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Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
#160 - How This One Sales Tactic Unlocked $10 Million in Potential
00:43:52
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- [00:00]
John
Our job is to give you the least amount of choice in whether or not you're going to be effective in your position.
- [00:10]
Jack
We're going through that process right now to try and get to weekly gross.
- [00:14]
John
Margin and like, can we simplify every position in the company to be scalable? But the net result was about two and a half million dollars to $3 million. Yeah, it was a, it was a big win. Wilson just wrapped up the year in the low 20s. Were pumped. I mean, most of the industry did not have that same level of success. And when I think about who was a huge partner for us, like, top of the list was service scalers. We've been working with service scalers for a couple years now, and they've helped us drive best in class SEO, best in class PPC and dominate LSA and GMB marketing. They've been a huge partner for us and we're really grateful for that partnership because it's helped us to take down 46% year over year growth. As we think about our budget next year, we're aiming for the low 30s. And one of our most strategic partners is going to be service scalers. They're going to help get us there. They're going to help us stay ahead of AI. They're going to help us keep our SEO relevant. They're going to help keep us on the top, exactly where we want to be. So make sure you check out service scalers.com. sam and his team over there is just a bunch of killers. So thank you, service scalers, for your partnership.
- [01:21]
Jack
Welcome back. You go for it, John. I did the last one. You do this one.
- [01:25]
John
You already did it, man. Thank you. Thank you for welcome me back.
- [01:29]
Jack
Back, everyone. Yeah. Super excited about this episode today. It's a John and Jack episode, which is always fun.
- [01:37]
John
Oh, geez, I missed you. It's good to be back. I love all these legends, but come on, get them out of here.
- [01:43]
Jack
You know, there's. There's a difference. Sometimes, like the legends, you got to be on point with your questions and getting them to provide the value. But when it's just you and I, we can really dig in and get.
- [01:52]
John
We could just do a terrible job.
- [01:53]
Jack
Yeah, mostly. Mostly.
- [01:54]
John
Yeah, mostly. Well, I think this episode is probably going to air at the end of December, so this could even be almost like the roundup round. Yeah, yeah.
- [02:07]
Jack
No, I mean, so we were talking offline, everyone. We've. John has made some massive changes to his business this year. Wow. That.
- [02:15]
John
We've just. Me.
- [02:17]
Jack
Well, both, but. But in particular I'm still working through my changes. I don't think they were as successful as yours or scrapped as quickly. I think that when you go through these changes, that they're a little bit more valuable to everyone listening. Yeah, I know. Your head's getting. I can see it growing on camera.
- [02:39]
John
Well, I'm just gonna argue because I don't know that they are. I mean, average listeners your size, so. Yeah, but we can talk about mine. Okay.
- [02:47]
Jack
Yeah. I mean, we'll talk about some of mine, too, but big changes. Looking back is kind of the theme of this episode is what went well? What did we change, and did it work?
- [02:58]
John
Right.
- [02:59]
Jack
We. You've listened to these episodes. We talk about it, and then we haven't followed up. So let's hit some of these items that, you know, three, four, five months ago, we talked about doing. We did them, and now what's. What does it look like?
- [03:13]
John
Yeah. Do you have a list or is it just the ones that I remember making big changes on?
- [03:19]
Jack
Well, I think that we had a few. Right. There's a few surrounding sales. There's a few surrounding KPIs, and then there's a lot in call center. So did you want to start off on some of the call center changes? We can kind of recap what the change was, and then. Are you still doing it?
- [03:38]
John
We are a unique. And I appreciate everybody that tags along every week and reads the newsletter and is in the Facebook group. We are a unique show for a number of reasons, but mainly, I think, because we're still relatable. I'm not $200 million. And you are actively, every week, listening to me, attempting to figure out how the hell to run this business. So, you know, welcome to the ride. And. And obviously Jack, too. And I think it's. I think it's kind of fun because when I think about even just listing these things out, like, hey, what are the big things that happened this year? Like, we talked about all of these on the show. Like, every single one we talked about. And we even talked about how we were going to implement it. We talked about how we were thinking about it. So I. I just think that's kind of cool from. Yeah. I don't know. Listen back to a year ago, if you haven't yet, because everything I'm about to talk about, we broke down for 30 to 45 minutes in the last 12 months. Yeah, that's exactly how we're going to implement it.
- [04:42]
Jack
Yeah. One of the ones that sticks out to me specifically is call center. Right. Call center. You guys did an overhaul of call center this year? Yeah, and I would say we did.
- [04:53]
John
Like three or four overhauls, but yeah, we've definitely done the. The most recent was about two months ago.
- [04:59]
Jack
And it was structural, right? It was a structural change to pay how they're paying. They're moving from.
- [05:05]
John
Yeah.
- [05:06]
Jack
Full salary or hourly to commission. Correct. And so are you guys still continuing that? And what was the outcome?
