#232 Buying $200,000 in Leads - Is It Worth It?

Summary

Owned and Operated - A Plumbing, Electrical, and HVAC Business Growth Podcast

Episode #232: Buying $200,000 in Leads - Is It Worth It?
Release Date: August 12, 2025
Host: John Wilson
Guest: Sam Preston, CEO of Service Scalers

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Introduction

In Episode #232 of the "Owned and Operated" podcast, hosts John Wilson and Sam Preston delve into the intricate world of lead generation for home service businesses. Titled "Buying $200,000 in Leads - Is It Worth It?", the episode addresses whether hefty investments in purchased leads can drive substantial growth compared to relying solely on organic lead generation methods.

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Lead Generation: Buying vs. Organic

John Wilson kicks off the conversation by highlighting the perennial debate between purchased leads and organic lead generation. He emphasizes the challenge of relying solely on organic leads:

"[00:00] John Wilson: We think about leads a lot. Like, it's kind of an obsession... If you can just go buy the lead, you just go buy the lead."

Sam Preston advises against spreading resources too thin and suggests focusing on channels that yield the best returns:

"[00:10] Sam Preston: Don't spread yourself too thin. Like, don't just do everything."

The hosts agree that identifying and capitalizing on effective lead channels is crucial. They advocate for "capping" successful channels to maximize their potential, essentially pouring resources into what works best.

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Marketing Budget Strategies for Different Business Sizes

Listeners posed questions about optimal marketing budgets for varying business scales, with insights particularly focused on smaller companies.

Listener Question 1: "How should a smaller company less than $500k stand out with a marketing spend of $1k to $2k a month?" (Jenna Harris)

Sam Preston recommends against hiring agencies for smaller budgets, suggesting grassroots efforts instead:

"[03:55] Sam Preston: ...don't use that on an agency. Like, you're just not going to get very much out of that relationship."

He advises leveraging free resources like YouTube to learn about Local Services Ads (LSA) and Google My Business (GMB), and investing in platforms like Nextdoor for local engagement. John Wilson concurs, adding that smaller businesses can innovate effectively with limited resources by focusing on content creation:

"[05:18] John Wilson: ...TikTok Organic would be really interesting... content creation is super underutilized."

Listener Question 2: "How can I spend $5k to $10k a month on leads if LSA is only giving me zero to one leads per week?" (Robert Brooks)

Sam Preston suggests testing various lead aggregators like Angie's List and advises maintaining flexibility in budget allocation to explore what yields the best results. He emphasizes the importance of cycle management in LSA:

"[07:00] Sam Preston: LSA is pay per lead, so if you're not getting leads, you won't be paying for it... get started right now."

John Wilson shares his experience transitioning from a $4 million construction business to a $6.5 million electrical service company, illustrating the effectiveness of reallocating resources based on demand and lead sources.

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PPC (Pay-Per-Click) Effectiveness and Optimization

Listener Question: "Is PPC dead? If not, what should be focused on to increase conversions other than optimizing the landing page, especially without strong brand awareness?" (Brendan Grant)

Sam Preston firmly asserts that PPC is far from dead, citing that 75% of their clients are "on track" with their PPC campaigns:

"[32:27] Sam Preston: The majority of our clients are hitting... 75%... on track."

He acknowledges the increasing difficulty for smaller companies to compete in PPC due to larger competitors but maintains that with proper management, PPC remains a viable lead source. John Wilson echoes this sentiment, expressing his surprise at the sustained effectiveness of PPC:

"[33:09] John Wilson: That's a lot. Yeah, yeah, PPC is not dead."

Both hosts emphasize the necessity of continuous optimization and the challenges inherent in managing PPC campaigns without professional assistance. Sam Preston recommends always partnering with an agency for PPC management, as it's too complex to handle internally.

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Choosing the Right Marketing Partner

Listener Question: "How to assess which marketing company to partner with, considering the abundance of options in the home service space?" (James Stone)

Sam Preston provides a structured approach to selecting a marketing agency:

1. Ownership of Assets: Ensure that all marketing assets remain under your control to maintain accountability.

2. Fair Fee Structure: Evaluate whether the agency's fees are proportionate to the services and results provided.

3. Industry Understanding: The agency should have a deep understanding of the home service industry and your specific business model.

"[39:16] Sam Preston: Our fee is roughly two grand a month. Minimum retainer to run PPC... somewhere between, like, maybe it is worth it to go pay nine grand to Scorpion if they get you the roas."

John Wilson adds the importance of verifying the agency's experience with businesses similar in size and scope to yours, and suggests probing questions and client interviews to assess competence.

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Importance of Google Map Pack Rankings

Listener Question: "How important is ranking top three in Google Map Pack for local service businesses?" (Mark Mag)

Both hosts agree that ranking high in the Google Map Pack is critical for visibility and lead generation. John Wilson emphasizes their substantial investment in Google My Business (GMB) optimization:

"[45:34] John Wilson: We spend thousands of dollars a month on our GMBs. We're driving insane amounts of leads and we're still growing."

Sam Preston predicts that AI advancements will further amplify the importance of GMB rankings, making it an even more vital component of local SEO:

"[46:18] Sam Preston: How you're able to optimize your GMB is going to be bigger than it is currently... invest in that."

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Website Optimization and SEO Post-Redesign

Listener Question: "I recently had my website redone and leads have kind of fallen off." (Justin Beam)

Sam Preston identifies potential issues related to website redesign, such as broken URLs affecting SEO rankings. He advises maintaining URL structures or implementing proper redirects to preserve search engine rankings.

"[46:30] Sam Preston: Specifically, it's probably a link issue... keep those URLs the same."

John Wilson shares a practical solution using Chrome's Wayback feature to retrieve old URLs and ensure continuity in SEO performance.

"[47:39] John Wilson: Now, the way we solved this is we used Chrome's look back... pull the old URLs off it and rematch it."

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Conclusion and Key Takeaways

The episode concludes with John Wilson and Sam Preston summarizing their strategies and future plans, including a 30-day series aimed at doubling profits and leads for home service businesses.

