never a way to be able to know how many of your phone calls are being answered by a human during business hours without the help of AI technology.

"And now that we have AI technology, these are insights that have never been able to be known by a business owner before. And now they can make better decisions."

How They Qualify Clients Into Four Programs

Tony explained they qualify their clients. They have four things they look for when they qualify a client.

"We're not like a restaurant where you have a menu of items to choose from. We have four programs that we sell and you have to fit within the programs."

Under a million dollars a year is their starter program. Between one and three million is their Accelerate program. Between three and 10 million is their Elite program. And 10 and over is their Titan program.

"You can't be doing $300,000 a year and get on the Accelerate program. And the reason for that is you're not ready for it."

That $4,000 a month program will generate so much business it will crush you as a $300,000 a year company.

They ask four questions about your people, location, services, and revenue.

People: They want to make sure you can answer the damn phone. How many people do you have in the office that can answer phones? If the answer is zero, you're not a good fit if you're over a million dollars.

Location: Are you out in a rural area and your goal is to add $3 million in revenue and you've got 10,000 people in your town? That's not realistic.

Services: They're niche. They don't do HVAC or roofing. "If you got a landscape company, we've got $100 million plus dollars spent in landscaping. I can tell you all about that one."

Revenue: Lawn and landscape companies don't have huge margins. The best ones focused on chemical treatments can see 20 to maybe 25% net margins. But if you're focused on maintenance and mowing, you're probably looking at 8 to 10% net margins.

"We recommend that you don't go over 5%. And as you get bigger, that gets smaller."

When you're a million dollar company, they don't recommend you spend any more than $50,000 a year on your overall marketing. That's all of your marketing put together including ad dollars.

Tony's Message: Embrace AI or Get Left Behind

I asked Tony for his message to local business owners and local marketers.

Don't be afraid to spend. "Don't go looking for the cheapest. We're not selling macaroni and cheese off the shelf in a store. This is not a commodity product."

Don't be afraid to hire somebody that knows what they're doing. You want a higher chance to win. Spend the money to gamble the higher dollars, but do it on a table where you're far more likely to win based on the reputation.

Small business owners don't want to put that kind of money out. They don't see it as an investment. They see it as an expense. "It's an investment."

For everybody, embrace the AI. AI is coming and it's changing our world whether you like it or not. Don't fight it. If you fight it, you're going to be left behind.

"Even if you just learn the basics of how to use it, you're going to be far better off."

Tony sees a lot of people still on the AI hate train. Embrace it. Learn it. "Because you will 100% be left behind if you don't."

And here's one final piece of gold. "Keep in mind every investment is not about money. Some of your best and strongest investments that are going to return the most for you are from your time."

When he started with AI a couple years ago, he didn't know anything about it. He was on the AI hate train. "I was an engineer. AI is dumb. It doesn't know anything."

He spent his time to learn about AI. An investment that cost him zero dollars. "And today it handles probably 40 to 50% of my agency's fulfillment and I've started two other software companies based on it."

Something he hated three years ago, he invested his time. "And now my investment in time to that AI is about to surpass anything my agency could have ever thought it would be able to do."

My Main Takeaway

This conversation with Tony completely changed how I think about niching and qualifying clients. The biggest insight is that it's not about being the best, it's about being the best known. Most agencies compete on being the best at SEO or the best at ads. Tony built authority by showing up at trade shows next to John Deere and spending seven years building a relationship with SiteOne.

The Crystal Insights story is incredible. They built it to solve their own problem, then realized other agencies needed it. Now they have almost 100 agencies signed up without spending a single dollar on marketing. That's the power of being known and giving value.

And the stat about 30% of phone calls not being answered during business hours is a wake-up call. Before spending more on ads, business owners need to make sure they're actually answering the leads they're already getting.

Thanks for reading, and if you found this valuable, make sure to check out the full podcast episode. Tony drops even more tactical advice about agency building and AI implementation that I couldn't fit into this recap.

You can find Tony on Facebook and LinkedIn by searching for his name or any of his companies. He's a pretty open person and keeps everything public, so feel free to reach out and connect.