From Recession to $2M: How Email Marketing Transformed a Painting Business

Welcome to the Profitable Painter Podcast. The mission of this podcast is simple: to help you navigate the financial and tax aspects of starting, running, and scaling a professional painting business. From the brushes and ladders to the spreadsheets and balance sheets, we've got you covered. But before we dive in, a quick word of caution. While we strive to provide accurate and up-to-date financial and tax information, nothing you hear on this podcast should be considered as financial advice specifically for you or your business. We're here to share general knowledge and experiences, not to replace the tailored advice you get from a professional financial advisor or tax consultant. We strongly recommend you seeking individualized advice before making any significant financial decision.

This is Daniel, the founder of Bookkeeping for Painters. Welcome to the Profitable Painter Podcast. My name is Daniel Honan. I'm the CPA that works exclusively with painting business owners. I'm super excited today to talk to Mike Bolu out of Michigan. He has an incredible journey of running his painting business, scaling it up, developing high, high converting emails and working his customer list to get a massive amount of revenue every single month. So I'm super excited to talk about all those things with him today. Welcome to the podcast, Mike. How's it going?

It's going well. Thank you, Daniel.

Absolutely. All right, let's jump right into it. Can you walk us through your journey? How did you get started and what led you to where you are today?

Okay, well, I started my painting business originally in, uh, 2008, um, right in the middle of that recession. And, you know, I, I started to try to grow my business at that time. Recently, I was able to sell my business with us having revenue over $2 million year over year and was continuing to grow that list or to grow my client base. That has really been a big journey of mine. We would have been at— what is it now? 18, 17 years. With the business before I was able to do that. But there was definitely some important things that I had to put into place in order to get ready to sell my business. And one of the big things that I did was my email newsletters, how they converted, how my past clients continued to call us back, how they continued to refer to us. And I really put that down as a big reason, uh, that my business was sellable, um, at this time.

Yeah, that's, that's incredible. Like, the fact that you started in 2008, like, during that huge downturn. I remember I was coming right out of college in 2008, and I was looking for, like, a normal paying job. I could not find anything. It was just crazy back then. I think a lot of people forget. What was it like trying to start a business in 2008?

Well, it was, it was quite a struggle, you know, to be honest with you. A lot of it started off with me just going around communities, passing out flyers, talking to people, just trying to get my foot in the door with a lot of clients. And so that's where I gradually started to build things. And then it was about 2011 when I realized, hey, you know, I'm starting to build this list of clients. I was using a CRM at that time, and so I was able to kind of track my list. And from there I seen, well, shoot, what am I doing? Because the paradigm with painters typically is, well, if I go out there and I do a great job for my clients and they love my work and they love me, Well, absolutely, they're going to remember who I am when it comes time to paint again. But the reality is, is we're just one service that they're hiring out of many different services. They're hiring somebody for their lawn. They're hiring people for different projects around their home, bug people, you know, all different things. And so we're just one of many services. So as much of a good intention that that client may have to remember your name, The reality is, is that a lot of them won't remember exactly who you are. And what they'll do is they'll end up— at that time was going to the phone book, or now they'll end up going to Google and they'll do a search and they'll see, you know, on the first page, is there a name that they recognize that rings a bell? And if not, what they start doing is they start clicking on other names. And so I knew that that I had to do something different. And so I started doing email marketing to my past clients in order for them to remember me. Now, that did start off simple with me just throwing out, hey, I'm running a discount, or hey, do you need something that, you know, service or not? But what I realized with looking at the open rates of those is that people after a little bit, if they didn't have a project right in mind, you know, they, they just stopped opening up the emails. Well, that's not going to do any good for me. And so what I decided to do was to change my approach. And so I started to put together an email newsletter that talked about the different decorating trends, the trends in colors that are coming up, colors of the year. I even talked about things on types of countertops and, and types of flooring and different things like that. Because I thought if I could get my client to start thinking about the design trends, and I could start to get them thinking about changes that, that maybe they should be making in their home, well, then they already have my name, they already have all my contact information right here on this newsletter, that they're going to call me in order to make those changes. And that's when I started seeing my my open rates consistently run between 40% to 50%. And my click rates, depending on the newsletters, some of them it's a little over 1%. Other ones are 3% to almost 5% open rates. And so that to me allowed me to start to really grow a really good past client base. And the referrals started coming in even more. And it just started to be a system that was just auto-generating these past clients. I mean, I literally had within this last year, just before I called, clients who were calling me that, you know, I personally was painting at their house, you know, years and years and years ago at the very beginning. And they're still opening up the newsletter and they're still reading it. And so it's been huge. Yeah.

