On this episode we are joined by Josh Kelly from Clover Marketing.
Josh has had great success, including helping Parker & Sons go from from $6 million to $200 million!
In this episode, we discuss the importance of tracking and knowing your numbers, 3 additional ways to make more revenue, and how to improve recruitment & retention efforts.
We also talk about how to utilize a ringless voicemail as an effective marketing tool.
Want free marketing tools from Josh? Email him here: firstname.lastname@example.org
The Smart HVAC Marketing podcast was created by Rival Digital to help residential HVAC contractors and is now streaming on all major platforms. Follow along for ways to improve your marketing and grow your business as we continue interviewing more industry experts.
We do not own the rights to the songs in this episode. Should we need to remove it from the audio, contact us directly at email@example.com.
In case you prefer reading, these are mostly correct. Scroll in the box to see more.
Eric: Hello, hello, hello again everybody. I hope you had an outstanding Thanksgiving with; maybe you watched some foot football. Hopefully, your team won. Hopefully, your fantasy football team won. I know a lot of our listeners out there watch a lot of football and keep up with fantasy football, as I do myself. My team lost, so not super stoked about that. But nonetheless had a great Thanksgiving break, a couple of days away from work to relax and spend time with family, but we are at it for the next couple weeks before another holiday rolls around, but we’re reloading on recordings and episodes for the rest of the year and as such, we have a really exciting guest with us today, Josh Kelly from Clover. Josh, how are you doing?
Josh: Good. Good. I’m excited to be on the podcast and chat with you a bit, man.
Eric: Yes, absolutely. Well, Josh, why don’t you go ahead and introduce yourself for our listeners out there. Tell me a little bit more about your history in the industry and what you’re doing now.
Josh: So you kind of mentioned it, I’m the CEO or COO, I think I’m actually the COO of Clover marketing, one of the founders. We are the largest, most successful kind of consulting business inside the industry right now. Most people though know me from my contracting background. I’m a contractor myself, a company called Parker and Sons, now the largest, most successful, most profitable HVAC plumbing business in the United States, will do about just short of $200 million just in Phoenix here and residential service and replacement. So that’s where most people know me. But yes, we grew that business from six and a half million to 200 million and I guess it’s about 18 years now.
Eric: Wow. Is it just in the Phoenix market?
Josh: Yes, just Phoenix. Yes, we’re single market. So if you were to take like, there are some bigger companies out there, there’s like the Service Champions, there are the Southern Airs, but Southern Airs has like 45 locations, so we’re like the largest, if you do it by location.
Eric: Single location.
Eric: And territory type of deal.
Josh: If you’re pulling together 20, 30 markets, there are a handful of companies bigger than us.
Eric: Yes, interesting. So let’s talk about that before we dive in with some of the operations and stuff that we were going to get on, but let’s talk about that growth. I mean, 6 million to 200 million is I mean, obviously that’s nothing to sneeze at. That’s quite substantial growth.
Josh: It’d be a big sneeze.
Eric: Yes, you would definitely need to get a booster shot after that one. So let’s talk about that, what did that journey look like taking it from 6 million to 200 million and how did marketing play into that?
Josh: So we bought the business, it’s my family’s business. So my father still runs and operates the day-to-day. I’m not in the day-to-day anymore but obviously still consulting the client parts and still involved but not nearly to what it was. I got out, we sold to the Wrench Group years ago, a few years ago and then I kind of transitioned out then. But yes, so we went from six and a half to 200 million, a lot of people asked me what’s the secret sauce, that’s big and it wasn’t like we had 200 million in line, we were just trying to make payroll. So there are a bunch of secrets to that, there’s not like a haymaker, if you do this, you’re going to have success. It’s really, we got really good at the blocking and tackling and doing the basic things really well. So the very first thing that we really focused on was making money off the customers we already had.
So increasing our average ticket cross-selling, making one call into two and I think that’s where most companies really struggle is they get these customers, the phone’s already ringing, but they’re not priced properly. They’re not set up to cross-sell. They’re not set up to upsell. They’re not transitioning into other services if they have multiple services, they’re not adding tune-ups to repairs. They’re not doing the bay basic stuff well and because of that they’re just not making as much money on every call and it becomes really difficult to scale and grow. Once we really started making more money on every single customer, guess what? We had more money for marketing and when we got really good at marketing, at one point our cost per lead was all the way down to $12. Which the industry average is like 70, 80.
So we started killing it there and every call that we brought in was worth more money to us and it became this snowball effect. So I guess if you got specific questions, I can give you specific answers. I’m an open book, you can ask anything you want, I’ll give it to you. But it really was just doing the basics really well. If you were to go into Parker and Sons even today, you would see dozens of mistakes we make every single day, but we did the basics really well. We answer the phone well, we upsell well, we create a good experience. We do the basics of marketing really efficiently. We do all the AB testing, all the basic stuff that you would hope a business runs, we do. We don’t just talk about, we actually do it and then we don’t dabble in the fluff as much because you just can’t scale complicated things. You’re rolling out this complicated play plan, good luck doing that to 750 team members. It has to be simple.
