Owned and Operated #116 - Navigating Success in Home Service Growth with Scorecarding

Time To Make the Grade.
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In this episode of Owned and Operated, John and Jack explore the intricacies of running a home service business, focusing particularly on residential plumbing, HVAC, and electric services. The episode kicks off with a nod to Service Scalers for their exemplary assistance in managing digital advertising for home service companies. The discussion delves into 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.

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

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John Wilson, CEO of Wilson Companies

Jack Carr, CEO of Rapid HVAC

Owned and Operated Episode #116 Transcript

John: 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.

John: Let's get into it.

John: Hey, this episode is sponsored by Service Scalers. So Service Scalers is actually a brand that I've personally used with our companies for a little bit over a year now. They've helped us manage our digital advertising. Frankly, they did a lot better than our last agency. Leads went through the roof and cost per click went way down.

John: Check out Service Scalers. If you're a plumbing, HVAC, or electrical home service company, that's what they knock out of the park and they did a great job for me.

John: Welcome back

Jack: to owned and operated. OOOOH YEAH, my favorite time. I like this time.

John: Yeah,

Jack: no, this is good. It's good. I have 600 text messages right now from people that are all trying to ring me up during this like hour long interview process that we're doing or podcasts. We take an hour out of our day and put it aside and blown up, but it's worth it.

Jack: I enjoy getting off of and having some fun. This is why we got into the business in the first place was to talk shop and have a good time. What's going on with you, man?

John: Man struggling through April. Really excited. Yeah. April's not doing good for us. I'm not excited about that, but the weather is nice, so that's good.

John: And Yeah. Jumping on LinkedIn. That's been a fun new adventure. Yeah, it actually has been interesting. There's some, so like it, most of our audience was built off of Twitter, which is cool. Loving Twitter peeps. The only downside of that is there are actually very few home service people on Twitter.

John: Most of our audience is nearly everywhere else. Or most of the home service industry is nearly everywhere else. So if you're You know, a lot of the aspirational home service folks tend to be on Facebook and Facebook groups and stuff. And the very large ones are apparently on LinkedIn. So I just found that out.

John: So that's interesting.

Jack: I believe that. LinkedIn is the place to be for a business in general. So that makes sense. It's just, it's so cringy. It's tough. It's tough getting through LinkedIn. I have

John: enjoyed I've gotten connected with some really cool people that run Like big businesses on LinkedIn, and that's been a lot of fun.

John: So it reminds me honestly, a very early Twitter. 2020. 2021. Twitter. . That's the vibes I'm getting from LinkedIn right now. Like obviously a little bit more professional. I, I can't say hell yeah. As much, but hell yeah, brother. Yeah, it is. It is cool. Yeah, it's cool. What's new

Jack: with

John: you?

Jack: We're crushing April. We are on track to, we have, I don't know how you set goals, but we have like our base goal that we have to hit. , this is our, we need to hit this number. And then we have our aspirational goal, yes. And we are on track at midway through the month for our aspirational goal.

Jack: We're pumped, we're excited. It's been, plumbing's finally calming down in the sense of it's merging in and it's a little bit more like I had one full night of sleep the other night without waking up. So that's how I gauge my stress level and how the business is doing is how much I'm actually sleeping.

Jack: And so we got one full night last week, which felt good.

John: Yeah, that's awesome, dude. That sounds great.

Jack: Yeah. Yeah. And but beyond that, like we have our two crews of HVAC that are starting to run our plumbing crew, we're switching over to the installer model, the same as and everyone's excited.

Jack: Everyone's moving the needle and cruising, man, cruising. And it's only getting hotter from here. So it's yeah, I'm excited. It's miserable.

John: Yeah. It's definitely starting to get hot here. We're close rates are down in HVAC. So that's a bummer, but a lot more financing declines than we're used to.

John: Yeah.

Jack: Yeah, we, did you guys see that the last year I felt like going into Q4, we saw a higher level of declines than we normally used to

John: picking up. It's been picking up more and more. It's more and more of a thing.

Jack: Yeah. You've seen the news credit is I shouldn't speak on this because I don't actually know that much, but it seemed like the numbers that I've seen are personal credit cards.

Jack: Or more people have consumer credit than ever before. Something crazy like that. Yeah. Not surprising.

