The Home Service Expert Podcast - Capturing 25% More Customers With Smart Financing

Episode Date: April 3, 2018

Darius is the COO of F.H. Furr Plumbing, Heating & Air Conditioning, Inc, a 250-employees home service company with two offices in Virginia, and one in Maryland. Their biggest accomplishment to date is doing $1 million in financed serviced jobs in just three months. In this episode, we talked about hiring, sales, financing...

This is the Home Service Expert podcast with Tommy Mello. Let's talk about bringing in some more money for your home service business. Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields, like marketing, sales, hiring, and leadership, to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Thank you, Home Service Expert fans. We're here today with Darius Livers. And this guy,

I first met him at Service Titan. Actually, they had an expo recently and he got up on stage and absolutely murdered it, did an expert presentation, mostly having to do with financing. And it really made me smile and just get excited and want to have him on the podcast because I learned so much. And I thought it would be great to share this with the whole entire home service industry. So Darius, I'm super excited you're on the show today and really glad to have you here. How's your day going? It's going great. Thanks for having me. Absolutely. Tell me a little bit about yourself. You know, I like to let the people know who they're dealing with here, how you got to where you are, how you've learned everything and why

you've come so far in the home service industry? Well, I began in the home service industry. It was through heating and air conditioning primarily, working on an inside sales and rehashing basically jobs and proposals that consultants in the field were unable to convert during their in-home visit. I worked in that for a couple of years down in Virginia Beach and then relocated up to the Northern Virginia region. And at that time, I worked as a comfort consultant and outside sales consultant for an HVAC company in Northern Virginia. And that was back about 17 years ago.

I was a 100% commissioned consultant for approximately 10 years, at which time they had grown the division and we were running about 18 consultants. And I took over the head position of running that as a director of sales for the company, firing 18 individuals out in the field every single day, 100% commissioned consultants in regards to selling heating and air conditioning equipment. Shortly thereafter, about five years later, I took my current position, which is running the company operations and trying to do that for the entire company. So that's the stance today. I'm the operating officer for the company I'm currently working for. Okay. Tell me a little bit about that. You know, you don't have to go

into a bunch of details about the company, but how many people do you guys have? What exactly are you guys selling? I think you're in a few different home services. So just kind of go through that. Yes. Yes. We're approaching a $50 million in revenue for this year. We have four core areas of our service. We do electrical, which we bought in approximately three years ago, and that's electrical residential service.

We have plumbing service, which our company was founded on. We have plumbing contracts, which is the larger jobs, water services and sewer services and that sort of thing. And then we have our HVAC division, which encompasses service and sales, which is our largest division for the organization. Yeah, I feel like that's kind of how it goes. And it seems like there's a lot of companies that do those trifectas and they have their strong base in the HVAC and then they kind of pull in the plumbing and electrical. Is that typically what you see out there? Yes, absolutely. You know, that being the core business and then, you know, reaching out and cross marketing

and then identifying that there's, you know, there's more to that. It's more stable because you have the seasonality of the HVAC side of things. And then to bridge that gap in the in those low months and to cover overhead, a lot of people get into the electrical and plumbing business as they're less seasonal and more consistent year round. It can really help, you know, keep that hole filled during those months. Right. That makes sense. I recently started working a little bit with direct energy on lead generation for they offer those three industries as well as a home warranty plan. If you go ahead and something breaks like an appliance or anything like that. And what they told me the secret sauce to this whole thing is once they get a client, they can pull them into all four of those. What are your thoughts on that?

Do you feel like you could pay more per acquisition for a client because you can cross market to that client and get them on more service plans? Absolutely. You know, we find that, you know, homeowners have those needs, right? They have the needs for the electrical. They have the needs for the plumbing. It's a home warranty. They have needs for that coverage of their appliances and what have you, and then the heating and air conditioning. We do find that by cross-marketing and by being able to offer more services, we do attract more of our client base.

A lot of customers out there will join in our memberships and what have you because of the different services that we provide and being that, you know, one guy does it all sort of company. I love it. I've got so many questions for you. So I'm glad we're jamming because it's going to be like crazy stuff. You know, one of the big things that we do as a company here at A1 Garage Door Service is we dive into KPIs. And when I mean dive in, I mean, we're looking at average time on job. We're looking at the products they sell. We're looking at for market managers in different states. What is the we're looking at hundreds and hundreds of KPIs.

And one of the things that a guy had told me on the podcast, I'm not going to go into names, but he said he believes that home services are headed into a realm because of the internet and education for commodities. And typically in this industry, you see commission sales on a lot of times. Now, his biggest beef with this was that people are selling air conditioning units for $15,000. It used to be they pay $1,500, $2,500, they sell it for $6,000. Now he feels like they're selling, they just hire salesmen that really don't know what they're doing. And he said, Tommy, he said, let me ask you something. At your company and most companies, he goes, the best guy is the worst salesman. They know the most about anything. They run warranty calls. Your best guy out in the field is a warranty guy. And he said,

that's a problem. I'm just curious, what's your take on this? Because I do think the internet's changing the game. And I do think we're headed to that. And I'm curious to hear what your thoughts are. I would agree that everyone has their strengths. And most certainly, your most technical individuals, the ones typically with the most technical expertise, with the most experience, are obviously utilized in a way for most organizations to handle, you know, your quality control and taking care of the customers in regards to with problems and escalated service related issues. And that goes for whether it's your plumbing or your HVAC or whichever divisions that you have in your organization. Do we as an organization look at that as far as where we place our employees? We absolutely do. And the reason being is, yes, there is a place for the individuals that have the strength on the technical side. And then there is a place for the individuals that have the strength on the

technical side. And then there's a place with the individuals that have the best abilities to articulate and communicate with the customers that are looking at it more from an application or project perspective. So in saying that, do I believe that the industry is gravitating in that direction? It is naturally gravitating to that because you have to put in position the people that, you know, cater to their strengths. But here at FHFur, and I'm not sure if I'm supposed to use my company name, but I just did. But here at FHFur and my company, we look at everything this way. We utilize every employee to their greatest strengths. But even when we look at that, and if your strength is in salesmanship or being able to articulate and communicate and gain commitments, if that's

your strength as an individual, we invest this time and the necessary resources to bring that person up to speed on the other areas to the minimum standards, which for us are very high standards, as to being able to conduct their position to the best of their abilities. So when we have a consultant that is 100% commissioned, and he is the one going out, he has been extensively trained in the areas of product and application and code, and making sure that everything he does and says is consistent with what the best of techs would do. Now, the voids for that individual, i.e., his ability to understand it technically and what have you, we then fill in because the individuals that we bring in behind that individual

will then fill those voids as far as the people that are actually going to be performing the work and installing it and servicing it and maintaining it. But the overall experience for that customer is they get a fully knowledgeable individual that understands the application codes and everything else on the first meeting. And then followed by a fully competent trained crew or installation team, followed by maintenance required, a fully trained maintenance technician, and followed by if needed, service, a fully trained service individual. So the overall experience to the customer, I believe we're still giving it to that person, but we have to give it to them with four different people versus one individual that may be stronger and technical, but he wasn't the person they met originally. But the overall experience, I believe, is actually better for that customer. Yeah. And I think that sales is underrated to a lot of the guys that are listening and gals too in the home service

