The Home Service Expert Podcast - Streamlining Your Operations with the Right Tools and Talent

Episode Date: August 16, 2024

Tom Howard is the VP of Customer Experience at ServiceTitan. An experienced home service entrepreneur and consultant, Tom owns multiple residential and commercial service companies in California, including a pest control company and an HVAC company. In this episode, we talked about budget management, automation tools, financing, marketing strategies...

The interesting thing is, as people have to know, is that we've changed a lot. The market and the industry has changed a lot in the past 100 years. Just so you know, the rate of change is increasing and the slowest it will ever be is right now. And the future, the change is going to be faster and faster and faster. And so not only do we have to handle change, we have to handle it faster than we handled it before. And we have to be accepting that it's going to be changing and staying on top of it and have the best tools for that matter to stay on top of it. But with that, I think that one of the biggest issues is that I would point out,

not necessarily what's working, what's not, but the people that are really effective and growing. 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. 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, guys, welcome back to the Home Service Sex. For today, I have one of my very best of friends, a guy I could count on, a guy that when I'm in the room with him, sparks fly. Without further ado, it's Tom Howard. He is just a savant in home service. He understands financials. He understands how to do a budget, hence why he always does our budget meeting every year. Tom is out of Vegas, recently out of Fresno. Got an exit, decided California wanted all of his money, so he did the smart thing and moved to Vegas. Tom's the VP of Customer Experience at ServiceTitan. He's an experienced president and serial entrepreneur.

And there's too much on his resume to list here. How are you, brother? Doing pretty well. How are you, Tommy? I'm great. I went and got the DEXA scan today, as you know, because of our group LDS. I always say LSD or whatever. LSD. LDS. Because of you you I screwed that up anyway

8% down and I'll be 14% down by freedom of that coming up here so he's talking about body fat guys in case for those of you that don't know what Nexus can is yeah yeah the

body and you're gonna book your appointment right I actually booked it this morning. So I got to check what day I booked it for. But yeah, when I saw yours, I was like, okay, I gotta go get the scan. You know, when Bree went to get her DEXA scan, everything kind of became reality. And she's like, she's never had a trainer or done a hard workout in her life. And now she's pushing, she's doing squats, she's doing lunges. Like it was like all this reality set in. She was crying pretty much today in tears, just saying she wants to lose weight faster, but she gained nine pounds of muscle. And she looks toned and she looks great.

And I'm like, listen, you don't need to get skinny. You need to get toned up and you're doing great. You already look amazing. It's just hard with women, you know, and I get it that she wants to become her best self, but it's like, once you get into this mode, it's like your body feels so good. Your energy level, your clarity, you've never been a drinker, never had a drug issue. So you you've been, I mean, it feels like we're all becoming Mormon now, just clear heads, focused, stay away from the coffee. But let's jump into just some home service stuff, man. I know you've had a lot of success these last few years, but what I love about you, Tom, is where you came from. And no one ever gave you

much. You got love in TLC as a kid, but you kind of created your own success. Can you tell everybody, most people know who you are, but just tell us your story. Let's catch people up. Yeah. When I was a young kid, my parents were divorced. My mom was on the East Coast. My dad was on the West Coast. And when I lived with my mom, my mom had an attitude that you had to get a job as soon as you were old enough to be allowed to by the state. I was like 15 years old. So I got a job cleaning, sweeping floors and cleaning out trucks at the local air conditioning shop. And just down the street, I literally rode my bicycle down there. And I don't know, one thing led to another. I got through high school. I thought, oh, I'm only going to do this to get through high school and into college.

And Tommy's mentioned a couple of times, he mentioned LDS and being Mormon and stuff. I joined the Church of Jesus Christ of Latter-day Saints when I was almost 18. So I ended up going on a mission for two years. And so I used air conditioning to pay for that. Then I come home and I do it. I say, you know, I'm just going to do this in college. So I use air conditioning to pay for college. I get out of college, I got a degree in finance. And I realized I'd take a massive pay cut to get into finance because I was making so much money in air conditioning by that point. I was actually got into sales and my income was pretty good. And I got out and I hated finance. And then I tried working for a tiny law firm and I hated that worse. And I was like, man, I got to go back to air conditioning. And I look back now and I think by the time I finished all that stuff, I had nine years of

experience in air conditioning and a business degree. What else did I think I was going to do? And so I got back in and I had tried to avoid it for so long. I ended up buying a company called Lee's Acutech Service Inc. out of California. Now it's called Lee's Air Plumbing and Heating. And still on it to this day. We're prepping for what will probably be a sale next year. We're actually going to Quality Earnings right now. But I've had several businesses in addition to that. As Tommy mentioned, I had one that was in Vegas that we sold.

I actually moved to Vegas for that. Now I don't own one in Vegas anymore, but I still live here. And we have... Tommy and I even have investments together all over the world. So it's turned out pretty well and I really, really enjoy it. You're really to the definition of a serial entrepreneur.

There's certain people I know that we get together. Keegan's one of them. There's most of the guys we know that are successful through Service Titan. When we met at Pantheon 2017, 2018, it was, as before you worked there, I was just fascinated by the conversation. And what I loved is you jump on a plane and go see anybody. And that's how I was. But what I love about it is our super sport

is business, specifically home service. And it's fascinating because we love getting behind the scenes and see what's going on and talking marketing, hiring strategy, culture, all the stuff and KPIs. We can get into balance sheet and income statements, but it's more fun to look. Those are lagging indicators, in my opinion. I like to look at what happens today, what's going on in the call center, what's happening with Dispatch Pro, what are the Pro Tools, what are the technology? And you're right in the mix of it. Those, those of you that don't know, I think, I consider myself a pretty good connector and influencer, but Tom knows everybody.