Key Takeaways:

1. Invest Smartly in Lead Channels: Identify and capitalize on effective lead generation channels, whether purchased or organic, without spreading resources too thin.

2. Optimize Marketing Budgets Based on Business Size: Smaller businesses should focus on grassroots methods and gradual scaling, while larger companies can afford to invest more heavily in multiple channels.

3. PPC Remains Viable: Despite increasing competition, PPC is still an effective tool when managed correctly, preferably by experienced agencies.

4. Select Marketing Partners Carefully: Ensure agencies understand your industry, have fair pricing, and retain ownership of marketing assets.

5. Prioritize Google Map Pack Rankings: High rankings in local search results are essential for visibility and lead generation.

6. Maintain SEO Integrity During Website Redesigns: Preserve URL structures or implement redirects to avoid losing SEO rankings post-redesign.

Notable Quotes:

• "If you're really relying on organic leads to drive traffic, I feel like that's kind of playing on hard mode." — John Wilson [00:00]

• "PPC is not dead. The majority of our clients are hitting... 75%... on track." — Sam Preston [32:27]

• "One of the best bang for your buck investments is your GMB." — John Wilson [44:35]

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

Transcript

[John Wilson]

We think about leads a lot. Like, it's kind of an obsession. So we're obsessed. If you're really relying on organic leads to drive traffic, I feel like that's kind of playing on hard mode. If you can just go buy the lead, you just go buy the lead.

[Sam Preston]

Don't spread yourself too thin. Like, don't just do everything.

[John Wilson]

I think you should always aim to cap a channel. So when you find a channel that works, you want to ride that channel like you stole it.

[Sam Preston]

Then I think you could probably bring in an agency to start doing some of that. But also, like, make sure the fee that they're charging actually makes sense.

[John Wilson]

Like, our budget painfully is $200,000 a month. Welcome back to the Owned and operated podcast. I am your host, John Wilson. I'm the CEO of Wilson, a home services company in Ohio. We have roughly 160 team members and are on track for about 30 million bucks this year. I have Sam Preston, the CEO of Service Scalers, which is a digital marketing agency for home service companies on with us today. Welcome back to the show.

[Sam Preston]

Also 160 team members and close to 30 million close.

[John Wilson]

Within 25.

[Sam Preston]

We're doing Q and A today.

[John Wilson]

Today we're doing Q and A. Yeah. So we had. So Facebook group. Make sure you join the Facebook group. It's really good. We have like a. We're, we're about to hit a thousand members.

[Sam Preston]

Let's go.

[John Wilson]

And Facebook Group has been in labor of love. We started it about a year ago and it's just slowly growing and we've been hyper selective about who we let in there and very liberal with who we kick out so that it stays quality. Like I'm in some of these groups where it's just like non stop vendors, non stop all this stuff and like this is just contractors trying to solve stuff. So I think it's really good. I think it's a really great group, really great community.

[Quick Staffers]

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[Sam Preston]

Yeah, you even have other, like, marketing companies in there that really add value. Every single time someone has a marketing question, they go in and they answer really good questions. And so it never feels like, you know, we're competing for, hey, who can post their stuff the most. Like, it just feels like, come in, ask your questions. We're all here to help.

[John Wilson]

Yeah, no, it, it, it feels really good. I think we've, it's probably one of the things we've done the best is just like, keeping that group clean and, and like, high trust. Yeah, yeah, it's a, it's a really good group. All right, so today, so we posted a question in there. We said, hey, Sam and John, you know, a couple, A couple total ballers, you know, that we are, are, are going to talk on the show. What do you want to know? And we got, we got some really good questions. So we're going to rip them today.

[Sam Preston]

Yeah, let's do it. I get two questions that are very similar, but two different budgeting questions and two different levels. I'm going to start with the lower one.

[John Wilson]

Okay.

[Sam Preston]

And then we'll go to the next one. So, yeah, I think I would say.

[John Wilson]

Like, yeah, who asked the question? And then, yeah, what is it?

[Sam Preston]

Jenna Harris. How should a smaller company less than 500k stand out? So spending 1 to 2k a month to get biggest bang for their buck. So I think that's two, you know, one to $2,000 of at, you know, marketing spend. And my first thought would be, is don't use that on an agency. Like, you're just not going to get very much out of that relationship. So don't go at that level. Don't go agency. We want to do all the things that we can do grassroots. So, yeah, go to YouTube and try to learn everything you can on LSA and GMB. Right. 80 to 90% of what we do as an agency to run other people's accounts. You can learn on YouTube, there's great videos out there. Go learn it and start doing those actions. And the third thing I would say is get into Facebook groups. I know a guy who has like a next door and that's all he does is his marketing. And he just completely owns next door for this local area and absolutely crushes it. So do the things that the bigger companies can't do. Well, yeah. And be small. And I would probably sink the 1 to 2000 on either ad spend in LSA or lead partners, probably.

[John Wilson]

That's. I mean, that's just a tough amount of money to work with.

[Sam Preston]

Yeah.

[John Wilson]

But I also think, like, innovation comes from lack of resource. And there are companies out there that, like, run circles around me and my extremely capable team, and they are a tenth of my size or maybe a twentieth or a thirtieth or a forty, like, small. And Nextdoor is one of those great examples where, like, you can really do something interesting in grassroots. That would take me a much larger investment. TikTok Organic would be really interesting. I see TikTok Organic clean up next door, like, content creation, I think, is super underutilized. There's a. There's a plumber in Akron, and, like, I. He's doing amazing, and it's like, one freaking dude. And he just, like, posts pictures of the jobs he does every day. He's like, oh, loved working for Nancy over at wherever.

[Sam Preston]

And.

[John Wilson]

And people eat it up. Yeah, it's a plumber. Right? Like, he's doing an awesome job. And so, like, I think my take would be. What? Yeah, exactly what you said, but just a bigger emphasis on content creation in a way that I can't do it, because I think that would resonate with people. And I think if you're in the Facebook groups, if you're in the next door, to me, that's a more valuable use even than lsa.

[Sam Preston]

Yeah.

