← Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
#175 - Find The BEST Leads: Modernize VP of Marketing Jamie Smith Breaks Down the Secret to Success
00:56:13
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- [00:00]
Jamie Smith
Last year, we generated over a billion dollars in business for our customers. It's a lot of thinking about what the consumer is doing and needing. We don't want any requests to go unmatched. We see about 50 million leads a year.
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Host
How much does Modernize spend a month on paid advertising?
- [00:24]
Jamie Smith
Oh.
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Guest
Recently we've been experimenting with lead aggregators. And one of the ones I'm most excited about is a company called Modernize. So what Modernize does is they do direct inbound calls for home improvement. So it's a direct phone call booking, which is way easier to book and has a much higher book rate than an Angie's List or something like that, where you have to sort of recontact them and try to find that customer. Modernize has a direct connection to our call center. So that's been a huge win.
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Host
It also has some of the services.
- [01:00]
Guest
That we've really struggled to get. Good leads for water heater replacements, H vac units, and water damage restoration and water quality. Those ones have been challenging for us to get leads and Modernize has been a really great partner for us. So make sure you check out modernize.com.
- [01:14]
Host
Welcome back to owned and operated. Today on the show, I have Jamie Smith from Modernize. Welcome to the show.
- [01:22]
Jamie Smith
Thank you so much. I'm excited to be here.
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Host
Yeah, this will be fun. This will be a lot of fun. I'm excited to dive into lead ags and marketing and what. How I should be thinking about this. So this, this should be pretty cool. Before we get too deep, can you give us a little bit of a background on yourself and maybe a little bit of a background on Modernize. So we know, yeah, level, level the playing field here.
- [01:47]
Jamie Smith
I have been in home services for about eight years now. Technically I've been with modernized those eight years. My background is in marketing and technology consulting and had a some interesting sense before that in sports and entertainment. But once I got to this industry, I have been addicted and that is an addiction. I really, you know, I am a homeowner. I understand some of the pain points. It has been really a privilege to work these last eight years on trying to solve the consumer and homeowner pain points, on finding the right home home service professional for their work. And as this industry continues to evolve in the technology as a whole, we talk about AI, etc. It just becomes even more exciting. More puzzles to solve from the consumer standpoint as well as our lovely and amazing customers. So. So it's been a huge journey for me personally, a little bit about Modernize. Modernize has been around for almost 20 years. We became a. We were acquired by Quinn street, was a performance marketing organization. They have everything from insurance, personal loans, credit cards, and now home services, now one of the largest categories for them. Excitingly. And that's thanks to the efforts of my incredible team here at Modernize. We really, really are passionate about finding the right consumer for the right home service professional. Our mission is to find and close more jobs for our customers. Period. The end. And we're very, very excited about that. Last year we generated over a billion dollars in business for our customers. We have over 22 different services that we work on, everything from exteriors to interiors and now into services which we call H VAC Plumbing, water treatment, electrical is an exciting one for us. So we have lots of different services where we're using our media teams to find those interested consumers and bring them into our customers who so they can focus more on getting the job done, earning more revenue.
- [04:18]
Host
I want to ask what's probably. Well, first I'd like to ask permission to ask a lot of stupid questions.
- [04:23]
Jamie Smith
Of course.
- [04:24]
Host
Great, great. I don't understand as a category, I'm a consumer of it, but I don't understand lead aggregation. Like, how do we get the lead? Like, so how do we find. How do you find the ethereal lead? Like, how is it out there? I. I know Angie, Angie specifically seems like they were really early on SEO because they're all over everything anytime you search for any service. So is it all just a giant SEO play or what else is at work here?
- [05:02]
Jamie Smith
That's a great question because I think especially as things are changing and evolving and consumers are changing and evolving, a really good example I love to, you know, sit at the dinner table and chat about is the evolution of TikTok. So if you think about it, consumers are actually changing their way they search using TikTok versus Google, right?
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Host
Yeah.
- [05:27]
Jamie Smith
That is another type of search where not your business, not now. You have to be on SEO, right? You have to be on Google and you have to optimize for Google very much what Angie's play is as well as ours. Now you have to be on TikTok and Instagram and Pinterest and Snapchat. And then let's talk about all of the huge amount of traffic sites where consumers are looking for answers. We're also there too. We have partnered with Forbes USA Today as big distribution channels to educate consumers. We are then looking for a contractor. Our experiences are embedded in some of those pages. And then we drive that traffic to y'all. Because again, you know, we, our main focus is like the, is to find that lead through all of the different methods that a consumer is searching digitally. And that is just changing and evolving and growing. So yes, Angie is really, really big on SEO in terms of Google. Every customer we advise also have their own SEO strategies, just like we@modernize.com have our SEO strategies. But what's exciting is all of those leads are coming not just from SEO, they're coming from everything else that continues to grow. My team has recently we've seen a lot of growth, about 10% growth month over month in ChatGPT, perplexity and Claude queries. Yeah, like what? That's crazy. So our job is to make sure we're ahead in making sure we know where the consumer is generating that lead through those mechanisms. When the consumer is raising their hand and then pushing that to the customer. And ideally it really helps the customer because it's saving time on marketing and it's generating that lead hot to you so that again, you can go focus on closing.
- [07:35]
Host
And is that like using that last example or even TikTok, is that like a form fill or is that a click through or how do they, how does that even work? Yeah, like, yeah, hey, contact me. I'm super duper interested in how tankless water heaters work.
