Matthew Housh - Ep. 44 - How To Generate 80% of Your Business By Creating Raving Fans

This is the Wealthy Contractor Podcast brought to you by G4 Marketing. Interviews with today's top home improvement entrepreneurs about marketing, sales, money, mindset, and lifestyle.

Now here's your host, Brian Kaskavalciyan.

Okay everybody, welcome to the Wealthy Contractor Podcast. This is Brian Kaskavalciyan with G4 Marketing Group. And on today's episode, I have my good friend and very longtime client, Matthew Hausch from Aries Roofing. I've actually been looking forward to this episode for a long time. This has been in the works for, for a long time. Matthew is a, is a busy guy and We just couldn't get our, our schedules to coordinate. And but he's finally here. So I am going to ask him all kinds of questions. And you are going to learn a ton from this guy. Now, some of you may remember that I interviewed his father, Ari, early in the podcast, I believe he's one of the first episodes. And after you listen to Matthew, you're going to want to go back and listen to Ari. Because this family runs such an amazing business in the Tampa Bay area. There's so much to learn. I could be with them. Well, I've been with them for— we've done a seminar together. Me and your father did a workshop together for 2 days. We had a room full of people and it took 2 days to go through everything. But Matthew, I'll stop talking now. Welcome. Thank you for being here.

Thank you. Glad to be here. Looking forward to it.

Let's actually start with, if you don't mind, tell people a little bit about Aries Roofing today in terms of, of, let's just talk about in terms of size and scope, like, you know, how many, how many employees, how many jobs are completed, how much, you know, how many salespeople, if you don't mind.

Yeah, sure. Um, so right off the top, um, like last year, just from my perspective of size of volume, we did just at around $20 million in sales. We're a mix of residential and commercial, but predominantly our focus is residential reroofing and service repair. And then all of the commercial kind of comes from that. I call it boutique commercial, but you know, we focus on typically the more affluent reroofing projects, and those people have businesses and rentals, etc., etc. And then a lot of our commercial comes from that. So we don't really go bid spec type work. And on that being said, right now we're on average doing about 50 jobs a week, but that's all jobs. So we have, let's see, it's around 27 crews. We have 7 or 8 repair service crews. They're typically a 2-man crews. We have 2 guys that are by themselves and 1 crew, that's a 3-man crew that do all the repair, service, maintenance, and even like smaller flat decks. That's what the 3-man crew does. And then the rest, about 20 off and on crews, specialized crews, all in-house, no subcontracting, no 1099 contractors, so we can control the quality and control the process. And then all types of roofing as well. So 2 metal crews. That's all they do is metal roofing. 2 tile crews, tile roofing. We have 1 main commercial kind of crew that does all the larger flats, but 2 that can kind of jump in and help with that and will handle that. They're kind of cross-trained. And then the rest are shingle off and on crews. So that's pretty much, you know, the makeup of the company scope, size, scale, etc. Did I miss anything there, Brian?

No, that's, that's fantastic.

Yeah, total employees are— we're now just shy of, uh, we're floating around 185 employees.

Wow, 185. It's a lot of people.

Yes, lots of people.

That's a lot of people. The main thing I, I really wanted to focus on and talk about with you is that most of your business comes from your relationships with your customers. Do you have a number, like what percentage of your business comes from repeat and referral?

Yeah, so it's growing every year, year after year since we kind of, you know, started the commitment and changed our viewpoint philosophy and how we were going to business in 2009-ish, 2010. And really, I guess it goes back to the beginning when we started, when we really started getting into it, when I got more involved in the business and and understanding the numbers and tracking and actually creating a plan, marketing plan, et cetera, and everything that goes with that. We looked at the numbers and realized that, let's say, the majority of our marketing spend, our entire marketing budget was going after what I call like a new client, you know, just whether it be a new neighborhood, new person, new client, you know, an ad. Newspaper, whatever it might have been at that time, even internet, trying to acquire new people. And then when we looked at actually our percentage of the business, even back then it was around 60% of all our, you know, business in totality was coming from previous customers, referrals, friends, family, you know, that kind of group. There's a little bit of overlap there. So I was like, this is crazy. You know, we look at our— what we're investing into marketing, and it's going after the 40% new clients, new business, and 60% of our business is in that group of referrals and previous customers and such. So we were like, hey, you know, it was the aha moment. We're missing the boat. And that's when we partnered up with you guys and committed to just investing. And there's more to it, and I'm sure we'll circle back to that whole philosophy in a little bit, but we started investing in that. And now over the years, some, 8, 9 years later. We just changed our CRM, so the numbers got skewed, but it's close to 80% of our business now. And that term is the previous customer, referral, family, friend, et cetera. That's all coming from that segment of our business. And we still have a little bit of efforts trying to, you know, what I call it, and there's different names with the new client, so to speak, but pretty much, I mean, that's a huge chunk. It's around 80% of all our jobs, all our work comes from that group, previous customer referrals, friends, family kind of a thing.