industry. I believe that, look, when you meet your wife, when you meet somebody at a Christmas party, I don't care what you're doing. You're doing sales, you're doing marketing, you're representing yourself. And if you get these people that you say, I would never hire a salesman, your close ratio goes to crap too. So I understand there's important KPIs like, and I really want to dig into KPIs with you because I just think key performance indicators are the way to run a business. And I'm looking at things like revenue per hour. I'm looking at a lot of performance over last month for individuals, gross less parts. How many, we rate our jobs one through nine and are the good guys

that proven themselves to a high close ratio a perfect customer satisfaction ratio and a good you know sales ratio are getting the one through three i mean these are all important things tell me a little bit about obviously i look at effectiveness, utilization, methods and tools, the marketing effectiveness. I look at the hiring process, non-billable time, you know, rates. Tell me a little bit about the top five KPIs that are outside of the box. I mean, we all have our top five, which were probably around the same stuff. But tell me something like that maybe you guys and you don't have to give me all your secrets of your company i'm not asking for that but just for the listeners if there's other things that maybe they're not thinking about that really

that you guys have found is a is a good estimate a kpi to tell us what's going on within the business that really falls out of a standard deviation that we have these outliers well there's overall kpis that you know on a month-to-month basis i'm looking at this falls out of a standard deviation that we have these outliers? Well, there's overall KPIs that, you know, on a month-to-month basis, I'm looking at this overall picture of where I stand. And then obviously we dig down and we do, you know, daily, weekly KPIs that we're looking to manage with on a regular basis. But overall KPIs, one of the KPIs, of course, we have different divisions. You've got different service divisions.

You've got the sales division and so forth. So we measure by different KPIs for the different teams, the different groups, departments. But KPIs for us, we've got two types of KPIs that we look at. One that gives us the overall information that we need to actually coach and manage off of, and that's managing direct to the individuals. And then we have the other KPIs that make us look at overall processes and overall things that we maybe need to be doing differently from, you know, 3,000 feet and above. So on a day-to-day KPIs on our service division, obviously with the normal things, we look at

conversion rates and we look at, you know, time per call and revenue per call and all of these things. But the most important number for me on a daily basis and KPIs is we actually break down as far as we know on service. We know when you're going to have to do a service, you're there to go do a repair or a maintenance. So there's what you go there to go do, what you're called out to do at that customer's house. We benchmark and we focus in on the KPIs outside of what you're actually going there to do. We're looking at what you're doing beyond to help that customer, what you're looking to beyond to provide solutions to the customer's needs, wants, and what have you. So what we're looking at, and for an example is on a KPI, is an enhancement

ratio on a technician. Given he goes out on 10 calls, and I don't care if you put three enhancements on one call or two on four calls or whatever the case may be, but we would have a minimum number that, are you looking outside the box? Are you looking to help that customer have cleaner air in the property, properly humidity control in that house? Are you looking at the things that professionals look for when you're in that home? Are you looking at helping the customer at a level that's far greater than the guy that's just going out there to turn the wrench?

Are you living up to the FHFR standards? So when we're looking at that on KPIs on that, we're looking at KPIs on what they're doing outside of why they're actually in the home, right? And how there are other ways that we can help that customer. So those are our daily KPIs that we do is maybe on enhancements on that or on memberships sold on opportunities and what do you categorize as an opportunity. But on a monthly and the bigger KPIs, which I look at, obviously, is output income versus revenue, the overall picture of this individual. And we have KPIs for every division, every personnel, every position in the company. If you're operating at more than a 7% labor to revenue, or an 8%, or 10% or 30%, depending on the division and individual, that very quickly leads us to a bigger picture of what that person's doing

overall in all of those capacities and whether or not that is something that is working for us or not working for us from a profitable standpoint. But most importantly are the KPIs. We talk about comfort advisors. We run reports in so many different ways. But the most important KPIs that we look at from the comfort advisor standpoint is, once again, you know, add-ons to equipment, efficiency mixes, KPIs on RTL, which is, you know, averaging in the average ticket along with the conversion. You know, your revenue to lead. Some people call it revenue per lead. We take that number

very seriously at this company because that tells us if you're a home run hitter and you're hitting home runs, but you're only hitting one out of every 10, or are you a balanced person where you'll hit a single, double, and triple on occasion, walk on occasion? Are you giving our customers the full realm of what our opportunities are and allowing the customer to make decisions and not deciding for them? So for us, holding the integrity through the whole process is very important. And we utilize the KPIs to ensure that our technicians and our consultants are offering a very balanced solution selling recommendation kind of format for our customers and utilizing those to identify areas for coaching and training. And then, of course, procedural and process changes, which we incorporate and do on a

regular basis with all management staff. Gotcha. I mean, it all makes sense. And I agree wholeheartedly with this. And it's kind of universal within the home service industry is I feel like Service Titan has changed the game for us. I've used five CRMs. I've used a lot more than five, but just for garage stores.

I mean, I've used lots and lots. I've used Salesforce, Zoho, everything in different. I've used Infusionsoft, you name it, in different companies. But I'm not even going to go in because I don't want to downplay any of the previous ones because they might be listening. But Service Titan, I believe, is really, they've got the right team and they've helped us do a lot of KPI and deep down digging and created a lot of accountability within the company. Tell me a little bit about

how important is a CRM? Because I know, look, you could get two data analysts to do the same stuff and have pivot tables and do a lot of this stuff. But I do believe having the facts right there and utilizing technology has become more essential than it's ever been. And it's going to continue to drive the market. What are your thoughts on that? I absolutely agree with that. You know, platforms in the CRM, like what we're working with now, and you mentioned Service Titan, has enabled us to do things well beyond what we could do in the past. And what it does better than anything when it comes to the transparency piece of things is in the past, you may have

numbers and you may have information and you may be able to look at KPIs, but those may be embedded in a form where you have to actually pull a report or create a report or assemble one by exporting a bunch of different information and compiling it in an Excel sheet. And then, of course, then you have to deal with distribution and then whether or not anyone actually looks at that. But, you know, through a CRM and as important as it is, and this is why it is so important, having that transparency for all individuals to see everything real time and identify those core KPIs that you want seen every day. For example, a booking rate, not only as a department, but a booking rate by individuals on booking the calls and being able to identify that steps everybody's game up because everybody can see it and it's real,

it's tangible and it changes and it's changing consistently. So when you look at booking rates, call efficiencies, ROIs on campaigns, marketing campaigns, all these different things that this CRM provides that previous ones could do in some fashion or form, but not nearly to the level that we're dealing with now, and certainly not with the critical information. It is evident that some of the information that's being provided is information many of us thought about in our industry. Manual entering things actually leads to, you know, questioning the results.

And then, of course, if you question the results, then it falls to the wayside and it's very time consuming and it doesn't get done. So CRM is very important. Some of the things that are already alive and active and set in the program have taken us to a whole different level as far as what we used to know versus what we know today and how we conduct our business. So I dig into those numbers on a consistent basis. And I'll tell you what, we've had our own call center challenges. We've outsourced it, brought it back in, outsourced it, brought it back in. We do some different things. We have about 20 agents right now.

Let's talk about if you get rid of all of the non-bookable calls. And I mean non-bookable by just straight solicitation or straight customer warranty calls. I'm not talking about, if they're not the homeowner, maybe you could still book that. If you're not the decision maker, or maybe it's a parts call, but I don't like that gray area.

