EP #29 - Scorecards: A Detailed Health Report On Your Business

'Cause you've basically got a business coach in your back pocket at all times.

Because money in the bank account is a result of other actions that you have done. And it's so true, right? So it's an emotional rollercoaster. So that's where the scorecards are really effective at being able to bring us back to ground and bring us back to, you know, true north and being able to go, no, calm down, stop everything that's happening in here. It's heading in the right direction. I just have to follow the plan basically.

So one of the most attractive aspects of The Local guys is the support that we can provide our franchise partners. We have all the traditional ways of support, and then on top of that, we have these things called scorecards and scorecard meetings. They're basically a detailed health report of your business, and we can look at that and then give you customized feedback for your business so you can grow and thrive. So I'm here with Jarrad Goulding, CEO and founder.

Hi, Harvey.

And again, we're going to talk about scorecards. So Jarrad Goulding, what sort of data is included in scorecards?

Yeah, sure. So I think importantly, the important thing to know about scorecards is it's ultimately the chassis of your business. Okay. So just like you've got a vehicle, whether it's a Tesla or you've got a Volvo or you've got a Porsche, You've got whatever, you've got the chassis of that vehicle. And so with the scorecard, what we're trying to do is make sure it doesn't matter what type of vehicle it is or what type of business it is. Ultimately, they have the same chassis of the business. Doesn't matter if you're cutting hair, service-based business, a law firm, anything, doesn't really matter. The chassis of the business is exactly the same. So those main elements in every single business are always going to be the same. And they are obviously your revenue, how much money you're making in the business, number of leads that are coming into the business, what the conversion rate is of all of those leads, of what the percentage is of how many you're converting into actual customers, the average turnover, or sorry, average transaction value. So ATV, we call it. So what is the size of each job, basically? So the value of each job. We look at things like reviews in there as well. So making sure that we're getting reviews, leads by marketing source, which has got a new name now, but where the lead's coming from basically. So whether it's a lead from the support centre or whether it's a lead from the franchise partner, we try and keep those at certain percentages as well. Typically most come from us, but we try and have the franchise partner contributing a little bit there as well. And then local area marketing. What activities they're doing to make it strategic local area marketing. So this thing that all franchises call, do called LAM, which is local area marketing, and we try and do SLAM, which is strategic local area marketing, only putting efforts into the areas that work. So that's the broad strokes of it, of what we're trying to apply there for all of our franchise partners. And all of that data is laid out for them so they can jump into our scorecards, see that at any time. And it's updated every month so that they've got access to that.

I was going to ask that. So it's basically all of the vitals of that business.

That's exactly right. If you can go through the business and you can make sure that you're just leaning into only that and nothing else, you will have a successful business. So yeah, we tried to get rid of all the guesswork. Instead of a lot of people in business just kind of going like this, no, I'm doing everything right, got no idea. Just follow the guide basically and you should be fine.

What do they look like? We'll put something on screen, but what do they look like?

Yep. So we've got bar charts. So for each metric, it's got a different bar chart and that's for the different months that we're going through. So every single month it's a different bar basically, and you can see how you're trending. So if it's for revenue, for example, you can see what your revenue has been for every single month that you've been with the Local Guys, as well as your average of where expected revenue for the year. So based on what you're currently doing, it projects that. Yeah, it projects what it looks like you're going to be earning for the year so that you can start to— and that gets exciting, right? And then you can see last year's and stuff like that as well. So you can see it's starting to trend upwards because being in business can be a scary thing. It can be an emotional thing. I heard a saying, saying the entrepreneur is, or business owner is the only person that can go from extreme panic to extreme exhilaration about 8 15 times a day. And it's so true, right? So it's an emotional rollercoaster. So that's where the scorecards are really effective at being able to bring us back to ground and bring us back to true north and being able to go, no, calm down, stop everything that's happening in here. It's heading in the right direction. I just have to follow the plan, basically.

Yeah. I was going to ask, can they see these scorecards at any time and how often are they updated? I think you've already answered that.

So as I said, yeah, once a month. They get updated from our team in here and all of our franchise partners have access to those from as soon as they start. Obviously there's not any data from day one, so it takes a month before they see any data and 3 months you start to see some really good data because you've got 3 months there to be able to work it on. And then we have our support team that are touching base with our franchise partners on a regular basis on what elements we need to work at. And because they see so many different scorecards, we're up to 113, 112 franchise partners now. So our support team see vastly different scorecards all the time. So they know what the average transaction value is for Test and Tag, what it is for Pest Control, Cleaning, et cetera. So they can say, hey, you're a bit low on this area. We need to work on your ATV, average transaction value, or we need to work on your conversion rate or whatever. So here's some stuff that other people that I've spoken with that have done really, really well in that area. This is what we recommend for you.