[John Wilson]

Yeah. Because I think part of the problem with LSA is minimum reviews. So maybe it's like a thumbtack or. Yeah, the 33 miles. A thing. I don't know. I'd be figuring out, like, basically. I agree with you. I just added a little bit more color.

[Sam Preston]

Well, to just kind of push back on you on the LSA thing. LSA is pay per lead, so if you're not getting leads, you won't be paying for it. Your biggest issue with the momentum there is is getting traction to begin with. And so because you don't have enough reviews, you won't get traction, but you also won't be paying for anything. So I want you to get started right now, because if it does start working, it is a really good way to push up into the market. Granted, you're right. Like, it is going to be a harder game, and you may not get anything. So you'll probably set your budget for, like, I don't know, a thousand a month, and you probably won't use that at all until it does start working. And you just want to be ahead of the game. What you don't want to do is be like, oh, I need LSA leads now, because we're getting bigger. I've got to feed my texts. They're hungry, and they're just bored sitting around their hands, and I don't have enough leads. What do I do? Oh, let's start LSA now we. You know, the. The. The tree thing, Right? When's the best time to plant a tree? 20 years ago. You know, second best is today, so get started when you can.

[John Wilson]

That makes sense. I think we're both pretty aligned. Don't do an agency, buy some direct leads, and do things that I can't do.

[Sam Preston]

Yep, yep, yep. Robert.

[John Wilson]

Thank you, Jenna.

[Sam Preston]

Jenna, you're awesome.

[John Wilson]

Thank you, Jenna. Thanks, Jenna. And also hope you kill it. I can't wait to hear your question. When you're like, how should a smaller company. 5 million. Like, I'm pumped. Like, yeah. Give us, like, every couple months, tell us how it's going.

[Sam Preston]

Let's go. You know that. That $2,000, I don't know if that would get you into breaking five, but, like, you know, like, I feel like that would be a great place to use some of that money is. Go learn.

[John Wilson]

Yeah, go learn.

[Sam Preston]

Go learn. Robert Brooks, where and how can I spend 5 to 10k a month on leads if LSA is only giving me zero to one leads per week? So that exact kind of scenario I'm talking about. First off, Robert, thanks for the question. Appreciate you, bud.

[John Wilson]

Thanks. Thanks, Robert. Second is Robert just sent me a really cool dashboard that rips data out of service Titan. And I think he said housecall pro. Okay. Yeah. Robert's a cool guy. Everyone should talk to him.

[Sam Preston]

Okay, Robert. Robert. Appreciate it, man. Yeah. 5 to 10k is, again, kind of that hard spot. Right. So, you know, again, if you're on that lower end, 5k. Again, I'm very tentative to want to give my money to agencies because, like, you know, you say you give them, you know, $1,000 or 2,000, well, then you only have about $3,000 for ad spend, and that's. That's fine. You can do something with that. I almost want to do things that give me more for that money. Yeah. And so I tend to want to put that money in LSA to lead aggregators and just try to figure out where can I go and get my leads from and test all those different lead aggregators. I've got a friend who swears by Angie's List. He spends, I think, 25k a month on Angie's List. He some of his best leads and they literally will not let him spend any more money.

[John Wilson]

That's nice.

[Sam Preston]

You've literally maxed out for your area. We, we can't, you know, we can't do anything more. So like there are plenty of lead partners in your area. Find one, test it out, see if it works. If it doesn't, try another one. I think that's, you know, that lower that 5k. Once we get close to that 10k mark, then I think you could probably bring in an agency to start doing some of that work for you. Right. Like you're, you're probably around that one 1.5 million dollar mark. I want to start bringing in some agencies to take care of some stuff that we can't do at a volume that you can't do. So maybe that is like your GMB or running your LSA if you're only getting one to zero leads A week.

[John Wilson]

Say a week?

[Sam Preston]

Yeah. Per week. You know, I would say that I want to know what you're actually doing from an LSA standpoint because LSA is a cycle. It wants to see that you're getting phone calls, you're answering those phone calls. Those phone calls are turning into appointments. Those appointments are turning into five star review book, you know, book jobs and closed jobs and five star reviews. If you continue that cycle, you can get really good results. In fact, I think we have a review on ours that said we went from one, one LSA lead a month to one a day in our first 30 days with service scalers. And again like most of what we know and what we do you can find on YouTube and just go do it yourself. So if you're on that lower end.

[John Wilson]

Do those things we, I'll take a little bit of an opposite. I, I totally agree on the LSA thing. Like, yeah, fix your lsa. Like I, I think that's the first part. Either do it alone or, or like, yeah, partner with Sam or something to do it. But like fix your lsa. Like that is a, going to be a great source of leads. I first started working with an agency when my budget was six. So to me like five is like, okay, yeah, that makes sense. Yeah, like five is a lot of money. You know, that's a lot. Like that's 60 grand a year and like for, for us, like we were a million dollar business. So 6% of our revenue is a big investment. And I had never done it before. Like I remember I actually have the book somewhere in my office, I think. But I bought Google Ads for dummies back in 2015 or 16 or something. Yeah. And I tried to run those ads for a little bit and then like, I think I did from like a thousand to two thousand or three thousand. I tried to like run Google Ads. Like, it wasn't good, dude. It wasn't good. And, and I, I. So we brought out an agency at like 6 and it was scary. It was intimidating. Never done that before. But you know, like, growing a business is just every month you're going to do something you've never done before. So. And like, yeah, making an investment in marketing. Like, businesses like literally only grow when you get more leads.

[Sam Preston]

Yeah.

[John Wilson]

So I don't know. I think if you're, if you're committing $60,000 a year, I think you should be thinking about how to, how to get some support on that is my take.

[Sam Preston]

Yeah.

[John Wilson]

Especially when there's no one inside the business that has ever done it before.

[Sam Preston]

Yeah. I would say that there are certain things that I definitely wouldn't pay. If you only have that much. I probably would. I'm not starting on a big SEO campaign. Maybe something small, but like, I'm probably, I want to do things that I'm putting money in and it's giving money out.

