Owned and Operated #117 - Leads and LSAs: The Post-Acquisition Journey to 5 Million

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In this episode of Owned and Operated, John and Jack talk about the challenges and triumphs faced by entrepreneurs in the home service industry, highlighting the importance of adapting business strategies to different platforms, like LinkedIn, for growth and engagement. A significant portion of the episode is devoted to an in-depth discussion on the use of scorecards - a tool for evaluating employee performance based on key success metrics. The dialogue covers the implementation, benefits, and potential pitfalls of scorecarding, emphasizing its role in fostering accountability and improvement within teams.

Episode Hosts: 🎤
John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter

Looking to scale your home service business? Service Scalers is a digital marketing agency that drives success in PPC and LSA.
Discover more growth strategies by visiting Service Scalers: https://www.servicescalers.com

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John Wilson, CEO of Wilson Companies

Jack Carr, CEO of Rapid HVAC

Owned and Operated Episode #117 Transcript

I'm John Wilson. Welcome to Owned and Operated. Twice a week, we talk about home service businesses, and if you're a home service entrepreneur, then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting.

Let's get into it.

Are you currently dumping money into the PPC pit of despair? That's how I used to feel before I started working with service scalers. I would waste money with 2, 3, 4 other agencies. Then I started working with service scalers and they were able to drive meaningful leads in my business. They specialize in PPC, SEO, and LSA management.

So if you're looking to increase meaningful leads in any of those areas, I would give them a shout out and see what they can do for you.

Welcome back to Owned and Operated. What's going on, John? Livin it up, dude. Livin it up. We're in, We're in the heart of April, which means 70 degrees during the day, 20 degrees at night. And no one has any problems. That's weird. Yeah. It's super weird. Yeah. Does that, what does that look like for the business?

Good. So what's been interesting this week past couple of weeks is we've struggled with options and that became like a glaring problem across the board. So we started addressing that through trainings and. Coaching and that's been good, but it was interesting because we got busy.

We started hitting very busy. Like, all the stuff we've been doing for the last months just blew up in April. So we started running more calls than ever, but revenue was down. So we're just like, what the heck? So we started looking at why. And Found it and started working on it.

That's always important. That's the first step, right? Of improvement. Yeah we got ran into the same thing is like everything from Q1 finally came to fruition and we just been, I've been running hard. And so the good news, which I saw you commented on Twitter today was this is the first month that we are on track to hit goal of our 5 million goal this year.

So April came around. We hit our goal that we needed to hit our 5 million number. The downside, which I will admit is we did not hit Q1 numbers. So we do have some makeup to do, but like at the end of the year, I feel like if I come in at 4. 2 and then that's the exact number I'm off for January, February, March, I'm.

Yeah. In my mind, we hit goal for what we were looking for. So really excited on that. And I will have to say huge shout out to this podcast and that breaking 5 million is what a lot of people don't understand is I've been implementing these things like they've just got implemented in the last three months.

And now we're seeing the fruits of that. This is really the first month where everything's coming together and we're really excited about that. Yeah. Yeah, dude, that's sweet. That is cool. So acquisition is going well, you're like 30 days out from when you acquired. Is that right? 40 days out? Yeah, actually.

Almost 60. It's 45 days out. And that company, the plumbing side, though steady is actually lagging a little bit, but it's growing pains. But the HVAC side is where like all the, everything's been rolling really well. Like we've gotten everything lined out. We've hired a few more people.

We've really put all the steps into place and our LSA is firing or PPC is firing. And it's really driving meaningful leads. And then we're getting. Wonderful flips off that and just doing well. Yeah. It hasn't been crazy weather either. It's been, we've been 75. I remember sitting and I know this is a little diatribe, but like for everyone, anyone listening out there, like the craziness of this change for me is someone brought up to me, where were you last year?

