#211 What Growing Home Service Companies Get Right About Sales

Summary

Episode Summary: #211 What Growing Home Service Companies Get Right About Sales

Podcast: Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast
Hosts: John Wilson and Jack Carr
Release Date: June 17, 2025

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Introduction to Sales Strategies in Home Services

In this episode, hosts John Wilson and Jack Carr delve deep into effective sales strategies employed by successful home service companies, particularly in the HVAC sector. They explore the nuances of lead generation, the importance of specialized sales teams, and the metrics that drive business growth.

Business Performance and Seasonal Challenges

The conversation begins with a discussion about recent business performance. Jack shares a significant milestone:

Jack (01:08): "So H Vac doubled over, doubled over 100% over our best month of last year."

This impressive growth in May contrasts with the atypical weather that month, which saw cooler temperatures than usual. John reflects on the impact of weather on their business:

John (01:43): "May was our April this year, which was kind of funky. Now June is like ripping. We're pretty much selling the budget every day."

The hosts acknowledge the unpredictability of seasonal factors and their effect on sales dynamics.

Differentiating Lead Types: Marketed vs. Tech-Generated

A central theme of the episode is the distinction between marketed leads and tech-generated leads. John emphasizes the necessity of specialized sales approaches:

John (00:00): "You can't get good at marketed leads if all you're served is tech flip leads. It is a different game and the biggest companies in the industry know it."

Jack adds to this by highlighting the differences in handling these lead types:

Jack (07:00): "Our comfort advisor runs both [marketed and tech-generated leads], and she has a different minimum goal for each."

The hosts argue that segregating sales teams based on lead types allows for more effective handling and higher conversion rates. John outlines the stages of growth for HVAC companies, stressing the importance of separating roles to enhance sales efficiency.

Optimizing Sales Processes and Team Structure

John and Jack discuss the evolution of sales teams as companies scale. John shares their transition to a three-tier sales structure:

John (04:22): "We've been still cooking H Vac for us. It took us like maybe six, seven months to finish that transition into stage three."

This transition involves dividing sales teams to focus exclusively on marketed leads, thereby increasing specialization and improving sales outcomes. Jack concurs, noting the necessity of having enough marketed leads to sustain full-time sales personnel.

Recruitment and Training of Sales Teams

Recruitment and training emerge as critical factors for maintaining robust sales operations. Jack points out the challenges in finding and training effective comfort advisors:

Jack (23:00): "The hard part is just in my opinion it's finding those guys and having a recruiting process and then a systems process to be able to make it."

John counters by emphasizing the importance of training existing technicians to enhance their sales capabilities:

John (23:15): "There are a lot of techs out there... we just hired two and like one of them does a couple million bucks a year."

This exchange underscores the balance between hiring specialized sales staff and developing the sales skills of technical personnel.

Key Metrics: CAC, LTV, and Average Ticket Size

The hosts delve into essential business metrics that drive sales strategies. John insists that understanding Customer Acquisition Cost (CAC) and Lifetime Value (LTV) is fundamental:

John (15:45): "It's just a math problem. How much does it cost me to get a customer? What's my average order value?"

Jack challenges this by highlighting the competitive advantage of established brands in lead conversion:

Jack (09:35): "Your branding plays a large portion which drives more click through."

Despite their differing viewpoints, both agree that these metrics are crucial for informed decision-making in sales strategies.

Success Stories and Industry Examples

John and Jack reference successful companies to illustrate effective sales strategies. John mentions Top Line, a rapidly growing company with impressive metrics:

John (17:25): "Top line... went from 0 to 40 million in four years."

Jack adds examples like Hiller and Peterman, noting their effective use of paid leads and strong branding to drive sales.

Scaling Challenges and Solutions

As companies grow, scaling sales operations becomes complex. John explains their strategy for managing larger teams:

John (26:13): "We're in the process of dividing our H Vac team and we just brought our sales manager on... we have three teams right now."

Jack discusses the potential pitfalls of expanding without adequate systems:

Jack (22:21): "We're trying to lock down the process on how to do the flip in the easiest way possible to customers."

They both emphasize the need for robust systems and processes to handle increased lead volumes and team sizes effectively.

