Owned and Operated #77 - Using Compensation to Drive Business Growth

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Uncover the principles of a successful compensation model on this episode with John and Jack. They dive into the structures they’re using for all roles on the team including: managers, technicians, and philosophy. Learn how to set goals, use bonuses wisely, and consider flat-rate incentives to boost productivity. Whether you run a business or are leading a  team, get practical tips on tailoring compensation for different roles. Listen now for advice that could reshape your approach to motivating and rewarding employees.

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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 #77 Transcript

John Wilson: 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.

if you like what we talk about on our social media, on Twitter, on this podcast, then you should be signed up for our newsletter. Go to ownedandoperated. com where every Friday we break down our business, we break down insights, things we're learning, things we're working on, and it's good stuff. Check it out, ownedandoperated. com.

Today on Owned and Operated, Jack and I talk comp structures. So we talk about it for every position in our business. We dive into managers, we dive into technicians, and we dive into philosophy, for how to set your comp structure. It's a loaded episode, but comp structure was one of the very first big moves that I made when I bought our business seven years ago that really helped put us on a path towards growth.

So if you get it right, it's a big mover early on in your business journey. Thanks for checking it out.

Welcome back.

Jack Carr: To owned and operated.

John Wilson: We got there bro. How's your week?

Jack Carr: Man, it has been busy. We've had some really big jobs come through and so a lot of the team has been pulled to that. We're so small that even our service techs sometimes get pulled. whIch is unfortunate because then that means they're not out flipping and selling units they're installing.

But overall pretty good.

John Wilson: The doom


Jack Carr: Yeah, we're trying to get away from that. And so our service managers hopped in. I've hopped in a little bit on that so that we can put them back out in the field to keep conversions going. Cause you just can't run a business only doing installs.

John Wilson: Yeah.

Jack Carr: Unless you're a large commercial new construction company, which we are not.

John Wilson: That's a tough problem.

Jack Carr: It's not too bad. Realistically the big thing for us is we need two more techs. That's hands down. I was telling you offline, we went through like a 2024. This is our goal and this is we broke down like the org chart of what it would need to look like what each truck would Need to make what the salesperson would need to make to create that vision and then the rest is just lead generation on my end and you Do the playbook get the leads in and then have the right people in the right places.

It should convert

John Wilson: Yeah.

Jack Carr: I mean, it's all easy in theory

John Wilson: yeah, I think I don't know. I have a lot to say and a little bit to say, I think that's one of those being able to Consistently just run service and handoff. And you're again, I've said it before.

You do HVAC so much better than I did when my HVAC was your size. Whereas like our flips were bad. Our comfort advisor wasn't strong and that's obviously not all the case now, but yeah, just like the continuing to keep people where they're meant

to be is tough

Jack Carr: you want everyone to wear lots ofhats.

John Wilson: it messes up one It always is gonna mess up one thing. You're either gonna kill service and just run a ton of tune ups or whatever,

Jack Carr: That's actually an interesting point and that's what we came to the same conclusion, right? So if you have people running what they're not supposed to be doing, what that ends up creating is it pulls out a link in the chain, right? it like even goes back to dispatcher, which is the weirdest thing.

So it's right. Dispatcher needs to do their job with. Outbounding and getting the calls on the board so that there's enough jobs for the service techs. And then if their service techs are being pulled over into installs, then it messes up the service tech side that you're not generating leads that are going to be feeding into the install side.

And you're not flipping stuff that then doesn't go to the comfort advisor, which in the comfort advisor has nothing to sell. It's crazy. It's an interconnected web. That if you start pulling parts out, it really collapses the house cards. It's just, I didn't realize until we did this experiment, like how interconnected everything is and really having in their places doing what they're best at.

John Wilson: Yeah. It's real. Call center feeds dispatch. Dispatch feeds service. Service feeds Sales

Sales feeds install . Install sells the membership, which feeds call center. And anytime you mess around with any of those it's a problem. because you're shooting yourself in the foot and it's just what foot are you going to shoot yourself in? If you do less service, all you're doing is you're making today look good.