John: Yep. Yeah.

Jack: Sweet.

John: I agree. So today we're talking scorecards. Yeah, scorecards are interesting. So scorecards. We use them differently, but scorecards, basically every position has a couple different numbers that they should hit and scorecards are the measurement for that position.

John: And I think the big, that's how we think about it. Is that roughly how you're thinking about this?

Jack: Yeah, we have about two KPIs or key performance indicators that we are really scorecarding people on for each position. We're trying to keep it minimal at this moment before we like over. Burden ourself and overburden the text.

Jack: And we're focus is on how do we create the scorecards, what each position needs to be scorecarded on, and then to how do we relay that to them? And what does that mean for the employee? Is that kind of how you look at it?

John: Yeah, roughly. Yeah. And a lot of the stuff we care about and we'll dive deeper, but like how quick can they access their scorecard?

John: Like how often do they see it? What's the information look like? Is it accurate? And then how do we improve it?

Jack: Let's start off with what, what does, what do your scorecards look like for techs? What does that process look like for you?

John: Yeah. We're blessed for most of our positions because service Titan has a scorecard.

John: So if you log into your iPads, it's right there. And I think that's an important part of this process is like, how accessible is the information? How quickly can people see it? How do they know if they're winning or losing in 10 seconds or less? That's a big part of Our philosophy here is knowing if people are winning or losing in 10 seconds or less.

John: Yeah,

Jack: definitely.

John: Call takers and dispatchers and really all these technicians, all these different seats, how do you get them information fast? So yeah, sales, number of options, number of memberships for installers, it's stuff like completed revenue overtime callback rate.

Jack: Let me ask you a question before we dig too deep into it.

Jack: What did it look like? So you guys have been on service time for what, five years now? Yeah. Were you scorecarding prior when you were a 5 million company without service and how are you doing that? Was it all manual?

John: No, we, yeah, we weren't even tracking it at all before service Titan.

Jack: Yeah. Cause I'm trying to, I guess I'm trying to relate for people that maybe don't have service Titan, how they can do that.

Jack: Cause that's what we use as well. So I don't even know.

John: It doesn't have to be service Titan in this case. Like it can be like jobber or any of those different things have a. Who completed it, who sold it component. But at the end of the day, that that's what you need is you need like the numbers.

John: You need to know what people are doing. I remember when we first jumped on to service Titan, I had no idea that our people were doing 11, 000 a month. I, and I didn't, I also didn't know if that was good or bad. Cause I had nothing to benchmark against. I had no one telling me Hey, that's good.

John: Hey, that's

Jack: terrible. There was no Twitter, John telling you or owned and operated podcast telling you what number that should have been.

John: Yep. Yep. So yeah, at the time I think we like went on and we found out and I was like, Oh, that's interesting. Cool. And I don't know that much else changed after that other than like really understanding what was good and what was bad about that.

Jack: Yeah. That's what we're looking at as well. We look at For key positions that are revenue generators, so like dispatch techs service managers, we're looking at revenue is our big one. What is, what does that look like for those positions for you? Are you looking at our revenue is the key one or there are other ones that, so we track memberships and stuff too, but just like the main

John: sales is obviously big number of options, number of memberships, number of reviews, like those are the big ones for the field team members that moved the needle for us.

Jack: Okay. And then for non. Needle movers. What does that look like? So for example, a call center or CSR, right? She's not, he's not, whoever is not necessarily driving revenues.

Jack: 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 two, three, four other agencies. Then I started working with service scalers and they were able to drive meaningful leads in my business.

Jack: 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.

John: Call takers drive revenue for sure. If they don't book calls at their book rate with a quality call, then we're going to not drive revenue.

Jack: So they're not judged on revenue. They don't have a revenue metric. They have a booking rate metric raw and probably not like a lead.

John: Yeah. I think it depends on the season. For us, like booking rate. Like we expect book rate right now to be like 90 percent because we've made it as frictionless as possible. We've gotten rid of basically everything that could be a disagreement to have a very high book rate. But, in peak season, our book rate might be 85 percent or 80%.

John: So I think it depends on where you are in like the cycle.

