In StoneTalk Episode 42, Patrick speaks with Scott Lardner of Rocky Mountain Stone.
Listen to this episode to learn more about:
- The joy of working with family
- How to succeed in an area where the population is spread out
- When it can be useful to downsize
- The importance of focusing on your target market
Be sure to subscribe to the podcast in iTunes… and please let us know what you think! You can leave comments for this show on the StoneTalk Facebook page or on this site.
If you have stories or insights that you’d like to share with other fabricators, please reach out to Patrick.
Transcript
Patrick: Welcome to “StoneTalk,” the podcast for countertop fabricators, brought to you by Moraware, the makers of JobTracker scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley. Today, I’m speaking with Scott Lardner, President of Rocky Mountain Stone. Let’s give him a call.
Scott: Hi, this is Scott.
Patrick: Hi, Scott. Patrick from Moraware. How are you?
Scott: I’m good, Patrick. How are you?
Patrick: Good. Is this still a good time?
Scott: Yup.
Patrick: All right. Well, let’s start with a very simple question. How did you get started in the stone industry in the first place?
Scott: Well, actually, the company was started back in 1963. My dad was a mason. Yeah, he was a mason. And there was a company that was here in town that went bankrupt, and then there wasn’t a stone company. And a friend of his came to New Mexico in 1963, I think it was, and they started Rocky Mountain Stone Company together. And we primarily, you know, bought and resold flagstone, and landscape gravel, and veneer stones, building stones, and boulders, so it was really more of a materials company.
So they ran that until about 1978. We had an opportunity to buy in to a travertine quarry, a quarry that had been developed back in the late ’50s and was worked until about 1966. And we were actually buying…we were quarrying and making veneer stone out of that travertine.
And the rancher, they sold the ranch literally on the courthouse steps. My dad was involved and kinda knew all the people that were interested in the ranch, and we bought the travertine rights for about 1,200 acres of land with the travertine [inaudible 00:02:16]. You know, and then travertine, we put in a little wire saw on a radial arm polisher and a bridge saw and started cutting up travertine here in our shop. And then we opened a big plant in 1983, went over and bought gang saws and polishing lines and started New Mexico Travertine, which is a sister company of Rocky Mountain Stone.
You know, it kinda went from there, and we had the equipment to cut. You know, we were cutting sandstone [inaudible 00:02:48], and we cut travertine vanity tops and furniture. And, you know, somebody asked us about doing vanity tops, and that was pretty early on. There were some granite slab being worked on, but it was sort of a whole different animal.
I think our first granite countertop job was like 1986, and that was for a local car dealer. They had remodeled their house. They wanted granite countertops. They went over to Cold Spring, or at the time it was Capital Marble and Granite, I think, back in ’86 over in Marble Falls, Texas. And we bought slabs of Texas Pink, and we cut them up and kinda did a rudimentary polish on the edges and did the install. You know, it kinda grew from there, and then it was, like, the mid-’90s when the granite countertop business really took off and kinda rolled that way for about 10 or 12 years until the bottom fell out of it.
Patrick: I mean, were you working with your dad from the time you were a kid, or did you…
Scott: Yeah. We joke about it. I started working in the yard when I was about seven years old. You know, my dad used to…he would duct tape a 4 by 4 to the brake pedal of the forklift so that his kids could drive the forklift. We weren’t allowed to touch the gas, but, you know, we could pick up palettes and move them around, and, you know, we palletized stones and pulled weeds. Those were the two jobs. So, yup, I’ve been working in it for a long time.
Patrick: Great guys.
Scott: When we started our shop and started doing fabrication, I worked as a delivery driver, and I worked as a…went out and learned how to template jobs and learned how to run the saw, and cut jobs, and finish edges, and polish slabs, and whatever needed to get done. So, yeah, I’ve kinda grew up in the business.
Patrick: Nice. So is there anything unique about New Mexico that makes it different from other parts of the country or so far as you know not much different?
Scott: In what regard? In as far as the stone business?
Patrick: Yeah, specifically. Are your customers any different there? Are you more spread out, less spread out, different tastes?
Scott: Yeah. New Mexico has only got about just shy of 2 million people in the entire state, and so it’s not a huge… Albuquerque is the biggest metropolitan area, and the MSA for our area is just a little over a million people. So there’s a million people in Albuquerque in the Albuquerque area, and then there’s a million people throughout the rest of the state.
