#102- Guerilla Marketing Tactics: Standing Out in Overcrowded Home Service Markets

I'm John Wilson. Welcome to Owned and Operated. Twice a week we talk about home service businesses, and if you're a home service entrepreneur, then this is gonna be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting. Let's get into it. Hey, this episode is sponsored by Service Scalers. So Service Scalers is actually a brand that I've used personally with our companies for a little bit over a year now. They've helped us manage our digital advertising. Frankly, they did a lot better than our last agency. Leads went through the roof and cost per click went way down. Check out Service Scalers if you're a plumbing, HVAC, or electrical home service company. That's what they knock out of the park and they did a great job for me.

On this episode of Owned and Operated, we deep dive the workshop, what we're gonna be talking about and why you should join us on our next one in June, as well as talking about overcrowded markets, what to do, how to build community, and what I personally am doing to guerrilla market my way to the top. Enjoy.

Welcome back to Owned and Operated.

Welcome back.

How's your week?

Yeah, it's been good. We finished out February.

Nice.

Um, not where I wanted to be, but not unrecoverable.

But you survived.

And we minimized damage.

Yeah.

Number one thing, minimize February damage. And of course, like March 1 hits and I think we closed on like almost our yearly goal, or excuse me, our monthly goal of what we need. Like everything just waited to not touch in February. And then March hits and we have, I think like 7 or 8 jobs closed and some of them were doubles and triples. So like just wild how mean February was to us, but we're gonna have a good March.

Yeah. I mean, that tracks with our last day of February and first day of March. We closed 3 days of business on the last day of February. It was wild. But yeah, February was good. We hit budget on the nose, which was really exciting. And then Another huge year over year jump. It was like 72.5% year over year jump, which is just like insane.

For me, just you hitting budget is the key, right? I don't care if you are flat in February or even just 2% up. If you hit budget, February's a win, hands down.

Yeah.

And not only that, my son was out in shorts the other day. Like it is a mild February in Nashville.

Yeah.

Everyone's struggling. At least in this market.

We were at a training last week, plumbing, HVAC, electrical contractors from all over the country. And I think we were the only one there out of 20-some contractors that hit budget in February. Everyone was feeling it all over the place. 67-degree February. It just, yeah, tough time for everybody.

Yeah, it is what it is though. Keep chugging on, get it back in March, April, and then off to the races for summer. Excited. Yeah.

And then it's finally March, so we're pumped up cuz in a couple weeks we have our first Breaking $5 Million workshop, which has been pretty cool. I think we ended up selling out, which was awesome and like a fun surprise. So we're gonna launch dates for the next one, which will probably be in June or July here coming up. But I know we had a couple questions from the audience on like what exactly was involved. We can spend a couple minutes there and then dive into the topic for the day.

Yeah, I personally had a few questions and they maybe have read online the outline of what's gonna happen, but I think it'll behoove everyone to go into some really high-level detail. We don't wanna give away all the secrets, but really we're just digging in. We're starting in on one of the most important things and that's proper business setup, location, fleet. There's one more. Help me out here, John. Don't leave me hanging.

Yeah, I mean, it's physical location. Fleet, how you buy 'em, software stack. Then we start diving into recruitment, how to fill the seats. We talk how the org chart should look, at what point should it look different ways. Obviously we talk about that a lot here on the show, when to hire managers, what those job descriptions look like. There'll be some sample job descriptions for techs, for salespeople, for managers, dispatchers, all those key roles as you keep going. Talk a lot. Almost the whole second day is on driving demand, whether you're working with homeowners or working with businesses, how to drive new customers. Yeah.

We also talk a bit about pricing, how to make sure to get your pricing correct, as well as moving from there into comp structures. Like you said, on recruitment, we have some really in-depth stuff on call center. I know we touch on call center a lot on the pod and we do some pretty deep dives, but we are going real deep. In on call center. I think we have a decent portion of the day on call center too, just because it's an extremely important key to really clicking and getting that business to $5 million. So I know that's a huge thing. We go over scripts and have sample scripting, sample streamlining, sample how to split. So we really are diving deep on all of these subjects to try and give you the playbook. On getting there.