He knows what's going on behind the scenes, not because of Service Titan, but just because he's got great relationships all over the world, specifically North America, but he knows people everywhere. And, you know, Tom, let's just jump into some questions that I think are really important coming from your perspective. I know one of the reasons Vegas did so well for you is you retained some of the best talent. HVAC Plumbing Electrical is $180 billion market cap,

garage doors are at $14 billion. You got not the top 1%, the top one of the 1%. And you charged, I remember you showed me one day, $54,000, $87,000, $42,000, and you're just scrolling through for the day. And I think you probably used to charge $7,000 for a five-ton unit. It's really easy to make money when you're priced right and you deliver quality. And I think, just talk to me about that transition. Because $7,000 still leaves money on the table five years ago when the units were $2,000. Well, I think you touched on two things there. One is the average ticket. So yeah, literally 10 years ago, my average ticket was $7,000 selling a system replacement, air conditioning system replacement. And now last month, it was $26,000.

And so now keep in mind, we're not just selling the unit for 26k, we're adding on a lot of stuff like ductwork, indoor air quality, whatever we can sell. We don't even sell that much indoor air quality. We sell a lot of ductwork, some insulation. And now with inverter technology coming out, we got higher prices for that. But we got away from being afraid to charge for what we need to. ServiceSite did help a lot with basically giving us more ways to automate the options process. So we could build all the options templates the way we wanted it. So it makes it super easy for technicians to click one button and offer three or four options. And when you offer people options, they tend to spend a little bit more money with you because now they feel like,

Hey, I can pick what I want out of this. And I mean, restaurants and department stores have known this for years. And we're just coming around to it in the home service space. But that has really driven amazing, amazing results. But the other thing that you mentioned was just critical. I noticed it with the success in all my businesses. And you talk about it all the time at your freedom events and vertical track and whatever. It's the people. In Vegas, we had an amazing sale. We went and I can't say what the number was, but it was literally... We bought it for $0. We sold it 16 months later. It was well above $50 million sale price. And I had a few partners in that. And they did really well. One of those partners was

Brent Buckley. He was pretty much the best sales guy I've ever met. And he killed it. But the thing is, people don't mention also like Phil Falaski... Brent recruited him over to FetcherTech. And Phil went out and was selling. He sold a million dollars in January one time. And it's... I don't know if you know this, but selling air conditioners in January is hard. He's selling like that. And I look at Lease now and my company in California. By the way, on that one, Brent ended up completing $12 million in sales for the year in Vegas, which is just incredible for one person. Just unbelievable. And without Brent, we would be nowhere close to that sale price that we got. In California right now, my numbers are skyrocketing. We have 84% growth rate right now, at least with what we

looked at last month. And it was amazing. But I look at the people that are there. My sister right now is a general manager and she's killing it. We actually have Phil there now. That's doing amazing. He went and worked for a couple other places and finally said, why don't you just come work for us? And I looked at this guy named Damon. Damon is, he's going to be the GM. My sister's taking another position, working with some of my other business interests. And Damon ran a $100 million plumbing shop before this. And Damon came in and gave a lot of great ideas

and those kinds of things. Ellen Rohr is advising us on financials and doing amazing. And I got to say, being able to recruit those people and meet with those people and get their input and their insights, it's just catapulted our business to the next level. Every time I look at these companies, it's easy to replicate a process. You can build a process, you can dial it in, you can use your own expertise to build a process. But you can't just replace people. Like you go to McDonald's and order a new person. It's not going to happen.

You've got to spend that time to build those relationships and recruit the best people to come to you and treat them accordingly. Yeah, I want to discuss that because, you know, Tom, I've been doing this for a long time. I'm almost two decades into it. And I've come to this realization, like hardcore. And you're one of the people that have really helped me come to this conclusion of becoming a talent magnet. But what I've just been saying these last few months is you don't really know what an A player is until you see a Brent Buckley. You don't know what an A player is. I had a guy do $100,000 by himself yesterday. One guy, 100 grand. You don't

know what it is until you see what... We think our best guy is an A player, but at a lot of companies that you know of, that would be a D player for you. How do we recruit? What kind of attributes do you notice in a guy like Phil and Brent? And the other guys you've done at every other company that you know, Kent Goodrich, you understand who Dale is. You understand guys at Any Hour. You understand guys across the country that work under Parker and Sons or Ken Haynes. What are this common... I'm personally asking because this is something I'm working on.

This is selfish. Yeah. Well, I'll give you two things. What are these common... I'm personally asking because this is something I'm working on. This is selfish. Yeah. Well, I'll give you two things. One is... And this you already know. Tommy's got this like the back of his hand is that you've got to have... Companies have to start with real KPIs and have consistent KPIs or else you never can measure one guy versus another and you don't know what you're going for or whatever else. And I see all these people that don't know what their close rate is. They don't know what their average ticket is. They don't know what you're going for or whatever else. And I see all these people that don't know what their close rate is. They don't know what their average ticket is. They don't know. Or it's all in one bucket. Their service, repair, retrofit, replacements, all in one bucket. So they don't know, well, what's the average ticket for install? What's the average ticket for service? You have to

know those things so you can start comparing what other people's A players are to your A players. And then you start realizing maybe your A players are actually B and C players, which is what I had in Fresno. My eyes were open when I got Brent Buckley and went, oh, wow, like, that's what's possible. And then I started realizing, you know, my people in other locations aren't quite there. And that it's really cool because you get the Roger Bannister effect, right? Like, as soon as you see someone else do it, then their mentality shifts to like, oh, maybe I can do that, which is pretty awesome. But when I'm looking at people across the country, one is that the people that are true A players,

they don't make excuses ever. And I know that sounds cliche. However, think about this. If I have Brad Buckley selling $12 million in Vegas, I had a bunch of guys in Fresno when I showed those numbers to them. Immediately, I heard the words, well, I don't know what you're doing in Vegas. That's not possible here. He's probably doing something wrong or whatever else. As soon as you have people that start making excuses like that, they'll never get better. They're never going to be A players because they'll never accept that maybe they should be doing something differently. So they're never going to get better. So I think that some type of test to see like, are they willing to take feedback? Are they willing to admit that they're not the best? Are they willing to open up?

I look at Brent Buckley and Phil Pulaski. They both have that attribute that I really think is critical to becoming an A player. The other thing I noticed, and this is with people across the board, that your top performers, you may get a sales guy that's out there that just overperforms other people. He's not an A player. He's like a B plus that has a lot of issues in his life and that kind of stuff and work hard, play hard kind of thing.