And I was sitting in a shared office space. with my comfort advisor. And we had one person in the field and we were talking about how do we drive any leads? Cause we were just dead. I think we did 40, 40 to 80, 000 last year in April. Like just, and then now we're 17, 18 people deep. We're going to hit 5 million.

We're on track and parking lots full. We're in 3000 square feet of space. Four GMBs up, like wild change in one year. Yeah. No, you guys are pumping, you're doing all the right stuff. It was interesting I saw something on Twitter earlier today about LSAs and LSAs got really complicated.

Obviously anyone in the trades knows that. And I think you just said it was like yours is pumping and it reminded me of this tweet from earlier. I don't remember the guy's name. Zachary. Yeah. Yeah. Zach. What? Wilson. Like I think even it has my last name. And he said that LSAs have not been. Working for him at all.

And I think LSA is like, we do talk about this a little bit, but we I'm going to plug service killers here cause they ended up building a program to help people with it. But LSAs are like an actively managed thing. Early 2019, 2020, 2021, when it first launched it was like put in a dollar, get a lead out type thing.

And it just worked and you fiddled with it a little bit, but It wasn't an active thing that you managed. And I think a lot of companies got used to that. But the companies like LSA is a game. So I don't know, talk to server scalers or something. Cause yeah, it's working, obviously it works for us, but it works for Jack too.

It's still our biggest source of leads. It just takes a lot more work than it did three years ago. Yeah, exactly. And that's how we originally thought it was just like, set it, forget it. You put a dollar in, but there is definitely strategy on the backend of it. So making sure that you are playing Google's game.

He's in the Google gods, you sacrifice the goat, whatever you need to do to get Google happy. Yeah. Yeah. It's still by far our biggest. Our second biggest is GMBs GMB management, hundreds of leads a week between the two of them, which is crazy because most people like, even if you set the, his example was he set the budget at 80, 000 a week and he got three or four leads. And that, to me, that actually makes sense because if you're not playing the game, then that's exactly what will happen. So that makes total sense. You have to you have to do the process. Yeah, we do talk about the workshop and then serve scalers.

Like I said, they built a program specifically for that. Cause we got that feedback a lot at the workshop. Yeah. So something to note but I'm glad it's working, dude. I'm glad you're on track for five. That's awesome. Yeah. I've been, it's been a change. And so I just try to keep looking ahead until next year because next year, I who knows, I hope it continues, but we'll see 30 breaking 10.

Breaking 10. Yeah, we'll start doing workshops specifically just for like your growth. Me. That's actually the secret is I've designed all of my wants around this podcast to be just like how to help me grow. And then anyone who can follow behind can ask me all the questions. It's work though. Like it sounds silly, but I'm like, I don't know how else to just like somebody asked me a question the other day and I said, you know what you would get so much value from the workshop.

These are things that we're covering. This is the question I had. This is where you need to be. So I cannot stress that enough. It really, we're still getting messages from the people from the last workshop saying, Hey, I did this. I did this. This is not working. Like the active feedback of how to get to that 5 million and these guys are really implementing and starting to run with it.

Yeah, no it's freaking awesome. I love it. I think it's cool. When is the next one? Next one's June 3rd through 6th, June 4th and 6th. Yep. Still high. Should be fun. I think people come in on the 3rd. Yeah. Dinners, questions, whatever yeah. Whatever questions you need answered. Home service. Residential home service. We did have some commercial service guys that, they got a lot out of it. Any service company would get a lot out of it, but Prime Target is residential home service and the, the stuff we cover is staffing and org planning and marketing. We do dive pretty deep into GMB strategy and LSA strategy and how to win the game that other people don't even know is a game.

How to scale, how to think about like when to split dispatch and call takers, how to do service install. A lot of the stuff that we talk about here on the pod, in passing we dive pretty deep. for hours. Yeah. That, that was one of the big levers for us was call center and call center swap and call center changes and getting everybody into the right positions.

Cause it's that is one thing that was holding us back. And by going through and designing the call center portion of this workshop took that issue and just threw it out the window. And then we were able to continue running. So while how those small little pieces are really. And then the peer engagement which was really cool.