[John Wilson]

Getting leads directly.

[Sam Preston]

Yeah, leads, phone calls, lead.

[John Wilson]

I mean, that's something that doesn't change. Something that doesn't change. I mean, even now, like, our budget painfully is $200,000 a month for marketing. Oh my God. And sorry, like so much. Yeah, so much of it is focused on like, put money in, get laid out. Put money and get laid out. And it seems like that's always the highest and best use, no matter where you are. And some of the bigger mistakes that I see is like, oh, our budget is big enough, so I'm going to do this now. And like, we fallen. We've fallen trapped to that too. And I just think, like, focus on the lead.

[Sam Preston]

Yeah. I mean, I think at some point you do get big enough to where you need to start focusing on like, future you, future John. Like, what is John going to need? And you know, at 35 million and how do I, how do I start working towards there? So, like, I think that there are some things that if you are big enough, you should probably start investing in things like SEO. You know, it's a bigger game. AI is, you know, a very different game from a marketing standpoint that I think you should start getting into. But it's probably not between that 5 and 10k mark unless you just, you're going to start trickling in a little bit of SEO. So it has a slow burn, but even then you're not really keeping up or catching up or passing your competitors. So at this rate, I'm focusing on anything that's going to be able to help me produce a lead quickly.

[John Wilson]

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 paper 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 to date we're up 30 something percent. April alone was 55. And we're just super grateful for service killers and that partnership. So if you want to learn more about how they helped us, make sure you check out service scalers dot com. Yeah, that makes sense. And then thanks, Robert.

[Sam Preston]

Robert. One of my favorite people in the entire world, Jeff Bates. I actually met him at the breaking.

[John Wilson]

I love a good Jeff Bates dude. He came down and did an interview. I don't think it's aired yet, but yeah, he came down and did an interview with us and yeah, I'm pumped.

[Sam Preston]

I'm going to be.

[John Wilson]

Love a good Jeff Bates.

[Sam Preston]

Yeah, yeah, it's good Jeff Bates. It's awesome. And he said like, hey, what's your marketing budget? Look at like 1, 3, 5 and 10 million for a single trade and.

[John Wilson]

Ooh, yeah, I feel like I have, I have like new opinions on this.

[Sam Preston]

Really? I want to hear. Tell me.

[John Wilson]

I, I'm, I so like I talk to a lot of people, right? I just talk to a lot of people. I have a podcast, I talk to a lot of people and I am finding, so historically I have been a 4 to 6% of marketing, like of revenue company for marketing. So that's like good. And we've been growing and I think like conventional wisdom is 10%. I'm starting, I'm starting to see single trade businesses in the teens often.

[Sam Preston]

Interesting.

[John Wilson]

I'm not saying, I'm not saying that people should do that because the Jeff's, Jeff's question is what should a marketing budget look like, and I'm not telling you that's what it should look like. I'm just telling you what I am seeing. Yeah, I think it's, I think it's fascinating. And now there's a couple similarities in every time I look at this. So I'm a big fan of like, let's get all the data, let's talk to as many human beings as possible and let's put together. Actually, I should honestly do a video on this because I, at this point, I've talked to 80 on this exact question. What is your mix between media and leads? And that is a fundamental question. And if, like, there doesn't seem to be an exact right or wrong, like, people have opinions. But as I, as I dive into who's spending the most, the most is being spent by companies that have a much larger media brand, like branded spend than lead gen consistently interesting. So I'm seeing companies with like, I mean, these are not small budgets. These are like millions of dollars a year budgets spending 15%. Sammy from Apex Pros in Columbus has been saying, he said this on a few podcasts recently. He's like, Yeah, I spent 15%. Now they're growing like crazy, but they're spending 15%.

[Sam Preston]

Yeah. Which is a lot.

[John Wilson]

That's a lot of money. Yeah, that's a lot. And I'm not saying it's right or wrong. I'm coming from the perspective of 4 to 6%.

[Sam Preston]

Yeah.

[John Wilson]

Now this year we made a big investment and we moved up to eight.

[Sam Preston]

Yeah.

[John Wilson]

And that was like, I don't know. So like seeing people double that is like, holy, holy.

[Sam Preston]

The other day, as a power washing company and they were spending a hundred thousand dollars a month Facebook ads and $200,000 a month in Google Ads. Profitably amazing. Really. Well, amazing. And I look at that. It's a single trade. There's not like, yeah, it's not like you guys, where it's like, literally, we can take care of your entire house if you wanted to. One thing that I was like, yeah, I didn't think you could even spend that much in one local area. It's not a franchise. We're not talking about like national company, one area. And they're absolutely crushing. And so like, you can, you know, we talk about like $5 million budgets or $5 million company or $10 million company. My couple, you know, hot takes here is don't spread yourself too thin, right? Like, don't just do everything.

[John Wilson]

Totally, totally agree. Totally agree with this.

[Sam Preston]

Find what's working for you. It's not going to be the same thing that works for John. It might be, but find what's working. Like, where are you putting money in? And it's coming at, coming back to you. The cost per lead that allows you to sell jobs consistently at a high volume with enough profit margin to continue to grow and then keep pushing that limit. Just keep investing more money in those same channels. Don't do one channel. That's a big mistake too. Right. Google AI switches, changes things. I don't know. Put you in bad, bad.

[John Wilson]

I don't. I think, I disagree. I really like man one. Like, I think you should always aim to cap a channel or like close to cap a channel. And I think I agree, like, hey, find the thing that's working, but like, it should only be one or two things. And what a common thing that I see is like, hey, I spend three grand on lsa. That seems like a lot. So I'm going to go add this new thing for three grand and I'm. And in. In. I'm sitting here like, dude, you're spending three grand and it's working.

[Sam Preston]

Yeah.

[John Wilson]

And you're trying to take, like, you're trying to not give more to your winner. Like, you give more to the winner. You bet on the fastest horse. So when you find a channel that works, you want to ride that channel like you stole it.

[Sam Preston]

Sure.