But they'll never be extraordinary. So if you got those guys that are like, works hard on Monday through Friday, but then goes and gets hammered every weekend and shown up kind of hungover on Monday morning, he might be able to be good enough to kind of outperform the other people in your company, but they're never going to do extraordinary things. This year, Phil Pulaski is probably... He's going to sell a couple of million dollars a month, which is just unbelievable. But on that front, he goes out there, he wakes up every morning at 4am. He went and talked to his team and said, look, all the sales people... Because he came in later in the game to Lee's a while later. And he said, look, I need to

help the sales team get an order. And he told him flat out, look, if you want my training, he's like, Tom has laws and things he has to follow when it comes to hiring you, but I don't have to train you. And so if you're going to, he told me that you show up hungover, you're drinking heavy or whatever else, I'm not training you. Number one, you're cheating on your wife, I'm not training you. You're getting into drugs, I'm not training you. Number one. You're cheating on your wife, I'm not training. You're getting into drugs, I'm not training. I'm not anything. And we actually had a guy who was screwing around on his wife. And Phil found out. He's like, I'm done. I'm done talking to you. I don't need all this drama. I don't need anything else. He said, high performance is a lifestyle.

It's not an attribute at work. And I only want high performers. I'm not going to waste my time and not have the impact unless you're a high performer. And so he has this standard. The guy's not Mormon or anything else. But he tells you, here's the standards. We're not screwing around. We're not dumping things into our bodies that are not going to help us. We're not going to do any of that stuff. We're not going to be slugging around. You got to be a high performer and high performer in all things, or else I'm not helping you out. And I was just really impressed.

And I started realizing Service Titan's motto is achieve extraordinary. And I look at the people in the company, there's always good people, better people, whatever. But then you have those extraordinary individuals and they take that extra step that just says, I'm going to be extraordinary in my life, in whatever it is. And they're going to push hard. And those are the people that just,

man, they can move mountains. It's just amazing. When I describe, there's 10 names that come to mind. Number one, they need to win. They're the most competitive. They're like, if I put out something like lowest callback ratio, they're like, okay, I need to be 0%. I need to figure out exactly what to say at the end, make sure. If I say most reviews, if I say recruit somebody, they're going to go recruit more than anybody. If I say whoever picks up the holiday, they're like, let me do it. And one of the other things, Tom, is these people want more. They're like, let me do it. One of the other things, Tom, is these people want more.

They feel like this is their opportunity to let their dreams come true and they like nice things. I guarantee you Phil probably has a really high-end car. Something extraordinarily nice. I guarantee you Brent's buying a nice house and probably a vacation house.

Brent had a Lambo. He just sold it because he can't fit it in his garage because he bought more cars. Phil has a McLaren. But even then, Phil's making great money. Brent was making great money. They didn't have those nice things until they had excessive amounts of money. So yes, they want nice things, but they also have extreme amounts of discipline. Both of them do. I look at both those guys and they're just...

Discipline. Brett will spend a lot of money because he has confidence that he can make a ton of money, so he doesn't care. But he's very disciplined in... He follows the exact same process every single time to a T. And he will tell you, I do the same thing every time I go in a house. And it's so smooth that it's interesting. People have asked to go on Rylance with him. And they're like, I don't understand why he's so good, like why he makes so many sales.

It's no big deal. And it's like, you don't understand. He's made it so smooth that it just looks like his normal part of his process, a normal part of his day. But he's doing the exact same thing in his mind every single time. And it's leading to exactly the outcome that he wants every time.

Yeah, that's one thing I have noticed is my top guys, they don't veer off there. They're not like, I'm going to treat every customer different. I'm not going to offer financing because they look too cheap or too expensive. They don't discount. They say, they're never going to go for this, so I'm not even going to offer it. They don't discount. They say they're

never going to go for this. So I'm not even going to offer it. They don't know what that's like, because that would be almost a way of being prejudiced. That would be like judging a book by its cover. If you stick to the same thing every single time, people could say no, but you're going to offer it regardless of how you look, regardless of how your house looks, regardless of what your car is, regardless if your house is a mess. And I think that's a really good skill. And I, it's just, I meet people, I look them in the eye, but I've been wrong. You know, I've seen somebody that takes care of themselves, that does pushups every morning. That's a good dad. It's a good husband. And there's just not, there's, there's something inside of people. And I wish it was super simple.

If I could figure this out and just give somebody a color test or a disc assessment, it would be easy, but it's not. It's so much more. You know, me and Kent Goodrich were talking the other day

and he's like, you're going to lose 30 to 40% when you're hiring 50 guys a month. Like, especially if you're bringing them out, you know, with HVAC plumbing, you need to have certain training and you got to say that this is going to be my livelihood because I got to pay to go to school. And, you need to have certain training. And you got to say that this is going to be my livelihood because I got to pay to go to school. And sometimes you got to spend five

years as a plumber to become a master plumber. Or garage doors, you don't need that formal training. So if you don't like it, the first day it's 125 or the first day it's zero degrees in Milwaukee, Minnesota. People tend to say, this is not what I thought it was going to be. This is the biggest thing I'm solving for. And I've got a lot of notes. This little conversation has helped me dramatically. So talent's one thing. The one thing I think we don't discuss enough is we talk so much about technicians. And I was a technician, you were a technician. So we tend to go there. But it costs just as much to not book a phone call and not dispatch the right tech to the right job. And I'm talking about CSRs and dispatchers.

What's your take? I went to a service titan shop in Memphis. Guy is booking 94% real numbers. They're doing 100 calls a day. 60 of them are incoming. 40 of them are outbound. Never seen anything like it. I decided I got to pay a lot more. He'd ask zero turnover. And I'm just like, I'm dumbfounded. His name's Lee Downing.