Because if you let the call center reps and the call center manager start to develop a gray area, it makes it tough because you're not looking at the facts and it lets them make decisions, which it's hard to get good information. So if you leave every opportunity in there, except for solicitors and past customers, what do you think is a fair booking rate? What are you going to hold your standard up to it? Really, what do you strive for? We strive for 90% plus, and we do it the way that you've

just described it. We only make exempt from being a bookable call is if it's out of our service area or a service we don't provide. Out of that, it's bookable. So very little will come off. So if it's a customer calling in for a ballpark price or a customer that's looking for this, it is their job to get through that and to get that call booked. And we consider that a bookable call. So 90% plus of bookable calls need to be booked. You know, if you've got challenges with, you know, time and timeframes or accommodating a Saturday or whatever that question is, it is the job of that CSR agent to figure it out, get through it, and get that call booked. So 90% plus. With my best CSRs operating at 95 plus.

Incredible. Okay. So I know Susie over at CallCap would say 90% is very hard to get, but she says it's doable. But, you know, that's a lesson. We're not quite there yet. I think we come out for free. Some of the times we charge a $20 service call, so it shouldn't be that hard to book it.

I mean, and that is, if you give them the autonomy to make that decision, you know, to waive that, and then there should be no reason why they can't book it for that objection. So give me an example. We'll get through this fairly quickly. I need a price. The last person gave me a price. All I know is that I pretty much identified the problem. I need a price. The last person gave me a price. All I know is that I pretty much identified the problem. I need a new thermostat. How much would you guys charge me?

And trust me, we've used power selling pros. We still use them. Bringham is a great guy over there. We get trained by the best. We're consistently training our CSRs. And look, I hate giving prices. We don't give a price. We have a level two that's allowed to give pricing. Level one's not even allowed to mention a price. But tell me a little bit about getting over that. Well, with our CSR, the way we train that, and it's not verbatim, but it's pretty close, is they will engage with that customer. The customer says, hey, you know, I've already got this diagnosed.

I know I need a blower motor. I know it's going to cost a lot to dispatch to this company. I just need to know what you're going to charge. Well, instead of them just saying, we don't give prices over the phone, right? We let that customer know with it. Once they say that, we let the customer know. There's two ways that we can do this. We can give you a price that's high to make sure we cover in the event that there's something different or something extra or something more that needs to be done. Or we can give you a real low price, which is what we want to do so that you can go

ahead and let us come on out there and give you that low price. And we get out there and we find something a little bit different, and then we start giving you a different price. You're going to look at us as if, you know, hey, you gave me a low price. Now you're out. You've been switched me, and now you want a higher price. So what we train them to do is we don't give you a price, Mr. Customer. And the reason we don't is because we don't know if we can or cannot honor it.

We don't want to give you a high price to cover us. And we don't want to give you a low price and then come out and find out that there's something else. Then we look like we did something wrong. So in an effort to protect our integrity, and that's the way we conduct ourselves, we will come out there. We won't charge you to do that. So we can put our eyes on it, take a look, make sure that we're verifying what exactly it is and give you that price in writing. And then we can look at you in the eyes and say, this is the price to do the job instead of guessing. And that's all we would be doing for me to give you a price over the phone because we haven't seen it. I hear what you're saying and I understand what you're saying,

but we'd be doing you a disservice by giving you that price. So that's pretty much how we train our CSRs. And depending on, you know, incorporating that with their personality, they do a wonderful job with it. Sure. And, you know, it's tough, man. I got to tell you, my call center manager is amazing. And I don't think there's any perfect way to get it going. And different areas might be different. You know, if you've got a chimney cleaner, they might be able to do different things. But I can tell you the industry average in the home service realm of things is about 45%.

And it's low because a lot of people don't even answer their phone, which is surprising. Older problem. Absolutely. They don't answer their phone. And if they do, they're like, I'm coming out there. I'm charging you this. I'm busy. You know, and they don't care. But yet they'll come to you. What I found is the hardest thing for most home service people that it might not be as big as you guys. More of the small, small shops as they say, Tommy, how do you get good people?

I mean, where do you find them? How do you train them? How do you make sure they don't steal from you? How do you make sure they're accountable? How do you make sure they're working? And it's really about checks and balances. And there's no perfect way to do it except start an organizational chart, put together a handbook for each role, train them and make sure you can pay them right. I mean, but really have a bigger net to get them rather than just posting an ad on Craigslist every month, have much bigger way to get people. What would you say your, your biggest tip would be on getting the great people? And I know referrals are great,

but what's one out of the box kind of different way of thinking to get great people? Our main, our main area with that is just getting more involved at the, you know, the entry level with the schools and the trade schools in the area, whether it's high school programs or whether it's throughout the community colleges or the skilled trade schools in the area. So we're very involved with our HR division with getting involved with their recruiting of these organizations, getting our managers and getting our HR in front of those classes on a regular basis, talking to students, talking to the individuals that

are getting into the business from the core. Obviously, you know, we do it. We do go out there and we try to get seniors and the veterans that have been doing this for a long time to experience and, you know, do our referrals and all those programs. But where we're getting our best employees that we can groom into the business to train them the way that we would like them to be trained, to train them to represent the industry the way that we want the industry to be represented is through the field trade schools. And we've had a lot of success. Now, you will have to go through a lot of students

because, you know, to match up with what you're looking for as far as the look and experience and what have you. But we have groomed over 25% of our skilled tradesmen in the field came from us recruiting them from schools and the different areas. Now, we do some of the trade shows and that as well, but nothing better than going to schools on a regular basis, standing before the students, letting them know who you are, why you do what you do, what you can provide for them, the opportunity. And then you carry them out of school. We carry them through an apprenticeship program where they'll have a mentor for the first 12 months that will be out there as a leader. They'll do ride-alongs and what have you. So we also do ride-along days where we'll go to the schools and we will say, you know, at no cost to you, it's completely complimentary, we will allow your students to have a day in the life.

Your day in the life, if you want to be a plumbing technician, a day in the life with a plumbing technician or a plumbing installer or an HVC technician or an electrician or what have you. Would you like to do that? And they jump on that. And then once the students go out there and it's building that relationship with your company, you have a very high probability that they're going to seek you when they get out of school. And, of course, they want to proceed with the career of their choice. So that's where we've seen some success. And I think the one thing that we've done better than anything is giving them that day in the life. And they really appreciate that. The schools appreciate it.

And, you know, it just works for us. So let me ask you this. You've got a lot of things that don't train they don't have trade schools whether your chimneys gutters landscaping i don't know if they got not really garage stores either but so one of the people listening might say that's good and great because there's hvac schools tell me about going to a high school or something that these guys and gals could do out there that are listening to utilize trade schools and high schools, but they don't have a necessary competency for that home service. Does that make sense? Yeah. So they don't have a specific, you know,

skilled trade that they're training in school. So we also, and this may be helpful, so we will often, twice a year, sometimes three times a year, we will actually put on our, and for smaller companies, a little harder, but you can just scale this down. You can open up to, and what we say is, and what we go out to do is, we will run an ad, and whether it be on Indeed or any of these large platforms, we will run an ad for individuals to get into the trade. And whatever that trade is, whether it's Chimney or Auto or whatever that trade is for us, obviously it's one of our core divisions that we run. But we will run an ad for that. No experience necessary, fully paid training, full training,

and put a value to that training that we're going to provide, all tools covered, et cetera, et cetera. And then we will get an influx with an estimated amount of first- tools covered, et cetera, et cetera. And then we will get an influx with an estimated amount of first year income, which we typically put there. And we'll get an influx of applicants now. So it's a very lengthy process, right? Because we want to get into a new trade, want to get into something that's almost recession proof and whatever, whatever, whatever. So we get their attention and they come in and we typically will start a class with approximately 10 individuals. So we'll get 30, 40, 50 applicants that'll get through the initial phone screening. Then we'll go through the personal interviews, at least two of them per person.

