by Patrick White
Photos by Jeff Ellis

Langton group: growth through self-performance and tech

THERE’S AN OLD SAYING that if you want something done right, you need to do it yourself. Langton Group, a four-season firm serving the greater Chicago area, has taken that sentiment to heart and transformed itself into a purely self-performing company.

Earlier in its history, the company – which was founded in 2005 by brothers John and Joe Langton – utilized subcontractors; in fact, subcontracting is how they got started in the industry. "Before we opened our company, Joe and I were actually subcontractors of another company. We had personal trucks that we used to plow snow for them," explains Vice President John Langton, CSP, who heads up the company’s winter operations.

The arrangement mostly worked, but the Langtons noticed that sometimes the contractor didn’t get paid by a client, and that in turn left them without compensation. "We thought the whole reason why we’re subcontractors is so that we get paid no matter what," John says.

That’s when the brothers decided to go into business themselves. "We started with our personal trucks and added one older used truck, and a skid steer, and we picked up a couple accounts while we continued doing a little bit of subcontracting for a couple of other companies," John says. "I think we did $40,000 in our first year, and we were excited." Fast-forward to today, and Langton Group is currently billing several million dollars in snow and ice work annually.

"We have a mix of big box retail; parking lots at banks, fast food restaurants and drug stores; a lot of school districts," John says. And over the past three to five years, Langton Group began taking on some city work as well.

The scale of the operation is only one of the ways the company has evolved. It has also transformed its business model and seen profitability increase.

Shift to self-performing

In its first years, Langton Group had five or six employee and several independent contractors who owned their own plow trucks and turned in timesheets. An insurance company representative pointed out that using the latter approach, they were still holding all of the liability, and that they would be better using a formal subcontractor model.

"We spent a little money on legal fees and had do-not-compete agreements set up on those accounts, and a good subcontractor agreement," John explains.

But the Langtons began to notice some downsides to the subcontractor model: While the company was retaining about 98% of the clients it was servicing, the retention rate on subcontracted properties was at least 20% lower. "These subs were smaller companies, without administrators, so we would often have to hound them for invoicing information. And then they would give it to us, but predated to the date of the event, and that would create a cash flow issue for us," John explains.

Perhaps the biggest issue, though, was that their own company was not flourishing under this model. "We struggled with profitability," he says. "We were so focused on selling accounts and getting market share that profitability suffered."

Some people suggested scaling up their use of subcontractors. "I felt that we needed to do the opposite," John states. "We haven’t used a subcontractor since about 2015. And, you know, that’s also when our profitability definitely shot up."

Continuity and control

Bringing all winter work in house has been the right decision for Langton Group, but that doesn’t mean there haven’t been challenges.

Payroll costs come every two weeks, instead of paying subs in 30, 45 or 60 days, John points out. Another is the capital investment required. "The trucks, the plows and spreaders, everything. We have to purchase and maintain those. But I honestly feel that these cons are heavily outweighed by the pros."

The pros to self-performing can be summed up in two words: continuity and control. "I would say it’s made our life easier, because there’s continuity throughout the whole operation."

— JOHN LANGTON, CSP | VICE PRESIDENT, LANGTON GROUP

The benefits of self-performing can be summed up in two words: continuity and control. "I would say it’s made our life easier, because there’s continuity throughout the whole operation," John says. For example, all invoicing is internal, so it’s easy to verify. And the company can capture all of the data it wants to help make operational/business decisions. That data is also easily accessible if it’s needed to defend slip and fall claims, etc.

Self-performing also improves the results for the clients. For instance, when working with a subcontractor, the primary contractor is legally limited as far as what it can tell a sub to do and when to do it, "because servicing is at their discretion," John says. This is an area where there is some gray in the snow industry, but it is still an obstacle that must be confronted when working with subs, he points out. On the other hand, a self-performing contractor has complete control over the level and quality of service.

Clients see this consistency, Langton says. When the company used subs, he would sometimes field questions from clients about why a Langton Group truck was working on a neighboring property, but a third-party company was on their site. "We would try to avoid those scenarios, but the clients are not stupid," he states. "Using subcontractors just led to a lot more issues. We see no reason for us ever to go back."

A look at logistics

One primary reason that some snow and ice companies choose to use a subcontractor model is to help expand coverage area. Langton Group is more concerned with growing closer to home, where John says there is plenty of opportunity. The company’s service area extends to about a 100-mile radius from its Woodstock, IL headquarters. Sales staff are incentivized to sell closer to home, which makes operations easier and more cost-effective, especially at a time of high fuel prices.

