The Home Service Expert Podcast - Using One System To Run Your Entire Business

Episode Date: November 1, 2018

Ara Mahdessian is the co-founder and CEO of ServiceTitan, the leading field software for home service companies. What started as a summer project to help out his family business grew into an $800m com...pany, and has since served thousands of successful home service businesses to date. In this episode, we talked about customer service, marketing, sales...

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Starting point is 00:00:00 This is the Home Service Expert podcast with Tommy Mello. Let's talk about bringing in some more money for your home service business. Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields, like marketing, sales, hiring, and leadership, to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Welcome back to the Home Service Expert Podcast. I'm Tommy Mello. And today I've got a very special
Starting point is 00:00:35 guest, Ara Madesian. He's the co-founder of ServiceTitan. Him and I believe Vahe founded it. And I've been using ServiceTitan for a couple of years. And I got to tell you guys, it's changed my business. He turned a summer project with a family business to an $800 million company. ServiceTitan was named in Forbes the next billion dollar startup. And you were the finalist of the Entrepreneur of the Year 2017 award in the greater Los Angeles region. Ara lives in California. Ara, how are you doing today? I'm doing great, Tommy.
Starting point is 00:01:10 Thank you so much for having me. It's a real privilege to be here. Yeah, yeah. I'm so excited to have you on. Definitely one of the largest companies to be the CEO and founder of such a huge company. I mean, when you guys started your summer project, I believe it was for, was it Vahe's dad? Or tell me the story about how Service Titan got started. That's right. So interestingly, Vahe and I, both of us were born in the trades. Both of our parents are residential contractors. Both of them immigrated
Starting point is 00:01:45 here and came here with no money, no language, didn't know what to do and had to find something to do to put food on the table and did all kinds of odd jobs. And those odd jobs ultimately turned into residential contracting. And when we were growing up, they ran very small contracting businesses. Even to this day, Vahe's dad runs a small plumbing company here in LA. And growing up, the earliest memories that we have is just seeing our parents wake up really early at the crack of dawn, like many of your listeners, heading out there and doing really hard work in the biting cold or the scorching heat. And coming home dusty, tired, broken. And they did it just to put food on the table and give us a better future. And ultimately, we were privileged to go to some good schools and learn a little bit of computer science and software development and programming. And as Vahe and I, one summer, were thinking about what we wanted to do with our careers. And of course, we were thinking like everybody else, we want to go and work for Google
Starting point is 00:02:50 and work for Facebook and Apple and all these cool tech companies. During that summer, we thought, well, look, before we go and get a real job at these companies, why don't we just spend a couple weeks building some software to help our parents better manage their business. Because like many of you experienced, we saw how hard it was for them to figure out how to get new customers, how to get their technicians in the field to sell, how to maintain great service, how to manage payroll and inventory and their finances and all these things. And we decided, let's build software to help them do that. And then we'll go and get those real jobs. And one thing led to another.
Starting point is 00:03:30 We built software for our parents. They referred us to other great contractors who referred us to other great contractors. And at some point, we were like, man, there's a critical mass of 20 salt of the earth, hardworking contractors that rely on our product. And we realized we can't abandon them. And, you know, this would be our future. And here we are today. Yeah, that's so interesting. What part of the country were you in originally?
Starting point is 00:03:58 In LA. You were always in LA. Okay. Yeah. Vahe and I are both ethnically, we're Armenians. We immigrated here when we were very young and we've spent pretty much the last 30 years of our lives growing up here in LA. So tell me a little bit about, I think there's like a Cinderella story about the first client that actually put you guys big time on the map. And I think, you know, it was somewhat, I don't want to say the word primitive, but it's definitely made huge advancements since this first client, the monster client. Can you tell me a little bit about that? Yeah, absolutely.
Starting point is 00:04:33 Yeah, this person, it's John. Today, he runs a very successful plumbing company called Rooter Hero. He might be one of the largest independent plumbing companies in the country. But at that time, we had met him. We shared with him our vision of what we thought the right software is for plumbing and ultimately heating and air conditioning, garage door and electrical and other trades. And it was just an idea. And he took a big bet on us.
Starting point is 00:05:03 And in hindsight, I almost think he was a little bit crazy taking this bet because at that time, he had a $9 million a year company to be able to run a business of his size. And one day he was like, okay, it looks good enough. Let's roll with this and let's launch it. And we told him like, John, I don't think it's really quite ready. And it's a pretty big gamble you're taking with a company of your size. And he's like, it doesn't matter. Let's just do it. What's the worst that could happen? And so we launched it. And frankly, yeah, while there were certain things that gave him such big benefits that made him a ton of money, it allowed him to overlook a lot of the other problems that it was causing because, you know, it wasn't perfect and there were some gaps. So Vahe and I, for like six months, every single morning, we woke up at 5am. We drove over to John's office. He had set up our own office inside his building. And we would code and fix problems and improve the software. And we would stay there until 11 o'clock at night. And then we would drive home and then repeat it all over again the next morning.
Starting point is 00:06:26 We did this for months until the software was in a much better shape. And then his business was just taking off. And today, he has a business that's over 50 million a year. And while, of course, almost all of that is just because he's a great businessman
Starting point is 00:06:41 and he's built an amazing business, even he will credit a lot of things he's able to do to being able to do it and support it through ServiceTitan. So, yeah, very bumpy road, but a great outcome in the end. Yeah, explain to me originally, so there's Vahe, you both are from a programming background, is that right? I mean, who does the most of the coding? Tell me how this all works. Today, Tommy, you're talking about who does it today or who did it back then? Today, I know that you're not as involved
Starting point is 00:07:12 in that. So you know programming pretty well still? Yeah. So Vahe and I are both software engineers by background. And early on, we built the product ourselves. It was literally half him and half me. And we did this for several years. And then ultimately, we hired engineers and slowly, they moved this out of engineering. And today, they don't even let us touch the code. They forbid us from touching it. I mean, how many employees... You guys are growing so fast and you said you doubled this year,
Starting point is 00:07:46 your goals to double next year. Tell me a little bit about the growth and the trajectory you're on right now. Yeah. So interestingly, we hired our first employee in 2013. Matt, for those of you that know him, he was the first person that joined the team. And that was in 2013. Today, we have almost 550 Titans at Service Titan. And the company has effectively tripled in size the first% in headcount each year for the next few years.
Starting point is 00:08:32 That is amazing. Let's talk about the... We just went on the great tour. You guys had us out there. What do we call that? Pantheon? Pantheon, yes. It was amazing. The first year you guys had that was 2017 tell me a little bit about the plan behind that and what the goal is from from the first
Starting point is 00:08:52 year to the second year what we're expecting next year yeah so much of service titan as a company and as a product uh has actually been built by our customers. And I shared the story about John and how instrumental he was in shaping what our product ultimately looked like. And then very frankly, Tommy, we owe so much to even you and how much you've shaped the growth and evolution of Service Titan as a product
Starting point is 00:09:20 and also our ability to service the garage door industry. Pantheon, our user conference every year, is meant to do a few things. One, it's meant to bring together all of our amazing customers so that they can meet one another, talk to one another about the business challenges and opportunities that they see and lean on one another to help them march forward in this industry. And then two, also to involve us in those conversations so that we can figure out and understand how are their needs evolving over time and what are the next features and benefits that we need to be thinking about and build in order to better support our customers.