But two weeks from now is gonna suck.

Jack Carr: Exactly. So we don't have an install this week. Because last week we were doing all those installs and so we don't have an install this week yet and we need three installs a week. And we don't have one because we weren't outbounding cause we didn't need to outbound.

To fill up schedules, which then our service techs didn't run because they're installing and then we didn't flip and then now we don't have installs this week. So it really is crazy how interconnected

everything is

John Wilson: Oh and the timeline too because it's like a reboot because if you fall off the cycle It's a week. two weeks to get back on and you already lost the opportunity Because you know we talked about this a lot but like customer has need they call They get next available appointment. Maybe that's today, maybe that's tomorrow, maybe that's two days from now. So there's already a two day gap before we even get out there. Then we get out there, we flip to the comfort advisor. Maybe the comfort advisor goes out that day, maybe they go out the next day. Three day gap from the need. Then, we sell something. We have to order the equipment. Maybe it's installed the next day. Maybe it's a few days. Maybe it's something special. I don't know. So we're at a four day gap at a minimum. Maybe a seven day gap if it's a weekend or something. From when that customer had a need to when you got out there and actually drove the real revenue. So it's a train that you never want to stop because every time you have to restart it. It is a pain.

Jack Carr: We've been hiring and so we have our dispatcher. Dispatcher was surprise, dispatcher CSR mix was surprisingly easy. We posted and we had 28 emails

John Wilson: Yeah Dispatchers have always been easiest one. I don't know why but

They are.

Jack Carr: I didn't realize how many companies actually did dispatch either because I've been going through all the resumes and looking at them.

There's a lot dispatch for like metal delivery and, trucking companies. It's a pretty prevalent thing, which makes it actually a really easy transition as long as you can get, teach someone service Titan or house call pro or whatever.

John Wilson: Yeah and I think the big difference that you really want to watch out for is who is revenue minded because like a lot of people can like organize a route. But are they going to understand opportunity? It's back to how are you going to dispatch. Are you going to dispatch based on a route?

Are you going to dispatch based on dollars? And where are you at the spectrum? And like the person that you put that in there has to believe in the method of dispatching. So if they came from like a route based thing, that's their first inclination is to go back to route based .

Yeah This route based.

Jack Carr: That's important definitely, but we're choosing based on, because this person, we don't have the ability at this, business range, we're going to have to hire an ISR, CSR, and a dispatcher, so they get that combined. So honestly, from the get go.

John Wilson: Living the dream. Shes got a big job.

Jack Carr: it's a serious, it's a serious position for this, and so what we do though we prioritize the bubbly friendly, CSR side kind of the most, because I think that you can teach route, figuring out routes. You really can't teach someone to like outbounding.

At least in my opinion, I don't think you can teach someone to like being an outgoing personable person. You just, they either are or they aren't. With a sales mentality, selling memberships, selling IQ over the phone, whatever it may be. Or finding that opportunity. We like bubbly. We like happy, bubbly, keep the customers,

Upset customers, especially coming back happy. And then, if you mess up a route here or there, we can work on that and say, Hey no, this is a big ticket item. Please put these ones first.

John Wilson: Hey, this episode is sponsored by service scalers. So service scalers is actually a brand that I've used personally with our companies for a little bit over a year now, uh, 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.

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.

Jack Carr: Speaking of dispatch, I know we're going off our original script on what we were going to talk about.

Have you looked into dispatch pro on service Titan?


You guys use dispatch or dispatch pro. you like that?

I'm gonna give you

my thing first. So I have,

John Wilson: You should define it for the listener

Jack Carr: Oh no, I'm too excited. Too much coffee, too late at night. So Dispatch Pro is Service Titan's new program that came out that utilizes AI and self learning and all this kind of technical speak, which I don't have experience in to supposedly dispatch and organized dispatch better than a person, or at least as well as a person so that you don't have to have a dispatcher.