Eric: Well, I think that sticking to the basics and always making sure the basics are done right is such an important thing, because there are so many contractors and business owners out there and this is in any industry. They focus on these shiny objects and they’re just like, ooh, look at this shiny object that just came out, and meanwhile, they’re glaring at this shiny object and their phone is ringing and they’re just ignoring the phone that’s ringing with a customer who wants to give them $7.99 for whatever it may be and they’re looking at this shiny object that’s going to cost them $1,600 a month that they think is going to make them $7.99 a day in jobs, but they’ve already got that call and then they missed the call because all they care about is the shiny object. So what are some of those basics?
Josh: So yes, I mean phones are a super simple one. There is nothing more frustrating, especially as really a marketing guy originally, I’m really more of an operations guy now, but I certainly am one of the more prominent marketing guys in the industry still. But there’s nothing more frustrating than getting the phone to ring and then not answering the phone. I always tell people this, I think this is a great example is like, unless you have a crystal ball and you know something I don’t know, I have no idea whether that phone call is a $79 tune-up or a $10,000 AC system. I have to assume it’s a $10,000 AC system. So I better pick up the freaking call and by the way, on the phone call, I don’t know whether it’s a $79 tune-up or a $10,000 AC system all the time either because sometimes those tune-ups really are replacements because it’s a 12-year-old system and they don’t know how old it is and they just move into the house or whatever. So I have to assume every single one and if I go with that mindset, every phone call is worth $10,000 to me, I freaking answer the phone.
Eric: Oh absolutely.
Josh: So I mean really the basics are not as complicated. Everybody knows it. It’s hey, answer the phone quickly, effectively, cross-sell over the phone. A lot of people don’t sell over the phone at all and that’s stupid. Let’s be real honest about it, all the big companies do that. All the really successful companies and there’s a reason, it’s because you can afford to have better CSRs significantly because you could pay them a spiff, which increases the quality of your calls significantly, which is how you set the table. Plus it’s way to generate revenue, a call center should not be a cost, it should be a revenue generator.
Josh: Then when you go out to the house, you better be really good at closing those calls. We can’t walk away with tune-ups, we have to make offers. We have to present options and it’s their choice whether they take them or not but it’s our choice whether we present the options and then we have to make sure we’re cross-selling and making one call into two whenever possible. So running the health and safety inspections, doing all the basic stuff that a lot of people have heard about, but most people either don’t do or do really, really ineffectively. That’s like when we’re getting calls and then the basic stuff is there’s nothing worse than hey, we’re slow, we’re just waiting for the phone to ring and no one says they do that, but almost everyone really does that.
Do you have your list saying that, are you sending emails? Are you sending text messages? What leverage do you have in place to make sure that your install board is always, always full? Because by the way, if you fill your install board every day, you’re generally going to hit numbers. Do you know what I mean? That’s where most of the revenue comes from. And then just tracking, there are so many low-hanging fruit that’s so simple and none of these are like, oh, I didn’t know I had to track stuff like, you know you do, but a lot of people don’t do it anyway.
Eric: Well, and that’s the thing when we were talking about this last week, maybe the week before, I don’t know, we were talking about the levers that you have and tracking things so that you know when the time is to pull a lever. If you know your cost per lead and you know how much money you invested into this particular campaign and you’re slow, well then you can pull that lever and say, all right, we can dump $7,000 into this because can expect to get this many jobs out of it.
Josh: Correct. Yes, you have to know your numbers, you have to know your levers and I mean like a PPC campaign is one of the most; there are literally hundreds of levers in almost every section of your business. We’re actually putting together a levers course right now, it’s freaking intense. Ferguson asks us to do it and we’re going to do it for Lennox and a few others too but like it’s intense. Just so we’re all on the same page, what we all mean by levers, what me and Eric means is like, Hey, if my board’s not full tomorrow, one of the most obvious levers you could pull is PPC, right? Your pay-per-click, SEM. I could double my budget for a day. I call code red, which means my digital marketing team knows exactly what that means. It means for 24 hours, I’m doubling the budget on service or install, whichever department I need help with and I know I can fill the board with calls because I know what doubling on a budget should equate to in the number of calls and if that’s enough, that’s good. If I need more than that, I need to pull additional levers on top of that.
Eric: Yes, absolutely. So when it comes to, you mentioned in the beginning, marketing for, taking care of your customers first, the people that you already have in front of you, that’s something that I see a lot of people falling short on all the time is trying to generate new business but they’ve got 8,000 contacts in their service Titan account who they haven’t reached out to in six or seven months. What are some good ideas for people for reactivating that customer base and getting them sold on other services and offerings?