- [05:15]
John
Yeah, I'll give the genesis to. Just because I think it's funny. The genesis of like figuring this out was we had Tommy Melo on the show and Tommy said something that like barreled itself so deep in my brain I couldn't get rid of it, which was he went and visited this other company that booked 80 calls a day per CSR and I was like, what in the hell? Like our CSRs aren't even taking 80 calls a day, let alone booking 80 calls a day. So that really spurred some action on, on, on our end. So yeah, so what we did, Call center has been a really big thing. We've spent a ton of time on this show talking about it. The reason it's been such a big deal for us is, you know, in summer of 23, we only had three call takers. Now we have like 20. Or actually now we have 15. I think maybe, maybe a little bit less, but. But we got as big as 22 in the call center. So we've, we've like learned a lot as we've iterated. And the reason it's been such an adventure and why we're still figuring it out, we feel a lot more comfortable now. But we went from three to 12 call takers in like 14 days last summer.
- [06:28]
Jack
So when, when you say call takers, are you referring to inside sales, outside sales, CSR dispatcher, or you just only inbound.
- [06:35]
John
Inbound.
- [06:36]
Jack
Okay. That's a huge growth in inbound.
- [06:38]
John
Yeah. And we didn't have the systems, we didn't have the process, so we, we iterated live on this show. For the past year and a half we've been talking about it. The most recent change was we obviously bloated up the staff of our call center and we didn't really feel like we were being super effective. And what is frustrating is I don't like, I like to build games that people can self manage for the most part. That's the kind way of putting it. The mean way of putting it is I would much rather force you to do your job than ask you. So when we create compensation and we create processes and we like, you know, think about how someone's day is going to go in every position. Our job is to give you the least amount of choice in whether or not you're going to be effective in your position. So that means like the least amount of tasks, that means forcing certain things that, you know, auto dials, that type of thing is like, hey, I expect this. And like, you can either choose to do it or I can just force it and I know it'll get done that way. So we tend to lean towards the force. So with call center, we really were fighting our own call center to be effective. We weren't outbounding at the cadence. We had to. We were not booking calls, we were not improving measurably. And every time I looked at it, I was just like, this is crazy. Like, we have to be able to just book the call. Like, just book the freaking call. So we got really aggravated. So what we ended up doing was we looked at our call center team. We saw about half of them were performing less than they should have been performing. And we had done a lot of coaching. This wasn't like a spur of the moment thing. We had done a lot of coaching. Like, we do a significant amount of coaching. We have a lot of investment into that and we just weren't there. So what we did was we changed the compensation structure and this was a part of our, like, let's get ourselves aligned. If you're full hourly, you don't care, but if we align our interest, you do. So it went to a very small base compensation with a dollar amount per booked call. So it's basically a commission per booked call with a base comp. And the base comp was about a third of what they were making previously, maybe even less, maybe 20% of what they're making previously. It's a small base comp and the goal was let's, I want you to make more than you've ever made because you're booking more calls than you ever have. So we ended up having, we ended up letting our low performers go. We put our high performers on this new compensation structure and it did work. They are making more than they've ever made. They're very excited about it. We have a bought in call center that is really like, they understand what we're here to do and they go out and do it. We never have to push them to go on to outbounds anymore. Like, they just do it because their compensation relies on it. I, I had someone earlier, like earlier today, Jocelyn, who's awesome, walked up to me and she said, hey, like, it's 2pm And I've done 150 outbounds today. And she's just like, I know. And I was like, that is. Yeah, that's freaking awesome. And she financially won today.
- [09:45]
Jack
Let me ask you two questions based on that, because we're. I'm curious. I don't think I asked this before, a. Was there a lot of pressure on you and the marketing team? Right. Because that. That compensation structure only works as long as the phones are ringing. Right.
- [10:01]
John
Outbounds.
- [10:02]
Jack
Well, I guess you could do outbounds too. Okay, so that's sort of the whole point. That's the point, right? Yeah. Because if they. They don't get inbounds, then they're still making great money, but just on the outbound, and then the outbound, you guys are full.
- [10:14]
John
That is, though, that was the literal whole point. And honestly, what ended up happening is they started creating their own systems to win the game. We didn't have to force it in anymore or train on it. So, like, in the first week, they developed their own culture for how to win, which is stuff that would have never happened two weeks before.
- [10:31]
Jack
Exactly. Working.
- [10:32]
John
One of them, his name is William. Again. Awesome. And his. His, like, rule of thumb that he. He came up with on his own, he told the other call takers and it became adopted, was, hey, for every one inbound, I'm going to make two outbounds, period. And like, he just came up with that on his own. He did it and he's making more than he ever has.
- [10:50]
Jack
And so with that, where is this list coming from? Where's. Where do you put the guardrails on. On outbounding? Right. Because outbounding on smaller scale could. Could idealistically get out of hand. You have too many outbounders. They've called everyone in your list a thousand times, and now it's spammy versus effective.