So we like Jack and I have been a part of a text group for, I don't know, like what you just got in a year ago, seven months, eight months. Yeah, and I've been in it for, I don't know, three years, maybe a little bit longer. It's been good. The peer learning is real. So we, we did just a couple of comments on that one, the peer learning is real from like in person networking.

So that's always one of the benefits of a workshop style thing. But we also just launched that Facebook group for, which I think is going to be really fun and interesting. Cause it's And it kind of, I was surprised at how many people jumped on in like the first day. It was like 150 the first day, which is crazy to me.

And people just started entering themselves and it's going to be really interesting. I think we'll have to like segment the group up a little bit or I don't even know, like we're still working through like how to basically help people and just make that a really cool resource. But. I think peer learning, whether it's a small group or whether it's a big group is, yeah, really important and like extremely valuable.

So speaking of that I, in this peer learning, it was actually a listener on the pod who reached out to me to talk and we went and had lunch and he had a user submitted question and I tried to answer it the best I could. And so I like it seriously for everyone listening. I have no idea what John's going to say that right now.

But I'm extremely interested. So he runs a restoration company. And he sat there and told me really the only way that restoration companies are driving leads are through plumber referrals, which makes sense, right? That's a huge point. I'm not disputing that whatsoever. But the question was like, how do you increase that is the answer for a company like his to go out there and go to more plumbing companies, knock on doors get those leads, give them moisture meters give them spiffs for like referrals and all that kind of partnership stuff.

My answer to him, how to increase leads was. If nobody is in the PPC realm, if nobody's pushing as silly as it sounds, tick tock, mold is one of those problems that I feel personally, like one, it's extremely visual. And two it's like electricity where people who don't know mold don't touch mold.

Like they know it can be dangerous, but they don't know enough about it. So my question for you is in your restoration company, do you actually do PPC LSA? Or is there any kind of avenues that you push on other than referrals from your own plumbing company?

This episode is sponsored by home service engine So this is a company that I would highly recommend if you are thinking about getting onto service titan Or if you're like me and you have to rebuild your service titan every few months because you set it up incorrectly So this is my go to team for any service titan needs and I really wish I had them from the start Give them a call today and start utilizing service Titan to its fullest potential.

Yeah. Yes. So our, I'll give a, I'll give some caveats and then I'll give my answer. So our remediation business is small. Like what I'm about to say. is from the perspective of a small remediation business. And so I only know what has worked for us in the past and I know what we're intending to do next.

But I have not successfully done the next part. So yeah, so we have a restoration business and it's been good. So we launched it in 2020. The first two years, honestly, were really difficult. It really went like nowhere productive. Mainly a right people, right seat problem. And we started putting really good players in late 22 and early 23 and the business started to take off.

So at first all of the leads were from Wilson. That's what I ask. Okay. So that was the idea. And the reason, so the reason we did this originally, and I'm not saying this is the right or wrong move but we launched it because. We found out the average ticket was like 3, 500 for Grant. and that we were basically, we had a restoration salesperson calling on us and she made a joke about, it's funny that you guys don't launch your own because you have enough leads to do that.

And I thought that was like, what are you what are you talking about? And I found out that all it takes is three leads a week to run a, basically a half a million dollar remediation business. And that blew my mind at, 3, average ticket. If you do, three of those a week, then that's a half million bucks.

Makes sense. And that's a manager and two techs. So real, real quick when you're going through these prices for people, sorry, I don't mean to cut you off midway, but just for people not who don't understand like what this industry is we're beating around the bush, but let's spell it out.

What exactly are you doing in the company? Yeah, it's important. People definitely get this wrong. So remediation is a project based business and it is it's insurance. Almost all of it is insurance. There's no recurring work, very common misunderstanding. There's no recurring work in this business at all.