Right. Yeah. Can you tell us what goes on in those scorecard meetings exactly?

Yep. So it's customised to each particular franchise partner and everybody's got different goals and everyone's at a different element part in their business. So, you know, you might have someone who's in year 5, 6, 7, 8, whatever. It's got very different goals to the person who's been in for 3 months. So it is very much customised to the franchise partner and it's working on exactly those metrics and what ones are standing out where you're below the mark. That we could work on or something we can put more polish on, or also celebrating the wins of things that they're doing fantastic.

Yeah.

You know, I've looked at some of the scorecards recently and we've seen a couple of the guys that have 13 months in and just got astronomical numbers and it's like, it's, it's, I love, I love looking at those because then I want to deconstruct them and pull them apart and then take the lessons out of those for the other franchise partners. That's the beautiful thing that I love. And if we didn't have them, we'd have no idea. We'd just go, oh, yep. No idea. That person's doing okay. I think that one's doing okay. Well, with this, we can pull it apart and we can share the secret sauce with the other franchise partners.

We're learning from each other.

Correct.

As a tribe.

That's exactly right.

Yeah, I love it.

Yeah.

Hey, is this a thing most franchises do?

I would say the better ones probably do it. I got some of the concepts from some business coaching people that I followed for many, many years on the chassis of the business. That was a Brad Sugars thing, probably well before your day. But he was a big business coach back in the '80s, '90s, and even since now. When we had our franchises, which was in the hospitality space, there was elements of that as well. Obviously, different metrics in those industries. So tracking slightly different things, but they're similar type things. So yeah, I would say the better franchisors would have it, but I haven't seen too many or haven't seen any service-based businesses going as in-depth that are ingrained as ours do, which I think is a real ace up our sleeve.

I think it's really cool because you've basically got a business coach in your back pocket at all times. You can have a look at your numbers, you can sort of self-coach, but then we have those meetings where you can really dive into why you are maybe falling behind on one category and how to actually increase that.

Well, the biggest thing is most business owners just run it from their bank account, right? Is there money in the bank account? Yep, cool. I must be doing okay. Is there no money? Oh well, I've got a problem. I've got to do something. And really that's a really bad way to do it obviously, but it's also very reactive. Because money in the bank account is a result of other actions that you have done. So we've tried to, the KPIs that we've got in the scorecard are results-based actions that you can do. Now, if you do those, that will result in money in the bank account. But just looking at, do I have money in the bank account as a typical business person does, is very reactive and it's counterproductive. So yeah, we try and spend less time on that. And the revenue, the revenue we've got to track because everyone's, you know, That's the big one that everyone's interested in, obviously. But ultimately it's probably the least important one because if I'm dialling in the other ones, that one will just take care of itself.

Yeah, exactly. So can you give us an example of maybe some types of feedback that might come out of a scorecard meeting? Give us a hypothetical.

Quite often one of the big ones that we're trying to work with our franchise partners on is conversion rates. So that's one of the biggest impactful things that they can do because they don't have to knock on one extra door. They don't have to find one extra prospective client. They don't have to try and increase their average transaction value or the average job by $1 extra and they just get the same amount of leads, even if it's just getting leads from the support centre and they can vastly change the business revenue from here to up here. And I go through some examples of that in the franchise training that we do for new franchise partners and show 3 different examples of that, of like a 30% conversion rate, a 60% conversion rate and like a 70% or 80% conversion rate. And yeah, it's vastly different even with the exact same amount of leads coming in. So that is a really, really important one that we highly recommend to our franchise partners that they're tracking. And not only are they tracking it, but reaching out to the other franchise. We send out a leaderboard based on conversion rates. And so all of our franchise partners can see that whoever's in the division, whoever's the top guys, and reach out to them and say, hey, yeah, I'm struggling in this area, what do you think I could be doing? But again, our support people obviously conversing with those guys as well and trying to reconstruct what they're doing or simply asking them, what are you doing that, why is it working so well? And passing that feedback on. So just being open, it's just being open and not just saying I know everything because I've been in this for 5 minutes, you know, and maybe there's some wisdom there and it could be passed along and then applying it. That's the thing, a lot of people just monkey, don't want to apply it. But that's where we just have to sound like a broken record and just keep saying it, keep saying it over and over and over. And eventually, hopefully it gets through and you see a really good result.

And conversion rate is the art of closing the deal, basically.