- [11:08]
John
Yeah, it gets curated by marketing. I think talking to your whole customer list twice a year is reasonable. Reaching out to them four times a year is reasonable. So assuming that they'll only pick up half the time.
- [11:24]
Jack
Okay, so then they're. They're getting outbound lists from the marketing team of people who meet that criteria. Right. That's it. I love it. And yeah, that ended up being a big one.
- [11:37]
John
Extremely effective. We have bought in. Team member. Call center was not bought in, and call center is now bought in. And they're financially winning. Their careers are growing, which is awesome. They will have, like, advancement opportunities because they get it More. And they're, they're growing like, you know, Will's, hey, I'm gonna create this system to do two for everyone. Like that was a big deal. That's a, that's a win. Um, so they're just playing leadership. So I mean really like across the board. It was a win.
- [12:08]
Jack
I love it. But I think that's, I don't know.
- [12:10]
John
Why most people like, I started bringing this up to our call center about a year ago as an option and it finally just clicked. So you know, if you start bringing it up now, you know, try to get it done, it works.
- [12:24]
Jack
I, I don't see a re. I mean it doesn't. And the cool thing about this is it how like in terms of implementation of everything that you've done, all the big wins that you've received, that one doesn't feel like a huge lift to get to. Like, especially for you, it was a lot harder because you're, you're bigger. But for someone like our size, where we have three people in call center total.
- [12:46]
John
Yeah.
- [12:46]
Jack
Like that lift doesn't seem too difficult to get over. How was the lift comparatively to saying to say hey, you know, we had to re. Redo our whole sales process.
- [12:57]
John
Yeah, I mean it was from my perspective. So we, we, we did two different things. We let go a number of low performers which was five people. So that's a lot. So I think that was the challenging part. The rest of it I don't think mattered at all. I didn't actually have anything to do with it. It was an, it was a, it was an idea that I floated a year ago. I brought it up a few times since my call center manager Lori, also awesome. Just like did it just like hey, here's. I think what we're going to do. I already implemented step one, here's step two. And they just, yeah, like so, so my lift was non existent. Like it just happened one day which was awesome. But I, I do think it is a simple change.
- [13:47]
Jack
I think it's one of the easier ones that we go through.
- [13:49]
John
Yeah. Because I think just like look, how many calls did you book a day? Okay, if you get paid 10 bucks a call, like this is what you could have made on the old, on this new structure. Like John, do it. And if they ask what happens if it's a slow phones day, you say that's the point. Like you go outbound. And now I don't have to ask you to go outbound anymore. You're just going to do it.
- [14:07]
Jack
So.
- [14:07]
John
Yeah, yeah. Self self policed. Because your comp depends on it.
- [14:12]
Jack
And last question in regards to it, is your, your, your inside sales team, did that change or is that part, was that part of it? Like how does that interact now? Because I'm assuming they're outbounding a lot. They're going towards a lot. Yeah, yeah, they're going towards just booking calls. They're not really inside selling. So was that a big change that you want to talk about? Because I know that that was.
- [14:38]
John
Yeah. I mean inside sales, we launched it last November.
- [14:43]
Jack
As I said, you created it while we were created from scratched.
- [14:46]
John
Yeah, talked about it, understood it. Look, at year end it's driven about $4 million. So it was a win. Like it was a win. It was a big win. What we've done there is we've adjusted. Same thing. We've actually done that with a lot of positions where we adjust the base comp and raise the commission, which we should have done originally, but we just didn't.
- [15:10]
Jack
And are this, if you don't mind me asking, are those commission spiff based or are they their actual commission Commission, like percentage based?
- [15:16]
John
Percentage.
- [15:17]
Jack
Okay.
- [15:18]
John
Yep. So 3% of the job, 2% of the job, 4% of the job. But yeah, no ended up being a big win. What we, we have added some more stuff to inside Sales to make it more interesting. And we see, I see inside sales as like a continuous project that we're going to continue talking about here because inside sales is what call center was. It's like the new thing that we think if we can unlock it, we're gonna, we're gonna make a lot of things happen. So we're excited about that. So if it did 4 million in the past 12 months, we think there's a path to 10 million in inside sales through those five or six people next year.
- [15:52]
Jack
I mean, 4 million in one year alone is a huge unlock.
- [15:56]
John
It was a giant change. Yeah. If I think about like what happened, why did we grow organically this year? We marketed like crazy. We built an inside sales department and we added weekends. All of all three of which we've talked about nearly nonstop on this show.
- [16:11]
Jack
Really interesting. Really, really interesting. But I mean, there's also the nuance to it, right, that if you weren't on service titan, you didn't have an opportunity offering section. If your team wasn't offering opportunities in the correct amount or the, or earning the right to offer opportunities, then the inside sale has a harder time to actually close opportunities because they're garbage. And so with that Being said that was a big part, I mean, not too long ago is you revamping training and sales opportunities. What, what. How has that been? Because I know that that was big. Like that's like the opposite of call center. That was a big deal for you.