Amazing guy. Not a massive shop, but very successful. And actually, not only did I fly out there, but Luke and Amy flew out there after I went out there. i went out there because he won a free tour for freedom and i was just like okay you won the lottery type deal and i was gonna go give him consulting and i helped him out on a lot of aspects i think but he opened my eyes to a whole new opportunity that i was like i gotta fly my team out here now we're working together on a bunch of stuff. I'm not investing in this company, but you know. Yeah. What do you have to say about the CSR dispatcher roles? I mean, I overlooked so many things early on in my career. I set a goal, a lifetime goal to hit

3 million in annual revenue. I was 1.6 million when I first got Lease. It took me like four years to go from $1.6 to $3 million. This year at my biggest location, it was $27 million in revenue last year. We're probably going to do about $54 million this year. So we're adding $27 million of revenue of organic growth without any acquisitions in Fresno this year. And I look back thinking, man, I was so dumb. And one of the things that I screwed up when I was young that made me grow so much slower was I didn't pay attention to call booking rate. Now, granted, we didn't even have a way to track it back then because service type wasn't out yet and those kinds of things. I didn't pay that much attention to conversion rates and everything else. So looking at the whole funnel and realizing like,

okay, where it comes in the top and how it comes out the bottom is so much more critical than just giving guys another sales training. So much more critical. I mean, if I can just get my call booking rate from 65% to 85%, I'm putting like 33%, whatever 20 divided by 65 is, over 30% more calls on the board just because I fixed my call booking rate without adding a single extra dollar of marketing. And it's just, Tommy, you teach this all the time at these events. And it's like, I mean, I think it's mind blowing because we want to be... It's just so funny. You mentioned everyone wants to talk about techs. Everyone says, I'm going to have the best techs that's going to make me the best company.

And it's so funny to me. I'm like, what's the most successful burger company in the United States and all the world? McDonald's. McDonald's. Is it because they have the best chefs? Is it because they have the best ingredients? No. I'm not saying we should all do McDonald's because I like Ruth's Chris. That's a great steakhouse, but also Ruth's Chris isn't great because they're the best chefs. They're great because they have a great process. They have, you know, and they're hitting a certain market. Like that's what we got to figure out is I need a way to make a thousand good texts, really good texts. That'd be great. I don't need to have the best ones.

I want a process that makes thousands of them. And then I want a process that has it do it the same way every time and be consistent. That's what McDonald's is. Consistency, supply chain, there's a bunch of stuff that they handled. They figured out faster ways to get the food to you. It wasn't about the quality of the food or the quality of the chef. And I mean, and that's huge in air conditioning. If we can figure out how to get somebody to your house in 30 minutes when your AC breaks down, we win the job every time. Now it's hard to do that, but we got to make ourselves better and overlooking things like call center, basically CSR, dispatch, that kind of stuff. You're just leaving tons of money

on the table. And it's something that's so much easier to fix because they're inside the box in your company. You can listen to them, watch them, talk to them, coach them. Your technicians are out in the field. You got to drive to them one at a time if you want to meet them in person in the field. Your call center is right there. Just focus on it. Get that adding 10% or 20% on your call booking rate.

It's going to just drive your profitability through the roof. Let me ask you a question because I love the idea of McDonald's. I also love the idea of Ruth Crisp. I talk about Steak44. You've been there with me. I talk about the high-end steakhouse because it's not uncommon. And I mean, this is pretty normal for me to spend a couple grand when I go out to a nice dinner with four people. Usually we get a really nice appetizer that's 400 bucks because it's got the seafood tower and a few martinis, a couple of the guys.

I haven't been drinking, but those are $20 martinis. But the deal is I'm happy to pay that because of the experience. A manager always has to touch each table. They're going to call the next day to make sure it was great. They're going to ask you, is it a birthday? They're going to be cleaning off. You know, the steaks come out. They're like, don't touch the plate. It's 150 degrees. And that experience, I could go to McDonald's, but I want to be a mix of getting out there right away because you know that people can only have three things. You want it done fast. You want it done

right. And you want it done for cheap. And you'll never be all three because you can't be. And I chose a long time ago, I want to be out there when they need me. And I want to be the quality they want with the background checks, with good people around their family. And I can't do that doing drug test background checks, training people with new trucks, with the best software, with the best trademark tools. So I can't be the cheapest all the time. I do have a cheap option, a builder grade option, but rarely am I marketing to that client. But if I could build a relationship with somebody that's selling their house or a real estate agent, I will. I'll have options for them. But I think this idea of everybody's like, raise your prices, raise your prices. And I hear Ishmael say that a lot, and I think he's right.

Don't raise your prices until you start driving around nice trucks. And you're a big fan of kick charge. You're a big fan of service title, which I am too. We subscribe to the same almost everything. I want to play a little video, just let you listen to this. This is something that Jeff Bezos said, and I sent this to Luke. Be stubborn on vision and flexible on details. Be stubborn on vision and flexible on details.

I run the vision of this company, and I'm the only one that has my foot on, like, not the normal gas. If there was, like, a triple gas pedal, I'm all about, like, my operations team is always like, dude, my CFO, everybody's like, that's not possible. You're not going to do it. And what I learned was, is without their buy-in, they've got to do the work. They've got to fix the price book. They've got to help the hiring events. I've always specialized in marketing, making sure the phones are ringing off the hook. And now I'm focused on getting the right people on board, but without their buy-in to the vision. And I got to do this one by one. I can't do it in a group setting with them, but if I'm

hitting the gas and they're not bought into it and they don't see what's in it for them, even though my vision is so crazy now, but it's so hard. This is the hard part for me is I'm so focused on like most entrepreneurs on really what the prize is. And they just, I go through this every day, every week, every month. And I'll tell you, I've got the best team anybody could ever want. I really believe that. But I'm figuring out now, I told our sponsor, Cortec, I said, I'm going to bring on five more leaders and it's not going to be cheap. I told them this yesterday. I said, this is going to cost us over a million dollars a year. They said, do it. And I said, but here's the caveat. It's not going to go against anybody's bonuses. By the way, I don't even get a bonus.

I negotiated myself out of a bonus. I said, I don't need a bonus because that's kind of counterintuitive to my major goal of making this company worth a lot more money. So I didn't negotiate a bonus or a plane or anything else in my deal. I do got a nice truck. But what is your thought on your job as the owner of the business? Because you do a lot.