[John Wilson]

Like, you want to run that thing into the ground. So, like, for us, that was lsa. Now it's a different time today than it was in, know, early 2000 and 20s. But like LSA, we were spending 90 grand a month at our peak with LSA.

[Sam Preston]

Yeah.

[John Wilson]

And that was the one single source that we had for leads was lsa. And organic.

[Sam Preston]

Yeah. No, I'm, I'm with you. If you're, if you're spending Underneath, call it 20 grand a month and a single channel. And it's working. Just keep pushing that budget. And in fact, like, the number really doesn't matter as long as you can keep putting money into an ad channel, whatever that is. I don't really care what it is. Whatever. You can put more money in the channel. It continues to give you a return. Keep upping that every week, every month, whatever that is. And don't get yourself siloed into one channel like you should. But then you should also take a percentage of that. Call it 5%, 10%, call it a discovery budget and go test something else out. Should you do this if you only have three grand a month to spend? No. Right. Everything is discovery. Right? Now we should find something that works and dump all our money into it.

[John Wilson]

Yeah.

[Sam Preston]

Should you do that?

[John Wilson]

Maybe you get your first like 30 grand in one channel and then you start thinking about it. But dude, I like, I don't know, like I have friends that spent not on LSA, but like with PPC, like they ran PPC up to 90 or $100,000 a month before even thinking about another channel. Because it's like, did you scale the channel? Did you, did you scale it? And at 10,000amonth, you didn't scale it. 20,000, you didn't scale it. There's still more to go. 30, 40, 50, like I think you start thinking like you might be at the cap of what you can get above 50 or 60amonth. Not a year, but like a month. So if you think you're at capacity for leads, the answer is you're probably not. You can run that thing like you stole it.

[Sam Preston]

Yeah, I mean, I'm with you definitely. Like, I don't know, we probably have different opinions on like when to make that change, which is great. Like, you know, whoever, whoever's listening to this run in, we disagree. You probably disagree with us. Run your business the way you want to. I think that you want to continue to invest into it, but like quickly. I want to, I want to as soon as possible get to two to three channels that are working just because I want to diversify my risk. Right. Like I don't want Google Ads to go away, which, you know, it's been going for. Like it's kind of like the S and p, you know, 500. Like it's literally been working for the last hundred years, probably not 100. So like just keep investing, it'll be fine. But also like, I like, I like just multiple channels, right? Like it's kind of what we're doing over here at Service Scalers, right. Like I have one lead source that works really well and then I'm also like, hey, how can we just test this one out? Like, let's see what else we can get at it.

[John Wilson]

All right, so for 1, 3, 5 and 10 for a single trade, I think that a single trade you're probably going to be running pretty close to like an 8 to 10%. Yeah, you can go above it if you need to. We have the benefit of like cross trade referrals, so that's probably how we're able to drive a lower cost budget. We also, even more importantly have really sold members and members becomes a really big part of your marketing strategy later on. Because it means that you, like, there are some companies that are 40, $50 million and they don't market at all, like 0% marketing budget because they're just like calling their members. So it's crazy. But members is like an owned lead source, so that's how you should think of members. It's an owned lead source. So I'd say 8 to 10%. But there are people running 15, and if you can do that profitably and you're really trying to take share, like, I guess go for it. But if you can't do that profitably, which I think I feel like a lot of people, I could not do that profitably. Like, we're a 15 net business now, so I would go down to 7 or 8% net. And I still have debt and stuff out to, you know, that we have to pay. So, like, I don't think I could run 15 if I wanted to.

[Sam Preston]

That's the beauty of being a smaller business, right? You just like, you have some of those things where you can do things. You can do things that bigger companies can't do sometimes. Yeah, agreed.

[John Wilson]

Thanks for your question, Jeff. We love you.

[Sam Preston]

You're awesome. Yeah. Leaf Martin has, and I think this kind of like, trans is beautiful. Transition says I'm new but strictly commercial electrical. So one trade service doing 6.5 million last year and want to get into residential market. Information on the marketing with almost no residential presence would be helpful for us.

[John Wilson]

Oh, yeah, I think Leaf I went through this. We just. We just did this two years ago now a little different because we had plumbing and H vac, but we were electrical construction and we pivoted to service. So two back. Back in 2022, we did $200,000 of electrical service. In 2025, we will do six and a half.

[Sam Preston]

Let's go.

[John Wilson]

Yeah. So it's like 200 to six and a half and three years feels pretty good. So. Yeah. So what we have learned is electrical does not have the same demand that plumbing and H Vac has, and it is much more dependent on bought leads. So the way that we think about leads, one of the way we think about leads a lot. Like it's kind of an obsession. So we're obsessed. But one of the ways that we think about leads is for a given business unit or service or trade, how many of those leads are organic and how many of those leads are bought on a daily basis? So we measure it daily, we measure it weekly. And what that means is, If I need 10 leads a day, how many are going to come in from my customer base. And how many are going to come in from ll, like ppc, lsa, like a bot lead source. I had to pay for that lead. And electrical, of all of our business units has the highest percentage of bought leads which, okay, that's fine. It's got a great average ticket. So like we have no issue with that. We're able to do it profitably. But what that tells me is it's just a little bit less demand, which is something that everybody knows in general. So what I would be encouraged, what I would all that to say that's kind of exciting because if a company, if you're really relying on organic leads to drive traffic, which there's a ton of trades that do that, I, I feel like that's kind of playing on hard mode. If you can just go buy the lead. You just go buy the lead. Like it's, it's, it's like not that deep, right? Hey, most of our leads, it's like 40 or 50% of our leads are bought instead of organic. So to me, what that tells me is a startup electrical service company can meaningfully compete with me because I don't have that much of a moat. I don't have that much organic lead flow. I buy most of my leads and anyone can just go buy leads. It doesn't take, it's not like rocket science. So I think that's my take here is like you're in a really good position because all this takes is money.

[Sam Preston]

Right.

[John Wilson]

It doesn't take a 20 year advantage. It doesn't take a $30 million company. This takes a credit card and a budget of a couple grand a month.

[Sam Preston]

What's your split on residential when it comes to like emergencies versus like projects?