Jack: Yeah. And with that so there's obviously, you have a a belief that they need to know it in 10 seconds or less. So there's heavy seasonality in some of your businesses, right? How do they know, right? You could go and look at a scorecard and say, okay, I made 22, 000 that month.

Jack: In HVAC, 22, 000 in a month on peak summer is probably garbage hot garbage. But in February, that might be a good number. How do you fluctuate and keep it simple enough that they hey, six months of the year, it's this, six months of the year is this, or what does that look like? How do you, I guess the question is how do you adjust for seasonality?

John: Yeah. Like the core stuff should never change. So average ticket should never change. Options should never change. Percentage of membership sold to membership opportunity should never change. Those are static numbers.

Jack: But so hypothetically you're in February, your call volume drops off a cliff.

Jack: So you're outbounding more, you're outbounding PMs to maintenance customers, your current customer list, March you load those up. Theoretically it should change. You shouldn't be able to sell it. Revenue as an output might change. Membership should change too, because you're Options shouldn't change.

Jack: You're loading up

John: Maybe memberships change, but not as a percentage of available opportunities.

Jack: Oh, okay. There's the key. So it's a it's a percentage base versus a number base. So you ran three calls. that were non members. So you should be have a conversion. That's interesting. Yeah. And then you obviously just revenue.

Jack: Yeah.

John: Yeah. Honestly, revenue doesn't even adjust that much for the most part. Because what tends to happen and we're on the other side of this, we're like, our service team is busy, like cranking, like absolutely insane, but our sales conversions are low. So like we're busier than ever, but we're just not converting.

John: We almost can't keep up. We're like booked out four or five days right now. But like sales are low, which sucks. We're slow, every call is precious. Every call is we go slower. We, we focus more on it and we tend to do better. We find that performance doesn't change much because you get to pay attention to less and you do more with those calls in February, March.

John: So like in April, we're busier than we've been in months, like from a inbound and perspective and it's difficult. To keep up the same level of performance on a per job basis that we were doing in February, which is crazy, like performance has actually gone down with busyness,

Jack: which, yeah, that's an interesting framework because it's true.

Jack: That's what we push to on them as a training is in February you might have three calls, but you make sure that you like everything is touched in those three calls to a point where, yep. You have loved on that system so much that, it's not top to bottom. Whereas if you're jammed with seven you might not see that because you're just rushing through to get to your next one.

Jack: Interesting. Cause we do we have a metric for six months of the year. So pretty much once October hits through. April is one and then May through October is the next or September is the next. But I'm wondering if I should change that because that's interesting. It's a, it's an interesting concept.

John: Yeah, I think percentage and I think like what are the, like average tickets shouldn't change and number of options shouldn't change. And what we continually get in trouble with is number of options change. So performance is down. Oh, let's look at our options. Oh, look at that. We're not offering good options and our financing request has gone down.

John: Yeah. It, yeah. Interesting. But yeah I think scorecard, and I think the big, how do you score? How quickly do they see it? And then what happens if there's a bad one? So how do you build a process around like training, like a coach up or coach out process? How do you think about that?

John: How long do they have to improve? How, what individualized attention do you give if there's performance issues? There's a lot more to bake in there. Cause like just knowing the number isn't enough. It's once you know it, then what happened? Do you get an attaboy or do you get a let's coach?

Jack: So and I've been to your office and for people listening who haven't been to your office, those scorecards are presented openly and publicly.

Jack: So everybody knows who's winning at what time, at what place and

John: like TVs on the wall.

Jack: So we tried to take out of that book and we have a conference room TV. So we just have one, we might get a second one in the front. I don't want to put it in. So you have a TV in your front. So we do, we have a video of it.

Jack: And guys, that is that's awesome. We'll take a take, take a break from this. We got another good one coming up. So we have a video that we've done. We did it two years ago. We did a a cost of service. So it's pretty much to the point where I'm clicking on it. Yeah, it's really hard. It's Oh, gosh, I couldn't do this.

Jack: There's so many things that I need to do. And then it's like a time bomb. You Breakdowns where you break down the whole HVAC team breaks down the scorecards for everyone. We dig into a few bad ones to see and coach and we coach publicly and it's it can be uncomfortable sometimes, but I think in the long run, it's truly what drives.