Josh: So I’m going to complicate this answer, which should be a really simple answer. If you haven’t reached out, which just happens all the time, it’s like I’ve got this huge list and I’ve never really reached out to them. The first thing you do is you have to create a burner account and I’m sure Eric is well aware of this, but most contractors have no idea. You’re going to get a huge opt-out if you’ve never emailed anybody in your entire career and now you’re trying to send 10,000 emails, don’t do it under your URL. If your company is, AC service, whatever, we’ll call you AC service, and your website is acservice.com, you’re going to want to create acservice1@gmail and send all those emails from there. That way you don’t burn your own email and keep whatever’s left after all those opt-ins.
But really what I suggest is if you’re trying to reactivate your list, you go up the value chain. And by the way, this is how you should do all of your activation customer lists is the value chain. So what I mean by value chain is how much does it cost? What kind of return can I expect? There are cheap, easy ways to do it and there are really expensive ways to do it. What most contractors do is like, Hey, I’m slow, start dialing out and there’s nothing wrong with that, but you’re too late. If you’re not kind of, you’re not being proactive, you’re being totally reactionary in that case and dialing out is one of the most expensive ways you could do to generate calls. Especially of your own customer base because like these CSRs are not inexpensive. There’s a big opportunity cost and to generate 10 calls, you have to talk to a hundred people. This is a big drain of time.
But an email, which I could send now to a thousand people or 5,000 people or 10,000 people, depending on how many calls I need, I could do that for a few dollars. It takes, once you get good at it, 20 to 30 minutes to write up a really solid email with a really solid offer and I could hit those people all at once, super, super-powerful, and incredibly cheap, incredibly low timeframe. After email, I suggest text messaging, because text messages get open way more than emails then you go into like ringless voicemail. If it’s a high enough ticket, you could do some direct mail and one of the last things you do is actually calling. Now it’s still part of the process, but like if I could take a thousand customers and I can email them and I could get a hundred of them, which is a realistic number from fifty to a hundred to respond back to me, now I have 900 people to talk to and I can text message. Now I got 800 people to talk to and I do a ringless voicemail and now it’s 750. Now I do a direct mail piece, now I got 700 people. These are less people I have to call on and by the way, I’m being proactive, my board’s full.
A key to this too is like don’t email, text message, ringless voicemail, and phone call them all in the same day. If you’re going to do this properly, you have to be proactive. Meaning like, Hey, I could see the weather report a week from now. I know it’s October, November, I know in Phoenix, the weather is perfect outside, it’s about to be December. I know we’re not going to generate a lot of natural calls so I’m going to start emailing today and I’m going to send a follow-up text next week and I’m going to start a segmented list. So Hey, these are people that I know have 10 plus-year-old systems, I’m going to hit them first. And then, Hey, after I’ve picked out the low-hanging fruit there, then I’m going to do it geographically so my techs don’t drive.
There are a lot of complications. If you want, let’s do this, everybody my email is firstname.lastname@example.org. I’m giving out my personal information. I could just give you kind of a step-by-step how to activate your customer list. We have like some content built on that. I’ll give that away for free if anybody wants it.
Eric: There we go. We’ll include that email in the show notes. So if you’re listening to this now scroll down and the email will be there on the show notes section. If you’re listening to this on the website, it’ll also be in a little description. So you go ahead and send Josh an email and get that because I think that’s huge. I think that I’m a huge proponent, I do digital marketing. So obviously, I’m always going to be a little bit more leaning towards the side of SEO and SEM and all that stuff. But I think that you’ve got to be hitting them with email, with text.
Josh: These are customers, like clearly, I’m a fan of SEM and PPC, clearly I’m a fan of SEO, these are great ways to grow your business long-term and you need new blood without a doubt. But if you’re looking for easy calls because my board’s not full, getting new customers, it is just more expensive and everyone’s competing after that. If I go after my own customer base, I don’t have a competition and they already know, like, and trust me, it’s just so much easier to get them to do business with me again, which by the way is just doing the basics. There are only three ways to make more money, more revenue. What are the three ways Eric? You know them.
Eric: New customers.
Josh: New customers is one.
Eric: Yes, upsells.
Josh: Make more money off your existing customers or get your customers to use you more often.
Josh: Those are the only three ways to make more revenue. There are no other ways.
Eric: Yes, and two of those ways are easy because they’re already your customer.
Josh: Correct. All three are easy. It’s just, at what effort level, what cost, how sophisticated are you?
Eric: Well, yes. So the cost of two of them, because even as a consumer, as a homeowner myself, the cost of switching companies, I’m not going to switch AC providers just for the hell of it.