Transitioning to a Marketing and Sales-Driven Model

The culmination of the episode centers on transitioning from service-dependent operations to being predominantly marketing and sales-driven. John passionately states:

John (32:18): "We're a marketing and sales company."

Jack concurs, suggesting that focusing on marketing and installation can streamline operations and enhance profitability:

Jack (32:25): "Stop worrying about service and just go install units. Market install, market install. Yeah, just figure that out and you're golden."

This strategic pivot is presented as a pathway to scalable and sustainable growth within the home services industry.

Concluding Insights

John and Jack wrap up the episode by reiterating the importance of specialized sales processes, effective recruitment, and a strong emphasis on marketing and sales metrics. They encourage listeners to adopt these strategies to achieve entrepreneurial success in the competitive home services market.

John (33:12): "Sign up for the newsletter. We're officially in the 40 thousands, so we're super pumped about that. And we're aiming for 100, so that'd be fun."

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Key Takeaways:

1. Specialization in Sales Teams: Differentiating between marketed and tech-generated leads allows for more tailored and effective sales approaches.
2. Importance of Metrics: Understanding CAC and LTV is essential for making informed sales and marketing decisions.
3. Recruitment and Training: Building a capable sales team requires both strategic hiring and comprehensive training programs.
4. Scaling with Systems: Robust processes and systems are crucial for managing growth and maintaining sales efficiency.
5. Marketing-Driven Growth: Shifting focus to marketing and sales can lead to scalable and sustainable business growth in the home services industry.

For more insights and actionable advice on growing your home service business, visit www.ownedandoperated.com.

Transcript

[John]

Think H Vac is kind of funny because it goes through these, like, different stages of growth. You can't get good at marketed leads if all you're served is tech flip leads. It is a different game and the biggest companies in the industry know it. So they run just different sales teams.

[Jack]

We have different minimums for marketed leads and tech generated leads.

[John]

All the companies that we see that are running H Vac at like, very real scale, that's how they all work.

[Jack]

Welcome back to Owned and operated. Today we have Jack and John in the house. Hopefully that didn't hurt your ears too much.

[John]

We love you. We subscribed.

[Jack]

If you can't tell, I'm excited. We haven't done one of these episodes in a few weeks now.

[John]

No. Yeah. Well, I'm pumped to have you up. You're going to be up in two weeks.

[Jack]

Like a week and a half. Yeah.

[John]

We can have whatever.

[Jack]

Either way. Either way. Yeah, man. There's lots going on.

[John]

Yeah. How's your. Well, how was your May? It's. It's June 10th, 11th today. How was your May?

[Jack]

So H Vac. H Vac doubled over. Doubled over 100% over our best month of last year.

[John]

Okay.

[Jack]

So we had our best month ever in the history of the company in May.

[John]

Nice.

[Jack]

Which was about almost 100% over last August.

[John]

That's crazy.

[Jack]

Yeah. So we're trying to continue that momentum, keep it rolling.

[John]

What are like temperatures, like, how's weather?

[Jack]

What's. What's super weird is that May was moderate for us.

[John]

Yeah.

[Jack]

I think people had just started turning on units, though, so that's why we got some of it. But we should be pushing into the 90s this week and next week.

[John]

Okay.

[Jack]

Which at a lot of humidity. So it's going to be. It's going to be a wild week is what our expectations are.

[John]

Things that's helped our business grow the most has been peer groups, and that's been for both myself and our leaders being able to talk to other companies about exactly how they've solved. The problems that I'm dealing with today has just been instrumental, whether it's how to acquire companies or how to add new locations, how to hire directors or service managers, or what should compensation look like. All of those things are things that can be solved by just asking people. A little bit ahead of you. Inside that group, we have fireside chats, weekly peer conversations by business size, resources to help you grow your business, and a lot more. Make sure you check out owned and operated.com and click on Join Pro this has been a really weird summer for us. So May, like, we still grew. Most of the departments grew 20 ish percent, but H vac was down, which, like, we actually haven't had a down month at H Vac for a while, like year over year down. But last May was 90 degrees in May, and this May was 45 degrees in May. So just like zero urgency. So really, like May was our April this year, which was kind of funky. Now June is like ripping. We're pretty much selling the budget every day. So that's been great. Obviously. Obviously loving that. But yeah, May was kind of a funky month for us.

