The Home Service Expert Podcast - Q&A With Tommy - Taking Market Share: How to Manage Finances and Scale Without Debt

Episode Date: October 18, 2024

Tommy Mello is the author of Home Service Millionaire and Elevate, and the founder of A1 Garage Doors, a $200 million-plus home service business with over 700 employees in 19 states. Through HomeServiceMillionaire.com and the Home Service Expert podcast, Tommy shares his experience and insights to help fellow entrepreneurs scale their businesses. In this special episode of the Home Service Expert podcast, Tommy answers your biggest questions about customer service, finance and credit, talent retention, scaling strategies...

we've got to earn the customer's business. We need to make sure conversion rate is 100%. We need to do whatever it's going to take. You might not make a lot of money on this. Most of my guys are on performance pay. We need to do what's right by the customer or you're not going to have a job here. It's very hard to talk about a culture when you're in the position you're in. You are squeezing everybody. You have to. You're using credit cards to pay your bills. You cannot afford one-star reviews. You cannot afford to get that call, not booked. You cannot afford that technician to not feel like going to that job that day. So making sure everything is optimized and get into marketing, go meet the

people, build relationships. I go back to BNI meetings and door hangers and email blasts and meeting the people because that's the only way to grow in this type of economy. I mean, literally, I'm willing to lose money to grow. I'm willing to lose money in certain markets to take market share when everybody's drowning. 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. Before we get started, I wanted to share two important things with you.

First, I want you to implement what you learned today. To do that, you'll have to take a lot of notes, but I also want you to fully concentrate on the interview. So I asked the team to take notes for you. Just text NOTES to 888-526-1299. That's 888-526-1299. And you'll receive a link to download the notes from today's episode. Also, if you haven't got your copy of my newest book, Elevate, please go check it out. I'll share with you how I attracted and developed a winning team that helped me build a $200 million company in 22 states. Just go to elevateandwin.com forward slash podcast to get your copy.

Now let's go back into the interview. All right. We are live for September 2024. I've been traveling quite a bit and somehow I caught a bug. I'm just working through it. Yes. Or today I went into the sauna twice, the cold plunge. Managed to work through it. Breeze sick. Everyone's getting sick right now.

So bear with me. I promise I'll bring my best game possible. I'm glad it happened this week because next week is freedom. And I plan on being on my A game. So there's been a lot going on. We went and visited a bunch of companies, Morris Jenkins. We got any hour coming up that we're going to be visiting. We've spent a lot of time. We just got out of our main core tech meeting, which is the PE company that invested with us. Getting bigger is not necessarily easier.

There's a world of issues, world of problems that happen. So it's great problems to have, but when you're greenfield growing, you're buying companies, there's a lot of things that go into it. And a lot of people think, man, it must get a lot easier. Well, they're bigger problems, but they're better problems because you got an army of people that can address these issues. So they're great problems to have. We had a great month. This month, we're well above budget, but there's still so many things to fix. And the hardest thing that I'll tell you guys right now is how do you recruit talent? How do you get A-plus players? How do you keep A-plus players?

We were in Sedona last week with 25 managers, and we spent two full days going through every single detail. It's hard when you're sprinting. You're trying to grow revenue and you're trying to grow profit at the same time. That's why a lot of people that grew during COVID, like they grew four or five years, you look at them today, rarely, I mean, one out of a hundred is actually doing okay. You know, a buddy of mine calls them COVID babies. Like they grew during COVID, demand was through the roof. They hired them COVID babies. They grew during COVID. Demand was through the roof.

They hired whoever people bought. They were staying at home. Now, you've actually got to have like operational excellence, marketing excellence, hiring excellence. You got to be top grading all the time. Anybody that says I'm hiring in the next month is not doing it right. You should be hiring all the time. You got to be looking closely at CSRs, closely at dispatch. We redid our price book. That was a nine-month process.

I can just tell you guys, it is not easy to grow a big business. A lot of people are like, yeah, I want to do 100 million. If you're running around like a chicken with your head cut off now, and you're not finding leadership to take you where you want to go. When I, when I first talked to Doug with Cortec, he said, everything's going to happen within these four walls. I'm hiring specialists now, but accountability is everything guys. Accountability is everything. So there's lots of great questions here. I want to go over. I'm really, freedom is like going to be amazing. I'm speaking for an hour. I'm doing an introduction for a half an hour. I'm ending for a half an hour. So total time at my own event, because there's so many great speakers, is two hours. I'm doing a couple

Q&As. I'm interviewing Keith Mercurio on stage, but it's going to be a blast. What I can promise you is to deliver so much at this event, so much. It's going to be just blast. What I can promise you is to deliver so much at this event. So much. It's going to be just phenomenal. Let's go over these questions. Scaling leadership operations and recruitment. Ronnie said, how should low ticket home service offer options? For example, I'm in house cleaning and beyond weekly, biweekly, and monthly, I'm at a loss.

I don't want to change the cleaning itself because it needs to stay simple for the cleaners. I don't know the cleaning industry very well, but what I do know is if you don't want to make it complex, it's got to be easy instructions. Like, what could I do over above and beyond? Well, what I could do is offer a service that would say, I'm going to do a deep cleaning of these three rooms, or I'm going to do the refrigerator cleaning every other week. If you want to keep it simple and not make it complex because you don't have great manuals and SOPs and checklists, there's no way. That's why I've got to train my guys for 90 days before they're, you know, 90 days it takes to train a really good technician how to give options. And then they need a bunch of continuous training all the time. You know,

Ronnie, if you expect the cleaning person to just, I'm going to teach you this and now you got to clean forever without giving options. And what I would do is I'd have a manager calling these potential homeowners or these commercial accounts and say, what can we do above and beyond? Because we'll have another option for that. I can tell you there's a lot of opportunities there, but that's going to require a lot of training. It's going to cover a lot of things that you might not want. So on a low ticket item, you might not be able to get to options if you're not training all the time and creating systems. Greg said, I always see your booking rate at the top KPI you monitor.

