← To The Point - Home Services VIP Room Podcast
To The Point - Home Services VIP Room Podcast
Why Some Home Service Businesses Stall at $5M While Others Hit $50M
00:58:41
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A
This is to the Point a Rhino experience voted one of the top home.
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B
Services, marketing and operations podcasts. Cutting through the and getting to the point.
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A
Hey, what's up to the Point listeners.
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C
It's boy Chris and my man Chatty B. Chatty.
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A
What's going on, buddy? I missed you, dude. We always got these stints here feeling.
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B
I know this end of summer, getting kids back to school, kind of navigating the shoulder season that's upon us. All the fun stuff. But yeah, it's been a busy little into the summer. Hoping to squeeze a couple more weeks out of it here in the lovely Midwest.
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A
Well, not today since it's nice and stormy there.
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B
I know. Yeah, it's like pop up shower once this humid out.
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A
I've had some separation anxiety, man.
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B
I know it's been too long, but we're gonna see each other here in two weeks. Two weeks. Two weeks from tomorrow.
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A
I'm excited. I'm looking forward to hanging out with everybody and yeah, it's gonna be fun.
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B
Emily's gonna, Emily's gonna come, so. Should be good.
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A
She's coming to home service freedom.
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B
Well, she wasn't going to. We had some, some nanny issues and then she's going to be available. So Emily's going to make the trip.
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A
Perfect. Well then I guess we'll have the ladies with us.
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B
That's right.
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A
Well, this episode to all you listeners is one that Chad and I haven't done in a while. It's just a little me and Chad special. Right. And it is. Sometimes I forget Chad, you know how exceptional of a co host I have in running and operating a large home services business.
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B
Business.
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A
So I, I don't take advantage of it enough. So what I'm trying to say. Okay, so today we're going to take advantage of some Peterman knowledge. Okay so but I don't want to let you down, buddy. I want to let you or our listeners down. So I would not even think about skipping our dad jokes. I really felt it that time. I've had now a few different people sending me dad jokes so it's starting to catch on a little bit. So literally every dad joke that I am reading on this episode did not come from me. So this one came from Garen Gilmore, who you at Rhino X from All Clear over Missouri. And he actually gave me quite a few. So I'm going to read just a few of these. And these are industry specific which make them nice. So are you ready?
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B
Let's do it.
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A
I know when you're ready to go okay, why don't plumbers play poker? Ready?
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B
Let's do it.
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A
Too many flushes. I mean, that was pretty good.
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B
Not bad.
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A
Yeah, not bad. Why was the technician so calm? Why was the air. Let's say. Let's say, why was the air conditioning technician so calm? No, no, because they know how to vent. Yeah. No.
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B
Yep. Let's hear that last one.
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A
These are. These are classic dad jokes. Okay? Like, okay, why did the electrician. Oh, this one's. We're gonna end on a super lame one, but, Garen, thank you again for handing these to me. Why did the electrician break up with the outlet?
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B
Something about tripping over a breaker. Something. I don't know.
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A
Something. Because there was no spark. Chad, did you see my paper airplane?
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B
Wasn't great. So work on that headache.
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A
Holy. Hang on. One more time. There we go. That was. That was much improved. Okay, let's get to the good stuff. Chad, are you ready?
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B
Let's do it.
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A
Okay, so this topic, what we're going to hit on is, and this is going to be relatable to a lot of you, listen right now, why some home services businesses hit that 5 million mark and they stall. Some might have been 3, some might have been 5, whatever. But you hit that 3, 5 million dollar mark and then you stall out, right? And then you probably want to blame a few things. Oh, it's the market, it's the whatever. But why does that happen when there's still others in the same market with the same circumstances that are able to hit the 20s and 30s and 50 million dollar numbers, right? There's got to be something in there, you know, that, that, that those that are stuck are missing. Would you agree, Chad?
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B
I would agree.
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A
Okay, so we agree on that one. So now here's what I want to do. So the questions I've prepared for this episode, what I do not want to do is give these generalized, like, cookie cutter bullshit answers, right? Like, so I'm gonna. I'm gonna push to try and, like, get some good shit out of this. For some of those that are listening right now saying, yep, that's me, I'm stuck. Or I even went backwards, right, this year to try and help you guys scale and grow. So, and we're gonna leverage the knowledge from the Wabash grad himself, Mr. Chad Peterman, sorry, the little giant. Okay? So the first thing we're going to do is we're going to talk about shifting from, like, an actual operator to, like a CEO. Like, when does this transition happen? How do you know? How do you recognize these things? So what was the very first role you stopped doing at Peterman Brothers when you decided to act like CEO? And, and like what was the impact of that growth? Like what was your first little, your transition?
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B
Yeah. So I'll, I guess I'll preface it by I don't think like these C suite terms get thrown around a lot. Like, hey, I'm the CEO. Well, guess what? You can be the CEO of a company that makes 500 bucks. You know, it's kind of a self appointed title in most instances. And so I think actually traditional.
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A
So it's a traditional C suite. It's just we've given it these titles like you can be a.
