Ep. 96 - Going to the “Next Level” Requires Some Pain - Sorry ;-) with Mark Olsen

Hello everybody and welcome to another episode of the Wealthy Contractor Podcast. This is Brian Kaskavalciyan with G4 Marketing Group, and today I have got my longtime client and good friend Mark Olson from Crumwede Home Pros back again. He is a return guest. Mark, welcome. Thanks for coming back.

Thanks for having me, Brian.

So our— the last episode that we had with Mark was back in, uh, we were just looking it up, it's episode number 43. If you have not heard it, I would recommend going back. It was a fantastic episode because what we talked about back then was how Mark and his brother Greg basically got a company that had a ton of debt and they overcame the debt and had to kind of reimagine the business, but also kind of, um, oh, what's the word I'm looking for? You, you had to reinvent the business. That was what I was looking for is you have to kind of reinvent the business. And, um, so that's been a couple of years now and it hasn't been easy, has it, Mark?

No, and it just, it was on an incline. We got better, we got out of debt, everything went great, and then it went right back on the decline. And then I had to reinvent kind of again because the process and procedures needed to change in order to get from A to B. Uh, and it's just a couple of licks that I'm taking, but obviously knowing people like you and people in the industry, just talking really, you know, put a foot in my rear, you know, and gave me the tough love. And, and by doing that, it's got me to the next level. I mean, level as in where we're going, uh, besides this COVID right now, but we're already, like I said, on a rocket ship to the next level.

So what's awesome about, uh, about what you just said is that you, you're not hunkered down in your office thinking, oh my God, I got to figure all of this out myself. You actually, you know, got up, you go make phone calls, you go to events, you meet people, you talk with people, and you learn. And you have done a lot in your business over the last year. Let's do this, though, before we get into all of the stuff that you've done over the last year, is let's give everybody like the 1 or 2 minute version of your story. Tell us a little bit about, about Crumwede Home Pros, and then we could start talking about some of the things that you've done over the last year.

Yeah, so it's originally named Crumwede Roofing. It's a 67-year-old company, but really a 5-year-old business since me and my brother are taking it over. You know, you could kind of think of the Chuck in the Truck type company, and that's kind of what we joined, you know, when we came out of college in the recession. My brother and I obviously were looking for our careers in our field of, you know, I'm in construction management, Greg was biology, but we couldn't find anything, so we're back on the roof. We saw the potential the company had organically, just people calling, but we weren't very proud of the services and really the work we did. And as we started understanding the company and going to certain organizations and learning business, we realized this company is going to fold any day now. It was just cash flow, and I was sick of going on unemployment, but that's kind of how I was programmed from our family. That's just the way it was. And so we worked our tails off, we got out of debt, and now we're really pumping it with processes, process, procedures, and profit. That's kind of— we go from Crombie Roofing and Exteriors, and now we're the Crombie Home Pros because obviously the way we're growing, we want to start introducing more interior trades, uh, with our growth. And, um, again, the growth is trying to basically constantly grow and maintain and scale. This past year, I finally realized scalability and measuring and KPIs, how important those really are. Um, but obviously it really started from that day I gave you a phone call of What do I do? I was talking about my two-step close to my one-step closing. He kind of knocked me on the head and gave me the tough love of which route to go. And then I reached out to Charlie Gundel, and he kind of did the same thing, and I just bit the bullet. And then that's how you introduced me to, uh, Mr. John English. So, uh, it's really kind of changed, changed everything, but it also almost put the company under again. Yeah.

Well, see, you know, sometimes to go to the next level, it requires some, some pain. So, you know, you talked about process, you talked about profit, you know, the big 3 things that I talk about with people in this business, especially, is people, process, and profit. And you have, you've made some big strides in each of those 3 areas. 2 years ago, let's go back a couple of years. When you and I started having that discussion, I think it was about 2 years ago that we had that discussion about the 2-call close versus the 1-call close. And the 1-call close, it's interesting, you know, people, a lot of people don't understand the 1-call close. A lot of people are afraid of it. A lot of people think of it as a dishonest, unethical immoral way of doing business. I think you had a little bit of that also that you were kind of grappling with.