Every week we travel all over the state. We go down south to, you know, Artesia and Roswell on the kinda east side of the state. We do a little bit in Las Cruces, but that’s really serviced out of El Paso, because it’s only about 40 miles north of El Paso. We do a fair amount up in Santa Fe, and then we do a little bit up in, like, Farmington, and we get into Durango and the Pagosa Springs.
Patrick: So you have to cover some area?
Scott: Yeah. I mean, you know, we kinda set the limit at about four hours. If you have to drive through there in four hours, we’re really not gonna…
Patrick: Got it.
Scott: …you know, unless it’s a really a big job, you know. We’ll go after some of those big commercial projects. You know, it’s a relatively poor state, and most of the economy is actually government-based, which is never really a solid foundation. We’re usually about two years behind any kind of downturn in the economy and two or three years behind when it comes back. We’re just starting to see a fair amount of growth and a fair amount of construction happening right now.
Patrick: Oh, really?
Scott: You know, it’s been back at it for three or four years, yeah.
Patrick: Interesting. And is your business still spread out across counters, landscape, cladding, that sort of thing, or, I mean…
Scott: Yeah. We closed our materials yard about three years ago. We sold a piece of property and just kinda downsized. You know, we’re still a material supplier selling flagstone, and veneer stones, and boulders, but we’ve gotten out of the gravel business or the retail gravel business, I should say. And most of the other materials that we’re selling we sell through a contractor, so we really aren’t doing retail business any longer.
Patrick: Got it. And when you say commercial compared to residential, you know, what is a typical commercial job for you like? Is it, you know, an office building? Is it an apartment complex? What does commercial mean to you?
Scott: Yeah. We did a big municipal complex down in Artesia. We’ve done a number of beach resorts, hotel projects. We just finished the Taos hotel up in the Taos Ski Valley, The Blake, and I think there’s two more buildings that they’re just finalizing the plans on that I think we’ve got a pretty good opportunity to get as well. And we do a fair amount of multi-family housing, not the huge mega apartment complexes, but the kinda middle market, where they’re building, you know, anywhere from 20 to 100 units. That kinda seems to be our sweet spot.
There’s been a fair amount of that around the state that we’ve been involved in. And the residential side, you know, the remodel part of the business is what has sustained us well. It’s sustained us for six or seven years, and we’re just starting now to see new home construction is kinda making a comeback.
In Albuquerque, in our area, when they started building houses again, they were all, you know, $150,000 or less, and at the end of the market we still aren’t the low-cost providers in this market. Well, Cosentino has got a stone systems here in town, and they do all the lows and home depot work that attract guys. Yeah, that’s just not the market that we’re in.
So we’re starting to see, you know, some new custom homes coming up online, and, you know, our business is…probably for the last 5 years, we’ve been up 25% to 30% year over year. We’re almost not quite back to where we were in 2007 or 2008. We’re still a little below the high water mark, but it’s definitely coming back.
Patrick: Good. Now, if you intentionally don’t want to go after that lower end of the market and, you know, don’t do the big bucks stores, etc., what do you do to get the higher end of the market from, like, a marketing perspective? How do you present yourself to customers as being worth more, or how do you find customers who are willing to pay more? How do you approach going up market as opposed to down market?
Scott: A guy told me once, “In marketing, if you wanna eat venison, you gotta hunt deer,” right? So we know exactly where our demographic is if we do a fair amount of Google paid ads, some stuff with YouTube that puts our ad up for, you know, the…
Patrick: Free roll ads.
Scott: Yeah. Our market is really women that are 35 to 65 in a house that’s $100,000-plus household income, you know, active lifestyle. The other thing that we did was we went back. The study showed that typically people do a minor remodel after 7 years in the house, so 7 to 10 years in that range. They typically do a major remodel in the 15- to 20-year period. So we’ve come back to the city, and I think you can do this in any market. You can go back and look at what areas of the city had the highest number of building permits polled.
So, like, if we said, “We wanna capture everything between 2005 or the year 2000, or let’s say 1998 to 2003,” you can go back to the city. They have maps that show exactly where all those building permits, and then we do a direct mail campaign. And specifically we’ll do two or three mailings. We generally do those, like, twice a year. We’ll do two or three mailings in a month to month and a half period specifically to those areas. That works pretty well.
Patrick: Do you measure the success from the standpoint of… Are you able to track which customers came from those specific mailings?
Scott: Well, we track. Yeah, you know, and that’s stuff I haven’t done. We used to map out where the jobs were, and we had a pretty robust kinda guerilla marketing program, you know, using yard signs. And the installers, they’d get done doing an installation, and then we paid them to go out and put 20, like, door hangers out on neighbors’ doors that said, “When your neighbors just got granite countertops, it’s your turn. Come see us.” You know, and that actually worked really well.