[Jack]

Funky. Yeah, that. That's definitely interesting. I remember seeing that because we talked once in May and you were wearing a sweater and I was like, why are you wearing a sweater? It's 85 down here.

[John]

Yeah.

[Jack]

And you were still in sweaters. So that makes sense.

[John]

I mean, it was literally like 45 degrees most mornings until the, Until June. It was to put this in perspective so people don't think I'm exaggerating. The pools didn't open on Memorial Day. Oh, yeah, it was that cold. The pools literally just didn't open. So they actually didn't open Memorial Day and they also didn't open the next weekend either. So in June, outside pools opened. And I've. That's. I've never had that in my whole life.

[Jack]

Yeah. The interesting part though is it really, you know, I know we, we talk about this a lot, but yeah, it, to some extent, it doesn't matter. Right. Because you're going to have that opening rush at some point when you get your first high week. It's just the hope that you, as long as you get a few high weeks in the beginning of the year or in the beginning of summer, I think is what it comes down to.

[John]

Yeah, yeah. I mean, we've been, we've been still cooking H Vac for us. We've done a ton of work over the past, like, year in order to basically hit it to scale. So I think H Vac is kind of funny because it goes through these, like, different stages of growth where, like, the first stage is like, you have a technician or the owner is selling, and then the second stage is you bring on comfort advisors and the techs no longer sell. And then the third stage is you go back to selling techs with comfort advisors and you separate the sales teams. And all the companies that we see that are running H Vac at like, very real scale, that's how they all work, is the technicians Run some leads. Like they, they basically, they're running their own tech flips. Their, you know, tax no longer flip to cas. They flip to either inside sales or the technician sells it on site. And then CAS actually just run marketed leads. So that's what I mean. Four seasons in Chicago, Logan and Cincinnati, Peterman Eco. That's like the model. So it's. So we're just. It took us like maybe six, seven months to finish that transition into stage three. From like every tech flip and every marketed lead went to a CA to now you separate them. And the reason is quantity.

[Jack]

Yeah, so the reason, the reason makes sense too from the logical standpoint.

[John]

Well, you can't get good at marketed leads if all you're served is tech flip leads. It's a different sales process. Like in a tech flip, you were given a lead that the, the homeowner already is bought into the business. They're already bought into the tech. They already believed the recommendation. Like it is a different sales experience. Then, hey, I have to walk in and create value in the first 30 minutes. I have to explain the. When I'm up against competition, when I'm up against competition, it is a different game and the biggest companies in the industry know it. So they run just different sales teams in some companies. Take it as far like Four seasons in Chicago, they actually have like different sales price books, which we have not done that. But like that's pretty common because on the CA side it's a more competitive process. Whereas the tech flip side is not like you have a bought in, you know, 80% likelihood to close.

[Jack]

We have different minimums for marketed leads and tech generated leads.

[John]

Oh, like, what do you mean like, like closing rates?

[Jack]

No, like we, I, our comfort advisor runs both. And she has a different, technically she has the bottom that we, we can't go under for anything. But then she has her minimum goal for tech generated leads and her minimum goal for marketing links. So like marketing leagues, she can go down. Her goal is like at minimum 45 gross margin. And then at on tech general leads we want to see that to be 55 in the summer months and then it goes down again in the offseason. But point being is that it is a dynamic. Oh yeah, pricing. And that's because we understand like if we come in and hit somebody with a 65% gross margin on a marketing lead that they've had three other people out, we're not even going to get a shot at the second opportunity to price match or whatever because we're just out of the range. So like we understand that going in. So they're handled completely differently. I think though a big part of that which is, which is really interesting that you put it that way, that the third iteration is that because the.

[John]

Everyone'S going through it and like you get stuck like these H VAC companies, just like they break when you hit a certain size and you're still flipping everything over to cas. Because the, the way, the way anybody gets better is repetition, right? Like if I wanted to be the best baseball pitcher in the world, I'm going to go pitch a million fucking times. Like the 10,000, 10,000 hour things. So you need reps. And when you're served up two totally different types of leads, it's really hard to get good at one or the other. Especially when one of them is so easy and one of them takes actual work. You will just never try to get good at the one that takes actual work.