- [16:49]
John
Yeah. So we, we rebuilt our sales packages and we rebuilt. We are starting to. We did a giant reorg that I actually don't remember if we did talk about on the show. But no, we did. We spent a little bit of time. That was like a big deal and that ended up being a really big win for us. So I would say a lot has happened since then. So if I think about like what are we doing with inside sales or sales packages, it really all comes down to, okay, the 40, 50 people that are in the sales side of the business are now like really focused in. On sales. Whereas like beforehand I don't think they were as focused. So we're next year, we believe has a lot of promise just because we are much more aligned across. Across them. But packages what we ended up doing, yeah, huge change. So we had like sort of a loose, good, better, best. Oh, always have three options type thing. We got much more deliberate with what is inside those options. What's the quality of option? How do we pre negotiate those options like at. To the executive level? Because we feel like this is a big mover for us.
- [17:57]
Jack
So are you saying that most of those options were designed by. I'm sorry, to your director of sales. What was his name again? We talked about hiring Ryan on while like on this. Was he the one that led the design of those packages?
- [18:12]
John
Yep.
- [18:13]
Jack
Very cool. Okay. So Ryan said we need to be very intentful about, you know, how we're offering, how we present what's inside.
- [18:21]
John
Yeah, what's inside. Because something we're bad at, it should be an executive function. So you know, we've started to look and we're still working on this, but we've started to look at price and price book and packages. That is an executive level function or like as high up the org chart as you can possibly get it because what price is the biggest mover of everything inside your business and how you sell is the biggest mover. So a lot of people delegate that to like their service manager.
- [18:52]
Jack
I was just going to ask, does that go to the call by call? Is that. What is that kind of tied into that?
- [18:56]
John
No, I really mean that I think price is an executive function. So like Brandon, myself, Ryan, like the senior leaders are dealing with price and price book and price control. Because ultimately hey if the only thing that matters is our gross margin, like if that's it, then we have to get there. So it has to be in our control.
- [19:19]
Jack
Well and that's why I asked about the compensation structure and I've actually talked to you offline about this on like the inside salespeople.
- [19:26]
John
Yeah.
- [19:26]
Jack
Is I don't think it's fair to, to put that onto tax. Right. So a tech doesn't need to understand how the inside sales compensation structure works but if they have ability to mark down price and then it goes back and they mark down the price and they add all these discounts.
- [19:47]
John
Yeah.
- [19:47]
Jack
It's in the offering and now your inside sales team gets it and they've been tasked and they're compensated in a different way. Right. And so they, there's additional revenue that gets taken out of that from additional offerings and or their salary or compensation structure. So you know, it's a very interesting like watching all these little tiny pieces kind of connect but it's really cool to see that on the sales side. So it's a. You've moved it to an executive function that's been a big win.
- [20:19]
John
Well I'm going to give it, I'm going to give an even deeper example.
- [20:23]
Jack
Yeah.
- [20:24]
John
So and I was told by this from a member of my team but there's a large PE firm like one of the large ones, one of the top five. They control price book from the PE level to the point where the portfolio companies don't even know what they're paying for the parts or equipment because it is that important of a mover to revenue and gross margin. So they take it out of the branches controls completely and simply tell you what you're allowed to discount account to. Which I think is a great idea.
- [20:59]
Jack
Yeah.
- [20:59]
John
Like I think as little, I think a lot of times we bring in our frontline leaders or whatever because we've set up a bad price book and it isn't set up properly. But if you, it has to be set up properly for you to win. So we have people fix it and, and service managers call by calls, play in it and I really don't think that's their function. Like this is a, I think it's an executive function which I mean that.
- [21:23]
Jack
That'S a great item to take off your service manager as well. Right. The service manager shouldn't be worrying about price. They should be focusing on training and making sure that the, the tech is doing the managing the service of the tech, not worrying about the overall price. I mean the overall revenue is important. But yeah, once again it's such a small, intricate piece that like you said, I mean in our company we, we manage it at the executive level but we're, you know, much smaller executive team.
- [21:49]
John
Yeah.
- [21:49]
Jack
So.
- [21:50]
John
But I think that's the right idea. Yeah, I don't think so. We, we have a, we had a sales team that just went live and we are trying it. So like we're not even telling them the cost. Like hey, here's what you're able to discount it down to let me know if you sold it because we think it's relevant.
- [22:05]
Jack
So talk to me though about.
- [22:07]
John
Oh, and we also did that with HVC sales. We removed the sales people's ability to see material and equipment pricing because we think that they have bad habits from wherever they came previously that tells them what they can discount to or what percentage the material should be. So we don't even want them to know because we need to control our gross margin.