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B
For sure. Yeah, you can be whatever. And I think that what I have seen or kind of my experience is that the kind of the grind, if you want to get to, you know, higher levels, it's never going to stop it. You're always just going after it. You're always looking around going, why am I doing this again? Or what am I doing here? And I think that's okay because I think that, you know, the great operators are not afraid to get back into the weeds when it, when it's needed. Right. It's, you know, we've heard Tommy talk for, you know, ever in a day about him. I'm gonna dive back in and do this or I gotta go do this and fix this. And I think that's just kind of a always happening thing for me as it relates to kind of H Vac. So when I first started we were H Vac only. And you know, typically what's the owner do? He sells the equipment. Right. Because no one can sell it like him and all of this stuff. Well, unfortunately I'm a terrible salesperson and I got put in that role. The first thing that I did to that grew our business was I stopped doing that mainly because the schedule, I was terrible at it. You may be good, that's great. But also think about the schedule of a comfort advisor. And you're never going to be able to work on the business if you are the primary salesperson. And I think a lot of that, that is just one example. I think the bigger issue that I see in a lot of companies who say we're stuck or we've always been three to five and then make up excuses, they lack trust in others. And I think that that's reasonable. I always tell people I got very lucky because I didn't have any, what I call technician baggage because I didn't I didn't come from that space. So there was never the, there was never the, well, no one can fix it as good as me or no one's going to install this like me or anything like that. It was, I had to trust people from day one that they knew what the hell they were doing and then coach them up around that. And so for me, if I'm ever, you know, helping, you know, a smaller company, it's, well, how, what, what are you doing on a day to day basis? Usually after about three minutes of them telling me, I can already understand, do you trust people or do you not? And a lot of these people who say, well, I can't find anybody, I can't hire anybody, well, it's oftentimes a look in the mirror problem. And do they actually want to work for you? And so to me, that's the biggest thing is, you know, finding those areas. I don't think at that level you're not looking for like specialized people who can do, you know, finance. You don't need a cfo, you don't need all of this stuff. You need pieces of the, of the puzzle. But I think it's identifying those areas that you could back away from and you can find someone to plug in and you can train and create process around whatever it is that, that you're putting them in there to do.
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A
Yeah. And I like that you said sometimes you just need to take a look in the mirror. Oftentimes I think that's, I mean, it still happens.
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B
Yeah.
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A
Even when it seems to get big, it still happens.
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B
Yeah, absolutely. Why isn't this working?
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C
Yeah, I actually.
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A
So for home service freedom, you know, I'm doing a keynote, which is awesome, on day two. And so it's completely new. I completely did a whole new. And then I kind of talk about that piece of it. It's either going to land really well or it's not. Because in my head, the way I have this thing, I've envisioned it going, I really hope it goes that way because if it doesn't, I don't know how I'm gonna feel.
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B
I'll clap for you. I'm gonna stand.
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A
Yeah, yeah, perfect. I'll have a couple of plants in.
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B
Place just to keep things get the crowd riled up. That'll be me.
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A
That's right, it'll be you. You are known for riling up the crowd.
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B
Try it. I'll bring my rally towel. Just get it going.
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A
Perfect. Because I'm going to call you out specifically then from stage and make sure.
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B
Good. That's fantastic.
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A
Chad's not in the room. Okay, so I'm actually going to switch gears for just a second. I mean we're gonna maybe stay on the same topic here. But you know, there's a lot of times when, when you're kind of, when you're building these businesses as the operator or the person that's running it, or you're the one wearing all the hats because it's, you know, you're doing sales and you're doing your own books, you're doing all shit. I think it's pretty easy to tell when you're that small. Like, you know, once you get to 5 million though, like you're not doing, I hope you're not doing that. Like you gotta be, have. You gotta start to have some people in place there. But like some people don't recognize that they're not out of that operator role. Like they're still working in the business way too much. And I think you still have to it, you know, and when you're at that size at some level, you still got to be working in it. You can't just like hand the keys over. I don't. But is there a, is there something that, like some key things where you could say, hey, guess what? If you want to know that you're not acting like a CEO, these are the things that you're still doing. Hey, if you know that you're not acting like a, you're leading this company, you know, or, or you know, you're focused on the actual company versus working in the company. Like you're doing xyz. Are there like some key things that you can share on here that people say, oh, yep, I'm doing that. Okay, clearly I'm still very much in this operator role and I'm not doing enough of the air quote CEO stuff.
- [12:26]
C
You're spending thousands to make the phone ring, but if your CSRs aren't picking up or converting, you might as well light it on fire. And what are the largest businesses in the country doing about this? They use Avoca, the leading AI platform in the trades. Hundred million dollar businesses like HL Bowman are operating with only nine CSRs because Avoca handles up to 80% of the calls.
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A
Plus Avoca follows up with your leads.
- [12:53]
C
Grades your CSR calls and helps you strategize.
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A
So my suggestion, go with the leading company.
- [13:00]
C
Check out Avoca AI.
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A
That's A B, O, C, A. I click the link below.
- [13:07]
C
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B
Yeah, I mean, I think what I said at the beginning, you know, running sales calls, running any calls for that matter, I think is. Is a big piece, especially you get to 5 million. Like someone else should be running the calls. You cannot do that and run the business at the same time. Early on. Yeah, you may have to do that. Like, anything related to running the calls, anything related to answering the calls, anything related to dispatching the calls. Like, all of, like, the building blocks of, like, call comes in, we dispatch it to a technician who then runs the job. If it's more back office stuff. So, like, I did still did a lot of the back office stuff, like, early on, like ordering jobs or, you know, putting this together, putting a proposal for a bigger job together maybe, but not running any calls. I think that's the biggest thing. Like, can you truly sit there and, you know, work on the business now? You're not going to work on the business at every minute. There's going to be fires that pop up and everybody's got to wear a bunch of hats. So it's not like you're just kicking back in your chair. But yeah, I think that's to, to me, is the biggest thing. You know, I know this isn't exactly the question, but I think another big part of these companies getting stuck is they don't know where in the hell they want to go. Like, they don't. Like, what is growing the company for you? You know, is it running a $20 million company? Like, if it is, well, make sure you go out and look at a couple of $20 million companies and say, do I really want to do this? It also, to me, really lends itself to you making strategic investments in the business. Like, If I'm at 5 and I really only want to run 10, well, I probably don't need to be like, well, when do I need to bring on a cfo? You don't. You don't need a cfo. So don't worry about that. That's not part of the, part of the problem. If you want to run 100. Yeah. At some point in time, you're going to need that role. And so what I always tried to do was like, go out, visit as many people, talk to as many people. But then I really wanted to hone in on those people that were like, one step ahead. Like, who are those people that are at the next step? What's their org chart look like and what pieces am I missing? You know, they're all going to look a little bit different, but like, and what pieces do I have that I can leverage on? I think too many people get caught up listening to yahoos like me and they're like, oh, I need this, I need that, I need to build a school, I need to do all this. It's like, no, we need to focus on the blocking and tackling first. And when you get really damn good at that. Because it's a lot easier to course correct the blocking and tackling when you've got four technicians, not 200. It gets a little bit complicated and can get out of whack really freaking quickly.