Josh: No, you’ve had to have a bad experience otherwise, you’re sticking, or it’s a completely unmemorable experience and then you don’t even know who you use.
Josh: It’s one of those.
Eric: I mean, the company that did my HVAC. I needed duct repair, I called them, I needed attic installation, I called them. I needed a water heater, I called them. They became my one-stop shop for everything because I didn’t want to have to go through the process of sending people out to my home again, having three phone calls and consultations and all this crap before I got service.
Josh: Yes, you’re the ideal customer. So everyone should be trying to get Eric to work with him apparently. We all want Eric, move to Phoenix. Eric. I would gladly help you out.
Eric: Yes, that’s what we should do. We should I should just start buying houses everywhere and then…
Josh: I’m okay with this. I think most people on this phone call would be okay with that.
Eric: But the thing is though, there are customers like me in your CRM right now, in your service Titan account who have got existing projects that they want done, but they just don’t, they need a nudge to give you a phone call.
Josh: A hundred percent. A hundred percent. The big key to this too is if you’re activating your customer list, you have to tell a story. No one likes a used car salesman who’s like, this month only it’s 10% off and there’s no why. If there’s no why then it’s just a cheap sales tactic. But if you make sure to tell a story of why that discount’s happening. So like right now it’s like, hey, there’s a slow season for every industry. This is our slow season here in Phoenix and we have to keep guys busy and because of that, we went to our distributor, I’m blaming on distributor which is great and we ask for a discount on whatever they’re specifically looking for, what are the odds? We’re going to go ahead and pass that discount off to you. It helps keep our guys busy and I know it helps you out too. So it’s a win-win.
We’re going to be in your neighborhood Wednesday or Thursday, which one works better for you and then you do an email, you do on text message. Now text message, email is long-form, you could say a lot. You don’t want to say too much, but you could tell a story more, text message short and sweet. I’m a big fan of text messaging YouTube links. So just take a video of yourself and then put it up on YouTube and just text message basic information and the link so you can still tell a story. Super effective, super powerful and everybody knows how dirty and amazing ringless voicemail is. I’m assuming you know what’s ringless voicemail, do we need to explain it just in case?
Eric: I know what it is, but for those who don’t, you might want to go ahead.
Josh: Yes, with voicemail, there are some things, I say it’s dirty and I’m okay with a little dirty. But basically what it does is let’s say you have a thousand people you want to want to call. If I were to call those thousand people myself, it would take several CSRs. It would take some time or I could do ringless voicemail and it would call all thousand customers in about three seconds. What it does is it rings that phone and if that customer picks up, then it actually immediately hangs up on them and there’s no callback number. If they can call back the number they were called it goes to a dead number. There’s no way to trace it back to yourself. If they don’t pick up and it goes their voicemail, then it’s going to leave a pre-recorded voicemail that you said like a perfect voicemail and it’s going to sound super personal as much as humanly possible and walk through, and you can leave, out of a thousand you could leave like 700, 800 voicemails and get in people’s inboxes and a good percentage of them will call you back and it’s incredibly cheap by the way, unbelievably cheap.
Eric: Oh yes. For those who probably didn’t know about it until just now I imagine there was a light bulb that just went off and they were just like, oh yes, that’s happened to me. I’m willing to bet it’s happened to everybody. It happens to me almost daily where you answer and then it just goes and it disappears or you don’t answer and you just get a random voicemail about an offer
Josh: Yes, it’s frustrating as a customer sometimes, but it is an effective marketing tool and as long that offers legitimate and you providing value, then I don’t feel bad about it.
Eric: So talking a little bit about some operational stuff. I know you’re saying keeping guys busy right now is super important and a challenge. What are some tips, from an operational standpoint that you would recommend for slower season, shoulder seasons for some areas that get those?
Josh: I mean, there are a bunch of things you could be doing. Number one is activating your customer list. In the middle of summer, nobody activates your customer list because the phone’s already ringing. You need to activate your customer list during this time of year and you really need to hyperfocus on cross-selling and creating two calls into ones. We do that with like an oh by the way script, which is the most successful phone script in the industry right now. A bunch of super high-end companies use it. If you want that, you can hit me up on the email as well. And we do it mainly over the phone, meaning someone calls for air conditioning, we’re going to give them a plumbing call too. 15 to 20% of the time, that’s a lot of calls, especially at our scale.
It’s just, oh, by the way, we also do plumbing. Do you have any leaking faucets, slow draining drains, or toilets that flush themself, which is like 80% of houses have one of those three things. Do you know what I mean? I’m going after the low-hanging fruit, just trying to get a plumber in the door and then it’s important too. That’s how you’re cross-selling and upselling over the phone and creating one call into two. Then in the house, you need to be doing the same thing and you can’t just tell like an AC tech, Hey, I need you to create two calls in the one and just let them walk away, that’s never going to work. You have to systematize it for them, systems are the secret to scalability. So we run a health and safety inspection.