Are you charging a service fee, dispatch fee? Yeah, so we charge $39. ServiceTitan did a whole study on this. We'll waive the service charge if we're in your area. And we'll make sure you're the homeowner. We're going to make sure you're serious about getting the work done. But we're not going to let our service fee lose a customer with a demand service.

For example, I've got a crash door and I don't want you guys just coming out here to give me a big quote I'm not ready for. Well, let's have a guy stop by when he's in your area. I got a guy in your area later this evening. Stop by, let you know what's going on with the door. And it's going to be on our time, not your time. No one really gets upset with gas prices the way they are. They understand good businesses need to charge some type of fee. I almost think it looks worse by not having a fee.

Free service, free service. You're attracting those customers that want stuff for free. And a call booked with a service fee is how you track that KPI. Yeah, so we do track the ones we didn't charge the service calls, few and far between, very little. Are you making sure all decision makers are present without a service fee? So on door quotes, which is a bigger purchase, we try to make sure both decision makers are home. Our technicians are trained to talk to the other homeowner, usually a husband or wife. When we go out to a job. You want to make sure all aware

when we go out there. And if you're going to make a purchase over $5,000, you want to make sure both parties are aware. Otherwise, you're going to end up with, I got to talk to my wife, I got to talk to my husband. Are you waiving your service fee in any of your markets? Like I said, we don't waive service fees. We waive them for certain clients if we're in't wait. Like I said, we don't waive service fees. We waive them for certain clients if we're in the area. Like I got a broken spring. I want you guys to fix it. I like your company,

but I don't want to pay a fee to have you guys come out. Okay, are you serious about getting the work done? Are you the homeowner? We'll go out there. That's what our guys are trying to handle. But I'm not going to lose. Now, here's the deal. If I'm booked out with demand jobs

and they're all paying the service fee, I am not going to put that job on. If I booked out two days, I'm going to say, no, we charge a service fee just to let you know, you're, I want to know you're committed. Now, if capacity is not filled up and I've got a guy that only has got one job on the board, I'm going to make sure to get him two other jobs if I got to waive the service fee. That just makes sense. Hopefully that answers your question. Brandon said,

what do you define as a healthy booking rate? You know, I think I met a guy, Lee Downing, that's at 94%. There are certain industries that offer free estimates. Like we got to come look at it and you're going to book every one of them. I mean, there's certain ones like for windows, no one's going to give you an estimate on the phone.

Like we'll come out, take a look, give you the estimate. I'm working on getting my house remodeled right now. Right. And we went back to the bidding process. We got an advocate on the buyer side and some of these companies want to charge me $25,000 to bid the property because they're going to have three weeks of work to give me an accurate estimate. Other people are like, we'll do all the work. Kind of like if you're in commercial, you got to look at all the plans and figure out what it's going to cost. And that's, I would say that there's no perfect answer

in HVAC, plumbing, electrical, garage doors, demand-driven. I think a great booking rate is 90%. I talked to Susie from CallCap. She said, world-class call centers that are demand-driven book at 90%. When you book above 90%, you got to ask yourself, am I booking calls that I'm wasting time on, that they're not serious buyers? And also you got to look at your marketing. Like if you're offering free, free, lowest prices, lowest price guaranteed, you're probably going to book more of those calls because you are the cheapest,

but you're never going to make money. Victoria, my husband and I started our own electrical company in January, 2023. We have been funding everything off of our own shoulders. We're doing very well and are strong for a new company. I would like to have a safety net of funds for payroll emergencies. Right now, everything is handled through our own bank account and what we make with our services. We just got a credit card for backup to have on hand. However, I'm having trouble finding options for lines of credit loans and business credit on hand. However, I'm having trouble finding options

for lines of credit loans and business credit cards. At first, I was told I needed to wait until my first year tax return. Once I did that this year, some organizations say we have not been in business long enough. Others do not give any reasons. Do you have any suggestions for small business to gain loans or business cards? All of our advertising for small businesses for cars and funding don't seem to be interested in helping actual small businesses. Do you have any suggestions where I can acquire to get assistance? Do you think that it is not the way to go and have any suggestions on what I should do for this? Victoria, here's what I'll tell you. I think the largest problem with small

companies when you're starting up off your own bank account is it's feast or famine. It literally is. You have your great weeks and you have weeks that you're drowning. And I think by using your own money and not having huge lines of credits, you tend to keep an eye on the ball. You tend to cut things when they're not working. You tend to cut people. Because if you start to go negative and you've got a safety net, you start making really bad decisions. You're like, we're just going to use our line. We're going to use this because we're in a pitch and you start going the opposite direction. It's a longer way of doing things, but considering you're a year in business, those big mistakes become a lot smaller because you don't have the money to make huge mistakes. Instead of making a $200,000 mistake, you made a $10,000 mistake. You tend to cut the CSRs quicker. You tend not to

spend too much money on PPC. When you don't have the money, you say, listen, we're going to have to downsize a little bit and I might need to go back in the field. Now, once you nail it, and I mean, you've proven you can make money. If I put a buck in, I take a buck 50 out. That's where you start to grow and you can borrow money. But it's got to be a sure thing. There's got to be an analysis done to make sure that's true. My first 10 years, I made a lot of mistakes, man. You got to learn leadership. You got to learn accounting. You got to learn finances. You got to learn on training and recruiting great people. And if your top guy leaves, what are you going to do? So I think it's actually a better idea

to not have something to fall back on. Worst case scenario, you're answering the phones and it sounds like your husband might have to go run jobs because you guys haven't figured it out. Because I see so many people go into a lot of debt because they've got a line of credit. But if I were you and I wanted to get a line of credit, it's typically two years,

then I would make sure my credit, I'd repair my credit. I'd make sure I'm getting the best, $750 or more. And there's a thing called Duns and Bradstreet. And if you just search on Google, how to get my Duns and Bradstreet credit score better, that's your business credit. Also, you could rely on the SBA. And I do have a contact that could help you get the SBA loan. And SBA is pretty open to this. Right now, I had a buddy I just talked to this weekend. He's not doing great with money. He said the bank took away all of his credit cards, even though he didn't have a high credit limit. He didn't have any outstanding bills.