Yeah, 100%. So it should be good. I don't remember if there's any seats left. There might be 1 or 2 at this point, but if you're not able to make this one, then we're doing another one over the summer. Just go to ownedandoperated.com. There's a button for workshops and you can just check it out and then you can check out the dates for the one coming up.

Awesome.

Cool.

I'm really excited. It's gonna be fun. It's helped me a ton. We're gonna bust through 5 this year for sure. Hopefully hit 6. And I don't think I can do it without this. Like this has just opened it all up. So really excited, guys. On a side note, segue, I'm historically great at just terrible segues into what we actually wanted to deep dive in on this episode. A big one that I know we wanted to talk about, we've had on our list for a while, is how to stand out in a crowded market. John, I think we'll start off with, like, I know you have some big companies in your area. You're kind of a suburb of a large metro. How did you think about this? How were you intentional when you started growing from that $3 million plus?

Yeah, I think the game has definitely changed a lot in the last 6 or 7 years. So some of the stuff that I did 6 or 7 years ago wouldn't necessarily apply today.

Fair enough.

I'll get to the answer, but like, I think a lot of small companies attempt to compete In the same way that I attempt to compete. And I think when I've in the past given, like, I'm not really sure why these guys are doing this at all. It's not like, why are they in business? It's more like, why are they attempting the same playbook? It just doesn't make a lot of sense to me. So I was talking to a friend, uh, of a mutual friend of ours, Nathan, uh, a couple weeks ago, and he's down in DFW, so very crowded market. And, um, he's competing against Milestone and Baker Brothers and these huge companies and He was at some thing with Jimmy from Baker and someone asked the question, exactly that question, like, Jimmy, how can I compete against you? And the real answer is that you can't, like you can't actually compete against a company that's 50 times your size in the way that they are competing.

Yeah. You scared me for a second.

No, no, you can't try to go head to head. And that's the mistake that I keep seeing folks trying to make. Yeah.

Let's break that down for people too. So just as from like a numbers perspective, I ran some of the numbers yesterday in Nashville.

Yeah.

And we have 6 or 7 companies in our area that we're directly in competition with.

Yeah.

That are over $50 million in revenue. So if you say 10% of that budget, which is the standard, goes towards marketing, that would be $5 million times what, 6, I said 6, 7 companies. So there's $35 million being pumped into the national market through your traditional means, which they're all competing with each other. They're going for the same LSA, they're going for the same Google AdWords, they're going for the same Facebook and traditional means. And so when you're competing against that as a $5 million company with 5%, 10% of your revenue being marketing, I mean, you are less than 1% of what is out there kind of dollar-wise. So when you go head-to-head with them, they are going to drown you or drown your customers out with their name over yours.

Yeah, absolutely. And the thing that I've said on Twitter is I spend more in marketing a month than many of my competitors make in revenue a month.

Yes.

And I'm not that big. So like, that's what you're competing against. And I have the same concerns. Like if a larger competitor came in or a PE shop really started pushing, I would have the same concerns of them pushing as much in marketing dollars a month that I push in revenue. So that's what you're competing against. But there's an advantage that small companies have that big companies don't. And that's how you can like get alpha and that's how you can get somewhere. So when some of these companies, like using Jack's example, Nashville's a super crowded market. And DFW and Houston and all these areas where you do have several to a lot of $30 to $80 million companies. The thing that they can't do very well is like get extremely narrow. The best way to think about how you can compete against a Goliath in your market is by owning your own backyard. And that was Jimmy's example too, in his story to Nathan. It's really hard for me To own someone else's backyard. And it's like that for a couple reasons. Like one, we have a lot of marketing dollars to spend. And like network and personal relationships is a real moat that bigger companies have a hard time getting around. Because our job is like, okay, if I have $1 million to spend or $1.5 million to spend in marketing, like we're looking for the best bang for our buck. We're looking for the most amount of people that we can reach. We're looking for brand awareness. We're looking for direct leads. So that means covering wide areas. of market. And like, yeah, we'll pick some zip codes to try to get deeper and denser into. But if you're out there as a small company and you're driving like face-to-face marketing and you're door knocking, or like you're inside peer groups or you're working with HOAs directly, that is hard to compete against. From my perspective.