I’d say, you know, we really rolled up our sleeves and got to work between 2011 and 2014 or 2015, and then it got really busy, and we’ve been busy for the last two or three years. You know, we’ve taken our eye off that a little bit, but we were doing a fair amount of very directed marketing to people that were living in houses that were, you know, 15 to 20 years and in the right income bracket, yeah, and it worked really well.
Patrick: So it’s easier to hunt deer when they walk in front of your own front yard is kinda what you’re telling me.
Scott: Yeah, that’s exactly right.
Patrick: Once things picked up, you didn’t have to try as hard to go out and find them.
Scott: Yeah. There’s more deer out there. And, actually, you know, it’s interesting also. You know, we don’t go out there and say, you know, “We’re the most expensive company. Come buy from us.” What we say is, “We’ve been in business for 50 years. We have a lifetime warranty. We’re the only accredited shop,” all of those things, locally, family-owned, whatever. And we’ve got a list of about 20 talking points that we try to focus on before we get to the price.
And usually people are…I think they hear a lot of horror stories about fabricators that, you know, broke their slab, or screwed up their job, or whatever. And so there’s enough of that out there that, if you promote yourself correctly, price is a secondary or maybe a tertiary component of the decision.
Patrick: Nice. You mentioned accredited. Is that MIA-accredited?
Scott: Yes, sir.
Patrick: And do your customers genuinely care about that, or is that just, you know, as part of your process that just gives them confidence, or…
Scott: Yeah. I’m not sure that they care about it, but, yeah, it’s kind of one more, you know, arrow in our quiver, so to speak. You know, the other thing we do that we’ve promoted recently is the slab cement layout. I’m surprised that people don’t use that as a selling point, because you tell people about that, and they go, “Holy cat. Really? That’s so cool.” That’s what we want. We wanna see what it’s gonna look like before we ever cut it.
We’ve got a little bit of staying parallel just because we’ve been around for a long time. But I can tell you that when things got really tight, you know, all the people that used to just do nothing but talk about price and how cheap they could do stuff for, or how cheap the market was, or whatever, none of those guys are in business anymore.
And I think that one of the fallacies of people that are in a business is…you know, the first thing you have to do is run the business, because you can’t really do much of anything else unless the business is sound, you know, and you gotta make money on every single job. You can’t do five of them for free and make it up on the sixth one.
You know, it’s just interesting to have lived through that downturn and seeing this mentality of, you know, like a race to the bottom kind of a thing where everybody just is trying to be as cheap as possible. And the problem with that in the stone business is we sell a really durable product that you only get one chance to sell it.
Patrick: That’s a good point.
Scott: And if that person buys it, they don’t need for another 25 years, or, I mean, unless they get white-haired and wanna remodel, right? But beyond that, there’s no reason to…you know, it’s not like you have to replace it for any reason. And, you know, you get that one opportunity, then you gotta go find new customers, right, every single day. So it just doesn’t make sense to do stuff and not make a little bit of money at it, you know.
Patrick: Definitely.
Scott: I know that there’s companies out there that are twice as much as the market. They’re an elite group. That’s not how we run our business. You know, we’ve got $39 per square foot granite packages for builders. We’ve sold a lot of them, but we’ve got them, and we’ve got a fair number of, you know, track builders, I’d call them more like custom tracks, smaller custom track builders that we do all their work for.
You know, so there’s a part of that market that we’re capturing. But, you know, when [inaudible 00:17:50] comes to us and says, “We need to be at $23 a square foot, ” it’s just a recipe for disaster, you know, so we don’t chase after that.
Patrick: Yeah. No, I completely hear you. I also see that you’re a member of Artisan Group. How did that come about? What does Artisan Group do for you? What does that mean, being part of that group?
Scott: I gotta tell you, do you know much about the Artisan Group? Have you been in the industry long enough to know who they are?
Patrick: Yeah. I have a general idea, and actually one of my more recent interviews was with Jon Lancto, so he gave me the overview. And I had the opportunity to play golf at the Collier gathering last year, which was a lot of fun. So I learned some from people at that gathering. So I know some, but go ahead. For people who haven’t, give me an overview.
Scott: Well, you know, the Artisan Group, initially it was like a buyers group that the common denominator was the import company, AGM. And, you know, we got together a couple times a year to review best practices and, you know, look at opportunities as far as other products that we could bring to market that we’d have kind of a proprietary interest in, if you would, like branded cords, or branded filler, or branded wood countertops. And we’ve put all of those in place.