That's huge. That's 40 to 50% open rates. That's amazing. And I love, you know, keeping in touch with your past customers because it can be so cost effective, especially when you compare it to something like Facebook or direct mail to colder leads, like just staying in touch with your customers. Is pretty inexpensive and it can really show up on your profit and loss. If you're just sending emails, I mean, it doesn't cost much to send an email, virtually free. And if you're getting 40 to 50% open rates and you're staying in touch with your customers, staying top of mind so that when they need that, that painting project, they, they think of you. I mean, that's, that's hugely powerful. And that's really, I'm sure, driving down your advertising costs significantly and you're like keeping your profit margins like super high. Like, is that kind of what you experienced and how— I guess my question would be like, how long did it take you? Because you started doing this in kind of 2011, if I'm not mistaken. And how long did it—

First year you're doing it.

That's when you first started doing it. How long did you to really figure it out? How long did it take you to really kind of nail it, dial in the system to figure this out?

Uh, it definitely took a couple of years to, to really look at the metrics and, and start to dive into what does clients want to read. Um, you know, a light bulb kind of went off, um, for me when I started thinking, you know, these, these clients that are calling to, to have me do painting, um, you know, they, they care about the trends. When I go out to an estimate, I'd get a lot of questions. Well, what's the color that everybody's going with right now. And they're really interested in what's happening now, what are the changes, what are people doing? And so I started to gear the articles that I was pulling towards that direction. And that's what really started to notice that click rate. And then I finally got it to a point in 2018 where I turned it into a business where I said, you know what, this really needs to go out to more painters. And at that time, there was, there was only like 1 or 2 companies that really focused on any sort of email newsletter, and the type of material that they were putting out wasn't the type of content that clients were really clicking on and reading and staying engaged. And so that's where I decided, hey, I'm gonna launch this and start to offer this for other clients. Now, you know, there's other factors that play into the email list because a lot of people have— I wanna talk about a couple of misconceptions if I can for a minute. So one of the misconceptions is, well, just send the email out and people are just going to open it, right? Like, just pull your list and send it out. And the reality is, is that you're one of many, a lot of times junk mail, quote unquote, that's coming through. So how do you get a client to open up that email? And so subject line becomes very important in terms of is that something that's going to engage them, that's going to catch their interest, that they're going to want to open it, that they're going to know that it's coming from you. The other is, is you don't just want to send out an email list without cleaning that list. Now, when I talk about cleaning that list, what you really want to do is you want to make sure that the majority of the emails that you're sending are actually valid emails. What I do for my clients is that I run it through a scrubber, which actually cleans the list, looks for which ones are live, which ones are catch-all accounts because you don't want to send it there, which ones they can even have on, you know, do not email me list. And if you're sending your stuff out and you get all these bounce backs, what happens is, is that these, these internet service providers that are hosting your client's email address looks and says, hey, everything that's coming from this guy, people are rating it as spam, they're rating it as junk. And so then it goes out the entire network that whenever you're emailing an you know, fill in the blank, um,.com, that they're automatically going to throw your email into the spam folder, uh, instead of the client's inbox. So you may be thinking that, hey, I'm sending this all out, why am I not getting more engagement? Well, that's because your emails are going right to the trash. They're going right to the spam folder. And so it's important that the type of list that you're sending out is clean. So I never recommend, um, going to any of these list grabbers or just grabbing a whole bunch of names. You really want to hit not only your past clients, but you want to hit everybody who's gotten a quote from you as well. And the reason why I include that in the list is because you don't know the level of service that they just received from that client. And number 2, it's going to be your name that's going to keep popping up to them every single month. So next time that they think about a project, well, you know, New Look has— that was my painting company's name— New Look has some great content and I love their emails. Let me give them a call and try them out maybe this time. So it sets you up in a more professional level. More of you're in the know because you know the trends that are coming. And so that becomes extremely important. And so those are just a couple of the misconceptions. Now, there's some other tweaks that we do as well to ensure that your email is going to the inbox. But that's something that we can have a further one-on-one conversation about. With somebody if they're interested.

Yeah, I think those misconceptions, I think you're spot on. And one of the things that I think is really important as well with staying in touch with your past customers and, and trying to get them to buy again is that if you can show, you know, set up that system and show that you can on a consistent basis reactivate those customers, That is a huge plus, a huge like bump in the value of your business. Like if you can show that you can on a regular basis reactivate your customers, that's recurring revenue essentially. So, and that will really improve the overall value of your business. So if you're ever looking to sell, which is something that you did, and I'd love to dive into this with you, is, you know, that can be a huge plus, you know, on the price that you actually end up getting for your business. Could you talk a little bit about what that experience of selling your, your painting business was like?