Starting point is 00:10:00 And then lastly, it's an opportunity for us to also share a lot of those ideas that we've been working on from the previous year and get feedback we had a little over 100 customers attend our first user conference. And then the second one that happened a couple months ago, we had close to 400 customers attend. And then, of course, next year, we'll want to do it even bigger and better and have probably 800 or so customers and have the events be even more productive and valuable for everybody that makes it. Yeah, it's amazing what goes on there. I kind of consider it last time I talked to you, it's like a little mastermind group. You've met so many people and we're so free to tell each other. What I found about the HVAC industry, which is now plumbing and electrical, that's where you you guys started that was the base of the growth uh what i found was they don't mind helping each
Starting point is 00:11:10 other you got next star which is a great community of uh experts to teach you how to book calls and just sell service agreements hire tickets and uh what i found was for some reason they don't find each other competitive they're willing to share and tell secrets. And I don't mind telling Roger guys my stuff. Obviously, that's what the podcast is about. But at the same time, I noticed that they're so motivated to grow to be so much larger in their city. Whereas my kind of growth patterns lately has been just I want to plant a seed in as many areas as possible because I know it takes two years to water and nurture that seed. I'll continue to grow a little
Starting point is 00:11:51 bit slower in each area, but service site has really allowed us to have a good grasp of what's going on in these other cities. And that's why, and I think we could have been really, really big in Phoenix and Tucson. We were before we started, but now we're able to grow 12 states. We've got 225 employees. And the interesting story that the listeners probably don't know about is I had a guy named Eric who consulted us for a while, and he came from Direct Energy, which is the largest franchise. It comes from One Hour Air, Mr. Sparky, and Benjamin Franklin. So there's a large, large, large company. And it got started a long time ago by Jim Abrams and Terry Nicholson and all those guys. Large, amazing company. And Eric came on and said, Hey, I said, Eric, I'm getting ready to
Starting point is 00:12:36 switch CRMs here in the next six months. But I'm thinking I'm going to go to Salesforce and get something completely custom. And he's like, dude, you're going to spend like so much a user because you take all these pieces and all they do is integrate into each other, but you're paying, you know, software as a service for each one of them. So the user, if he goes up, up, up, up, up, and then you do with the accounting CRM and the integration, the APIs. And so I said, well, what do you think? And he goes, well, there is this one called service Titan. So, I mean, I fell in love with it. I looked at it and I said, this is the one. And then I made the phone call. And unfortunately, I didn't get you to start out with. So the guy said, ah, he goes, garage doors. He goes, sorry, we the first thing I did is I found you on LinkedIn and I wrote you this long email and we should find that. It might not have been that long, but you said, okay, tell me a little bit from your end what was going on because I think you might've started some other stuff in the
Starting point is 00:13:35 beginning and said, we need to focus. Tell me the mindset and how we were able to get around that because it was the best thing that's ever happened to this business for me. A1. Yeah. I still have the, the LinkedIn message. So we have a fanatical focus here at service Titan on making sure our customers are successful. And if we are not convinced and certain that our product is a good fit for someone,
Starting point is 00:14:01 we will not sell it. Even if they're willing to pay money. This is not about us taking money from people and running. We want to make sure every one of our customers is very successful with our product. And back then, Tommy, when you reached out, we had only validated at that time that this was a really good fit for plumbing, HVAC, and electrical. And that doesn't mean that it wasn't a good fit for any other industry. It's just we hadn't had the time to actually go and work with companies in those other trades to validate that it was a good fit. And so when you reached out to our team, our team is trained not to sell unless they're certain of success. And so by default, they said,
Starting point is 00:14:40 we haven't opened up into the garage door industry yet. And then when you messaged me, yeah, I thought about this long and hard. And I was thinking, well, look, whenever the time is right, we're going to want to find a partner in the garage door industry to help us validate that this is the right product. And if there's anything missing, they'll be the right person to help us figure out what those things are that we need to build. And from your email, it was very clear to me that you were that right partner. And even if we weren't thinking about going into Garage Door at that time, you can't choose timing in all cases. And we had the right partner. And I made the decision that I wanted to take the chance and move forward with you.
Starting point is 00:15:22 And it turned out to be one of the best decisions I've ever made. You figured out exactly where ServiceTitan worked well for garage door industry and what needed to be tweaked. And you helped us make those tweaks. And then, yeah, I got to give it to you, Tommy. I've been very grateful how many garage door companies you've referred to us since then as well. Yeah, no, you guys are the company that does it. I mean, I think we've got a good opportunity here. And I love it when somebody jumps on service time because quite honestly, most businesses do not think about their
Starting point is 00:15:56 exit strategy. But when you are thinking about an exit strategy, I know Precision is getting on this. We've got Sears that is getting on it. So you get some of the big boys on it. All of a sudden, you become much more appealing for a company because you're taking over systems you already know. And you're building a little bit of an infrastructure, which adds to the value, more importantly, the multiplier of your EBITDA, which we don't have to go down too much into that. But I mean, you sent the freaking team down here. I think it must have been 10 people. You had Matt, you had Amy. I mean, you guys sent down a lot of people. Normally you don't send that many, do you? No, definitely not that many, but this was our first entry into garage door and we wanted to
Starting point is 00:16:36 do everything we could to make it a success. That's amazing. I mean, I think the first month Adam broke the price book about 10 times because we were loading so much stuff. But no, it's amazing. I mean, the software, what I love about it is there's so many things that you guys have thought about and tweaked. And the biggest thing that you guys do is your focus groups and you take people and you literally figure out the best practices. And just, I talked to a guy yesterday, uh, Corey that's on it. And he said, uh, you know, there's some things it's working great. It's the best investment we ever made, but it's not exactly everything that's on it. And he said, you know, there's some things,
Starting point is 00:17:05 it's working great. It's the best investment we ever made, but it's not exactly everything we used to do. And I said, you know what? Let me just save you a bunch of time, Corey. I said, you're going to have to change your business a little bit when you get on this. And I think that's the hardest part is so many people say, this is how we've done it since the beginning of time.
Starting point is 00:17:22 We're not going to change. We need to have them change their software. So we just got done rolling out. We used to have all these separate shenanigans with payroll. And it really is shenanigans to make it work for the techs. And finally, we said, let's give a lot of carrots and let's give some opposite of carrots. You know, we're going to have to take some stuff away. But it made life so much easier.
Starting point is 00:17:42 So that's one thing that the listeners out there, if you have an opportunity to get on a CRM as advanced and as great as ServiceTitan, it can't do everything. It can't do like, it's a great software, but the best businesses in the world that are in the home service niche help to define what the best processes are. And I think we talked about this,
Starting point is 00:18:01 from your perspective, what would you tell somebody that gets on that has all these special little tinkering they do on things and just how to change that mindset? Yes. So we see this all the time. Customers will get up and running on Service Titan and then they'll ask us, how do I do this one thing? Why do you want to do this one thing? And I'll say, well, look, in my old software, I used to do X, then Y, then Z, then A, and B, and C. And I need to do that again with Service Titan.