Health and safety inspections are incredibly effective, they tell a great story for a customer, create an amazing experience, and actually generate a ton of revenue. That’d be things like, so you’re done with a call, everything’s completely finished, you’re about to walk out the door and you say, oh, before I leave, I have to do a quick health and safety inspection. It’s actually a company policy and really, it’s just going to take a few minutes, we’re going to go for a few things that could actually cause damage to you, to your house or worst-case scenario, your family and I would hate to leave without at least taking a look at these. Can you go ahead and walk me to your water heater real quick, and then I’m asking them to do a visual inspection. I don’t want an AC tech to be like an expert on selling water heaters, that’s not the point of this. I’m looking to see, Hey, is this an old water heater? Is it rusted? Does it have a drain pan?
If all those are good, we move on. If it’s really rusted, then you see this, you might want to get a plumber out here. I could probably get someone out here today and then down to the water stop, or do your reverse osmosis, do your carbon monoxide detector, do your pressure regulator. I mean, there’s a list for each type of service. So we do air conditioning, plumbing, and electrical and water treatment as well. So each department’s going to have a slightly different health and safety inspection because it’s tied more directly to you. I don’t need an air conditioning tech to go see how old the AC system is they should have already done that. But a plumber, I want him to, and once again, I’m not looking for this plumber to be an expert at air conditioning, but I want them to be able to tell how old the system is, which is pretty easy and hey, does it look, is there weeds going through it? Is it all rusted up? Is there bird shit all over? Are there rats eating all the wires? Like if that’s happening, then yes, let’s get an AC guy out. If it’s not, that’s okay. We write down how well it is and we have a list we could contact people later with.
Eric: Yes, I think that inspection would be a huge win for a lot of the smaller companies, even medium-size companies that aren’t doing it would be a huge win.
Josh: If you’re a one service company, so you’re just doing air conditioning, that’s fine. You can still do a health and safety inspection. You can look at the carbon dioxide detector. You could take me to your whole house surge protector, which they don’t have. There’s still a list you could put together. It’s going to be slightly different. You’re not trying to cross-sell, you’re using it more for upselling, but still super valuable. And the key to that health and safety inspection is I get a customer to sign off on it. So if the customer signs off on it, then I know it happened. I know the conversation leads happen and they have a carbon dioxide monitor which is totally different than a detector and they’ve got gas in the house. I mean, that’s dangerous to be honest, carbon dioxide detectors go off after it’s a deadly level. That’s crazy that that’s legal. Carbon dioxide monitors go off at lower levels where you’re likely to get sick, get headaches, have other issues sometimes your whole life, which is terrible.
But like that’s an easy sell and if I have that on health and safety inspection and a customer says, no, I don’t have one and they sign off on it. I know that the customer had a conversation about it because there’s just no way around it. If they signed off on it saying they didn’t need it and they were aware that they didn’t do it and we let them know there’s a little blurb on there if they say, no, just be aware, this is what you’re saying no to. So it’s very difficult to get around and when things are slow, I know that I have a list of a bunch of people with carbon monoxide detectors that really should have the monitors and I can run a special right now and I can tell a story because there are thousands of stories every single year who die from carbon dioxide poisoning. I pick one story that’s local to the area and say, I don’t want this to happen to you, please do a favor, we’ll give you a discount just for a thank you for the holidays. Let’s go ahead and get this taken care of. So I know that none of our customers end up getting sick or dying over the holidays because of something as simple as upgrading from a carbon detector to a monitor.
Eric: I was just about to say, you could segment those. I mean, and you do that and you say, okay, this person has an 11-year-old water heater with rust on it and there’s this and then there’s that. Well, then you can segment those people into audiences. All right, here’s a water heater email talking about here’s four signs that you need to get your water heater flushed or here are four signs that you need to get your water heater replaced.
Josh: Yes, you’re not flushing a water heater that’s rusted and 11-years-old. But yes, I agree, that’s a be for breaking a water heater yourself and the thing is that like, you’d be surprised how often water heaters have rust on them and then it’s just that homeowner never went and looked at the water heaters. They don’t look at it. So it’s an easy conversation, fairly easy upsell and then the other side too, when really slow, it’s a long-term play, but you better be stickering up the house too. Stickers are still like, they’re so inexpensive and they’re so effective over time. You can’t just put like Parker and Sons on your wire here, there has to be a story. It’s how to shut off your water here in an emergency, same thing with your electrical panel, garbage disposal, AC unit. Make sure there’s a story or a reason for that sticker to be there.