- [07:49]
Jamie Smith
Yeah. So in the plumbing category, a lot of our products are call oriented products because a lot of consumers are looking for someone right away. So we have products that aren't just form fills, we have calls. We also have what we call widgets would be experiences that educate a consumer. And then it's a button to say, hey, I actually want to talk to this customer. We have branded products where we're taking the customer that we're working with and pushing them to your site. So all of these things are very, essentially they can come in different forms and all of those forms can be a form, can be a call, can be an inquiry. So it's a lot of, it's a lot of thinking about what the consumer is doing and needing. You know, our experiences will change. When a consumer is looking for emergency plumbing services. Most likely we're going to show a call, we'll show a form. But you know, the high likelihood of a phone call will happen versus a form.
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Host
What percentage of leads are coming from like a social media platform versus AI versus Google.
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Jamie Smith
It's interesting. That's changing very rapidly. I don't want to be the, the person that's just continually saying that, but I definitely think that is, is changing. Our team has been really focused on the, the pie. Right. So our pie is really focused on the elements of the different, sorry, the different pieces of how consumers are coming in. I'd say right now it's, it's a third, a third and a third. You see a lot of customers that are, or consumers that are coming in through our display advertising where they were looking for something and then they went to see a help article on Forbes and then they're like, you know what, I need to get this done right now. So we have a lot of that. We have a lot of SEO and a lot of SEM. The average consumer is always going to Google. Google has been the largest Traffic source for 10 years and continues to be. We just are seeing some changes and I would say the smaller piece of the pie are what, you know, what we're talking about around like new mechanisms of search around AI. Bing is growing just based on some of the changes that we've seen with Google. So that makes it the smaller pieces. But you could think of it as a third. A third, A third. Right. We're always going to find display native networks where consumers have already been searching and then are ready to commit. We've got social media, which is a huge, huge platform for us. And then you have your typical SEO and SEM metrics like using Google as the primary.
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Host
How much of that's paid versus organic. I mean social media is going to be almost all paid. Right. Like we're getting impressions, we're getting click throughs.
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Jamie Smith
Yes, yes. And I think those algorithms are really tough to battle. Right. So I think you're right, you're, you're dead on. 100% paid on social, 100% paid on, on the native and display. And then depending on, you know, Google and search that can vary. It varies very much based on what I have, what our team has experience in, which is different services and also the consumer. We have some more savvy consumers that are searching meticulously through our site, spending pretty like hours on our site versus those that are like ready to commit and move. Move to a customer. Yeah, it definitely depends on the service. We've seen that high priority services, shorter duration of time on site because they really need something done. Whereas consumers that are focused on exterior projects, they're not. They need more research to have a very confident conversation with, with the customer. They're going to be spending a lot more time and thus more SEO. So it really does vary by trade. But I do think that based on the service and the need and the consumer. That's where you see the variability.
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Host
How much does modernize spend a month on paid advertising?
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Jamie Smith
The answer is millions. Millions.
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Host
Yeah, but how many millions? Like are we talking like 20 million or like 2? Because like that's the difference.
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Jamie Smith
Yeah. You know, I'm not going to give you the exact answer because that's definitely something I'm not allowed to give you.
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Host
We'll delete when you tell me we'll delete that part from the episode.
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Jamie Smith
Okay, okay. But I can tell you that, you know, it's, it's definitely in the tens and the twenties and the reason for that is just because we want to make sure that we're investing in the right type of media. Yeah. So one of the things that we are very passionate in and again, I don't want this to be a sales pitch, but one of the things that is very important to us as we invest, like we prospect for new customers is we really want customers that are going to put provide us performance data. And the reason why we want that performance data is because we want to make sure that we're getting the right media for that, for that customer performance data.
- [13:11]
Host
Like hey, I got 10 leads from you. I closed one like that type of. Okay. And specific to like your leads. Right, like the leads that were. Okay.
- [13:21]
Jamie Smith
Yeah, we understand we're not going to, we're not going to ask for our competitors data. No, we understand that. However, we need a scorecard. Right? We need a scorecard so that we can then go find more of that media or find less of it. We call that right pricing. And that means that we'll spend more sometimes for really good media for a customer depending on how they're performing or the flip side is, which is really, you know, another piece to this is that our account management services will come to that customer and say, hey, you know, we really want to spend more on this media source, but we need the bottom of the funnel to improve. Like here's what we think could help. Right. So we really do take a consultative approach. But back to your original question on like how much do we spend? It does vary but it, we will invest in that on that customer, especially if they're going to take this next step as a partnership versus considering us a lead ag. You know, with the more that we can learn and understand the customer's behaviors, the easier it is for us to make more investment on the front end. So yeah, so although I can't share, you know, exactly how much we're Spending on media and where we're spending, I can promise you that we, we do make a ton of investments where, where we know we should be because that's the right thing to do for the customer in terms of long tail, you know, retention. And then, you know what, what has been really great in some use cases is when we're able to actually, you know, that flywheel effect works where the customer is also improving the. The bottom of the funnel too.
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Host
Yeah.
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Jamie Smith
Because that only makes it even better for the customer in the long run. So. So, yeah, so it really does vary, but we do spend a lot and, and especially as we're getting into the spring season and consumers are ready to jump in, we will see a bit of a higher amount of cost per month. Again, I know that doesn't answer your question. Exactly.