Starting point is 00:18:30 And then after deep conversation, it turns out the only reason why they're doing all those steps and jumping through all those hoops is they had limitations in their old software. And they had to implement all these workarounds to get something done. And then it turns out, there's a much better way of doing things in business. And it's a short path between A and B, and it's one click and one step. And we'll show them how to do that in service time and explain why that is a better process. And then in most cases, they agree that this is the right way of doing things. And that's a magical moment for most people. That's a very common thing that we experience because of the limitations they used to face in their previous software. I mean, I can't express enough how important
Starting point is 00:19:15 a CRM is, which is a customer relation management system. But tell me the difference between, and I hear this a lot, and I kind of want to hear your definition of an ERP versus a CRM. And I'm not trying to confuse the listeners, but we hear these terms thrown out a lot. And I just want to give myself and some of the listeners a solid foundation of the difference of what that means to you. Sure. So in short, a CRM is meant to help with a lot of the customer facing parts of business. Things like helping you sell better, helping you provide better service to your customers. And then ERP typically is meant for more of the back-office functionality. Things like processing payroll, managing inventory, tying into financials, and so on.
Starting point is 00:20:02 But ultimately, look, all these fancy words, whether CRM or ERP, technology isn't meant to be some fancy, shiny thing. Technology is just simply about improving business. If you as a business owner, or as a manager, or as an employee, want to help the business get more customers, want to help the business increase sales, want to help the business get more customers, want to help the business increase sales, want to help the business streamline operations. So you automate things and lower costs and you don't need to hire a whole bunch of people as you grow the business to take care of all the back office
Starting point is 00:20:37 paperwork and invoicing and managing payroll and managing inventory. Or if you just want to be able to very easily manage the business and not have to spend a lot of time tracking things and running reports and crunching numbers. If you want to simplify business and be more successful in business, all technology is, is a conduit through which you can make that happen. It's what helps you have a better sales process. It's what helps you track your marketing spend to tell you which marketing investments are working and which are not. It's what allows you to automate all these tasks and manual processes you have in the office. So you don't need to constantly add headcount as you scale. And it's the thing that at the end of the day, you're able to look at, you know, one report that tells you exactly how your business is doing in every
Starting point is 00:21:28 part of it that's important without having to do a bunch of number crunching or hire a bunch of people to do the number crunching for you. That's all technology is. It's not fancy software. It's just, it's a business enable. Yeah, but it allows you to see where your technicians are at. It allows you, I'm just going to go over some of the highlights for me. I can tell you that I know how long it takes EdJ to do a spring job on average because it tracks that. It tracks where they're at, how long they've taken, how many breaks they've taken. I know everything about where my technicians are at. My customers know where my technicians are at, number one. Number two, I can tell you the average margin, sales numbers, close ratios,
Starting point is 00:22:06 booking rates. I have over 3,000 tracking numbers that tell me each and every campaign. And I renegotiate the crap out of my contracts with my advertisers. I mean, literally, I'm paying less, and I'm sure there's going to be a lot of grozder guys out there, but I dare to say I'm paying less than anybody in ValPAC. And I met with the CEO the other day and he said, Tommy, we want to work directly with you with our whole team to start doing some crazy stuff with ValPAC just to prove a point. And I said, well, what is it? He said, I'm going to allow you to do up to four different pieces of mail within a zone.
Starting point is 00:22:38 He goes, I'll sign a non-disclosure agreement, which he already signed, a mutual one. And then he said, we're going to take all your old clients. We're going to send them a different offer. We've got the ability to do that and doing all these things for us, but it wouldn't be possible without service site when he, you should have seen a look on his face when I showed him service site and he just lit up like a Christmas tree and said, okay, we want to work with you. This is amazing. You're going to help prove a point for our business. And in return, we're going to help you. So the point is, and I have not even, we're going to help prove a point for our business. And in return, we're going to help you. So the point is, and I have not even, we're going to dive into a lot of more features and benefits.
Starting point is 00:23:10 But overall, I can tell you, anybody can make it work with old invoices. And a lot of people there are saying fancy schmancy, websites, Facebook, all this different things. But I got to tell you, last year, more millennials bought houses than baby boomers. And the whole paradigm, the shift that's happening right now with the buying decisions are just so crazy between Facebook, Yelp, Instagram, Pinterest.
Starting point is 00:23:35 I mean, this stuff's going crazy. So I just feel like those who don't jump on, it's a cliff and it's going to happen faster. There's a thing we always talk about linear steps versus exponential and it's exponentially happening. Like if you look at a computer chip, it does a hundred times more than it did last year. I mean, I think solar in the next few years is going to be so much more advanced. And I just, I just plead with people. I'm like, look, I don't get any money from you if we sell service tight, right? I just, I love the platform for people. But the point is, if it's not ServiceTitan, some businesses do not fit ServiceTitan.
Starting point is 00:24:09 You know, if you've got a... I know there's certain regulations and certain things. I don't know. For example, do you guys do bug companies? I think you guys have some problems with certain things for bug spraying. I don't know. We do. Again, it's not a focus area.
Starting point is 00:24:23 But there have been guys similar to Tommy Mello who've really wanted to get service-tied and forward. And so on a limited scale, yes. Who would not be? Because look, I mean, if I've got three technicians, is service-tied the right fit for me? I mean, I'm just wondering what's a good fit, what's not a good fit. Yeah. So today, and this will change in the future, but today, if a company has only one or two technicians, we have not gotten the same level of success as we've had with people that have three or more technicians. So one or two is not a perfect fit today. And if somebody doesn't have any office staff, it's also not a perfect fit because we need somebody in the office to go through the implementation process with us and support
Starting point is 00:25:08 the software. And then also, if you're doing a whole ton of new construction, it's not the perfect fit. And if you're outside of US and Canada, again, not the perfect fit right now. So the perfect fit today is three or more technicians with at least one person in the office in U.S. and Canada and is in plumbing, engaged back electrical or garage door and does mostly service and replacement work. But that may all change. Well, yeah, you guys are growing. You guys are just in this growth mode. It's amazing. So why is it that you guys and there's a lot of companies going this this route and it was different when I got on, I had to change, but why is it that
Starting point is 00:25:49 dispatchers, and this doesn't have to happen. It's not criteria to use the software, but dispatchers and your call center reps are separated to explain. And I believe in it. And I can talk a lot about this, but I want to hear what you have to say about why you guys decided to do that. I think it goes back to specialization of labor. It's easier for somebody to become a master of one role than it is to become a master of two roles. So if I think about all the different reasons why you might specialize, that is probably number one. Smaller companies who just have one person in the office, I mean, at that point, you really can't specialize because you only have one person. So they got to do both. But maybe to ask you, why do you specialize your roles between the call center and dispatch? I mean, from my perspective, dispatching is
Starting point is 00:26:42 kind of an art. It's not really a skill base. There's so many things going on. You got to be good at puzzles. You know, we do personality profiling. We try to find these people that can handle a lot of things going on at once. So you're dealing with customers, you're telling them they're going to be late. If a priority one comes in, it bumps ahead. I mean, your dispatchers in your business single-handedly can double the profit of the business. And they can single-handedly, like take for example, last night, I'm sitting at about 945 looking at the schedule. And I'm looking at my number one trainer. And I would say I have several great guys. So this guy's just been on fire. He's been selling a lot of doors. He just goes to high-end homes and he's
Starting point is 00:27:19 able to sell really nice doors. So we're not ripping anybody off. We're ethical. We've got our morals in the right place. But the point is, this guy's training somebody and I see warranty call, warranty call, site check. And I looked at six of his jobs. None of them were opportunities. And I called the dispatch manager and I said, this cannot happen. But the point is, if he would have ran those jobs, he would have came out still making money. But by just switching that, I mean, I'll tell you, he had a $12,000 a day the other day. And it's not uncommon when you sell high-end products, like we do custom garage doors to have, I mean, one of my guys has 60, $70,000 days. Cause he's
Starting point is 00:27:54 going to apartment condo communities. But the point is you do that. I always say, are you going to let Tom Brady sit on the sidelines during the super bowl? Are you going to put them into play? I mean, that's exactly right. So dispatching is definitely something where you excel and you move up to dispatch. And call center, don't get me wrong, I think if you're great with customers and you're customer facing and you just care about people, it's a difficult role, but it's not as many things going on. So I think the dispatchers do great. We got six dispatchers. I think we've got 22 call center reps. So dispatching is something that I strongly recommend switching. And you're absolutely right. You can take a shotgun approach. You can have a lot of people wearing a lot of hats, but as you grow, specialize, a rifle shot is where you want to go.