Yeah, so what was really cool about, you know, when we first met, I remember you guys made two really important decisions. And we're talking about, you know, I met you in early 2010. So, things were not great in early 2010. Your father made the decision that instead of lowering our prices like everybody else, we're actually gonna raise our prices. Now, you did some things to add more value to what you did, but everybody else was going down, but you guys decided to go up. Risky move. The right move, but a risky move. And then the other thing was, like you just said, you all looked at this and said, we have this relationship with our customers and they're the ones that are driving our business. Why aren't we doing more with them? And so you became very focused and very committed to your relationship with your customer.

Absolutely.

Yeah. So, what I wanted to kind of ask you is when you guys first really kind of made those decisions, what did it look like? I mean, what did you do different than you were doing the day before you made that decision?

Sure. I mean, it was, and, you know, we made a lot of mistakes like any company, you know, and marketing is like the great experiment testing. And everything that goes with it. But when we decided to commit to that, I mean, before that, you know, we were like most businesses. You look at a, I guess holistically, and then we can dial in granularly, but holistically you kind of look at a job, you look at a sale, you look at it very transactional. You know, there's a lead, there's an opportunity, you go to it, it's a transaction, get the job. Complete the job, hopefully hit all the numbers, make your margins that you need to stay in business, get your profit, and go on to the next one, kind of looking for that next deal. When fundamentally at its core, we said that we're not going to treat the experience as a transaction. Obviously, it's still at the core essence, we're doing a roof for someone, but we looked at it as a a relationship instead of a transaction. We wanted to earn the respect, earn the opinion, earn just the appreciation of that granular transaction but of the job that we were doing and build a relationship where not only could we do that repair or that roof for Mr. and Mrs. Jones' home but we essentially made a friend, a companion, a relationship where now they would tell their friends and family, and we could have a relationship with all of their extended, you know, relationships. So, and we could do their roof in 20 years, we could do their mom and dad's roof, we could do their neighbor's roof, their friends. So when you at its core just look at, decide to start looking at everything so transactional, that's where I see a lot of businesses as we were, you just kind of, it's easy to do, you get sucked up in the routine, you get sucked up in the financial statements and, you know, the numbers and, you know, trying to survive sometimes, which we all have moments of that. But you forget if you keep the core, you keep your focus on people and people first, you know, your customers are the ultimately the focus of that, but your employees, your vendors, you know, like Brian and his team, like the people that we work with, you know, are typically first and foremost our friends that we care about and we care about their well-being. And then as a result of that, you know, everything else kind of lines in place. The numbers make sense, the transactions work, and everything flows down. So that was kind of the, I guess, the defining moment. We just, if you can articulate it all, and it didn't really, we didn't really know that at that point in time. It was several choices, but we holistically decided we're going to be relational-driven, focus on relationship, focus on people, and let the rest kind of take care of itself. So to that point, once that transaction was done, we really never talked to that person again. We stick a yard sign or something, but that was it. So we found Brian and his team in G4 Marketing, and we said at the very— we What I kind of see as the backbone of the whole program is your customer appreciation, your gratitude for the experience and the referrals and everything else that kind of comes from that. We started touching those people, sending them newsletters, thanking them first and foremost right out of the gate, just giving them a gift, saying thank you, we greatly value the relationship, the experience, the opportunity to serve. To do a job for them. And by just saying thank you and giving them a gift and then continuing to touch them and, you know, then at the same point nudge them that how we stay in business and how we operate and continue to do so is by, you know, your referrals and by you telling people about who we are. And, you know, if it was a great experience, they do that naturally. So, you know, it's been said, I always like the analogy, it's kind of Your customer base is your herd, and if you water them and feed them, they naturally reproduce. So we just, we, the practical day-to-day is we started investing kind of after the transaction, if you will, after we got a job. And there's, you know, different, a lot of different ways or some other different things we can go into, but just, we just started investing in those relationships and always reminding them and telling them we're here instead of it treating as a transaction and it was just a one-and-done we invested in, you know, in that relationship to keep bringing fruit.

