#190 How AI and Automation Are Revolutionizing Home Service Marketing

Summary

Owned and Operated Podcast Episode #190: How AI and Automation Are Revolutionizing Home Service Marketing

Release Date: April 29, 2025

In Episode #190 of the Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast, host John Wilson delves deep into the transformative impact of AI and automation on home service marketing. Joined by Sam Preston and Ethan Wright from Service Scalers, the trio explores how these technologies are reshaping advertising strategies, lead generation, and overall business operations within the home services industry.

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1. Introduction and Guest Overview

[00:09] John Wilson opens the episode by sharing the success of a recent marketing campaign, highlighting impressive metrics like "300 hits in the first 30 days" and "$250,000 in sales." He warmly welcomes Sam Preston and Ethan Wright from Service Scalers, emphasizing their longstanding partnership since 2021.

Notable Quote:

"At Wilson, we've saved a stupid amount of money by having AI help out with our call center." — John Wilson [01:31]

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2. AI in Call Centers and Customer Service

John introduces Evoca AI, an advanced AI-driven Customer Service Representative (CSR) tool that has revolutionized their call center operations. Evoca distinguishes itself by:

• Immediate Response: Answers every call on the first ring.
• Human-Like Interaction: Sounds authentic and assesses caller emotions to transfer to a human agent if necessary.
• Seamless Integration: Directly integrates with ServiceTitan, handling tasks like rescheduling, checking arrival times, and customer information lookup.
• Enhancing Team Performance: Offers post-call analytics, auto-tagging, and coaching tools to ensure consistent customer service quality.

Notable Quote:

"Evoca knows the caller is getting frustrated or annoyed and hands the call to a real human." — John Wilson [01:31]

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3. Marketing Budget Strategies During Volatility

The conversation shifts to the broader economic landscape and its influence on marketing budgets. John argues against reducing marketing spend during uncertain times, advocating for strategic investment. Sam and Ethan discuss contrasting approaches:

• Conservative Spending: Some businesses pull back on marketing to conserve funds.
• Aggressive Investment: Others see economic downturns as opportunities to double down, especially in high-demand seasons like summer.

Notable Quotes:

"Reducing marketing budget is dumb. Yeah, it is dumb." — John Wilson [07:04]

"There's rarely someone in the middle that's like, yeah, let's just keep steady." — Ethan Wright [07:17]

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4. Cost per Lead vs. Quality of Leads

A critical discussion unfolds around the cost per lead metric versus the quality and conversion rate of those leads. Sam emphasizes the importance of understanding the return on ad spend (ROAS) rather than merely focusing on cheaper leads. John shares his experience of initially prioritizing low-cost leads, which overlooked higher-ticket opportunities that yielded better revenue.

Notable Quotes:

"Whoever can pay the most for the lead wins. Like, who's got the best economics?" — John Wilson [15:19]

"Cost per lead wasn't even his problem." — Ethan Wright [19:33]

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5. Operational Enhancements and AI

John introduces the concept of a three-pillar framework—Lead, Sale, and Fulfillment—to streamline business operations. Ethan and Sam discuss how AI and automation can enhance each pillar by:

• Lead Management: Automating responses and optimizing lead allocation.
• Sales Processes: Training CSRs to improve conversion rates.
• Fulfillment Efficiency: Ensuring high-quality service delivery and upselling opportunities.

Notable Quotes:

"We have a three point system inside our business where we focus on each problem one at a time." — John Wilson [19:34]

"Automating tasks like reporting can free up valuable time for human-only activities." — Ethan Wright [48:42]

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6. AI and Automation in Marketing Teams

The trio explores the integration of AI agents within marketing operations. Sam shares Service Scalers' approach to leveraging AI for:

• Account Monitoring: AI agents continuously audit client accounts, alerting teams to significant changes or inefficiencies.
• Data-Driven Decisions: Automating report generation and competitive analysis to empower sales teams with actionable insights.
• Increasing Capacity: Freeing up human resources by automating repetitive tasks, thereby enhancing overall team productivity.

Notable Quotes:

"The best money you can spend is whatever it takes to get your team to get more reviews." — Ethan Wright [31:59]

"Our AI agents can alert us to any big movements in ad performance before they become real problems." — Sam Preston [39:54]

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7. Ownership and Incentives in Marketing Agencies

Sam Preston highlights common pitfalls when home service business owners engage with marketing agencies. Key issues include:

• Budget Transparency: Many agencies charge a percentage of ad spend, creating misaligned incentives to maximize spending rather than optimize it.
• Ownership of Assets: Businesses often do not own their websites or ad accounts, leading to loss of data and control when switching agencies.
• Incentive Alignment: Service Scalers structures their fees to avoid conflicts of interest, ensuring that account managers are incentivized based on client success rather than ad spend volume.

Notable Quotes:

"If you don't own your account, you're going to go through a period where we don't have a ton to work off of." — Ethan Wright [89:04]

"Incentives and ownership are like the two big things." — Sam Preston [86:27]

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8. The Future of AI in Search and SEO

The discussion turns to evolving search behaviors influenced by AI technologies like ChatGPT and Perplexity. Insights include:

• Conversational Search: Users are increasingly using natural language queries, leading to more long-tail keyword opportunities.
• SEO Adaptation: Businesses must optimize content not just for human readers but also for AI agents that may book appointments directly.
• Dynamic Search Engines: As AI continues to evolve, SEO strategies need to be flexible to accommodate changing ranking factors and user interaction patterns.

Notable Quotes:

"Eventually, there will be a switch and that will still be the most important, but instead of being the most helpful and relevant to a consumer, it's going to be most helpful and relevant to an AI agent." — Ethan Wright [75:05]

"More long-tail keyword type of searches are going to become more relevant." — Sam Preston [71:05]

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9. Trends in Marketing: Brand Building and Guerrilla Marketing

John, Sam, and Ethan identify emerging trends in marketing, emphasizing the renewed importance of brand building as a competitive moat. They discuss innovative strategies such as:

• Local Brand Building: Utilizing platforms like Facebook Groups and Nextdoor for guerrilla marketing tactics.
• Customer Retention: Focusing on exceptional service and personalized interactions to foster long-term customer relationships.
• Outside-the-Box Marketing: Encouraging businesses to engage in non-traditional marketing methods that may not scale but build strong brand loyalty.

Notable Quotes:

"Brand is now suddenly a thing again." — John Wilson [84:08]

"There are certain opportunities for arbitrage where you can think outside the box." — Ethan Wright [91:33]

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10. Final Tips and Conclusion

As the episode wraps up, the hosts offer practical advice for home service business owners:

• Choose the Right Marketing Partner: Ensure alignment in incentives and ownership of digital assets.
• Embrace AI and Automation: Start small with manageable projects and scale as confidence and expertise grow.
• Focus on Customer Experience: Prioritize quality service and personalized interactions to drive retention and referrals.

Notable Quotes:

"Incentives and ownership are like the two big things." — Sam Preston [89:27]

"The core structure is going to remain the same. Regardless of what happens with AI, businesses have to be listed somewhere and they will be indexed and they will be searchable." — John Wilson [80:27]

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Key Takeaways

1. AI and Automation as Game Changers: Leveraging AI tools like Evoca AI can significantly enhance customer service efficiency and lead management.
2. Strategic Marketing Investment: Maintaining or increasing marketing budgets during volatile periods can capitalize on lower lead costs and drive substantial revenue growth.
3. Quality Over Quantity in Leads: Prioritizing lead quality and optimizing conversion rates yield better ROAS than merely focusing on low-cost leads.
4. Operational Efficiency through AI: Automating repetitive tasks frees up human resources for more strategic and high-value activities.
5. Ownership and Alignment with Marketing Agencies: Ensuring ownership of digital assets and aligning incentives with marketing partners fosters transparency and long-term success.
6. Adapting SEO for AI-Driven Search: Businesses must evolve their SEO strategies to cater to AI-powered search behaviors and conversational queries.
7. Brand Building and Customer Retention: Investing in brand building and exceptional customer experiences can serve as a sustainable competitive advantage.

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For more insights and detailed discussions on growing your home service business, visit www.ownedandoperated.com and subscribe to the podcast.

Transcript

[John Wilson]

Reducing marketing budget is dumb. Like, it is dumb.

[Sam Preston]

Google is not your friend. They are trying to spend your money. We'll be literally just lighting money on five.

[John Wilson]

Yeah. We got like 300 hits on it in the first 30 days and we sold $250,000 of today on the show. I have my good friends Sam Preston and Ethan Wright from service Scalers. Welcome, guys, to the show.

[Ethan Wright]

Awesome.

[Sam Preston]

What's going on, man?

[John Wilson]

This will be fun. We did an in person with Sam last July.

[Ethan Wright]

Yeah.

[John Wilson]

Different setting, new studio.

[Sam Preston]

That studio was so small.

[John Wilson]

I know. I'm pretty sure we were like touching knees the entire time.

[Sam Preston]

It was cute.

[John Wilson]

It was intimate.

[Sam Preston]

Yeah, it was intimate.

[John Wilson]

It was nice. Obviously, you know, if you've listened to the show for any amount of time, Service Scalers has been an awesome partner to us since like 2021, which has just been amazing. But for the folks that haven't heard yet, you guys want to give a quick description of what you guys do?

[Sam Preston]

Go for it even. I want to hear.

[Ethan Wright]

Yeah. Awesome. Service Scalers. We essentially are a home services focused digital marketing company. Our job is ultimately like, match your goals and what you want out of lead generation, whether that's organic paid, the whole nine yards and taking you from like, idea all the way to lead, involving your website, everything like that. So we'll get into a ton of it. But leads at the end of the day is what we care about.

[Sam Preston]

That's what we do, sell leads.

[John Wilson]

At Wilson, we've saved a stupid amount of money by having AI help out with our call center. And the best tool out there that's making that happen is Evoca. So look, you've probably heard the buzz about AI CSRs. They seem to be everywhere. But not all AI CSRs are created equal. And Evoka seems to rise to the top every time. They answer every call in the first ring, they sound just like a real person and they don't take breaks. But here's what makes Evoka really interesting. In the real world, if a caller's getting heated, like they're getting frustrated or annoyed, Evoka knows it, hears the tone, emotion, and hands the call to a real human. So you can still save that call. And this has been huge for us here at Wilson. There's no more churn or people yelling representative into the phone and the back end is tight. It directly integrates into Servicetitan at the gold tier level. That means it can handle reschedules, check, check arrival times and look up customer info. It even helps with capacity planning. It's basically a CSR with perfect memory on top of all that, it consistently makes our team better. We get post call analytics, auto tagging and coaching tools so that no matter who's on shift, we deliver for our customers. If you're curious, go to Evoca AI Avoca OCA AI, book a demo and tell them owned and operated. Sent you. That is. That's awesome. So we have a couple topics up for today and we're going to be riffing. We're here because we're. It's the Breaking5 workshop.

[Ethan Wright]

Yep.

[John Wilson]

So that should be a lot of fun. You know, the bigger the show has gotten, the more. For a while, a lot of our audience was people interested in buying home service companies or like just bought it or like pretty early on, like revenue wise. So, like sub 5 was what we saw a ton of what has been really interesting. And I think it's like we got more active on LinkedIn basically, but much larger and more sophisticated operators have been popping up. So we're going to try to, as we sort of talk through this, we'll be talking about it from, I think, all levels. Like, hey, what's it look like at my level and how I think about stuff? What's it look like if I'm in my first five million bucks and. And anything in between.

[Sam Preston]

Cool.

[John Wilson]

That's a fun game plan. What I think would be interesting, just because I feel like any time in the past five or six years you could say, man, we're at a weird period. It's volatile, it's whatever.

[Ethan Wright]

Yeah.

[John Wilson]

So I don't, I don't want to use those words, but hey, it's kind of weird, right? Like, we've got AI, we've got Trump doing his tariff situation, potentially recession. And I've got to imagine that some of this stuff comes up and what I've always wanted to do is I've wanted to be a spy. So I've wanted to know what are my peers thinking about today? So when they're getting on calls with you guys or some of your active clients, like, what are people thinking about and what are they concerned about as they're approaching 2025?