- [16:44]
A
Yeah. And you said, actually that's a really good point because if you don't have some sort of vision, you're just kind of going into each day, it's just like the day, like I'm just back in a routine day to day. But actually what am I working towards, what am I doing, what am I trying to get to do? Which I think is very common, especially as you're smaller. Right. Because you are just kind of in that like, grind of trying to figure the out and get in there and handle the things and, you know, the people and stuff like that. Now, even though, you know, you weren't a technician, I know you really wanted to be. Even though you weren't a technician, maybe, maybe you can talk about this from the perspective of some of the, of the, of what you're seeing and the. In the other companies that you're coaching that are like within this range, this size. But maybe talk about like some of the habits that, that you're seeing that people had to drop or adopt to start, you know, leading, you know, being a leader in their business versus, you know, that technician mentality or even from your perspective, you know, it's just like, what are some of these, these bad habits that you're seeing from people that, you know, that they're having to adjust with.
- [17:44]
B
Yeah, I think, you know, the number one, and this is kind of overarching, so we can dive in deeper on like, specific ones, but like, for as an overarching kind of statement. I think the biggest mistake that I see people making is they, as the owner, are dependent on just the growth of the people that are running calls, dispatching calls, whatever. It's like, well, they need to get better. I've always been a firm believer, and a lot of this because I didn't know what in the hell I was doing when I started. And so, like, you know, I just turned to, okay, well, I'm going to read as many books, listen to as many podcasts, whatever. It is like, I have to set the pace of growth at this company. If I'm not growing, then who am I as a leader for others to look at me and say, well, I'd love to become a better service manager. I'd love to become a better technician. You have to set the example. And I think so many times we sit back and we're like, well, I'm already so busy. I'm, you know, I'm doing this, I'm doing this. I'm wearing all these hats. I'm doing all these things. And we forget about this leadership aspect of, you know, as the leader, as the CEO, whatever it is, like, you are driving the culture of your business, whatever that may be. They're all different, but what is it that you want your business to represent? And I think getting really clear, just like the vision piece, getting clear on what the culture is going to be, what type of behaviors, how we're going to show up for customers, all of those things. Like, you got to get really clear on what that is. It's not just putting in another furnace or another water heater today. It is, you know, how are we going to do this at scale if we're going to grow? Because, you know, ultimately, whatever level you scale to is, you know, it's going to be more people, more problems, more. All of these things. And so I think the habit that I got into very early on is just continually learning as much as humanly possible. Like, I still remember it to this day. We started the school and I reached out to you. I loosely knew you, but I knew that you knew all these people that were going to help me, right? And so I reached out to you. Lucky for me, you had me on the podcast, the first podcast I ever did. But it was just that willingness to reach out and connect with people and find out, hey, maybe there's something here, or, hey, can you connect me with this person? Or whatever it is. And I think the great thing about our industry is everyone is so willing to Help. I mean, you know, I've already had the conversation with my wife. When we go to this conference here in a couple weeks, I won't stop talking to people. Part of it is there's a lot of questions, but part of it is I really love to do it. I really love to help. And I think there's a ton of people out there that are willing to do the same. And so for me, it was just, how do I learn as much as humanly possible about this business?
- [20:40]
A
Yeah, I think one thing that's important is to share. Because you're talking about leadership. I think it's important to share that. That doesn't mean that you, if you're leading by example, doesn't mean you're actually doing all the things right. Like, part of leading by example is also delegating to the appropriate people to get it done. That's being responsible.
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B
Yeah.
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A
So actually, it's a great segue into, like, building a leadership team. And you talk about, you know, people not needing, you know, a CFO at 5 million bucks. And we don't need to talk about, like, when you need a cfo, you still have to have somebody, obviously, who's paying attention to your finances. But the, you know, part of it is, like, when do you know, like, who is your first. When you. Let's say we're a five million dollar company. Like, what's my first leadership hire that you recommend for somebody who's stuck there, you know, and why? And why is that the role?
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B
Yeah, so I think that's different for a lot of people. As a. As a leader, you have certain skills, you have certain things that you like to do that you're really good at. What I did, shoot, this was more of a kind of me and my brother kind of separating responsibilities. But we wrote out a job description. Like, what is it that you really enjoy? We were just talking about this in our leadership training this morning. Is operating in your zone of genius. Where are you really, really good? Like, where are you? Like, you could get lost. And three hours go by, and it felt like three minutes. And so for me, the way that I would start out is, this is what I'm really good at. This is what I can cover. So if I need five roles, well, you're gonna have to wear a couple of hats. Company smaller. But what are the things you're not really good at? So for me, when I was growing it, I'm not real good at the finance side. I don't know, accounting, credits, debits, all of this stuff. Like, I took an accounting class, not my zone of genius, for sure. So I knew that I needed someone that could do that part of the business so that I didn't have to worry about it. Yes, I'm going to look at them on a, you know, weekly basis, monthly basis, so on and so forth. But I needed someone who could do that because that wasn't my jam. Now, some of you may be saying, well, I come from an accounting background. I'm really good at that. I can do that piece. And then maybe I can. Maybe I'm not so great at, like, the technical side, so maybe I need, like, a really good service manager to help me. So I always look at it from. And that's why I said earlier, like, look at that org chart from that next level group. Like, what are all the roles? And then what roles can I cover without, you know, burning myself out and all of that stuff? But then where are the. Where are my gaps as a leader? Because if you're driving the business, you've got to understand where you can provide value and where you need other experts to provide value. I think the other piece is as you grow, some people aren't going to scale. Some people don't want to go to the next level. Some people hit a ceiling. And so you've got to be okay with being able to evaluate when that person who was good a level or two ago is maybe hit their ceiling, and you're gonna need somebody else to propel it forward.
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A
Yeah, man. It's even harder, too, if it's, like, family or friends.
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B
Oh, it sucks. It's the worst part. Worst part of this job.