- [15:34]
Host
That's okay. I'll bother you once we're not recording. When I think lead ags in general get. I think the smaller the business, this is probably more, probably the smaller, like the contractor side, this is more relevant. But lead aggregators sort of get like a bad rap, I think, for like, hey, they sent us these leads and they're bad lead. Like I can go into any Facebook modernized probably gets to avoid all this because most of the hate goes towards like HomeAdvisor. Most of it seems to be like practices on the contractor side. But, like, what are you guys seeing for best practices on working with a lead aggregator? Like, how can I win the best? How can I set myself up for success here?
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Jamie Smith
Yeah, I really, I really don't like the word lead ag, but I get it.
- [16:26]
Host
Give me. Yeah, give me a different. Give me a different word.
- [16:29]
Jamie Smith
No, I mean, I think it's very important to talk about it because I do think that that has been historically what we've. We've been known as. Or.
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Host
Yeah.
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Jamie Smith
Our home advisor or Angie. And it's because, you know, just think about the word, like, that's a lead act. Right. It's even got a negative connotation to it. Where, where I think it's. It's different for us is what I mentioned around that. Right. Pricing element. The customer that is willing to partner with us and give us some of the data that we need. You don't have to give us all, but you got to give us something because you should be thinking about us as like an employee of yours and give us that performance input, that scorecard. Because what we're going to do with it is we're going to get better. And the hard, the challenging times that we have are when we have no visibility to how the performance of that source is working. We know for a fact that consumers that are coming in, they're coming in and raising their hand. Some are going to have different types of Personas than others. That's a lot of what my team focuses on. What type of consumer, where are they in their buying process? How can we help them get that answer to talk to a customer? The flip side is the minute that the customer provides that information to us is the minute that we can then start to tweak the campaign and understand how to change that performance. Top of funnel. And I do think that that's very different than what other providers have had in the past, even for us. Right. Pricing has become such a critical element of success that we now, most of the time, we require it to work with us. The only way for us to make sure that we can be successful for, for your business and frankly, like, it won't work without it, especially as sources continue to grow because consumer trends are changing. So it's not, it's not even the fact that we want the data for our own scorecard. It's the fact that we need the data so that because consumer trends are changing so rapidly, we need that data to help make sure that we're performing quickly. Fast.
- [18:57]
Host
Yeah.
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Jamie Smith
So that's the biggest piece of success that we've seen. The partners that will, will share that data with us are the ones that we can then really partner with. As, as cliche as that is. So, you know, maybe, maybe we, we become a lead partner. At least that's how I like to.
- [19:15]
Host
I'll, I'll use that for the rest of this. So it sounds like most of the feedback so far is like, give, give a scorecard, give feedback. Like, tactically, most of the industry has been really, my side of the industry has been very focused on like speed to lead process. In my mind, the feedback is the end of the journey. Right? Like, hey, hey, Jamie. This is what happened a week later with this cohort of leads that we received from you. Our book rate was X, our demo rate was X and our close rate was X for this amount of money. But even further upstream, like, how can my side of the equation here improve book rate, improve demo rate? Like, what are you seeing the best providers do?
- [20:08]
Jamie Smith
Great question. So I think a few things and I'll, I'll give a little bit of, maybe an insider, some insider information on how we.
- [20:16]
Host
Inside baseball. Let's do it.
- [20:19]
Jamie Smith
You know, so first and foremost, I would say the the customer that can give us real time data, that appointment set is a clear indicator for us. So I would say, and we start acting within 24 hours if we start to see some changes right away. And that is a, that's an SLA within our business, within my media teams and a service level agreement. So in our world we've got, you know, you need to, you need to act within 24 hours if you start to see a slip in appointment set rate. Right. So that's like a big indicator for us. So the customer that can provide us that data in a, in a, in a real time way, that's great. We understand that some customers cannot do that, you know, so we ask for weekly, you know, at, at minimum, monthly. That would be the best case scenario. And you know, the faster we can get the data, the faster we can react because we have those protocols in place. I will say that we also have, in our, in our business, we have a calls business, as I mentioned, and some of that data is actually being scored right, like immediately as we contact consumers to provide their intent so that we know immediately if we need to stop something or if we need to push, push harder on a specific source because we're seeing the higher intent. So we have, we have our internal factors, but we also have the external factors. So I think that that's super important to have both because then you're able to really match the data and make quicker decisions when you have a bigger set of data. Our analytics team is constantly looking and matching both our internal and external data.
- [22:22]
Host
So let's say, hey lead partner, I want to. Or I, I received 10 leads from you month to date. Yeah, I don't remember the onboarding with, I wasn't there, I guess. But like, is there just somebody set, like, hey, I need X amount of leads. Is that a part of the onboarding?
- [22:40]
Jamie Smith
Yes, it varies. I mean, sometimes buyers have, you know, they have budgets in mind they want to start with.
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Host
Okay, but like we're setting a target of some type.
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Jamie Smith
Oh yeah, yeah, we're. There are times where some consumer, some customers have asked us like, hey, what, what do you recommend? But most of the time the customers are coming to us with a goal and it's because you guys have done X in marketing already and you're trying to supplement it or you're trying to decrease operating expenses, so you're going to go external. You know, there's a lot of different scenarios, but mostly it's coming from the customer. So.