Starting point is 00:28:39 And you want to have, you know, we've got a very, very sophisticated organizational chart that there's a leader in each department that I got to look at and I got to expect them to do good and they make mistakes. But the big thing is don't keep making the same mistakes because that's when I get annoyed. Yes, that's my role. It's two different responsibilities and two different skills. You know, call center agents, they need tremendous empathy on the phone.
Starting point is 00:29:05 And then dispatchers, of course, you need empathy because you ultimately communicate with customers too. But the primary need there is this business chess that you're talking about that they do in their head. Absolutely. And it's hard to test for that. But the people that do it well, it's like they're very hard to replace. And it can make you a lot of money. And I think these small things, I'll tell you what's interesting. This is just a testimonial to Service Titan. Last week, I was dissecting some numbers because it's so easy to pull the numbers out into Excel and organize them. And I noticed that one of my worst close ratio guys, his name's Daniel, had the second highest margin per call, even the ones
Starting point is 00:29:45 that he wasn't closing if you average those in. And so I looked at it and I dissected it and I said, oh my God, I called Daniel and I said, you're selling by far the highest things with margin. Everything you sell has the most margin. And I said, I had no idea how much more profit you get per opportunity, even though we got to work on your close ratio. So he's brought it up. He's actually brought it up 18% this week, which is phenomenal. But to be able to work with him on those little things.
Starting point is 00:30:11 But I started telling people, look at what he's selling because he knows that his paycheck depends on margin. So when we made those changes, we hit a record day Tuesday. We beat the record on Wednesday. And if today happens, we're like, it's looking, we're going to beat that record today. And one thing I've been trying
Starting point is 00:30:30 to do is call each technician up and make sure they understand what margin really is and what gets in the way. Because one of the things the guy told me yesterday in Michigan, he says, Tommy, what if another company came in and they gave a really, really cheap price a year ago for a new door? I said, what are the three questions we always ask? How long have you been in the home? How long have you stayed in the home? And when's the last time the door was looked at? They say they had a company come out there last year, but nobody compares to our quality. If you're going to sell, it's like saying somebody's got an old 1972 Volkswagen bug, we're selling you a brand new Tesla. I mean, let's talk about apples to apples here. But the point was just the phenomenal
Starting point is 00:31:06 reporting you could get from service tight. And it's just to the next level that we changed so many things because of it, the booking rates, just to see that. And you know what the most annoying thing is, is I go into a call center and they say 90%. And then I look at them and then I listen to the calls and they're like, Oh, that was an out of service area. And I'm like, why the hell are you getting calls in an out of service area? Let's figure out why you're getting those calls. And then the call center rep goes, well, we were booked out. There was nobody to run the calls. That's not my fault.
Starting point is 00:31:36 I shouldn't have that count against me as a CSR. I'm like, but it's not you. We need to know that we're understaffed in that area. This is amazing how many people say that that shouldn't count towards our numbers. And I'm like, so I don't really trust when most people say they're at 90% plus. I'm like, there's no freaking way most of the time. But tell me your experience with that, because that's a huge part of the business, is the call center. Yeah. And real quick, Tommy, I just want to highlight how much opportunity there is in this industry and how many misconceptions there are.
Starting point is 00:32:08 One of them, you talked about the average tickets your guys are able to pull. And you talk about how it's all done in an ethical way and so on. I'll tell you, as a consumer, I experienced this myself. A year and a half ago, I had one of our customers come out and quote me on new air conditioning system. And he didn't quote me on the XC25, the top of the line Lennox air conditioning system. And I caught it and I asked him, I'm like, how come you're not offering me the XC25? And he's like, well, it's too expensive. And I don't know if it's worth
Starting point is 00:32:45 the extra money. And I told him, I said, look, let me be the judge of that. Your job is to diagnose the problem and show me the different options. And that might be the most economical option, the band-aid approach that'll get me by for a few months until I scrap together more money to be able to do something long-term or more luxurious. Or it might be, I want the greatest amount of comfort or the best aesthetic or whatever it is for my home. And this is the area where I want to invest most of my money. And ultimately, I got them to finally offer me the XC25 and that's the one I bought. Going into any home, none of us should have bias and prejudice and decide what the customer will want. Give them all the options and let the customer pick. And as you've seen, you can raise your average tickets so much by doing that and doing it in a very ethical way.