You got a full-time job at Service Titan. Yeah. I mean, it's... I was talking to Ellen Rohrer earlier today. And she came in and was working with basically building a financial quick check that is consistent so I can see numbers for all my companies very quickly and make decisions fast. And I had a problem with the budget from last year and the previous controller and I got into an argument about it and I didn't approve it. And they made some changes and he made it kind of good enough that I

approved it. And I shouldn't have approved it. I should have just said, you know, the heck with this is too complicated for the company to understand. And I really need everybody in my company to understand the budget. And she told me, she said,

Tom, there's two things you got to have your finger on and it's marketing and the budget. Those are the two pieces. And you took your eye off of this and this is on you. And she was really laying into me about it. And that's what I, you know,

I don't have any problem with Ellen. Like my respect for her is really high. So when she says that kind of stuff, it's like, yeah, she's right. And I think in my companies, I need to be in control of the budget.

I need to be setting the vision and setting what I expect the goalposts to be so that the company can hit the goal. And then the reason this came up is because the budget was set too low on the base. The stretch was good. The stretch is legitimately a stretch budget, but the base was set too low. And so everyone was happy that they're in between stretch and base. And they're beating the base budget and i'm like guys this isn't good and like you're not going to be strong enough for the sale if we just keep going off this base budget and ellen hopped on i was like well why are you going to come in here and crap on the budget when you're the one that approved the budget and And I thought, you know what? She's right.

Bottom line is I've got to set that tone and say, hey, this is where we've got to be. And I'd say every owner needs to determine the strategy, set the budget, and let their people execute. Now, past that, if you're a smaller company, you might have a lot more hats in the company and you might have a lot more things to do. But that's where you need to be at the top level. Yeah. I mean, you don't know the people that go to your budget meetings when we have a budget meeting that you put on for the day that are like, the budget is a formula that comes back

to the price book that comes back to leads that comes back to booking rate that comes back to the price book that comes back to leads, that comes back to booking rate, that comes back to conversion rate. And your price book is built in a way to reverse engineer where you're going to hit. And then the fuel is the leads. And I think a lot of people miss this. They think, man, if we do an extra 5 million this year, we'll be killing it. But they don't know where to go. I know if I have this much protein, this many carbs, and this much fat, it's called macros, and burn this many calories, there's a mathematical certainty. When I'm trying to create my body the way I want it to be, mathematically, I can guarantee you without a shadow of a doubt that it will come true if I do the work. Very few companies have that. Very few companies have these metrics and understand. And a budget, by the way, I've got a stretch

called adult gives 200% bonus. If you make 150 grand, you get a $300,000 bonus. And there's a very good chance this year, everyone's getting a 200% bonus, which is very, you know, it's going to cost the company millions and millions of dollars and I'm happy to pay it. I'm very happy to pay it because I'm going to set, because you got to understand that's the new threshold next year. Hey guys, I hope you're enjoying today's podcast. A quick reminder,

the Freedom Event is happening on September 25th to the 27th. In today's tough economy with PE firms invading, lead costs spiking, and customers cutting back, it's time to protect your bottom line and your future. At Freedom, you're going to learn how to bulletproof your business from home service legends like Paul Reed, owner of Northwest Roofing, a $30 million a year business. Aaron Gaynor, the owner of Eco Plumbers, a $75 million business.

Ken Goodrich, the chairman of Gettle, a $250 million business. Aaron Gaynor, the owner of Eco Plumbers, a $75 million business. Ken Goodrich, the chairman of Gettle, a $250 million business. And Leland Smith, founder of Service Champions, a $500 million business. Listen, you can keep doing what you're doing and hope for the best, or you can arm yourself with the proven strategies I've used at A1 Garage Door Service. Get your tickets at freedomevent.com. That's freedomevent.com. Now let's get back to this episode. And you know what I mean? There's a lot of pros for me to pay out millions of dollars knowing that on my eyes, what is it? John Worlow wrote, built a cell. So many people are worried about the day-to-day, month-to-month, quarter-to-quarter, year-to-year. Since I've been through this process, Tom, my vision has changed dramatically and I'll not build the legacy company. It's always going to be that.

Whatever I'm involved in will be a company that's amazing. But more, it's about how many people could I build generational wealth for? And to not have a budget, not have a goal, not have EIP, not tell people where you're going and when. You're not helping anybody's major dreams. Yeah, you can give them a good income, but it's not going to make, it's not going to end their family curse where they change and burst out when no one else was,

when everybody was living check to check and maybe their best asset was their home. This is going to create so much generational wealth for so much people. So my mindset's like, this is the first thing. I talked to you this week about this. We talked about it yesterday or the day before. The number one goal for me is where are we going with this company? Where's everyone going to be happy? And then we'll reverse engineer and just make it happen. But we got to hit that target. If we don't do it in the timeline, great. We'll keep going.

But let's get the facts right and let people know what needs to happen and what's in it for them. Yeah. I think that last piece is what's in it for them, which is something I didn't mention on the budget piece. It's like, hey, once you get that budget, you've got to build your incentive structure around that budget so everyone has a reason to start driving towards that budget. So they're all pulling in the same direction and running the same route. And if you definitely, like I did, buckled on the budget, say, you know what, it's good enough and we just went through it. Then everyone's going to pull to hit what you said was good enough. And then you can't be mad at them when they hit the good enough number. It's just...

It is what it is. And I think as owners, we got to step up and we got to get there. Let's pivot a little bit here. Marketing. It seems like a lot of the questions I always get is, what are you doing different? What's really working out there? Me and you have talked a lot about the questions I always get is, what are you doing different? What's really working out there? Me and you have talked a lot about different types of marketing,

and you know every major player in service type. What do you see outside of LSA, PBC, Organic, the Google My Business listing, Angie's List, the basic things that we all know about? What do you see that's different that's really working well? You know, it's changed so much in the past four years. And it's crazy because every time we think we've just gone through

a huge marketing shift and like, GMBs are the new thing and then GLSA comes in and Yelp changes the way they run their algorithm. And now all of a sudden, they don't have three offerings in their top. Now it's the top. All the ones on the first page are all paid.

And it's just, everything keeps changing. I realized it's not going to end. Vahe Kazoyan from Service Titan made a really good statement and they said it at Pantheon. He said, the interesting thing is, as people have to know, is that we've changed a lot. The market and the industry has changed a lot in the past hundred years. Just so you know, the rate of change is increasing and the slowest it will ever be is right now.