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Host
Okay, that makes sense. Okay, so I, I come in and I say, hey, I want 10 leads a month and you supply them. It totally works. It's amazing. It's the greatest thing that's ever happened in my life. And I want more. Yeah, how does that work?
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Jamie Smith
Oh, good question. That's a good one.
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Host
Well, I feel like with. And I'm gonna, I'm gonna contrast this to Angie's because so far the last five minutes, it like, this is a totally different experience from working with like, who I think is the gorilla in the space, which is Angie's List, where you just sort of get what you get. And they have a ton, like, they have all the history, they have all, everything in the world that you'd want to know. They can roughly tell you what you'll get. But there's not really a mechanism to make it more. But it sounds like with you guys, there's absolutely mechanisms to make it more.
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Jamie Smith
That's right. Yeah.
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Host
Okay, that's interesting.
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Jamie Smith
Yeah.
- [24:14]
Host
Yeah, walk me through that.
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Jamie Smith
So typically our account management services will first and foremost understand one, your goals as an organization. And then two, we'll start slow. We always start slow. Like that is. That's probably the second ground rule. The first ground rule is we've got to have some kind of scorecard. The second ground rule is we'll start slow. Right. Just because we don't want to inundate your call centers and your service teams without understanding performance. That's, you know, at the end of the day, we need to find and win more jobs. So that's one and two in terms of expansion. From that, we'll analyze your DMA coverage. So let's say that you're in multiple DMAs. We'll make sure that we're covering the entire DMA. We'll make recommendations on potentially where to expand. Maybe you as a business are waiting to expand, expand to another dma, but are hesitant. We can provide some projections on that based on our data and our, and our tools to say, hey, we can expect you to grow in San Antonio. I'm in Austin, so, you know, we can expect you to grow in San Antonio in about two to three months. With this amount of budget and this amount of leads, can you service San Antonio? So we'll, we'll start to, we'll use that as a big lever because that's a, that's a big opportunity. There's always going to be word of mouth consumers within that space, specific space that are using your services. And that's typically how we see customers expand. The other way that we can Expand is just based on how much you're servicing per week, per month and per day. Right. So we have. If you're thinking about your call center, let's say you know, your operating call center, or you have specific service, service reps that are on call within specific hours, we can make. We can analyze to see how much volume you would get with a few more hours on the phone or, you know, a few more hours in the morning. Right. Or even we've had some really successful use cases where customers have been off on Sundays and we've had them turn on on Sundays because consumers at home, they're investigating projects, they need them. And we're able to experiment and turn on Sundays. And again, we have the levers to control that. Right. So if you wanted to run some experiments. So I'd say days are a big thing. Zip codes are a big thing. And then sources. So as I was explaining in the flywheel, with data, we can add more sources of media with those performance benchmarks. As long as the flywheel is working and we can get that feedback, we'll add more sources, make sure it's performing to your sales reps, and then provide any recommendations to you, and then vice versa. So there's three different ways that we can do it. We can go pretty fast, too. We've seen some really incredible use cases where we've had customers say, hey, you know what? Wanna try a new dma? Like, I've got some reps that are willing to go out there. Let's do it. We've seen some use cases. There's a bathrooms customer that wasn't on on Sundays, was kind of hesitant about it, but put in agents just to set appointments on Sundays. I mean, it. It tremendously changed his bottom line. So really, those are the three different levers, I would say, to expansion and even I think whether you're using a lead partner or not, I think that that's. That's a really solid way to think about digital marketing. Right. Like, how you. How you can expand and grow based on leads coming inbound.
- [28:00]
Host
How, like, do you have access to, like, pull up data for Ohio now?
- [28:05]
Jamie Smith
For Ohio? Yeah, sure, sure.
- [28:06]
Host
I'm curious. Let's do it.
- [28:08]
Jamie Smith
Fun. Okay. All right.
- [28:09]
Host
What. What's going on in Youngstown?
- [28:11]
Jamie Smith
Youngstown. Okay. Give me a second here. Let's go here. Okay. What are we looking for? What's your.
- [28:17]
Host
So, like, do I. Do I do this by, like, job type?
- [28:20]
Jamie Smith
Yes. Yes.
- [28:21]
Host
Okay.
- [28:21]
Jamie Smith
Yeah.
- [28:21]
Host
Okay.
- [28:22]
Jamie Smith
Yeah.
- [28:22]
Host
What are the job types you guys cover for plumbing?
- [28:24]
Jamie Smith
We offer. We Pretty much offer everything, I would say everything from water heaters to septic. General plumbing. We could do a lot of general plumbing, but frankly, it's because the consumer doesn't know what they need. Yeah, yeah, That's a tough one. I love to ask some customers about that. We could have a podcast where I can sit with.
- [28:44]
Host
I'm right here. Let's do it, Jamie. But, yeah, let's do water heaters. I want to know water heaters in Youngstown. Okay, walk me through it. What's my opportunity look like?
- [28:54]
Jamie Smith
I've never done this before. This is pretty exciting.
- [28:58]
Host
Me either.
- [29:02]
Jamie Smith
But it's true. We've got. So I'm looking at a year of data, just so you guys. So, you know, and, and this is.