The fact is they're getting very tight on loans, especially in this economy. Some people will argue we're in a recession right now. So you're seeing banks tightening up loaning standards. It's very hard to get a company like Enterprise to give you trucks without two-year standings. I mean, especially for me, I have a great business that I can say I'm involved in this. So give me the line and I've got the money in the bank to back it up. It's a weird predicament to be in and it feels impossible at times. But be thankful that you're making your big mistakes are actually a lot smaller. You know, the mistakes I make now cost me hundreds of thousands of dollars.

But metaphorically speaking, I have all these cuts and bruises all over, remembering all the mistakes I made early on that I'm like, man, I'm glad I didn't have millions of dollars. Because I would have kept saying, grow, grow, grow, even though I let really, really bad CSRs, really horrible dispatchers, really bad technicians, really bad installers that got one-star reviews. They stayed on too long. And sometimes you got to go, I hate to do this, but I'm going to have to cut this person because there's no money left in the bank account. I'm going to have to go run jobs again. And these mistakes are so important to make early on in business. Create the manuals, the SOPs, the checklists, and you got to know

beyond a shadow of a doubt, I put a dollar in, I take a buck 25 out. I put a dollar in, I take a buck 50 out. And I know that's not the answer you might be looking for, but a business isn't good. Maybe I'm growing in the wrong economy. I'm trying to grow in a recession. And that's great because I did this. I literally started in 2007. I went into the biggest housing crisis of all times. I'll just tell you, the making these mistakes quick, falling forward, where they're not a lot of money and kind of earning your stripes is the way to go. Amber said, we are a small plumbing company out of Toledo, Ohio. And after we went through theft and overcoming that, we fired and cleaned house. We have been using our own capital to pay for marketing and payroll.

Me and my husband have not received a paycheck since all of our profit goes directly back into the company. We have been in business since 1999 and I joined my husband in 2022. When I realized I was using credit cards to buy groceries and make payroll, I didn't realize what was happening until it was too late. Last year in 2023, we paid off a lot of debt and were slightly profitable. Do you have anything you would suggest us to do next?

We are fully insured, bonded, et cetera. Okay, Amber, here's what I would tell you guys. I'm a marketing guy. That's my number one thing. I look at our cost per lead and I make sure I'm, you need to fight for every client and you need to explain to your technicians, me and Aaron Gainer, he's in Columbus, Ohio. He started out as a plumber. He literally went up to all of his technicians six months ago. And this is a letter

that I just made a video. Actually, we've got to earn the customer's business. We need to make sure conversion rate is a hundred percent. We need to make sure conversion rate is 100%. We need to do whatever it's going to take. You might not make a lot of money on this. Most of my guys are on performance pay. We need to do what's right by the customer or you're not going to have a job here. It's very hard to talk about a culture when you're in the position you're in. You are squeezing everybody. You have to. You're using credit cards to pay your bills. You cannot afford one-star reviews.

You cannot afford to get that call not booked. You cannot afford that technician to not feel like going to that job that day. So making sure everything is optimized and get into marketing, go meet the people, build relationships. I go back to B&I meetings and door hangers and email blasts and meeting the people because that's the only way to grow in this type of economy. I mean, literally,

I'm willing to lose money to grow. I'm willing to lose money in certain markets to take market share when everybody's drowning. And I know this sounds really bad, but we're in a position now where we'll go in and say, okay, we're going to lose money for the first two years, but we're going to take a ton of market share. That's a whole different circumstance. And it's taken two decades to get to this point. And I know your husband has been at it since 1999, 23 years in. Something's got to change, right? And the question, and don't get mad at me. I'm just going to say this, Amber. A great plumber could probably make, an excellent plumber could make $300,000 to $400,000 a year. And your husband's been at this 23 years.

And unless something changes, I think interest rates are going to come down next week. We're going to hear about it. But you cannot take your best year and say we can get back to that because the economy is not going to be back to that anytime soon. So I'd really look at this and say, I'm not going to give this up. But I would just do a complete SWOT analysis. Strengths, weaknesses. I go through opportunities and threats.

And I'd really think about, does this business make sense? And it's not really giving up. It's saying, man, he can have a nine to five. And by the way, this might not be the right answer. These are all the questions I'd be asking myself. I want to be very clear. I'm not telling you guys to do this. What I'm telling you to do is analyze certain things and say, if he had all the benefits and he's one of the best plumbers that ever lived and he excels and he's ran his own business. Anybody would be glad to have him. I could go do this and bring in whatever. He could make this because you're 23, 25 years in. And that's a long time. And you've been through some

of the best economies and some of the worst economies ever. So these are things that like entrepreneurship is hard. You give up everything. You give up relationships. I can't tell you. I can tell you this, that if I had to start all over again with no money, without making all the mistakes I've made for the last two decades, I wouldn't do it again. I could honestly look you guys in the eyes and say, at 41 years old, I'm not married. I don't have kids. And I worked weekends, nights, holidays. I gave up everything. And I don't think I could do it

again at my age. I'm not saying I'm still healthy. I still work out. I still could move. I'm not achy at all. But I'm saying to put it in another time, I'd be 60 before I'm at the pace I'm at now. So I look at every single KPI. What does it cost me per lead? Do I need more reviews? Do I need to meet more people? Do I need to go network more? What can I do to generate more calls? Then I look at what's, am I booking every single call that comes in and fighting for those calls? Then I look at my conversion rate. And then I look at opportunity job average. And am I getting reviews on everyone, building the machine that's going to get you more and more leads? I would tell you this.

