#116 - SCORE! Navigating Success in Home Service Growth with Scorecarding

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. Uh, 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 outta the park, and they did a great job for me.

Welcome back to owned and operated. Yeah, my favorite time. I like, I like this time.

Yeah, no, this is good. It's good.

I have like 600 text messages right now from people that are all trying to ring me up. during this like hour-long interview process that we're doing, or, or podcast. We, we, uh, take an hour out of our day and put it aside and blown up, but it's worth it. I enjoy getting, getting off of, uh, the line and having some fun. This is why we got into the business in the first place, was to talk shop and have a good time. What's going on with you, man?

Uh, man, struggling through April.

Really?

Not excited. Yeah, April's not doing, not doing good for us. Um, not excited about that, but the weather is nice, so that's good. And yeah, jumping on LinkedIn, that's been a fun new adventure. Um, yeah, it actually has been kind of interesting. Uh, there's some— so like, it— most of our audience was built off of Twitter, which is cool. Loving Twitter peeps. Um, the only downside of that is there are actually very few home service people on Twitter. Most of our audience is nearly everywhere else. Um, so, or most of the home service industry is nearly everywhere else. So if you're, you know, a lot of the aspirational home service folks tend to be on Facebook and Facebook groups and stuff. And, uh, the very, very large ones are apparently on LinkedIn. So I just found that out. So that's kind of interesting.

I believe that. I mean, LinkedIn is, is the place to be for business in general. So that makes sense. It's just, it's so cringy.

It's tough.

It's tough getting through LinkedIn.

I have enjoyed— I've gotten connected with some really cool people that run like big businesses on LinkedIn, and that's been a lot of fun. So it reminds me honestly of very early Twitter, like 2020, 2021 Twitter. That's the vibes I'm getting from LinkedIn right now. Like obviously a little bit more professional. I, you know, I can't say hell yeah as much, but, um, hell yeah, brother. Yeah, it is, it is cool. Yeah, it's cool. What's new with you?

Well, we're crushing April. We are on track to— we have— I don't know how you set goals, but we have like our base goal that we have to hit. Like, this is our— we need to hit this number. And then we have our aspirational goal, like, yes. And we are on track at midway through the month for our aspirational goal. So, um, I mean, we're pumped, we're excited. Uh, it's been, you know, plumbing's finally calming down in the sense of like it's merging in and it's a little bit more like— I had one full night of sleep the other night without waking up. So that, that's how I gauge my stress level and how the business is doing is how much I'm actually sleeping. Um, and so we got one full night last week, which felt good.

Yeah, that's awesome, dude. That sounds great.

Yeah, yeah. And so, uh, but beyond that, I mean, like, we have our 2 crews of HVAC that are starting to run. Um, our plumbing crew, we're switching over to the, um, installer model, kind of the same as, um, HVAC. Uh, and, uh, everyone's excited, everyone's moving the needle and, uh, cruising, man, cruising. And it's only getting hotter from here, so it's like Yeah, I'm excited. It's miserable.

Yeah, it's definitely starting to get hot here. We're, uh, close rates are down in HVAC, so that's kind of a bummer, but a lot more financing declines than we're used to.

Yeah.

Uh, so yeah.

Yeah. I mean, we— did you guys kind of see that the last year? Like, I felt like going into Q4, we saw a higher level of declines than we were normally used to.

Picking up. It's been picking up more and more. It's more and more of a thing.

Yeah, I mean, you've seen the news. Credit, credit is, uh, I, I shouldn't speak on this because I don't actually know that much, but it seemed like the numbers that I've seen are personal credit cards rates, or more people have consumer credit than ever before, something crazy like that. So not surprising.

Yep.

Yeah, sweet.

I agree. Uh, so today we're talking Scorecards.

Scorecards.

Scorecards. Um, yeah, scorecards are kind of interesting. Uh, so scorecards, we use them differently, but scorecards, basically every position has a couple different numbers that they should hit, and scorecards are the measurement for that position. And I think the big— that's how we think about it. Is that roughly how you're thinking about this?

Yeah, we have about 2 KPIs or key performance indicators that we are really scorecarding people on for each position. We're trying to keep it minimal at this moment before we like overburden ourselves and overburden the techs.

Mm-hmm.