And the future, the change is going to be faster and faster and faster. And so not only do we have to handle change, we have to handle it faster than we handled it before. And we have to be accepting that it's going to be changing and staying on top of it and have the best tools for that matter to stay on top of it. But with that, I think that one of the biggest issues is that I would point out, not necessarily what's working,

what's not, but the people that are really effective and growing. Aura called me the other day and said, Hey, look, there's people that are killing it right now and people that are getting killed. And we see a bimodal distribution of companies across the US. We see, and what that means is that you have a group that are really losing and a group that's really winning and we don't have a whole lot in between.

And so he said, I want you to figure out what's the difference between the losers and the winners? Because it's not like a normal distribution, which has a lot in the center. And then on each end, a small group, it's like really winning a ton and small group, it's really winning. Yeah, you've got this bimodal distribution. So he said, go figure out what the winners are doing. And I started, I went around to a bunch of the winners, and I called them up because I can see on their data and service item on who's winning and who's not. And they all said the same thing. They all answered me when I said, what are you doing differently? And they all said,

Tom, I don't know what we're doing differently. We're always doing what we always did. And so I thought that was weird. So I went on site with a few of them to see what is happening. And what I noticed was a consistent pattern. On all the winners, you had strong leadership with strong processes. And I'm not talking about process. People screw this up all the time. Oh, my process is when a call comes in, we book it this way. Sure, you got to have that process. But when I'm talking process, I'm talking all the way through your company, including marketing. What do you do in marketing to make sure that you're on top of all the change and everything all the time? What is a process? You need to have a process around that. So the winners had great cadence, reporting cadence.

The winners had great leadership standards. the winners knew how to make changes and were not afraid of change the bottom line they're great leaders and their marketers are sitting there trying all new things and they're redistributing they're tracking everything well they're redistributing money towards things that are actually working versus things that are not the reality is people still have clogged toilets in the US. People still have broken garage doors. People still have broken air conditioners and they still need to find you. It's not like their air conditioner stopped breaking. It's just they're looking in different spots. You need to have all those lines in the water and you need to start figuring out which lines are working and which ones are not and putting more emphasis on those lines that are

working. And so if you have that constant cadence, they're naturally going to grow up, which is why these companies don't know what they're doing differently. They're like, Tom, I don't know what we're doing differently. There's no magic bullet. And so at my company, Josue is in charge of marketing.

He's basically becoming quickly a CMO, a chief marketing officer. And he's like, from what, he's been working with us for like six years. He's gone through a bunch of education to get to that point. And he's getting really, really good right now. We call him marketing coordinator.

So I'm director of marketing. I don't know. But he's very good. He holds his monthly meeting on how our performance was for the previous month. He holds a weekly cadence meeting with every single department head on what's going on and what's being offered. He's constantly going through those numbers and figuring out where to reallocate funds. He's trying new things. Now, a lot of what's working for and what's being offered. He's constantly going through those numbers and figuring out where to reallocate funds. He's trying new things.

Now, a lot of what's working for us right now, but keep in mind, by the time you listen to this podcast, it might be something different. You've got to have that cadence of checking what's working, what's not. You have to be able to track it. Our GLSA started doing really well in the past couple of months. Google changed its algorithm, but we're luckily well-positioned. We have a lot of grassroots marketing that's doing well. Believe it or not, our brand recognition campaigns on Facebook are blowing up. We actually... We had

someone walk around our office filming, just asking people what their favorite temperature was on their thermostat, where they set it to at home and put it up on Facebook. We got 3.something million views in two weeks, TikTok and Facebook. And we got a few million views just blew up. And the reality is, I think a lot of people need to know when it comes to marketing, when it comes to brand recognition, is that you're trying to get them to recognize your brand. You're not trying to sell them something. If you're going on Facebook and putting pictures of your air conditioner and saying, we do new air conditioning installs for $9,999 or $158 a month or whatever it is, it's not going to be effective. People don't go to Facebook when their air conditioner is broke. When their air conditioner is broke, that's when they call you.

And what they're typically going to do is look it up in Google or some other Yelp or whatever and find someone. So don't spend the time on Facebook to do that. If you want to go on Facebook or some other medium that's for brand recognition, do brand recognition campaigns where all you need to do is get them to recognize your brand. And so in those cases, what we're doing is stuff that's interesting to them, like getting in arguments about what to set the thermostat to. And that's what really blew it up. People want to post like, I can't believe you said to 68, my power bill would be through the roof. Oh my gosh, 74, I'd melt to death, blah, blah. I mean, you just see people going crazy over that stuff. And we've been doing a lot of that. And it's really just driven up our conversion rate on people on our website because they're familiar with us. They're comfortable with us. They're

just feeling good about it. And especially those posts, they're inexpensive to make. And if you really want to boost the posts, you can do that and spend a little money on it to get it there. But just don't spend the time going out taking pictures of air conditioners. Nobody wants to see the unit you put in an attic. No one's interested in that. Garage doors is a little different. Garage doors has a visible appeal. And it might be like, wow, look at that. I can't believe that I can get a garage where it's custom wood and all that other stuff. But other than that, plumbing, no one wants to see the pipes you put in. Air conditioning, no one wants to see the furnace you put in. Don't do that stuff.

Just put up something that is interesting to them. 100%. I love this conversation, man, because my brain, it just starts writing things down to get done. Two quick things on marketing. Number one is no algorithm and nothing will ever change relationships. When you connect with a realtor who's a top 1%, designer, whatever it is, it could be a builder, it could be a lot of things. Number two is, I've very rarely seen, when you went and studied those people, most of them had a very, very solid brand and their marketing was unified, meaning their yard signs look like their billboards look like their, it felt, you know, there's prolific, there's kickchairs, there's companies that do this. And most of them invested 20 or 30 grand to get that brand.