The application will see that you have somebody somewhere in the system that needs to dispatch out or it's running late and then it autocorrects and moves appointments around. I have anxiety and stress thinking about that. Not to mention the backend work of teaching the system Hey, this is my best guy for flips.

And this is my best service guy. This is my best maintenance guy, assigning all that. So , this is me guessing right now that you assign that. So that's how it learns


John Wilson: Yeah, so we've been using it For two three weeks because it has a four to six week on board So we began the process two months ago, but it goes through a learning phase They say it's AI. I don't think it is. It's just machine learning. it's not overly complicated. It is this person on this job type has the highest close rate, highest It's what your dispatcher already It's just, this is like the robot doing it instead of a human doing it. It takes four to six weeks to learn. And it basically just pulls data. And there's an onboarding time for new employees where it takes four to six weeks figure out what are they actually good So if you know someone's good at something specific, then you have to guide it. But yeah, just reshuffles the board uh, every 10 minutes or something like that. And whatever, however you do it. And exactly how I described. The spectrum of dispatch is there's a bar chart thing. There's a slider that you slide like that Is dispatch so like hey, do you want to focus on route efficiency?

Or do you want to focus dollars and like you pick so I think we're at like nine out of ten on dollars. Not totally dollars, like I don't want to drive to the middle of nowhere, but mostly dollars

Jack Carr: It's saying that hey, Gary has sold three out of the last, or he's upsold more than the ticket price on three out of the last five whatever, plumbing jobs, sewer jobs. So it's saying that we're going to put Gary on this job pretty much no matter what, because he's three out of five is better than the next best person, which is one out of five, right?

I'm interested after this onboarding to see how it actually works, because, I see the idea, and the idea is great, but practice and idea don't always mesh.

John Wilson: yeah. I think the biggest issue that we have found so far is it works and it makes sense. And it will eventually reduce burden on dispatch which will free them up to do other stuff, which is cool. The issue that we're seeing is do the dispatchers trust it or like it? And they often don't. So you have to train your dispatch, like it's there to make the job easier, and then we will add more things, like their job will adjust.

But I think it's initial fear is like, this just replaced me. So you have to get over that because that's not what it's meant to do. It's not meant to replace a dispatcher, it's meant to augment a dispatcher and strengthen the dispatcher. So that's the first one. But then it's a lot like bad data in, out. How tight are your job types? How tight are your job descriptions? tight are your options? And when your dispatcher moves something, they have to tell Dispatch Pro why they moved it. How good are your dispatchers are following directions? It's a very active program, and I would personally worry about it, if, don't know what the target size

Jack Carr: I was going to say, it sounds like it's something that works at like maybe 15 to 20 is where you would start to make sense when you have one or two dispatchers. don't know, but I could see it being like a use case on these mixed roles, right? If that's the last thing you have to worry about, or if it's like, Hey, this took my dispatch portion of my job and I do CSR, ISR or whatever.

And it made it like, hey, I do it 10 out of 10, that's my only job, and it just made it like a 10 and just reduced the difficulty of that part of the job. I think that would be of use, but I don't know. I'm interested to see.

John Wilson: Yeah, I think so.

I think it's a big program, and I think probably the earlier on you get in the better, but it's a big program, and it's gonna take long time is my current take, to be, Like yes, I fully trust this thing to run with this and there's always going to be input it genuinely does not replace your dispatcher it's not supposed to it's supposed to take like the busy work off your dispatcher. So your dispatcher can focus on like the real work. So for us the real work is if there is a p1 That comes in we're gonna do it that day and I don't think dispatch pro is doing that yet It's not going to automatically reschedule stuff. It's not going to like mess with it, but it does fill capacity. So it's a good tool. We're still very early stages on it. So I don't have like big grand opinions other than it seems to be working.

It seems to be optimizing the learning phase takes a long time. And most of the continued success of the program is your dispatchers using it right. Because there is human touch.