Oh, big time. I thought it was just the dirtiest, sleaziest thing ever, and I didn't want to touch it. I just couldn't imagine trying to walk out with a sale and not leaving. I mean, the horror stories you hear, and honestly, none of that is true. I've had reviews go up. I, I go from a 4.7 to a 4.8 in Google. We even, you know, we are good quality. We just got the good quality, uh, what is the, the Master Award. I mean, that is all about what you want your company to be. If you don't want to come up, come looking like that into the house, then you got to train your reps. You know, it's all about earning the business the right way. You know, I mean, it's— what's the difference between the first step and the second step? You know, and that's what John used to tell me. And I said, I don't know, you know, it's earn the business, you know. I said, all right. Yeah.

So, so, but you know what's great about all about that also is there is a very defined process. And so this is where all of the stuff kind of how they work together. So there's a very defined process that when done a certain way creates a predictable result. That result being, for every number of leads that I give you, you are going to bring me back a certain amount of money. Then we take that and we apply it into our profit model, and we say, okay, is that, uh, process running profitably? And if that process is not running profitably, then what adjustments do we have to make? Then if we go backwards from there and we look at, okay, here's a process I've got to be able to teach it. So one of the issues I know that you had with the two-call close was salespeople, right? Having good salespeople that could go in and be productive and close sales and make money at the right price. Right. You want to talk a little bit about that? So 2 years— let's back up for a sec. So 2 years ago, how many salespeople did you have?

I had 4, well, 5 including me.

Back then?

Yes.

Back then. And how much were you outselling? What percentage was you and your brother?

I was, yeah, I would say 70% running sales.

You and your brother were 70%?

Uh, my brother wasn't. He was more admin production. Oh, that's right.

So it was mainly you. So it was you were doing 70% and you had 3 or 4 other guys that were doing 30%?

Yes.

Okay. And so did that give you time to really focus on the business and grow the business and look at the numbers and the KPIs?

No, it was, it was very stressful. Now, now here's the thing with the 2-step and these guys, like A lot has changed, as in we tried to be all things to all people. So someone called and wanted a cedar roof, slate roof, shingle roof, vinyl siding, fiber cement— we'll take it, we'll run with it. We didn't have a call center. You just set the lead, you go out, then you try to sell, you know. Then you go back to the office, you call around, price it up, and go meet with them and present them, try to sell it. You know, I've learned that you cannot be all things to all people if you want to scale a company. You find what you're very good at selling define it and what's the most profitable, narrow it down and do it all in one sit. It was very difficult to stop doing and turning down everything that came in besides if it was asphalt shingle, then we'll run it. If it's a single-family home, we'll run it. If it's just vinyl siding, we'll run it. If it's just vinyl windows, we'll run it. Everything else takes a back seat. And that was a start that was very difficult.

Yeah, so you got more focused.

More focus, a narrow focus on what we could sell in our presentations. You know, we're not all things to all people. And again, that is extremely important to realize. If you just narrow focus on what you have, and by doing that, once— one-stop open, we like to call it, not the close. We like to open a relationship, right? Yeah, we do that. Yeah, yeah, one-stop open. When we, when we do that, you're able to measure better on our benchmarks, right? And that's trying to track that net sale per lead issue, which is a key number. And it's very difficult to do that on the two-step, and it's also very difficult to trust your sales reps to make that second appointment. And I was getting lead— I was getting taken advantage of by my leads, where our sales meetings were more about, tell me about your hot list, guys, who do we have on the pipeline? You know, now it's— we talk, we actually get to go over sales training, we actually watch videos, we actually run through other things besides the KPIs or trying to figure out, you know, where is this lead? What happened to this one? What happened to this one? I mean, the smooth process is unbelievable right now. I can't imagine how I did it years ago from where I have right now.