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A
Yeah, I. I love. I love. Whenever I talked to Tom Howard, when we were going up to Tommy's, I forget what, like, you know, a month or so ago. And listening to him talk, he's like, I fired my mom. I fired my sister. I fired my wife. He's fired everybody in his family. I was like, damn, dude, they don't have. That's a shitty Thanksgiving. Yeah, but, you know, he just said, you know, this is the job. You know, this is the job. This has to be done, you know, And. And the worst thing you can do, man, is give your family and friends leniency. And people see that. Yeah, that is a terrible mistake. So. So when you're small, okay, you start to find these. Hey, I'm really good. Like, my. My zone of genius is sales. My zone of genius is finance, whatever it is. So you're. What you're saying is the next Great leadership role would be where is your weakest? Like, where are you weakest? Where that you can find somebody who's that, that's their zone of genius, and you plug them in, you know, into that role. You know, if you're great at sales, well, you should probably find a really good operator because usually, you know, usually they're not, you know, the same.
- [25:13]
B
Yeah, exactly.
- [25:15]
A
So, so then when you start to build this team, when you're smaller, you're also still kind of busy wearing multiple hats even though you're building your leadership team. So there's no real, you know, there's no real room for micromanagement. But how can you hold your team, like, as these things continue to scale, how can you hold your leadership team accountable in a way that actually, like, drives them, you know, to scale with you without being microman? Nobody wants to be micromanaged. And really, I believe good leaders don't need micromanagement. But like, what, what is some good ways that you can, like, you know, motivate your leadership team to keep going without micromanaging the shit out of them and annoying them and making them want to leave?
- [25:56]
B
Yeah. So I think that where I found success is creating systems and processes that allow them to. That allow them to hold themselves accountable. There again, didn't want to look like a knucklehead. So a lot of things that, like, I see that are broken or we need to fix or we could just get better at, like, we haven't focused on it. It's no one's real fault. It's not like someone's doing a terrible job. It's just like, oh, well, we weren't focused on that metric, so we don't know how to improve it. So I think figuring out what are the KPI drivers of the business, you know, one for us is booking rate. Well, you know, booking rate, true booking rate. We wanted to see that. I wanted to see, are we improving this? We're spending X amount of dollars on marketing. We're trying to get the most out of what we do. So I simply said to our call center manager, I said, why don't you just every day just email me our booking rate. Just email it. You know, I'm not going to get on you or whatever, but just email it to me. And then every once in a while I'll respond like, oh, awesome job. We killed it yesterday. That's fantastic, whatever it is. But again, what I saw from the time that she started emailing me is that it got progressively better. Now I didn't go and tell her how to do her job. I have no idea how to do it. What I did was put in a system that allowed her to hold herself accountable, allowed her to see, hey, I want to do better than we did yesterday. And again, you empower them to make changes. Ah, crap. We fell a point or two yesterday. What did we do? Let me look into that. I want to look good, right? But it's also not like me just sitting in the call center going, hey, let me tell you how to do this. So I think systems or processes that can allow your people to hold themselves accountable. Because what I've uncovered, at least in my journey, is that there's a lot of things rattling around up in our head. And we may know the KPI and this, that, and the other, but a lot of times we forget to share that. And then we're wondering why we're not doing well. And then we're like, well, that person sucks. And it's like, do they even know how to win? Do they know how to win? Like, what is their scoreboard? We had the same problem with our technicians. You know, we had managers going, well, you need to do better out there. I'm like, okay, well, you know, I'm sure they were like, what do you mean? What, what's good? And, like, a lot of them didn't even know, like, what's a good day, what's possible, what are some of the top people out there doing until we gave them a dashboard that showed their real time KPIs, what their real time conversion is, what their real time, you know, average ticket is, and how that compares to the levels within our department. Well, then I had technicians showing up, holding themselves accountable, showing up, going, hey, I really want to get to this next level. My conversion rate is like 3% off to get to that next level. Here's the five things I'm really struggling on. Can we go over this and train? And then all of a sudden they're coaching themselves. And so I think it's a lot about. Not so much about, like, yelling and dictating and having these terrible meetings and all of this stuff. It's like, just put the system so they can see their scoreboard. And their scoreboard is not the same as the company scoreboard. Like, they don't really care where we hit in gross margin for the month. Right? Like, they just want to make more money and take care of customers. So show them the way they can do that.
- [29:35]
A
Yeah, that's good. I. You made me think of one. One thing that Hoffman told us. And really what you're talking about is you're almost kind of motivating by adding accountability. And like, they can see, hey, here's the goal, here's where I'm falling short. And they know they get support to hit the goals. They're kind of managing themselves. But what you've done is you added like, what, what this one in particular with this call booking piece is you, you added in a layer of additional accountability because that person has to send you a number on the daily. And so it kind of. That drives you, you know, that drives you. But you're not telling them how to fix their problem. And you're also not responding. Probably every time there is a problem, you're kind of being thoughtful on when you respond and then also giving you, like, praise for, you know, for things. So. But really you're paying attention. You're paying attention to these numbers.
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B
You got it? Yeah.
- [30:20]
A
So, but what Hoffman would say is, you remember when he talked about, when we, when we talked, had the conversation around budgeting and he would talk about how he budgets from the bottom up. So they would come up with a number, you know, whatever they want that year to be in growth. And then they would drill down to their individual teams, their leadership and their teams, and then the people, and they would come up with their own plan to execute on whatever that, you know, team's responsibility was to hit, you know, the top budget, which I thought was awesome. So now they've created their own plan. So they're accountable for the plan that they created.
- [30:52]
B
Yep.
- [30:53]
A
And all you're doing is holding them accountable.
- [30:55]
B
That.
- [30:55]
A
And then supporting them on, you know, whatever the metrics are to, to measure that success, which I thought was great. Right. Because that gets everybody involved, you know, in the overall plan. Now you talk about, like, systems, you know, like. So let's just go into that. You know, it there's. You've got sales, service, hiring, training. Like, there's so many different layers in this business. If you could, you know, if you could only systematize one part of the business first, like out the gate to you, what is the most important thing? Is it the call? Is it the call answering? Would that be your number one or is there something else?