It always amazes me how much as business owner— I'm going to throw myself into this because I've made this mistake in the past and God knows I probably still make it, but I'm more aware of it and I work really, really hard not to. But we focus so much on new, new, new. You know, so much on the front end. We spend so much money, especially in this business, you know, with lead costs escalating, with competition, and especially when the economy is good, right? When the economy is good, there's a lot of competition out there. Not as much for you guys, just because everybody wants to work with you. But for most companies, there's just so much competition out there that the focus is entirely on how do we get more instead of Why don't we take a little bit of time and effort with the person that just trusted us? And why don't we work to develop a relationship so that that job turns into, into more jobs? And I got to say, I mean, I don't think I've seen anybody do it better than you guys. And I don't mean to say that to embarrass you or anything. It's just there's so much to learn from how you've treated your customer and your customer relationship over the years. And then, of course, there's the results. You know, 80% of your business, if somebody does the math, that's a, it's a lot of business coming from relationships.

Yeah, absolutely. Yeah. And I think that's where, you know, in talking with, you know, peers and contractors, friends, that a little bit, um, here and there in the networking we do is when it gets down to it, they'll look at the, the numbers and, uh, the math, you know, and they just get cheap investing in those customers. In a way, it's, it's a mindset. Look, I already got the job and made some money off of them. I don't want to spend any more money. And it's just, you kind of have to get rid of that thinking and really look at it as an investment, like you would invest in any part of your business. I mean, we've just never really counted the pennies when it comes to that sort of thing. I mean, you know, not only with your program, we've, we've actually added and, you know, where we the cups and different levels of different things. We give, you know, the little copper, you know, all kinds of little thank-yous along the way to touch our customers and remind them that, you know, we do care and we appreciate their business. And I think when you do that, to a certain extent, it's kind of the golden rule. When you give, you, you know, you get more in return than you ever imagined. So it's just kind of getting out of your own way a little bit and just being committed to that. Obviously, you can't be stupid about. You have to be somewhat aware of it. But you know, when you look at things, it's sometimes we— that transactional, $1.99 versus $3.99 option. But when it comes to your customers, to a certain extent, I don't think you can overspend. You can't outgive them. So it's worked for us, you know, and we've kept— we've stuck to it and just committed to that and to being grateful and saying thank you and sending gifts and touching our customers.

You know, let me ask you, you know, one of the things about price is such an issue with a lot of companies and a lot of business owners. You guys are, you know, way at the top of your, of your market. I always say it always seems like people are waiting in line to do business with you. Why is it that they'll pay more to work with Aries Roofing rather than the other guy that sells the same product with the same warranty that's, you know, the next town over that's significantly less money? Why, why will they pay you more for the same job? It's not the same, but you know what I mean, the same product.

Yeah, I mean, that's, um, I think really at the end of the day, it, I think it's that relationship, um, whole aspect where they're, it which at the core of it, the essence of it, is trust. You know, there's a trust factor that they know our family, they know our culture, they know our character, or at least if we do a well enough job presenting it, presenting the value, that's kind of our story. Our heart, you know, and the culture and the passion for being excellent on all levels, all that's conveyed. Into our people, and then the people deliver that message. They're passionate about delivering that all the way down to the installers being passionate about being excellent. We're certainly not perfect, and even this whole interview, and I'm humbled to be able to do it and talk. So don't let anyone think that we're perfect. We definitely make our fair share of mistakes, but if you're just committed to excellence and doing what's right, people they can connect to that passion, they can connect to that, you know, to that trust. And I guess it kind of, from, to bring it down to a practical example, it's the same reason on Friday night when there's a plethora of restaurants you could eat, yet we go to the, you know, to the best restaurants in town and wait an hour to 2 hours sometimes, you know, or at least 30 minutes to get the meal that we wanted when there's, you know, McDonald's right down the road where you can get your meal you know, right now, or even a subpar steakhouse where you don't have to wait and go. So, you know, people, they always will gripe or complain another bit. Well, who's going to wait? No one will wait. But to a certain extent, everyone waits for a good meal because they see value in it at the end of the day. And people will wait for a better experience with a roofer or a window guy or door guy or whatever it is if the value is there. It's just our job is to deliver that value, to convey that mass, that message. And I think practically, it's just done with, you know, conviction and passion and honesty and transparency. And when you do that, people sense it more now than ever, I think. And they, they want to be on— they want to join the family. It's kind of what we said, and be in the team. And they know that if something does go wrong, that they'll be taken care of. So I think that's ultimately what they're paying. They just trust that they're going to be taken care of.