Starting point is 00:33:40 You are not forcing the customer to do anything. You're giving the customer freedom and choice. Right? 100%. And with you, I think that you've had a lot of challenges in service Titan. I mean, obviously, you've got a lot of weight on your shoulders. You have investors. There's a lot of things going on behind the scenes that I don't think people realize. Tell me about one of your largest challenges in the last year and how, maybe not overcome it, but how you were able to go at that problem and start to work on solutions rather than dwelling on the negative outcome. Yeah, certainly the biggest challenge is keeping up with all the
Starting point is 00:34:16 evolving needs our customers have and all the opportunities ahead of us. And whether it's the things you mentioned, where it's inventory management, or integration with larger scale accounting systems, or it's this upcoming service-tightened phone system, or service-tightened payroll, or what have you. The biggest challenge there is just having the necessary number of engineers and the quality of those engineers. It's very expensive. Engineers are some of the best paid people in the country today. And there's a huge shortage of them. And it's very hard to find talented people. And this is the number one challenge for us. And we work really hard to make this the place they all want to work and to pay them very competitive salaries. And all that requires millions of dollars. And hence, you know,
Starting point is 00:35:07 at this point, I think we've raised like 160 million, but that's how expensive it is to build high quality software that we think our contractors deserve. And yeah, that's not to say we're perfect. We were absolutely none. There's still a lot we have to improve, but man, it's a very expensive endeavor, but we're getting through it together. You said something really interesting that I think applies to all businesses. And I think there's a lot to be said about paying well, but there's a lot to be said about the culture. So, you know,
Starting point is 00:35:37 when I go out there to California and visit you guys, and I think a lot of software companies do this, but you've got, you know, M and M's and Skittles and protein bars and sodas and waters and beer and everything you can think of that you just give to the employees to go at it. Tell me how you've created the culture there and what more than just pay does someone need to create to attract the best employees? Yeah, great question, Tommy. And I actually see this becoming a bigger issue just in home services. And a lot, which is to create a very successful business, take great care of our customers, and in doing so, ultimately earn a financial profit for ourselves. And I want the highest performance team to maximize that outcome. And if you think about
Starting point is 00:36:40 high performance teams, whether it's in business or it's in sports, and take your pick of any great sports team, there are a lot of commonalities in how high performance teams are run. And namely, there are a few things such as, we all have this shared vision of where we want to go, and a shared mission and calling of why we want to do this. It's more than just money. We believe in something much bigger. And we all sacrifice our own personal interests to some degree for the benefit and success of the broader team. We all have each other's backs. And it's these specific behaviors that you want out of the team that help create this high performance environment. And so when we think
Starting point is 00:37:26 of the word culture, and today it's kind of become a cliche, and everybody mentions, you know, culture, culture, culture, I just translated to, I want a high performance team. And what are the things we need to do to create that environment? So clearly, look, we have the Skittles and the Snickers bars and the protein bars and all that. But that actually is like one of the smallest things that we do. And that actually is one of the smallest things that we do. And that's just simply so people, if they want to eat something, they don't have to go out of their way to get it. The things that we do that I think are much more important. One is we have a shared set of values and we only hire people that live their lives and practice
Starting point is 00:38:03 their work in accordance with these values. And for us, by the way, those three values are one, this concept of changing lives. Everybody that works here doesn't just work for a paycheck. They truly are motivated by being able to help improve the lives of our customers in the field. Two is this notion of achieving the extraordinary. We don't just want to be a good extraordinary. We don't just want to be a good company. We don't just want to be a great company. We want to achieve some kind of outcome that is truly extraordinary that very few people get to achieve and experience in their lives
Starting point is 00:38:35 and create a very special journey. And that's what motivates people to set really high bars and take on really ambitious goals and find ways to achieve those goals. And then the third is this notion of being a great team. If you look at Service Titan, out of the 550 people, there's probably 550 individual rock stars who are all really good at what they do by themselves. But what makes them truly special is that they're also able to operate together as a great team and as one unit and sacrifice themselves for the collective good. So it's a shared set of values. And then it's also how we reinforce and remind ourselves of these values to make sure that they are embodied at all times. And we do that through all kinds of things. At all hands, when we have our all-company meetings, we share stories of how certain individuals went to great their peers for the good of the team.
Starting point is 00:39:45 It's all these reminders that help reinforce how we operate. And then, of course, we try and lead from the top. And I try and embody those same values myself in everything that I do. And certainly, my leadership team embodies it as well. And when people see that this is the only way to behave, they very quickly make sure they're behaving similarly or they realize this is not the right company for them. And then we help them find the right company for them. But without culture, you do not have a high performance team. And without a high performance team,
Starting point is 00:40:18 you do not have success. And as you know, Tommy, it all starts from the top. And everything I've seen about your company in A1 Garage, you guys have done an absolutely amazing job of hiring the right people, reinforcing what it takes for you guys to be successful and making sure everybody plays by those same behaviors and attitudes in the business. Yeah, I mean, it's a constant struggle when you're...
Starting point is 00:40:43 We've doubled and our goal is to... You know, I like to shoot for the stars. And if I mean, it's a constant struggle when you're, we've doubled and our goal is to, you know, I like to shoot for the stars. And if I land on the moon, I'm going to try to triple next year. But if we double, I'm happy. Anybody that's able to double, I don't care if you're a five person, five technicians, it costs money because employees cost money to retain, to train, to recruit. We've got two full-time recruiters right now. I mean, not a lot of businesses and I'm not patting myself on the back, but we spent a lot of time finding the right people. And it takes a lot of effort. We've got two, Darlene and JJ that do an amazing job. And, you know, and I will say this, Sarah, you've got Amanda's our account success
Starting point is 00:41:19 rep. And she's absolutely phenomenal. I mean, the sweetest, nicest person. She's just absolutely amazing. And Adam deals with her on a daily basis. Allie, the first time I met Allie, she's just funny. She's spontaneous. We still communicate all the time. Jackie came out here to help shoot videos. Matt, I call him all the time. Amy, I forgot my computer. I left it at the, uh, the, when we broke out into those groups. So I left California without my laptop. She had it mailed back within three days. She was amazing.
Starting point is 00:41:48 I mean, Patrick, I mean, everybody with your company is Nick. The people there, whether it's from sales to account management to just the photography team and the social media. I mean, you know, when I walk around at those meetings, the Pathion, people are like, oh my God, I see you every day on my Facebook feed. But it's so much fun. When we go there, we just have a blast and you guys really, really take care of everybody. I want to dive into a question here that... And I won't keep you much longer.
Starting point is 00:42:19 We'll go into a few more and then I just got to close and stuff. But do you got a few more minutes? Absolutely, Tommy. Okay, cool. So you've seen so many successful businesses and I'm sure you've seen businesses based on their scorecards and different things that aren't doing so well. And this doesn't have to be a single one thing answer,
Starting point is 00:42:36 but what do you think the biggest, most effective way to change the home service business if somebody was just to get on service tight? And obviously, let's not even go into the software side of it, but what are the largest things that you see people, they're not beginning behind the eight ball on it, they're just missing opportunities. Where can they correct the people that are listening right now? And if they're going to change and focus on a few things, what are those? Yeah, so maybe if we can start at the beginning of
Starting point is 00:43:03 the funnel and then the beginning of the funnel and then end at the end of the funnel. Yeah. Beginning of the funnel, it all starts with how you attract customers. And most businesses invest in marketing and advertising to attract new ones. The big problem there is you invest in a whole bunch of things. You invest in Yelp and you invest in Google AdWords for Water Heater in Phoenix and No Cooling in Tucson and Garage Door in this other area. You invest in newspapers and radio and Valpak and so on. And it's really hard to know which one of those investments is bringing you customers and how valuable those customers
Starting point is 00:43:45 are. So traditionally, what everybody's been able to get is call counts. They use call tracking. They advertise a unique phone number in each one of those ads and they see, I got 5 calls from my ValPack ad, 10 calls from my Google AdWords, 3 calls from my newspaper ad. Problem is they have no idea how much those calls are worth. Did those calls get booked into appointments? Did we actually close a sale? Was that a repair job for $100? Or did we sell a new garage door for $15,000? Nobody knows. So one of the biggest areas ServiceTitan has been able to help with is by automating all that and actually giving you marketing, tracking, and telling you how much revenue you generate from each one of those ads. And if you know how much revenue you make and the margin you make, then you can decide which advertisement is worth doubling down on
Starting point is 00:44:34 to get more customers and which is a complete waste of money that you can shut off and save the money. So that's the first area. The second is also not just advertising to your new customer base, but advertising to your existing customer base to generate repeat business. Most companies I've seen do this shotgun approach where they just blast one mailer. Typically, it's a newsletter that goes out to their whole customer base. I don't really think that's very effective. Today, we're in the world of personalized and targeted advertising. And Tommy, you are exceptional at this. It's all about identifying, okay, these are the customers that, for example, haven't serviced their garage door in the past five years. And we need to send a targeted
Starting point is 00:45:22 email to them that says, Hey, Tommy, notice you haven't serviced your garage door in the past five years. Here are all the problems that could happen if you don't service this soon. Here's a $30 coupon to have someone get out there and service you. So that type of what we call marketing automation or targeted marketing is also a big opportunity to bring back customers. So that's all related to marketing. The next area is when those customers call and you're on the phone with them, it's what you talked about. The importance of making sure you convert each and every phone call into a booked appointment.