Every time you disagree with the program, you have to tell it why you disagreed. Which is a lot. So if you're moving ten calls a day, you have to explain why so it can learn. And then eventually you

don't have to do that.

Jack Carr: It's like everything else is service tight and it sounds like it's the more good data you put in, the more good data that comes out and that's an ongoing fight. If you're using service Titan or actually any of the programs, I'm sure it's like, Hey, you got to make sure that everything stays tight.

You're using the right tags using the right business. types. You're only going to get as good data as you put in. So I'm interested to watch it though and see it. I'm definitely not going to be one of the early adopters, but hopefully as we grow, it's something we'll grow into.

John Wilson: It's been out for almost a year in beta.

So, maybe it's public now? But yeah, we got on a couple months ago yeah, it's interesting. I think it's worth a look. I just think go into it with eyes. It's not going to replace anybody's role. It's going to take the busy work off that role so they can focus on the more


Jack Carr: So speaking of all of this, before we got sidetracked we are hiring, like I was mentioning, we're hiring a tech because we don't want to send people over. We're hiring an installer because we obviously need installers. and then we're hiring a dispatcher CSR. And so the question today in our last limited time is what's the framework that you lean on when trying to figure out the compensation structure for just any position?

John Wilson: Yeah, I'm going to go with any position. Cause I think people talk about it with texts a lot, but I think people miss the boat on just talking about it with tax. I think that in general, there should be a comp philosophy.

Jack Carr: That's exactly what I'm talking about,

John Wilson: Yeah. So what is the philosophy that we take to comp so that we'll talk about that and then we'll talk more strategically. How do you implement it into each role? sO my philosophy for compensation is that everyone should have a goal and get paid when they hit that goal. And even deeper, they should get paid very well when they hit that goal. So our desire for comp is that we will pay you a good wage for base compensation. it's a healthy wage. don't low ball people on base. Like you get paid a good base and the bonus is meant to be the real dollars where that is where an overachiever can drive significant value to themselves

Jack Carr: And when you say bonus, do you mean actual bonuses? Or are you structuring those as commission?

John Wilson: All the above,

our managers are a bonus.

So, Did you hit your gross profit dollar goal? Did you hit your gross revenue goal? If you didn't, where did you fall? Bonus. Uh, If you're a technician it's commission basically, but it's total, it's not commission on individual jobs.

It's like total monthly revenue. For CSRs, it's spiffs. Did you sell this club or did you do this thing? For ISRs and SPFs, did you book this appointment?

Jack Carr: So there's a base with an upside component on every single position that aligns incentives towards a singular goal, which is growth and revenue


John Wilson: Yeah, and where we seem to continually land is our expectation is that base should be around 60 percent of the expected total compensation. That wasn't really a philosophy that we had a long time ago. That's just of the math that I kept ending up with. But that is how we see it now. So if I expect someone to be a hundred thousand dollar field personnel, their base is likely going to be around 60 to 70 grand a year total. So maybe that's 30 to 35 an hour. And then they would have commissioned on top of that to

Jack Carr: Sorry. I'm listening. I'm also calculating out to see our tech, like where are we at? Are we at 60%?

Yeah we're about 50 to 60 or somewhere in there.

So that's interesting. and that creates the next good point when structuring, The actual individual role compensation, right?

So what are you using, right? So you're saying 60 percent of what we believe you should make, and then the rest is on , like a, you believe that a 300, 000 truck and you say, Hey, 10 percent is what you're going to make on a 300, 000 truck. Just say, if you're doing off gross receipts, that means that you would make 30, 000. that plus the base is going to be what your goal salary is or goal compensation for that position, correct? But then if that truck does 500, 000, that tech is making an extra 20, 000. So the incentive is for them to get their 300, 000 average truck to be a 500, 000 exceptional truck to make that 20, 000 extra on top of SPFs and everything else.