- [29:10]
Host
Like, number of queries that have touched. And one of the, one of the. Correct me if I'm wrong. I'm making an assumption here. But, like, one of the benefits of being, like, a nationwide lead partner is you get leads from everywhere. But one of the cons is that you might not have a buyer in that market. So, like, young sound, specifically, you might be, like, totally drowning in water heater leads, but, like, no one's buying them. Is that right?
- [29:36]
Jamie Smith
That's correct. That's correct. You're about to see a screenshot of a lot of green. So what that means is that we have, we have a map, and you'll see some, some of these dots, and it means that we don't have a buyer. Youngstown. So we should definitely start working together immediately.
- [29:55]
Host
Yeah. Yeah, that'd be fun.
- [29:57]
Jamie Smith
Yeah.
- [29:57]
Host
I like Youngstown.
- [29:59]
Jamie Smith
I, I, I've never been there, but I'll.
- [30:04]
Host
It's like 45 minutes away, but it sounds like there's a lot of water heaters.
- [30:08]
Jamie Smith
There's, there's definitely a lot. I mean, the, you know, the last, like, week, it looks like there's 45 requests in the last week.
- [30:17]
Host
That's a lot.
- [30:18]
Jamie Smith
Yeah, it's a lot. And it varies. Right. So, like, my question to you and how I think about plumbing. Like, one of the toughest things about what we do is consumers don't know. They don't know what they need. And, you know, to. I was, I'm a consumer, and I'm a homeowner. And, you know, eight years ago, I had no idea that I would need to replace my pipe in my, in my apartment, but that happened to me. But it was, it was an inquiry on plumbing because you're just like, hey, there's water on the floor. Like, I need my Toilet fixed. So it is a challenge. Like that is an, a big challenge is we have a lot of opportunity to expand nationally to your point. But then the other challenge is we have some really tough times with getting the right project to, to a customer transparently because we don't know exactly what that consumer is going to need. And like I mentioned, like it's tough. Like if you're, if you're a consumer and you need help, you're gonna call, you're just gonna call. Like it's just one of those things about a 10 page form, about the size of your home, the error, upload a picture, like all those types of things to then have a customer qualify that and call you, you want something right now. So we talk about speed to lead. That's a tough one. I don't know if you have any feedback there, but I'm always looking for that because it's tough to digest.
- [31:45]
Host
Yeah, I mean some of it is just general. What we've noticed with lead partners is they all seem to struggle with that.
- [31:51]
Advertiser
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- [32:32]
Jamie Smith
Qualifying or like even consumer.
- [32:35]
Host
We started using modernized specifically for one job type which was water quality. And the the benefit for us was your team was the only team that segregated that one, that water quality from general plumbing. The way I would think about it is is it fixture based? So is it a faucet, is it a toilet, is it a water heater, is it water softening piece of equipment? Those are all fixture based problems. Whereas like leak and pipe obviously more complicated to like create. You could do a pipe leak but I don't think that would really give anybody much more information than just visiting the home itself. But it is like I think the tighter you get down to like what type of equipment is it that arms the buyer? I guess me in that case with the information that they need to at least book the call.
- [33:31]
Jamie Smith
Okay, yeah, no, that's good. I mean, I definitely think my experience developed water, Water treatment, to be clear, is the demand was there, right? It was coming in through plumbing in our, in our, in our services. And we kept seeing these indic of search site.
- [33:53]
Host
And most lead partners don't separate that at all, which to me is kind of dumb because you know, from like if I don't, I don't know exactly what Right. Pricing is. You've referred to it a few times, but like, hey, a toilet lead, like a broken toilet lead to me as a consumer is not worth a tremendous amount of money. Like at the maximum, I'll get $1,000 and much more likely I'll get $200 out of that opportunity. So like, what am I willing to pay for $200? The answer is not a lot. But water treatment, that might be a $10,000 opportunity. That's like H vac, right? And H vac, everyone understands exactly how to price an H Vac opportunity. But for some reason, water quality, despite it being potentially a five figure ticket, is not segregated from most lead partners. For you guys it is, but it's very weird.
- [34:51]
Jamie Smith
You just explained right. Pricing, right. That's part of the part. Right? You nailed it. You nailed it. And I think that's one of our superpowers is being able to take a request and be able to identify it to the right job type. Again, I will effect like we need that information to be able to then segment even further. So you know, it, it's. I, I don't think that problem will, will, will change. I think it'll continue to evolve. One, as consumers get more savvy. You know, we've seen so many consumers that want to research more prior to reaching out to y'all. So that's one. And then number two is, you know, just again that performance and like we can get, if a customer wants a 200 job, we can get you a 200 job. We just need to know that you want that 200 job.
- [35:46]
Host
So 45 water heaters in Youngstown in the last week or queries.
- [35:50]
Jamie Smith
What percentage of plumbing requests? Yeah, it's hard to tell. It's hard to tell quickly where that is. There's probably a few water heaters in there, but a few more clicks would tell me that.
- [36:01]
Host
So what percentage of requests or queries or whatever become a lead? Like, how does that work? Or is that the Lead itself. You had 45 leads.
- [36:10]
Jamie Smith
That's the lead itself, right? Yes, that's the request coming in from some type of consumer in Youngstown. It could be a busy week, too, so don't forget.
- [36:21]
Host
That's okay. That's okay.