[Jack]

Well, the problem though, right for everyone listening and for myself versus you, not everyone listening because there's some big listeners out there, but is there's a few things that have to happen as a prerequisite priority. A, you have to have, you know, enough leads for marketing alone to be able to hold a person full time. Right. And that comes with scale.

[John]

I don't know.

[Jack]

So you're, you're living in John world here and I'm gonna call you out on it because I guarantee 99, you.

[John]

Can just go get the leads though.

[Jack]

Not direct marketing leads. That's very, very difficult. And like so you for example here, let me give you examples. Is like 100 million dollar company like Peterman or all.

[John]

Yeah.

[Jack]

All these people that you're talking about in my market, Hoffman, Hiller Lee, they can pay that thousand dollars for a PPC H vac installation lead, right?

[John]

Well, anybody can no just have to close it.

[Jack]

Yeah, you're right. Anybody can. In. In a magic world where you have to close it but inevitably you are going up against other people. Your sales process has to be amazingly tight. But just based on numbers like you are going to close at a lesser rate than you would tech generated. That's why tech generated are I guess.

[John]

Like I'm not being sarcastic, walk me through it. Because like from my perspective, okay, size is irrelevant because using your words.

[Jack]

Well, it's not irrelevant because I think it's relevant.

[John]

It does. It doesn't have anything to do.

[Jack]

Well, you have a branding that allows. Your brand is so large in your location that it allows you to generate more.

[John]

No, we're full Buying these leads.

[Jack]

Yes, but at a cheaper PPC because you have branding, people hear you on the radio.

[John]

These are typically Angie's List leads or Modernize or like they're paid for leads.

[Jack]

Yeah, no, I'm with you on that.

[John]

I'm following. Okay.

[Jack]

I'm just still saying if you're on Angie's list or on thumbtack, are you on an aggregator or you're on Modernize or you're on PPC or lsa. Wilson company in your area has branding and that branding drives ppc. All those costs lower or it drives people there easier for you. You have a higher click through rate on that because they've seen your branding before versus Joe's Crab Shack H vac that nobody knows about. It's a single guy in a truck that has two reviews because they don't have that many people. Whereas Wilson has the ethos of 30 reviews or 130 or 500 reviews on their Angie's profile because they're running so many calls. So you're so far ahead. There's a moat there for specifically marketing leads. So we try really hard to run marketing leads obviously because we're buying a great lead. Like I would love to pay the 100, 200 bucks for the great lead, don't get me wrong. What I'm just saying is that when they have additional optionality, your branding plays a large portion which drives more click through. I think it's probably the best way to describe it to you. Yeah, but like we see that with Hiller. So for example, Hiller in our area.

[John]

We'Re paying like $400 a lead. So we're, we're not like sometimes we might get a discount, but that's I. So my perspective, you're paying 438.

[Jack]

So is Joe's Shack. Right. Your BU are both paying that $400. What I'm saying is the volume of clicks that you're getting is more than Joe's. So for example, the volume of your.

[John]

Lsa go buy a lead. So like I bought a lead from modernize, it was $400. So I'm going to go out and I'm going to sell 38% of the marketing leads that I get and my average ticket is going to be $10,000. So I paid $900 to get that job. Which like that's math that irrelevant to the size. Like to me all, all, all that we're talking about is like what's your cact ltv? Which like that has nothing to do with how big Our budget is. That's just like we now it does have to do with. We have a sales process. So maybe that's a part of it.

[Jack]

I think that's a huge part of it.

[John]

I do think cact LTV is is irrelevant to how large the total company is.

[Jack]

I'm just saying. So on Angie's and thumbtack. Yeah, as, as the consumer you go through, you are buying a Central Air H VAC installation lead for 250 bucks. Yes, you are buying that lead. But the way that that process works is the customer goes onto there, they fill out what they're looking for and then they click three companies, they click Wilson, they click company B and Company C. Company Company Wilson has 500 reviews, 5 stars. They've been killing the game. Company B also pays that same price, but they have two stars, two reviews and they suck. Company C is a middle, middle size, maybe 160 reviews. Now the 160 review company doesn't have a speed to lead person in place that is focused solely on answering these as quick as possible. So the minute that they enter you, you hit.