I'm telling you this because Kellen's helped so many people. And if you're running more than five calls a day, I would call my buddy Kellen at pinparrot.com. And I guarantee you, he could get your lead costs down. Everybody's complaining about leads. You want to turn your leads up, pinparrot.com. And I guarantee you he could get your lead costs down. Everybody's complaining about leads. You want to turn your leads up, pinparrot.com. Anybody that's called

Kellen within 60 days sees a massive spike in leads because it's a software that literally makes you rank better on the Google My Business that shows your hours and reviews. And I would go to B&I meetings and I'd go meet realtors and I'd be buying cookies every day, walking into offices. I'd be going to the chamber meetings. And when I'm small, I got to do the things that no one else is willing to do. I can't just pray to my marketing company. I need leads because leads are getting expensive. When no one has enough leads, it drives the cost up. It's almost impossible to make money on pay-per-click right now. I look at pay-per-click as only capacity planning. If pay-per-click is your only way of making money, it's going to be very hard to turn a profit.

Sam said you mentioned that you thought that a home remodeling company might make an attractive acquisition target. Can you say more about your thoughts on that? I thought that the large and lumpy projects might make it unattractive. I don't remember saying home remodeling because my problem is the same thing with a handyman. Do you do... Home remodeling requires that you're a great contractor with a lot of great subs. Yes, the ticket averages are through the roof, but now you're no longer a master at one thing. Even two things, plumbers, HVAC, electrical, that's a hard business. You got the shoulder seats, you got a lot of things. Home remodels, yes, bigger tickets, but you misbid one thing. You got all kinds of insurance,

you got all things of compliance, you got to get the state licenses, you got to know how to pull permits. The people that are so focused on manuals, SOPs, processes, the right software, and they know how to bid and they get five bids and they got great subs. You can make a lot of money with that. But I'm such a specialist. I want to focus on one thing until it gets so big that I can add one more thing and make a lot of extra money. And I hire a specialist for that and I gamify it. I don't really think that if I would ever go into remodeling, unless I had

a team, unless it's where I grew up and my dad did it and I knew I got good subs and I could beat people on, I was known for my quality. I don't ever want to be the cheapest remodeler. Ben said, who would you recommend as a private business coach who could help me launch my business? Also, what books would you suggest for partnerships? I don't understand the books for partnerships, but a private coach, there are a lot of coaches out there. There are a lot of good ones. I would need to know the business exactly. I mean, there's a lot of coaches out there. There are a lot of good ones. I would need to know the business. Exactly. I mean, you know, there's a lot that you need to do. You need to form your EIN number. You need to pay your taxes. You need to get the right LLC and the right protections and you need to get licensed. Then you need to understand what marketing channels. I mean, we're talking about

greenfielding at A1 and there's a list of 150 things that we were just talking about in the other room it is it's getting harder because it used to be just put an ad in yellow book and you'd win especially if you got the first listing the double truck now it's like do i go on angie's list do i go on yelp do i do valpac do i do clipper and here's the deal you've got to as the owner you're going to be running a lot of those calls unless you've got a lot of money to invest. I talk to people all the time. I'm like, listen, to make this business,

how quick do you want to make it a $30 million business, I say. And if they say five years, okay. If they say two years, I say we're going to have to put 5 million in. We're going to have to have a hiring team. We're going to have to have trainers. We're going to have to have recruiters. We're going to have to have a hiring team. We're going to have to have trainers. We're going to have to have recruiters.

We're going to have to have a CFO. Dan Martell, he talks a lot about Richard Branson. Richard Branson, he hires the CEO first. And then he says, then I'm going to hire the COO, then the CFO, then the CMO. Then I'm going to get a CHRO, the HR director. And then they're going to build a team. And they've got the experience to get us there. I'm supplying the money. And that's a whole different way of saying I'm going to start bottom up. And first thing I would hire is probably a personal assistant that can handle phones,

that can help manage my calendar, that can make sure I can wear all the hats, make sure to give me some time back. Then I would build an org chart and I would hire, what do I hate doing the most? I hate answering phones and I hate doing payroll. I find those two people. And slowly but surely over the course of a few years, I'm doing everything I love. But business coaches, a startup business coach, I'm going to need to think about that. I always say, listen, I wasn't a startup. I was $15 or $17 million when Al Levy started.

But without Al Levy, the seven power contractors helped. I wouldn't be sitting in this building today. I wouldn't have the house I'm living in. He taught me financial discipline. He brought Alan Rohr and her sister out. He taught me about SOPs. He taught me about org chart and depth sister out he taught me about SOPs he taught me about org chart and depth chart he taught me about delegation and I will tell you without Alivia

there's no better person I've met in my life to run a business than Alivia because he's just done it so many times and helped so many businesses Ebon said how do you deal with attitude how do you follow up and when is it time to fire an employee with an attitude?

Oh, attitudes are hard to fix, man. I've kept top performers on for too long. And they've got, you know, they're toxic. I think you got to talk to them one-on-one. I'd be very careful though, because sometimes it's your attitude. Sometimes I was the problem. Sometimes I was never giving. Sometimes I was never giving compliments and I was just bitching and I was complaining about bills. And I created this

negative culture and environment where people are, they're going to complain. And by the way, a technician's job, they only know the only voice they have is to say what's going wrong. I like one of the things I've kind of figured out over time is they don't know how to come with solutions because they're in the dogfight every day. They're just going to tell you the CSR keeps booking the wrong address and I don't have the right parts on the truck and I'm in a bad area. It's your job to kind of open the doors to their constructive criticism. That sounds like complaining and say,

that's a really valid point. Let's sit down and I'm going to come up with an idea to make this better for you. So just be careful. Bad attitudes usually stem the majority of the time from the founder. When you got a great attitude, you attract great people. When you got a negative attitude and you're living on the edge, and I've done this, struggled to make payroll, borrowed money, literally against the line of credit I had against my house to make payroll. And I wasn't the happiest camper. So I just be very careful on that one to make sure it's not you. David Fisher said, junk removal.