- [36:23]
Jamie Smith
Just like you guys, you have your ups and downs on seasonality. Like, I always say this, it's the craziest thing. Every year. Every year, the last week of December, quiet as a mouse. And then the January 1st, it's like the homeowners have opened up the doors, and it's just like. It's. It's incredible to see it. So, yeah, it just depends. Youngstown, probably. Maybe it had some storms that could also be a big problem, et cetera. Like, you know, there's a lot of factors there.
- [36:54]
Host
Yeah. What. What's a lot? 100,000 population, zip code, or how do we measure it? Like, is this like MSA or zip?
- [37:02]
Jamie Smith
We prefer dma. We prefer dma. And. And there's complexities to that. Like, I know a lot of. We have a lot of organizations that work in, like, Los Angeles or Miami or New York. And, like, Los Angeles, you're not going to drive from north to south. Like, we. We completely understand that. But our DNA, as. As. As the person that is shepherding all of my media teams into y'all. We think about it from a DMA standpoint because most of the media networks, the social media networks, the newsletter networks, a lot of our native networks are all focused on IP ranges to dma. So that's a big thing that we explain to customers is, you know, zip codes are. You know, we are definitely tracking zip codes, but DMA is where you're going to get more reach.
- [37:58]
Host
How many leads a month don't get bought.
- [38:02]
Jamie Smith
I'd say right now it's probably between 15 to 20%. It definitely varies based on trade, but it's either. We haven't found a buyer for them in that specific market that has been much higher lately. We have a lot of requests coming in in the past quarter. You know, I think it's.
- [38:24]
Host
I think it's a little bit like new buyers.
- [38:26]
Jamie Smith
New. Yeah, New. New consumers. Right. So new consumers coming in, like, high demand is high.
- [38:31]
Host
Interesting.
- [38:32]
Jamie Smith
Yeah. But I definitely say it's around 15 to 20%.
- [38:35]
Host
When you find. Is that good or bad?
- [38:37]
Jamie Smith
It's not good. It's not good. It's not good.
- [38:39]
Host
I mean, I don't know. Like, Martin, like, maybe the end. Maybe your industry can't. KPI is like, 50. So, like, you guys are like killing it, you know.
- [38:47]
Jamie Smith
You know, I always think like we would strive for under, under 10, right? Yeah, that would really be great because that means that more consumers are getting to customers to close the job. Anything that's, that's get not getting matched, that means that consumer has to do more work. And that means that one of our customers hasn't won the job and they've come to us and they've said, yes, I need to talk to someone, and we couldn't match them. So that's definitely something that we're focused on as a business. Like you don't want any request to go unmatched.
- [39:21]
Host
How many requests come in a month.
- [39:23]
Jamie Smith
Across our business or.
- [39:25]
Host
I'm just fascinated.
- [39:29]
Jamie Smith
You know, I'll say there's quite a few.
- [39:34]
Host
Oh, nice.
- [39:35]
Jamie Smith
Where I'm like, I don't know if I should say that number.
- [39:38]
Host
Millions. Okay.
- [39:40]
Jamie Smith
Millions and millions is what I really want to say. And that's my goal, of course. But I would say we, we definitely see a large amount of requests dimensionaling that. We see about 50 million leads a year last year. So hopefully that can help. Help.
- [40:02]
Host
You said newsletter networks. What does that mean?
- [40:04]
Jamie Smith
We've seen a lot of success lately on this again, going back to consumer, Consumer trends. Yeah. You know, I think a lot of people in marketing are like, email is dead. Like, that's actually not the case. I think a lot of subscriptions and focus groups like you would subscribe to something like News Break or that, you know, like there's a female newsletter called the Skim. That's a big network. A substack is a new network that. I wouldn't say it's new, but it's, it's growing in popularity where you can subscribe to a newsletter from an influencer or community member. That's, that's where we're seeing a lot of traction where, I don't know, as.
- [40:53]
Host
Someone, as the, as the market gain consumer leads.
- [40:55]
Jamie Smith
Yeah. Okay. Where they'll be engaging with someone that is in home and garden type newsletters or they're, you know, influencing around home and garden and they're seeing our, you know, information about Windows or, or, you know, we do a lot of like proactive H Vac marketing. Right. Getting ahead of the summer, getting ahead of the winter. We do a lot of preparation in those messages.
- [41:31]
Host
Interesting.
- [41:32]
Jamie Smith
Yeah, it's a big, it's like, I feel like a broken record saying the consumer is changing, but we're definitely seeing that. We're seeing lots of new networks popping up left and right as Consumers are starting to change their habits. It's kind of like, I don't know if you have a personal Gmail account, but your Gmail account is separated and the promotions, tabs and updates. Tabs. We have seen, you know, changes in trends and in open rates across the board in our own emails. But interestingly enough, we're seeing lots of traction on newsletters. And, you know, I think that that's because the consumer's mindset is changing. Their behaviors are changing, just like the mediums are changing. So.
- [42:17]
Host
Yeah, yeah, that's fascinating.
- [42:19]
Jamie Smith
Yeah. But I've said that for eight years now, so I just feel like it's just going to constantly change. It's just constantly changing, which makes it so hard for businesses. That's why, that's why I love this job. I love this job because I get to be that liaison for these customers. I think it's so hard what customers have to do day in and day out in the bottom of the funnel. Like, if we're talking about marketing the bottom of the funnel, that's not an easy job. So not only that, now you have to focus on the top of funnel. So I'm, I'm, I'm so excited to be able to navigate those challenges for consumers because. Or for customers. Excuse me. Because it's just, it's just always going to change.