Yeah, absolutely. Um, so just to put it out there, the, the process takes a while, okay? Um, there's, there's a lot that needs to be done in preparation of selling a business, but what I had done is I had, uh, met with a business broker. Um, it'd be just like a realtor if you're looking for a house, okay? And so I met with a business broker and we were able to put it on the market, so to speak, for other people to look at. But the things that really made the business sellable was the fact of how many of the past clients. So what is the percentage of the past clients that are, that are coming back to you? What is the percentage of referrals that are coming back? Because what people are doing when they're looking to buy your company is they're looking to buy a system. They're not necessarily just looking to buy your name. Your name is one aspect of it, but that name and the systems you have got to be continually bringing in work. And so what I was able to show was that I had low cost of advertising because I didn't need to throw you know, giant bucks at it in order to get my name out there. Because of systems like my newsletter, I was able to bring in a high number of past clients and referrals. And so, you know, it really took, you know, potential buyer looking at, well, what, what are my systems? How do we have this in place? Are things clean? Are they organized? You know, what is that producing on a regular basis? And so would a potential buyer be able to step in and that system continue to move forward? So I've always been big about the systems in place. And so that, that really played a key role. And, and to be honest with you guys, with the online bookkeeping, I've used your service for many, many, many, many years. And, you know, you guys really helped me to see some of those numbers and to know what types of things I needed to kind of systemize a little bit more in order to get it to this point to where I could take a $2 million business and now sell it to another client and be able to walk away from it and that system still produce. But you guys, things like the newsletter, those were huge for the buyer of my company personally.

Nice.

Yeah, you mentioned low cost of advertising. Would you mind sharing what was your cost of advertising?

Oh, I think I only spent about 1 to 1.5% of my total revenue. Yeah, that's— you know, I didn't spend money on the SEO. I didn't, you know, there are things that I did at times, so don't get me wrong. There are some advantages to some of the SEO that I did do at times, but those were very minimal. Was able to get the name into the Contractors 3-Pack, which we all see now when we go to a Google search. Um, so with that and, and then doing the, the advertising, I mean, with the newsletter, uh, you know, I hate to make it sound like, hey, the newsletter's all you need, um, because there's definitely other ways to, to— you want to add on top of that, that you could go even further than what I did. I know that if I would have kept the business for a number more years, I probably would have thrown some more money at some other types of, you know, avenues. But for what I needed in order to get the company to that level, that was the big thing. Consistently posted on Facebook and Instagram. But that's about the bulk of it, to tell you the truth.

That's incredible. I mean, for a painting business doing over $2 million in revenue, having a cost of advertising of 1.5% or lower. I mean, that's, that's amazing. And I mean, because typically you'll see painting businesses, especially that are trying to hit higher revenues, you know, somewhere between 5% and 10% for, for marketing costs. And so you're only spending 1.5%. I would venture to say probably a big part of that was because you actually reactivated your prior customers, because that's so much cheaper than trying to get new customers all the time. Because I know a lot of folks are focused on getting new customers doing door-to-door and Facebook marketing, which are fine, not to say that you shouldn't do that. But you can, if you're, if you're not doing the customer reactivation stuff, you know, you should probably focus on that first, especially if you've been around for a while, you got a large list. Oh yeah, then going after the always going after new customers.

Absolutely. I mean, in the industry we call it re-engagement and you see this all the time. Any business that you shop with online, what starts to happen right from there? You start to get emails from them either offering specific discounts or offering, hey, this is some other products and you might not purchase off of that first email. You might not purchase off that second email. Or that third email. But if they have your attention and you're at least perusing that, when you see something, when something kind of triggers for you, then you're going to click on that link and you're going to go ahead and make that purchase. And so all the big companies have figured this out. The thing is, is that smaller businesses, and especially within our trade, you know, that's one big thing that I think hasn't really clicked fully that, hey, my inbox is flooded all the time. I look at these emails on a constant basis. Why am I not doing this to my clients and engaging them the exact same way? And it gives you that personal feel to it. We know that that's a trend in the industry, is that people want that personal touch. And so if you're getting that, that customized newsletter with certain articles that you know, interest them. I mean, that's just adding another layer of a personal touch.

One of the other things you mentioned about going through the process of selling your business was you, you really— the buyer wants to have systems, you know, when they're purchasing a business, they want to ensure that they're buying a business that has systems set up. Could you talk a little bit more about what was important for selling your painting business? Like, what systems are you referring to? What do you— when you say systems, what are we really talking about? Are we talking about the written processes? Are we talking about the software or a combination of both? Like, could you kind of just unpack that a little bit further?