And then we'll get down to all the way down to the core 10 that we want to start that class. And if you're a small company or you're one person, you know, you're the owner, you're the manager, you only have a couple of them that you may be that trainer, but that's what you're going to have to invest into this. But you're advertising it as obviously paid training and that you're going to cover all costs for that training, right? So not only are you covering the cost of the training, you are paid training. And we do a one-year contract with the individuals once we get them to that point where they're serious, that they're going to commit to at least giving you 12 months of service. If not, you can create that however you want, but there should be some responsibility in that

as far as if it's $10,000 worth of training that you're providing because you're going to do four weeks and this much classroom time and this many ride-alongs and you're going to run them with one of your teams out there to learn it in the field

as part of their training, which I'm sure is part of that. You'll go through what is all that training worth to your organization? You want to advertise that number as far as what that training would cost if you were to go out there and try to get it, right? So we do that. We bring that class in and we run them all through that. We have a lot of success in that way. And they're not minded in HVAC or plumbing or electrical or anything for that matter. They just don't know what they want to do, but they want to do something. And getting paid to do it, the training, and to go through that training,

the training is covered in the cost, and you'll cover their tools and necessary things that they'll need. We've attracted a bunch. We have a class starting in mid-January, and we've already got about 50 applicants for that position or for that class. So we're probably going to get 100 on this round the way that they're coming in. And it's all about the wording in your advertising. So it's not specific to, you know,

you need three years of experience. It's a no experience, you know, want to get into a great trade, pay you while you train and cover all your training costs. And we do that. And we don't do that in the schools necessarily because we're able to do that through our, through the, you know, the different websites,

hiring websites. And we're able to do that through our through the you know the different websites or hiring websites and we're able to do that and get enough traction to where we we've never had a problem building a class now you got to be willing to commit right into the time that's going to take to build that but that's what you're talking about doing anyway yeah right right no it makes it makes a lot of sense and i agree that it's a lot of work to set up the infrastructure but we brought on a full-time recruiter. That's all she does is post on different places. She actually does a personality profiling test of each person once they make it through a certain amount.

First, we do the drug test background check. Then they go through some tests to find out what... There's some patterns we found of success rates that actually adopt the training within the first year and are successful. So I agree. Yes, we do aptitude testing as well. And they're not an end all if you don't score well, but it's certainly an indicator that we need to look into that a little further. Right. So that's something I'd really advise. I love all this stuff. And I, you know, I'm running out of time here with you, but I haven't even got into the meat and bones. I'm going to ask you one more question.

I'm going to jump into some really cool stuff. Venture capitalists, I feel like are just, they're coming in to especially your industries, the plumbing, HVAC, and they're coming into electrical. And they're swooping up. I mean, they're swooping everything up. The people are doing these shares. I know of a local company. I'm not going to go into their names, but he's split a couple of times already. And what their goal is to get up to 500 million and potentially a billion in the next three to five years. is because I see it happening all around me. I got a pretty good idea on the IPOs and what's going to happen and how they make their money. But explain to a lot of the people that are listening,

trying to understand how that works and how they're getting the multipliers for their EBITDA and really just the process of that play and why it might work for some and not others. Does that make sense? Or is that a question you want to even go into i'm not sure if i'm that familiar with that that particular topic or maybe i don't quite follow exactly where you know what you're looking for as far as my take on it and yeah i've had time just talking about it without talking about the

company's names as well so well the you know direct energy was one of them that can solid they took a lot of companies one hour you know, Direct Energy was one of them that consolidated. They took a lot of companies one hour. You know, they took all these companies and they bought them. But you look at other groups that there's hundreds of them out there. They're going and raising money to take out. They're basically buying revenue and they're doing it in multitudes. And I just I know how it's done, because once you do an IPO, you get seven times, but it's really worth 12 times. As you build a company in the infrastructure,

you get a much higher multiplier on the company because it runs itself at a certain point. And I just am curious, you know, if that's something that you're familiar with. Well, the thing in our industry and our area and what I typically will see and where it's headed, our industry, obviously, there's a wide variance between, you know, the small mom and pop companies. And then, you know, the typically top 5% of companies in any region that basically run 60, 70, 80% of the business in that region. Right. And everyone else is trying to pick up the crumbs left over.

And in any real geographic region, you usually have two, three, four, five players that do half the market, and then everybody else is sharing the rest of that market. So in doing that, as an organization that has fundamental processes and procedures and infrastructure with that company, it's very easy to get good bargains on the companies that may be running at a very low margin, but by implementing your processes and what have you within that organization, drive up double-digit increases very quickly and rapidly, obviously driving that stock up on that business. So because our industry, the service industry, there's such a wide variance between your entry

level companies and the larger big players in any area. There's so many opportunities in our industry to pick up companies that are not effectively managed, not effectively run, in essence, to where you know when you drop these different processes and infrastructure within that, it's going to more than have double digits in the first year. And with that being what you're looking at and how you can get it, you know, you bring that in, drive up the revenue, drive up your stock in the company. It is very much, in my opinion, it is a concern because it's almost monopolizing the industry as far as these companies that are coming in and they're able to pick up certain companies, knock out competition, drive up those costs, drive up their value, and then, of course, dump or just profit

off of it. So not sure if that's what you were looking for. Yeah, no, that's great. I appreciate that. No, you did perfect. That's exactly what I wanted to know. So I'm not sure if you guys ever acquired a company, but you see that there's somebody out there who's running another HVAC company, or if you're a gutter hanger, there's a gutter company that they've done well. They've been around for 40 years. They just don't have a good profit. So you can pick them up for a pretty good rate. All their expenditures that they're burning through because they hired this guy 20 years ago, they feel like he should be making 150 grand, even though he doesn't even come into work anymore. I mean, you go in and that's what

venture capitalists do. That's what these people do. They go in and they trim the fat. They put effective systems in place. You remember that old movie called with Julia Roberts and she's like a hooker in the- Yeah, yeah, yeah, yeah, yeah, yeah. Pretty Woman. Pretty Woman. Yeah. And Richard Gere, that's what he does. He goes in and he takes companies, builds them up and sells them. That's pretty common. So that's happening in the home service industry. It's crazy.

Absolutely. It's opportunity. It's what it is. It's crazy. And this economy, man, what do you think about this tax law? It all goes well. It should help.

I think the economy is looking pretty good for the next couple of years. Anyway, so in three months, you guys did a million bucks of financing those this is the subject i want to get to and i'll make this as quick as possible but i know this is your uh you got a lot of passion for this so if i take a little bit longer i'm really sorry but no problem financing changed the world for you, you said. Tell me, let's just dig into it. Tell me what your thoughts are on financing. How much should my home service company be doing on financing?