- [22:32]
Jack
Whoa, that's a big one. So you're saying. I'm just repeating this back. So you're saying that your project manager, your comfort advisor, your salesperson is going on to site, doesn't know material cost, doesn't know it's irrelevant to their job of the unit. Yeah, they're just going out there and selling whatever the price book price is that or yeah.
- [22:55]
John
With the ability to give X amount discounts that we pre approved.
- [22:59]
Jack
Yeah, that is absolutely wild. That's.
- [23:02]
John
I think you need it.
- [23:03]
Jack
Interesting.
- [23:03]
John
I think you need it. I think like, I think it's, it's not important to their job to know our price point. And I also think one of our big wins of the year is we have gotten better at vendor negotiations which means our equipment pricing got better and we would have lost all of that. We would have lost every bit of those hard earned negotiated dollars if we had continued to let them see price point. So we took that away and I think that that's why the big PE firms do it too is because they're so effective at negotiating that like hey, they're Maybe they're paying 20% on H VAC equipment versus industry standard of 35. And they don't want, they don't want people getting in their heads about that. Recently I checked out Field Pulse as a field management software for our restoration business and honestly I was pretty impressed. The big wins that we saw was it's got two way sync with QuickBooks online and desktop. It's got some really good dashboards and reporting. It's Got custom workflows and this is probably one of their most unique features. It does have CRM and it has a lot of the other things that you'd expect out of a field service management software. You're going to have financing and payments. You're going to have customer booking portals, project management tools, price book, work order management estimates and invoices. But where they really shine is the scheduling dispatch, custom workflows and the dashboards and reports. It automated and streamlined our operation and it gave us a bunch of easy tools for scheduling and dispatching our team. And we loved the workflows feature. Make sure you mention owned and operated for a special offer. 15 off the annual plan.
- [24:41]
Jack
And that's exactly where I was going to go as a salesperson. I know that it's a very mental game that they have to play and being able to see that number definitely plays a part in their mental game. So just removing that ability, I'm curious to see how that would work. That's really interesting so far. Well, I mean, when did you implement that?
- [25:02]
John
Two months ago.
- [25:04]
Jack
So it is a throwback. I don't know if we talked about that.
- [25:07]
John
No, I don't think we brought it up. But it's a little bit of a throwback and I think the further we get, the more we want to remove all ability to see price from anyone and then just control and maneuver the price book and then give, hey, here's what you can discount the retail.
- [25:21]
Jack
So eventually even the techs won't be able. Are you saying that the technicians are not going to be able to see price at that time and they're just going to present and then they pick and. But the consumer needs to see it. So how is the text eventually going to see price? Just not when they're creating estimates. Correct. Yeah, I don't know how that would work.
- [25:42]
John
Yeah.
- [25:43]
Jack
Cool. Okay, so we've talked about call center. You've revamped your entire sales process. You brought in Ryan, brought in packages.
- [25:52]
John
Realigned team, made sales managers. Yeah, absolutely. Massive change. Did the reorg, which was a big, like a very big win for us.
- [26:01]
Jack
We mentioned call by call. Did you. You implemented a call by call team this year, correct?
- [26:07]
John
No, we did that. I would say we got close to perfecting call by call, but we're about two years into call by call.
- [26:15]
Jack
Okay, but you. Yeah, you made a big change to call by call though.
- [26:18]
John
No, that was a part of our reorg. We had the call by calls report to the director of sales and we created a call by call po, which we've done with basically every support function of the company now where they turned into these pods where they like manage horizontally. So if, if a call by call was off like sick or on vacation four months ago, then call by call responsibility went up to their ops manager. So it went vertically. Now if somebody's off, then it goes horizontally to another call by call. Yeah. And the same thing happened with dispatch too because we used to be trade specific dispatchers, so plumbing dispatch. So if a dispatcher was off sick, it would actually float up. And now because we made a dispatch pod, dispatch stays inside dispatch. So we did that across five functions in the middle of our reorg and it was a really big deal. Like, but like a huge.
- [27:16]
Jack
That's huge. If you can get it right. That's huge. The hard part is getting it right.
- [27:20]
John
It took us like years to nail this down. And what, I mean once we got the idea in our head of what the org chart could look like, we did it in like 45 days because it was like the pain of like just, you know, it just. We were losing traction. But now we, you know, we feel like we're blowing it up again. So big wins.
- [27:41]
Jack
Very cool. I know we talked a lot about data and how you measure wins and how you show wins to your team. I know we went through huge amounts of changes on that.
- [27:52]
John
Yeah.
- [27:53]
Jack
What, what does that look like in your company now and are the changes you made throughout the year big wins?
- [27:58]
John
Yeah, I would say the biggest win that we made on data was we got our accounting tighter. And by doing tighter accounting we got to daily reporting again, which we used to do ok, an okay job of, but now we do, I think a very good job of. And that was inspired by our good friend Rich Jordan. But he has a daily gross margin and daily revenue report and that we're about 90 days into. And that has been a mover. Like our gross margin is consistently rising month over month, even during shoulder seasons because everyone's looking at gross margin every single day. So to give an example, like we're in November. In November, the first part of the month was 80 degrees and we are still running at budget gross margin.