[Ethan Wright]

Yeah, I think a few things. But I think one of the things you hit on the top AI is huge, I think, on kind of on two sides. One is how do, how do we market in a world where AI is, you know, some people say it's taking all the search and like everyone's just going to have an AI agent and next week doing all of its chores, doing all the chores. For them and everything. So how do you essentially market in a world like that? And then on the other side, it's, how do I as a company utilize AI myself to be more efficient, to make sure that for us, if I do get a lead, am I responding to it quickly? Is it serviced well, how do I keep up with it? How do I, you know, things like that. So, I mean, we could probably spend some time specifically on AI, you know, other things, like always on the top of people's mind is like, you know, especially for paid ads and paid leads is like, costs and kind of how to think about that. You know, not all leads are the same. And then even like two companies can have the same cost of lead, but their return on that is very different because of different things. And so people are constantly asking, how do I get better cost of leads? But how do I actually take advantage of a lead in general so that, um, the more leads that come in, I actually sell more on, um, kind of taking the conversation just from a lead to actually close revenue, which I think is ultimately.

[John Wilson]

Yeah.

[Ethan Wright]

Where a lot of, like, sometimes marketing companies can miss is, oh, hey, we got a click. Someone looked at your website and you're.

[John Wilson]

Like, great, but like, where's the dollar?

[Ethan Wright]

Doesn't do anything for me. Um, and so I think those are a couple of them. But probably AI is probably the number one thing that I'm hearing from our clients. And then also just on calls that.

[Sam Preston]

We'Re taking, one thing you, you mentioned the tariffs. Tariffs is interesting because we get so many people have different opinions on it and the ways they approach it. Like, half the people are like, hey, let's. Let's pull back a little bit on our marketing budget because.

[John Wilson]

So that's been a conversation.

[Sam Preston]

Yeah. I mean, some people are legitimately trying to go find money. They're like, hey, like, this is going to be an issue. I need to create a little bit, you know, less. Like I'm going to spend a little bit less on marketing. The other half of the people are seeing that happening.

[John Wilson]

Yeah.

[Sam Preston]

And going, well, this is the chance to spend more and more. Summer's right around the corner.

[John Wilson]

Yeah.

[Sam Preston]

Like, this is where we spend the most and people are pulling back. Let's go in it. You know, let's double down whether it's.

[Ethan Wright]

Tariffs or not, too. It's like, it's always something.

[John Wilson]

It's always something.

[Ethan Wright]

And so that's always the question. I get. We get all the time is like, it's a slower month now. Like, yeah, should I pull My spending back or. And the other side, like, is. Oh, my gosh, it just a month. Like, this is the time I need to lean in.

[John Wilson]

Yeah.

[Ethan Wright]

Or whatever outside, you know, outside of your control thing is happening. It is funny because it's like, there's usually. There's not one. There's rarely someone in the middle that's like, yeah, let's just keep steady. It's like, either, like, I'm all right, let's push on the gas. Or like, hey, do I need to.

[John Wilson]

Conserve one of the most, like, memorable. I've always been a never turn the marketing off guy.

[Ethan Wright]

Yeah.

[John Wilson]

Now, I do want to preface two things. One, like, we think of lead gen marketing kind of different. Like, we turn it off and on every day.

[Ethan Wright]

Yeah.

[John Wilson]

So, like, when I. When I mean turn it off, I mean, like, modulate the amount that I'm willing to spend over a certain period of time.

[Ethan Wright]

Yeah.

[John Wilson]

Not like if, you know, if I'm full for the next five days, I should modulate my. I should turn my lsas off and give them a break.

[Ethan Wright]

Yes. Yeah.

[John Wilson]

That's important distinction. And I remember my other one, actually.

[Ethan Wright]

That's good.

[John Wilson]

Yeah. That's probably the big one. Anytime we've ever had, like, an opportunity, we are a. Oh, let's double or triple down. So one of the things that we were working on, like, brand last year and getting ready to do this big rollout for tv and we're doing billboards and stuff.

[Ethan Wright]

Yeah.

[John Wilson]

And when we went to go do it, Jesse was trying to figure out, why has our searched volume increased over time? And, like, what does that mean? What were we doing in that time period? Like, why does it. Why does it work? And it's all back to this one decision I made in 2020, when the world shut down in March of 2020 and inventory opened up on radio stations. And I got this. I still have the same pricing today, but I price. I got insane pricing. I got this, like, crazy discount on. On the flight schedule. So we ripped it. And, like, that decision was made when we were a $4 million company, and it still drives our brand today at 31.

[Ethan Wright]

Yeah.

[John Wilson]

And I think any time there's an opportunity where there's blood in the streets, if we're going off of, like, you know, Warren's thing for financials. But anytime there's blood in the streets, like, to me, shutting off or even slowing down isn't the right answer. Maybe, like, shift things around. I think that was my other point. Like, oh, yeah, that was it. The other caveat. Is like if something's not working, totally. You know, figure out another way. But like, reducing marketing budget is dumb. Yeah, like, it is dumb is like a markedly dumb thing. I feel like every book in the world tells you that.

[Ethan Wright]

Well, and it, I mean that's like kind of where you go like, you can learn all the right things and then like it's the behavior. Something punches you in the face and it's like, okay, how do I actually react? And you know. Yeah, it's. Yeah. Be greedy when others are. Feel fearful. Fearful when others are greedy. For sure. Yeah, it is. It is funny too because like, obviously you don't want to double down on something that isn't working, but it's not like, okay, something's not working now we just don't have, you know, a place to spend this dollar. It's how do I best spend my dollar at all times?

[Sam Preston]

Right.

[Ethan Wright]

And yeah, even like the way that we, that we have like structured over at service scalers is like we're never really incentivized to like spend more money. Like we don't, you know, we can get more money.

[John Wilson]

Yeah. Because you guys aren't percentage of like.

[Ethan Wright]

Yeah. So yeah, for like paid Scorpion used.

[John Wilson]

To be like 10 or 12% of ad spend, I think.

[Sam Preston]

I mean, I know average just spend. They're like 35. Yeah.

[Ethan Wright]

So like average is higher for sure.

[John Wilson]

It's insane.

[Ethan Wright]

Yeah. And so, but, but either way it's like, it's nice because I can sit on a call and be like, hey, I think you should keep your spin the same. And like, maybe it changes where you're spending it or what you're investing in, but there's, there's always somewhere that you can make the best use of it. And it is interesting.

[John Wilson]

It's not even keep it the same. It's like other idiots will reduce their spend.

[Ethan Wright]

Supply and demand.

[John Wilson]

Every lead just got cheaper. Like your favorites, your favorite store just went on sale. Water heater leads just went from a hundred dollars to 60. And you want to cut your budget. Like, it makes it. It just makes no sense.

[Ethan Wright]

And there, there are times where, and I think it's obviously it's company by company. So like you have a certain situation that comes out.

[John Wilson]

Be strong, Ethan.

[Ethan Wright]

Well, I'm saying you're wrong. No, I say in terms of cutting marketing spend, but more so like what makes the most sense. Like, yeah, not everyone needs to spend the same amount on paid versus organic and things like that. But it is always like there is always going to be the opportunity There for sure. So that's like. That is really common.

[Sam Preston]

Well, I think that there's actually a really big problem that I see from home service business owners and their connection directly into marketing agencies that they're working with is that there's this big disconnect. So they just see like, hey, I spent five grand total, and this is how many leads I got. What they're not looking at is what. What that cost per lead is and how much they can continue to push that. So let's say you're getting a hundred dollar cost per lead. Right. That's that. Great. Why not keep spending more money in that one service? All right, so you spent five grand, so $100 cost per lead. So you got 50 leads there.

[Ethan Wright]

Yeah.

[Sam Preston]

All right, great. Now spend 10. Yeah, I'll spend 15. Keep pushing that number out until you can't go, like, once you spent 25, and suddenly that cost per lead jump to, you know, 150 or 200. Okay, now reduce that budget. Yeah, but what I see a lot of people, because they don't actually know those numbers. They're not having those conversations with their marketing account manager or whatever. Their. Their person, you know, point of contact is that they go, okay, I've. I'm doing Google Ads. Let me try something else. Facebook ads, too. It's like, you should do that 100%, but you've not maximized what you can get out of Google Ads. So don't try something new yet.

[Ethan Wright]

Yeah, yeah, it's. It's also, you know, I think that goes back to, like, knowing your numbers and syncing with your agency, but at the same time, too, like, do you know what a water heater lead costs you versus a leaky faucet?

[John Wilson]

Yep.

[Ethan Wright]

And what's your strategy behind both of those? Because, like, that's a really. Honestly, like, a common thing that will come in. You know, a new client will come in, we'll go and clean up their ads account or their strategy or whatever. And it's kind of set to spend the same no matter what the lead type is and no matter what the revenue that comes out of it is.

[John Wilson]

Yeah.

[Ethan Wright]

And like, specifically with, like, an ads account, it's also never been, like, those offline conversions are never, like, sent back in. And so you're. There's no feedback loop. Right. So, like, I want you to tell me, how are leads? How are you anecdotally and from your side and what you're tracking? How is lead flow? How's lead quality? What are you actually closing in revenue and then on our side. Cause, you know, I can make your cost per lead look a lot lower if all I went for was low quality, low revenue leads.

[John Wilson]

Well, I remember thinking this when we were, like, small, and I remember seeing H vac replacement leads, and they were like, $200. And, like, it'd be like, H vac service leads were like, 20 bucks, 30 bucks, something like that. But, like, one in seven service jobs turns into a replacement. So we actually have to buy seven leads for $210, which is the same as the 200 install lead. And I was. I was too focused on cost per lead. And I really think. I think we've said this on the show before, but whoever can pay the most for the lead wins. Like, who can pay the most? Like, who's got the best economics? Who's got the highest average ticket, the highest closing rate? And how do you walk confidently into that? If we have business units, we pay $500 a lead for. But our closing rates, 55% and our average tickets, $12,500. So that job at 500 bucks cost me $900.

[Ethan Wright]

Yeah.

[John Wilson]

Which, like, that's 8% of 12,500. So, like, I feel pretty good about that number.

[Ethan Wright]

Yeah. Like.

[John Wilson]

Yeah.

[Ethan Wright]

Yeah.

[John Wilson]

But when we were smaller and just focused on cost per lead.

[Ethan Wright]

Yeah.

[John Wilson]

We were missing the forest through the trees.

[Sam Preston]

Well, the thing is, people don't know those numbers.

[Ethan Wright]

Yeah. Like, we.

[Sam Preston]

We have conversations with owners all the time, and they're like, no idea.

[John Wilson]

Yeah.

[Sam Preston]

The other day I was on a phone call with the guy who's like, hey, I'm not getting good leads through. Through Google Ads right now. I was like, you weren't. I was like, okay, cool. Can I listen to those phone calls?

[Ethan Wright]

Oh, we don't.

[Sam Preston]

We don't record in those phone calls.

[John Wilson]

Yeah.

[Sam Preston]

What do you mean you don't record those phone calls? How do you know those are quality or not? Because, Ethan, you were telling me the other day, you should tell them about the.

[John Wilson]

You should tell me.

[Sam Preston]

Yeah, you should tell John. You should tell me about the.

[Ethan Wright]

One.

[Sam Preston]

That started listening to phone calls and started realizing their CSRs weren't actually selling appointments.

[Ethan Wright]

Yeah. I think that's one where. You know. Yeah. It's almost like marketing companies have made all service businesses only think about, hey, here's what I could get your cost per lead to. Let me get you the lower cost per lead. But this example was great, was we were having a conversation, and I was brought in. It's like, on our end, it's like, hey, it Seems like your account's actually performing really well, but the revenue's not producing like we think it should. Hey, let's listen to these calls together. And it would be something, you know, the CSRs just weren't trained well at the end of the day. And so a good lead would come in, but it would be, hey, can you service us today? Nope. Yeah, instead of, hey, we're full today, here's our next availability. Like, how do I incentivize someone to wait a little bit, like, if they can? Because, I mean, if you could, if your CSR is booking, let's say three out of ten calls, but that could be five, that's massive.