And tell me a little bit about service versus new installs, because everybody has gutter service or chimney service versus new installs. Sure. The higher your average ticket for whatever service you're providing, you know, the more important financing becomes because obviously the higher your ticket, the harder it is for your customer to afford what it is that you're offering. So if you're dealing with some minor services that are under $1,000 or you're dealing with larger services that are $1,000 to $5,000 or, you know, larger projects which are $5,000 and higher, financing becomes more and more important. But what is even more important to realize that the higher the price, the more

important financing becomes is that any job can be financed. And whether financing should be offered for the use of financing or just to get the commitment from that customer, it can be used in both ways. And what I mean by that is that we have found in our organization that when we offer financing on every call, and don't get me wrong, I don't have all of my personnel offering on every call. I wish I did. But if you offer financing on every call, you will still only have a percentage of your customers that will finance, but you also have a percentage of your customers that will move forward with it because internally they could afford what you are offering and decided internally that they're going to go ahead and proceed with it. But then of course it said, I want to get my miles. I'm

going to use my credit card. But a lot of those customers, when you have that, so a lot of my technicians will come back and they'll come in and they'll mention, you know, hey, I offered financing and the customer showed interest. And then we went through the options and they chose this one. And then right when we're getting to the payment, they said, you know what, I'm going to use my credit card. So that customer really didn't need financing. But they're missing the point. By offering it on the payments or utilizing of the financing, they gain the commitment on that product or service.

How the customer actually ends up paying for that product or service is irrelevant to me. What is relevant is did we get the sale? Did we get the commitment to do that product or service? So it's very important to understand that just because you may only use financing on a certain percentage of your jobs doesn't mean that that financing isn't helping you get the others. They're just not using the financing. So what do I expect? I, you know, as far as the numbers go and why I believe in it so much, I expect on high ticket items, tickets being 5,000 or more in the

home improvement business to me are high ticket items in home improvement, 5,000 or more. I expect over 50, I'd like to see a 60% or higher use of financing, especially if my conversion is low. Now, if your conversion is really high, you may be able to throttle back a little bit on that. But unless you're converting it much greater than the industry average in whatever industry you're in, then you need to be looking at doing more financing. If you're converting at a much higher rate than everybody else, then you need to look at one of two things, potentially cutting back financing or raising your prices. Right. Or both, really. So you have to really identify that.

So let me ask you this, and I agree with that wholeheartedly. If you're closing over 70%, raise your prices. The industry average, I believe, is around 50%, 52%, 48%. Does that sound about right? In use of financing or conversion? No, I'm talking about conversion rates on high ticket items. Conversion rate on high ticket items, obviously, lead sources play a big role and industry plays a big role. But I would say on big ticket items, anything above a 40% conversion, I don't know what industry, is actually a good conversion. On products that people typically get one or more estimates on, right, or try two or

more estimates on, I would consider a big ticket item. So if you're in an industry, no matter what your prices are, if your customers typically get two or more estimates on that product or service, that would be in that high ticket item, you know, because to me, maybe a $4,000 gutter job would be a high. And I don't know what gutters cost, but I would think in my mind, $4,000 for replacing my gutters would be a big ticket item for me. So, and a lot of people I think that are getting gutters replaced may get two or more estimates to have that work done. So that to me would be a big ticket item. Now, yes, I would say that conversion anything over 40% on a big ticket item is a good conversion overall,

unless everything you're doing is just your referrals, customers, and the technician leads or what have you, then it might be 50%, 60%, 70% of your benchmark. But overall, I think 40% for someone responding to an SEM campaign or something like that, I would think that would be a correct number, 40%. So let's say you're doing a ticket for $1,200. What's your percentage that you feel like you should be using financing on something like that? Okay, so tickets that are not big ticket items that people don't typically get multiple estimates for, which would be service repairs, roof repairs, better repairs, things of that nature,

replacement one downspout, these kind of things. I would think that on a conversion scale, 70% plus. Conversion rate is going to be more on financing for smaller tickets? I don't know. Oh, no, I see what you're saying. Conversion rate. Now, what about the financing? Oh, financing, no.

We're targeting for 25% of our service, our small repairs, our non-big ticket items. We're targeting for one out of four on finance. thing that's going to stop you today from purchasing this new unit? Money. Now, if you say yes, then I've narrowed down the reason and now I just need to make it affordable for you, right? I think that's what you're talking about is how you get that narrowed down, right? Right. Because, you know, the thing is, is instead of asking it, because sometimes they'll even lie about that, you know, being, well, I just want to double check the price or I'm not going to price. I want to get another estimate. So it's going to stall you.

So rather than do it that way, which a lot of our technicians do it that way, we just present that $250 or $400 repair as a monthly payment. So, you know, this was going to be, you know, $18. And then, of course, the customer will then ask, well, what's the total, right? So, but the $18 has already been thrown out there and that's already what they, what they're, and they can afford the $18 in most cases. And they can certainly afford $18 more easily than they can $400, right? So the reality is, is no matter how you look at it, the payment's always going to be more affordable than the total amount. Now they may be able to afford both of them. That's great. And that's all fine. But once I hear that, you

know, your option, your first option for, you know, this minor repair is $400 and that's all fine but once i hear that you know your option your first option for you know this minor repair is four hundred dollars and it's going to be eighteen dollars or i can go and replace the downspout and that whole gutter on that front side because that is showing it's a little bit dinged up in the nail just trying to come out i can do all that for eight hundred dollars or you know 27 i'll say 27 or 800 whatever however you want to pitch it but you want to pitch it to the low payment first or i can go and do the whole front of your house or do all your gutters in your house and just get this done one time, and that's only going to be $72, right? So when I say 18, 27, 72, all three numbers were affordable the whole way through.

Now they have a decision to make, which one they want to do because they can afford all three. And as I had alluded in my presentation, it's only only two things have to happen to get a sale, right? They have to have the ability to pay for what you have, and then they have to have the want to do it. So if I can eliminate the ability, I know I can eliminate the ability in 90% of my customers by presenting three payments. I can't say that by presenting three numbers. I don't know if my customer can afford 400, 800, or 2,300 for my three options. They may not be able to afford my $2,300, especially when you talk about times like these where maybe you're leading into the holidays or different circumstances.

If they even had it, they don't want to come off of it because they're spending all kinds of money in different ways, especially this time of year. But besides the seasonality factor to it, it applies year round. If I present three numbers or three options or two options or even one option that's more affordable, I have a better chance of closing that sale. Now they may be in, and this is what I meant by that. If you say 1827 and 72, they may choose, well, I can actually afford to do all my gutters in their mind. I can afford to do it. But then they may at that moment step back and say, yeah, let's go ahead and do that but i'm going to use my credit card because my wife wants the points right on her credit card so in their minds they've accepted to do the project project so it's no longer a decision

as to whether or not they want to do it or not but had i presented the other way option three may not be an option because i don't want to spend you know two thousand dollars right now i'll just take option a so yeah you a sale, but you lost an opportunity. So never ask, always assume. Tell me about that. Never ask, always assume. I keep telling because when you ask, you always get the answer no.

And that is a conditioned response by most consumers because they have learned by saying yes to anything in a transaction involving a product being offered and then, of course, the consumer accepting it, they've been conditioned to say no. And the reason is, obviously, it's a stalling tactic. It might be protecting themselves from making a bad decision. It may be a pride thing where, are you suggesting that I need financing? It just may be cash you know, they're feeling that if I say yes to financing, then my price is going to go up because, you know, whenever you use financing, it's more expensive. You know, different things that are going on

within that consumer can react with the response being no. So our technicians, our consultants are trained to not ask a customer if they need financing, because chances are the answer is going to be no, no matter what it is that they're thinking in their mind, just because of the different reasons. So what we train our people to do is to present on the low payment. Yes, the customer will more than likely ask, well, what is that total? But the payment's already out there by then, so they've already decided in their minds whether they can afford your product or service.