John Wilson: yeah. We've done a bunch of different stuff base comp, ultimately where we have currently landed and maybe this changes one day cause more and more of our guys are pushing for flat rate, which we think is good, like they will make more money and our cogs will be perfect.

So all about it.

Jack Carr: Are you guys not on a flat rate right now? You guys do hourly?

You're not talking about their compensation, you're talking about what you're selling. If you sell plumbing

John Wilson: Oh no their comp is out. Yeah. No flat rate like task rate

Jack Carr: Okay, so if they do X, they get flat rate Y? Oh, that's interesting.

John Wilson: It's really prevalent in HVAC.

Jack Carr: Yeah, we see it in installers very often. Every package you make 800 dollars.


John Wilson: So super common in HVAC we've run it a little bit with plumbing. We've run it with electric so we've run it in a couple of the trades and we're just starting to do it everywhere guys like it because they make more money. We like it because we believe it will One, it gets our cogs perfect, and two, we believe we will actually do more work because suddenly, if you know exactly what you're gonna make on a job, you're gonna move through it probably faster than you would if you were hourly, and you will ask for a second one. So that is the philosophy, or you'll go home, which is fine. Most of the guys that are starting to move to it are the guys that absolutely will ask for second. They will be like, hey,

I want more. And we're like, here is more.

Jack Carr: heck man, two package units in a day, right? I'm just HVAC brain right now, but you can walk out every day with 1,600 in your pocket.

Boom. Boom. Boom. Boom. you split it with a

helper, but still, a thousand bucks, 1, 200

John Wilson:

yeah so we have guys coming in now we have somebody starting in January, and he was like, hey, I have to make this much, and he's gonna be in install, and I'm like, literally the only way to get there in install is this. We're not going to pay someone in install 50 bucks an hour. juSt not. But, you can get there. If you want to share some risk with me and go flat rate. So the way we're doing it is basically 8 percent of job in install. Uh, so it's sort of commissioned, but you didn't sell it.


Jack Carr: So that's what we do. 7%, five to the lead, two to the helper. If you can do the whole job by yourself, which some jobs you can, they'll take the seven home themselves. And I've had techs or installers really love that part because they get like a little two ton and a one and a half ton.

They'll slap the, it's in a garage. They'll say, Hey man, I'll take this myself. Please gimme that 7%. And then if they get these higher, we sell a lot of. Inverters and really IAQ and stuff like that. It's one of our upsells. And so they love it too. Cause it's a little bit more work, right?

When you're working with inverter systems and higher seer stuff. And it's on IQ. It's ah, that kind of sucks for just 800, but because they make a percentage of it, they love it a lot more because they can say, okay,

yeah, this is not a regular base model. There's more work that's going to be into the install, but I get more money.

John Wilson: Yeah , it's a win.

The people that make the most money in our company are like full, they share risk, right? That's how it goes. If you're a full commission or full flat rate, if you don't have a base, you make the most money and it's not close. like it starts at double, basically. Just because you share risk and that's how it's set up. So what's happening is, as the company gets larger and larger, more people they see that the work is there. And I think that's a big part of why people scared of it, is like, Can you keep me busy? Like what happens if we're slow? And our team has not seen slowness for a while. And, we're continuing to grow. We're driving more and more work. It's getting better and better. So we have more people every week asking to move to flat rate. So it'll likely just become, which is something we've wanted to do for years. So it's exciting for us that people are like please. And we're like, hell yeah. Sign me up. Like it helps with retainment they make so much more money.

It's hard to compete if somebody was trying to like, recruit them away from us.

Jack Carr: It's easier to on like them understanding side. I don't know how you pay your plumbers, but I know a very common way to pay plumbers is just a percentage of gross, right? Than me. 10, 15, 20 percent of gross. And it's really easy to say, okay, sit down, you make 20 percent of this. If your truck does half a million dollars a year, that's 100, 000.