And, you know, the idea was to do some national marketing for Artisan Group members and potentially try to get some national accounts. One of the things, I think, that has been a little bit challenging, I mean, there were a number of companies that went through some pretty tough times, our company included, that when you’re just trying to keep the doors open, you’re not worried about being a part of a group and sharing metrics, because there wasn’t a whole lot of metrics to share.
And so it kind of…I don’t wanna say lost some momentum, but it lost a little bit of focus. And we hired Jon about a year ago to take over as the executive director, and he’s got, you know, some group buying programs that we’ve put together, and we’ve got a metrics program, so we’re all sharing, or most of us, I should say, are sharing metrics on a monthly basis.
Patrick: That’s interesting.
Scott: And we’re doing some shop tours. We’ve got one set up for Dave Stockett down in Phoenix in October. Mostly kind of best practices kind of a program to help everybody’s business get better.
As far as buying and being a member of the Artisan Group and buying through AGM, you know, they’ve gone through a couple of…well, they went through a buyout about two years ago, and the dynamics have gotten a little bit shaken up. And I think that’s all kinda settling out. It used to be that they had consignment programs, and they spent a lot of time on the palette of colors and tracked all of the colors that we were buying on a regular basis, and they did a really good job of always having those materials in stock.
You know, but, again, the market sort of threw everybody a curveball, and we’re just now getting back to a point where it’s becoming a more focused effort as far as the Artisan Group goes. Does that make sense?
Patrick: Absolutely. And, in fact, I would relate that to the shop tours that you said that reminds me of a couple of saw manufacturers I know. Park Industries for sure, but I noticed a couple of others, put on events where they’ll invite prospective customers to meet up one of their customers who already has their equipment.
And just the act of getting 20, or 40, or 50 people who are all attempting to do the same thing and succeed in the same way, get in somebody’s shop and start talking shop, that’s inherently beneficial. I mean, it’s kinda obvious once people get in there, like, good stuff happens. So, if nothing else, when you belong to a group like that that schedules tours, and people shop, that’s pretty beneficial, I would think.
Scott: Right. Yeah. I was a member of Vistage for a long time. I don’t know. Are you familiar with Vistage?
Patrick: That one I’m not. No.
Scott: It’s like a business owners group. Typically, they’re 8 to 12 business owners, and there’s a moderator that…or a facilitator, I should say. And they get together, like, on a monthly basis and listen to a speaker. It’s sort of like having a board of directors since you get the whole ideas off of. I mean, if somebody, you know, that’s maybe not new to business but, you know, looking to take their business to the next level, it’s a really solid format.
One thing that we tried to do at Artisan Group, and it just didn’t gain any traction, was to have, like, a small group meeting and have those guys meet on a more regular basis either by phone once a month or, you know, in person every quarter or something like that. And I think that it was just, you know… That’s one of those things that we need to get back, that we need to refocus on and get set up.
The shop tours are kind of a…I think this is the second one or the third one that we’ve done, and they’re really a lot of fun. I mean, you know, you get plenty of time to sit down and talk to everybody and have a little bit of social time. They’re really beneficial.
Patrick: Yes. That’s what I have observed as well. I’ve never seen someone say, “Oh, I wasted my day visiting this person’s shop.”
Scott: Right, yeah. Are you one of the owners of Moraware?
Patrick: Nope. I’m one of the earlier employees at least in sales and support. So the two owners are Harry and Ted, which you might have met at events. And I met them at a kind of software event years and years ago, and we’ve stayed in touch. I joined about four years ago.
Scott: They pretty much own the fabricator job scheduling market, don’t they? As far as programs.
Patrick: We, certainly by numbers, have a healthy share of the market, and we always say, you know, our biggest competitor is whiteboard. So we still have a long way to go. A lot of people are still using the whiteboard and file folders. And we have thousands of requests for things people wanna add, so we have of plenty more to do and plenty more customers to find. So we’re still moving upward in our journey as well.
Scott: Yeah. Well, good.
Patrick: Thanks. So one last question. So what are you working on now, or what keeps you up at night? What do you most wanna change from a business perspective? Where are you trying to move the needle on something, whether that’s marketing, or equipment, or employees?
Scott: You know, yeah, interestingly enough, we kinda dismantled everything. We went from 60 employees to 23 in about a 18-month period.
Patrick: Oh, wow.