- [31:28]
B
Call answering, number one, no doubt.
- [31:31]
A
Yeah. Because it's the one that, like, nothing else matters. Right. If you can't get the business right. Like, nothing else matter. Like you can't sell shit if you don't have a call.
- [31:41]
B
Right.
- [31:41]
A
Or you don't have somebody who can Take the call, even if it's an existing customer, and book it.
- [31:46]
B
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- [32:37]
C
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- [33:08]
A
Relax.
- [33:12]
B
Yeah, I mean, here's what I would. Here's what I would be willing to put some serious money on. If you had a company that's under $5 million and they said they've been stuck there for multiple years, their growth is in their booking because at three to five, you've got probably what, three, maybe, maybe four CSRs. And my guess is it's kind of an afterthought. Like, oh, yeah, you know, they're just answering the phone. And I think, too, again, like I talked about technician baggage. Well, what does everybody focus on out the gate? My tech's got to sell more, they got to do more. We got to put this process, we got to dip, dip, dip all this stuff. And they've never spent any time in a call center or. That's usually not their background. And so to me, once you can get that fixed and it's humming, it's like, okay, now I feel like I can spend a few more dollars on marketing because every dollar I spend, I'm booking nine out of every 10 phone calls that comes in.
- [34:13]
A
Dude, dude, I. I just had a. This is like a real life scenario. It just happened last week. So I hop on an escalation hall because, you know, escalation call, nothing ever gets to me until it's like on fire, right? Like, if it got to me, like shit's hit the fan. I talked to this contractor, 10 million dollar contractor, like, you know, pretty good. Been around a long time, 30 years. And when I'm looking at it, it was, you know, first thing I always ask is, or I always look at is I look at their performance, you know, I look at round tracks 2.0. I can see every lead that came in, the quality of lead, their booking rate, like all the revenue attached to it. So everything. This guy's a 30, a 30 year old business. I looked at missed calls. I saw one month, 96 missed calls. June, 52 missed calls. And already in this month, this month there were 64 missed calls. Like, how do you miss that? How did you miss that? And he said, hey man, I hired this virtual assistant and they're just not doing that great or no, excuse me, this AI and AI answering service and it's just not doing that great on booking. And I was like, no. Like, geez. So I'm looking at booking rate for like normal booking rate was actually not bad. Like it was pretty, pretty good booking rate. But the missed call piece of it was like, hey, like let's not, let's not focus on anything else right now other than changing that. Like, let's not use that anymore because. So I had him send me his actual, like who he's. The information of the company he's using. I pulled the call booking or the call report to look at all the missed phone calls. And the 80%, Chad, 80% of this was during business hours, like not even after hours, weekends. 80% during business hours because it was their overflow. I'm like, hire the next person. Because shit, you'd be better off hiring somebody because it's like a revenue you just missed by that. All he needed to do is look at the damn report, man, and look and catch it. Now I will say this. I do think that we should have brought that to his attention a little bit faster, right? It's like the first things I look at. But the point is, is that to me, it's always the number one thing to look at is how is your call handling? Because you can't do anything else in the business if you don't have a customer to serve. So that's the number one and a lot of time what you, the listener who owns a business, who has all this pride and doesn't want to take responsibility. Like you want to put blame on somebody else. Like I'm telling you, squash that real quick. Look at your own internal booking rate and if you're missed calls and your after hours answering services and make sure before you start pointing fingers at somebody that you're doing your job too and making sure that your call handling is on point number one.
- [37:07]
B
Yeah, I mean most of the, most of the basics is what's your booking rate, what's your conversion rate, what's your average ticket? If you can drill into those numbers and look at them every single day and coach up your techs, Coach up your CSRs, like you're going to win. Like, you can't help but not win. Like if my, if my booking rate is 90 plus percent, I can go throw some money at marketing and my conversion rates up there, you know. Yeah. Again, my booking rate's 90, but my conversion rate's 30. Well, Jesus. Like that means you're, you're. So if your conversion rate's 30, you're. My COO puts this so perfectly. He asked the manager this one time when he said, what's your booking or what's your conversion rate, man, he's like, what's 30%? He's like, so you're okay telling seven out of every 10 customers that you don't have a solution for them? Well, you, I didn't ever looked at it like that. I'm like, how else would you look at it? Like, come on. Like, yeah, it's probably not going to be a hundred. You're probably priced too low if it's a hundred. But it should be 60, 70% like all day long. If you're not getting that again, you got work to do out in the field. Yeah.
- [38:26]
A
So I'm going to give you a chance to think. I 100 agree with you. So you can look at your, yeah, you look at your booking rate, you look at your close rates. I think that there's probably like, I want to move to a different, you know, a different service in, in the business. A different, you know, vertical or, you know, different team in the business. I want you to, you know, maybe to walk us through a process that you documented that saved you like time or money. Now we talk all, obviously we talk about, call the call center business, but there's so much other. I mean, you're a big business. You're a big, big ass company who's had a lot of growth, who has lots of, you know, lots of things that can go wrong. Lots of there's. Even at the size you are, there's still room for improvement in some areas. But like maybe what's another process that you like found you documented that helped change and was successful in the business, aside from the call answering. So maybe, maybe let's think on the operations side if there's something in there that you can maybe share that to give the, you know, the listeners an idea of like, okay, here's something I should be taking a peek at in my operations or whatever, something like that.