And, uh, where focus is on how do we create the scorecards, what each position needs to be scorecarded on, and then 2, how do we relay that to them and what does that mean for the employee?

Yeah.

Is that kind of how you look at it?

Yeah, roughly. Yeah. And a lot of the stuff we care about, and we'll dive deeper, but like, how quick can they access their scorecard? Like, how often do they see it? What's the information look like? Is it accurate? And then how do we improve it?

So, um, yeah, let's start off with what, what does, what do your scorecards look like for techs? Like, what does that process look like for you?

Yeah, I mean, we're blessed for most of our positions because ServiceTitan has a scorecard. So like, if you log into your iPads, it's right there. And I think that that's an important part of this, uh, process is like, how accessible is the information? How quickly can people see it? Uh, how do they know if they're winning or losing in 10 seconds or less? Like, that's a big part of our philosophy here, uh, is knowing if people are winning or losing in 10 seconds or less.

Yeah.

Definitely. So call takers and, uh, dispatchers and, um, really all these technicians, all these different seats, how do you get them information fast? So yeah, you know, sales, number of options, number of memberships. Uh, for installers, it's stuff like completed revenue, um, overtime. Callback rate.

Let me ask you a question before we dig too deep into it. Like, what did it look like? So you guys have been on ServiceTitan for what, 5 years now?

Yeah.

Like, were you scorecarding prior when you were a $5 million company without ServiceTitan? How were you doing that? Was it all manual?

No, no, we— yeah, we weren't even tracking it at all before ServiceTitan.

Yeah, because I'm trying to— I guess I'm trying to relate for people that maybe don't have ServiceTitan how they can, can do that, because that's what we use as well.

So I don't even know I mean, it doesn't have to be ServiceTitan in this case. Like, it can be like Jobber, or any of those different things have a, you know, who completed it, who sold it, uh, component. But at the end of the day, that, like, that's what you need is you need, like, the numbers. You need to know what people are doing.

Mm-hmm.

Because I, I remember when we first jumped on to ServiceTitan, I had no idea that our people were doing $11,000 a month. And I didn't— I also didn't know if that was good or bad.

Yeah.

Um, so because I had nothing to benchmark against, I had no one telling me, uh, sort of, hey, that's good, hey, that's terrible.

There was no Twitter, John, telling you, or owned and operated podcast telling you what number that should have been.

Yep, yep. So yeah, at the time I think we like went on and we found out, and I was like, oh, that's kind of interesting, cool.

Yeah.

Um, and I don't know that much else changed after that other than like really understanding What was good and what was bad about that?

Yeah. So I mean, that's what we're looking at as well. We look at 4 key positions that are revenue generators. So like dispatch, techs, service managers, we're looking at revenue as our big one. What does that look like for those positions for you? Are you looking at revenue as kind of the key one or are there other ones that So we track memberships and stuff too, but just like the main sales is obviously big.

Number of options, number of memberships, number of reviews. Like those are the big ones for the field team members that move the needle for us.

Okay. And then for non-needle movers, what does that look like? So like, for example, a call center CSR, right? She's not— he's not— whoever is not necessarily driving revenue. Are you currently dumping money into the PPC pit of despair? Well, that's how I used to feel before I started working with Service Scalers. I would waste money with 2, 3, 4 other agencies. Then I started working with Service Scalers and they were able to drive meaningful leads in my business. They specialize in PPC, SEO, and LSA management. So if you're looking to increase meaningful leads in any of those areas, I would give them a shout out and see what they can do for you.

I mean, call takers drive revenue for sure. Like, if they don't book calls at their book rate with a quality call, then we're gonna not drive revenue.

So you know what I mean? I mean, like, so they're not judged on revenue. They don't have a revenue metric. They have a booking rate metric, raw, and probably not like a lead.

Yeah, I think it depends on the season. So for us, like, booking rate— like, we expect book rate right now to be like 90% because we've made it as frictionless as possible. We've gotten rid of basically everything that could be a disagreement, um, to have a very high book rate. But, you know, in peak season, our book rate might be 85% or 80%. So I think it depends on where you are in like the cycle.

Yeah. And, and with that, um, so there's obviously— you have a, uh, a belief that they need to know it in 10 seconds or less. So there's heavy seasonality in some of your businesses, right? How do they know, right? You could go and look at a scorecard and say, okay, I made $22,000 that month. In, in HVAC, $22,000 in a month on peak summer is probably garbage, hot, hot garbage. But in February, that might be a good number.