Scott: Because, I mean, the market has disappeared. There were five granite companies, five sizeable granite companies that went out of business between 2008 and 2010 probably. So we knew we needed to cut back, and I used to…you know, it’s kind of interesting. We put in a fusion. It’s been about three years ago now. We had two bridge saws, and a line polisher, and a flat edge polisher, and two CNC machines, and, you know, we were cranking out anywhere from 400 to 500 square feet a day, something like that.
That’s a decent size operation, not as big as some of the big metropolitan, you know, big city shops that are doing, you know, 1,000 feet a day or something. But, for us, it was a lot. And when it shrunk down, we actually took both of our CNCs out of commission, because we found that we were using them primarily for, you know, doing sink cutouts and doing radius work. We weren’t doing very much radius work, so mostly they were undermount sink polishers.
So, when we put in the fusion, we were gonna fire up both the CNCs. And we went back, and I had one of our customer service gals. She pulled 10 jobs from each month for the 3 years prior to 2014, and we made an Excel spreadsheet that showed straight outside profile edges versus either radius edges or inside profile, like an OG, or a [inaudible 00:27:29], or something that you have to have a router to do. Everything else could go through the inline polisher, right?
We put 360 jobs, and, of those jobs, 92% of them were straight edges and outside profiles. The 92% of everything that we did in that 3 years, you know, came off the saw, went through the edge polisher, and then sometimes they’d go to the CNCs to have the sinks done. But 92% of it, we could have just, you know, buttoned up the edges by hand and polished the sink out, and so we just unplugged the CNC machines and hired two more fabricators.
And that’s the way we’re doing it today. Now, we’re up to, you know, that fusional cut, on average, about 12 slabs a day, 12 to 15, somewhere in that range, and we have the capacity to run all of that work on the edge polisher and button them up by hand. And I’ve got six fabricators, but we’re doing almost as much volume now with actually fewer people than we had back in 2008 or 2009. So it’s been interesting.
I still think there’s a place for CNCs. Well, obviously, there’s a place for CNCs. There’s still a lot of CNC machines, but they’re a mechanical nightmare if you don’t know what you’re doing with them. And getting somebody that knows how to run them and can keep them running and keep the quality up, I don’t know, might have something to do with the workforce around here. We’re always challenged with that even when we had the CNCs. So it’s kind of interesting. You know, that’s my take on it, but empirically it works.
Patrick: That is fascinating. That is not at all what I expected you to say on that, because, yeah, everyone always says, “Go to CNCs. Go to CNCs.” But I think the real message there is know your market and look at the work you are actually doing and plan and respond accordingly.
Scott: It’s kinda funny. I’ve got the original CNC that we bought. We spent $400,000 on it. I mean, it’s probably not worth it. If I could get 25 for it, I’d be thrilled, you know. Some of, you know, the new CNCs, I think that they’ve come a long way. But, again, it goes back to that, you know, when you’re in a business for a long time, and you have a good way of doing things, and it works, you’re slow to pick up on new technology. And when you’re fresh to the game, you want the latest and greatest stuff that’s out there, right?
I’ve always tried to, you know, just be aware of new technology and see how it fits into our system and try to be as proactive as possible in adopting…you know, we do all digital templating, and digital layouts, and, you know, cutting on a CNC saw jet, and that sort of stuff. But the CNC routering, it’s gonna take a long time for me to pull the trigger on one of those ends.
Patrick: I believe it. Well, that’s really interesting stuff. Scott, thank you so much for giving us some of your time and sharing your experiences.
Scott: Yeah, absolutely.
Patrick: You know, this is our little way of trying to get people in a room together and talk about the way they do business as well by sharing these interviews with other fabricators. So thank you for sharing your experiences. I really appreciate it.
Scott: If there’s any hold in the information, you need anything else, just send me an email, or call me, or whatever, and I’ll be happy to fill in the gaps if there are any.
Patrick: Super. Thanks, Scott. Likewise. If you need anything from us, just let us know.
Scott: Bye, buddy. Appreciate it.
Patrick: All right. Take care. Bye-bye.
Scott: Okay. Thanks, Patrick. Bye-bye.
Patrick: Thanks for listening to StoneTalk, the podcast for countertop fabricators. If you liked this episode, be sure to visit stonetalk.org or subscribe to StoneTalk in iTunes for more. Visit the StoneTalk Show Facebook page to join in the conversation, and follow @stonetalkshow on Twitter.
StoneTalk is brought to you by Moraware, makers of Systemize scheduling software and CounterGo estimating software for countertop fabricators. I’m your host, Patrick Foley, and I look forward to spending time with you again on the next episode of StoneTalk.