Now they hear the total number, and it'll either validate that or extinguish it, right? Where they're not going to do it. But either way, we assume financing on every opportunity as part of our protocol and then allow the customer to prompt a question. Because after all, if you offer financing on every call, which is the number one thing in the service industry is, you know, you can't sell something unless you offer it, right? So by offering financing on every call makes it part of every conversation. By making it part of every conversation, it will prompt questions. And if your client responds back to you by $9 a month, oh, is there any interest?

Oh, do you have any no interest plans? Oh, I didn't know you could finance something like this. Oh, do you have anything that's lower than that? So any of those questions coming back from your customer are good questions. They lead into the conversation, which will then help you lead into that potential sale of that service or product. And that's what we train the guys. They may not use the financing in the end. They may use a credit card, but you know what it also does? It does,

it takes them away from talking about the actual repair and the pain of that repair or that service, right? They're talking about something different. We'll take away from that and now help you get into a different conversation, which will now help you build that relationship with that customer. So we got GreenSky. I use GreenSky and EasyPay, and we use ServiceTite, and it's got a great toggle feature. I believe you're even able to build in the interest rate into the sale. Tell me, how important is that to have that, the CRM and the features on that toggle? Oh, it's absolutely critical. You know, there are challenges you cannot overcome without

having the, we'll call it integrated financing piece with your CRM, right? Because otherwise you're relying on individuals to actually hand carry that information or, you know, have it available to them in a booklet or a laminate or a brochure. And now you're relying on this extra tool to come into play and that your technician will actually embrace that and have that readily available and utilize that on every single call. We all know the challenge in our industry is front of mind awareness and whether or not our technicians will speak about the things that we ask them to speak about on every call, whether that's speaking about products our company offers, services that our company offers, great things about what our company does.

So our greatest challenge, obviously, is getting our people in the field to do what we are asking them to do in whatever capacity that is. When you have the integrated piece with Service Titan in this particular case, it isn't a choice. When you bring up the pricing, when you build your pricing, the payment automatically comes in with the pricing. So it's not a choice of whether or not I'm going to break this down into a payment. It's not a choice as to whether or not I'm going to talk about finance. No, it's there and it's there for the client to see and it's there to bring awareness to it for

the technician and it makes it very easy. So naturally that payment coming in, the ability to apply through the CRM, you know, just by clicking a button, not having to remember phone numbers or account numbers and all this data that you have to remember to be able to process in previous methods is a huge benefit. And then it providing the payment for that customer, all electronic without having to have any sales lists or applications or paperwork. And fill it out right there on their device. Hit submit. It gives it an approval.

You complete your payment process. There's nothing else to it. There is no calling the technician afterwards saying, oh, you signed it in the wrong place. Oh, you filled out the wrong boxes. Oh, we can't get paid because of it. Because anything you do to make that job harder for that technician to do this, the less chance it's going to be utilized in the future for that technician or that consultant. So the process through the integration with the CRM with financing is absolutely critical to have success or high levels of success in financing integrated into your business. I love it.

So we're going to dive into it. I'm going to just go through this real quick. You said there's four reasons why technicians don't do it. You said mindset because, look, they don't like to buy. And I've heard so many people that say, my technicians, say, you know what? I would never pay that much. And I'm like, you don't even have a house, okay? You said change.

Nobody likes change. You said it's complicated. I got guys that don't even know how to text message. But, you know, they use the iPad. They're good at the technician. I would never finance that, so why would they? As I was coming up to the house, you know, they got a beautiful car, beautiful TV, beautiful this. They don't need financing, right? So, and I call this, you know, selling out of your own pocket. The biggest thing there is to get that employee or employees to understand that we aren't selling to you. You are not the one purchasing that service. You may not even call somebody to your house to get your garage door worked on.

Or maybe you do those things yourself or you've got a brother-in-law or a cousin that does that for you. So you can't compare that, right? So you're not the same person. And it's so important to role-play that and to actually get that through to the individuals that are there. You have to understand that you are not the person standing in front of you. And quite frankly, what your responsibility is, is to make sure that you do not make decisions for that customer. Because where does that stop, right? You're deciding whether they need financing or not. You can decide whether they should fix it

or not. Are you deciding whether they should do this or not? No, you're not, right? So don't make that decision for them. Your job is just to give the customer the option and let the customer decide. How would you feel if you weren't given the options to make the decision, but rather the person in front of you decided for you that this is not a good for you and your family, that you shouldn't benefit from this,

that you should, you'd be upset about that. Would you not? And they all agree. Absolutely, no. What you want that person in front of you to say, here's the features and benefits of what I have to offer. Here are your options. What would you like to do, sir? Every one of us in the room would want that approach if when we're dealing with anything where we have to, you know, we're looking at

getting a service or a product for our home. We would say, give me my options and allow me to make a decision that's right for me. Would we all agree on that? Yes. So now you've gotten through with that. So now you got to, you know, nobody wants to go through change. So you don't want to do a lot of change upfront. So that's the second point. Reduce the amount of change, make it seamless, make it easy. Don't have 14 plans with different APRs with no interest, same as cash and no payments. Select two or three plans, never more than three, make them very easy, dummy them down and practice those three and those three only to make it very easy for them so that the change is simple. So there's not a lot of

change from what they're typically doing or what they are doing currently. If they process payment this way, keep it as close to how they process payment with the new methods. So make it transitionally where you're not making a lot of change. Make it so they understand it and it's not overly complicated because the confused mind says no, which is what that was. So one of the reasons that they don't do the confused mind, if I'm confused about APRs and interest rates and finance charges and same as cash, no interest, what's the difference? If I'm confused about APR and interest rates and finance charges and same as cash, no interest, what's the difference? If I get confused about that, I'm just going to stay away from all of it. So it's very important when you choose these two or three plans and you're keeping the change simple that you also make sure you educate the individuals to make sure that they understand what it is.

And by doing that, you have to actually not just teach it. You've got to coach it. You've got to have them get comfortable sitting with one another. And you just ask, you have a question and answer card. Here's the question. Is there any interest? Here's the answer. And then you have six or seven questions. You have the two individuals read the question and read their response to it until they're so comfortable with it, they can answer the questions without using the cue card. And it's critical that you do that because they have to walk out and know that they understand it so that they're not confused by it. And when you do those things and you keep it

simple, you get them understanding that the person in front of them is not them. You let them know that it's a minor change. You get a couple ambassadors of the division that actually adopt change quicker and you get them to start speaking about it. You start recognizing all of the individuals as far as when financing is used, and this guy sold a $3,000 ticket and utilized financing. You make sure the world knows about those things. I agree. So I love this stuff. I know you got to go. Tell me just an overview. No, take your time. I'm good. Three buyers, right? You got three buyers, low interest, no interest, and low payments. I want the audience to hear about that because I thought that was really powerful.