[John]

I think my point is like, yes, we're more mature, but that stuff can be put in place at any size. Well, not any size, but like if you're a $5 million business, like you have the similar type of resources to put towards that process because you got to be able to buy leads. Gotta be. So yeah, if we're talking about like a one man shop, sure. But if you close 38% of marketing leads then like that's just a, that's just a math problem.

[Jack]

I think we'll have to agree. I will agree, but I think that there's more to that on the back end and I will accept. Well, we are going to somewhat disagree on this.

[John]

What will probably happen is they won't close at 38% so maybe they'll close at 30. The leads are there, but if you go get the reps, you will close at maybe a lesser percent. So that I would, that I would concede that you would close less leads potentially. But like you could still make up for that on average ticket or you could just have less overhead so you can take a slightly reduced margin to what we could withstand.

[Jack]

So that's the first one is either whatever way you cook it, you need to have enough marketing leads somehow. And if that process is in place, you need to put those processes in place, overcome the lift, spend the money to have those processes to be able.

[John]

To handle some of its process. But some of it I'm just going to encourage people to do their math.

[Jack]

So like I agree, I don't disagree.

[John]

What does it cost for a lead? How many of those leads do you close and what's your average sale? And if, if you have your numbers. This is just a math problem. Like it has nothing to do with us being big or not. Like maybe we close a higher percentage because we're bigger and we're more branded or whatever. But like leads to lt like CAC to LTV is literally the math that every single business has to work off of. How much does it cost me to get a customer? What's my average order value?

[Jack]

So Hiller for example market is $100 million company. Yeah, they don't actually I was looking through one of the, the, I forget the home service Pro, whatever. The how do you look at your competitors? Yeah and I was looking at them. They don't own any map pack. They're almost on zero map packs across. They have a lot of hey high first page stuff but they bring in all their leads through paying but they're able to drive those paid leads through the Google platform because they have the branding that everybody knows. Hiller. So I think that what we're, you're discounting here is the amount of leads that you're able to bring in through subconscious people clicking on your PPC link versus they wouldn't click on other people's ppc. My PPC when I, when I run it I pay, I'll pay the same thing as Hiller but I will drive two calls on PPC a month if I were to.

[John]

I think that's a marketing funnel problem then because like Top line proves my point. Right. Have you followed their story?

[Jack]

No, I don't know.

[John]

Top line is so, so top line came out of nowhere like four years ago and they went from 0 to 40 million in four years and all like I think it's 100h vac so like obviously fast growth and they don't have a brand like they're not branded and it's all sir, it's all service replacement. It's actually I think all replacement. They, they're doing this thing where they don't service equipment that they don't install. So it's basically fully replacement. So the, they're, they're on like they're far, they're deeper in it than I am where they're even more optimized as a zero dollar brand now $40 million. But they started four years ago where it started with just the math like this is what it cost me to get a customer. This is my close rate. This is my average job. You can ramp that to infinity. And they, they literally just did like they're in their fourth year. So they started from nothing. They're not Hiller and Hiller's been around forever.

[Jack]

This is awkward silence.

[John]

I like.

[Jack]

No, I, I mean, I like. So part of me doesn't disagree with that. I, I just think that there's a discount and maybe it's me justifying why I don't do ppc. But you know, it is what it is. We have enough that we, we do run quite a few marketing leads through aggregators. I think it's a great source. It's just making sure that you are able to put systems in place, have enough and then receive enough leads. Maybe through math, maybe through a little bit of branding. I don't know. We'll find out. And then secondly, the other side to this is having enough good systems in place that your technicians are, can close because that's why you moved them to in the first place at number two was because, you know, it's. Recruitment's a huge issue. And then training and making sure you can build a training program. I mean, I like the model. I think the model works because you, your, your technician's already building that rapport with the customer. Like that's going to be the easiest sale. But the reason in phase two, you moved it to a comfort advisor and flipped everything was because the technicians that you had were not good at sales.