When the water heater goes out, your shower’s cold, whether your experience and have anything to do with the water heater or not, what do 90% of customers do? They walk to the water heater and go look at it. They look at it, they’re not going to do anything with it. Well, it’s here, but there’s a big sticker on the front that says, Hey, if your water heater is leaking, do this. If it stopped having cold water here are three things to check and you know they’re not going to check it. They’re just going to call you which my phone number’s large and center and powerful.
Eric: Oh yes, absolutely. So what are your thoughts on companies, single service companies expanding into other services like electrical and plumbing?
Josh: I mean, it’s a great way to grow your business. You really just have to be set up for it effectively. So like your first service that you add is always the most difficult and when I say you need to set up, there are really two things you really need to have in place. Number one, you have to have a large enough customer base to justify. If you’re doing AC right now, and you want to add plumbing, but you have to be able to justify that, Hey, without marketing plumbing, I should be able to keep a few plumbers busy just by cross-selling and being good at cross-selling. Because most when you launch a new service, it’s going to be driven through your old service. That’s the most effective way to do it. That gives you the profitability to make some mistakes and have some issues and not come out of your shorts.
So you have to justify that you have enough customer base and that you know how to cross market it and cross marketing is actually fairly easy. We can help you with that or you get a bunch of information from people like us or other people, that’s not difficult. And then the other thing is, especially if it’s your first department, you better have the right leader in there. A department that has a good leader is guaranteed to work and the department that has a poor leader, no matter how well you set up is pretty likely to fail. So you have to find the right person to run that department, to start it off. That’s a really strong implementer and knows the industry, not like front to back, but more than you. To be clear, a lot of people, I’m a contractor, I consider myself a contractor, I’ve been in this industry for, I’m going to age myself, but 20 years, 20 years now, yes, 20 years anyway. But if I were to come out to your house and say, Hey, I have a leaky faucet and I’d be like, well, like I’m likely to break everything. I couldn’t fix a single thing, but I know how it’s supposed to be fixed and that’s what you need for that person running the division. They don’t necessarily have to be a plumber. It can be ideal, but it’s not required, but they have to be a strong driver.
Eric: What are some tips that you would suggest for people if they’re starting off a new division, say electrical, they’ve got HVAC and plumbing already and they want to open up electrical. What are some tips? What are some of the first few things after finding that good leader that you think they should do to generate business for that division?
Josh: It all starts with the leader. I’m a big fan of the WHO method for hiring. It’s incredibly effective for managers and supervisors. So if you guys want that, hit me up for that too. I’m just giving away shit. Anyway, so you got the right person, the next thing is you guys figure out, I mean there’s a lot to this. So like, what do you have to do? You have to figure out how to cross sell. You still have to figure out market, but even before that, you have to figure out pricing. You have to figure out your parts, you have to figure out your distribution. You have to figure out your truck stock versus OEM. You have to figure out paid plans. There’s a lot to it. What I would suggest anybody do is, Hey, if I wanted to start a new division, don’t do it yourself. Don’t make that mistake of like, I’m going to start everything from scratch and learn everything from the beginning and hope it works. Talk to somebody like myself or somebody in your area you have a good relationship that launched that division and learn from their mistakes and like, Hey, here’s all the things. Get that truck stock inventory from me, don’t make it up. Get that selling technique from me, don’t make it up, get that pay plan from someone like me or a competitor that you’re friendly with, or out of your service area, whatever it looks like. Put together plans from other people, don’t try to create everything yourself. And that goes just not for launching a division.
I mean, I’ll tell you one of the biggest reasons we were successful. And by far, I’m a pretty creative guy. We’ve come up with some ideas that really originated with Parker and Sons, a good percentage of them. But most of the stuff that we really moved the needle with, that really changed everything, it was because I traveled all over the country and met with other contractors and I begged, borrow and stole amazing ideas and made it my own. Made a little bit more scalable or simplified them a little bit sometimes, but don’t feel the need I have to figure out everything myself. That’s a for sure way to lose, learn from others, because especially right now, the industry is shifting so much just because of private equity and big businesses. When I got in this industry the big player here in town was George Brazil and they were probably 30, 35 million at the time and it was like gigantic, unbelievably large. Like how are they doing it now? Like 30 million, this sounds dick, but I’m just being honest, that’s a good size company, but it’s no longer impressive to me. I grew up businesses from five to 30 million every few years. This is just what I do now. 30 million’s not that impressive, not that difficult to hit.
When you get above a hundred million is when you start to impress me like, oh, you have some stuff really down. Getting from three to 10 is like cake now. Now, it’s not for everybody but I know how to build that. I know exactly what that looks like, I know step by step the processes. I know the pitfalls that you could fall into. I know the opportunity as you probably have. So it’s easy for me because I’ve done it so repetitively and the thing is like, you could try to figure that yourself, or you could just learn from someone who’s already done it and that’s a much better play, because there’s just way less risk and way more upset by doing it that way. So definitely whether you’re launching a division or really just having trouble scaling or growing or having trouble recruiting. Big companies, not just big companies, smart companies don’t have trouble with recruiting right now. It’s the ones that aren’t spending the time, money and effort are the ones that struggle.