[John Wilson]

That's.

[Ethan Wright]

That's. That could be hundreds of thousands of dollars of revenue at the end of the year. And so there, I mean, it's that. And then, like, how are your. How is your service team actually servicing and converting and upselling? Like, you're saying, like, hey, if one in seven service calls turns into a replacement, well, what if that actually could be like one in five and a half?

[John Wilson]

Yeah.

[Ethan Wright]

And it's just a little training there. So it's like, you know, knowing every step of the funnel. But what's even funny is, like, we have some of our best success stories are actually people that have come in. There's one specifically, I think of where he was. He was really focused on cost per lead. But it actually, his cost per lead wasn't that bad. But he thought, like, that's the only way I can get a better return is if everything else stays the same and I get the cost per lead lower. But we actually went in and his cost per lead with. With us reduced by like 8%. Like, nothing crazy, but when we went and looked at the account, there was like two obvious opportunities. He was converting at such a high clip for. For these higher revenue jobs than like what was industry average. And then pretty much the same conversion as these lower ticket jobs, but they were still being spent on equally. And there was a certain area, like a certain town that he performed really well in and these other ones that just weren't converting, like, it just like whether it was lower income areas or whatever. And so we go, this is like, are we. This is almost too easy. And so we go, hey, higher revenue jobs, the cost per lead is proportionately, you know.

[Sam Preston]

Yeah.

[Ethan Wright]

And then. And then, hey, let's double down on the areas you do well in. And his roas, which is for us, it's like return on ad spend more than double because his revenue more than Doubled. And he actually decreased his ad spend by like $2,000 a month. He was spending 22 grand. He dropped it to 20 grand, but his revenue doubled. Because it's just this holistic view. Right. And then he knows, hey, my CSRs are dialed in. My service guys or sales guys are dialed in. But then also like there's. The marketing arm is actually looking for. Every lead is not created equal and how can I send every dollar to its highest and best use at all times? And that actually takes effort and attention.

[John Wilson]

Yeah, it takes a lot of work.

[Ethan Wright]

And thinking about it, but that can just make a massive difference. And cost per lead wasn't even his problem.

[John Wilson]

Yeah, I feel like as we were talking about the operational enhancements on one hand, like you are right. Like it's. And I'm not, not dogging on it. It's like, yeah, you don't know this. And, and, and, and I'm like just having gone through the whole journey like we're not as big as we're going to be. But like I remember not having call center dialed and I remember my call takers responding that way and I remember how much work it took. And, and I remember. And it's like if you. That's why I get really like obsessed and I mean really obsessed about this just three point system inside our business where like how do we focus on each problem one at a time? Because what you just said, like totally, absolutely true. And as an owner, it is so demoralizing to listen to your calls that you spent so much money on and hear them just like completely butchered. Like it is painful to listen to and I've just had to listen to a lot. So, so we. What I like to focus on when I think about improvements because what you just said is absolutely right. But like you, you got to eat it one bite at a time. So like you've got your lead, you have your sale and you have the install the fulfillment. So like this is the three pillars that we run our business by. I know we've shared it with you guys a lot but like the lead is like this all encompassing. Like there's a bucket of things inside the lead. Yeah, there's. Okay, well what's, what's your brand?

[Ethan Wright]

Yeah.

[John Wilson]

What are your trucks? What are your uniforms? What's your hiring practice? What type of customers do you serve? And like we haven't even talked about spend yet. And like all the way down to included in leads, we consider our call center like that's a part of the lead. So system like, hey, we got the lead and how do we book it? What do we do about the lead? And if it's in text format, what do you do? So it's complicated. So yeah, you focus on the lead and like everything that touches the pre revenue lead or pre appointment lead. Yeah, the second one. Like, okay, what, will your technicians even do a good job when they get out to the house? Maybe, maybe not. And like that's the sale. Yeah, that's the sale piece. Are we talking about how to upsell? Are we talking about options? What's our accountability there? How often are we training? There's a lot going on, like years of things to work on on just that step.

[Ethan Wright]

Yeah.

[John Wilson]

And then the fulfillment, for better or worse. That's, you know, because, because the customers you guys tend to probably work with are the smaller contractors. That's probably the only thing that they're actually good at is that final thing. It's like, well, I can plumb up anything but I, you know, I don't know how to do the other two.

[Sam Preston]

Yeah.

[John Wilson]

So I don't know, like I, I think it's easy to say but just remembering like the last nine years of my life, I'm like, oh my God, it took us a long time to dial in.

[Sam Preston]

Yeah.

[John Wilson]

Feel, I mean right now I feel like we are good.

[Sam Preston]

Yeah.

[John Wilson]

Like we're good. And the only departments that were not good are the departments that we, that we've changed from this like three step process. So we actually have two departments right now where we're like overhauling because they have four steps instead of three and like it breaks at four steps.

[Ethan Wright]

It's the magic number.

[John Wilson]

Yeah, I don't know. Or at least it's how my brain works. FieldPulse is the all in one field management solution for growing home service companies. FieldPulse is designed to simplify your day to day operations by combining everything you need into one platform. It also includes integrations to help you save time, like QuickBooks, desktop and online. It has a bunch of advanced tools and features like a CRM, estimates and invoicing, good, better, best options, maintenance plans, a robust price book and scheduling dispatching. FieldPulse will transform the way that you manage your field team altogether. It will save you time and finance, find revenue that you didn't even know existed. Whether you're a small company that's looking to grow or a larger company Looking to optimize, FieldPulse has the tools that you need to do it. And don't just take our word for it, FieldPulse has earned over 580 glowing reviews with an average rating of 4.8 stars. That's Field EU L S E. Head to their website to learn more. Fieldpulse.com so what.

[Sam Preston]

What does. What's the size then of a company that should be starting to focus on that? For example, like, we. When we look at SEO, we sell SEO. We love SEO. You should absolutely be doing SEO. Don't do it until you're at least 1.5 million. It just doesn't matter.

[John Wilson]

I mean, probably. I mean, SEO is, like, crazy. And I know I'm talking to, like. Yeah, I know I'm talking to, like, SEO guys. But, like, it does work. We threw. We threw this tool up on our website to, like, help capture, like, customers. You can check it out. Go to my website. Check out my website. Better call Wilson. Check out my website. And we put this thing on to, like, sort of walk through a cart, like, experience. And we no paid zero paid to it. Pure organic. And we got, like, 300 hits on it in the first 30 days. And we sold $250,000 of shit off of that in the first 30 days. Pure organic. Like, that's awesome. Freaking crazy. And that's SEO. That's us showing up when we need to show up. Yeah. It is a wild game. We started when we were like, two or three million dollars probably.

[Sam Preston]

Yeah.

[John Wilson]

And just like everything else, like, we just, you know, obviously it came up as, like, a question mark of why are we doing this? But, like, I'm sure for Tommy Mello, it's even more stark, where he's probably driving millions a month.

[Sam Preston]

Yeah.

[John Wilson]

Off of his. Because I'm driving in the 200s now. We're on our third or fourth month of 200 plus, attributable to our organic site. So we're. But Tommy's probably in the millions.

[Ethan Wright]

Yeah.

[John Wilson]

Like a month.

[Ethan Wright]

Well, it kind of goes back to, like, what's the best use of your dollar today? Yeah. Because I think when Sam says, like, hey, you know, organic or SEO is great, but maybe not when you're, like, smaller.

[John Wilson]

That.

[Ethan Wright]

That's not necessarily saying, like, hey, if you had an unlimited budget, of course you're going to.

[John Wilson]

Well, you have to handle. Yeah. Like, you have to handle today, and you have to handle nine months from.

[Ethan Wright]

Exactly. And some companies are in the spot where it's like, I'm so, you know, I have to choose one or the other based on the budget I have.

[John Wilson]

And so you always choose today.

[Ethan Wright]

Yes, exactly. Get the plane off the ground.

[Sam Preston]

Yeah, yeah.

[Ethan Wright]

And then usually it's like, okay, once, once we use the fuel, usually like analogies, paid ads off the ground. And then you start to kind of shift the. To where you're in the air and you can kind of reallocate budget differently.

[John Wilson]

Yeah.

[Ethan Wright]

But of course, organically is the best we think about.

[John Wilson]

You know, the way you could, the way like a framework you could use is what percentage of my budget is paid. Lead versus branded. And for this sake, we're going to consider SEO to be branded. But you know, it's going to drive organic traffic. So that is how we approach it. So our budget, like we actually track it daily. I wish I could pull it up on the screen, but next time. No, okay, we'll do that. That'd be sick. But so we track our spend every day. And It's I think 68 to 73,000 is how much we spend on leads. Just the lead a month. So that's our expected spend. So is that three grand a day or something? And then we add another 40 grand on top for branded spend.

[Ethan Wright]

Yeah.

[John Wilson]

So that's going to be our SEO work. That's going to be our, like TV ads, radio, you know, we're doing billboards. There'll be another 10 on there. So we break it out into those two categories. And that really helped us a lot figure out like, hey, we need this lead for today. We literally need it.

[Ethan Wright]

Yeah.

[John Wilson]

But in nine months from now, how do we grow the pie?

[Sam Preston]

Yes.

[John Wilson]

And that's this other section of the budget.

[Ethan Wright]

Yeah, we'll usually like, got it. Similar framework when I talk with a lot of people. But it's, it's almost where are you capturing demand on one side, where it is today. And then like not. I don't know if created demands the.

[John Wilson]

Right, the right word, but like it is.

[Ethan Wright]

You're.

[John Wilson]

You're hope you're generating demand.

[Ethan Wright]

Exactly. So like, when someone sees your billboard, you'd get really lucky if the moment that they saw your billboard, their wife called and said, hey, our water heater went out.

[Sam Preston]

Right.

[Ethan Wright]

But if someone's in the shower and it turns ice cold, they're going to search. They're presenting their demand there. Right. And so that SEO is kind like depending on what you're thinking about it as can be kind of in both. Because if someone's like 24. 7 plumber, if you can show up organically for that, that's still like you're capturing the demand where it is. And then what's really cool is like you can do that in a lot of ways. It can be your website, but it can also, you know, your Google business profile. Like, yeah, I know we've seen like a ton of your calls and leads. Like, we'll drive from that too.

[John Wilson]

Yeah. GMB is crazy.

[Ethan Wright]

Yeah. And crazy. And it's another thing where again, usually on I'm talking to a small business, I say, hey, your dollars today should probably go towards leads for today.

[John Wilson]

Yeah.

[Ethan Wright]

But the things that you can do that don't necessarily scale are how you can actually grow your organic right now. Right. So it's like how do you inst. Incentivize your team to, to get reviews? Because you can grow your, your gmb. There's a lot you can do other than this, but you can't grow it at all if you're not constantly getting good reviews on it.

[John Wilson]

Right.

[Ethan Wright]

And so those can come from, hey, it started as a paid lead that then is also contributing to my organic. And so it's like, you know, like you said, like, hey, the, the smaller companies we might work with, like, yeah, what they're great at is fulfillment. Like they do a great job.

[John Wilson]

Sure. They like, I mean they're plumbers, they're electricians. Yeah.

[Ethan Wright]

And so, and so they are doing five star worthy work.

[John Wilson]

Yeah.

[Ethan Wright]

But they're not always thinking to actually go and make the ask for that review. And that's one of the simplest things you can do.

[John Wilson]

But I always tell it's so overpowered. Like the larger, the larger companies that I talk to, it's almost like I feel stupid half the time when I talk to these because like it's so clear how much I overcomplicate stuff. But I was talking with Tommy Mello in January and like one of his big strategic goals, like, I was like, hey, we were just talking about our goals for the year and one of his like 3 was to add. It was like 40 more google my business profiles.

[Ethan Wright]

Yeah.

[John Wilson]

And like that was, that was the goal and that was like an organizational moving goal. And he has a team built around adding GMBs and like that is so important to what they're trying to do and it is literally something that anyone can do. Now granted, we can't all add 60 and we don't all have a team but like to just. Yeah, how are we thinking about GMBs? Is it optimized? I have this, I have a friend who's like, he, I get a lot of inspiration from him and how he thinks about GmbH and even like the words inside your responses for reviews matter. For local SEO.