So you need to do half a million, you know, you need to do 500, 000 off this truck at the end of the year to hit your six figure goal. And there's no ifs, ands, or buts about it. Like they can break

that down into a daily amount, a weekly amount, a monthly amount. They know exactly how much they have to sell to make exactly

what they want.

John Wilson: Yeah, I think, now the hardest thing with flat rate, or commission, not as the but like percentage as the installer, is you have to put a lot of trust in the salesperson.

I think that's where you lose people, where you gotta kinda go slow. But you have to trust that that salesperson is gonna tee you up.

Nicely, because like they could bomb your day for very little, if they sell it wrong. So I think that's the big risk. Yeah, if they sell it too low it did take a full eight hours and you ended up earning 20 bucks an hour, where like on hourly you would've been 30 or 35.

So Yeah.

I think there's definitely a risk to it. You wanna make sure your sales are tight. You want to make sure your guys are doing well, but it does cross, like one of the biggest gaps we've had as the business has grown is like service just makes so much more money. So it is exciting that we're having the opportunity for our installers to really earn a lot too. So what we've continued to find is like compensation does drive the bus. you get what you pay for. And if you pay performance based model, which I assume everybody is on like, it'd be crazy to me if I found out somebody wasn't. It's not like it's 2010

Jack Carr: You'd be surprised, some of these companies that I've looked at to acquire and stuff, zero performance incentive. And the big headache from that owner, which we were talking about buying his company, his biggest headache is, man, these guys are milking the clock every day. milking the clock.

I know they can get that done faster. And I just, I'm sitting there going, they have no incentive to go faster. There's zero incentive to align other than not get fired. So they're going to do the bare minimum not to get fired. Whereas if you take that and say, Hey, we're cutting your pay 10 bucks an hour, but you can make 20, 30, 000 more this year.

If you hustle. It's up to you. I think that's the way to go. Aligning incentives across the board with every single position. Backing it out and saying, Hey, what's this position supposed to make? 60 percent as a base or even go full. if the position can go full. Flat rate. I like If I went back into the workforce and I had the opportunity, I'd hustle

John Wilson: Yeah. It just doesn't make, sense not to. there's an upside.

Jack Carr: It also makes the conversation really easy. So we had this early on in our hiring processes, guys that would come and say, Hey Jack, I want to raise and saying, well, let's look at how much you made on commission. And then you can walk them back through and say, Hey, you're underperforming on commission, which is why you're not hitting what you should be. If you're selling X, Y and Z, if you're offering X, Y and Z, then

you'll get there. You just aren't doing it. You're not doing the steps you need to be taking to make what you should be making. And people that are really like that or they want to milk the clock or they want, the easy way.

And if someone wants to not drive revenue and they want to sit there, it's sit on a maintenance for four hours, you're not right for this company either. That's how we try to look at it and maybe I'm disconnected, but it's gotten us some great texts and we have a decent team that we're pretty happy with.

John Wilson: I think the philosophy I want to share is that the same idea can go to nearly every single position in your business. How do you drive comp for CSRs? How do you drive comp for ISRs? Managers? even AR? Like, how much did you collect? I think how you scorecard. A position matters a lot and how quick can you score card? And I think that this is where people usually mess up comp is they come up with this very elaborate version of compensation that is really long to calculate. And especially with manager bonuses, I think that anything based off EBITDA is kind of stupid, honestly. unless you can measure EBITDA weekly. Which most people can't. I can't. So, People need to know in 10 seconds

If they're winning. That is it.

Did I win the day or did I lose the day? Did I win the week or did I lose the week? Like, What are we doing? With technicians, they have stuff on service titan. I did x amount of sales, my closing rates x, sold this many clubs, I'm winning, I'm losing. With CSRs, what's my book rate? How many calls did I take? Am I winning or losing? With managers, they get a weekly scorecard so they know if they won the week. Here's your revenue, here's your gross profit dollars. So we measure gross profit dollars weekly. Because I didn't even feel like I could do a good bonus program for my managers because our scorecarding wasn't tight enough. And that's a relatively new thing for us. How tight is your scorecarding and what are you measuring and is it simple? I think that's the other big philosophy here is how do you make it as simple as possible? Nobody wants to play games with comp and they need to know quickly if they're on track or off track.