What's your general outlook on that industry right now? Next year, the next three years. Can it scale? Is something worth investing time in over the next five to 10 years? I think it's a great business. If you look up a guy, Cameron Harreld, 1-800-GOT-JUNK. I'm getting ready to hire him, to work with him, with my COO. He's got COO Alliance. I think it's a great business. People are always going to have junk. I think it's a great business. The question is, how are you going to market for it? How are you going to have junk. I think it's a great business. The question is,

how are you going to market for it? How are you going to hire for it? I like that business. Is it the easiest business? No. I see it doing very well in the future though. I do. I do believe it's a big business. And Cameron Herold, 800 Got Junk worked originally with a wizard of ads. And that's about TV, specifically radio ads and making a national brand i mean they spent a lot of money and a lot of time to build that no like what i do is i kind of cheat i call cameron harold and i got his contact and i'd go can i come shadow 800 got junk for a day to find out good bad and the ugly i mean before i'm going to commit my life

to something now, I'm making all the phone calls. I listened to this thing this morning by Steve Jobs. When he was 12 years old, he called the, I don't know if it's Hewlett Packard or IBM, the CEO. It was still listed in the white pages. And he said, hey, my name is Steve Jobs. I want to come. I was wondering if you could donate me parts to build this little thing for the computer. And he got a job there for the summer. And he said, worst case scenario, he says, no, I'm going to do as much investigation, hang out with the people before I'm going to decide what the next 10 years of my life look like. So I'd get ahold of somebody with a business and I go talk to somebody. Maybe the 800 got junk. It's too big to go visit. Maybe you want to go to a company that's big

in a city that you're never planning on going to in the next five years. Like if you live in Minnesota, find a company in Florida or Texas or Arizona or Seattle. And I say, eventually somebody is going to say yes. Get the good, bad, and the ugly. Find out what kind of mistakes they made. I'm always putting myself around great people.

I'm always still asking questions. See you next week, Ronnie. A good closing percentage. So I like to be over 90% on-demand service. And I like to be at over 60% for new broad stores, HVAC units. There's a difference between service to sales. Service to sales is 100%, right? Because you converted that lead. But when you're going to new equipment sales, it's going to be over 60%. Eight steps to service calls. Yeah. So let me just explain.

By the way, you need an exact script. We've built an exact script. But first is you want to make sure that you call the customer on the way first impression, right? So first one is announce yourself. You're calling on the way. You sent a perfect profile of yourself. You're a good company. And you're calling, offering coffee, doing something on the way above and beyond. The next one is first impression.

So you make sure you're clean. You make sure you're parked in the right spot you make sure you knock the door rather than ring the doorbell you're smiling when you walk up you're asking all the questions the next one is gather intel you're learning about how long have you lived here are you staying in the home you're literally asking great questions you're not diagnosing the initial problem yet the next one is you want to start the work. You got to get the work started. They asked you to do something. They might've called you out for something random. Do what they called you out to start. Don't do a complete analysis of everything.

Earn their business first. You know, there's certain ones that would apply to garage doors, but I'll kind of go through these with you. You start the work and then you say, listen, if I see anything that looks like it's unsafe or out of place or needs to be looked at, do you want me to let you know? Now they're going to ask you to kind of, yes, I want you to let me know. Like if there's another toilet that's leaking, let me know because I don't want to call you out next week. If the hot water heater looks like it's about to go out, let me know. If there's a drain that's clogged and you're here, let me know. Of course. Yes. And then so you do your complete inspection at this point. about to go out, let me know. If there's a drain that's clogged and you're here, let me know. Of

course, yes. And then so you do your complete inspection at this point, and then you let them know. And then you got your expert help. That's when you'll call into a manager to say, hey, listen, you're an advocate for the client. It's me and the client versus the company saying, hey, there's a lot more here that I found. I'm with the client. What can we do for them? And that's when you'll build packages and give options. The next one is sell it right. And one of those expert help, like I said, and then sell it right is when you make sure you spend a long time with the customer after you finish the work. You explain the warranty. You put the serial number of the warranty product in the manual or the booklet. For us, it's openers where we'll put the serial number and then we'll

show them how to get on MyQ. We'll program their cars. We'll show them how their keypad works. We'll run the door up and down. We'll show them the stickers. We'll tell them the five top warranty calls. And then we'll ask them for a review. This is where buyer's remorse goes out the window. You've collected the money. You're still showing that you are interested in the client's success. You still want them to do right. You want them to be happy with your service. That one is so important. So the two most important things is here is start the job they called you out for and make sure that you sell it right. At the end of the call, you spend time with them. You tell them that it's important that you get a

review and why it's important. You explain to them about your family. You run the door for us three times. You show them how the safety eyes work. You clean up after yourself really good and you make them feel like they made a good decision by using your company. How do I set up my performance pay scale as an HVAC tech who sells and installs their own jobs? The standard performance pay doesn't seem to fit this model. How do I set up my performance pay scale? I've never seen a company scale that the salesman does the installs. The best salesmen need to be selling and the best installers need to be installing. I would tell you that, oh, Al, I didn't know you were on here. I would tell you that the best companies, and I'm not saying you can't get started somewhere,

but I'll tell you, Aaron Gaynor kind of figured this out. Some of his guys still do the installs, but he separated them over time. So what you would do is you'd say, I'll give you this much for selling it, this much for installing it. There's two different goals there. The salesperson is trying to maximize the conversion rate and ticket, right? The total ticket. That's the sales guy's job. Conversion rate, average ticket, get a review.