Jack: change and what drives that culture of like we have to offer, we have to do good.

John: Yeah. Yeah, I agree. Yeah. We have to do good. And then what happens if we're not, and I think those are the big ones.

Jack: Yeah. And, um, here's a great question, right? So there's, there can be some I would say I don't want to call them auxiliary, but like some, Other factors that can change a scorecard like flips, for example.

Jack: So how do you reconcile a tech that's low on revenue? But high on flips, is there a metric that you or they utilize that say, Hey, if you get three flips, like we don't care what your revenue is that week. Cause yeah, you're generating.

John: Literally flips. Yeah. That's how we would look at that.

John: So it would be it's by department. So if it's plumbing, then that's different. Cause like plumbing doesn't have a lot of flips for us, but if it's HVAC and revenues low, but you had 30 flips yeah, you, then you're, then we count that as your revenue basically.

Jack: It goes towards revenue and the close rate.

John: The sale, the sold job goes towards their revenue.

Jack: Okay. Okay.

John: Hey, you flipped 2 million last year. So

Jack: that's how we think about it. I'm just trying to, we're just trying to wrap our heads around what is the value? And I see what you're saying, but what's the value of a flip, right?

Jack: Cause I guess if For example, if you, they generated zero other revenue because they're going out in an extreme case and just trying to flip every single job and everything's goose eggs across the board with three flips are they good or is that bad? And so that this is one of the areas where scorecarding is and be ambiguous to some sense.

Jack: And I, I don't know how you deal with that.

John: Yeah. We try to remove any ambiguity and make it very clear. So percentages helps a lot.

Jack: Yeah. That's a good, that's a good one. No, I mean that, that's actually a silver bullet key for us is like number of options.

John: That's one of the like number of options is almost always a leading indicator for revenue.

John: So if someone's struggling with performance, it's almost always an options problem. Like almost always. So then how do we correct that behavior?

Jack: I was going to say offering good options. What's the extreme ownership behind that is, is generally what that you, for a coachable employee what have you guys done on the management side?

Jack: That's been able to take friction away from that process for them to add options.

John: Call by call is the whole point of that basically. So like the way we run service management systems, the way we do daily trainings, like most of it's cause what happens is if all you do is say Hey, I need X amount of options, then you'll end up with bad options.

John: The customers don't care about. So it's how do we create good options that customers do care about that creates a good customer experience? Like we only want to give talk about things that people would want. We don't want to, talk about random nonsense. There's the quantitative, which is number and qualitative, which that's obviously more complicated.

John: Yeah. That takes active management from the service manager or whoever runs that process to basically get in there and be like, yeah, these options make sense. Or no, these options don't make sense.

Jack: Sweet. Yeah, man. Scorecarding is one of those things where it can, it's, you could really overcomplicate it quick.

John: So very easy. And we are guilty of continuously overcomplicating it. Yeah, we are. Like what ends up happening is we always overcomplicate it. And then we lose track of the four things that matter, which is like, what is number of options?

Jack: We'll have to keep that one in our back pocket.

Jack: Cause we do a lot of revenue. We don't do enough options. I think we have we have a metric for it. Like we watch it, but it's not something that we have at the top of our mind when we go into scorecarding. So I might take that one and bring it to my GM and see what he thinks.

John: Yeah. See what he thinks.

Jack: That's neat.

John: This was a good one.

Jack: Awesome, man. Scorecarding.

John: Scorecarding. If if you liked what you heard, check out ownedandoperated. com and we have another breaking 5 million workshop, June 4th to the 6th

Jack: in

John: Stowe,

Jack: Ohio. Sweet. I'm excited. Come visit us. It'll be a lot of fun. We had a great time last time and I still get emails from the group today.

Jack: There's 18 people in that group that are emailing follow ups, and if you guys are listening to this, shout out to you guys for taking these things. Yeah,

John: you guys are killing, you guys are killing Kristen. Keeps me in the loop. Yeah. Which is really cool.

Jack: Super cool. So really excited for y'all and seeing those things come to fruition.

Jack: Definitely sign up if you can. We'd love to see and love to, to work with you. Cool. Awesome. Thanks John. Thanks. Bye.

John: 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.

John: You can find me on Twitter at Wilson companies. I'll see you next time.

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