The company utilizes satellite locations in the winter to help it service that broad area. "They’re usually temporary sites, something we can get a six-month lease on, and often they’re pretty much just a gravel parking lot that we can store salt or equipment on," John says. In other instances, customers agree to allow Langton Group to stage equipment or materials at their large facilities. "In the next three years we may look at expanding to other locations. But at this point, our process fits very well with what we’re doing working out of this hub."

Efficient routing also takes on special importance when self-performing, he notes.

In addition to preseason route scheduling, planning is done before each event, looking at changes to staffing or equipment issues that need to be accounted for. "Or if there were any customers that had an issue last time out that we want to really make sure we service well so we don’t have back-to-back problems," John says. "Typically, we adjust for service level over profitability. And usually, when we do that, profitability falls in line."

The ability to make these sorts of adjustments, like prioritizing a certain customer at a specific time, are nearly impossible when using subs, he adds.

That said, self-performing also means maintaining a larger in-house team. That means hiring more employees – something that’s been a challenge for years and that has only become more burdensome since Covid. "Getting winter employees has been a challenge for 17 years," John says. He says it helps that Langton Group can offer year-round employment. The company’s roughly 100 year-round employees are supplemented in the winter; during the 2021-22 season, the crew swelled to nearly 300 employees during big events.

John credits the company’s dedicated team for finding, training and retaining all these employees. That team is led by Director of Snow Operations Tony Schanna, CSP, ASM and General Manager Tanner Lindell. "They may have had to throw up a few Hail Mary passes, but we’ve maintained a full staff!" he jokes. He also puts a focus and investment in the future, with a vision for robotic equipment helping to create more efficiency and opportunity over time.

AUTOMATION TRANSFORMATION

President Joe Langton is the king of automation at Langton Group. The company has a separate business, Automated Outdoor Solutions, that sells and services robotic mowers. The company uses Husqvarna mowers on its commercial lawn care accounts; and Joe feels that robotic technology will improve the game in snow and ice management.

The use of robotic mowers and other electric equipment led Langton Group to build a dedicated high-tech charging room capable of charging some 250 equipment batteries. It has also helped the company attract younger, more tech savvy, employees to the industry. And electric power (the company recently added two electric vehicles to its sales fleet) will hopefully make a small dent in the company’s large monthly fuel bill, which recently totaled $55,000.

That included tripling the size of the company’s sales team as part of a concerted effort to add new accounts that were up for grabs as other companies took a wait-and-see approach.

And it meant additional and substantial investments in equipment. "We’ve spent about $8 million in the past three years, with another $2.5 million worth of equipment that’s been ordered and will be here before winter," John says.

He admits that going all-in during an uncertain time was nerve-wracking. "Even people in our office asked, ‘Are you sure you want to do that?’ "

At least in this instance, looking at what others were doing and then going the opposite direction paid off. "That’s what allowed us to really accelerate our growth, and really become super-profitable," John notes. "It took a lot of courage for Joe and I to do that, but it’s paid dividends. That put us to the next level, really over the past couple years."

The decision to invest big in equipment during the pandemic has proven to be especially wise now that prices are up, interest rates have risen and everything is harder to get.

"Not that I knew at that time, but the calculated risk paid off because, where everybody else is struggling to get fleet, we have ours in good shape," John says.

AUTOMATION GAINING GROUND IN SNOW

During the 25th Annual Snow & Ice Symposium, SIMA moderated a panel on automation in the snow industry. Panelists were Joe Langton, President of Langton Group and CEO of Automated Outdoor Services; Michael Mayberry, CTO, Level Green Landscaping and True Winds Consulting; and Ryan Hebel, Vice President, Green Ventures Landscape Care. Among the takeaways:

Beta-testing. Robotic snow removal machines are being beta tested across the United States and Canada, with successful results and improvements being made each season. To date, multiple wellfunded companies are working with snow professionals in real-world snow management scenarios. As with most robotics products (think Tesla), software updates over time will help improve systems and performance, as well as identify issues and errors.

CREATIVE SALT SAVINGS

Salting services are a huge part of Langton Group’s business. The company sees about 30 to 50 salt events each season, as opposed to 10 to 20 plow events. Precision is critical when it comes to working with salt, says John Langton, CSP. "That’s probably one of the areas I’m most passionate about in this business."

Beyond carefully recording the amount of salt loaded onto trucks, calibrating equipment and applying only the amount of salt needed in any event, Langton Group recently undertook an effort to ensure that its salt doesn’t make its way into the environment. In 2018, the company put up a new salt dome and undertook an ambitious project to build a system to capture its salt runoff.