Now, the installer is trying to get it installed correctly and make sure there's no warranty calls and making sure he's doing it on a timely basis. So they're different KPIs. So it's really hard to do performance pay because they're separate models. So you got to blend the two models. Aaron Gaynor is a great person to reach out to for that. Brandon said, what's your opinion of referral programs and what are the reasons they are successful? What are the reasons they fail? Well, what gets measured gets managed, right? So what I can tell you is if you're going to do a referral program, you've got to have a system in place to run it. You can't just say, we're going to ask everybody for referrals. Where's the attribution? How do you guys get credit for it? How do they

make sure they get paid for that? Or the clients. There's some software we've been looking at that automates a way that automatically handles, like we'll give you a $30 gift card to Starbucks and we're checking some different things out. I've seen companies do well with it, but as the larger you get, there's better programs. I had a company in here yesterday that does influencer marketing. They're murdering it with it. They spend very little money in marketing, but they find the biggest influencers in that market. They got a tool to find them and they go do a free carpet cleaning for them. Right. And that drives a ton of business. There's a lot of things, door hangers work, yard signs work, but those don't work to bring in the

leads that I need. I need to bring in hundreds of leads per market per week. So if you're not maximizing, if you're not ranking on Google organicallyically if your gmb is not dialed in with a ton of reviews and that pin parrot stuff i was talking about if i'm not posting regularly on social media if i'm not listed at the top of the lsa and i use lauren at search kinks for that choose your battles wisely and choose the best roi I think a lot of people, they go after, man, if I did this, this, this, this, this, this, this, this, there's all these ideas. But none of them really get implemented correctly. So choose your battles wisely. And don't go after everything like Al taught me is a top five list.

And if you're going to build it out, find out. What if I told you you could call House Call Pro or you could call ServiceTitan. There's people I know over there. You could call Jobber. You could call Sarah. You could call Service Fusion. And you could say, who do you know that's built the best referral program in home service? I'd be on the first flight out there for a day. I'd buy them all lunch. I'd do something for them. I'd make their day. I'd say, I'm here to help you too. And I'd say, just all I need is an hour. And they'll probably tell me, this is the software we use. Here's how we got started. Here's some of the mistakes we made

along the way. And they'll tell you the whole playbook, especially if you're not in their competing service in their own market. What should my marketing spend be at? Oh, that's a really tough question. Marketing spend is a roll of thumb is 10%. Now, if you're trying to take market share, you might go up to 20%. It's hard to make money at 20%, but you're taking market share. The smaller you are, the less really your budget becomes because you're out there as the owner doing a lot of the work. You're building the relationships. And a newer market will go up to even higher than that to take market share. But the rule of thumb, some people love 5%, but they don't grow a lot. They say it's safe to grow 10% a year. Now you do the math. 10% a year, you double after seven years. That's not fast enough for me.

You want to double after three years, you need to increase marketing, you need to increase booking rate, you need to increase conversion rate and average ticket. You need to train better. If you want to be conservative, then spend 5% and make sure those KPIs are dialed in. Don't spend more until the KPIs are super dialed in. Will you let me shadow one of your top sales performers? I asked you in person at OKC. I'm kind of confined a little bit. We're PE backed.

If I let one person come shadow my guys, it's one thing. Like that's a distraction. Right now I'm training 43 guys a month. My top guys don't even get enough time to train the guys I have. 43 guys a month. We're doing ride-alongs every single day. And by the way, not every technician I allow to do ride-alongs. You got to love the company. You got to praise the company. There's not a day that my top guys are not with another technician. And I you know, I can tell you, Brian Burton is putting on a sales training. That's probably better than anything I've ever seen with waste no day. I know

that's coming up here. I've always given as much as I can, but not at the detriment of the company. So just know like Tony, I, if there was a way to do it, I'm sorry. It was Walter. I'm not afraid to do it. I'm proud of my guys. I love to show you, but there is some things I'm kind of can't do based on the situation we're in. I don't mind it. Who knows seeing a sales guy do it and doing the work. If my top guys could train a guy with one day on how to sell, I would be a multi, multi, multi, multi billionaire. It takes 90 days, every single day training every day. It takes tests and quizzes and practice and role play. You're not going to learn what you think you will. You're going to see it and say, wow, that was awesome. To learn the body language and the tonality and the things we do in this industry.

I've watched Dale Steele sell people. Ken Goodrich invited me into Gettle when Dale was still on the phones closing deals. I've never seen anything like it and I've never been able to duplicate it. And I spent the whole day with him. And Dale and I are good buddies.

But I don't think that's the answer you're looking for. And listen, man, if there's anything I could do that actually I could do without damaging A1, I will do it. Tony said, examples of above and beyond nuggets for exterior residential pool, landscape, et cetera. Cookies backed, baked by house cleaners.

Examples of above and beyond. Exterior residential services, pool and landscaping. Here's some examples, just thinking outside of the box. What are some things that cost you very little to do? I would say if my gutters were hanging off, hey, I tacked in some more nails.

I would say, you know, I really need to think about like landscaping. You know, if I went above and beyond and I had a winterized, I could say, hey, I flushed your whole system on the last landscape i didn't charge you any extra i could say hey listen each industry you need to think long and hard about if you gave me like one hour to think about each industry i'd come up with a dozen but uh a nice letter a handwritten letter to say today i went over everything one of the issues with the dead grass was the sprinkler head wasn't opening right. I redid the sprinkler spring inside of it,

and that's fixed. I also fixed two drip systems, like letting people know what you've done to make sure everything's working right. On exterior cleaning, they say part of the cleaning didn't include this. We went above and beyond. It didn't include cleaning your sidewalks when we did your driveway, but we went ahead and did that anyway. And here's the before, here's the after. And you set it in a nice, like the pictures in a handwritten letter. I think there's so many things for every industry that we could do to go above and beyond.

At Garage Door, there's a million things, but I had a guy just help an old couple fill up both their car's tires. I had another guy go help a lady on the weekend pick her weeds. He's a garage door guy. He's one of my best performers. He felt bad for this old couple, and he said, let me come help you. He did this for two hours. We talk about this guy at meetings.