- [39:29]
B
So I think this is perfect timing. So we're going into shoulder season. So for the vast majority of the country, your service call, and we're just talking H Vac, the vast majority of your service call volume is going to be down. No marketing company on the planet can put us. It's going to struggle to put a service call on the board when it's 60 degrees outside. There's no demand. So if you don't have demand, what is your process for keeping your guys busy? A lot of people would say, well, we need to leverage our membership. That's fantastic. I would agree. But there's another layer to this. So you can leverage your membership all day long. But if all of you, all of your members, if you're not strategic about how you leverage your membership and you're running all a bunch of, let's just say, let's just do easy math. I got two techs, they run four calls a day. So I got eight calls that I can book for tomorrow. It's going to be 60 degrees, probably not going to get a whole lot of demand in. I'm going to have to give them work. Well, if you book eight under 10 systems, you're going to struggle to sell an install job. It's not going to work. And it primarily in these H Vac businesses, your install revenue is what drives the ship. It's why we have a giant TV screen that shows all of the data across all of our H Vac install. So what you need to do, good rule of thumb, good rule of thumb in Any season is 33% of your calls should be what I deem opportunity calls. So anything basically out of warranty that could potentially be replaced. So anything basically over 10 years old should be there. So 33% of those calls. Now what we do is we were just in a meeting about this yesterday, so we are getting super like dialed in on, well, let's move that percentage up if we know it's going to be 60 and maintenance opportunities turn at a little bit Less rate than a, you know, a broken system. The system's not broken, it's just aged. It may need to be thing. So we'll up that percentage to like 40ish, 45% to make sure that of all the service calls that we run, we're actually giving ourselves a shot to sell a system. And for me, when it comes to process and procedure, that being known by our call center and our dispatch, that being known by our marketing team, who's reaching out to people to schedule their maintenance. Who do we reach out to? Well, we don't want to reach out to all the systems that we just put in this past spring. Like not a whole lot of revenue attached to those bad boys. But we want to make sure that we get the right mix each and every day to give ourselves an opportunity to hit our goals. When you look at your install budget for, let's just say the month of September, it's probably the lowest of any month in the year depending on where you are in the country. But we're in the Midwest, God's country here. This is how we do it. But so we'll look at, okay, maintenance ops turn at this percentage, we sell at this percentage, we expect this many marketed led leads, they close at this percentage and it should literally spit out the number of jobs that you should expect to sell every day. So for me, the best process you can get in place is basically scripting out how you're going to get to that goal as opposed to, and we were guilty of this in the past, crossing your fingers and hoping, well, maybe it'll just be hot in September or maybe someone will call or maybe we just need to come up with this whiz bang marketing idea that's going to like grab all of the people and September is going to be a bang up month. You've got to be almost surgical when it comes to especially the shoulder season if you're going to set yourselves up for success.
- [43:26]
A
Yeah, that's great. That's actually an awesome segue because I did want to jump into just a couple of marketing questions, but you're right. Like the old cross your fingers and pray trick, you know, doesn't really, doesn't really. Isn't really scary.
- [43:38]
B
It doesn't work.
- [43:39]
A
Yeah, doesn't really work that well because then when it doesn't happen, you're like, well and then think about how far behind you fall and then you start losing employees and showing up.
- [43:50]
B
Well then you just start blaming the marketing companies, blaming the weather, blaming just about everything besides, oh Wait, I didn't prepare for this month.
- [43:59]
A
You mean the one in the mirror?
- [44:01]
B
Yeah, exactly.
- [44:03]
A
Well, let's talk about this for just a second. Take yourself back to 5 million, Chad. 5ish. Million ish. All right, you. If you build a 5 million dollar company, like you got a pretty decent little business here. Five million bucks. What are, what are, what are like some of the, again, because you're doing some coaching with some of these companies, they're of similar size or maybe even smaller, bigger. I'm not sure how many that you're, that you're doing coaching now, but you have some around that range. What are some of the biggest like marketing mistakes that you see these guys making and you know, in today's world that are like really preventing them from scaling? Like, oh, well, is it just that they're scared or they don't know or they don't understand how much you know to attribute to what type of marketing? Like what are some of these mistakes that you're seeing these guys make?
- [44:45]
B
Yeah, so I think the biggest one, and you guys have worked really hard to kind of solve this problem for the contractor. So kudos to you guys is a lot of people I think that are smaller, they think that, well, my next step is I need some marketing person. And I'm not a marketing person and I'm not talking about myself. I'm just saying like most owners, like, I'm not a marketing person, like what the hell am I supposed to do? And I think they make a cardinal mistake is they go hire somebody who is a graphic designer or some, you know, makes things look pretty or whatever it is. Like there's a place for that, trust me. You gotta like there, there. That is very important at a certain point. I think what you can do to help yourself is to get someone who understands lead generation and the data that sits behind that. We are in a lead gen business. This is not, you know, this is not B2B. This is not most of us. This is B2C. So you need someone who is dialed in, who can have an intelligent conversation with the marketing company and can understand the data. Like the minute that someone is doesn't have all the data in front of them. Our marketing department is built on data, data, data, data. Where do I put dollars and how many dollars does that bring back? Super simple equation. I can even do that math. I spent 10, it brought me back 20. Pretty good. Can I find another lead source where if I spend 10 it brings me back 30 and then you can start to really drill into that and figure out, you know, hey, am I. Am I fishing in the wrong ponds? Am I, you know, is a better lead, Is there better lead quality over here than there is over here? You can start to get really, really, like brainiac into this stuff. But I think that's the biggest mistake is a smaller. And we're. I say this from experience. When we were small, it was like, well, I guess we need to spend money on marketing. So Valpak sounds good. And the money mailer and, well, we need to do some digital. That'd be great too. And so you're just like spraying and praying and hoping. You don't know where leads are coming from. You don't have any attribution. It's just all over the place. The great thing about being small is there's not a whole lot of leads coming in. You don't need a whole lot. So you can analyze the shit out of the 20 leads that you ran today. So even if you have to have a little spreadsheet and say, hey, all these people called, we booked all of these jobs, where they come from. Okay, perfect. How much revenue did it result in? Then you can start to see this ROI type thing where I think a lot of people are not drilled into that. And so they're just. They get frustrated because it's like, I'm not growing, but I'm spending more money on marketing. It's like there's a whole lot more questions behind that.