Eric: When it comes to recruitment, this is a topic that I hope we’ll quit talking about in the next year. I mean, I feel like we’ve really been hitting on some…
Josh: We’re definitely not going to, this is going to be a long term problem.
Eric: And I feel like this time next year I’m still going to be like, all right, what are you doing for recruitment these days? No, but when it comes to recruitment, what are some things that you’re seeing that are working for people, smart companies?
Josh: I mean, so recruiting retention, it’s a hundred percent the industry is like the haves and the havenots right now. There are companies that are amazing at recruiting and retention and that’s a big piece of it too. A lot of people focus on recruitment, but not retention and that’s a mistake. You have to be doing both and there are companies that like are just terrible at recruiting retention. For the most part, the difference is really just the amount of time and effort they put into it. I’ve talked to companies, smart, successful companies and they’ll tell me their number one problem. I’m like you can tell me your number one problem and I’ll fix it in an hour, guaranteed. Whatever the problem is, I’ve run into it at least, maybe not with Parker and Sons, but with one of the companies I’ve helped across the United States get over a hundred million. I guarantee I’ve run into it. I can fix a problem within an hour. And then almost, yes, I would say probably eight out of ten will tell me like, if I just get enough good people.
Hopefully it’s good people, some people just tell me anyone will do but enough good people I could change my business and I say, okay, well let’s start with what you’re doing now and you start doing the math of what they’re doing. They’ll say like, I put this ad on indeed and I’m like, okay, that takes 15 minutes. It’s like, okay, I talked to my parts house and we put out a fly. I’m like, okay, that takes another 15 minutes and then I talked to my guys one time a month ago about a referral program we’re doing. I said, okay, that took a half hour and you start adding up the math on this and some contractors spend, what they’ll tell me is the number one problem in their business minutes a month. Sometimes not even hour most of the time, minutes. Now if you were to spend 40 hours a week on recruiting, would you do better recruiting? Of course you would, there’s no doubt. Can you imagine spending 15 minutes on marketing or 15 minutes on sales or 15 minutes answering the phone? That would be stupid. You would never do that. But people do that with what they’ll tell you is the biggest problem in the industry, by the way, having the right people solves almost every other problem you have.
Eric: Oh, absolutely.
Josh: So it’s really a method of time, money and effort. Most people don’t put the time, money and effort into the problem. You can’t spend 40 hours, that’s not realistic, but could you spend five hours a week? Yes, you sure could. You probably could and if you can’t, then you need to get someone in there who can and then you just have to be creative. You can’t do what everybody else is doing like that. Indeed done, like number one, most people people’s ads are terrible. They’re just not poorly set up, that’s a marketing piece. They think of it differently but I think of it just like I’m trying to recruit a customer, I have to tell a story. I have to tell why us, you can’t just start with a pay and hope that’s good. That’s just not people work. You have to be willing to do things that other people don’t think about or are unwilling to do.
I mean, we have a list. I think it’s 32 unique ways of recruiting that’s unbelievably effective. If you want, I’ll send you that as well. In fact, what I could do is like I could spend like three hours on recruiting and retention on some creative ideas that will blow your mind, on simple ways execute o,n how to save money on and how to retain people. We have a whole course. We literally have like a seven day course and like a half hour a day, plus some homework step by step to recruiting. It’s actually badass. But I could spend four hours on that question very easily and blow people’s minds but we don’t have four hours and people would be frustrated that they took that long anyway, so why don’t I just give you the information, make it easy.
Eric: Yeah, absolutely. So if you’re listening to this and you’re not doing anything at all, I would say, just start with an hour a day.
Josh: An hour a day and actually what I would say is like, don’t just, you just sit there, like pull people in, have a meeting an hour a day and say, how can we fix this? You want to learn a secret to solve literally any problem and people won’t like this answer, but it’s just the truth. It’s meet often enough with a right people and you could solve any problem. So what I mean by that is like recruiting retention, it’s not a once a month meeting. That’s not often enough, for most people it will be once a week. Some people will be twice a week. Some people, it might be every day, it’s a really bad problem and you will not sit in a meeting for an hour, once a week where you’re not allowed to talk about any other topic and you’re trying to creatively think of new ideas. You’re just not going to sit there every week for an hour and not come up with things. You want to be out of that meeting, I don’t want to have this meeting anymore, so I’m going to start to come up with some crazy stuff and see what it works.