Some people think that, insurance companies have to call you or. No, absolutely not. This is a project by project. Business and what they the goal is you get active situations so you can get water damage or storm damage or fire damage and you go in and you remediate the property. So what that looks like for us as a plumbing company is hey basement flooded a lot of water damage from this leak mold from the water damage from this leak.

And there's different sections of the industry So if I looked at like a serve pro What they would be doing is they would be doing the remediation plus the putback and the putback is construction It's just straight up construction. I'm gonna hire some carpenters. Got some drywall guys. We're gonna do some paint You And so those are the two sections of that business is you have the remediation and you have the putback.

You get to pick what you do in this industry. You can pick however you want to go about this. So like how I play this game very well could be different how you as the listener would play this game so for us we did this as a retention tool because all of the rotor routers Launched a remediation department of their plumbing and we were consistently losing water damage Calls to rotor router because they had the ability to do the cleanup too So that was the one of the original inspirations for launching this is we wanted customer attention.

So You We opted that we were going to run this business nine to five, same as our plumbing company at the time. And we were going to only do the water and mold cleanup. And that is a specific strategy. The reason that we like that is the average ticket is like good 3, 500 to 4, 000. You're in and out in three to four days.

And all of the gross margin is in that side of the work. So on that section of the work, you might get 60 to 70 percent gross margin on the putback side of the work. It's construction. So you get like 25 percent or less. Okay. Yeah. That makes sense. And so you guys started off only doing the former. That's still all that we, yeah.

So we only get leads from the, we were only getting leads from plumbing and we were only doing the water and mold cleanup. And we still only do the water mold cleanup. Perfect. Most people do add the putback in just to put this out there. Most people add that in because the ticket size is so much larger.

Yeah. So if you have if a job is 10, 000. Then 3, 000 of it is the water cleanup and seven is the putback. So most people chase the 10, 000, but like all of the profit on that job is in the first three days with the water cleanup. Yeah. That's the section that we take. Yeah. And so it's not a, it's not a high gross margin business, but it's a higher, or excuse me, it's not a gross, high gross revenue business.

It's a lower gross revenue business, but higher margins. So better at the end from a cashflow standpoint. Okay. So 2022 is coming through. You've started this business. You're getting those three leads a week from your plumbing guys. You've rolled that out to them. It's fair. It was a fairly smooth transition just internally as a, like a additional vertical question.

Yeah, no, it was an absolute nightmare. We had no idea what we were doing. It was a completely different sales process. It was like we'd never been paid by insurance before for anything. It's a game. Yeah that, that business has five employees right now, and I'm pretty sure I have 180, 000 in AR.

It's it's wild. Yeah. For a while because it's insurance. No, it took us two and a half years before that business became good. But now the business is good and we're really happy with it. A lead flow, for those first couple of years, all we did was focus on leads from the plumbing company.

We weren't really focusing on leads from anywhere else. We started focusing on leads from other places last year. And what we have been surprised by is a couple of things. One, we do run LSA. And PPC for the remediation business. Now, granted, we're not running a 10 million or 20 million remediation business, this guy's small.

So if you need to really feed the beast and you need a hundred leads a week. This might not be it for you, but at our lead size, we are happy with it. And the nice thing is if you can optimize it, which we know how to do from our core business, it can be good. Because tickets are always insane.

It's not it's not like you spend 80 on a lead and you get a 500 ticket. Like you spend 80 on a lead and you get a 10, 000 mold cleanup job. So we get one of those a week, we get a lead a week and we tend to close them. And what's your cost per click or cost per lead look like on something like that?

Because I know appliances can get really low and if you're trying to bid directly for HVAC replacement or high ticket items, roof replacement, you're going to get a very high six, five, 600 cost per lead is mold remediation the same. Yes. Okay. But the game cares, who cares? Yeah it averaged take us four grand.