[John Wilson]

I don't, I don't think we're a good use case for that question. Like we're basically, we're service and replacement. So like we don't do new construction, we don't really do remodels. Like 100% of our revenue is service and replacement revenue.

[Sam Preston]

So someone's calling in saying, hey, I'm having electrical issues, come check. Yeah. So what I mean by that is like of course that, that's all going to be paid for leads. Right. Like, because someone's just literally like, hey, I need an electrician. I have no idea what's going on. I just don't have electricity now to half my house. Yeah.

[John Wilson]

Which again is great. Like that's like such an advantage that all that means is you can just go buy the lead. Like, there's no secret sauce here, which I, you know, that's amazing. Like, so, Leaf, the answer is like, go rip it, bro.

[Sam Preston]

Yeah.

[John Wilson]

Like, go rip it. Like, so. Yeah. I would just buy leads and don't overthink it.

[Sam Preston]

Yeah. Next three years, you can go from six and a half to 12. Right. If you're on John's direction. So, though, go get it.

[John Wilson]

So what we did is we had a $4 million construction company with a 200,000 service and the construction company, it was 2022, so inflation, just a bunch of stuff. That 4 million of construction went to zero. But what we did was we grew service. It was the. I will never be able to replicate this again in my life. Just so we're on the same page. We took service from one person to 20 at the same time, at the same pace that construction was going from 30 to 0. And we were able to move labor from one side to the other and match supply and demand in, like, probably the most outrageous level of execution I've ever pulled off in my career.

[Sam Preston]

It's too good to be actually on purpose.

[John Wilson]

Like, literally. Yes. Like, we took. We shut down a $4 million business and we turned it into a $6 million business, and we did that in the course of a year.

[Sam Preston]

Jeez.

[John Wilson]

Like, that's crazy. Anyway, so that. Yeah, so that happens. So when you have the construction side of the electrical business, you can use that pool as a labor source.

[Sam Preston]

Cool.

[John Wilson]

Which I think is a big win.

[Sam Preston]

Love that.

[John Wilson]

Yeah. I don't. I don't think I could ever replicate that again in my life.

[Sam Preston]

Great question, Leaf. Great to. We've got four more, and I think we've got, like, six minutes. So let's. We got this. We got this. Brendan Grant asked, is PPC dead, if not, what to focus on to increase conversions other than optimizing landing page. If you don't have a real brand awareness yet. One is. PPC is not dead. The majority of our clients are hitting. We call it on track. So, you know, just to give a little insight on our business, 75% of our PPC clients are hitting on track, meaning they're hitting the lead volume, cost per lead that they need to make PPC successful.

[John Wilson]

That's a lot.

[Sam Preston]

That's a lot. And that includes that 25% includes people that are hitting a, you know, a 90 cost per lead when they want a $75 one or, you know, someone who literally gets started today like that kicked off today. They're already off track until we prove that they're on track. So there is like some.

[John Wilson]

Oh, that's interesting. Yeah, yeah.

[Sam Preston]

And I kind of expect that number. So we went in the last three months from 65 to 75% and I, my, my goal is to push that towards 85. Yeah. So PPC is in just to be transparent. There's also some of those campaigns that are just not working and it's, you know, we are testing and trying to test our way out of those. So not coming on here trying to say I'm perfect, you know, sometimes it just doesn't work well.

[John Wilson]

75%. Yeah.

[Sam Preston]

But I feel pretty good about 75%. It's not dead.

[John Wilson]

Honestly, I am surprised by that. Yeah. PPC is not dead. Yeah.

[Sam Preston]

But it is getting, I think it's getting a little harder. I do think that it's harder to start in as a smaller company to get in and break in just because it works so well and these bigger companies are willing to outspend.

[John Wilson]

If your books say you're making a lot of money, but there's nothing in the checking account, let's talk about CFO Made easy. Most term service businesses hit a point where the money's coming in, but it's still unclear where it's all going. You've got a bookkeeper logging the past and a CPA filing your taxes with no one helping you plan the future. And that's where CFO Made Easy comes in. They provide part time CFO services specifically for trades and home service businesses. H vac, plumbing, electrical, roofing, you name it. They help you improve cash flow, maximize profit per tech and make growth decisions with confidence. If you're tired of winging it financially and you want to see that bank balance grow, schedule a free financial insight [e-mail] or click the link below. We'll uncover what's holding you back and lay out a path forward. No fluff, no corporate finance speak. Cfomadeeasy.com it's time to grow with clarity. Yes. Yeah, there's that. And it's complicated. Like the whole second, the whole second part of this question is how do you increase conversions other than optimized landing pages? Like one that's complicated. Like if I look at, if I look at lsa, put money in, get lead out, right. PPC is like, there's a lot going on there. And, and in a, like paid search engine or paid in general. Like, it's the same with meta. Like if I'm going to go run meta ads, I also have to optimize the landing page. I have to optimize a bunch of stuff there. So, like, there's no, I think my overall comment here, whether it's meta or Google, if you are. If it's not a direct lead, like that customer, you swipe for 50 to $150, you get a lead. And if they get sent to your website, which is going to be meta, tik, tok, Google, I'm sure a lot more you will have to optimize your landing page. Like, you got to do it. That's a part of the deal and that's part of why, on one hand, yes, it's harder. On the other, there is some alpha there because who's going to do it? Yeah, like, that's hard work. It's like a whole other step. A whole other kind of. A lot of steps.

[Sam Preston]

PPC is like one of the only services that I think that you should never bring internal. You should always be an agency just because it's too hard.

[John Wilson]

I agree with this.

[Sam Preston]

And so I'll say this, and I know we got to move on to the next question. I was brought in to consult on a, on a, on a PPC campaign. They were spending $100,000 a month in PPC for a service and they were doing really well. But they're like, hey, how can we get this better? First thing I did was I pulled all the keywords over the last 90 days that have not converted and I matched them to their search terms and I basically found $10,000 of what you would call wasted spend, meaning they spent $10,000 over the last 90 days on these keywords that did not drive leads or, or revenue for them. And I pull this up to him in front of him. I said, hey, I can save you $10,000 right now. We can kill all of these keywords. The problem, though, is they are perfect keywords. Like, this is the looking for your service in your area keyword. And so PPC does get interesting. Sometimes it is just a game of continuing to optimize on your keywords and find things and remove things. And sometimes it's like you are going to have to spend. You're going to have a percentage of your budget that doesn't actually turn out, and you'll have to figure out why.