Very community oriented.

Yes. That's challenging because yes, we have money, but we don't have time. That is one of the benefits of being smaller is you can afford to be more personal With your customers. Now, as businesses do get larger, like you get more community engagement and we're starting this now too. But for us, community engagement looks like engaging a little bit with a lot of communities instead of engaging a lot with one community or two communities. So I really think that owning your backyard is the best way to compete against someone like me or someone larger. Because there's just too much money being poured across the whole market to try to go head to head with that.

Yeah. I mean, there's a perfect example in our market. So northeast of Nashville is a company that owns a small city. It's about 62,000. I want to be in this market. Everybody wants to be in this market. It's 62,000 people, decent average household income. So very middle class, upper middle class market. There is one company in that market and every big company has tried to go into that market and they've gotten stomped out, completely stomped out of the market. And these are $100 million plus companies that are trying to get into this market that just give up. They give up. I'm gonna name drop 'em 'cause they're great. Dairy Berry, they have a funny name. Dairy Berry is in Gallatin, Tennessee. They're maybe an $8 to $10 million company. HVAC plumbing, I think only HVAC plumbing, or maybe just HVAC alone. But anyway, they have a spot directly centered downtown. They have a giant building. They sponsor every single high school team and every single middle school team and every single element. Like they sponsor all the sports teams in all of Gallatin. And then on top of that, they're throwing community parties and they're at every time they shut down the square, they have a big parade and a float and they just do everything possible to own that market. And guess what? Everybody in Gallatin buys from Derryberry. They don't even get second bids. They don't get third bids. And from what I've heard, it's all hearsay. So sorry if someone's listening from Derryberry, but the company's actually not ran that efficiently. Like it's pretty mediocrely ran besides for their community engagement. And that community engagement has kept out the big boys, kept out private equity, kept out everybody. 'Cause they truly double down on it.

We're launching a community engagement campaign. And for us, like, that's a team. So it's gonna be its own team of people that go out and do community marketing. And we're gonna do exactly what you just described. But the problem is we have 80 communities that we have to serve. Um, so as I think about this, it's a full-time team of 2 or 3 people. They're gonna be going out, like we're thinking of as branding, community awareness, and direct lead gen. They're going to be alternating which community is the core focus because we have, let's say, 10 core zips that we want to really drive home. If you like what we talk about on our social media, on Twitter, on this podcast, then you should be signed up for our newsletter. Go to ownedandoperated.com where every Friday we break down our business, we break down insights, things we're learning, things we're working on, and it's good stuff. Check it out. Ownedandoperated.com.

Let me ask you a question real quick.

Yeah.

So do you lose value though? Do you lose that community engagement value when you go to multiple communities? So we had this conversation in-house is we have a few locations and one of the locations is 60 miles. The 2 football teams don't play each other, but the question came up was, do you sponsor both football teams? Because if they know that you're sponsoring multiple football teams, competitors, Are you really like, it's an us versus them mentality. Like that's the goal is to build a, these are our guys, this is our team, this is our tribe. And if you're out multiple different communities, do you lose some of that?

Yeah, I think you do. 100%.

I guess the real question is what's the way around it? Is there a way around it or do you just try to do different things?

We're not deep enough into it. What I do know is that a lot of the big PE shops that I'm seeing are beginning to follow a similar playbook. So everyone is trying to drop community engagement and they have the same limitations that I'm gonna have, which is there's too much community and there's too little people to do it. So the way we're thinking about it is every home and garden show, every farmer's market, every everything we're gonna try to be at. But, you know, there might be 15 farmer's markets a weekend. So like, which one are we gonna be at? And it's gonna be driven by our core zip code. I don't really know. I'm not at the moment wild about sports teams, but it's probably because I'm not in this town like Galeton where I can own the whole town. Because for me, sponsoring a sports team would just be cutting a check and that would be it. It really doesn't matter. Like I'm not that much of a part of any of those communities.