He goes above and beyond. Doesn't mean you need to do things. Listen, help grandma get the Christmas tree down. Her door is squeaking. We lubricated it to make sure it stopped squeaking. I needed help finding a good roofer. We did the research and helped the person find a good roofer because we've got a friend in the industry or we did the research and we know this guy's good from a B&I meeting. There's a lot of things you could do above and

beyond that a lot of people don't think about. How big was your company before you got your incorporator of all the visions of your company? And do you wish you did it sooner or did you think to do it too soon? Well, you know, in this book by Gina Wickman and Mark Winters, Rocket Fuel, it's called an integrator. And I fell upon Adam in 2014 accidentally. He did everything that I hated and I did everything that he hated. And we were a perfect match. And I think it's really hard to find a great integrator. But when the company grows, you find multiple integrators per department. They're your chiefs. And your COO is probably the largest integrator, but they need to work well with everything. They need to work well with marketing. Marketing and operations go, they fight all day long. It's a battle. It's their fault. It's their fault. For us, it's healthy. But yes, any business,

when you're founder backed, you need to find the visionary and the integrator. Visionaries, we get a lot of ideas. Half of them are not great. Most of them would be great if it made it to the top five list, if there was a team behind it that believed in the project, if everybody was all hands on deck, and there was a really systematic approach to making it happen. The problem with founders is Walt Disney had a million ideas. Roy, his brother, only had enough time to figure out the big ones and make sure there was enough money in the account. They got the right contractors to build Disney World and Disneyland. Roy was building it the way Walt wanted it to be, but Walt Disney died before it was done.

Walt Disney knew what it would look like when it was all perfect. And to find the integrator to make your dreams possible, I need really good people. I've got a lot of ideas. We need to filter my ideas. A guy like me needs to know that I was heard, that the ideas made it to the board, that we're going to address this. And here's why it's not number one. Here's why it's not number 10. Here's why it's number 30. And if you feel like it needs to be above any of these, here's what I'm working on, Tommy. Are these more important than this? And sometimes I'll say yes. Sometimes Ara at Service Titan, I was just with him last week, I was at the Service Titan headquarters. He says, this is more important than this. He makes the executive decision. But you can't ask somebody

to say what happened to this when you gave them something else they can't do everything and they need a good team and they need the resources so typically i'll say what would you need to make this happen in my timeline what kind of investment would we need to make what people do you need and you'll go further. How often do you do chest and triceps? That's the one group of muscles I try to do twice a week. It's my favorite one. Genetically, my chest is not, I got to fight for it. But if you look, I got this AI that takes you today and shows you what you could look like with AI and everything's chest for me and abs. So that's the one today I did legs and biceps. I know that's a random thing, but today I told the trainer, I don't feel great.

I don't mind doing legs today. I loved it. And I said, let's throw biceps in the mix. Cause I'm not going to see you again until Saturday. Now I'm going to work out alone and my workouts are really good, but I don't have a spotter. So the workouts with him, I can't do chest and triceps only with the trainer. So some days I'll do those on my own. Great question. Way to throw me off on the business side, but I love that question. Tommy, how much percent of your jobs at A1 are emergency compared to regular jobs when people decide that they need a nicer garage? So this is an interesting question. This is from Igor.

The majority of our jobs are demand driven. Something happened. Something's not working properly. The remote stopped working. The bottom rubber is not keeping out the bugs and the nasty critters. Something's not right. The door got hit. It's spring's break. The rollers fell out. Now, Window Nation is a big company that we recruited a gal from. They're all, now I'm home service today. Garage doors are also home improvement.

So the question I think you're asking is how much are you home service versus home improvement? I want to grow dramatically next year in the home improvement space where people are like, I'm just here to improve my home. Right now, the majority of our calls are something's wrong. Do we get new door quotes? Yes. Sometimes it's because it's damaged. Sometimes it's because I moved into this house. I want something nicer, but I'm trying to drive way more leads. I say 90%. And this is just a guess, but the majority of our calls, Igor, are because something's just not working right. It's making a weird noise. Some of them are like, I want a nicer opener with my IQ or I want it to be quieter. It's making a lot of noise. My son's sleeping upstairs, but that means there's something wrong.

Kevin said, thoughts on scaling a door-to-door team to bring in leads rather than using a third-party service. Kevin, door-to-door teams work great, but you're not going to make any money the first year. I can tell you, read the Door-to-Door Millionaire by Lenny Gray. You could build a great business, but that's supposed to build a snowball and it works great for pool service, pest control. It works great for landscaping because your first year, you don't make any money because you got to pay for the door-to-door guys, the summer program. But then you keep a lot of those customers.

But I'll tell you a little dirty down secret here is in the pest control industry, if you're a door-to-door driven model, they'll pay you a lot less multiple on that business because the customers will go to the next guy. The next guy that knocks, it's a little bit cheaper versus calling you because they've done their research. They like your brand and they went with you because they needed you. So I like door-to-door to get businesses going. I think it's a great program. I think it works. But do I want to build an entire business? No. I think if I was going into multiple markets the first year I do door knocking, that'd be the last year I do door knocking. And I'd still use the model. I might have a door-to-door

team every summer to go to a different market if they're good. And that's how I'd start in a market. Invest in a marketing company, postcards, SEO, LSA, and Google ads at the same time? Gerardo asked me. Well, this is when it comes down to attribution. SEO takes a long time. And I happen to know if SEO is working because I use AHREFs. AHREFs. I look how many backlinks I'm building. I look at my scores going up, my domain authority. I look at the competition. These things are not like the static yes or no question, Gerardo. I look at my scores going up, my domain authority. I look at the competition. These things are not like this static yes or no question, Geraldo. I mean, postcards work, but I'm going to know within a month how well they're working and what zones they're working in. And zones could

be however you interpret them, but ValPAC has zones, Clipper has got zones. I'm putting call tracking numbers on all this stuff to see what's working. I get out of zones that don't work. I double down on the zones that do work. LSA, of course, I'm going to pay LSA all day long because LSA is cheaper than PBC. I'm also going to make sure I'm getting reviews as many as possible and using that pin parrot stuff on my GMBs to rank them because that's the lowest cost of all. And make sure my hours are 24-7. By the way, there's an update coming out next month that if your LSA doesn't have the same administrator as your GMB or GVP, that you're going to get suspended. Google's getting away with all the spam. They're stopping it. They've already done this in Europe. This is a big factor. It's going to change a lot of the way we do business because

we're getting rid of all the fake profiles. At least it should get rid of a lot of them. There's still going to be fake GMBs, but the LSA, all these fake LSAs, now they got to be attached to a GMB. Katie at Camp Digital was the one that told me about it. And then Lauren called me with Search Kings and let me know because I want to make sure we're compliant to everything. It's a good thing. And by the way, fake reviews. The FTC came out and said they're going to start charging $50,000 per fake review. So if anybody's buying reviews, you better get away from that.