And now they got driving billboards and they see that. I can't say how many people are like, I feel like you're every other vehicle, like you're everywhere, but people recognize us that we're not a white truck. Yeah. And I think those are easy wins. Um, what are you most excited about with service Titan? I'm not talking about anything of the future of investments, but just where it's going and the technology. Because I always tell people, I used to be a garage today. Now I'm a technology company that does garage doors. Yeah. I think there's a lot of stuff. You've told me this, Tommy. ServiceTitan's got a lot of ancillary products that are kind of like it's not quite as good as a

third-party or not as good as a third-party service. So let's just talk about that. It might be better. What I told you was they don't have ambassadors. They don't have anybody running that product that actually understands it, that lives in it, dies and breathes it, that's showing up to home shows, that's onboarding and staying the same

person. I'm not discounting service-type because I bet you they've got the money to build better products. They just lose the ambassador to the products. Oh, that guy's not here anymore. That person shifted. You're a success manager. And this is every CRM. This isn't a knock-on service-type.

That's all I want to be clear about. I'll never discount what Art of IA and your team has built. Yeah, no, I'm just talking about in some cases, like for instance, the marketing pro, for instance. It sends out automated emails and that kind of stuff. And you might have a text message platform or an email platform

or something like that that will send out automated emails to customers better. The thing is that Surgeon has all that data. So it's got all in one spot. And so if they can be 80% of what the best email marketing company is, it's still much easier to use Marketing Pro because it can all be automated. I don't have to use an integration to try to get in.

I don't have to export spreadsheets. I don't have to export lists. I don't have anything else. It just automatically does it and keeps it going. And then Surfshank can always build on that product later. So some of the things that they've come out with has just blown my mind. It's like, oh, wow, this stuff all integrates together and makes things very easy. One of the things that really is making me super excited right now is their Ads Optimizer for Google. Yeah, I was to ask you about the PPC ads optimizer.

Yeah, it's pretty incredible. It will look at because ServiceTrend has the data on what your capacity is in your company because it can see how filled your dispatch board is. It has the data on how much marketing spend you're putting in because you tell it what's going on. It connects to Google and sees which ads are working because ServiceTrend has the data on how much revenue is being produced.

It will look at all your Google ads, which Google's most expensive right now advertising source for a lot of people because they're spending a lot of money into Google PPC. And it will start looking at all of your PPC spend. And it will start telling you to reallocate funds towards the ones that are higher performing. And it's up to the second. I mean, it's just constantly updating. It's not like, oh, my marketing person is looking at it once a week. And so it can start really helping you get that dialed in. And what it's coming out with is going to say, okay, instead of just us telling you what to do, we can just even autopilot it and allow it to just automatically start reallocating funds to the things that are working the best and reducing on the ones that are not working. Additionally, it'll start looking

at your capacity filling up. And as your capacity starts to fill up, it'll start turning down your ad spend in order to save money when you're fully booked, which can really get you help you get better returns on your spend. And it was just a brilliant thing that because it's all in one spot, they can do those things that are almost impossible for anyone else to do. And marketing companies, I think, are taking the wrong road and saying, Oh, well, we already do that. You don't need that.

You don't have to pay for server-side stuff. It's like, well, that's cool. But server-side is doing it automatically and doing it 100 times a day as opposed to you looking at it once a week or every two weeks and trying to make decisions based on what you see after the fact. I think it's really impactful. I think what marketing companies need to do is start saying, okay, we're server-side and certified. We can get on there. We can help you determine which ads to make and that kind of thing. A server-side doesn't do that for anyone. They're just helping you dial in what you already have. And so I wouldn't be talking to a marketing company that doesn't do that for anyone. They're just helping you dial in what you already have. And so I wouldn't be talking to a marketing company that doesn't want to use that tool.

It's a super powerful tool. They just need to not see it as a threat to their own business because ServerTown has no desire to go out and be a service business that does marketing for people. It's just not scalable for us. And let's just dive into real quick. So you got Ads Optimizer, Dispatch Pro. The best case that I think you guys have is probably Wyatt at any hour. And one of the biggest problems we've had is literally human error, which ServiceTek does not fix. When you type in the job, you don't look at previous history. You're feeding the algorithm wrong stuff, so it's not going to

spit out the right stuff. And that's why we need higher caliber and invest more into training and getting the right people at the CSR level to book the job correctly. So this best bro could do its job. But talk to me a little bit about the opportunity with this best bro. It's that. I think there's a lot of people want to slap on AI onto random things and just, it's like the new buzzwords AI. We use AI for whatever.

And I don't see AI as always being super effective in all things. I think that with dispatch pro right Pro, right now it's an ML algorithm, machine learning algorithm, not full AI. But as AI gets implemented into it, it will get better and better and better. ServiceDyn is gathering data daily, obviously,

on all the jobs that go and what needs to happen. And the more data it gets, the smarter it gets. I've been running Dispatch Pro. It took me a while to get everything dialed in to the way I wanted it. But right now, we're seeing massive revenue increases. We're seeing higher conversion rates. We're seeing shorter drive times. We're seeing a lot of things in my own companies that just blow my mind. And basically, what Dispatch Pro is, I guess I didn't explain that earlier, is that as you book calls, it automatically assigns the calls to people that have the highest conversion rates for that type of job type and highest average tickets and shortest drive time.

It takes all that into account and then it rebooks your board every 10 to 15 minutes and determines where everyone should be and who should be getting what job in order to maximize profit at your company. And basically, I used to have three dispatchers. Now I have... I went from three to one. I've added one since then because our... Basically, I had somebody that had to call back a lot of installs. Our install sales skyrocketed. The bottom line is when we first did it, we went from three dispatchers to one and our revenue increased. So we saved the cost on the dispatchers and we

increased our revenue and it's way more than paid for the cost of Dispatch Pro. That one I'm very excited about. Phones Pro. That one is something that I've talked to the whole executive team about. Vahe assured me, Brian French

assured me, some of the other guys, Anmol assured me that this product will kill 5.9. It'll outdo 8x8. It'll be like everything else combined will not touch it. And there's a lot of money, time, and energy going into it. And it's not like you guys are building it from scratch. You're getting the best and adding on to it. Yeah.