How much more does trust go up when somebody that you know recommends, go to this roofer, go to this plumber, work with this window company, we did and it worked out great for us. That's a, that's a, that also, I mean, that adds to that, that whole level of, of trust and you don't have to sell your story. As much, right? When you've already got somebody, their friend or their neighbor or their family member, tell them, hey, this is the company you got to work with.

Yeah, absolutely. And they usually add, it's kind of great, the brand that we've created, but they'll usually say, I mean, we can read the, you know, the reviews, but something to the effect of, hey, look, I just had a A marvelous experience or a great experience with Aries Roofing. They, you know, I did get multiple bids. They weren't the cheapest, they were the highest roofer, but it was worth every penny. You know, I had a great experience. I love them. You know, please, you know, use them and, and don't worry about the price or something to that effect. The core of the message, you know, out of 8 or 9 out of 10 reviews. So they're even telling their friends or family, their neighbors, you know, they're giving that referral and they're even telling them, look, yeah, you're going to pay a couple couple bucks more, but it's worth it. So that's, I mean, I don't know what else you can ask for.

No, you can't. Yeah, because, you know, the bottom line with price is price is not only about, hey, I'm just going to charge as much as I can possibly charge. Price is about, you got 180 people on staff, you've got buildings, you've got, um, there, it takes a lot to run a company the right way. And I say to people all the time, you know, if your overhead goes up, your prices go up. If your marketing costs go up, your prices go up. You have to protect your margin. You have to protect your profitability. We're not in business to do anybody favors. We're in business to earn a profit.

Yep, absolutely. And I mean, even which we know that, but it, it, it costs more, one, to have the best employees. So if you're attracting high-level, you know, the most skilled employees in your marketplace and you're taking care of them, that costs more. And if you're using the best products, which we are, and the best components that go into the system, that costs more. But even more when you just do everything the right way, above par, and you're not cutting corners from an overhead administrative perspective when a lot of competitors do it. And there's significant savings that can be made. And so when you— but then again, most consumers are aware of it. They're, you know, they're not idiots that you can explain that in a very nice, tactful way where you say, look, there's real risk going with contractors, you know, especially in our state. And there's— you need to have all those things. And to have all those things and do right to protect your best interest in your home where you live and your family resides, it costs, you know, more. It's not that, you know, 30 more— 3 more dollars out of 10 is going in our pockets. It's certainly not the case. It just costs more money to do things the right way, right, and to deliver that kind of experience. So yeah, and that can be conveyed Yeah.

So I spoke with your father about culture and about people. Let's talk a little bit about that. How do you instill in your people the idea that, hey, look, we're all about developing relationships with our customers. How do you, how do you do that with your people?

I mean, it's, I guess it's from everything from A to Z. So it's, it's at our, the core of our, our heart, our mission, our, you know, even in our mission statement. I mean, from the, even on our walls, we have what a customer is when you walk through the office and what they mean to us and how important they are to us. To get that perspective wrong. It's easy to, especially in construction, it's so easy to get jaded by, you know, the crazies, you know, the 1 or 2 out of 10 that you get and you kind of group everyone into where people are just unreasonable and rude and everything else that goes with it. But really at the essence of it, there really are, you know, great customers. There's always going to get those and you can't get jaded by that. So even how we handle those experiences. And we, every experience that comes in, you know, through teaching our employees. And, you know, now we're very fortunate. We have so many great managers and supervisors that know that and understand that and essentially are extensions of our, of our character, of what we want. So they've been with us for so long, 15, 20 years, and they work with their people underneath them that everyone knows all the way to the top. Like, it's, you know, fun little things. Like, you just walk out sometimes and you'll see a new person that might even have not met, or someone on a crew go out and, hey, look, tuck in your shirt, or do this or do that. You know, it's just, you know, we want to be excellent here. We need to be clean, we need to be right, and it needs to be perfect. Everything needs to be right and tight. So I think it's, you know, it starts ultimately at the top. Um, it's one thing just to say it, but you have to kind of live it out. So when you're passionate about people and doing things the right way, and you display that on an everyday way, just from how you handle phone calls to how you handle transactions to how you handle the actual employees, people then believe in it. And when it becomes a part of their, you know, their core and their belief system, they live it out. So I think for us, it just starts with how we treat internally our people and how we deal with those our customers. And it's just understood that that's what we expect, and that's what we want. And people get fired up. And we do even practical things of, you know, inspiring our employees to look for ways to make the experience special. And we have the Wall of Praise, where we put all of the comments on the, you know, the wall to try to inspire the, you know, the team to do little things to go above and beyond and make someone's day. And make moments special because at the end of the day, roofing is not really sexy and a lot of people can do roofs and they're expecting the roof to look good and they're expecting the roof not to leak. So we have to do something outside of that to really make the experience special. You know, whether it's take the trash cans up for the customer at the end of the day or go above and beyond and cut a tree limb. You know, whatever it is to try to find those little moments that you can make yourself You know, unique and special and show a little simple gesture of gratitude and just care about, you know, it's not just the job, it's not just the transaction that we care about, the long term, the relationship. So when you start at the top, it goes through and you find little ways to do that, incentivize the team, incentivize your people to get to have fun with it. And then they kind of do the rest. People are pretty amazing when you when you just give them a chance to shine. That's what I— what we found.