Well, you were— I remember you were stressed out all the time. So let me ask you, so today, how many salespeople do you have?

6.

And what percentage of the business is coming from you?

I haven't ran a sales appointment for Polly over a year.

Wow, look at that! How cool is that? So you actually get to focus on the business.

I am 100% focused on the director of marketing sales. We have a sales manager who's right along, who's implementing, um, who's doing a phenomenal job. And my job is to create these leads and get these leads in their hands because now I know exactly what we're closing, what our NSLI is, and all I need to make sure is I'm bringing the leads in because now my marketing makes sense. I can measure everything down to the T.

So what's interesting, so all business, regardless of the type of business it is, all has a set of fundamental economics behind it. And this business, the one you are in, the one that I would imagine most of the people that listen to this are in, has its own set of fundamental economics which then give it, you know, certain fundamental KPIs, NSLI being one of them. You know, how much, how much for every lead that I put out, how much money comes back and is that money that's coming back profitable. You look at and you can measure every single— what does every phone call cost me? What does every appointment cost me? What does every blah, blah, blah? We can go on and on and on. But now you're acting as an owner measuring KPIs. You are now able to manage people to KPIs. And one of the things that I love, you know, especially when we went to that whole system, you know, when we did the EOS system and really started to look at our numbers, um, is now you can hold people accountable to their numbers. So with salespeople, you can hold them accountable, your sales manager, your product, everybody can be held accountable. Um, what, uh, give me an idea last year, or give the listener an idea about how many jobs did you guys complete last year?

I want to say over 500.

Over 500? Wow, wow, that's awesome. And you made money last year?

Give or take 500. And you made money last year? Last year was that year. Last year was a growing, a rebuild year. And I don't know if anyone out there listening understands what a rebuild year— very stressful. You know, when I made that merge from a 2 to a 1, I I didn't realize you needed a call center. I didn't realize, uh, a lot of things that came with it. I had turnover. I had great sales reps that left because they were not bought in. I had, uh, people inside that left that were not bought in to the changes. I knew I had to make a change. I had— I was spending too much money on the sales reps not performing, too much money on leads that I couldn't measure. So profitability was getting really, really difficult to measure. So I decided, okay, it's time to clean up. And I cleaned up, and it was extremely stressful. So stressful, like, you know, we're talking no one even answering the phone because I didn't have anyone at one point. Yeah, because they quit. You know, I had to rebuild a call center, I had to rebuild the sales team, I had to train the production how to handle these type of sales because it's a different type of sale, it's a different type of way to act faster, you know, because now you have a 3 days right to rescission. When I was doing the 2-step the nice thing about that was I never had a canceled job. You move to a one-step, it's more of an emotional buy, you're gonna get at least a 10% cancellation. If you're not, you're leaving business on the table. But it started to really come all at once and realize, you know, we need to make money while we're doing these changes. So last year was a very difficult year. This year though, again, we were hitting bench— we are smoking every month out of the water until this COVID-19 came. However, even April, we smoked April's sales goals. So we're on a path now and still on this path of great success, and our margins are probably most likely, the last we checked, we're gonna hit about 15%.

Nice.

And we should, no matter what.

Of net, 15% of net?

Yes.

Nice.

And that's roofing, siding, windows. Yes.

Nice. Nice. It's where it's supposed to be. Um, so let me ask you this. So let me ask you, and this is— I, and, and, you know, I, I, uh, I have the good fortune of knowing you and, and, and getting to spend time with you, but the, the listener doesn't. So let me ask you this for the listener. With everything you were going through, as stressed— yes, stressful as it was to reinvent the business and make decisions, so you had to make a decision Just so everybody understands, this was a fundamental change in the way that Mark thought about how his business should be done. The 2-call close versus the 1-call close. Now, there's a lot of other things around it, but this was a fundamental thing that you had to overcome in your, in your head, and you did it. To your credit, you finally said, okay, I'm gonna believe what these other people are telling me and I'm going to do it. But it wasn't without its pain, for lack of a better word. What kept you going?