[John Wilson]

And just keep playing the game. Yeah, it's experimental. It's experimental. Like, we're doing this a lot with Facebook ads right now. And it, I mean, it's the same thing. Like, I don't think there's any getting away from this. Like you need good landers and they have to convert. Like yeah, if, and if you don't want to do that, then like go buy leads. Yeah, I think that's the answer. But like if you want to scale through Meta or Google, you do have to care about landing. You do have to compare, like care about what that those pages look like and how they, how they're optimized.

[Sam Preston]

Yeah. 100. Next question.

[John Wilson]

That was a great, that was a great question. That was a great question. Thanks Brandon.

[Sam Preston]

Thanks, Brandon. James Stone. How to assess which marketing company to partner with. There are a couple of well known names in the home service space and I'd be curious on how to truly identify best in class before you work with one. I'll say a couple things. One, one, case studies, reviews, all can be bullshitted, right? Like there's so many times I get on a, a, a competitor's website and I'm looking at like things that they say and I just like, no, they're lying. It's like, yeah, this is not, this is not right. So I have a couple things that to me are super important. And the first thing is, is that you own everything. You know, I don't work for work with an agency that they take it off your plate and work in their accounts. And the reason why is because you can't hold them accountable, right? Because they own it. You can't look inside the tent and go, hey, what, what keywords have you been bidding on? You know, like, so we want, you want to keep it, keep ownership of it because you want to be able to remove the agency, move on from them. If that is a situation that, that happens. The second thing is make sure the fee that they're charging you actually makes sense. I get all the time. It's wild how much people will spend. And the cheap one. So we, let's talk PPC for a sec. Our fee is roughly two grand a month. Minimum retainer to run ppc. Some people hear that and they go, oh damn, that's cheap. And some people hear that and they go, wow, like that's so expensive. I would never spend that. Like truly, we're kind of in the middle of the pack for that service.

[John Wilson]

I don't even know, I don't even know if you're in the middle. Like, and I'm not trying to like self serve. I'm not trying to fluff you up too much just because we're talking here, but like we were paying Scorpion nine grand. Like I don't even know, like that's insane. That's insane.

[Sam Preston]

A lot.

[John Wilson]

It was 30% of ad spend, which.

[Sam Preston]

That's insane. Like, the most we get, I think is like 10% of ad spend.

[John Wilson]

Right. So I think a lot of. A lot. You know, I've seen into some of these contracts.

[Sam Preston]

Yeah.

[John Wilson]

And they're like big companies. This isn't like, this isn't like, hey, I'm a small company with a $2,000 budget and 1,000 of that is retainer. So 50% ad spend. These are companies with 40 or 50 grand a month budgets.

[Sam Preston]

Yeah.

[John Wilson]

And 30 to 40% is going to management fees.

[Sam Preston]

Yeah.

[John Wilson]

And that is insane.

[Sam Preston]

Yeah. Well, thanks to John, we are now $2,500 a month at minimum. And.

[John Wilson]

It'S crazy. I like, it was nine grand a month to work with Scorpion, but yeah, it's crazy. It's crazy.

[Sam Preston]

Yeah. So. So that's our basic pricing right there. It's 2000amonth to manage it. I see companies trying to sell other companies at like 500amonth to run your PPC and I just don't understand the math. I know what it takes to pay my PPC campaign wizards, if you will, to go run your campaigns, and it's a lot of money. So like, in order for them to be able to run that profitably, they've got to be working with like 60 to 80 clients and they just don't have enough time in the day to go manage that. So I would just really encourage you to look at the price, make sure it's fair. If they're charging you too less or not enough or too much, somewhere between, like, maybe it is worth it to go pay nine grand to Scorpion if they get you the roas. Like, yo, you know, it's the old adage, like, I will pay whatever it takes to get me a good enough roas.

[John Wilson]

Right.

[Sam Preston]

And so like, find something that is actually works for your business and your return.

[John Wilson]

Yeah, I struggle with that one. So, like, on the contractor side, what I would be self select, what I would be selecting for is do they understand my industry? What is their actual average customer size? I think that's important. Like, I was talking with someone and they were like, yeah, our ideal customer is 20 to 30 million dollars. Yeah, I bet. Like, I bet. But their average customer was actually like three. And so like, if I, if I engaged with them, they wouldn't know what to do with my account. So I just think, like, that's important. You should. Do you know how to handle businesses that look exactly like mine?

[Sam Preston]

Yeah.

[John Wilson]

Size Scope services. I'm a big fan of asking for, like, hey, can I talk to some clients? That's something I've gotten better at as I've like selected more. Now obviously they're going to send you like clients that fucking love them. But I still think you can ask like probing questions. Like, hey, well talk to me about this and come up with some good interview questions. But I would try to interview their other clients and I mean Facebook groups, like, look for Rex. You know, ask your friends, like, who are they using?

[Sam Preston]

Yeah, yeah, your friends won't lie to you. Oh yeah.

[John Wilson]

And now I would ask, I would add to this. This is something that I'm like, think a lot about. Before you take advice from someone, including me, you need to ask or identify is this person capable of giving me good advice. There's a bunch of bullshit on the Internet and anyone can say anything and they have to be able to back it up. And so like really just like be cautious who you're talking to. Be cautious who you're listening to. This is something that I've gotten better at. Like I'm in a lot of peer groups and group chats and Facebook groups and. And like people will just say stuff and, and like, hey, Yeah, I spent 15 on marketing or I do this and. And then like I want to know more. Like, okay, well like walk me through how you're doing this thing because I'm not doing this thing. I want to understand how you're doing it better than I am. But ask probing questions about the businesses before you take advice from them.