Yeah.

So how do you, uh, fluctuate and keep it simple enough that they like, hey, 6 months of the year, It's this, 6 months of the year is this? What does that look like? I guess the question is, how do you adjust for seasonality?

The core stuff should never change. Average ticket should never change. Options should never change. Percentage of memberships sold to membership opportunities should never change. Those are static numbers.

I mean, but so, so hypothetically, right, you're, you're in February, your call volume drops off a cliff. So you're outbounding more, you're outbounding, um, PMs to maintenance customers, your current customer list. March, you, you load those up. So I mean, theoretically, right, it should change. You shouldn't be able to sell—

Revenue as an output might change.

Well, membership should change too, because your—

Proportion shouldn't change.

You're loading up.

I mean, maybe memberships change, but not as a percentage of available opportunities.

Oh, okay. There's the key. So it's a, it's a percentage base versus a number base. So you ran 3 calls that were non-members, so you should have an extra conversion. That's interesting. Yeah. And then, and then you obviously adjust revenue. Yeah.

Yeah. Honestly, revenue doesn't even adjust that much for the most part because what tends to happen and we're on the other side of this, we're like, our service team is busy, like cranking like absolutely insane, but our sales conversions are low.

Mm-hmm.

So like, we're busier than ever, but like, we're just not converting. Um, we almost can't keep up. We're like booked out 4 or 5 days right now, but like sales are low, which sucks. So, um, you know, but when we're slow, every call is precious. Every call is like, we go slower, we, you know, we focus more on it and we tend to do better. So, uh, we find that Performance doesn't change much because you get to pay attention to less and you do more with those calls in February, March.

Yeah.

So like in April, we're busier than we've been in months, like from an inbound perspective. And it's difficult to keep up the same level of performance on a per-job basis that we were doing in February, which is kind of crazy. Like performance has actually gone down with busyness.

Which, yeah, that's an interesting framework because it's true. I mean, that's what we push to on them as a training is In February, you might have 3 calls, but you make sure that you, like, everything is touched in those 3 calls to a point where you have loved on that system so much that, you know, it's, it's top to bottom. Whereas if you're jammed with 7, um, you might not see that because you're just rushing through to get to your next one.

Mm-hmm.

So interesting. I mean, because we do, like, we have a metric for 6 months of the year. So pretty much once October hits, through April is one, and then May through October is the next, or September is the next. But I'm wondering if I should change that because that's, that's interesting. I mean, it's a, it's an interesting concept.

Yeah, I think percentage, um, and I think, uh, like, what are the— like, average tickets shouldn't change and number of options shouldn't change. And what we continually get in trouble with is number of options change. So like, performance is down. Oh, let's look at our options. Oh, look at that, we're not offering good options, and, um, our financing request has gone down.

Yeah.

So it— yeah.

Interesting.

But yeah, I think scorecard, and I think, um, the big, you know, how do you score? How quickly do they see it? And then what happens if there's a bad one? So how do you build a process around like Training, like a coach, coach up or coach out process. How do you think about that? How long do they have to improve? How— what individualized attention do you give if there's performance issues? There's a lot more to bake in there because like just knowing the number isn't enough. It's like once you know it, then what happens?

Yeah.

Do you get an attaboy or do you get a let's coach?

Mm-hmm. So, I mean, and I've been to your office and for people listening who haven't been to your office, I mean, those scorecards are presented openly. Openly and publicly so everybody knows who's winning at what time at what place.

Yeah. And, um, there's like TVs on the wall.

Yeah. So we tried to take out of that book and we have a conference room TV. So we just have one. We might get a second one in, in like the front. I don't want to put it in. So you have a TV in your front, front area where somebody enters in and they get to see John's smiling face, talk about his, his dad and his grandpa and how they started the business and whatever. Um, I don't want to put one in there because you don't want customers who may walk in seeing your scorecards, but we are trying to figure out a second location for another TV. But yeah, we like that idea. I mean, we, we do once, once a week, um, breakdowns where we break down— the whole HVAC team breaks down the scorecards for everyone. We dig into a few bad ones to see and coach.

Yep.