Who cares? It's 11 percent and gross margin, 70%. And I have like barely any overhead. So it's just, it just doesn't matter. It's definitely, it's honestly a fun business because you get to. Because the average thing is so high, you just get to spend more per job to acquire it. And it's really a game of whoever's willing to spend the most, but it also opens up a bunch of other stuff.

So last year we were going through the same exercise, how are companies generating leads? And what I did was I talked to all these large restoration businesses, Hey, 5 million, some tens, a couple of twenties, 20 pluses. And I asked the same exact question because what I wanted to hear was you can do it all digital because that's one of our core competencies.

And what I heard was, no, you cannot do it all digital. But many of them did not go the plumber route, which to me makes, honestly makes sense because the problem with plumbers, that was a good idea five years ago. Yeah. But now plumbers are used to remediation companies walking in and saying Hey, I'll give you 300 bucks a lead.

I'll give you 400 bucks, lead 500 bucks a lead. So that's the irony is he took me out to lunch. We had this conversation. As a listener of the plot, I always prioritize them above all else. But within two days of checking my mail for the business, I received two remediation companies.

Sending me just mailers saying, Hey, if you refer us, we'll give you x, x. And so they, they lined it out like how much we can make going with them. And so it, it went from not in my view at all to now this blown up thing where I have multiple remediation companies soliciting. Because we're plumbers, we're a plumbing company with a small HVAC side.

Yeah, no, it's real and it is and the techs know it because what most of these companies will do is they'll skip the business. Like why deal with Jack when they can just go to the tech? So they'll meet your guys at a supply house and they'll be like, Hey, you want 500 bucks a week? A thousand dollars a week.

Every time you find water, call me. Because why involve you? Yeah, it's it's real. A lot of people are thinking that's, it's just expensive. And highly competitive. What a lot of companies do is they still do in person, but they just find other ways. Maybe property managers, maybe plumbing companies but they just look for other people.

But the biggest lead gen source for all of these businesses was in person marketing. And it wasn't close. Wow. So that is just. That's just the nature of B2B. So for your strategy though, moving forward, do you plan to continue that in person? Cause I know you guys are opening up like a large in person marketing side to your business just in general across the board.

Are you guys going to focus on that or are you guys going to double down on some kind of marketing via digital platforms? Both. playbook for a direct to consumer and we're going to run a playbook for business to business. I suspect the real scale is going to happen business to business. And we started that maybe 30, 40 days ago.

That's neat. So for a small guy, so right, you have a large amount of resources that can start this up. Obviously the benefit of being small in this instance is extremely personable, right? You are the owner going and talking with someone. And you can work out any kind of details and, or.

Situations, et cetera, et cetera with business owners. But do you have any other recommendations for the smaller guy going out there to try and gain an edge in this industry? I really think we should have hired a field marketer earlier. like years ago, that would lead flow is for any business is the limiting factor and it's no different for us in remediation.

We can close them, we can do them. We need more leads. I'd get, I'd give myself a 50 percent on that. I think I undervalued the in person marketing aspect that you're referring to now, but that makes sense. Cause that's what the recommendation is for B2B anyway. It's to go and try to meet as many people as you can, who are going to be able to send you leads.

Interesting. Yeah, I think, don't overthink it, like digital works and we get leads from it, but like the way we're looking at scale is not digital because it is mainly referral. Like someone else has water damage, who's going to call you? If I had water damage, I guess I would call my own restoration company like my first call would be my insurance guy.

Yeah. If I had maybe a different example is if I had huge hail and my roof was messed up, I would not call a roofer like I, that would be like my second or third call. Yeah. Roofer. My, my first would be. What's my coverage? Yeah, I think the general thought is the first call is to the plumber to stop what's ever causing that damage.

And then that's where the plumber pushes them over into that insurance bin. Yeah. But it's a home service. It's just that it's a referral business coming from other businesses. It's like inspection, right? Like you only, the only way you grow a home inspection business is you run a marketing program to realtors and they refer you.