- [43:00]
Host
So.
- [43:01]
Jamie Smith
Yeah, always going to be something. You got to index properly, you got to set up your Google business profile, you got to set up your profile now you got to be focused on Reddit, you know, all these different things.
- [43:11]
Host
My. I have an assumption.
- [43:12]
Jamie Smith
Okay.
- [43:13]
Host
But we've got Youngstown, you know.
- [43:15]
Jamie Smith
Yes.
- [43:16]
Host
I'm going to have to go mess around with Youngstown, I guess. Like, do, do you end up reselling? I would assume you would. Because it's sort of dead inventory. Right. Like, the lead is the inventory and you want to do something, so you resell it to other lead partners or what do you do with excess leads?
- [43:34]
Jamie Smith
Yeah. In full transparency, we don't want the request to go unanswered. So we will sell that request. We'll. We'll sell it to Angie. We'll sell it to other partners that have someone in their network. Yeah. Because that's just not the right thing to do. Again, if we have an interested consumer coming in and looking for help and we can't match them, our experiences will share that with the consumer as well. Like, hey, sorry, we can't match you, but you should hear from a partner soon. So it's not like a hidden Thing, but it definitely is something that is part of our strategy only because, like, we don't want to lose that consumer trust. So obviously, like, you heard my KPIs. Like, we don't want to do that. And, you know, neither does the. Does the other partner. But I think it's just one of those things where we have a handshake to share in this event so that we can get that consumer's request felt.
- [44:36]
Host
Okay. You guys just launched plumbing last year, right?
- [44:38]
Jamie Smith
We did.
- [44:39]
Host
Okay. Like, what's been the win or what's been the loss or both?
- [44:43]
Jamie Smith
Oh, I really like these questions.
- [44:46]
Host
I'm glad. I'm. I'm glad I'm keeping you on your toes.
- [44:48]
Jamie Smith
I do. I really like it. Well, you know, I think it's kind of interesting when you don't know the script, so you can't. Like, really?
- [44:56]
Host
Yeah, that's right. Unscripted.
- [45:01]
Jamie Smith
So I'll start with the bad and then go and then end with the good.
- [45:04]
Host
Yeah, that's a good way to do it.
- [45:05]
Jamie Smith
That's how I. That's how I live. So I think the bad is we. We talked a little bit about it, but we definitely are still trying to understand how we can get a consumer's request more clear for a customer. You know, it's one of those where I think with time. With time, I'm very confident we will figure it out. We've started launching new tools on modernized.com, as well as segmenting out a few of the different categories like you mentioned, with water, Water quality and water treatment. So really, we're really starting to understand that. I think the other thing that's really tough about plumbing that we've learned is which. I think plumbers might laugh when I say this, because it's pretty obvious, but it is a very urgent trade that. You know, our background for the last 10 years has been on really heavy. What I call it.
- [46:08]
Host
Yeah, like a planned investment.
- [46:10]
Jamie Smith
Yeah, yeah, yeah.
- [46:11]
Host
I'm gonna do my siding or my Windows or.
- [46:14]
Jamie Smith
That's correct. That's correct. Whereas, you know, this has been a little bit of a different swing for us. And I think we're fully. We. We were prepared for this. But then when you're in. In. When you're in it and you're seeing these requests come in through calls, it's just a different ball game because you still have your DNA, right? You still have your ethos on. Like, you want to make sure you get that request to a. To a customer. But our customers are. They. They have specifics in terms of how they go out to see a job like to see. So that's been really, really tough for us. We've had some really great partners. You guys like, like sharing feedback with us to really help iterate. I'm really hoping in the next year like we'll there, there will be a monumental shift as we continue, continue to learn and learn from our customers. The, the good thing, the win is we have as we started to add more plumbing to our services category and our, and our owned and operated assets. So we have, we have modernized.com which is our flagship site, but we also have hundreds of other sites that we own and operate those are starting to add, we're adding plumbing services. We are pretty strategic on where we add things because we want to make sure that we have the right result out the gate gate. So in the last year we've been able to add more and more media to plumbing. So now it's really about making sure that we can find the right partner who wants to test with us and then once we get that we can start adding more media sources. We're getting more confident on adding those sources. So I'd say, you know, last year when we started we only had three to four sources on, you know, we've, we, we've tripled that and you know, that will be at hundreds probably in the next year once we start to get some more partners on board, which I'm excited about.
- [48:19]
Host
This might be like two in the weeds, but when for the hundreds of other sites, these are like hot water tanks, cleveland.com type things or is it like different than that?
- [48:30]
Jamie Smith
They can be right. Just because we have access to that and then we are able to use, you know, our resources to buy that media effectively. You know, I'm pretty biased, but we have some of the best media buyers you can find. So we're able to optimize very quickly. Again that's, that's a reason why a lot of people partner with us is because you don't have to go in and beat the bidding system of Google. We can do that. So to answer your question, we use those types of sites because that's what the consumer, consumer is looking for right then and there. And we have a lot of them, but they all have solid content structure. Like it's not like we're just duplicating sites left and right. They are with strategy in mind and we'll continue to do that as we start to see different trends. Right. Like we saw with water treatment where we were like we really need to start thinking about this separately. So then we started building out entities of where consumers are searching, because we look at search trends, be able to educate them, and then again, bring them into your funnel.