Starting point is 00:45:57 Most companies lose so much business either because their call center agents are busy and don't pick up the phone, or they don't provide the right level of empathy and service on the phone to be able to book that appointment. Or customers have objections and questions like, how much is this going to cost? Or when's the tech going to get out there? And they don't really know how to overcome those objections to book the phone call. And being able to plug that leak and book every single that call comes in is typically a very material increase,
Starting point is 00:46:30 ultimately, in business. Then it's the next step in the dispatching process. It's what you talked about. You got to dispatch for dollars. You got to assign the right tech to the right job at the right time to maximize sales. And there's all kinds of opportunities to increase your revenue by doing a better job at dispatching.
Starting point is 00:46:49 And then finally, it's when the tech is out there. Today, you've got to be able to offer customers different options. And many of your customers you'll find will pick the more expensive options and increase your sales automatically for you. You got to give technicians tools to help improve their close rates. One of the things we've done, you talked about this, Tommy, is that visual price book, where a tech can actually show the customer pictures and videos of the product or service that they're considering.
Starting point is 00:47:21 Another thing is our integration with financing, where if a customer is considering a larger purchase, a $5,000 replacement, and they don't want to put on their credit card or write a check, within 5 seconds, we can get them automatically and immediately approved for financing. And that increases their buying power and that gets them to typically buy higher ticket items. So as you see, just through the entire business funnel, from marketing to booking calls to dispatching to selling in the field, every step of the way, there's opportunities to improve sales.
Starting point is 00:47:56 And the law of compounding numbers is that if you improve your marketing by 10%, you improve your call booking by 10%, you improve your dispatching by 10%, improve your close rate by 10%, and your average ticket by 10%, those things compound and you effectively double your business. You will almost see 100% increase in business by just tweaking each one of those things by 10%. And that's something you've done really well and look at the gains that you've seen. So what's interesting is right now we're developing a KPI calculator that you
Starting point is 00:48:31 can plug in your numbers and you can know exactly your opportunity cost of by switching your booking rate, conversion rate, average ticket, all the different things and show somebody how much more money they can make. But not only that, it tells you how much money you need to spend in marketing. So it goes into acquisition costs. It teaches you all these things that I'm super excited about. But I want to add, when I was at these conferences, you know, Ara and his team do a great job
Starting point is 00:48:58 of picking super amazing speakers. And we talk about booking rate. And Brigham Dixon wrote a book pattern for excellence. He coaches people, power selling pros, and he helped contribute to the book as well. Ara, you're helping with the home service millionaire book, put it together. Jamie DiDimonaco, listen to this. This guy's got 14,000 service agreements. And he talked last time about how important the average service agreement will spend three times more money over the lifetime value of the customer. I got Darius Levers from
Starting point is 00:49:30 the first time we went to Pathion. He talked and he helped contribute. And the coolest thing about him is he loves financing and he teaches exactly that everybody will buy for financing, but there's four different types. And the biggest obstacle was the fact that your technicians don't believe that financing actually works, but it's the biggest misconception. So I just think it's amazing what I've been able to do through Service Titan with the Home Service Millionaire
Starting point is 00:49:56 and this podcast, because every one of those guys have been on the podcast and they got it. You know, we've got this commonality now and it's service-type. We talk about the best practices. Tom, you've got the who's who on your podcast. Look, at this point, I have 3,000 of the most successful
Starting point is 00:50:15 home services businesses on service-type. Jamie DiDomenico that you mentioned, he is the king of service agreements. And you have him talking about how to build and launch a very successful service agreements program. There is nobody better in the world than him at this. And then you mentioned Darius at FH for the king of financing. I remember at our first user conference, he gave us... It was the best session at the whole
Starting point is 00:50:45 conference by far. You had every business owner just engaged, trying to understand how he made $6 million more because of this amazing financing program that he implemented. So just a wealth of knowledge for everybody in the home services business and huge gains for anybody that implements it correctly. It's just amazing because when my guy went and did this amazing day, the other day, he goes,
Starting point is 00:51:13 Tommy, he goes, every one of these jobs I did through financing. And what's the most amazing thing is he goes, Tommy, do you realize that it takes less than 60 seconds because service Titan actually integrates into green sky. And obviously you guys do several things. You guys allow us,
Starting point is 00:51:30 I just can't tell you enough how much this means to the business to not have to go through all these channels and make all these phone calls to get, it's just so simple. It's like bing, bang, boom, you're qualified. You're good. And then they're like, well, how much? And then we found out a lot of these people are trying to go to home Depot and use their GreenSky stuff. It's just funny because now that they have access to the money. But more than anything, I love the dashboard. I love the fact that I could see this is so I can see a daily deposit report. I can see how much came through GreenSky, how much went through credit cards. Even with taking a picture of the checks,
Starting point is 00:52:03 it's just because we're in 12 states, 20 markets, it's so nice that we're able to deposit that money in real time. And the time value of money is it gets deposited that day. And the customers are just so wowed over the fact that you guys have an Uber-like feature. So here's something, a little hack that I did on your system. And it's not a hack. It's just an idea I had. We sent a profile. Your system automatically text messages the customer a profile when the guy
Starting point is 00:52:29 dispatches himself to the job. And it says, hey, my name's John. And a little bit about him. And it's a good picture. Well, I added into that a little message from the owner. So it's a little clip. And it's just going live here next week. But it says, I'm looking at my notes right here. It says, by the way, thank you so much for choosing A1 Garage Door service. My name is Tommy Mello. If you have any problems whatsoever, I need to know about them because we expect five out of five service. I also want to know if we do great. Here's my email and my phone number. The phone number goes to a VoIP line. That's a, I can listen to it cause I can't take five calls from every customer.
Starting point is 00:53:04 But more importantly, I say, by the way, I want you to find out or know a little bit more about some of the products we offer. We have decorative hardware. We have storage unit solutions. We have flooring epoxy solutions. We have lifestyle screens. We have garage door armor. So it shows a 10 minute reel of each of them. And what it's doing is most of my guys don't talk about these things. The customer doesn't even know we offer them. What it's doing is most of my guys don't talk about these things. The customer doesn't even know we offer them. So the fact is there's three ways to make money, right? You get more customers, which is marketing.
Starting point is 00:53:32 You keep your customers coming back, which is those service agreements that Jamie talks about. Or you charge your customers more money. And if you're going to do it ethically, you just got to sell them different types of products like storage solutions. My acquisition cost is minimal to get into a home for storage solutions versus garage stores because it's, it's kind of, it's just not as a convoluted part of the, it's just,
Starting point is 00:53:54 the business is just, there's not a lot of competitors there. So. That's brilliant Tommy because there is no consumer out there that cannot benefit from more products and services that we all have to offer them. It's up to them to decide if this is the right time and the right investment for them to exchange money. But it's our job to make them aware of what we offer and let them decide. And anybody that comes into my home, I would love nothing more than for them to identify all the things that they can take care of right now. So I don't have to think about it again. So I don't have to call them out and take time off of work again, two weeks from now, when there's a new problem or there's a new unsolved need. And that's a fantastic way that you've decided to do
Starting point is 00:54:41 it. Yeah. And that's the problem with the mindset of the technician is they go, they're already upset that they're spending this money. And I tell my technicians, do you love to spend money when something breaks in your home? Are you supposed to be excited about it? But you definitely want it to get fixed right. And you got to give the customer the opportunity to say, look, I can band-aid this.