So just to put it in perspective, we drive probably, I don't want to say it's huge, but maybe 6 to 10 New customers every season in football. And then the customers we do support, yeah, like they say, we called you because we hear your name whenever you guys score a touchdown, which it's one of the best football teams in the area. Um, they say that this touchdown was brought to you by Rapid Response, blah, blah, blah.

Oh, that's cool.

Yeah, so it's really cool. So they really lean into it.

Yeah.

Um, and then next year what we're planning on doing and trying to work with them is we want to do a halftime show race. So we're Rapid Response. If you can beat the, the Rapid mascot on a 50-yard dash or something, 20-yard dash, that's good. You get a t-shirt. And then maybe once a year for homecoming, we're gonna do a big giveaway.

Yeah.

And so have kids race and have one of our fast guys. Mm-hmm. It's probably gonna be me trying to like chug on, just losing the company money 'cause I can't make it fast enough. Um, I'm getting old. Like that's the community engagement, right? You see it on both sides.

And it's hard to compete with that. Because like from my perspective, so our budget for 2024 marketing is around $1.5 million. Our job is to like, how do we go deep on a channel? It is really challenging when you're spending $1.5 million to have like a $200 sports team sponsorship and like have 20 of those. It's just too much to manage. It's just too much time. Like our job is to find a channel that we can put a half a million behind or $200,000 behind.

But that's also the opportunity.

And that's the opportunity for smaller companies is we literally don't have the time. And from my perspective, our marketing budget isn't that big. I'm talking to these other companies and they're spending $4 or $5 million a year. I'm able to do things that they're not able to do. It's like the same thing, like because we're smaller and a little bit more nimble, we can do things that they can't do. But for them, they have to find channels Like their lowest channel might be $300,000 because they have to be able to invest it. Right. So you do have an advantage in that you can do exactly this type of thing and really own a community in a way that larger companies just can't because they don't have the capacity to get that deep.

Yeah. I think the biggest issue with this whole conversation ends up being it's not scalable. So you grow, you own a community, you get to that $7 million, $5 to $10 million mark. At some point you have to back outta that community to grow if you want to go any bigger. You can always own it to some extent and love that community, but I think it's very hard to recreate that somewhere else too.

Yeah, it is. So it, this is probably the one thing that is a little bit, does follow our corporate timeline a little bit.

Mm-hmm.

You know, when we were growing and building and whatever, those first 55 years were very dense inside 1 or 2 zip codes. Like very dense. Most of our work, and I mean like 60, 70% was inside 2 zip codes in one part of Akron.

Yeah.

And we didn't really do team sponsorships or billboards or like carpet bombing or like, it wasn't this intentional thing. It's just like the entire company, most of our customers were inside these zip codes. Really, it's just one zip code that is such a big bulk. And even today with the company the size it is, that zip code is still our top zip code. And it's not super close. That one zip code drives 30% of our revenue. So it's still big. I think the way that we accidentally did it is the way that other companies should intentionally do it, which is we built a really good base inside one community and we weren't as intentional about it as we could have been. Like, how much further would we have been if we did this? If we dove into sports teams, if we covered all the schools, if we carpet bombed it intentionally?

And then if you went down to Columbus, Ohio and started up another location to create that community focus would be very difficult. That's what I mean.

We would struggle to break. But yeah, I think that's basically the how of how you compete against, like if you're up against a bunch of big boys, like focus, it's same as the pool route thing that we talked about a few weeks ago. Focus denser, try to own one community, one zip code, one little area, and then build out from there once you own it. Because that's much harder to compete against. When a lot of what we're trying to do is spread over zip codes or, you know, in multiple zip codes, 'cause the budget's just too big.