[Sam Preston]

That's what we do.

[John Wilson]

Yeah. The product descriptions, updates, like crazy.

[Ethan Wright]

Everything.

[John Wilson]

Yeah. Like there's an infinite number of things that you could work on just on your gmb. It is wild.

[Ethan Wright]

Well, and that's usually like there's two things I tell people that are earlier on too. One is like the best money you can spend is whatever it takes to get your team to get more reviews, to gather more reviews. So if that's like, hey, it's a. I spend 500 bucks a month or 300 bucks a month on a reward for some internal competition we have for the most reviews.

[John Wilson]

Oh, man.

[Ethan Wright]

Like if you get, you know, 50 reviews out of that, how. What three bucks?

[John Wilson]

We're literally doing a Rolex right now.

[Ethan Wright]

There you go.

[John Wilson]

I'm literally.

[Sam Preston]

How do I sign up for this?

[John Wilson]

So we have two different goals to like on the sales side because, because our whole first off, I believe so firmly in the lead sale fulfillment that we actually reorg last year. And that is the structure of our org chart in there. Yeah, that's the, that's the directors of each vertical. So like on the sale and fulfillment side, we created a quarter tube program where like, hey, all we care about for the next 90 days is reviews. The winner from this team gets a Rolex. That's the sales team, the winner. And. But like the install guys, I love plumbers. Like, they could not give a fuck about this Rolex. They're like, dude, what the fuck am I going to get? Like, dirt on it.

[Ethan Wright]

Yeah.

[John Wilson]

So we were like. So we created a separate price for them and it's like a $5,000 Milwaukee tool shopping spend.

[Ethan Wright]

I was going to say.

[John Wilson]

Let's go.

[Ethan Wright]

I was going to say like a grill. A smoker.

[John Wilson]

Oh, yes. Smoker, second price. Yeah. Smoker, second price.

[Sam Preston]

That's amazing.

[John Wilson]

But no, I totally agree. Like, we literally put a Rolex on the line.

[Ethan Wright]

Well, and, and think however many reviews you. You guys generate, like let's say the numbers like you're gonna be thousands and you're gonna end up spending like three bucks for five star review. If I was a company that could somehow sell you five star reviews, you would empty your pockets for that.

[John Wilson]

Right.

[Ethan Wright]

So I always tell people like that that is illegal. Yes.

[John Wilson]

Don't do it.

[Ethan Wright]

Yeah.

[John Wilson]

Keyword.

[Ethan Wright]

If. But, but then secondly, like what? Yeah, best money you can spend is on those, is on getting your team to care about reviews. And then two is like, there's so much you can do on your profile. Like you said, it's crazy. And that's like something that we do. There's. But I always tell people like I show how like updates Q and A keywords in your review responses. I mean it's money. If you can get a, somehow a customer to leave keywords or like pictures.

[John Wilson]

Yeah. Can you get them to leave a picture?

[Ethan Wright]

Yeah.

[John Wilson]

That apparently counts as like the old LSA gold reviews.

[Ethan Wright]

Yeah.

[John Wilson]

You have pictures.

[Ethan Wright]

So it's just like all these things that it's like if you really need to be like lean and mean, like go do these things. Now we, we love to help people with their, with their gbps because there's some other stuff on the back end and like, you know, whatever you can do. But really a lot of what it comes down to with Google is like hey, they built out all these features on their profiles and like the Q and A section like I don't care about it. You don't care.

[John Wilson]

Like you just gotta do it.

[Ethan Wright]

Your consumers don't care about it. But Google paid some engineer way too much money to build it. So they care. Yeah, yeah. Use it and you play. Exactly.

[John Wilson]

And, and so it's like they suggest it, do what you do it.

[Ethan Wright]

Which is funny because even in like ads accounts you'll see like they will tell you if something is like good or bad or not. And so many times you do these PPC audits and I'm like here, I'm here to tell you all the things that like Google isn't telling you. But it's kind of crazy that when you look in this account, everything says it, it says you're doing is bad and like nothing's been changed yet.

[John Wilson]

Yeah, well, I think people are convinced it's wrong but like they have the data. You know, we, we started getting, we've been guys, we're going on, we're on YouTube now. I know we're pushing really hard on this. And Google like offers us up like recommended topics that people like, hey, you showed up in this amount of feeds and the people that are, you're showing up for in those feeds also search something like this.

[Ethan Wright]

Yeah.

[John Wilson]

So we got, oh yeah, a lot of air pros questions. How to grow a plumbing company was one which was like a uniquely well suited topic.

[Ethan Wright]

Yeah.

[John Wilson]

But it was interesting. So what we started doing was like, hey, I mean Google knows like they have data. So the moment we get those suggestions, like yesterday we ripped one in like 20 minutes from John telling me we had this suggestion because like, hey, if they're saying it like you should, let's just do it right well, and do it.

[Ethan Wright]

And it's interesting too because I think like on this side of the fence there's certain perspectives or thoughts about any search engine. Like let's use specifically Google. But what you have to think about with Google is like they also are thinking of the consumer. And so an example is like you get in your ads account, you get rated on your ad relevance and that is a factor in if you will show up. Like even sometimes the cost you what it will cost you to actually get a click. And so if Google sees that you're running you know, a very general plumbing ad, but someone specifically is looking for like 24. 7 drain repair and you don't make mention of 24. 7 or drain.

[John Wilson]

Yeah.

[Ethan Wright]

Google's going to say this is an average rated ad because they want the most mid. Exactly. Literally you guys are mid.

[John Wilson]

Pretty mid.

[Ethan Wright]

And so the, and so they want to serve their consumer by serving them the most relevant ad. Same with like your landing pages. Google coming back, Google will tell you, yeah, is your landing page relevant? Like they're not going to let you, they're going to send consumers to your site if you're running violin lesson ads to a, you know, a Safari, whatever experience website. Like those are totally separate things and Google doesn't want to waste their consumer time. So so similar to like filling out your Q and A section and things like that on your gbp. People may say like, oh, that is a waste of time. Like who actually uses that? Why would it be a ranking factor? Or like the Google suggested things. Why would I do products?

[John Wilson]

Yeah, or products is kind of a weird one. But like you've got all of that is things that show up and it's.

[Ethan Wright]

Because Google ultimately saying, okay, how much information are you giving to a consumer? How helpful do you seem, how relevant, how authoritative on these things? Not just because they're like we're Google, so like dance the way we want to, but ultimately they want to retain as many consumers as they can in their search ecosystem.

[John Wilson]

Yeah.

[Ethan Wright]

And so they're trying to force you to play the game that they think will keep people with them.

[Sam Preston]

Yes, yes, yes. And, but, and, but, and but Google is not your friend. They are trying to spend your money. So there are things that it will suggest you do that will screw you. I've been on so many of these calls with these Google reps and they're like, hey, we need to turn all these, these keywords to broad. And I'm like, yeah, yeah, yeah, no, I'm not going to show up for Just anything Google thinks I should show up for. So.

[Ethan Wright]

Especially when it's a word you already know.

[John Wilson]

Yeah.

[Ethan Wright]

Performing well. You're like, I don't need to add to it.

[Sam Preston]

So you're absolutely right. Google is going to have its ratings and some of those things are very key. Like ad relevance is super key. You should always look that your, your, your keyword copy. Its rating is so good on that. But there are certain things in your account it's going to say we want to see this. And if you do that you will be literally just lighting money on.

[Ethan Wright]

Yeah, a lot of times it is for the things that it's like, will this affect how much I actually spend? Yes or no. Okay, then maybe I'm. Maybe it's not something as much.

[John Wilson]

That's funny.

[Sam Preston]

So it's both. It's. And that's why Google Ads is more complicated than something like lsa. Lsa. Get in there and turn it on. Optimize it for sure. But like it is not nearly the skill set required for ads. Yeah, for sure.

[John Wilson]

I want to, I want to hear a little bit about what you guys are doing internally and what you're thinking about externally on AI. I know you brought on automation team.

[Ethan Wright]

I'm.

[John Wilson]

I'm just interested right now in people who are doing automations internally. Yeah, like we've, we've done this.

[Ethan Wright]

Have.

[John Wilson]

Are you guys using like replit or lovable or N8N. How much NAN or like how am I supposed to pronounce that?

[Sam Preston]

Nan? No, I don't know. Nan I think is what it is.

[John Wilson]

Okay.

[Ethan Wright]

Yes.

[Sam Preston]

So if you don't know, Nan is a kind of like a Zapier or Make.com automations platform. It's a little bit more complex than those. So you could do a little bit more as far as like AI agents and so which again I don't, I don't know how much, how much nerding I'm about to start doing right now.

[John Wilson]

You do it. I will at this conference. I'll like, I'll preload you at this conference I was at. I hosted was a lot of fun. It was so cool. I have ever. Huge. The hosts were amazing. Just incredible. Very handsome. Great comb over. One of them was short. So, so we had this one of our, one of our speakers and it's Holdco Conf. So buying businesses, incubating businesses, like how to think about that, how to approach it. And one of our speakers is Brian Rand. And Brian is just like an awesome speaker. He's a lot of fun to Listen to fun anecdote like we're giving away Rolexes for our reviews contest and his sales manager for one of his companies is the third largest purchaser of G wagons in the U.S. no way. And they give their G wagons. He buys 13 a quarter and he gives 13 g wagons every 90 days to his highest performing sales reps. That's amazing. So wrong industry don't get any ideas either. Absolutely wild. A lot of fun to listen to. But one of the things he's focused on right now is AI and how it can be used for like overhead arbitrage.

[Sam Preston]

Yes.

[John Wilson]

So if I'm wanting to buy a plumbing company in Georgia or even like in Ohio, whatever. If I want to buy a plumbing company two hours away, how can I take their expected overhead and instead of it being 35 to 40%, how can I make it 25 to 30 and like what's the arbitrage lift that I can get on that? So like the way that we're approaching that, we've talked a ton on the show about like we have like we, we are now in a remote first hiring mentality where, which is still shockingly innovative for the industry. But if we're looking at hiring like we're looking overseas first and now we're adding in automations on top of that. So like how are we reducing lift? How are we like take finding friction points in the business and reducing those friction points. Yeah. So yeah. How are you guys thinking about this?

[Sam Preston]

So when I think of AI, I mean we literally just hired a team for this. Right. This is a massive opportunity for us specifically in the marketing industry because we're 100% remote, everything is digital for us. It's not like we have to go, you know, plumbing a house. Right. We are missing out. I actually have done it once but never again. So when I look at this from, from our standpoint, one is I want to increase the results that we get for our clients and two is I want to increase the capacity of my team.

[John Wilson]

Yeah.

[Sam Preston]

Right. So if I can get because you know our game is all about how do we keep people for as long as possible. The best way you can do that is get them good results.

[John Wilson]

Yeah.

[Sam Preston]

And so what I'm looking at it to do is have very specific AI agents that live inside of our clients accounts and so looking for one specific thing. So where do we see keywords that have been, have enough data behind it that aren't converting to alert us Now I want one that is basically just sitting in there that's like hey, if there's any kind of big time movement ad, stop spending something like that, like just alerting us at any time of, you know, hey, something's looking off on this account, let us know. Our team's in there three times a week anyways, at a minimum. But if you have somebody that's always in there that can catch problems because before they become real problems, things as simple as, like its job is to find, you know, you're talking about landing pages, always connecting ad copy to landing pages and always just making sure that, hey, everything is good and when it's not alerting us. Yeah. We're looking at it from a capacity of being able to audit our clients websites. You know, I want to at some point get to a place where the kickoff meeting that we have with our clients, we have so much already built out because we're able to automate, like, hey, this is our clients, you know, local area. These are their top three to five biggest competitors in the area. This is what they're doing wrong. This is the opportunity gap that you're not even taking advantage of. So Ethan goes to the sales meeting and has and closes that deal because we're able to show the client or the prospect at this point, look at all this opportunity that.

[John Wilson]

Yeah.

[Sam Preston]

That you don't even know about. And they're like, wow, Ethan, how did you get all this done?

[John Wilson]

So it was like opportunity arbitrage.