I guess I constantly research and look at companies who are doing it and have faith and watch how they do it and understand how they do it. You know, you look at a lot of the much larger, more profitable companies and the systems they're doing, you know, to me, I had a deep feeling knowing that this is going to work. This is scalable. All my numbers when I was using our CRM at the time, I couldn't— it was just too unorganized. I couldn't really grasp everything, and I knew the more I kept it up, the more I kept going, the more it's going to start coming together and making sense. And it really did. I, I know everything's about the numbers, everything's about scalability, and what I was doing before, I couldn't grasp. It was too messy, it was too sloppy. Even if I tried to sit back and redo everything, it just didn't make sense. That style with the receptionist and the two-step, and that form does work, it worked great, we made sales, you know, we were profitable doing that, but I couldn't get past the next step and something was missing. Again, there are people out there that do a two-step and that crush it and do phenomenal and and amen to you guys, but we could do that with a lot less work on a one-stop with a call center. So I don't know, I guess I just have my, my vision, my mindset of where I want to be and how I'm going to get there while talking to people that are doing it and have done it on the way. Just keeps reassuring me that I'm doing the right thing. Yeah, and that's, that's really important. And there's a lot of people out there that will give you free advice and really help you out. And just, you know, you gotta reach out to them.

You mentioned, but you also, you mentioned mindset. And I know that, and look, I've been, you know, I think I've been pretty transparent that that was also something I've battled with for years and years and years is keeping your head above water, keeping your shit straight, for lack of a better way of saying it, and not letting fear and anxiety overtake you. And I know that, you know, you battled your way through this. I mean, anybody that is out there, we were talking before we turned on the recording. I mean, anybody that's out there tells you that, you know, building a business is easy, they're out of their minds. You know, just, oh, all you have to do is do this. You know, and it's going to be easy and you're going to make money. That's such a bunch of BS. It's unbelievable. And it all starts with, and, you know, and I've seen it with you is it starts and ends with what do we think about? What do we believe? And, um, and then, and how do we go to work changing the thoughts that are holding us back? How do we go about changing those beliefs that are holding us back? And while doing that, we keep moving forward. You just got to keep moving forward. And you, you just, you've done an incredible job over the last year. Um, one thing that I do want to point out, well, go ahead, comment on that.

And then I would, I would have, I would have to say I'm very fortunate to have a business coach since day one when I started this, uh, journey. Sean Foer. He is a mindset coach of mine since day one, and having someone to talk to and to get you through and constantly keep pushing you, because, you know, I can make, you know, I'm a very high risk taker, and having someone who is more grounded and also very, you know, understanding of what I'm trying to do was very, very important, very helpful. Because I also have a partner, my best friend and my partner is my brother. And he has a different mindset than me. And when you wanna make changes to a company and you have a partner, you gotta make sure both are in sync and understand. And it's going to create friction. And that's also why having a business coach is very important because this was not easy. I do have stress, anxiety, all the above. But, you know, just keep pushing at it, keep talking to people that are positive around you, and then, you know, start with your worthy goal, you know, constantly repeat it, memorize it, think about it, read about it, you know, and that's really what keeps me going.

Yeah, I, um, just to the listener, I'm going to say it again. You've, you've heard me say it a thousand times, and I'm going to keep saying it over and over again. Success leaves clues. And if you— I just wrote down a few things. So you met in that, you know, in that little, that statement that you just made, you mentioned you have a business coach. OK, great. You talked with other people. You did not do this alone. And then you formed some new habits and that involved some repetition and, you know, talking to yourself and, and doing the things that you needed to do to, you know, to coach yourself, to help yourself, right?

Yeah. Yeah.