So yeah, well, and you guys do— you guys do an amazing job of it. Well, look, I'm, uh, I, I'm looking at the clock here, and I, I appreciate you, you taking the time out. Um, if I could just say, you know, for, for— take this last minute or two, you know, um, I always say, you know, you want to model success. You want to look at companies that are really doing an amazing job at whatever you're trying to learn. And the models are out there. This is a company— I mean, I use you guys a lot to show people, hey, look, if you really make these commitments to your customer relationships, look at what could happen to your business. And it's nice to hear you talk about gratitude and how important gratitude is in giving. I hope it's okay if I say this, Matthew, but, you know, a year ago, I don't know what it was, a year or so ago, you came to me and you said, hey, I want to put this— I want to do more. I'm not going to say what it is, but I want to do more with the thank you gift. That we're sending to our customers. And they spend more money on their gift to their customer than any other client that we have. And it just goes to show just how important it is and how they walk the walk. And what is it? Walk the walk, talk the talk, all of that.

Yeah. Yeah, that's it. Close enough.

Yeah. And the other thing too is that with the whole thing with keeping in touch and with referrals is month after month, without fail, month after month, the communications are going out, the newsletters are going out, the thank you cards with the checks for, hey, thank you for referring us, month after month go out. And we write more checks for you, by the way, than anybody else that we work with, any other client we work with. And I, you know, we know why, because You're getting a huge amount of your business from referrals. But anyway, I just, thank you so much for doing this. I appreciate the friendship that the Kaskavalciyans have with the Hauschs. I appreciate them as clients, but I'm also always impressed by the way that they do business and as a family, how they work together. So, Matthew, thank you.

Thank you so much.

Yes, we will be talking soon.

I—

and everybody that's listening, I hope you got a lot out of this episode of the Wealthy Contractor Podcast. I'm really trying to help you all think about the future and think about what your business can do for you. Part of what I'd like to instill in all of you is really get a focus on developing your customer relationships, because when the economy turns— this is not the only reason, and this is not doom and gloom talk— but when the economy turns, as we know it always does, companies like Aries Roofing are not really going to feel it because they have that base of customers that is going to support them regardless of what's happening in the economy. If you don't have that relationship with your customers, your business is at risk when things do change. So this is Brian Kaskavalciyan with G4 Marketing Group, and this is the Wealthy Contractor Podcast. Until next time. All right, so that's it for today's episode of the Wealthy Contractor Podcast. Let me ask you, did it help you look at your business in a new way? Did it spark an idea or ideas you hadn't thought of before? Do you have a list of action items that you can take and implement into your business or your life today? I really hope so. Now, before you go, make sure you subscribe to the Wealthy Contractor Podcast so you get access to the latest episodes as soon as they're available. We're always striving to provide you with great content, so you don't want to miss what's coming up. And a favor, I'd really appreciate it if you'd go to iTunes and post a review of this podcast. Let us know how we're doing. And finally, we started The Wealthy Contractor as a resource to help you, the home improvement entrepreneur, regardless of where you are on the wealthy scale, get where you want to go. We want to provide you with the motivation, the confidence, the resources, and the tools so you too can live the life of of the wealthy contractor. Now, the wealthy contractor is a place where it's okay for you to want it all. In fact, it's not only okay, it's encouraged. So until next time, this is Brian Kaskavalciyan with G4 Marketing Group.