Yeah, it is. But it's really not rocket science, to be honest with you. These customers are calling us up and they're requesting a quote. They're leaving all their contact information. They've got a problem they want us to solve. So it shouldn't be difficult to do it, but you've got to be quick. You've got to get in there fast. When a lead comes through, you've got to be contacting them almost instantaneously. You don't want to be waiting 2 hours or whatever because the customer's calling competitors in that time. So yeah, you want to be competitive with price and probably in the first 12 months, you're not so much after that because you can allow for your conversion rate to drop down a little bit after that. But And you've got to demonstrate value, really. I've seen some terrible examples of it and I've seen some great examples of it where people are just calling up and saying, yeah, you need pest control done. Yeah, it's whatever price, $250, $300, whatever the price is, I don't know. Or I'm saying, yep, okay, cool, no worries. Here's exactly what I'll do. I'll go around the eaves, I'll do the perimeter of the property, I'll identify any hazards that you've got. I'll then give you a warranty, I'll then give you this, I'll then give you that. And then if you work with me as well, I've got a full police clearance, working with children, fully insured, blah, blah, blah, blah, demonstrating value, demonstrating value, demonstrating value. This is my price. And if you demonstrate enough value, then price is not insignificant, but a lot less.

What sort of conversion rate should our guys be sitting at?

It depends on the division. So it does tend to be division specific, but I would suggest 65% is a good number. So anything 65% or higher is great. Anything below 65%, I think there's room for improvement.

But if you get towards 95, 100.

So 95 to 100 is actually a bit of a problem. I encourage our franchise partners not to be at 95 to 100. I dare say that if you're at that, your probably price is way too low and you're converting everyone and you're leaving money on the table. I remember running an AI comparison once to where the sweet spot was of the conversion rate because it depends on if I charge 50 cents to go clean someone's house, obviously my conversion rate's probably going to be very close to 100%. But that's not the ultimate goal. Look, our ultimate goal is to get happy, successful franchise partners that are making a great living. So we've got to find the sweet spot in the middle. And it depends year on year as well. So if I've been in this game for 8, 9, 10 years and my book's completely full, I get new leads that come through. I might be happy with the 30%, 40% conversion rate because I'm only filling up because I've got regular clients that are ticking over and I've got a higher price point for what I'm charging now for those. So I'm only going to let someone come into my client base at a premium price. And that means that my conversion rate is going to probably drop down. So it does depend. And this is why we have customized franchise meetings with our support consultants because it depends on the franchise partner.

Talk to us about how these scorecard meetings have changed over the years.

Yeah, they're a living document. They're constantly changing. I was only just talking with our pest control divisional, Sean and Carly, our general manager, about how we can optimise them even further and we're making changes to optimise one of the elements on them. So yeah, they've changed significantly and they'll probably continue to adapt and change significantly. Significantly over time. One that I really want to get in there is repeat, the metric for repeat clients. That's one that's been massively on my radar because we're in a service industry. Repeat works huge for us. So I would love to have a metric on there which tracks how many of our clients are rebooking in again. Maybe I got to have a conversation with ChatGPT or Claude or something like that to try and get that one into our scorecards. But But yeah, so really trying to hit all of those metrics to make sure that they're as successful as they possibly can be because we've got happy, successful franchise partners, then we've got a happy, successful franchise network. Yep.

Great. Yeah, it's probably one of the most surprising things. I didn't really know much about how we supported coming into this job, how we supported our guys, and this seems over and above to me. So yeah, I think it's really interesting and just having that custom one-on-one time with our consultants is invaluable.

It's great.

Has to be.

And you imagine the complete opposite of that. You're an independent and I've been an independent in the past as well. And you're just out there in the wind by yourself. You know what I mean? You've got no idea. Whether it's technical skills, whether it's the business KPIs and all that sort of stuff. And even if you say, oh, I'm good at that sort of stuff, I'll do it. Unless someone's kind of— you get so busy that just with everything, because you're trying to sit on every seat on the bus, you'll never do it. Like, it doesn't matter who you are, you'll never do it. So when you've got certain people that that's their sole job, to focus on that side of things and to help push you and drive you and challenge you and all that sort of stuff, you start to see these blind spots that you might have that you had no idea that were there. So yeah, no, it's, it's invaluable and it's something we're proud of, and I'm extremely proud of.

Sort of the crown jewel of our support team, isn't it? The scorecards.

Yeah, no, it's, it's good. Yeah. And I think it's only— we're only getting warmed up on it. I'm working on a whole new support side of things, which will be like the— I don't know what version we're up to now, version 15 or whatever of it, where it's just going to be completely go to a whole nother level on there. So I've been deep working onto that and working with some software engineers on that to try and get that one concreted in. So I can't wait for the next version where it's even cooler again than what we've currently got. So yeah, no, no question. It's, it's a very important part of what we do.

Just keeps getting better.

That's the plan. Just evolve or die. That's what they say.

All right. Thanks, Jarrad Goulding.

No worries. Thanks, Hammy. Appreciate it. Cheers.