- [47:41]
A
Yeah. Okay. So there's two things that you said that I want to hit on. And obviously this, this is my world, but I'm not going to go deep on it. I don't think. I think you actually hit the nail on the head. It's just, I think that when you're 5 million because you are still wearing multiple hats, and we talked earlier about hiring for where you're weak, and if marketing is where you're weak, well, that's fine. But you probably know basic math. Like, you could see, like you said, I spent $10,000 this month. What did I get in return? I think you have to. You're relying on the marketing partners to give you that kind of, like, transparent, clear information. So that way you can trust it. Number one, that it's. That it's true. And then two, you can legit see the return if you have a good, you know, if you're on service titan or whatever your CRM is, you can tie the revenue back to it. So it does all the math for you. So you can just make sense as Long as you can trust a partner, you know, and I know that, you know, obviously, you know, Chad is one of my friends, and that's something I've chased forever, like 18 years or so. Just trying to make. How can I make this as clean as possible for the contractor to understand, to know, was this a good month or not a good month? And if I need 100 more drain cleaning leads, it's going to cost me X. And if you know that, well, then you can run the business. Once you bring in a person who's a marketing coordinator or marketing manager, you hit the nail on the head, too. If it's a graphics person, they're not a marketing person. Like, we're thinking, like somebody that needs to understand funnel math. Like that can know. Okay, you just said you need 100 more leads and you should know where to go get it based on the data that's, you know, that's being shared. You like the results, you know, from your current marketing efforts. But what happens when people don't know the answer, Chad, is who they going to protect first? They're going to protect themselves, man. They are going to protect themselves. And they're gonna, like, even if the marketing company's right and the person who's your marketing coordinator in house doesn't quite understand it, they're still going to protect themselves first. And that is only going to hurt the business. It happens all the time. They don't want to look stupid. Like, they don't know. So I've thought through these things over the years. So I thought, how can I, like, stupid proof this thing, right? To make sure that even if you're a marketing coordinator doesn't really understand the math, that the math is so simple that you get it. Hey, okay, cool. They're asking me how the marketing work. I can clearly look at my dashboard and say, oh, you know, we. We had 87, you know, service, you know, service leads that we ran and, you know, 14 installs that we sold. If you see that, perfect. That's what they want to know. How can we get more of those installs? Well, you need to spend X more. So data is. Is everything, but also making sure you can trust the marketing coordinator. And by the way, this happens in big businesses, too. Like, big businesses bring on marketing coordinators that think they know everything and they don't, and then they protect themselves and it screws the business overall. So if the data is clear and you trust it, that will always be your answer. Take the feelings out of the way and let's look at the facts.
- [50:21]
B
Yep.
- [50:22]
A
So, so I want to hear your, your answer on this. I've been hearing Ishmael on a bunch of his videos, sharing what he would do with $10,000 a month, like his marketing mix. And it's interesting because I disagree not with everything that he's saying. I disagree with, I think with the way that he views Internet marketing today. I disagree with his, like with how he thinks Internet marketing is today. I, but his actual marketing mix I actually kind of agree with on how he would spend $10,000 a month. And, and I think the thing that, that keep keeps you and I close to it, Chad, is, you know, we're like on our way, you know, with our roofing business. Right. And so we are kind of in that phase where we're paying attention to like, hey, what is our marketing spin? Like we have a pretty decent marketing spend for a small business, but we understand the game, right? And we understand the metrics and we're looking at our, you know, our lead aggregates and who's providing what and versus now our paid ad campaign that's running. So we know what to look for. You know, so we're thinking like bigger businesses, but we're still, you know, trying to get to a five million dollar number, right? Yeah, but if you had a $10,000 a month budget to spend on marketing, how would you split it across the channels? Like what would, what, what are the things that you would focus on today and you don't want, we don't have to go into the details of like, you know, you know, the, the weeds of the, of whatever the lead source is, but just like what would your mix look like?
- [51:48]
C
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A
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C
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- [53:01]
A
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C
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- [54:26]
B
Yeah, so, you know, I think it would look different than what it is for us today. You know, I think, you know, typically our budget we're about of a monthly budget, we're about 60, 65% digital. Like that's what draws the leads in. But I think it's important to remember, and I'm sure you would agree with this is your brand recognition plays a huge role in how successful that is. We see it all the time when we go into a new market and no one knows who in the hell we are. Digital is a hell of a lot more expensive and it's harder. And so I guess if I'm looking at a small budget like that, I think the first thing I'm looking at is what is my area. I think, you know, a lot of people, a lot of people, you know, look at, well, I'm in a big city so I'll just target the whole damn thing. Well, what I've learned is that like you may just be like, can you just be the biggest fish in your zip code? So if I've only got 10 grand, I'm looking for just about everything that I could potentially do. I think you mix in some digital there, but hell with digital. With most of cable TV now, like, you could just target this zone and people would think that you are massive, like, absolutely crazy. I mean, we've kind of done this in roofing, where it's like, hey, we're just going to focus on this side of town because we're small. If we try to spray our message across the whole city, it's really expensive to do and to hit it with the frequency that you need. So I would be looking for. You know, we talk about this a lot. The little League, the, you know, the B and I, the, you know, whatever it is that I could be in my small community. And then as you start to build, well, then grab another zip code. Grab this one, grab this town. You know, we always do. We do a lot of, like, heat mapping of, like, where our customer. We do this for our maintenance is we do heat maps and then we push out to those customers so I can keep my maintenance guys all in the same area for the day rather than driving across town and traffic's terrible and all of that stuff. So, like, look at a heat map. Where are all your customers at? Where are all the people that already know, like, and trust you? Like, go be their. Their friends. Probably live close. Go be their friend, too.
- [56:44]
A
Yeah, I mean, I think that. That this is actually, you're, like, mixing in some grassroots stuff, which makes perfect sense. But I. I think it. The best example that we can give is, like, with our roofing business, we are treating it just like this. Like we have money allocated towards digital because we know the lead, we know the cost is going to be higher. But a year and a half later, our brand equity is actually in a way better spot today because we just focused on our small little market, right. And we hammered it. We did the high school stuff. We got involved with football, basketball, you know, this. The clubs, you know, in our neighborhood and, you know, the parades and all that. Like, we did all the basics and we really focused on building our brand. That first year, we went heavy on it.
- [57:27]
B
It.
- [57:28]
A
And then we got, you know, you and I got to go on wthr, like the news and just we were trying to find anything that we could do that cost us nothing.