Starting point is 00:54:59 And I don't say this is a cheap fix. I say it's a band-aid. And if it's the best option, let's say, Ara, we've got an amazing opportunity for the best investment we could possibly give you. An investment is you're going to get money back from it when you sell the home because it's a brand new top of the line unit. There's some value there. So, I mean, I love this stuff and I really could talk to you. I mean, maybe when you take me to Armenia, we could have another long conversation about this stuff. You want a new market to get into? You want to make it 21 markets?
Starting point is 00:55:28 Yeah, I do. I would love to go there. You just got back from there, by the way. How was that? Tell me a little bit about it. Absolutely. So for those that have heard, Armenia had a velvet revolution six months ago, very peaceful revolution, where 10% of the population went into the streets and demanded that the existing government resign and that the new government take over. And that happened. And the first mandate of the new government has simply been to eliminate corruption. And it's still very early, but from everything we can see, this is actually happening and happening in a very good and positive way.
Starting point is 00:56:10 And there's just a incredible renewed sense of hope and renaissance in the country. But outside of that revolution, for those that go to Armenia, what they will find is the most hospitable, generous, warm, welcoming people that greet all travelers and strangers as family and invite them into their homes and their restaurants and take great care of them. You'll find the most delicious food, whether it's, you know, if you love barbecue, Armenia has an incredibly strong barbecue game. And if you like other types of Mediterranean cuisine, Armenia has that as well. A very beautiful city in Yerevan, very European style. And then also just, yeah, Armenia was the first nation to accept Christianity as the national religion back in 301 AD.
Starting point is 00:57:09 And so it has a very rich history of lots of churches and beautiful places to see and just a very fun loving crowd. If anybody ever wants to go, I'd love to send them any tips. And if I'm there, I'd love to host them myself. Well, definitely. Let me know. I think that's where we should make the next path. So I want to close up here. One of the questions I always ask is, is there any books that have really just you recommend?
Starting point is 00:57:41 I mean, I love the E-Myths. I always recommend E-Myths, the two-second lean, the ultimate sales machine. But is there any books that you know about or read that you just think is a game changer? And it doesn't need to necessarily be in the home service niche, but just any customer experience or just something that changed the way you look at things? Lately, I've been reading a lot of books about high performance teams. There's one that's not very well known that really influenced how I think about my leadership team. And it's actually called
Starting point is 00:58:11 Senior Leadership Teams. And then one that is more in vogue and everybody's talking about it is this book written by two Navy SEALs called Extreme Ownership. And they talk about these six principles of building great teams. And they talk about each principle through a story of real life events in the war in Iraq and their experience there. And Extreme Ownership is an incredibly highly rated and acclaimed book. I think it's like the only book I've ever seen on Amazon that has 10,000 reviews and is still five stars and hasn't even dipped to
Starting point is 00:58:50 four and a half. I love it. So those are two books that I will be picking up and give me one final thought. And then I want to do one more thing at the end of this, but I'm going to put, I'm going to put all the information by the way about service site. And I'm going to put all the information, by the way, about ServiceTite, and I'm going to put a lot of the reasons we use it on homeservicemillionaire.com forward slash CRM. And like I said, there's some small companies that there's other CRMs that fit better. There's certain things that maybe if you don't exactly have, if you're just solely construction, this might not be for you. My point to get our on here was not to push necessarily ServiceTite. It's just to get to know somebody who's growing a billion dollar company that's super successful and has all the secrets.
Starting point is 00:59:28 300 of the largest. I mean, just how many customers do you have right now, Aura? Clients in the home service. 3,000 companies. And they represent roughly at this point, $10 billion of annual transactions in home services. 3,000 clients. And he's going to double next year.
Starting point is 00:59:46 So you guys can only imagine. This is history in the making. And I'm telling you, this is changing the way home service is done. The average plumber, I think, is 47 years old. And this is what we need to start doing is adapting and getting on this train with these guys that are building the future of the home service niche. So tell me a final thought. And then I want to close out with one more thing.
Starting point is 01:00:07 Yeah, you bet. I don't know what final thought you want me to talk about, but real quick, you talked about how the millennials are buying more homes, et cetera, et cetera. I think the most interesting thing I realized is these changing consumer expectations of how they want to be notified when somebody is coming to their house and who is that person and is that person well-rated, et cetera. That's no longer just the millennials. I mean, I think about my grandma. My grandma gets a text message when her prescriptions are ready for pickup from Walgreens. That is not about millennials anymore. Everybody now expects better and they expect different.
Starting point is 01:00:48 And if any home service business wants to be competitive, I mean, look, Tommy, you started this business. Your reputation is on the line. You are known in your community. What do you want to be known as? You want to be known as, Oh, Tommy that provides mediocre service and a mediocre product? Or you want to be known as, yeah, Tommy, the guy that provides the best service in my city of Phoenix or whatever other market you're in. I'm pretty sure you want to be known as the latter. to now meet the different set of expectations that people have, which is when somebody calls into your office, there's an amazing, warm, empathetic voice answering the call. You confirm the appointment. You send a bio of who's coming to the house in a picture. You follow up with a review request to understand how your tech did. You hold your technicians
Starting point is 01:01:43 accountable. You train them well. And then the same with not just the expectations from the consumers, but Tommy, the expectations from the technicians today. And what is the biggest challenge in the home services industry? In the same way that my biggest challenge is finding great engineers, your biggest challenge is finding great technicians. And don't you think they come in with a different set of expectations now where they want an awesome work environment to work in with a great culture and management that cares about their personal and professional success? And management that is going to equip them with the tools they need to do a great job and the tools they need to earn a great living. And what those technicians are expecting is that management is going to equip them with things that are going to help them be productive in the field, that are going to help them close more business and increase their average tickets, right? Things like
Starting point is 01:02:37 the visual price book that you have today or the integrated financing that allows them to sell better. And they expect things that eliminate all these manual steps they got to do. The technician no longer wants to fill out a five-minute application or call a number to get a customer approved for financing. They just want it done automatically so they can move on with their day. They no longer want to do paperwork. With a couple of clicks, they want to create options and an invoice. They no longer want to do paperwork. With a couple of clicks, they want to create options in an invoice. They no longer want to spend five minutes talking to the office to find out where they need to go and what the customer details are and what the previous work history is. They want access to all these things from their tablet.