I can't talk too much about the phones product because it's not released yet for Securities and Exchange Commission reasons. I can't go out and start providing things that aren't out there yet. But I can tell you that they're working very hard and they're very aware of the issues that we have in the industry

when it comes to things like outbound calling, power dialing, the issues that we have that ServiceTitan customers are facing right now with wanting a more advanced phones product that's built into ServiceTitan and with better functionality, better features. So I can tell you that that's definitely a topic of conversation that's definitely heavily on the minds of the chief technical officer, the president, and the product managers. Okay, as we wrap up here,

you've got a book that you've been working on. Can you tell me a little bit about the book you're going to be putting out here? I know it's not just getting published tomorrow, but what are you writing about? It's coming out in mid-January. It's already sent with the editors and the publisher right now. And basically, it's the story of what

happened at Fetchatech in Las Vegas. A lot of people want to know. We bought it for $0, built the company. 16 months later, we sold it for a large amount, above $50 million. I'll say that. And it was an awesome story to be able to be in the trades and spend no money and turn it into tens of millions of dollars in 16 months was awesome. And a lot of people asked me how we did it. And I said, you know what, I'll just write a book about it. I'm going to make no money on the book. 100% of the profits are going to be donated to charity. Right now, I believe that charity is going to be the Edward J. Didlow Foundation, which is my grandfather's name. I started up a while ago for scholarships for kids

that want to go to school for business that can't afford it. And that 100% of the proceeds in that organization goes to scholarships. There's no fees or anything like that. I get no cut. And I'm just really excited to do it because I want people to be able to do the same thing in their business and feel like they really... Trades people to... They feel like they can make a lot of money. Additionally, with that, my sister wanted to launch a podcast. It's called Dealing With The Howards. It's howarddeals.com. It's about the deals that we made, buying and selling these companies, that kind of stuff. And we've been doing this podcast and we have a training

course on how to find these deals and how to put them together and what EBITDA is, why multiples are based on EBITDA, that kind of stuff. And just one of the places where people could go and that's 100% free as well to anyone that's on there. At least right now it is. We have no revenue stream. If we ever want to do something bigger and make some better content, we might have to charge for some things. But for right now, it's just there and you can just go and get whatever you want out of it. We just launched it a couple weeks ago. And if someone wants to reach out to you for

anything, is there a best way to do so? Yeah. My executive assistant checks my emails at thoward at servicetitan.com. That's T as in Tom. thoward at servicetitan.com. That comes to my executive

assistant and myself. I can get your emails there and help out as best I can. By the way, Tom's just as busy as I am flying around the country 10 trips in two weeks. He's crazy. Last thing, you're going to be speaking at the Freedom Event.

I think you're doing a panel. I know the way that we met is through Pantheon. I know that getting a bunch of smart people in a room and just the network that it creates without Pantheon and without events like Freedom, this isn't a get rich quick for me. I think you know my take on this next deal will be over a billion. Even if I made money, which I don't on events, this is not like, man, Tommy's really going to become rich from doing these events because I'll tell you that's created for me. In a selfish way, I connect with people like I did at the last Freedom event and sent my whole staff out to his call center to study. So I get a lot of connections myself, but I think you're going to put on, you never disappoint. So I'd love for people to go to just get a chance to meet Tom. Anybody that's met Tom in person and connected with him for 15 minutes has changed the direction of their business,

by the way. But I'll, I'll let you, we talked about a lot of stuff. I absolutely, I could talk to you for hours. We need to do a podcast like every six weeks. If it's on your schedule,

this podcast is getting more views because of guys like you coming on. But you close us out. Maybe there's something we didn't touch on. Maybe there's something you want to let the audience, we'll leave it up to you. I got to point out, Tommy mentioned earlier that I'd fly out to anyone's shop early on in my career. And it's when I had almost no money. I'd scrape together the cash I could to buy a plane ticket to go see somebody in Florida or New York or Arizona. I didn't care. It was anywhere. And it was like getting a college degree in how to run an air conditioning

company because there's no degrees on that, obviously. And I don't know if it'd be effective if there was one. But going and meeting these people, they're the ones that gave me the education. They're the ones that really taught me stuff. And Tommy and I met when Tommy was $5 or $10 million in revenue. I was like $5 million in revenue. And now I look at it and I'm sitting...

If we finish this acquisition this year, it'll be about $90 million in revenue in my one company. And I've got a lot of other companies that'll put me $140-145 million, maybe, all combined. And that's after I sold $25 million of revenue last year. And Tommy's doing way more than that and has grown a lot faster. And the reality is that we always learn from each other. We met Aaron Gaynor when he was 7 million in sales at that same Pantheon event way back in the day. Me, Tommy, and Aaron met at that same event. And Aaron's doing like 70 million in revenue now in plumbing

and he's pulling like 20% EBITDA. The guy's a beast. And the truth is, it's like, you should be going to these conferences. Pick the conferences where the top people go to, where you have real serious speakers, not just random Joes or whatever. And Tommy puts together this group for these events. And it's just awesome. And you want to be in the same group in those groups of like-minded people that really stretch who you are. Remember that you're the average of the top 5 people you hang out with. And if you want to be broke, just find 4 broke friends and hang out with them all the time. If you want to be a great leader in the industry, go find 4 or 5 people that are great leaders in the industry and start watching what they do. Start working with them and growing. And I love having Tommy around pushing me all the time. We got a group

thread that has seven big entrepreneurs on it. Literally, it's live every single day on this text thread. And it pushes me every day. And it's the reason I'm doing this DEXA scan today because Tommy posted his body fat percentages. I'm like, crap, I got to go do it. So literally this morning, I called up, there's a DEXA scan five minutes from my house. I'm going to do it. And it's just stuff that you got to push each other to get there and get the right group. And this event coming up in September is a huge way to get it done. Thank you, Tom. You're absolutely phenomenal. You're writing a book. You're doing a QV on a business. You're one of the top 10 at ServiceT Titan. You're invested in other companies. You take time to answer calls about Service Titan

and business advice. You come join me at my events. You're definitely giving back to the trades. And I like what you're doing with your nonprofit. It's commendable. I appreciate your time very much and looking forward to seeing you in September, my friend.

All right. Thanks, man. Appreciate it. Appreciate you. 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.