I'll buy them steaks. I want to see how they take control of the sale and study their techniques. Oh, yeah. You should come out and visit Brian Burton. I'll tell you that. Mike said, what are good AI platforms to invest into for home service industry where call center follows dispatch? I mean, Mike, here's the deal. I'm a little biased because I invested in Chirp, but I don't invest in things that I don't think are the best in the world.

Chirp is, I think, by far, they're investing in better reporting, more campaigns, more A-B testing. Like where they're at today is light years ahead of anybody, but where they're going i want to pick the winners that's why i picked service time in 2017 like i want to go with the companies that are investing millions of dollars in their growth to make a better product and what i can tell you is chirp has the best automations the best call follow-up the best non-book call follow-up the best rehash team follow-up it has the best thing if you want to get the manufacturer's warranty.

All the automations, there's nothing that comes close, in my opinion, to Chirp. There's different things out there that are more complicated. Their stuff is onboard in a day. You get it dialed in, you A-B test a few things, you set it, and you forget it. As far as AI, I mean, Rilla Voice is good, but you got to be a decent-sized company. I don't think everybody's ready for AI. I don't think everybody's ready for Dispatch Pro. I think you need to hit a certain size until you're ready for some of this stuff.

I talked to several of your guys at the gas stations. Which software are you looking at that helps systemize? Oh, man. I look at so much software each week. which software are you looking at that helps systemize oh man I look at so much software each week I had my whole team go through it if you ask me on the next if you get a hold of me and by the

way just flag this question for Tommy but Gianni make sure you get to Tommy go to homeserviceexpert.com forward slash questions. Say, Tommy was supposed to give me the name of this company. Put your email in there. I'm brain farting the name of them, but there's a great likelihood we're going to put them in there for referrals. And it's a badass software.

And here's what's cool. They love the idea of working with me because they know that if I believe in something, I'm not very shy about it. I tell people, like, I always say, just because I'm winning doesn't mean you have to lose. Like, people don't understand. Why would you share your secret sauce? Because people share their secret sauce with me. People open up their doors that don't want to meet me.

But they know they're going to get a return on investment from this relationship. The more I help you, the more I'm pretty certain you'd help me. You go out of your way to help me. And it seems like the more I give, the more I get back. It's weird how the world works. I don't ask for anything in return, but for some reason, God's got a funny way of saying, you did this. You're helping people. I'm going to give it back to you tenfold. Oh man, there's a lot more questions here. I want you guys to submit these.

Go to homeserviceexpert.com forward slash questions. Giuseppe's going to put that in there right now. Homeserviceexpert.com forward slash questions, which is plural. How do you stay ahead of the market in a competitive landscape? This is the one thing that makes me unique, and I'm very lucky, is I get to be on podcasts. I get to do research. I get to talk to a dozen marketing companies on a weekly basis. I get to go to events and people share with me the newest insights. Why? Because they know I'm helping them. I don't like to pick my favorites. I mean,

look, at the end of the day, I'm always A-B testing. There are things that I try. I'm always testing two companies against each other. Almost always. I've tested 10 marketing companies just on different things throughout the last year. You know, I'm never running just one company for Facebook ads. I'm A-B testing. I'm obsessed with marketing. You know. I'm obsessed with recruiting and training. I would say it won't come easy. It doesn't come easy. I had a crash and burn a hundred times over again. I really did. But I was meant for this. Tiger Woods sport was golf. Mine is home service. And hopefully it extends out to other businesses. But I love discussing these things. He hits a thousand balls a day.

I talk several hours of business a day and I'm looking at reports all day and I'm working on leadership and I'm reading about it. I'm listening to podcasts and I'm showing up to events. So my passion is business. That's why I stuck it out for two decades. And that's why success is coming and it has come. But I don't feel like I'm ever going into work. That's the biggest difference is I don't go to work. I love what I do. I show up because I want to, not because I have to. Man, I feel bad for you guys. I'm all stuffy. I'm pretty sure I got a fever. I was coughing like a dog earlier. But I'm here to help you guys. I want to help all of you. You guys have great questions. So keep

submitting the questions. Just happy before the next one. I want to do a lot of research on this stuff so I can bring deeper answers like the names of software and stuff. I was going from meeting to meeting to meeting today. Bree's like, you should stay home. You're sick. I'm like, I wish I could. I don't get that luxury. If I was really, really sick and I thought I was going to get other people sick, I don't think this is going to get people sick because that's just a responsible thing to do. But I definitely got a cold. I got something.

I'm just super congested. But it seems like everybody's got something going on. So I appreciate you guys listening. I hope I brought some value. I know I'm a little off today, but I appreciate you guys listening. I hope I brought some value. I know I'm a little off today, but I appreciate you guys very much. I hope you guys have a great week and I hope to see you next week at Freedom. Appreciate it. Hey there, thanks for tuning into the podcast today. Before I let you go, I want to let everybody know that Elevate is out and ready to buy. I can share

with you how I attracted a winning team of over 700 employees in over 20 states. The insights in this book are powerful and can be applied to any business or organization. It's a real game changer for anyone looking to build and develop a high-performing team like over here at A1 Garage Door Service. So if you want to learn the secrets that helped me transfer my team from stealing the toilet paper to a group of 700 plus employees rowing in the same direction, head over to elevateandwin.com forward slash podcast and grab a copy of the book.

Thanks again for listening and we'll catch up with you next time on the podcast.