[John]

Yeah.

[Jack]

So like how do you get them up to par so that they can still have that same close rate and that same average ticket?

[John]

So companies are doing it a few different ways. One, you can just train the tech directly, which, that's like the old school way of doing it. But it does work. Like you can, you can have selling text. Like you can have selling text do. Our selling tax average ticket is considerably higher than our comfort advisors, like thousands of dollars higher. So it's not a, it's not a guarantee. I, I think it's, I think what people get confused by is they say, which I thought the same thing, but hey, our CA's average ticket is higher than our selling tech average ticket. Like maybe. I think most of it's like, is there a process there? Yes. No. Because the reality is a tech flip average ticket is higher than a marketed lead average ticket. And I think that's the real distinction as long as both follow a process. But yeah, so we, so one, are you training them or Two, a lot of companies use some version of a call by call, like Joe Chrisra's like, hey, I'm going to call into my coach and we're going to talk through this option and we're going to try to sell it together. Or like we have an inside sales process that we run and that's how we do our tech sales. So there's a lot of different ways to do it. I think the benefit, you know, when the team gets large enough, what the friction you start seeing is like a speed to sale. And like if a tech just spent an hour or two hours building rapport, why are we willing to lose that rapport? And why are we also willing to inconvenience the homeowner, waste more of their time for a second appointment just for someone to have to come in and restart the rapport building process? It just doesn't make sense. So as a homeowner I would be really inconvenienced and annoyed, but I'd be like, okay, well if it's another appointment, like you'll be meeting my assistant next time you come out here. Like I'm here right now, I don't have a lot of time.

[Unknown]

We just are finishing the best April we've ever had. 55% year over year organic growth really just a huge thanks to service scalers for being our marketing partner in that a ton of that growth came from both paid and organic SEO efforts. We did a ton of work on our SEO with service scalers really strategizing and working on that about a year and a half ago and the results have been creeping up over the past about year really started to go crazy over the last few months as we're starting to see multiple six figures of revenue attributed to our website and that's from their work on our SEO. On top of that, the management of paid has just been absolutely huge year.

[John]

To date we're up 30 something percent.

[Unknown]

April alone was 55. And we're just super grateful for service killers in that partnership.

[John]

So if you want to learn more.

[Unknown]

About how they helped us, make sure you check out servicescalers.com I mean that.

[Jack]

So that's actually one of the issues that we're having right now is we've had a slew recently of cancellations or reschedules. And I said, you know, we're trying to lock down the process on how to do the flip in the easiest way possible to customers. Because here's what happens if in that flip process is you open yourself up and your team up to Friction which then opens you up to losing the sale.

[John]

Yep.

[Jack]

So it gives the customer time to hire or call or look around. It gives the customer time to do this because the test. Yeah, cancel. They could talk to their cousin who says hey no, you could buy a unit for $1500 and I'll come install.

[John]

Yeah.

[Jack]

You know there's about 17,000 ways that you could lose a customer at that transactional point or the junction point right there. So I mean I like it. My thing is just like how do you get, how do you get the text to that level? Because our.

[John]

Well, it's a lot of training. It one is a lot of training. But to. There are a lot of techs out there. Like over the years we've had plenty of techs cross $1 million of equipment soldier. Now they do need a lot of help with like here's how to offer options. Here's how you like you do have to work through that a lot but like you can have seven figure selling texts. Like we just hired two and like one of them does a couple million bucks a year.

[Jack]

I mean as a company that started out in that direction. One of the guys that left that first week that when I started my business he wasn't a million dollar but he was $750,000 in a small company, in a two person two, three truck company. So like I know it's definitely possible and we've tried to buy other companies that are two guys and those two guys are tax owners. Everything their wives.

[John]

Yeah, yeah.

[Jack]

And they're. They're doing about a million each because there was a two million dollar top line company and then sub out the install.

[John]

Yeah.

[Jack]

So like it's definitely possible to find those guys. The hard part is just in my opinion it's finding those guys and having a recruiting process and then a systems process to be able to make it.