[Sam Preston]

Yeah. And then the second thing is the capacity. Right. Like, how can we get more done? Right. You know, we're, we're in business to make money, so we want to be profitable as possible. And so how can we take one person, spend a lot of money on someone that's super talented at strategy, and then take all these other jobs that. That would be a part of their job.

[John Wilson]

Yeah.

[Sam Preston]

And automate it.

[John Wilson]

Yeah.

[Sam Preston]

Right. Like, there's no reason that we should have an account manager writing up a report on a weekly basis. Yeah, that should be all the data that's aggregated from the CRM to the ads account to their overall marketing goals pulled in for them to review it and go, yeah, this makes sense. Okay, let's send that off versus them having to type something out.

[John Wilson]

Yeah.

[Sam Preston]

You know, it would just save hours. So like that's the type of stuff that we're trying to go like, hey, how do we automate this so that we can get better results at a higher capacity?

[John Wilson]

Yeah, I think we had our quarterly this morning and it was quarter two. And one of the pain points that came up was capacity of our leaders. And it was interesting how much lift is going into reporting and analytics every day, week, month. And I think that only accelerates the bigger you get because you need, you just need a lot of information to run this type of business. Like there's 50 sales reps. We have to know what's going on with those 50 sales reps. We get hundreds of leads a day. We have to know what's going on with all of these leads. So it is interesting. Yeah, that's one of our approaches too is how do we gain leverage for our existing team and how to instead of remote first. So the way that I've compared this is you can hire American, you can hire remote, or you can put in a software in place alternatively now some type of AI solution. But yeah, the automation. Yeah, we see a big opportunity in it, but we still feel like we are fumbling in the dark. Yeah, we got our first app out. Yeah. Made internally and functioning like it went live Monday.

[Ethan Wright]

Nice.

[John Wilson]

Very cool. That's amazing. And it is, it's a response time app. So for HR accounting, fleet marketing and accounting, it dashboards our time to respond and our time to resolve issues. Which is apparently something that we needed because once you start like growing, you need to track it more. But it was, yeah, it's cool. But we're trying to figure out what to do next to get the highest lift.

[Ethan Wright]

I think too, it's just going to become another investment column on the spreadsheet and where we even had the conversation because we were like had a few different positions we wanted to hire for.

[John Wilson]

Yeah.

[Ethan Wright]

And we were kind of in between two and one of them had to do with automation and it was kind of like, well, if we hire the automation one, do we need the other one? Do we need the other one? And also it will probably free up enough money to hire that person faster than, than vice versa. Right. And so it's like.

[John Wilson]

Yeah.

[Ethan Wright]

And what's cool too is what we're finding is a lot of the things that ultimately make our team productive are also the things that produce better results for our clients. And so like nothing like a lot of these for us solutions kind of just go hand in hand.

[John Wilson]

Yeah. I mean the more like friction you guys reduce, the more time you can literally spend doing the important human only parts. Yeah. And that's how we see it too. It's hey, can I remove this four hours a week of reporting off your plate? And that four hours a week can go to like working with your team.

[Sam Preston]

Yeah.

[John Wilson]

Which that is way more Frigging important than, you know, the four hours a week to look at it for 20 minutes.

[Ethan Wright]

But, but I even think like, you know, someone might look in like a digital marketing, like online world and be like, well, of course you all are doing a bunch of. I just think in. And I'm sure like you're already doing this, but I think in like three, five years, it's going to be like every plumber or every trades business or service business is going to have some sort of literal, I think like a person on their team that it's just like they are the, whatever it's called, AI automations, agents side. Because I think both, there's going to be internal things that can be fixed and helped and then also so much is going to be changed externally that it's like, how do, how do, how do we fit our business into this different ecosystem that is, that is changing and adapting? And so it's just like one of those things where I think it can seem like, oh, it's for another industry or that's really intimidating because that's not really how our industry works. But like, it's really not, as some things.

[John Wilson]

I mean, it is a bit intimidating. I mean, coming from my perspective, we felt pretty out of our depth when doing it, but. And we still do. Like, we only have one person on the team. We're getting ready to bring on our second. You guys have two. Yeah, we're getting ready to bring on our second and the first one was like a custom dev and now we're getting ready to bring on an AI specialist to help support them. But it is, it does, it's weird. I mean, it's a weird thing and it's hard to look at sections of your business, at least because I'm not used to it. I'm sure I will get better at it with time, but it's hard to look at sections of your business if you don't come from a background that has anything to do with tech and say, I can automate that task management for us. If you look at it, it's simple. It's a dashboard that shows how many tasks are open. It's not that complicated. We could probably buy something like it off Monday.com or something, but getting all the APIs to work was more complicated. But yeah, I think it is, it's unusual.

[Ethan Wright]

It is, yeah.

[John Wilson]

I feel like in the next couple years though, it'll be very normal. It'll. It'll be normal and I think you can do it small. Like I, I think companies sub $5 million. You could figure out a way to bring on somebody part time or you could do something.

[Ethan Wright]

Yeah.

[John Wilson]

To help facilitate.

[Sam Preston]

I wouldn't. Yeah. If anybody wants to dip their toes in it, just go to upwork.

[John Wilson]

Yeah.

[Ethan Wright]

Right.

[Sam Preston]

You can find somebody that's, you know, that does zapier or make.com for 50 to $100 an hour that you just bring in and go, hey, I want you to audit what we have and tell us what you would automate. Right. Like having that small conversation. I was the one that really pushed it internally.

[John Wilson]

I feel like someone at the top of the org chart has to push it.

[Sam Preston]

Yeah.

[John Wilson]

Like almost every leader that I know is trying to figure out they're, they're personally driving the bus on it or they're trying to figure out where do I even begin.

[Sam Preston]

Yeah.

[John Wilson]

But every, it's on there. It's on our, everyone's brain and I think it has to come from the top. Otherwise it, you know, it doesn't seem to work as well.

[Sam Preston]

Yeah. So when I, when I went and pushed it, my first thing was, guys, this is going to increase capacity and increase, increase profitability. Here are the few things that I think we could, you know, immediately see.

[John Wilson]

Yeah.

[Sam Preston]

Three to five grand a month of savings. Yeah. In the next, you know, 30 to 90 days with just automating these things. So like if you're trying to figure out like, does this even work for my business? Is this a good investment? Go see if you can, like, hey, if I didn't have to have somebody do this, yeah. I could free up 20 hours a week of their time and that would save me $500 a week or a thousand dollars a week. Suddenly. Okay, that's four grand.

[John Wilson]

Yeah. Great.

[Sam Preston]

Right now you've already, you know, because I think you can go find offshore talent to do this. Yeah, I know you can't because I hired that person.

[John Wilson]

Yeah, we did. Ours is in Brazil.

[Sam Preston]

Ours is in Colombia.

[John Wilson]

Yeah.

[Sam Preston]

And so, yeah, you can. Absolutely. And it wasn't just one person. It was quite a few people we had conversations with. I will say the one thing that is tricky is that not everybody knows AI to that depth.

[John Wilson]

That part has been hard. Yeah, we, we, our custom Dev. I mean, Dev's been around for a long time.

[Sam Preston]

Yeah.

[John Wilson]

But it was much harder to. Anyone can say they're an AI expert and who's going to call them out?

[Sam Preston]

I mean everyone has the most same amount of experience. Two years.

[John Wilson]

Yeah, yeah, yeah, exactly. Yeah, exactly. Like, yeah, we're all, yeah, we all have Exactly. Two years. That's funny. But, yeah, no one's going to call them out. Yeah. Because no one really knows what expert is right now.

[Sam Preston]

Yeah.

[John Wilson]

But when. When we went to go hire the, like, AI specialist to add to that team. Everyone's an AI on, On any of these, like, remote hiring. Everyone's an AI specialist. And it means that they've used chat GBG once. Yeah, yeah. So that has been challenging. How. How did, like, what were the metrics that you used to find yours?

[Sam Preston]

So it was off of ransom, LinkedIn ads lat am. Because just, like, there's a lot of great talent there. And I just called it an AI specialist or AI wizard or something like that. No, AI and automations wizard is my.

[John Wilson]

Title as two people.

[Sam Preston]

Yeah, Two different people. Yeah.

[John Wilson]

Who reports to who?

[Sam Preston]

Everyone reports to me.

[John Wilson]

So they're. They're flat.

[Sam Preston]

Yeah, right now they're flat.

[Ethan Wright]

They.

[Sam Preston]

So they report to, actually my director of fulfillment, because ultimately she's in charge of capacity and ops, which is where they're working underneath.

[Ethan Wright]

We.

[Sam Preston]

We do the same thing. We do leads, sales, ops. We actually have our. Our fourth bucket is hiring or team management.

[John Wilson]

Like, people, I want to say something that makes me, if not sound like a boomer, definitely feel like a boomer.

[Sam Preston]

Say it.

[John Wilson]

Just the amount of people over my career that I have heard say, oh, we're building custom software for that. I've created a lot of content that's probably pretty easy to find on my, like, Twitter or whatever. I'm just like, that's the stupidest idea I've ever heard.

[Ethan Wright]

But.

[John Wilson]

But now when we're looking at team leadership, because I got a lot going on, I don't have. I have. I can give the resources to get this started, but someone needs to be like the. The how do I find friction person. They have to. And for us, it's physical because we're physically. You guys are remote and dispersed, but we're physically located somewhere. So someone has to walk around, I think, and, like, feel and touch different sections of the business, work in each department, find the friction, and then lead a team to develop solutions for that. And that's what makes me feel like a boomer, is I'm. I'm this. I'm like the CEO that has to hire a young whippersnapper to lead AI into his fucking business. And I'm like, God damn it, how did I get to be this age? But, yeah, it does. It does make me feel very old.

[Sam Preston]

Yeah.

[John Wilson]

Yeah.

[Sam Preston]

I mean, well, it's also moving faster than Anything else has ever moved.

[John Wilson]

Yeah, it's, it's fast. And the opportunities out there, I mean all the, all the apps to support it have been really fun.

[Ethan Wright]

Yeah.

[Sam Preston]

Yeah.

[John Wilson]

But we're just making almost no use. Like the first year of AI we spent, we. I mean we're. I think there's layers.

[Sam Preston]

Yeah.

[John Wilson]

Maybe there's three right now. I'm sure there'll be more. But the first layer is like, are you using AI at all?

[Sam Preston]

Yeah.

[John Wilson]

The second layer is, are you custom developing solutions to solve your problem?

[Sam Preston]

Yeah.

[John Wilson]

And the third layer is, are you replacing people?

[Sam Preston]

Yeah.

[John Wilson]

And we are def. We've been on layer one for a while. Like we were implemented in every team at least eight months ago, maybe more like even field team. We are, we've been using it in call center like a lot to support our call functions. Haven't really replaced people with it, but just now the custom part. So on one hand I feel like we're barely scratching the surface of AI and on the other we're using more AI in our business than most other plumbing companies that I know.

[Sam Preston]

Yeah.

[John Wilson]

So it does feel kind of weird.

[Ethan Wright]

But it's one of those things where it's like we're talking and so we feel like everyone knows what AI is and like has tried all the different models and whatever. And then for me it's like I go talk to my dad and he's like, what? Like, yeah, what do you mean? And so it's like the fact that people are having the conversation or thinking about it in general is good. And then I think even to go back to the. And you know, it being kind of an intimidating piece. And I think John, like, hey, how, how do you vet if someone is actually good at it or not? Like that can be a lot especially for a much smaller company. But I, what I'm also seeing is there's like the custom company by company use case where it's like this is very specifically answering a very specific problem for us. But I'm also seeing that like a lot of the AI today acts kind of like a software would anyway. Like a very efficient and you know, forward thinking software. And a lot. There's a lot of these solutions that are maybe more general. Right. They're not a perfect. Like only Wilson had this issue.

[John Wilson]

Yeah.

[Ethan Wright]

But if you're a smaller plumber, I just. Or smaller whoever, I don't know how to vet this or whatever. Like there's so many tools now that are coming out that are, that are more like, hey, this is kind of A one size fits all, it will fit you and it's making it more approachable, more efficient, more cost effective. And so at the very least, like keeping up with what's happening. Not saying you have to go code your own app every day or anything like that, but just.