- [57:35]
B
Yeah.
- [57:35]
A
You know, and then to drive leads, yeah, you gotta. You gotta spend some money on some direct advertising. And, you know, we did that. You know, we built the brand. We, our sponsor, Prolific, created our brand. We did our. Our wraps on all of our vehicles. And now we're really starting to take off. But we still focused on like our little area, just our one little side of town and just hammered everything that you, you know the basics. So any but you know, that's one thing. But your chad, talk about like spray and pray. You got to make sure you're tracking all those lead sources. You have to like that way, you know, definitively. Okay, well, I guess I won't spend any more money on this or hey, let's go ahead and spend more money here.
- [58:12]
B
Yes. And don't ever, ever, ever, especially if you're small. Don't ever buy TV or radio without a media buyer. Like their cost of what they do is already built in to the price. So you're not going to pay any, you're not going to pay any less with one. And they know what they're doing. There's a lot of times when you can take money to the TV station if you want to and they'll spend it for you. But is it even a useful, you know, exercise in, you know, hey, we only have this much amount of money to spend and TV station like okay, yeah, we'll put you on, you know, in the 2am slot. This will be great. Like you're not going to know. Whereas a media buyer can tell you, hey, 10 ain't going to get it done. Like that isn't a good source. And I also think too to that point is if you have a smaller budget, what are, where are all the, as you said, where are all the places that I could get free publicity? I'm have to work at it, I'm have to grind. Well, that's part of it. Where are all these places that I can get free stuff for? Where are all these things? Like you're going to have to do some wheeling and dealing to make you stretch your dollar a little further. But I think getting in all those sources, what do they say? What's the marketing? You got a customer's got to see a seven times or something like that before they know something like that. Well, they need to see in seven different places. So could they see you with a postcard? Could they see one of your trucks? Well, it probably a better likelihood they'll see one of your trucks. If you're just concentrated in one area, they'll think you got a shit ton of trucks and maybe you only got two, which is fine, but you know, you don't have to tell them. But yeah, I think kind of layering on that I think to me is, is the right branding play. But there's a lot of branding that you can do for very, very cheap.
- [60:01]
A
Yeah, that's a great point. I appreciate you saying that. Yeah, don't, don't let your pride get in the way of wanting to see yourself on tv because.
- [60:08]
B
Yeah, please don't.
- [60:09]
A
Because that pride's gonna, gonna take a, be hurting when you realize it's not gonna produce shit because your budget's too small to sustain it. Because you have to be able to, you gotta be able to continuously run it. What, what Chad and I did was we did run OTT ads that actually went exceptionally well for us, but they were significant. And that's, by the way, for those who don't know, OTT is over the top. It's so streaming video. So think about all the cord cutters now who aren't using cable. You know, they're just streaming video. Well, it's when the, you know, the ads pop up. And what we could do is we could run specific ads to specific zip codes and we could actually track what comes from it. You know, QR codes and things like that. You could scan and, you know, book appointments from the tv. And it was happening for us, but it actually helped us build our brand fast that way because we could, we could put so much more commercials out on OTT and people were seeing them and sending them to us all the time. So just something else to, you know, to, to think about. Well, I don't know, man. I think that, you know, you covered, I mean, you covered quite a bit in this stuff too. And I know, like, you're obviously a pretty decent chunk away from $5 million these days, but you are coaching with quite a few who are around that range. So you're, you're spending a lot of time, you know, in the, in this space. So I think one thing that, you know, a couple things that you said, Chad, or that I'm taking away from it is you talked about your, you know, your, your zone of genius, you know, making sure that you, the listener understand where is your, where's your zone of genius and where do you need the most help? And maybe that's what you need to focus on next. And if you have one person who's, you know, maybe what's the next, and what's the next place where you know that you, that you need help. And you know, Chad's point too is if you're at 5 million, here's the great news. Unlike the 50 million dollar contractors who only have, you know, a few options of shops they can go Visit, you're at 5. If you're at 5, you got a lot of options of shops you can go visit that are at 10 or 20 or whatever it is that you want to be. So. And you got all the opportunity in the world to connect with them, and they will bring you. Like, you can come in and visit their shop. Like, everybody's so cool today and open. And I get asked it all the time. And I've sent so many people into many different shops that I know kind of all over the US I don't.
- [62:15]
C
Have anything else, bro.
- [62:16]
A
I think that was a pretty solid little episode. I, you know, I always enjoy your little Chris and Chad specials. These are always fun. Yeah, I like interviewing you.
- [62:27]
B
Well, I appreciate that. That means a lot. And, you know, I think that, you know, for listeners, I think a lot of the stuff we're talking about is the harder stuff. It's not the sexy stuff. It's looking at data. It's, you know, making sure you're booking your calls, making sure you're doing all these things. But I'm here to tell you, I did not focus on that stuff when we were smaller. And I always think about, like, the stuff that I know now or the stuff that finally we focused on is now getting better. It's like, God, how good could that have been if we focused when we were smaller and we set the culture and this and that. And so, you know, I encourage you, yeah, you may not double in size next year, but what I can tell you is when you do double, and if you focused on all of that stuff, the bottom line is going to look a hell of a lot better, and it's going to be worthwhile doing it, as opposed to, I doubled and I'm making no money. Why is that? And you don't even know where to look.
- [63:23]
A
Yeah, no doubt. Absolutely. Well, I think that, you know, something that's worth sharing to kind of close this thing out is I'm pretty sure Chad and I are all at the same. Like we have. There's quite a few industry events coming up. So if you're listening and you're going to, you know, Home Service Freedom or Pantheon or Super Meeting. Chad, are you gonna go to Super Meeting?
- [63:41]
B
I will not be at Super Meeting because I have three events in a row and did not want to float that to the wife that I'd be gone four weeks in a row.
- [63:50]
A
Understood. So you'll have to catch Chad at Home Service Freedom or Pantheon. I will be at all three events, so come see your boy. But, Chad, I appreciate all the insight today, and to our listeners. You know, like I always say, you don't got to do everything, but you got to do something. No. Zero days.