Jack Carr: Cause

once again driving ambition and driving motivation. If you have to sit down and calculate out something an hour every week, you're just not going to do it

John Wilson: It's a scoreboard. yeah, you've got, you have a players, they're playing a game, like compensation is just a game and you set up some rules. Here's how you're going to play this game. You're going to run four calls a day, five calls a day. You're going to get this type of opportunity. You're gonna use this thing in order to put points up on the board, and this is how you win, and this is what you get when you win

Jack Carr: I like it.

And so the real question, right? So now this was, this is great, right? We are HVAC plumbing. Boom. We can do this for both industries. Is this possible in septic for a driver?

John Wilson: yeah, we don't currently but it is possible I think it looks like the flat rate pickup, so they get paid 50 bucks a load, to run the septic. So I think that is how you, do it. I heard of a dumpster company that did flat rate. I think I brought it up here on the show.


I think that's the magic is I think you flat rate that we tried commission with it and it just, maybe it was the person that just didn't seem to drive the same results.

Jack Carr: I mean, the faster you can do it, the faster you can get to your next call, the faster you can make another 50. I think it's there. Like I said, if I were to be in any industry, I think that there's a version of this that needs to be implemented to help drive.

Revenue and, you could scorecard anything based on that and give them a portion of it.

John Wilson: Yeah, I think so. I Remember talking to a friend of mine's younger brother. had graduated high school a year or two before. He got a job working on trailers, and he was flat rate. And he was, like, 18, 19 years old. And, he was, like, I don't think I could ever do anything not flat rate.

I'm saying that because from your and my perspective we own these businesses. So the idea of working with an upside is what? But this was a 19 year old kid and this was like his second job. And he's like, I can only do a job with an upside. So I think as you're thinking about recruitment simple is obviously hourly, but you get what you pay for and you get the type of person that doesn't care about the upside, which might not be the person that you want.

Jack Carr: Yeah, once again, I have trouble imagining running a business without that portion in it,

John Wilson: Our business, like, can point fairly clearly on our path to growth. Like when it first started at 1 million of sales. One of the most impactful things that we did was add, a bonus structure to our techs. That was it because what it started doing immediately was other people cared about revenue besides me and  other people worried about the growth of the business

Jack Carr: The other only downside too that I found with this is recruitment is a little bit harder because explaining to somebody, Hey, you're only making 25 an hour. They're going, what? I used to make 35 an hour. Whatever that if they're used to hourly, it's a very hard transition mentally for them to wrap their head around it.

And usually my once again, my overly caffeinated Excel spreadsheets, I crank out and show them doesn't move the needle for them. So it's a very specific type of person who needs to understand. But at the end of the day, I still think it's , you're either for this business and you're into this model and then you're really into this model and you're really for this business. Or if you're against it, I'm not going to change your mind. unless you see it in action and you want to hustle, it's just, you're not right for the business. You're not focused on that revenue generation. So yeah,

John Wilson: I totally agree.

All right. As people are thinking about compensation, scorecard it, make it easy for people to find the score. Don't do these elaborate, drawn out bonus structures. Make it easy. Get scorecards accessible ideally it's just in the platform that they log in every day.

For us, it's Service Titan. And make the rules clear and stick to it. If you're going to have an incentive program, a bonus program, people need to know how they can win the game because it is a game and make sure you're precise and knowing when they get paid out. So ours is the last payroll of every month. very deliberate.

Jack Carr: sweet. I love it.

John Wilson: Thanks for tuning again for owned and operated. Twice a week we're dropping knowledge. Make sure you go to owned and operated.com. Sign up for the newsletter, check out some of the events we're hosting, and just seeing what else we're up to we appreciate the listen.

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 at Wilson companies.

I'll see you next time.

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