[Sam Preston]

Them.

[John Wilson]

So for me, like at this point we're really cautious to take advice from people that do less EBITDA than us, either in dollars or percentage. Yeah, if you're doing. I have a lot of people in my life that are single digigit profit people. Like low single digit profit people trying to tell me how to run our business and I'm like, we're five times your profit.

[Sam Preston]

Yeah.

[John Wilson]

So I don't know, like, I don't know. Like yes, you do a few million dollar more in revenue, but like we are a better run business than you are. So. So just be cautious who you take advice from.

[Sam Preston]

Yeah, 100%. Okay, I think we got one more.

[John Wilson]

Yes.

[Sam Preston]

Mark Mag.

[John Wilson]

Mark Mag. Welcome. Mark, how important is ranking top three in Google Map pack for local service businesses?

[Sam Preston]

I would start with go listen to the last podcast that we just maybe next one. But like we, I go into big time like, hey, this is like how AI is changing and how it's going to affect you and map pack is going to be bigger than it is currently. Yeah, it is currently.

[John Wilson]

Super. Our take is. Yes. Our take is important now and even more important in the future. Yeah, yeah, I agree. I totally agree. I think, like, I really think one of the best things, like one of the best bang for your buck investments is your gmb.

[Sam Preston]

Yeah.

[John Wilson]

Like, it is just so powerful and if you can keep driving that forward, like, our GMB is still one of our biggest sources of leads. Like, and it's so much. It's crazy. But we, we spent a ton of time and energy on it.

[Sam Preston]

Yeah, I mean, like, hot take. I think that at some point you might end up starting to spend more money on optimizing your GMB and efforts to optimize your GMB than SEO, you know, and right now that's flipped. Like, you're gonna spend more on.

[John Wilson]

We already spend. Yeah, we already spend Thousands on our GMB. We spend thousands of dollars a month on our GMBs. Yeah, like 100%.

[Sam Preston]

Yeah.

[John Wilson]

So like. Yep. We might have already passed it, but for us, like. Yeah, I know you already said this, but gmbs is local SEO. So, like, it's in the same bucket for us, but it's very, very specific to gmb.

[Sam Preston]

Yeah.

[John Wilson]

I want to say it's four or five thousand a month. It might even be more. Like, we spend a lot, but we're top three. We're driving insane amounts of leads and we're still growing. So worth the investment.

[Sam Preston]

And again, like, the way AI is going to be searching in the future is going to be based a lot on reviews and your ability to drive quality reviews, how you're able to optimize your GMB and stuff like that. So I would 100% be investing in that.

[John Wilson]

We have one more and I'm just going to answer it really quick just because we literally only have one more. Justin Beam. I recently had my website redone and leads have kind of fallen off.

[Sam Preston]

So.

[John Wilson]

Justin Beam.

[Sam Preston]

I would say it's probably. Specifically, it's probably a link issue. So when someone rebuilds your website, one of the most important things to do, specifically if you have good SEO coming through, is to make sure the URLs stay the same. So it'd be, you know, the will.

[John Wilson]

Per page, per service, per blog. Yeah, we did this when we switched off a Scorpion because they, they took our website. So I had to rebuild the website in like 48 hours. And we spent a ton of time on like matching links.

[Sam Preston]

Yeah. So, like, if you're just like all of a sudden dropped. It's because what you used to rank for in Google search, people are clicking on it and it's not coming to that same page. It's going to a rant, like a page that doesn't exist anymore. So Google is deranking you, so you're not getting the search volume. And when people are clicking onto your page, it's not going anywhere. So you want to keep those URLs the same and that way the content stays the same. That's. That's most likely the answer. There's a couple other ones or indexing and stuff like that. But like, if you drop traffic overnight, yeah, it's probably that or yeah, you shut off your ass.

[John Wilson]

I totally agree. Which is good because it's solvable.

[Sam Preston]

Yeah.

[John Wilson]

Now, the way we solved this is we used Chrome's look back.

[Sam Preston]

Yep.

[John Wilson]

So Chrome has this look back or way back, I don't remember what it's called, but it's like a wayback feature where you can look at what a website used to look like and you can look at the old links from any period of time. So, like, Google indexed your site, they saved it. You can look two weeks ago, five years ago, and you can actually pull the old URLs off it and rematch it. So that's how we did it when we went through this.

[Sam Preston]

Yeah, exactly. That's exactly what I would do. You should have like a site map of exactly what it is. Yeah. And so that's like the first thing we do when we build a website is we take on your current website, specifically one that already has good SEO. If you don't have good SEO, we don't care because you don't care. You don't have any traffic. But if you do have good SEO, we don't want to mess that up because you'll be mad at us. And I don't like being. I don't like people being mad at me. So, yeah, we want to match up the URLs to make sure the traffic keeps coming through. Or you could do redirects. If you really do want to change the structure for whatever reason, you can redirect old page links to the new ones.

[John Wilson]

Awesome. This was great. I feel like we covered it. I think we covered it. So, I mean, thanks everyone for tuning in and thanks everyone for asking questions. I felt like that was good. I feel like we solved some good stuff. Yeah, we're about to. We're doing these 30 day series, which I'm pretty excited about. And the first one is 30 days to double your profit. The second one is 30 days to double your leads.

[Sam Preston]

Whoa.

[John Wilson]

I know, I know. So, like, every single day for 30 straight days, we are picking one single aspect, like LSA map pack, PPC meta 30 days. And we're going to rip into every single one of them for like, 10 to 15 minutes and just open up our experience with it, talk about how we're doing it and, like, talk about things to avoid and how to make it win. Because at this point, we do, like, we do all of them, right? Like, we spend two and a half million dollars a year. We do it all.

[Sam Preston]

Yeah.

[John Wilson]

So. So, yeah, that's going to be really cool. And that airs September 1st.

[Sam Preston]

Let's go. Let's go. I should subscribe. I want to subscribe so I can watch. Yeah, it's good. It's good.

[John Wilson]

All right. If you like what you heard, please give us a five star review. Make sure you link and like, and sub and check out ownedandoperated.com for more.