- [28:42]
Jack
Yeah, not much to there. I mean it's one of those things that you say and it's really easy to say but then to like the actual nuance to get. Because we're going through the process right now.
- [28:51]
John
It took us months, we're going through.
- [28:52]
Jack
That process right now to try and get to. To weekly gross margin.
- [28:56]
John
It was like six Months. I mean payroll was the big nut. How do you get to daily payroll? I mean that took a lot of work.
- [29:04]
Jack
Yeah. So I mean we pay weekly, so I figured if we started a weekly that's kind of like you can make changes on a week to week basis, that, that drive versus, you know, day's nice. I could see day being very helpful. But at least like even for us getting plumbing and H VAC separated. Right. Completely separating out the two gross margins so that we can go into that and then separating out install versus.
- [29:29]
John
Yeah. Service.
- [29:30]
Jack
Service like the amount of work that that takes and then to. It's huge.
- [29:36]
John
Huge.
- [29:37]
Jack
So that's why we brought on full time staff to, to do that function so that we can have that good data and use it to drive information.
- [29:46]
John
Yeah, it's a big deal.
- [29:47]
Jack
Yeah. We, I mean we were thinking about like when we were talking with Rich about even his like break even point. We don't really know our break even point. We, we have a range where we think it's in, but you can't get to that unless you like really have everything else dialed in.
- [30:02]
John
Yeah. And so you got to get your, you have to get your P and L dialed in so you know your break even and then you have to like, like it's a lot. I know it's. Yeah. It does sound easy to say and like fast to say, but I think it took most of the year to get our data clean enough to be able to present daily financials. And at this point, the way our daily gross margin reads, it's actually a little bit more robust than that because our data got so good. We have daily net margin so that we've been able to. Yeah.
- [30:31]
Jack
I mean the hardest. Once you get the gross margin. Yeah. You can just pretty simply, you know, chop up the, the recurring.
- [30:38]
John
The big things that change are going to be advertising which we actually upload inside that daily gross margin tracker. We upload our month to date advertising spend so we know exactly where we're at to budget. So we're pretty accurate. Yeah. I think we were like ten grand off last month in net margin, which.
- [30:55]
Jack
Positive.
- [30:57]
John
Yeah. Yes. But, but like we were. That was very close because as a percentage of net, like that wasn't a big percentage.
- [31:03]
Jack
Okay. So huge changes around data.
- [31:06]
John
Yep.
- [31:07]
Jack
How you. You collect it, where you put it. Big wins there.
- [31:10]
John
Big ones.
- [31:12]
Jack
The last one that I had was. I know those were the four big ones that I had. Did you have any other ones? Any big changes?
- [31:20]
John
I would say weekends was a big one that we Talked about.
- [31:23]
Jack
We did.
- [31:23]
John
Talked about end of last year. And it took us a long time to implement it. I even think I gave an update in January of like, hey, this actually took a long time to implement. It ended up like, I would still. I would say we're not perfect. I was at a shop that did a great job of it a month ago. I think that we're better than most, but we're not where we want to be. But weekends added millions to our top line, like literally millions of dollars. So that did end up being a very big win. But it took a lot of work. I mean, we had to create different shifts, we had to hire people in different ways. We had to. How do you staff the weekend? How do you call center? How do you dispatch? How do you call by call? So it was very complicated, but the net result was about 2 1/2 million dollars to $3 million just from those efforts. And that's just since end of January.
- [32:16]
Jack
Yeah, I mean, that's a huge. Talk about an organic boom, right? That. Yeah, it's huge to be able to.
- [32:21]
John
Offer leads that we already had calls we were already getting. We weren't able to service them until Monday. It was like captive demand that we basically just started serving.
- [32:30]
Jack
The relevancy of that. I don't. I would love to see from our listeners how many people are not doing weekends. So, you know, we talked about initially as kind of a hiring practice or incentive is not. We don't have. Weekends are on call. But I mean, man, there's like, you said 4 million for you. Yeah. There's so much good money on weekends that we just have to throw away or not service.
- [32:56]
John
Not service.
- [32:57]
Jack
And then, well, we.
- [32:58]
John
You lose water heaters, you lose furnaces. Yeah. Yeah, you do. I mean, it's. Who's available, who has capacity. But no, it's. It was a big win. And we're still like, we're still iterating, I think. I think we're still. We're going to change how we think about our shifts. But the big advantage to weekends from anyone I've talked to, so if you're thinking about doing it is you make the shift really attractive. So I've talked to people that do three twelves. So, like, you get four days on your own. So like, that's awesome. Or I've talked to people that do like a fireman shift, which is like three on, two off. Three on, two off. It's something like that. But. And, but you get to cover weekends. And I guess people like that or it's like three on, two off. I don't remember what it is exactly.
