“I was picking something up at the hardware store, and this guy said, ‘Hey, you interested in buying a business?’” says Morrill, CEO of Pacific Pavingstone. “It turned out that he had a paving stone business. And I had, at that time in 1999, never heard of paving stones before, even as a contractor.”
Morrill hired the company install a paving stone project at the job he was working on as a general contractor and was so pleased with the outcome that he bought the business. Seven years later, he also runs Morrill Landscape Group and California Waterscapes, companies he opened to complement his paving stone business.
Pacific Pavingstone grew from $9.3 million in revenue in 2004 to just under $13 million in 2005.
Smart Business spoke with Morrill about how he uses referrals, marketing and stellar management to grow his businesses.
How do you build a positive reputation for your company that encourages referrals?
You produce a product that’s beyond the expectations of the customer. We also get Better Business Bureau reports, which are available to the public, and we do that with ourselves and our competition. It lists the number of reports or complaints ... and then how those were handled, if they were handled.
We’ve had no complaints, where our competition could have 14, 15 complaints. When we enlighten our customer, we tell them the type of company we are, that we’re really, really interested in quality.
At the end of each job, somebody with our quality control section, they’ll call up the customer and ask them to rate the salesperson on a scale of one to five, rate the crew on a scale of one to five, rate what their expectations [were] there’s a whole series of questions that we do so we can catch right away and then correct if we have an unhappy customer.
How do you train employees to be problem-solvers?
A lot of people think that a good manager is someone who can handle any problem that’s thrown at them, but ... we take the viewpoint that they need to present us with a solution, not with a problem, because otherwise, that’s what buries an executive. All he does is handle problems.
And any time somebody ... has a problem, then they can’t present the problem without also what they consider the solution is. It gets them to constantly think of solutions, and a lot of times they’ll end up implementing the solution and it just works, and they don’t need to check with the manager.
How do you find competent management?
We put people through a series of very preliminary [tests]. We do an IQ test. We do a basic aptitude test on all new employees or applicants, and then we’ll do some more practical tests ... where they’ll work for a couple days with pay, and they’ll have specific tasks that they’re asked to do that we know, because we’ve done them before, how long those tasks should take.
For instance, there could be a task of putting together some (promotional) packs that we do, and we know the task should take three hours, and there’s clear instructions on what to do. ... And a day later, after 15 questions, and (that person) continues to ask about (how to do the task), you know that person is not the guy for the job.
How do you adjust to fluctuations in sales?
We look at every week what we produce. ... We collect all the data, we look at them, we measure all these graphs and we see how we did that week. And if we did less sales than the week before, there’s certain actions that we take, formulas that you take, that are different than if you did more sales.
If the sales statistic is going up, then you find out what’s making it go up and you strengthen it. If the sales statistic is going down, then ... you need to promote more. You don’t cut your promotion like some companies do. You promote more. And using (this system) has helped us grow from four employees to over 100 employees in six years.
How do you decide how to allocate your marketing?
We actually have a way to trace all of our marketing. We literally have about 15 different sources that work comes from. And I can tell you what each one costs us.
I can look at Yellow Page ads and last year what it cost us for both [the] paving stones, ponds and landscaping [businesses] to get somebody to call, what it costs per job sold and what percent of the marketing budget is in each area. That way, we can constantly throw out the things that aren’t very successful and try new things and watch how they do and see if the cost to get that sale is better than, say, postcards.
If we weren’t as aggressive as we were, we could probably just live off of referrals, but there’s no way we can have a 40 (percent) to 50 percent growth.
HOW TO REACH: Pacific Pavingstone, www.pacificpavingstone.com