[John Wilson]

Well, I'd be like rethinking potential solutions. Like the things that made sense two years ago suddenly don't make sense. You know, we're, we're looking at, I'll give an example in accounting, but we're getting ready to switch to an erp, like a more robust accounting suite. And the natural progression in our industry is QuickBooks and Sage Intacct. Sage Intacct is a really strong integration with Service lane. Suddenly there are much better, cheaper, faster, smoother options that are AI driven. And that is a new thing. So just be really thinking about on top of keeping up. But are there other solutions that may not yet be the common knowledge thing? Yeah, because Sage intact is 50 grand to start.

[Sam Preston]

Yeah.

[John Wilson]

And then 50 grand a year.

[Ethan Wright]

A lot of these incumbent enterprise software.

[John Wilson]

Yeah. This is not a great time to be there. Yes. But yeah, this new one and it takes. So I'm going to run because this is crazy. It takes six months to onboard on the Sage Intact or NetSuite. You can't test it, so you don't know if it's going to work for you. It costs 50 grand to an outside party. Like it's a spread. Maybe it's 30 grand, maybe it's 80, but ours was 50, so it cost us 50 grand to integrate over six months. And it was actually going to be such a lift for my team that my controller was going to have to hire an assistant controller. So 80 to $100,000 to support the accounting department while he transitioned the RPS and then it's 50 grand a year and you still don't know if it's going to work or like, did they do a good job integrating? It could be a total clusterfuck. So companies spend hundreds of thousands of dollars migrating to these antiquated solutions. We found a solution that's AI driven. They can move us from QuickBooks in five days. Five fucking days. And it's half of the price annually of Sage intacct. And there's no integration fee because they've designed the workflow and tech stack to do it in five days. So there's no cost. It just. They just do it.

[Sam Preston]

Hey John, I've got this great business idea.

[John Wilson]

It's crazy. It's crazy. So sudden.

[Ethan Wright]

Anything that Takes six months to implement. That's the business idea.

[John Wilson]

Six months and fifty grand. It's. Yeah, no, it's so. It's totally crazy. So. So, like we were getting ready to like, cut our $50,000 check in Q3, like we were going to begin integration and now we're like deciding, hey, do we want to integrate this week or next week? Oh, no, I got a couple things going on this week.

[Ethan Wright]

What's great is you didn't have to. We didn't try and play around with.

[John Wilson]

Relet and yeah, we didn't have to do anything. Like, there's just solutions that are starting to come out that are just simply better.

[Ethan Wright]

Cheaper, better. Faster, more efficient.

[John Wilson]

Yeah, yeah.

[Ethan Wright]

And so that, that's where I'm like, you don't even have to be, you know, the AI wizard or, or know how to point one out, but you, you will see cost reduction, efficiency improvements, things like that. And so it really is just like, where is there friction in my business? Whether that's sales process or excess cost. Exactly.

[John Wilson]

Like service titan. I hope somebody comes up with a better solution. And like, they probably can, like just really AI driven. Because anyone in the industry that has a massive fucking budget is spending money on like, that cost me $28,000 a month. I would move.

[Sam Preston]

Yeah.

[John Wilson]

Find me a better solution. I would move, like, what's the. Your margins? My opportunity. The AI is your opex is my opportunity. So there's no opex to fucking develop a software anymore.

[Ethan Wright]

Exactly. And so it's just like friction in my business.

[John Wilson]

Yeah.

[Ethan Wright]

Like what, what, what has cost me outlandishly and can I either automate part of it or find someone who has figured that out? Like, I think that's because then like, ultimately, like, yeah, drives your profitability, but then also, like gives you an edge on what you're able to price at.

[John Wilson]

Oh, yeah.

[Ethan Wright]

And so you're winning more.

[John Wilson]

Yeah.

[Ethan Wright]

And ultimately that's going to drive your total, you know.

[John Wilson]

Yeah. So someone's going to come up with a service titan killer. I mean, it's just too much money.

[Ethan Wright]

Yeah. Well, or. Or it's going to force. Yeah. Or it's going to force people to rethink how they price and how they deliver and all that. Like, either way, it's going to be a net win for.

[John Wilson]

It'll. Yeah.

[Ethan Wright]

Consumers or users.

[Sam Preston]

I hope they're going to be one service titan killer.

[Ethan Wright]

I think it'll be lots.

[Sam Preston]

Yeah. The way I see is AI is going to become a wrapper for marketing. Yeah. And then basically you're going to have instead of like one or two services softwares, you're going to have, you know, my stomach 10 growling.

[John Wilson]

Yeah, you're hungry. No, I had sushi but like I feel like Ethan's just like listening to my stomach just like, you better hope these mics aren't.

[Ethan Wright]

Aren't that good.

[John Wilson]

Yeah, thankfully. Thankfully they're so good that they block all this out. I believe I was gonna say.

[Sam Preston]

Yeah, that's amazing.

[John Wilson]

That mic won't pick up me talking.

[Ethan Wright]

That's so wild.

[Sam Preston]

Yeah, that's wild. Well, one of the, the problems that I'm actively trying to solve in our business is speed of feedback loop. So how quickly can our clients results get back to the marketing team?

[John Wilson]

Dude, that's wildly important.

[Sam Preston]

Yes, it's so important.

[John Wilson]

Yeah.

[Ethan Wright]

So, and I think good.

[John Wilson]

I just my feedback as a contractor, I actually didn't realize how important that was until we were in our mid 20 millions.

[Sam Preston]

Yeah.

[John Wilson]

So my suspicion is most people don't.

[Ethan Wright]

Yeah.

[John Wilson]

But like, hey, this stuff doesn't come out of the box working. Like Angie's List, ppc, even lsa. Like nothing just is going to fucking work.

[Sam Preston]

Yeah.

[John Wilson]

Like you have to give data back in order to understand what is working. Back to your story of hey, we found this zip code with this one service that delivered all of our roas that takes feedback and no one, not.

[Sam Preston]

Your internal marketing team, not your sales team will know that intuitively. So you have to consistently give good feedback on things. And so we're looking on like how do we build an AI agent that lives inside our clients individual CRM that just always is giving us feedback and pulling in data for them to CRM and from their Google Ads and for their LSA and then wrapping it into something tangible for us to be able to use.

[John Wilson]

Yeah.

[Sam Preston]

Which leads me to. I think we might. You know, I don't want to speak this or maybe I shouldn't say this on a podcast, but like I could see us getting quickly into, hey, we actually create AI agents for plumbing businesses and here's like 10 do you need any one of these tens offer? So anybody has any ideas or problems they want solved, you should reach out.

[John Wilson]

There's that one business that does that.

[Sam Preston]

Which one?

[John Wilson]

Yeah, there's probably a lot, but there's one that has like 10 little. Yeah, I'm not naming them.

[Ethan Wright]

Yeah.

[John Wilson]

I've caught myself like five times this episode. Like I can't name them. Can't name them. I'm really working on that. You know, would you say no free promo no, for Celsius. Celsius. We have an official studio guys now but yeah, there's a business we started using. I don't think it works very well. It'll probably get better in time but it is these. It's the earliest version of functional AI agents that we've seen and there's 8 to 10 and it's very specific roles. So this is a marketing bot. This is a. And I think all they do is respond to emails. It's not that robust. This is a sales bot which I think is like clay wrapped. It, you know, just does outbound. It's not very good but it's early stages of what you're talking about and it doesn't cost a lot of money. I feel like it's like $200 or something.

[Sam Preston]

Yeah.

[John Wilson]

So you know, I don't know.

[Sam Preston]

Yeah, there's a lot of different ways.

[John Wilson]

Also barely works so who knows if it's good, good spend.

[Sam Preston]

I also don't really want to get into that game so if there are other options I'd rather go that direction.

[Ethan Wright]

Yeah, we just have an appointed people like here, this is great. Come go use this one.

[Sam Preston]

Yeah, I'd rather do that. But also it's. Sometimes it is. I mean that's why we got into. We did. We didn't want to get into the website game. We actually tried to avoid that and.

[Ethan Wright]

Just do our services.

[John Wilson]

I mean the landing page is just so important.

[Sam Preston]

That's where we came into problems is we'd go, hey, we're going to run ads to your page here.

[John Wilson]

Go, go, go.

[Sam Preston]

Create landing pages. And they're like, yeah, but we don't want to spend 30 grand. It's like, why are you spending 30 grand on a website? It's like, well that's what the agency quoted us. And like no, yeah, don't do that. You don't need, you don't need a new website. You need a landing page.

[John Wilson]

Yeah, yeah.

[Ethan Wright]

It is actually kind of wild how many people you'll talk to spend a significant amount of money on paper, click.

[John Wilson]

And send them to their homepage or something.

[Ethan Wright]

They have a, a service page with all of their services on it.

[John Wilson]

Yeah.

[Ethan Wright]

And it doesn't work and it doesn't have a phone number button. Like, like, like unless you scroll down, you can't call or think like things like that.

[Sam Preston]

So but you know that their dad started this in 1965 and their whole.

[Ethan Wright]

But it's also funny because I'm like, you know, you're paying someone a lot of money to manage that. And you're putting a lot of spend into it, I think.

[John Wilson]

Don't understand the sections.

[Ethan Wright]

It's holistic.

[John Wilson]

Yeah. They don't understand how it relates. And we've all been trained as an industry, like, hey, Angie's List doesn't involve my website. LSA doesn't care about what's on my website. Why would ppc? So I think it just takes education of, hey, PPC sends someone to your website, then what will they see? And like, that's the whole question. Whereas LSA is a phone call. Like, that's it. Angeles is a lead form.

[Ethan Wright]

Yeah. Yeah. Can they. When they see they land on your website, do they know I'm on the. I'm in the right place?

[John Wilson]

Yeah.

[Ethan Wright]

This is for the right service. And I. Oh, all they have is a call button. But I don't really want to talk to somebody on the phone. Is there a way to. There's no form or. Or vice versa.

[Sam Preston]

Yeah.

[Ethan Wright]

I can't find the phone number and I need to call somebody now because there's 2 inches of water on my kitchen floor. So, like, those. It's those little things again. It's like a lot. They seem so small. But when you go from specifically on spending, like, you know how much a click costs.

[John Wilson]

Yep.

[Ethan Wright]

How. How many of those convert on your website from a click visitor to a lead, how your CSR handles that lead and their conversion rate into a appointment, and how many times you close that appointment to a job. Like, if you. It's just compounding. If you improve each of those by 2%, it's crazy.

[John Wilson]

We call it. We have a. We have a framework for this, but we call it the circle of accountability. And it's nine prongs. Ten prongs. But it's like, obviously I focus on the three lead sale fulfillment, but even deeper into that, who's in front of you that has to do a good job for accounting at the end of the day, to distribute profit. So, like, marketing comes first. Then next is call center. Do we book it? Literally, do we book it? Dispatch. Does it go on the right tech technician? Do we sell it? Installer, do we do a good job installing it? And we go around and there's a couple more. But basically everyone really only has one or two things that they have to do now. You have to do them well. But yeah, we train on it in our leadership because, hey, this is the section of the pie that you own. You have to do a good job here because everyone after you relies on you to do A good job.

[Ethan Wright]

Yeah. Marketing can crush it and sales can flop or booking or whatever.

[John Wilson]

Sales can be incredible, but you have no leads.

[Ethan Wright]

You have no leads or bad leads or lower quality. Like you want to be the premium price in your market.

[Sam Preston]

Right.

[Ethan Wright]

But you're only getting leads in a less than, you know, premium area. Whatever.

[John Wilson]

So we spent a ton of time talking about AI inside our own businesses. How are we. I spend a lot of time thinking about this. I've gotten absolutely nowhere with it, but I do consume hours. How are we feeling about AI and search and like what that looks like and what, what we, what we should be safeguarding against?

[Sam Preston]

I mean, one thing that we're, we're seeing is just a change in how people search now. Right. Like it used to be and people still do. The majority of the surges you're going to get is like Plumbers near me or Plumbers Los Angeles H Vac company in Dallas. But there is starting to be a little bit more of like a conversational narrative. Yeah, yeah. Like, hey, what are the best plumbers in this area with at least 5 star reviews type of conversation that you're having with these search engines?