- [49:36]
Host
Do you have H vac and Electric?
- [49:38]
Jamie Smith
We have H vac, yes. And we are. We are literally, like, weeks away from launching Electric, which I'm excited about. Yes, yes.
- [49:47]
Host
Can't wait for it to be all green around me. That sounds. That sounds great.
- [49:51]
Jamie Smith
We're getting there. We're getting there.
- [49:53]
Host
That sounds great. Cool. I got to ask some super duper nosy questions about lead partnership, which was fun. I. I think I'm mainly. It. It's just, like, interesting. So from our side, it's like a black box, right? It's like, okay, I get this lead, but where did it come from? And is it stale? Which, like, yeah, hey, maybe, like, maybe somebody got a lead, and then two weeks ago or two weeks later, they sold it to Angie's, and then Angie sells it to us or whoever. And. And then it's like, okay, well. Well, that lead was stale. And it's like, well, yeah, it was still. It originated two to four weeks ago. Makes total sense. But, yeah, from our side, it's kind of a black box. But I do think what was really interesting, which I agree with, was, like, the scorecard and, like, how we think about communicating back and forth. Yeah, I think that's. I think that's. I think that's interesting. And just like, I suspect larger businesses are going to do this better because on the plumbing, H vac, electric side, you. You talked about urgency. Like, our industry is like, we're sort of, like, drunk on urgency, where you can build a $20 million contractor and not have any idea how to market at all. Like, you don't have to do anything interesting, which is crazy. Right?
- [51:20]
Jamie Smith
Like, that's why I'm addicted to this industry.
- [51:23]
Host
Yeah, it's like. It's like. Like all you have to do. And especially over the last, like, 10 years, all you had to do was pay local service ads, money. Like, that's it. Like, put dollar in, get lead out. It was the dumbest thing in the world. And so it just didn't take any energy. So now, you know, you can. There's companies down in. Down in your neck of the woods. So I was listening to a talk from Jimmy Dale from Baker Brothers. He's in Dallas, not Austin, but they're $110 million. And he. He was on a show or something at the end of 2023 or, like, early 2024. And I like Jimmy, he's a cool guy. But. But it was like a, it was a comical, like the way he said it. He's like, yeah, we're actually gonna have to start caring about this. And they were like an $80 million business, and they were trying to figure out how to essentially do marketing 101. And it's because population growth was crazy, leads were cheap, demand was high, and it's like this, this. All these things mixed together, and Boom, you've got $100 million business and you barely even thought about it. Like, it's kind of ridiculous. So, yeah, plumbing H VAC electric is kind of weird because you get, you just live on urgency and you live at the bottom of the funnel. Like, okay, I'm going to pay $200 for a lead, but they're going to buy in an hour.
- [52:46]
Jamie Smith
It's one of those where I think, like, as we talk about consumers changing, one big bet that I, that our teams are making is we talked a little bit about, like, community. I think that a lot of companies now are having to, quote, like, work harder.
- [53:03]
Host
Oh, yeah.
- [53:05]
Jamie Smith
Because the consumer's expectations are changing. Right? So you have to. And this is why it's so hard for businesses now. You have to have reviews, you have to be on Google. You also have to be on their, their businesses. You have to be on Yelp. You have to. You have to have an Angie profile. You probably need to have a modernized profile. Like, you have to have all of these things because the consumer expectations are changing. They want someone super qualified that's going to, that they can trust within 30 seconds. And that, that is a dynamic that has been changing. Like, not just mediums of media, that's been changing. That's the dynamic that's changing. And that's why I'm really excited to work with partners, because we can help them with that. Like, we're not just a partner. That's like, gosh, let's schlep some leads over. We can also tell you how that's performing and then provide some feedback on that. We have some customers who, in our calls, products where we can listen to the calls and provide some feedback on our agents. Right? Like, so it is a wild industry that, you know, for so long there was this, this thought. There's the thought like, oh, I don't need any. I don't need to think about marketing costs. I don't need to. I don't need to do anything. But I think the consumer is, is. Is pushing for that. So that's why it's hard. Sometimes we think about ah, the cost per lead. Oh, it's $200 for the cost per lead. But I like to encourage people to also think about that under you know, within their op like their operating expenses, like the amount of effort it is to put into their marketing budgets to that when you are going to get a cost from us, one cost for that inquiry, there's a little bit more to that cost just to consider. Right.
- [54:58]
Host
Well, this was awesome. I appreciate the information on Modernize. I appreciated the behind, you know, inside baseball on how lead like partners and like this whole industry works. This was. I really just wanted to ask people so I really got to like, I really got to, you know, got some questions answered.
- [55:18]
Jamie Smith
Well, thank you and thanks for your, your feedback too. Like I said I, if anyone has any suggestions on plumbing, I can handle my email. Like we're, we're ready to keep growing in these services and categories and I'll let you know an electrical launches.
- [55:33]
Host
Yeah, yeah, yeah, we're. I'm looking forward to that being all green. If people want to learn more about Moderise, how can they get a hold of you guys?
- [55:41]
Jamie Smith
Yeah, our website is modernized.com pros that'll give you all the information on our products and services. You can call us just like our customer. Our consumers can call you guys. You can call us and we can get a consultation set up right away.
- [55:59]
Host
Awesome. Cool. Well thanks so much Jamie for coming on.
- [56:02]
Jamie Smith
Thank you. Thank you.