Starting point is 01:03:18 Everybody's expectations have changed for how business is done. And the leaders in this industry, the most successful companies are going to be the ones that adapt to those changing expectations and service customers the way they want to be serviced and create the right environment that technicians want. And they're going to get all the market share and you see it in your own success time. Yeah. I was talking to somebody the other day and he said, treat your employees as internal customers because everybody says customers come first, right? But they're almost internal customers. And I got to tell you that, interestingly enough, there's a book that talks a lot about peaks and valleys. And I think we were at our valley. I mean, sometimes you can only have seven direct reports to be successful. Sometimes we take on 20 and we got through that. But I think what the goal should be of most companies, especially in the service industry, because that's what I talk about the most is to really focus heavily on when you're hiring people to make sure, number one, like you said, that they're buying into the culture, but retention is so very,
Starting point is 01:04:21 very important. And I think a lot of us lose great people from, you know, retention is 10 times cheaper. And I just find it that most home service companies, the number one problem, especially when the economy is great unemployment so low is getting great employees. It's the hardest thing, but I'll tell you, if we just took the other day, I was talking to an advisor. His name's Al Levy. He does amazing work for us. And he said, what's your number one challenge?
Starting point is 01:04:49 I had a few of them, but obviously compliance, writing people up and really holding them accountable for me is a big deal. And I'm not great at it. But I said, the biggest thing is the bottom 20 percent. I said, if I just replace them and put them in the 80 percentile, it would mean about $7 million a year for me. And regardless of the money, regardless of the money, it's look, we're all trying to make a company work here because it's providing a lot of, you know, the average person has two kids and a wife or a husband times the 225 people times four, we're providing for a thousand people. Yeah. It's just interesting to look at it that way. There's a book that I'd recommend to everybody. And like I said,
Starting point is 01:05:28 this is just a book that when I was talking, he made me think about it. It's called raving fans. It's a revolutionary approach to customer service. And I'll tell you, it's such a simple read, but it explains what an amazing customer experience is all about. And it's so easy. You can read it on a plane and an hour flight, maybe a two hour flight. But, uh, last thing I wanted to go into our, uh,
Starting point is 01:05:49 is you had an amazing experience happen when we were at Pathion and you read it on stage with that client, that customer. And I just wanted to let everybody hear how amazing this could be to change your, your life when you do get organized and you see the facts, you're able to make these changes within your company. Yeah. Pantheon was one of the best experiences of my professional career. Just like the emotional journey I went through seeing so many customers there and each one talking about how Service
Starting point is 01:06:20 Titan has impacted their lives and made them more money or given them more time with their families. If I met 50 customers, personally, probably 47 of them told me about one of these experiences. And to what you're referring to, Tommy, I was about to walk on stage to deliver the closing remarks to finish out the conference. And my team had gone through nights of writing my final speech. And right before I got on stage, I got an email forwarded to me by one of my sales reps. His name is Mark. And I read the email. And then I called my team and I'm like, guys, just a heads up. I'm throwing out the speech that you've written. And I'm just going to wing it because something very moving has happened. And they were all freaking out. But I got up on stage and in front of all of my customers, I told them, guys, I just want to close out Pantheon by sharing this email I got forwarded. It's from one of my sales reps, Mark. Mark was just... He had brought on a new customer. The customer's name was Julie from Bergen Plumbing,
Starting point is 01:07:27 Heating, and Cooling out in Waterloo, Iowa. And Mark had reached out to Julie via email asking Julie, Hey, Julie, if you are at the user conference, I want to see you face to face. I want to find out what your experience has been like on Service Titan. And if there's anything I can do to help, I want to help. And Julie had responded via email to Mark and the email reads, Mark, I'd love to see you, but I got to say, you probably won't even recognize me when you see me. Thanks to our transition to Service Titan, I've actually lost nearly 50 pounds in three months. I've been able to go on
Starting point is 01:08:08 numerous trips this year, including two weeks away from the office in July. Even our kids have noticed the big difference that mom and dad are home so much more now. My husband and I are no longer slaves to the company, but we actually get to work on the business instead of in the business. And we've stopped having to put out so many fires every day. None of this could have happened if we hadn't made the decision to switch to Service Titan. And I looked at the crowd and I told them, I'm like, if you guys are wondering why these 550 people at Service Titan work so hard for you, it's because of these kinds of success stories. People today don't just want to work for a paycheck. They want to work to make an lives and your businesses. And every once in a while, you stop to share your success stories with us.
Starting point is 01:09:07 You will keep our team motivated to continue to fight for you and work hard for you every single day. I got goosebumps. I literally got goosebumps. You know, you shared that story with me several times now. And I just, every time I hear it, especially you reading it,
Starting point is 01:09:21 it's absolutely phenomenal. And it is fun. And when I said the testimony of the original time of, it's hard to get into business when there's problems happening. But when you see the good stuff and you really notice that there's so many good things happening within the business
Starting point is 01:09:35 and you can start rewarding people that are kicking butt because it's black and white, it's so simple. And the charts, the graphs, the easy ways to see the KPIs, key performance indicators, and just the reporting is just phenomenal. And I got to tell you, it's been an amazing podcast. I just love to get you on and anything I can extract from you. It's just amazing what you've built. And the fact that you have 3000 amazing home service companies, and you get to deal with them whenever you want, and take the best of the best and put them in a room together. It's just, it's an amazing experience. I've felt fortunate to be part of it. And I got to tell you, I appreciate everything you do and for coming on this show right now. It's amazing. And I hope the audience just took, they can take one gold nugget out of this. I think there'll be 10 times more successful going down the road here than in the new year. So thank you so much, Tommy. It's always a pleasure to talk to you.
Starting point is 01:10:28 You've been such an integral part of our journey. Want to just thank you from the bottom of my heart for everything you do for us. And also just want to give a quick shout out to all the great Service Titan contractors out there who have also been a very integral part of our journey as well. And also just even if you're not a Service Titan customer, all the contractors out there who have also been a very integral part of our journey as well. And also just even if you're not a Service Titan customer, all the contractors out there, tradespeople, we were born in the trades, it's built for the trades. We know how hard you guys work. We think of you as the blue collar backbone of America.
Starting point is 01:10:59 And we're your biggest supporters and fans. Well, I'll just give a shout out to all the Service Titan employees for building such an amazing team and a company because it's every day that I get involved with anything to do with Service Titan. It's an amazing experience. And I mean that from the bottom of my heart. So thank you again.
Starting point is 01:11:17 And if you're interested in Service Titan, there's about a million ways to get ahold of them. But Ara, he loves to hear good things about his company. You can reach out to him on LinkedIn. I don't know if you really want to... What's the easiest way to get ahold of you, Ara? Ara at Servicetitan.com. A-R-A at Servicetitan.com. All right, folks. You heard it from Ara. This is an amazing experience. And I'm telling you, just working with him is just amazing. So thanks again, Ara. We will definitely be talking soon appreciate it all right tell me all my best thanks hey guys listen i'm working on something very very special with service titan
Starting point is 01:11:57 it's some new technology that we're working on together that's going to change the game and i'm working on getting a little bit of leverage to really help them push it forward. So if you signed up because of the podcast or you heard it from me, please let me know. Email me at a, the number one lead LEAD manager at gmail.com. And let me know when you signed up, how many employees you have, and when you heard about it, that would be so amazing. So a, the number one lead LEAD manager at gmail.com. Let me know if you're having any issues with anything with service time because they're rolling out some really cool things that I'm going to be beta testing. Tell me the good,
Starting point is 01:12:34 the bad, the ugly, when you signed up, your company name, how many employees, and when you heard about it. Thank you so much.

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