[John Wilson]

Huh.

[Sam Preston]

And so, I mean, honestly, more long tail keyword type of searches are going to become more relevant.

[John Wilson]

I wonder if that's why we're like doing better than ever.

[Ethan Wright]

Maybe that's why we rock. That's always, I mean, that's always been a thing. Like, hey, who actually takes the time to add in long tail keywords instead of just Plumber near me.

[Sam Preston]

Yeah.

[Ethan Wright]

Akron.

[John Wilson]

Yeah.

[Ethan Wright]

You know, but, but more so now. Yeah.

[Sam Preston]

So I think that's going to be a big deal going forward.

[John Wilson]

I'm still a staunch Google user. Yeah. I don't know why. I just like every time I use it, I'm like, why am I doing this?

[Ethan Wright]

I got to get you on perplexity.

[John Wilson]

I know, I just haven't pivoted, but I do. It is very conversational search.

[Ethan Wright]

Totally.

[John Wilson]

And it serves me up a lot of Reddit.

[Ethan Wright]

It's interesting. Yeah, that's for sure. And it's interesting to me too, because I'm a little bit similar. I am. If I ever need to think through something or figure something out, like I was trying to like calculate something for taxes. It's like I'm going to go use Grok or Chat GPT because like I'm going to be able to when there's a ton of inputs I have that I need something to work through, it'll do it.

[John Wilson]

But if it's like, that was a humble brag. I'm working on my taxes. There's just so much input.

[Ethan Wright]

No, no, no, no, no.

[Sam Preston]

So many commas.

[Ethan Wright]

No. But then if it's like, gosh, I really want some Mexican. But I'm here in Akron, like, Mexican restaurant, and I look at. I look on Google, right? And so, like, it's interesting because I would even say, like, we're probably in like, the top 5% of people that think and use AI. And it still is hard and fast in that way until you think of older generations and the general consumer is still, you know, using Google regularly. It's. It's interesting, though, because I actually had a cool conversation with a guy who is actually buying a. An H VAC business. Yeah, he's under LOI and let's go. But he has a big background in AI. And so we were talking through the marketing side, and then I finally just got asked him, like, hey, I, like, this is how I kind of think through it. Like, am I thinking it through this correctly? And what did you guys see? Because he was head of AI for a Fortune 200, I think, or like a director that was doing a lot of stuff with AI. And it was interesting because. But there was a few things because I kind of asked him. I was like, here's how. I'm kind of trying to figure out how AI works, which is like a very big thing to try and do. But I'm always trying to learn so that I can keep our team updated and our clients, whatnot. So I'll just go search like, I'm in Dallas and I need a new water heater. Who should I use? And then it'll give me a list of names. And it's always changing. And. And I just keep asking questions, how did you get that list? Okay, here's the things that factored. What, what, what did you weight the heaviest in this decision? Right. And so it breaks it down. It's like, well, you know, I used the proximity from your location along with, you know, the reviews that I pulled from these three websites. You know, Google, you know, maybe the BBB and Yelp. And so you kind of learn, like, here are the inputs that currently matter to AI. But the interesting thing is that is constantly changing. Yeah. And so in this conversation with, with this gentleman, you know, he's like, anyone who says they figured out, like, any marketing agency that tells you we have cracked the code on ranking for AI?

[John Wilson]

Well, yeah, no one knows.

[Ethan Wright]

Well, because it's also changing literally every second because it's Learning and iterating. Right. So he's like, he's like the search SEO game for AI is going to be weird and who knows how it'll end up. But he was also like all most of these either search engines or like the perplexities chat GPTs they eventually need to monetize. Like how did Google monetize ads? And so will there be an ad element?

[John Wilson]

Well, that's like thumbtack on chatgpt. I feel like we're going to see a lot more of that.

[Ethan Wright]

Yep.

[John Wilson]

And frankly it works like the ROAS on that is good. Like wildly good. I think we're at 11 or 12 times.

[Sam Preston]

Yeah.

[Ethan Wright]

And that's wildly.

[John Wilson]

That's fucking wild.

[Ethan Wright]

Yeah. But the most interesting part was I was just like, how should someone think about optimizing for AI whether it's content on your website? And he said, I think that search is probably going to stay similar in terms of how you rank. It's going to be helpful content, relevant to the user, all those things. But he said eventually there will be a switch and that will still be the most important, but instead of being the most helpful and relevant to a consumer, it's going to be most helpful and relevant to an AI agent.

[John Wilson]

Well, see that I texted you about this yesterday. I actually think that that went into effect. That was an update that just happened a day or two ago.

[Ethan Wright]

Yeah. Google was like had slowly rolled out some updates and things.

[John Wilson]

Yeah. And it was making SERPs so that hey, are your pages more relevant to AI bots?

[Ethan Wright]

Well, I don't. But I'm not even talking about just the content I'm talking about. And what he was talking about is that eventually people will not. Not AI searching for them, but AI actually booking the appointment for them. So an agent that is John Wilson's personal agent that exactly that you go, hey, I need a water heater replacement and same day. And what website is set up so that a it has AI on it that can communicate with AI because it's much faster, ease of use for scheduling, all these types of things. Now that's pretty far in the future. Not crazy far, but your grandma does not yet feel the need to have an AI agent. But there will probably come a time where most people are using some sort of service like that. And so less because a lot of people be like SEO is completely dead because AI has it all and all that. It's like there's no data that you actually see that especially in the local service. If you had like a website draw.

[John Wilson]

The data from somewhere. Like AI literally has to pull that information from somewhere.

[Ethan Wright]

Yep. And so like if you had a recipe website now it could just pull your recipe. And so it's like they don't need to go to your website for ads anymore. But it's not like hey I need a water heater repair. If they pull your information up there, that's not a bad thing because they're still going to have to find someone to do it. And so in, in the local service business like it's changed the way people are searching like Sam said. But it's not like cannibalizing what your website's SEO efforts have, have been. It's more. So eventually we're gonna have to change it.

[John Wilson]

Like yeah.

[Ethan Wright]

Instead of catering to a human audience it'll be how do we simplify this for an AI agent to come find book and schedule.

[John Wilson]

Yeah.

[Ethan Wright]

Which was really interesting because you know again it's like you'll see people on wherever it is X or LinkedIn like we've cracked the AI code and they've got a screenshot of one of their clients showing up in chat GPT.

[Sam Preston]

Yeah.

[Ethan Wright]

It's like well if I go search today that could be totally different.

[John Wilson]

Well I mean even if I search minute by minute like I'll get different results. I ran a search for like I was, this was something I tried to Google and I couldn't. So I was like fine, I'll use chat gbt. And it still like produced bad results but I was, I was looking for a hyper specific book. I was like hey, can you give me a book? And I don't like consume video or audio really. I just make it apparently. But I, I just tend to read a lot. So I was like hey, I need a book on how to go from like what are the steps involved? Or give me someone's journey on 20 to $150 million in multi location. Like it's some, someone's written that book.

[Sam Preston]

Yeah.

[John Wilson]

I don't know who. It's probably really small anyways I searched it like four or five times and like same exact words, different results like just continuously. So yeah, I feel like there, there's no cracking it yet. And I do think what, what Thumbtack's done is what it will probably continue to look like and eventually yeah it'll be probably paid. Paid ads on. I mean that's, that makes the most amount of sense. If you're going to replace Google then you start selling ads.

[Ethan Wright]

Yeah. And then and too it's like how realistically how much, how many consumers are going to move away from Google. And if it's not a mass exodus, then it's not in Google's best interest to cannibalize their own revenue maker, which is LSA and ads. Right. And, yeah, and, and, and then the engagement on their platforms like maps and and so forth. So it's definitely something that we're always keeping up with. And like, I love to share when we find stuff and like what Sam was saying, like whether it's, hey, is there enough of a similar pain where we can go build an agent that then like our clients get to use and benefit from or like I'm, we're really all about, like, we know what we're good at and what we're not good at do. And so if there's like a tool out there where we can go, like, doesn't really, we don't really benefit from this. But like you will benefit from this. Like, we want, we just kind of think of everything as we're partners and so the better your business does, the better, you know, will ultimately do. And, and so yeah, it's like we just, we want to stay on top of this stuff so that we're being effective, but also so that we can actually add a lot of value outside of just like the small world that we live in within, you know, the grand scheme of your business.

[John Wilson]

Yeah, I think the core structure is going to remain the same.

[Ethan Wright]

Yeah.

[John Wilson]

So regardless of what happens with AI, even what happened with Google or whatever, businesses have to be listed somewhere and they will be indexed and they will be searchable and wherever that can happen. Someone's gonna sell ads. Yeah, because like people want to grow. So I feel like the way we're trying to approach it is just to be flexible and like keep an eye on it. But it's, there's a lot of talk about what could happen and like people concerned. But like what's actually happening is not much like really inconsistent results from ChatGPT. We've added thumbtack, which that's been kind of cool. Like Google's still just more consistent.

[Ethan Wright]

We're going to look so dumb when this is all wrong. AI is just taking over the world.

[Sam Preston]

Yeah, yeah.

[John Wilson]

I mean, but they're going to sell ads.

[Ethan Wright]

I know, I'm mostly kidding, but also caveat.

[Sam Preston]

My guess is it's going to turn very much into Amazon. So you think about like running ads on Amazon, it's very much product centered and then it's SEO based. And so instead of. Because you, you're only going to get so many of these spots. So you're going to run ads on ChatGPT, you're going to run ads on Perplexity, you're going to run ads on cloud or whatever the search engine of choice is and you're just going to have to run it the same way you do Google Ads, right? Like you drive traffic to your website and phone calls or make it super easy for them to book appointments and then make sure that there's an actual feedback loop and a, if there is, you throw more money at it. If you don't, you'll kill it. But you're right, like they're, they're going to make money off of this. They're going to make a lot of money off of this. They're not going to mess it up.

[John Wilson]

Yeah, yeah. I wonder what, I wonder what the value of like home service advertising is.

[Sam Preston]

Big industry.

[John Wilson]

It's a big industry. I mean it's just so ridiculous.

[Ethan Wright]

Think of lsa, right? There's only so many categories that they.

[John Wilson]

Yeah, actually I'm sure that's publicly reported. Like what the revenue on that product is. Are you getting it?

[Ethan Wright]

Because you can be, I mean like.

[John Wilson]

If you're like, let's just say ad spend is 10% of like total market size, which I thought the market size. I mean I don't want to overstate it and sound ridiculous, but I remember it being like fucking crazy of Google's.

[Ethan Wright]

Like market of their revenue share or.

[John Wilson]

What like the size of the home service. How much revenue is driven through home service and home repair?

[Sam Preston]

Hold on, we're using Chad GBT right here.

[John Wilson]

Oh damn.

[Sam Preston]

Marketing services. Okay, so it looks like the home and so. Excuse me. The home service industry is a 700 billion dollar little small industry.

[John Wilson]

So 70 billion ish, 80 billion of advertising spend that like the vast majority of that is going to be digital. Yeah, like that's crazy. That's freaking crazy. So yeah, so yeah, to me, like, yeah, good. Yeah, great business own. Yeah, I, yeah, I think be flexible and I think, you know, get ready to spend and if you're large enough, focus on brand because brand is, brand is sort of like a new moat. It's kind of interesting. Whereas like for the past five years, and I advocate ignoring it too until you're a certain size. But for the past few years it hasn't had to matter because cost per lead has been so low. Like 80 leads are like, that's cheap.

[Sam Preston]

Yeah.

[John Wilson]

So but like brand is now suddenly a thing again.

[Ethan Wright]

Yeah, totally.

[John Wilson]

This Was great. Before we end, I want to do a couple quick hits.

[Ethan Wright]

Okay.

[Sam Preston]

Hit us.

[John Wilson]

I'm a small American plumber. Just. Just a plumber from Akron.

[Ethan Wright]

Just a plumber.

[John Wilson]

And I'm thinking about bringing on a vendor. What should I be looking for? One thing. A marketing partner.