Okay. Well, so typically you have buyers that will utilize financing in one of three ways, and they're one of three types of finance buyers. But what's important to understand is that everybody, when I say everybody, I'm really generalizing, a very high percentage of individuals utilize financing in some form in their lives and they use it in one of three ways for the most part. So you have your low interest buyers, which they're okay with borrowing money,

but it has to be at a decent interest rate. So the people, they're maximizing their opportunity on that. So, you know, some people that might be 4%, 3%, it might be 8%. It might be a lot higher for someone that typically speaks to pays 18, 19% on a credit card to them. 10% sounds good. So we don't know what that number is. We just know that they are okay with borrowing other people's money at a reasonable interest rate to them, a reasonable interest rate to them, a low interest rate in their perception. Then you've got your no interest buyers. They just want to use somebody else's money because they either believe that money is coming to them

in the form of a bonus or a tax return or something like that. So they just want to leverage or they have money sitting in a 401k account that they're going to take a loan out of, or in a savings account, or stocks that they're going to liquidate, or what have you, and they have the ability to get that money, but they don't want to come off of that money right now. So they're going to leverage, and they're going to use that no interest term, 12 months, 18 months, whatever your company may offer. So they'll utilize that to leverage their money. Or, you know, for me, it may be that I've got the money sitting in a mutual, but I don't want to sell it right now. So I'm going to pay off as much as I can for the next 12 months. And if whatever I have left over, then I'll take some out and pay that off. So that'll

be your no interest buyer. And then you've got your last one, which is just your low payment buyer, which interest rate is not the biggest concern. And same as cash, it's definitely not because they don't have any cash in the bank and they don't see in the foreseeable future they're going to come across any. So what they need is something affordable. They got a budget, they're typically budget-minded, and they just want the lowest payment possible. Length of term is not on the forefront of their mind and it's not of importance to them. They'll pay for 10, 15 years, no problem, just as long as that payment's affordable each and every month so it doesn't create any unnecessary stress or what have you on their lives. So those are the three types of main finance buyers.

But when you sum that all up, what that means is that everybody in front of you is a finance buyer. They may not finance what you're offering today, but they are a finance buyer. With certain products and services and certain things and certain times in their lives, they will utilize one of those three, if not all three, at some point in time. So they're utilizing it, and they're all finance buyers. So what we have to get through to our personnel and our staff and whoever we're trying to implement is that all customers are candidates, not just people that appear to be broke or not people that appear to be rich and they want to utilize no interest

because they've got hundreds of thousands sitting in their checking or savings account. No, everybody is a finance buyer. It's just a matter of where and when. So we don't decide when and where that's going to happen. We just assume it through and assume that everybody is. And we lead in with that low payment because guess what? The low payment when you're it, will bring about what type of buyer that customer is. If they're a no interest buyer, the immediate response will be, do you have anything with no interest? And if so, for how long? That low payment buyer, is there anything lower than that? If a customer is going to tell you which one of the three they are, we don't need to ask them that. They will tell you once you present on payments and they are actually considered utilizing leverage with financing.

Okay, so now correct me if I'm wrong, but does Service Titan allow you to build in the fee or not with financing? Service Titan allows you to build in three plans. They have a toggle. They have an ability to input a percentage markup on your tasks for financing if you want to utilize that. My suggestion is to build just like your credit card fees and other costs in your business. It is a cost of doing business. You obviously have to be safe and you have to estimate how many percent based on how much you've used in the past, how much growth you're going to do in the coming year.

But to take that, you know, if you're leaning towards the fact that 40% of your revenue is going to be financed this year and, you know, you're a $1 million company. So you're going to finance 40%, 400,000 and your three plans average at 6%, then you would just take, you know, the $24,000, which is 6% of your 4,400,000, take that $24,000 and build that into your overhead like you would credit card fees. And that's something you'd have to manage. So, you know, obviously you've got to manage this. And yes, in essence, if 40% of your jobs are going to be 6% fee, you're going to see a 2 point something percent increase in your overall cost to your customer across the board. So you mentioned that you could get 25% more by doing financing. Is that something that you can elaborate on? The number is actually probably higher depending on where your organization is

with the use of financing. But conservatively, even if you're using it moderately, I think 25% is real. There's two areas that your business increases when you start utilizing and embracing financing to a high degree. One, your average tickets start to soar. And the reason your average tickets soar is because you are making it more affordable. If you think about it, approaching a customer with a $10,000 option is the $10,000 option. Approaching a customer with a $12,000 option is a $12,000 option. It is $2,000 more. So in financing, that $10,000 option might be $100 a month, and that $12,000 might be, in that particular case, $120 a month. It is far easier to afford option B, the $12,000 option, for $20 or more a month than to get $2,000 more on top of the $10,000 that you're asking from me today. And I think most people would argue,

unless you're just sitting on a bunch of cash and you just enjoy spending it, that in fact, $20 a month is more affordable than $2,000 more today. So in doing that, your average ticket, more option Bs and Cs, if Bs and Cs are higher efficiency options or whole house with all your gutters instead of just the front of your house or all your siding or your entire roof with an upgraded architectural shingles or what have you, I think we can all agree that if your second option was $20 more a month, that is going to be more affordable if you were to pull 100 people out there than an extra 2,000 on top of the 10,000. So that's the first area in which

you'll see a massive increase in your average ticket and higher margins, either higher margins for the stuff you're already selling because you have to discount less because you can get the margins now because you're not asking for it in cash or credit card, right? So you can either increase your margins by selling the same products with less discounting, which will give your average ticket higher than it is today, or you're going to see more higher-end products and higher options being sold, which should, if you're priced correctly, provide you with greater margin dollars and greater average tickets. So that's your first way.

Your second way, if you're not incorporating financing correctly, is that there's a certain percentage of the market you're losing. There's a certain percentage of the market that need financing, but they don't necessarily say, you know, I want financing. They just can't afford what you're offering. So they continue to get estimates from other people until they finally realize I'm going to have to do something. But by then there's three people involved and there's only a 30% chance that you're that going to be that winner, given that you didn't sell it when you were there. So having said that, by giving them the option of financing every time, that 10, 15% and different markets, you know, some places are more affluent and have

higher credit scores than others across the country. Some places it's very hot, you know, where financing is needed more readily than in other locations. So this number could be a lot greater for you. But there's a percentage of your market, no matter where you live, I don't care if you live in downtown Manhattan, there's a certain percentage of your market that would have bought from you had you offered them an ability for them to pay for it other than them using the cash out of their bank or a credit card, which they may already view as a negative thing to put anything on the credit card because they don't ever pay it off. They do have the available credit, but they don't want to do it and so forth. So we don't know the reasons, once again, but there's a percentage of the market that would buy from you if you gave them more options on how

they could pay for it. And you're losing that to your competitors if you're not doing it. And so you will capture now that 10, 15 percent or whatever it is, maybe even higher, which may relate to a 10, 15 or 20 percent increase in your conversion rate in that space, in that area of your business. This is so powerful. What are your thoughts? A lot of companies, and if you go to the restaurant, you'll see it everywhere. Bowling alleys, movie tickets, everything. They're adding a fee for credit cards and it's legal in 40 states, but if you call it a mobile convenience fee or whatever, and then you give them a cash or check discount, what is your take on that? And that doesn't have to do as much with financing, but you know, 4% percent and you know you're probably up there like we are eighty percent of the stuff comes through credit cards it's not as much checks and cash as it used to be adding that four percent to get a

check or cash and we don't like guys carrying cash either but do you agree or not agree with adding something like that a mobile convenience fee and you discount it with a check. I disagree in doing it in that form in terms of the approach of you add this if you want to use your credit card. You're just creating a deterrent for a customer to be able to buy what you're selling. I don't want to pay more for anything. Even though it's built in, I'll use my credit card, but I don't ever use my credit card when they say it's going to be an extra 2.5% or 3% if you want to use a credit card. When I see that, it's a deterrent for me wanting your product at all, quite frankly. But if I'm running at your bowling alley, which is a completely different service, I'm probably still going to bowl.