Eric: I mean, I definitely like the concept of talking to people too. Figuring out how we can fix this, but also asking them, what do you like about this company that you would tell? What are the good things that you tell your family when you go home at night and get that and highlight those as well in your recruitment campaigns?
Josh: Yes, that’s really both recruitment and retention play. If you don’t know why people should or wouldn’t want to work for you, you have to have a USP, unique selling position. You should have one why do customers want to use you? And it can’t because we do good work because that’s what everybody says. It has to be unique, that’s the most important thing. But you have to have a USP for your customers as a GM or an owner, which is your team members. Why would they want to work for you over other people? And if you don’t have one, you need to make one.
Eric: One time I was interviewing for a position. This was several years ago, like right after college, I was just kind of applying to places and seeing where I would find something. I got to like the final round of interviews for this web developer job and this guy said, why do you want to work here? And I said, honestly, I don’t know. I just need a job, I guess and then I started thinking about it and I was like, well, that’s when it kind of like, I was going for a few different companies and I was like, I don’t really want to work there. They would just probably give me a lot of money versus this other company where I’ve actually seen why I would want to work there outside of just the pay. It’s the same with being an HVAC technician right now, you can go make a ton of money with any company, but why should they come work for yours?
Josh: Right, and to be clear, if you don’t have at USP, you might still get people by paying, people will come for pay, but they don’t stay for pay. That’s not the reason that they stay and if you don’t have a solid USP, you will have an issue of retention. People will leave you because someone will always be willing to pay more than you. No matter what, right. There are three things that work in marketing in our industry, there’s quality, speed of service and there’s price and no one likes to play the price game because there’s a race to the bottom. It’s the same thing for team members. If the only reason they work for you is because you pay them more and you could pay them more, but that can’t be the only reason they work for you. Because if that’s, then you’re on a race to unprofitability. There will always be someone who’s willing to pay and we pay 20%, some company will pay 25. Eventually someone will pay 35, some days some of them will pay 40% and it’ll be some mom and pop that’s desperate and it’ll make sense for them but it would never make sense for us because we would go out business.
Eric: Well we’ve hit on marketing, we’ve hit on some sales, we’ve hit on some recruitment, we’ve hit on some operations. I’ll have to timestamp each time there was a freebie that you could get if you emailed email@example.com.
Josh: Let’s do this too because we sent a bunch of these out, I’ll be real honest, I get tons of emails. I’ll be responding, but I’m not the fastest in the world. Why don’t we hit up firstname.lastname@example.org and either AJ or Tracy will respond to you generally within an hour and get you all this stuff. We’ll put together a list off this podcast and we’ll just send it all, just say here’s all the above, enjoy.
Eric: Yeah. Awesome. Well, I’ll include that email in the show notes and also when we send out the email blast to everybody for some good information there. I think that like you were saying earlier when we were talking about starting a new division, there’s already someone out just created this stuff for you why not just go grab it? And I know it sounds crazy for me to be plugging in another marketing company, but this is good stuff that will work for you.
Josh: We’re not competitive either. We don’t need digital marketing in any way. That’s not what we do. We’re more strategy and operations.
Eric: But this is good stuff you guys, and honestly I’m going to go grab it because I mean, I don’t think I’ve seen this stuff yet and I want to see it because I’d love to be able to know some of this stuff. I love learning new things and if it’s free then go.
Josh: So I had a business partner, I used to have a sound for a business called Review Kangaroo and we sold it right before COVID actually, it was a pretty lucky, good deal for us. But my business partner always told me like, your first option is to borrow, your second option is to buy, your third option is always built. You build last, borrow if you can, if you have to you buy, build is the last case scenario. You don’t have to start things from scratch. It’s just bad business to try to learn everything yourself.
Eric: Absolutely. Awesome. Well, Josh, is there anything that you think we may have missed out on that you wanted to talk about?
Josh: No, man. Here’s what I would tell you. If I, anybody needs help or have questions you can hit me up, you can hit info. They’ll get you on a call with me or we could do kind of a group call if there are a bunch of people asking the same question. You’re not alone, there are lots of resources out there in the world. Eric being one of them, don’t try to figure out all this stuff your own, talk to an expert, talk to someone who’s done this before. Who’s been where you’ve been and is at where you want to go. Don’t ever take marriage advice from someone who’s had three divorces. So you have to handpick and be careful about who you listen to, but there are a lot of people out there not just myself. So ask questions, get into the right group, get to the right mentor, get to the right support system to help make sure you’re successful. Otherwise, man, I appreciate you taking the time and letting me be on here and chatting to your followers. I hope everybody enjoyed and got some good value.
Eric: Yes, absolutely. Josh, I appreciate you joining me today. I hope you have a great rest of your morning.
Josh: Yeah. Thanks bud.
Eric: All right. Take care.