I think from here I would like to ask you a question. So we did a huge marketing exercise led by me, and one of my core beliefs with how we also grow in this community. So most of our work is in a single zip code as well. We own a single market, and that's why I bought the business, 'cause this market was a solid market. We have 2 competitors that are not even close to us. Like we own one city and we're expanding to 2 other cities and taking over market share. And it's been great. Growth has been a difficult thing because it's hard to get more without the community aspect. So our core belief here is that we have to think outside the box and do things that nobody has ever done and really capitalize on the same thing. I look at social media apps and everything else there. We have to capitalize on attention without, like, in a guerrilla way. So some of the few ideas that we're coming across are to create a brand that is 100% an attention getter. Like, I think I used other words over text to tell you what we were going to be, but essentially attention maniacs. That's how everything needs to be surrounding our business. What do you think about that? Just kind of framework to start. Am I shooting in the right direction?

I think so. The strategy that you're thinking about Can only be done by like 2 different sizes of business. It's either a small business or a large business, but like most businesses are in the middle, so they can't compete with what you're talking about doing. Mm-hmm. Like we're creating a content machine, hiring all these internal people and we're doing all this stuff. And like the only type of business that could compete with what we're about to do is a very small business because they're the only ones that have, like, it's the owner out there doing it or the owner's spouse or partner or whatever doing it. In the same way that we're about to do it. So creating a ton of content, doing community engagement events, doing all these things, 'cause it either takes like a lot of the owner's time or it takes a team which requires budget. So I think what you're describing gives you a big moat. It's stuff that most of your competitors are simply unable to do because they're too big for their attention to go towards it and they're too small for their budget to go towards it. So I think that strategy is good. Like, I think that's a way to compete against most of the people you compete against.

Yeah. So hear me out. This idea, this is an example of it for everyone out there, came from actually ServiceTitan. So ServiceTitan sent me something in the mail, a mailer, but your mailers, normally when you look at a mailer, it's a postcard.

Yeah.

You get so many of 'em from every single company. I know that it works for some people.

Great.

Congratulations. I find that it doesn't work very well. And why doesn't it work very well? Because they're just like everyone else. They have the same $49 service, $59 service. You know, the customer, unless they need it at that exact moment, it's not grabbing the attention. So what our idea was and what ServiceTitan did is they sent us a big-ass card. I'm talking about it barely fit in our mailbox. It was a 14 by 12 or something like that. And it was huge. Like it was a hard cardboard, big card, and you had to physically like toss it in the fireplace to get rid of this thing. You weren't going to throw it in the trash. And so the idea is there's mailers and they're cheap. Big companies are doing them. Small companies are doing them. Everybody's doing them. But what if you wanted to do it from an attention-grabbing side? You send these giant mailers. And so we said, what would be the biggest mailer that you could send? So we're looking into, even if it's just a folding fold-out piece, right? They're probably going to be $1, $2, and we'll pick very select neighborhoods. Like, could you do a light, like an actual size unit that folds out? You fold it out and it's like a cardboard fold-out of a unit. And so those are the kinds of ideas we're trying to wrap our head around. And you hit the nail on the head though, budget, right? So this would be unique. It would be wonderful, but it takes my time. to drive around and to do the research and to find a neighborhood that actually makes it worth it. And 2, the budget for those, instead of sending 15-cent mailers, we're sending $2 mailers. So they really need to work. But we're hoping to send, have a big QR code on it. It's the size of a unit and it says, take a picture with this, upload it on social media, tag us, and we'll give you $1,000 off, $500 off.

I think that'd be interesting.

Yeah, it'll be interesting to see if one, people actually take pictures with it to try and get money off. Or a free service or a free whatever. But I try to stay away from the free stuff. And 2, if people like it, it's a big unit. Maybe that's the wrong thing to send, but the idea of the big mailer is what we want to try.

Yeah, I think that sounds sick. Like I look forward to hearing how it goes.

Yeah, that'll be a fun one. I'll post all the details on the HVAC Jack Twitter.

That sounds good, man.

It'll be a good content machine either way.

Yeah, 100%. Yeah, I'm looking forward to it. Man, this was good. All right. So that's basically how, one, attention getting, 100%, getting guerrilla as hell with it. And 2, owning a community. And that's how you compete against companies that are bigger than you. Like that's the way to win and you can still win.

Yeah. I love it. Sweet.

Well, thanks everyone for joining us on Owned and Operated today and tune in for our next one. Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at @WilsonCompanies. I'll see you next time.