So you're still going to do it on service, though. You'd still do it regardless because you go to pay. I don't like that throw something in at the end. But service is a little bit different, right? Well, service is different, but as a business, I know what my costs are going to be. And those are slightly variable from year to year as far as a percentage of business, but it's pretty close. And I can predict what we're going to pay, and that is a cost of doing business. I mean, processing payment is a cost of doing business, no matter whether it's a person hand carrying a check to the bank,

there's a cost of processing that payment. So the cost of processing payments, whether it's merchant services through credit cards or financing fees or whatever, to me are overhead costs. To me, those are costs of providing your service to the customer. So because of the raising it, no, but I'm not opposed to, okay, well, you have, and let's just say you don't average it. And let's just say 40% of your jobs are going to be financed. So 400,000 out of that million dollars if you're a million dollar company. And some companies will job cost that, you know, if the average financing you use is 6%, they're going to job cost, okay, 6% on the $400,000 that I am financing, that's $24,000, which is 2.4% of my revenue. I'm going to add 2.4% to every job in my company, to every task, right?

So that's one way to do it. The other way you can do it is say 6% for financing. I'm going to build in 6%, so $600,000 on my million dollars into my overhead, 6% across the board, increased to everywhere. And when I present, and I present with financing every single time, I then can offer an instant rebate or a discount, given that they're going to go ahead and pay with it. If they use a credit card, I get 3% off if they give me cash. I'm giving them 6% off, whatever. A rebate, a discount, an incentive.

You can use it in different ways through the year. Yeah, that's a smart way to do it. Yeah, discounted rate. Yeah. I can see those two ways. I like having those bullets. So I'll let you go here. The last couple of things I'd like to ask is,

I always ask the people I get on here, if there's a couple books or anything that you're just like, like me, I love the Ultimate Sales Machine. I love the E-myth. I love seven habits of how to successful people. I mean, I have thousands of books, literally thousands. If you had to pick your top three for the home service industry, what would they be? For me, I'm conflicted because I come from a sales background. So sales, I'm all about it. Home service is sales. Yeah. Yeah. So I mean'm all about it. It's home service. It's sales.

Yeah, yeah. So, I mean, for me, my favorite would probably, you know, Brian Tracy. Advanced sales from Brian Tracy, which I think is just a down-to-earth, just person-to-person, no-fluff kind of sales book. It's just about understanding the person in front of you and giving them their options and letting them make those decisions. I mean, he does that amazing in advanced sales by Brian Tracy. I am a huge fan in sales and leadership.

John Maxwell, of course, The 7 Habits, it's right next to my bed. I read it all the time. I'm always striving to become a better leader. And through that, it definitely affects everything because it's about how to lead people and how to inspire people, which in the end will help you be extremely successful. Another book, and it was by an individual that I'd met at a conference, but The Freak Factor by I think it was David Rendell is an amazing book. He just talks about being different. He's that elephant in the room, being that pink elephant, whatever, however you want to look at it, about how being different will always yield

success. And he does it in a wonderful way. So if you get a chance, I think you purchase that book, the three-factor, read it, you'll be very impressed. Yeah, there's a book called The Purple Cow that's about being different as well that I just purchased. Okay, and then finally, is there anything else that you want to tell the audience? Something maybe that you think will help them create a breakthrough? We talked about hire. We talked about finance. We talked about a lot of amazing stuff. I guess my question for you is we always have more to say and we leave stuff out because I'd love to have 10 days with you, not one hour with you. So tell me a little bit about maybe something that you're passionate about that you think would really drive them forward to the next level, if there's anything you wanted to mention.

Well, I mean, the most obvious one to me, and that's not as obvious for a lot of people, but a lot of the service industry has adopted it. We always question between performance-based program with field personnel and how that may sacrifice some integrity and cause people to do things or say things or perform things that they otherwise wouldn't because they're on a performance-based pay. I can tell you the one thing that will revolutionize any company that is not on some form of performance-based pay program is that you really need to take a closer look at that and not fear that. If you hire the right people, if you instill the right vision and hold people to certain standards of integrity,

you will not have that problem and manage that effectively. So my greatest thing for every company, and it doesn't just stop at field personnel, incentivizing even down to call center reps and any position within your organization so that they can feel fulfilled, they can aspire, they can drive, they can help, they can push, they can serve as the people within the people to help raise the entire level of performance within your organization through helping your customers and be successful with it. I certainly would suggest that you get on board and you be successful with it, I certainly would suggest that you get on board and you get going with it and believe that the things that you're doing and

the people you're hiring, being the right people, they will just thrive and do more for you. And in many cases, if not most cases, it can't hold itself to a higher level of accountability and integrity. So I would say that piece, and second to that, high level of accountability. You have to have accountability through your team for workmanship-related issues and being accountable, held accountable to that, whether it's consultants and their paperwork, held accountable to that, whether it's CSR agents inputting the data into the system wrong and transposing numbers and having a technician showing up at the wrong house. Accountability through the organization is an absolute must. You get performance-based throughout the company, reward them for the performance, hold them accountable for when

they don't perform, and you will yield the highest results in your organization, I can assure you. Very, very powerful information. I got to tell you, I'm excited. I think this was great for the audience, and I'm definitely going to be in touch with you and I'll get you back on. We'll have a round two of maybe six months, but great books. Remember, I'm going to have all this information on the Home Service Expert podcast. The books he mentioned were Advanced Sales by Brian Tracy. I have a book called The Psychology of Selling right in front of me. You got Advanced Sales, Freak Factor, habits of highly successful people. I'll have a lot of information on some of the stuff we talked about. And if you want to get a hold of Darius Livers here, is there any way

that you prefer maybe LinkedIn or is there a way that if somebody just wanted to reach out and maybe get some of your time or pay you to consult them or whatever it might be, and I know you're a busy man, is there anything you recommend as far as getting in touch with you? I think LinkedIn would be the best source. I mean, obviously it's just linked to my email and comes directly to me.

So I would suggest LinkedIn would be the best way. All right, sounds good. I'll make sure that there's a link to that as well. Darius, I'm going to be in touch with you. I learned a lot. I love this stuff. And thank you so much for being on today. No, thank you for the opportunity. All right. Listen, you have a great day. I'll be in touch. Hey, guys, I just wanted to say thank you for listening to the podcast.

And I wanted to talk real quick about the new book I have coming out in November. It's called The Home Service Millionaire. And I discuss everything it takes to hire the right people, train your salespeople, how to get tax breaks. It talks about how to sell your company for the most amount of money. We've got a lot of great contributorships coming on. Everybody from Paul Akers about how to go lean

to how you do sales from enterprise, how to get the best write-offs in the industry and save a ton on taxes and actually make your company look more professional. I got the CEO of Service Titan. I got the CEO of Valpak. We've got great people on here that know everything there is to know about marketing and Google. And there's basically no secrets we left out of this book. Literally, there's people that have read it so far say, I cannot believe you're giving all this information away. And the reason I did that is I just feel like you guys could just take each one of these gold nuggets and run with them. I mean, the ultimate goal of the book is to make sure that everybody is successful and makes money. If I could contribute to your lives,

then that would be amazing. And I feel like it's the least I could do. And I really appreciate listening to the podcast. I hope you enjoy the book. Go to Home Service Millionaire. That's homeservicemillionaire.com and pre-order your book today. Thank you.