[John]

So train it. Yeah, yeah. It gets. I and I, I think it just comes later. I think it, it comes at the point where hey, the team is big now. It's at scale and we need to be able to this it's no longer one or two comfort advisors. Like how do you run 17 comfort advisors? Like that's the question. How do you run 17 or how do you run 8? You know, not like onesie twosie. But the companies that we're drawing inspiration from for this process are literally running 20 comfort advisors. Like that's it. And all they're doing is marketed leads all day long. And, and in order to get really good at it, you just need to be doing marketed leads.

[Jack]

Generalist to specialist. The specialist is specializing at comfort or marketing leads.

[John]

Yeah.

[Jack]

I don't like this conversation, John. It feels like a lot of lift that I just don't want to think about.

[John]

I don't think you have to worry about it. I don't think you have to worry about it. And it's kind of messy. Like, it was really messy. Like, we, you know, we had some. We had obviously some turnover in the process, but, like, long term, it's the right decision. Like, it's. It's the businesses that are like the businesses that are twice our size. This is the process. So. And we want to be twice our size. So. Okay, that's what we're going to do.

[Jack]

That's sweet. That's sweet. And it's cool that their industry allows you to see that. Like, they're. They're really open to the conversations. Even though. Right. Peterman's potentially moving into your market.

[John]

Like, we compete. Yeah.

[Jack]

Yeah. So, like, it's so interesting how this. This industry is so friendly and so nice across strategy and model. Too. Cool. And where. How do we even get started on that just, like, new thing you were doing?

[John]

No, I. Well, we're in the process of dividing our H Vac team and we just brought our sales manager on, so we're really excited about that. We've never had a sales manager before, so we have a few teams right now, actually, that. It's cool. It's, like, different. It's a new thing. So each of these teams are getting big enough that we have to actually split them in half. And we have three teams all doing this right now. Like, okay, what do you do once you have 12 sales plumbers? Well, probably four sales plumbers ago, we should have hired a second manager and then had two teams of eight and got another 16. Same thing with H Vac. Like, we were having our service and sales managed by the same guy. It's a lot of people. 17 people. Right. Like, what are you gonna do with that? So we're dividing those off and then I think we'll divide H Vac service again pretty soon into like, some version of 6 and 6. The problem is, like, obviously H Vac service, like, doesn't produce revenue really. So it's hard to, like, you know, it's hard to give overhead because, like, the H Vac service doesn't really support itself. You know, unfortunately, that's just. We've tried over the years to, like, get more out of it, but it.

[Jack]

It just doesn't H vac causing problems like usual. Sexy. But then causes a bunch of issues.

[John]

Yeah, I mean I, I think it feeds install like it just, it feeds install like that's what it is. We talked about the business, but that's.

[Jack]

What it does is install.

[John]

The business is install like the business. You know, like most companies try to run an 80, 20 of like 80 of your revenue and H vac should be install and 20 service. We're typically like an 85, 85, 15. Frankly, we're comfortable with that. And I actually, I wouldn't even mind getting up into the 90s because now that we know how to get leads and we understand our math, we can just go buy more leads. Like I don't need to go through this whole like, let's get a tech out there, let's diagnose it. No, I'm like, let's get up to 10 CAS and run some freaking leads. Like let's scale a sales team. That's that, that gives me a lot of energy.

[Jack]

Yeah. I mean you see it in other industries, right? Like water filter only companies, they're just only running, they're just only running comfort.

[John]

Advisors or bathrooms exteriors. Like. Yeah, H Vac is the only one that has like a feeder system. And I think the smaller you are, the more you're like, oh, I have to do that. But like Logan has a three location, 70 million dollar h vac business. They have 17 comfort advisors and they're just running comfort advisors. And I think that's freaking great.

[Jack]

Yeah. It leads to the, the, the company at once you start getting to a scale becomes less of a H vac company, it becomes more of a marketing company that drives to hv.

[John]

We're a marketing and sales company. 100.

[Jack]

Yeah. Which is super interesting because it always feels like when we talk about like the 9010 because we, I think we're somewhere like 70 low 70s, like 71, 72.

[John]

Oh yeah. Rich is there too.

[Jack]

Yeah.

[John]

And he's like 60 or something.