Um, I just want to clarify one, one thing. Um, we're talking about what, you know, one-step selling system versus a two-step selling system. Um, it depends on the business that you're in. It just so happens that, you know, I'm a believer that if you sell replacements, roofing, windows, siding, one-day bath, a whole host of things, it's a one, what we call a one-call close, or as you said, a one-call open, which is really nice. There are certain things in construction that are, or home improvement, that would be a two-call. So like, you know, kitchen remodeling, anything custom, obviously, But however, there is a process and a system and economics behind that as well. And so if you are in that business, then you have to understand what the economics are of your business and then the underlying fundamentals of what make those economics work. And then you can design your processes around that. The underlying is exactly the same. In this case, the tactic or the strategy that we have going to be talking about is, is the selling system. So, um, so the other thing that was, um, that's been big for you over the last year or so is really now this new focus on profitability. And, um, do you want to talk a little bit more about that? Because if I'm not mistaken, This year you are probably going to make more money than you've made before. So it's something new, if I'm not mistaken. So how are you kind of— how are you wrapping your head around that?

So, okay, we figured something out that was very useful but also very dangerous if certain people, you know, know about, like sales reps, right? If you talk about price increase to sales reps, it goes right to the HUD. Yeah, it rattles their cages. So before we're doing a two-step, the way we used to cap out jobs for commission is they'd see the breakout and where, where the gross margins were, and then they get a percentage off where they landed. That created a lot of problems because of unforeseens, and, and if they mismeasured, we had to get the sales reps away from all of our pricing, seeing what it is, and really get things down to really just per square. Per window. I mean, we narrowed it down so much where everything's included, where they just— you can't screw up almost, you know. You get the EagleView or the measurement from the aerial, there's just no way to screw up when you just got to put in the squares with waste. And that's the only way to keep their heads straight and not worry about the price. And it has done nothing but help our bottom line. We're making more profit margins now than we were even on a two-step and we thought that's how you're gonna make the most out of a job, but it just somehow starts to balance out way better. And it's, yeah, and that's kind of what we're doing, and that's what we've been doing, and it's been working, and we're still gonna do it every month until we get to that sweet spot exactly where we wanna be, which is pretty much right now, but we're gonna keep testing the waters.

[Speaker] Yeah, and you're not, You're not obscene about it. So a lot of people, when you talk about price increases, they start to think, oh, you're greedy, you're being obscene, you're being— call it whatever, you know, whatever you want. All you're doing is you're saying, okay, here is my model, here's my profit model. And in order for me to net the 15% that I am entitled to for delivering good value and good service, here's where my price needs to be, right? That's all you're doing.

Well, we had a price book that was, you know, all broken down, and it's taken probably 2 to 3 years to constantly keep perfecting it, you know, because when jobs break out, the production manager would call me and say, hey, this doesn't seem right on this, so we need to adjust the pricing for this. Like today, he called me about the smaller siding jobs, you know, they don't break out quite as well, what do we do? And so I'm trying to think, okay, what is the minimum, what are we going to increase if it's smaller. So I think just from doing it for so long, having set pricing and tweaking and tweaking and tweaking until we see our bottom line making way better sense, that's what it's all about. Now, I'm not trying to gouge. I'm trying to pay for everything. You know, these sales bonuses we give out are phenomenal. The 401(k)s, you name it. I mean, it's a— you have to charge the right price for marketing. I mean, I'm at like almost a 15% marketing cost for my growth. I have to pay for that through the sales we have, so I have to make sure that we're pricing accordingly to cover those costs. Then I want to make sure I'm making a profit. So yeah, we're very expensive, but you have to be. There's a lot of risk out there, right? A lot of pain, a lot of problems.

My God, this is music to my ears, Mark. I love hearing you talk like this. And look, aren't you able to better deliver your quote-unquote brand promise to your customer? Aren't you better able to do it now that you have good people in place? Which, you know, people, good people are not cheap.