- [33:44]
Jack
Yeah.
- [33:46]
John
But it's a very, like, forgiving schedule. But you have weekends, and then you just get a lot of people that run that shift. Or you do four tensions, which is what. How we do it. We do four tens, and, hey, you get three days instead of two. So, like, people frigging love it.
- [34:01]
Jack
People love it. We used to run it at the wineries all the time. I would switch every winery I moved to to 4 tens because it's huge. It's a huge driver for. For hiring even 3:12. There's people who would love to bust for three days, just work hard, you know, get it down, and then have the next four days off. Like, that's huge.
- [34:19]
John
Yeah.
- [34:20]
Jack
So I think you have your family.
- [34:22]
John
I think that's how we're gonna start looking at it is like, can we do a 312? Can we do like a Friday through Sunday or Saturday through Monday, give you three 12s and you work and we'll see you next Friday.
- [34:34]
Jack
Yeah, I love it. I mean, that's a really good way to do it, I think. And in the long run, I mean, that's how, like, the big guys in our area do it. Hiller does it like that. There's billboards all over work. Three days, and it's like, oh, it's hard to compete with.
- [34:48]
John
Yeah.
- [34:50]
Jack
Okay, so we have that as well. Any. Any other big stones, big boulders you did this year?
- [34:56]
John
CSRS inside sales outbound. But I sort of covered that inside CSR data. Weekends, vendor negotiations was big. We started really, like, nailing that down. I'd say we're continuing to get better.
- [35:08]
Jack
Do you have a number on that? Like, just a relative number of how much you think you've saved over the course of. Since we started that you've started vendor relations and really driving.
- [35:17]
John
We've saved a few million dollars. Yeah. And it's come from, like, the way we do it is every month we come up with a hit list. And it's like, here's what we're going to go beat up. And that hit list can be like, we did our VOIP a couple months ago and we dropped it in half. While staying on the same void. We just said, hey, this price sucks. We did Verizon and we went from 20 grand a month to six, obviously. Anyone listening materials?
- [35:42]
Jack
Do it, do it, do it, do it. We have to. So this is one John where both of us same have done this, and we pick one vendor that's it. We just, we don't have a ton, so we just pick one vendor per month.
- [35:54]
John
Yeah.
- [35:54]
Jack
And we go and ask them for a discount. Can you give us a discount? Can you give us a discount? And the amount of discount you get is ridiculous.
- [36:02]
John
It's crazy. It's crazy. Like, you just start asking, it's like, oh, yeah, actually, I don't really want to pay that. So what do you want to do?
- [36:08]
Jack
Yeah, we, yeah, we're just not going to be on the service. We're going to go somewhere else if you don't want to pay that. We, we dropped 3,000amonth on one vendor. And I mean, like, 3,000amonth for us is huge. Totally.
- [36:19]
John
3,000Amonth is huge to anybody. Like, that's a lot of money. So. Yeah, I think what would probably astonish people is because we started doing this in like January, February, and we've gotten more disciplined about it the further we've gone. Our overhead throughout the course of this year has actually dropped by around a hundred thousand dollars a month. And that's our overhead. Right. And in that same time period that we've dropped our overhead by a hundred thousand dollars a month, our revenue is up like 60% from January. So, like, our highest month was 60% higher than our. Than January. So it's. Yeah, it's a lot.
- [37:01]
Jack
Yeah, that's a big one. That one's an easy one too, that anybody can implement. That's because I like, pick one vendor. Right. Relation.
- [37:07]
John
Yeah. And the easiest one is always cellular or like a software just be like, hey, this. There are a million other choices, especially like voiceover IP or like cell phone. There are literally so many other choices that if they say no, you can just go find another one tomorrow. Like, it doesn't matter. Like, nobody cares if Verizon is whatever AT&T is great. So, like, it just doesn't matter.
- [37:33]
Jack
Yeah. And you go to your VOIP and say, hey, we want, you know, this to be half price. And they say no. And you go, okay.
- [37:38]
John
And then we say, great, there's. And then you go 100 other solutions that are the exact same as yours, undifferentiated, that we can happily switch to.
- [37:48]
Jack
Yeah, we actually dropped our one. I'm okay. Talking about is we, we dropped our insurance this year from a hundred thousand dollars a year to 27,000 while. While tripling our vehicle count and headcount for workers comp. And that's huge. Vehicle insurance.
- [38:05]
John
Yeah, that's a huge drop.
- [38:07]
Jack
That one. That one's been wild.
- [38:09]
John
Yeah. We're, we're going to have, we expect to be that level of a drop next year in insurance. Our insurance has been going wild and I have, I haven't been very deliberate. So I'm actually going to spend roughly the next year I'm meeting with one insurance vendor a month, and our renewal is October. And we're going to establish relationships. We're going to go out to market in a different way. And we think we're going to drop at least by half.