[Sam Preston]

Start there. One that you can afford good price. And so what I mean by that is don't spend too much. Don't spend too little. If.

[John Wilson]

Oh, yeah. Off camera, I'll say it so you guys don't get in trouble. But what look like you. Or. Yeah, localized, local like you. They were like, they were charging someone 37 ad spend.

[Sam Preston]

Yeah, we audited that account.

[John Wilson]

That insane. And then. I know Scorpion for us. I. I don't remember. I don't remember what it was.

[Ethan Wright]

But I think average. When you think of percentage of ad spend, it'll be somewhere from low end would be like 15 from what we see in high end will be in, you know, 30 and maybe.

[John Wilson]

Well, I actually think our. Our LSAs were what was 10 with Scorpion and our PPC, I think, was 20.

[Ethan Wright]

Yeah. Well, and that's like one thing. It kind of goes in like, what do I look for in a vendor? Or like even maybe red flags. But we're just big on, like, incentives and being aligned. What is it, Charlie Munger? Like, show me the incentives. I'll show you the outcome.

[John Wilson]

That was my story with Scorpion. It's what pissed me off so much, is because they commissioned my LSAs at a lower dollar, they refused to allocate budget to it because they got 20% on PPC, but they got 10% on LSA. So three years ago or four years ago, when we were still working with them, they couldn't figure out how to spend $200 a week on our LSA is $2 a week. I spend 15 now, like zero issue. And we turn it off like we could spend more. And they just. I mean, now looking back, once we switched and we understood what their, like, structure was, we're like, oh, you just didn't. Because it was 10% here.

[Sam Preston]

Yeah.

[John Wilson]

And 20% here. That is bullshit.

[Sam Preston]

Yeah.

[Ethan Wright]

And so. And. And there's kind of like two levels of incentives. Look for it's. It's like on a company level. So, like, an easy example is ad spend. Right. We don't charge a percentage of ad spend. That's somehow the industry norm. But it never really made sense to us because you want us to spend your budget in the best possible way and we would grow our revenue if we constantly got you to spend more money. And so the question then is not how can we get John's cost as good as possible, it's how can we keep John's cost just good enough that we can ask for more and spend?

[John Wilson]

Yeah.

[Ethan Wright]

And so that's like a company level, but that usually trickles down even into like the account manager. The typical role of an account manager is they're a generalist. And so they're like, they don't actually know pay per click or LSA or SEO or website. They're just kind of like a salesperson, customer relationship manager. A lot of times their bonus is tied to the total revenue they grow. So that does two things and incentivizes them to try and get you to spend more on ads. And then also when you think you're getting a better deal because you have a smaller budget. So, hey, I'll pay a percent and so my fee will be lower. Well, you represent much less of their total goal, so you get less attention. And so we always try and think like we try and reverse engineer, like, okay, if John knew how to run a PPC account or how to build an SEO campaign, what would he optimize for and what would he think about? And then we try and actually like pay our people based on that. So the happier the client is and the more aligned with the strategy our account managers are, the better they get paid, the happier you are. And then hopefully for us, we're like, that's just going to keep a long term relationship. And we even like, we remove that generalist account manager role. Like if you work with an account manager with us and you're doing ppc, you're working with someone who is working in your pay per click account that morning, that actually sets a strategy that actually knows how to talk about what your results have been. So when you get on a call and you go, hey, what's the deal with this? It's not, well, let me go email someone on the team, we'll get back to you. It's, well, let me pull up your account because I actually saw that this morning too. And so what we found is like, we have certain metrics and requirements of how often an account manager has to do certain things and check certain things and whatnot, but they usually end up doing more than that just because they want to make more money and their pay is tied to the results you actually care about, not vanity metrics, not just, we got you a bunch of clicks and impressions, but your revenue was produced and here's your return and Your cost per lead looks like and so on and so forth. So a big one is definitely incentives. Another big one. I think you've talked about it before, but ownership, I think the most common thing that we'll see people get surprised by is when they don't own their website. And so they.

[John Wilson]

That was a big shock.

[Sam Preston]

It's always a painful conversation.

[Ethan Wright]

Well, it's like you pay someone to.

[John Wilson]

Build your website and then you $28,000.

[Ethan Wright]

For us, but then you pay them to do SEO work on that site for years and then you want to make the decision that actually the results or whatever you've given us have been great. The relationship's not good. We want to leave. Well, not only do you not own your website, everything you've paid for multiple thousands of dollars a month goes down the drain. And so do you own your website?

[John Wilson]

Chrome does have a look back machine. So I say if they fuck you, you fuck them back. So that's what we did. Yeah, so we actually hired a VA to replicate the site in 24 hours and we copied the entire, which we.

[Ethan Wright]

Help a lot of people do that as well. Like really common for us to build those sites and, and keep the traffic and the SEO intact. But even like a lot of people don't own their own ads accounts and that's a big problem for two reasons. There's no transparency. So you're relying on second party data for all your metrics, but also like you can't even go in and see if there's any activity in there and how well they're doing. Like we do free audits a lot of the time for PPC accounts and I go, hey, can we add your account? Well, how would I get that access? Well now you don't even know how well it's going. And then on the flip side, all the data that you build up over time in that account, that's actually useful, you don't get if you ever switch.

[John Wilson]

Yeah.

[Ethan Wright]

And so I'm always honest with people, like if you don't own your account, you're going to go through a little period where like we don't have a ton to work off of. So we're kind of, we're having to backtrack a little bit. So I always tell people like if it's, if you work with us, we'd love it. If not, just make sure you own everything. Reread your contract three times, make sure that everything that's produced is yours and you have the keys and can, can go with it. So incentives and ownership are like the two big things.

[John Wilson]

Those are good ones. Final one for you. What are some trends that we're seeing right now in marketing? Doesn't have to be Google. It's even better if it's not that are exciting. What are we seeing? What do we like?

[Ethan Wright]

I think the thing you mentioned about brand becoming a moat again is. Is good because that's one of the few things that will.

[John Wilson]

That's work through uncertainty.

[Ethan Wright]

Yes, exactly. There's some people doing cool things. That's almost a little more like guerrilla marketing on the organic side with like platforms like Facebook groups and next door that have been really cool because it's a little bit of local brand building.

[John Wilson]

Yeah.

[Ethan Wright]

As well as we have a play on that.

[John Wilson]

We haven't talked about it publicly, but we're like 60 days into it and it's really interesting. Even we launched like a local brand. When the camera's off. Yeah, I'll tell you about it.

[Ethan Wright]

Well, even I actually connected with one of the marketing guys at Brown Roofing.

[John Wilson]

Oh yeah? Yeah.

[Ethan Wright]

And I know you had the CEO on a couple of years, but he, his marketing guy said he's like, my job is to make our owner and our name locally famous in every market we're in.

[Sam Preston]

That's awesome.

[Ethan Wright]

And he has talked about it before, but he's like, I have 37 lead channels because it's like not just paid, but it's like next door, Yelp, Facebook group, Facebook page, like all these things. And they're just, they have built a brand around their owner and around their, you know, name and slogan in non traditional ways. So I do think there's this like cool opportunity for arbitrage to just think outside the box. And really I always tell people that are, you know, like we're doing this Breaking five workshop. So like you're still smaller. You feel like that's a disadvantage. But a lot of times it's like that's the time you can do the things that don't scale.

[John Wilson]

Yeah, right.

[Ethan Wright]

Like there's.

[John Wilson]

Yeah. I mean if you're competing against. We've talked about it here, but like if, if you're competing against a bunch of companies that are like under 30, under 50. I know this sounds shocking, but a lot of Companies north of 20, north of 30 are still very unsophisticated businesses. Like they don't actually know what the fuck they're doing. I would say that we still don't know what the fuck we're doing and we're learning every day.

[Sam Preston]

Yeah.

[John Wilson]

But I And I, I feel when I look around some of our peers, like, same size. I'm like, holy shit, we're miles ahead of this company.

[Ethan Wright]

Yeah.

[John Wilson]

And they've been at 30 million way before us, so. Yeah. I do think at 5 million, you can meaningfully compete if you're scrappier.

[Ethan Wright]

Yeah. Well, and there's. There's a. Actually a friend of yours who, who we're working with now. But he, he told me he eventually hit a point where he couldn't do it, but for a long time, him and his wife delivered cookies every month to new. To every new customer.

[John Wilson]

Yeah.

[Ethan Wright]

And he was like, yeah, I can't do that. Yeah, well. And he's like, I actually noticed, like, I tracked. Our retention rate dropped significantly once I got to the point where I couldn't do that. But the people we did, they're customers forever. Right.

[John Wilson]

And so there's actually, like, a good idea. I wonder if I could do that. We bring on, like, you can automate.

[Ethan Wright]

A lot of that.

[John Wilson]

There is a size where, like. And we're just crossing into it where, like, dumb shit starts to make sense again. But, like, at $20 million, you actually don't have that much resources. I know it sounds like a lot of money, but, like, you sell a lot of cars.

[Ethan Wright]

You just really don't.

[John Wilson]

Yeah, you really don't. And, like, the team is still too small to, like, waste a roll and waste payroll on the cookie delivery guy. Like, it's just too complicated.

[Ethan Wright]

There's a, There's a car dealership.

[John Wilson]

Cookie delivery guy.

[Ethan Wright]

I'll tell you offline, there's actually a company that does this for.

[John Wilson]

No, we've, we've looked into it. Yeah. Yeah.

[Ethan Wright]

But in Texas, there's a group of car dealerships called Sewell and, And their, Their, like, tagline is customers for life. And the guy who started Sewell actually wrote a book about that.

[John Wilson]

Yeah.

[Ethan Wright]

And it's crazy because they charge more than other people. They don't negotiate on price, but their attention to detail and service and really that customer for life allows them to charge those premiums. And like, I am usually someone who will always go to the best price on anything. I go and buy from Sewell anytime I need to buy a car or have anything done on my car because of their honesty, the quality of their work and then their brand. And really, I mean, that's in my head customer, like, they are great at that. So. And that started a long time ago.

[John Wilson]

Yeah.

[Ethan Wright]

But they have somehow scaled. It's almost like Chick Fil. A Right. They've. They've somehow gone to a scale where they still have that value run through every single person who works there and they just slam that so hard that even some of the things that they don't do anymore that they can't do anymore because they don't scale. Like the spirit of that is in still in everything they do as they go. And so I just think of that and it's the same thing. Like if I have a plumber who comes and is, you know, does a great job and is. Is thorough, like I'm willing to pay more and I'm never going to forget that person. Like I'm going to call them every time I love when I have someone I can do that for. So. So it's some of those things that you do when you start small that may be the exact action doesn't scale the same. But like, what are the things that initially don't scale that you can keep the spirit of as you go? I think, I think is a big, you know, leg up. Just. It's maybe a little less marketing, but I think at the end of the day, like lead retention.

[John Wilson]

Yeah.

[Ethan Wright]

And customer retention is kind of hard.

[John Wilson]

To solve problem too. Yeah.

[Ethan Wright]

Solves a lot of lead problem too.

[John Wilson]

Yeah. You have any sad at all? Sweet. This was a lot of fun, guys. Appreciate you coming on helping break in the new studio.

[Sam Preston]

It's great.

[Ethan Wright]

I like it.

[John Wilson]

I don't know how many episodes I get to still call it a new studio, but I'm on number three and I'm still calling it that. This was awesome. If people want to connect, where can they find you?

[Sam Preston]

I'm on x. I'm on LinkedIn service scalers.com.

[Ethan Wright]

Yep.

[Sam Preston]

Oh, yeah, right there. So guys, you want to connect? I'm on x. I'm on LinkedIn service scalers.com.

[John Wilson]

Slide into your.

[Sam Preston]

My cell phone number is 4 6.

[John Wilson]

Awesome.

[Ethan Wright]

Yeah, same for me. X. LinkedIn. If you contact us at service dealers, we will probably have a conversation. So that's easy enough.

[John Wilson]

Sweet. Well, thanks for joining me and everyone else, thanks for joining us too. If you like what you heard, check out owned and operated.com and make sure you subscribe so you can get more stuff exactly like this.