Well, it's a little of everything. You know, you have nicer trucks, you get happier Employees could get better bonuses, and that's for every field— production, call center, marketing, sales. Everyone has performance benchmarks, you know. And, and then, you know, whether it's using G4 Marketing at the end of the sale, you know, it, it's creating everything and why we're priced the way we are. It's making sure that we're taking care of the people. Are, you know, after job's done, now we have our events manager going off the jobs now and wrapping it up with a photo. And, you know, it's when you're charging the right price, you're having enough money to do these extra things that are going to create the funnel of bringing more repeat business. That's really what it's about, to help lower our marketing costs.

Yeah, but, and also, ultimately, at the end of the day, it's the right thing to do for the customer. At the end of the day, most people, most people are perfectly fine paying more to get a better experience, to get better communicated with, to have better service warranty, to not deal with a company that's so financially strapped that they're taking deposits today and having to go pay the supplier to go install the next job so that they can get paid on that job to go buy the material for the last job. It's, it's not good for anybody to run a business that way. And so, you know, I applaud you for, for, you know, for, for making these changes and, and, and, you know, and doing right by your people and doing right by your, by your customer. So as we, as we wrap up here, I usually ask if you could you know, if you can go back and, you know, what would you do different? I guess, you know, for you, there's a modified, I guess, slightly modified version of that is, what would you have pulled the trigger on faster 2 or 3 years ago? What's like that one thing that you would have pulled the trigger on faster had you known what you know today?

You know, and I, I say this with, with all respect to, you know, I'm not saying the sales system changed everything and changed the whole dynamic. I think it's the— it's— I think it's understanding your numbers extremely granular as far as, you know, your raw lead to a set lead to an issued lead to a demo to an average job size to an SLI. Understanding that 3 years ago. Yeah, understanding that and how to do that, and then understanding a better scalable sales process and understanding that I can't be all things to all people and start narrowing down these items that are replacements I could scale. That changed everything, you know. And get out of sales if you're an owner and you're trying to grow your company. Hire a sales manager. Get out of sales, because that has opened up a wide door of accountability for my sales manager and everyone else below me so I could focus on growing this company. And I haven't ran a sale in the past year, and I did it that way. I knew that me being in the house for 3 hours twice a day isn't helping this company grow. Yeah, it's bringing in money and everything, but it's not helping this company grow. So I knew we had to make an investment at the end of the year into a sales manager. To get to the next level so I can move on to the next thing. And mainly it's marketing. Dive into marketing, understand marketing to grow that sales team. So I mean, I guess that's a lot, but I would understand that, yeah, those, those understanding the numbers and how to get those numbers was something I wish I understood better. Yeah. And then making that, making that change and going 100%, you know, you You gotta go 100% and you're gonna get kicked down a lot and you're gonna probably go broke a couple times, but you'll get back. It's always, you know, it'll work out. It really does. Yeah. Hopefully not go broke, but you know.

Right, get close. You might get close.

Get close, yeah.

Yeah, but you have to keep fighting like Mark did. Well, Mark, look, you're, you know, I am so happy to see you where you're at. It could not happen to two nicer guys. You and your— I know you and your brother have just, you know, you've worked really hard over the years. And I hope this year is, you know, I know that, you know, the whole COVID thing is out there this year and we don't know how it's going to shakeout, but I'm glad that up to this point things are good. That's a, that's actually a really good sign, and hopefully it continues this year. And at least now you'll know what you need to do. You'll make adjustments and you'll protect your margins, you'll protect your profitability, and grow a great business.

Absolutely. Amen.

All right, well, thank you, Mark. Thanks for coming back. I'm gonna have to come back, you know, next Next year we're gonna have to do another one of these and talk about what you learned in the last year because this is great. I love it. Thank you. Thanks for being here.

I would love to come back. Absolutely.

All right, so to everybody that is, that's listening, if you don't, by the way, if you don't have a copy of my book, The Seven Secrets to Becoming a Wealthy Contractor, by all means please go to thewealthycontractor.com and get yourself a copy. It is still free. I just ask you to pay shipping and handling on the book. Go and get it at thewealthycontractor.com. And that's it for this episode of The Wealthy Contractor Podcast. This is Brian Kaskavalciyan with G4 Marketing Group. And until next time.