Yeah, that's a good question. So it would be a little bit of both. You know, what the business needs to be is that I'm not doing everything. That's really the big thing that I have other people in place and this is how we go about doing the business as a whole. And so within my business, I had my crew lead. So I had a model where I was part employees, part subcontractors. And so my employees, I had my crew leads for each job. And for the subcontractors, I had my list of subcontractors that we used. I had— for the subcontractors, I had a project manager that would oversee, get the crew set up on a project, and also close down on the project before it was ever presented to the client. And then on top of that, I had an operations manager who who oversaw the crews, ordered the product, took care of issues that occurred. And then I also had my office manager, which kind of helped in that flow as well in the billing. And then I had, at the end for the last year, I had a residential estimator while I focused a little bit more on the commercial estimating end of it. And if I would've gone further in it, I would've taken myself back if I'd hired a commercial estimator to come in. And then I would've just kind of oversaw all the things. But there was certain software that I used as well to kind of help with that process. And so some of the software that I was using was an important part so that everyone knew what their role was and how a project flowed from beginning to end. One of the things that I talked about that's really important is what is the customer's experience, okay? So the customer's experience starts from that moment that they pick up the phone or send a text or fill out an online form till the project's complete and then further on with that, which where the newsletter comes at that very end on how we continue to reengage. So what does that client's experience look like from that start to end? A lot of times painting companies will focus on just what the customer experience is when they're in the house and they're actually doing the work. Well, you know, I think that's the wrong time to really focus on that. They could already have a bad taste in their mouth. And so you want to make sure that from the very beginning that entire experience to them is a smooth transaction and that they feel that their needs are being met, that they're being heard. And that you truly understand what they're looking for.

Makes sense.

Cool.

Well, this, this has been an amazing conversation. I really appreciate you sharing your journey and your process with emailing, reactivating customers, and going through the process of selling your business. Where can folks learn more about how you can help them, you know, with developing high-converting emails and reactivating their, their list?

Yeah, so I'll be able to send you over a link for that. I'm currently in the process— when I first started the business, I was looking at doing some other areas of marketing, and so I have the paintersmarketingpro.com out there. Currently in the process of changing that over to email newsletters for painters. Because that's the only thing I really want to hone in on and really focus on is just that. So paintersmarketingpro.com would currently get you to a site that you could set up an appointment where we could kind of discuss and see if we're going to be the right fit for you and the system. But that's going to be getting changed here within the next week or so. And so I'll send that out to you as well. Um, so they could reach out through you and then I could, uh, could talk to them, or they could go right to that website. Yeah, one of the things too, because, you know, I, I love your business, um, so much. Like I said, you guys have been instrumental, um, in, in helping me grow to where it's at, that anybody who mentions, uh, this podcast, um, I am running a discount right now for them. And then also what I'm going to be throwing in free, something that's been a really help in pre-positioning my company. I have a guide, 8 Things You Must Know Before Hiring a Painting Contractor. And this is about a 20-page thing that just kind of goes through everything about, you know, to the client, you're not just going to purchase a TV to where, you know, you can just go to any store and the TV is going to be exactly the same. Hiring a contractor is a totally different experience. And so there are different questions that should be asked. And so it just tries to help to preposition, put the customer in the right type of mindset. So when a client sets up an appointment, I would send out that, that guide right away to them. And then also when I'd send out the quote, I would send them that guide one more time. But I'm going to throw that in. That's something I typically charge, but I'm going to throw that in free. For anybody who contacts me through this link here and signs up for the newsletter.

Awesome. That's amazing. We'll include the link in the show notes if you want to grab a hold of that offer. I'd highly recommend it. I mean, Mike has done everything that— he's walked the walk. And so if you don't want to have to spend years dialing in your system for reactivating customers, just go with what's already worked in the past and make it easy. Hit the easy button and definitely schedule a time to talk with Mike and, and get, get, uh, get that low cost of leads through customer reactivation. Cool. I really appreciate your time, Mike. Uh, any last thoughts before I let you go today?

You know, just, uh, I mean, you kind of hit it all. I mean, it is low cost. You know, one, one sole job for that would basically pay for the newsletter for the entire year. And then everything after that would be just profit. And I do a month-by-month basis because I want to be able to prove myself consistently that what we're delivering for you and your clients is something of value. So, yeah. Cool.

Awesome. All right. With that, we will see you all next week.

All right. Thank you.