That's it. If you run on that, I don't know how far you're going to get. Cause are just in the process of buying a house and yeah, a realtor referred us to the broker, the inspection person, the raid on person, et cetera, et cetera. And we use most of them. There's a few that we went out on our own and I used Google to find them.

But generally speaking, it was a referral service. So that makes sense. I still wouldn't sleep on social media marketing cause it's mold is one of those things that is just it's such a visual product or such a visual issue. Totally. Totally. I think that's you can totally do it with mold.

Mold would be an interesting one. Mold honestly is what kills for our digital. Like we do good with mold. We don't do good with the other things. Now the downside of mold is it's almost always a cash job, good or bad, which means that like insurance doesn't cover mold because if there's mold, that means you didn't solve another problem.

If there's mold somewhere, you let the roof leak for too long. You didn't clean up water. You didn't fix something. So the mold is a byproduct of a different issue. So when insurance sees mold they say no. So that's good and bad. The good is that it's not insurance and it's high margin and you get COD paid, which is sweet.

And people are reaching out to you directly. Yeah. It's just mold. Cleanup is really expensive. Yeah. Fair enough. That's interesting. I feel like I learned something. I hope everyone else did today too. That, that's really, interesting. Especially, we don't do much B2B. We've thought about it.

We've thought about doing plumbing, commercial plumbing, but we've decided against it. And so it's just a very interesting change to the business, but I like it. In person. Don't sleep on in person if you take anything away from this. I think that's true though for residential too.

Residential B to C. 100 percent is. Yeah. Yeah I think it's one of the dumbest things I read on Twitter. Every day. Hey, so I'm coming from digital marketing I think I'll kill it in a home service. And it's bro, like everyone is a digital marketer, home service, like where have you been for the last decade?

Like this is DTC marketing. Like I, I don't know what you're looking for here. You have no alpha. Cause it's easy. It's it's easy to find a provider, it's easy to, it, yeah, that, that's just not the advantage. Yeah, it was 10 years ago, but not anymore. Yeah. Not anymore. Yeah, it just doesn't, it's not like you have.

Aye. Jack have ran a failed DTC winery. So I know a thing or two about marketing. I know a thing or two, but didn't spell because the leads or sales is failed because product exploded in people's houses. So that's not great. That's not great. You're going to make some real energy and has a moat. No, I think so.

And I think that's, we're going to see the pendulum swing back here shortly. If it isn't already moving in that direction, I think the leaders are, I think so too. We'll all follow and then we'll all go back to digital. It's going to swing back and forth. We have a group of competitors that all listen to the show and, um, what we tend to see is like we do something and then six months later, like we see the exact same thing, which I think is I think it's interesting.

It's fun. But I think in general, that's how it always works is like someone. And it's the same with me. I see someone doing this thing, so I do it. And and then I talk to thousands of people a week on the internet and they see me do it and then they do it. And M list celebrities.

M list. Yeah. But I think that's just the nature of it. Like marketing always changes. So like in person might be good for the next 12 months. And then after that Who knows? Maybe Angie's list will suddenly be like incredible. Yeah, maybe I'll I'll wait for that day. Yeah, me too. All right. Thanks for tuning in.

This was a good one. And thanks for submitting the question. If you want your question answered, email info at owned and operated dot com. Or even better, sign up for the newsletter and then respond to it. Boom. That'd be great. Goes to the same spot. Or DM Jack or I on Twitter. What I think would be really fun is some guest appearances from some of the folks coming on Facebook group.

So we have really engaged, really cool people that are introducing themselves. So If you're listening and you introduce yourself, gird your loins because we want to bring you on the pod. It should be a lot of fun. Question. Are we allowed to talk about I actually just completely forgot that thought because you were going for it.

But this part from the show, please don't just leave it in there. Okay. Yeah. Find us on Twitter, the HVAC Jack and at the Wilson companies. Yeah, sick. Check out OwnedandOperated. com. Thanks for tuning in. Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast.

If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at Wilson companies. I'll see you next time.

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