- [38:29]
Jack
Especially with your size. I mean, I can't imagine that bill.
- [38:32]
John
It's $270,000. Yeah, yeah, yeah. It's a lot. So we'd like to get it to 135.
- [38:39]
Jack
So were there any other big, big changes you made?
- [38:41]
John
A lot, but I feel like those were the big ones we talked about on the pod. I mean, this was a huge year for us. And it's sort of crazy because our budget next year is. It's $34 million. And so our stay in the 20 millions is going to be pretty short. You know, it'll be sad. We'll wave, wave in the rear views. But it's exciting because we feel like we knock down all of the fundamental stuff this year and we set up a really good foundation for success. Like accounting got nailed, call center got nailed. We built inside sales, we set up weekends. And the last two or three months has really been us, like, finally earning the, like reaping the rewards. And next year we, we continue to see momentum. So, like, we keep getting better on sales, we keep getting better at inside sales. We keep delivering more results. And I think it's just all the stuff we've talked about over the last year and a half, which is, is.
- [39:34]
Jack
Really cool because that's like we, we. I don't know if the episode has dropped yet, but the Ishmael episode. Ishmael Valdez.
- [39:40]
John
Yeah.
- [39:40]
Jack
Like, that's what he talked about. That's what he said. He's like 0 to 10. It's hustle. It's the hustle and grit. Yeah, there's, there's processes you have to put in place, but really it's hustle and grit. 10 to 40. It's lock in. It's like locking in all your systems, getting everything lined out the way you're doing right now.
- [39:57]
John
Yeah.
- [39:57]
Jack
And then 40 to 100 is. I forget what he said because my mind doesn't even register 40 to 100. But, but yeah, I mean, next, next year, that's what it was.
- [40:08]
John
Next year. We still see I think 40 to 100 was like extreme expansion. But next year we're, we're still, Next year is still like a very block and tackle year for us. Like hey, can we, can we consistently offer good options? Can we consistently book the amount of calls we need to book? Can we consistently keep the conversion rate roughly what we want it to be? And like, can we continue to develop our sales team? And that's, that's all next year is for us. It's like, let's continue to block and tackle.
- [40:32]
Jack
Yeah, yeah. And then keeping all processes in place basically.
- [40:37]
John
And like can we simplify every position in the company to be scalable? And then in 2026, that's when we believe expansion begins to really happen. And that looks like geographic expansion. But I don't think, I think by the end of next year we will be mature enough to take on new markets. But right now I don't think we are. I mean we're definitely not.
- [40:59]
Jack
Cool stuff. Awesome. I mean that, that is a huge list and I think from, from my big last question to you in, in regards to all this stuff is if you were to do it again, what. Or for our listeners even, what do you think are some of the really easy ones that need to be implemented? That not too much lift. They're easy. They drive huge amounts of results right away.
- [41:24]
John
I mean I really think the call center stuff and building an inside sales team like that stuff is real. It does not take a lot of resources. You can do it easily. I really think that that's like those are the big ones.
- [41:39]
Jack
I think so too because I think the call center one, we run into this issue every probably three months as we get super good on three day call board and then something happens and then three day callboard stops and now we have text sitting around and then we get super good at three day call board again. So this actually solves that issue and that there's really no three day call board like code red for service. It's just always going. They're always outbounding, always shooting for it. And then you know, our service managers do inside sales. But I'm wondering right now based on the amount of offers that we have.
- [42:15]
John
Yeah.
- [42:15]
Jack
I think that we could probably justify an inside salesperson. That's that, that that is their only job is to call out.
- [42:23]
John
Yeah, I think you can, you're definitely big enough.
- [42:25]
Jack
Yeah. That would drive big results. Awesome, man.
- [42:29]
John
Those would be the big ones. Yeah, I mean we'll be, you know, stay tuned for the next year. We're going to be figuring out how to go from early 20s into our mid-30s here. And I think it's going to be a totally different set of challenges and frankly, probably more boring of, like, hey, we're building some processes today, but it is going to be, unfortunately, it's going to move the needle.
- [42:51]
Jack
Well, my hope, John, my, my, like, my one hope with this is that there's a small group that listens religiously to this podcast like, that are my size, and that they're just following along. Right? So, like, as we're growing, the tides rise, all the ships in the bay or whatever. And so as we run into new problems in, like, the five to seven category, now, they're going, oh, we have these same five to seven issues. And then then the next year after, like, 10 to 20, and then by then, you know, in 10 years from now, there's a playbook from, you know, three to 100, 200.
- [43:29]
John
Yeah, hopefully.
- [43:30]
Jack
That'd be fun.
- [43:31]
John
Follow along.
- [43:32]
Jack
Follow along.
- [43:34]
John
Yep. All right. Thanks, everybody, for tuning in to Own.
- [43:36]
Jack
And operate on that.
- [43:38]
John
I mean, I feel like it was good, too. Check out owned and operated.com if you want to hear more.