[Jack]

It's difficult because my, the worry on the back end. Right. Is like at 90% the amount of marketing leads you have to drive and close is crazy. Just because you can't sustain like a 90.

[John]

And that was my argument earlier. If you know your math and you're a marketing and sales driven business and like you understand the funnel, then it's not intimidating. Like that's just like what it is. And, and I think what gives me a lot of like relief around this is roofing is 100%. Exteriors is 100%. Like, it's. That is just how those businesses work. And our industry is just like we have this crutch of having service. No other industry with a $10,000 average ticket has this type of thing. Like none of them. And they all do just totally fine. So I think, yeah, I, I think the industry is wrong, which is fine with me because that means like, I think I'm right and because every other business in the world is just like cact ltv like boom. And. And they're big.

[Jack]

You just want to own a roofing company, John, just say it already. I do just buy a roofing company.

[John]

I honestly do. Chad owns one, Chris owns one. Like, is it my time?

[Jack]

You know, you just want to own a roofing company? Get real.

[John]

I, I think it would be fun to just be marketing and sales driven, which like, that's what plumbing and electric are for us is plumbing and Electric are. They're 100% sales sales. Instant like marketing sales at this point. Like H Vac is 8515. Like plumbing is like 99 sale, 1% service. Like it's same with electric.

[Jack]

I mean, I think it comes down to. Right. There's no mechanical function to plumbing or H vac for the most part. I mean, yeah, there's pumps and, and stuff that you have to maintain, but not really. They're like the pumps in, in plumbing are built as 10 year, no maintenance pumps types things. And so, you know, I view H Vac more as like the auto mechanic industry to some extent in the sense that, yeah, like it is a piece of functioning machine that needs to be maintained regularly or it breaks down. You got to do your oil changes.

[John]

Yeah, really interesting. We have the same thing with generators. So like we are thinking about joining like a. The generator generac program. And if we did, we could, we could access all of the service leads. But like, it's like, why do I want them? Yeah, like why do I want them? It's like, okay, I can go out and get 500 bucks and I could do that a lot and then have to optimize routes and like all this annoying stuff that would never amount to that much money. Or I could just go get leads and cell generators. So yeah, I feel like, so if.

[Jack]

I'm taking away anything from this episode, it's, you know, everything that we worry about in the H Vac industry. Just don't worry about it anymore. Stop worrying about service and just go install units. Market install, market install. Yeah, just figure that out and you're golden. Don't even worry about the rest.

[John]

Marketing and sales. We're a marketing and sales consumer brand.

[Jack]

I mean, I wouldn't disagree with that idea though, in general, because I think, Lyle, I forget what company they have.

[John]

They have a top line.

[Jack]

Is that top line. Systemized leads? Yeah.

[John]

Yes. Yeah.

[Jack]

So, yeah, they're literally doing it.

[John]

They're literally doing it.

[Jack]

I mean, I will say though, like, he cracked the marketing formula at just the right place in the right time to get on, like, Tick tock when nobody else was on Tick tock. And it was super juicy to be able to do that but still work. But yeah, it's definitely growing.

[John]

So no, it's.

[Jack]

It definitely works. I'm not. I'm not discounting that at all. We used it for a year and a half and we potentially would go back to it. But it's, you know, as a service, it's very expensive compared to what you can do yourself.

[John]

Yeah. I haven't even looked at using them as a service, to be honest. But I do think, like, they understand the number.

[Jack]

They definitely understand the number and they understand, like the speed delete process.

[John]

Just like CAC to ltv. Basic math.

[Jack]

Grow your John and Jack arguing episode. Everyone's like, oh, gosh, there's trouble in paradise. No wonder why we haven't seen them together in the last.

[John]

It's three weeks. We're arguing about cac.

[Jack]

Yeah, don't put that in there.

[John]

No, no, no. That's the time.

[Jack]

Oh, fun stuff. Wrap it up.

[John]

Yeah, let's do it. Thanks for tuning in. If you like what you heard, make sure you check out owned and operated dot com. Sign up for the newsletter. We're officially in the 40 thousands, so we're super pumped about that. And we're aiming for 100, so that'd be fun. Sign up. Make sure you like and subscribe.