And we coach publicly. And it's, um, it can be uncomfortable sometimes, but I think in the long run, it's truly what drives change and what drives that culture of like, we have to offer, we have to do good.

Yeah. Yeah, I agree. Yeah, we have to do good. And then what happens if we're not? And I think those are the big ones.

Yeah. And, um, here's, here's a great question, right? So there's, there could be some, uh, I would say, I don't want to call them auxiliary, but like some other factors that can change a scorecard, like flips, for example. So how do you, how do you reconcile a tech that's low on revenue but high on flips? Is there a metric that you or they utilize that say, hey, if you get 3 flips, like we don't care what your revenue is that week because like, yeah, you're generating.

I mean, literally flips. Yeah, like that's how we would look at that. So it would be, uh, it's by department. So like if it's plumbing, then that's different because like plumbing doesn't have a lot of flips for us. But if it's HVAC and revenue's low but you had 30 flips, like yeah, you— then you're— then we count that as your revenue basically.

It goes towards revenue and, and the close rate.

The sale— the sold job goes towards their revenue.

Okay. Okay.

So, hey, you flipped $2 million last year. Mm-hmm.

Yeah.

I mean, so that's how, that's how we think about it.

I'm just trying to, we are trying to wrap our heads around like, mm-hmm, what is the value? And I, I see what you're saying, but what's the value of a flip? Right? Yeah. Because I guess if, for example, if you, they generated zero other revenue because they're going out in like an extreme case and just trying to flip every single job. And everything's goose eggs across the board with 3 flips. Like, are they good or is that bad? And so that, this is one of the areas where scorecarding is, is kind of, um, ambiguous, uh, to some sense. And so, um, I, I don't know how you deal with that.

Yeah, we try to remove any ambiguity and make it very clear. So percentages helps a lot.

Yeah, that's a good— that's a good one. No, I mean, that's actually a silver bullet key for us is like number of options.

How do I— that's one of the like number of options is almost always a leading indicator for revenue. So like if someone's struggling with performance, it's almost always an options problem, like almost always. So then how do we correct that behavior?

I was going to say them offering good options. What's the extreme ownership behind that is generally what you see. That you, for a coachable employee, what, what have you guys done on the management side that's been able to take friction away from that process for them to add options?

I mean, call by call is the whole point of that, basically. So like the way we run service management systems, the way we do daily trainings, like most of it's like, because what happens is if all you do is say like, hey, I need X amount of options, then you'll end up with bad options that customers don't care about. So it's how do we create good options that customers do care about that creates a good customer experience? Like, we only want to give— talk about things that people would want. We don't want to, you know, talk about random nonsense. So, um, there's the quantitative, which is number, and qualitative, which that's obviously more complicated.

Yeah.

So that takes active management from the service manager or whoever runs that process to basically get in there and be like, yeah, these options make sense, or no, these options don't make sense.

Sweet. Yeah, man, scorecarding is one of those things where, uh, yeah, it can— it's— you can really overcomplicate it quick.

So it's very easy, and we are guilty of continuously overcomplicating it.

Yeah, we are.

Like, what ends up happening is we always overcomplicate it, and then like we lose track of like the 4 things that matter, which is like, what is number of options?

You know, we'll have to keep that one in our back pocket because we do a lot of revenue Um, we don't do enough options. I think we have like, we, we, we have a metric for it. Like we watch it, but it's not something that we have at the top of our mind when we go into scorecarding. So I might take that one and bring it to my GM and see what he thinks.

Yeah. See what he thinks.

Yeah. That's neat.

Cool. This was a good one.

Awesome, man. Scorecarding.

Scorecarding. If, uh, if you liked what you heard, check out ownedandoperated.com. And we have another Breaking $5 Million Workshop, June 4th to the 6th in Stowe, Ohio.

Sweet. I'm excited. Come visit us. It'll be a lot of fun. We had a great time last time. And I mean, I still get emails from the group today. There's 18 people in that group that are emailing follow-ups. And if you guys are listening to this, shout out to you guys for like taking these things.

You guys are killing it. And Christian keeps me in the loop. Yeah. Uh, which is really cool.

Super cool. So really excited for y'all and seeing those things come to fruition. Um, definitely sign up if you can. We'd love to see you and love to, to work with you.

Yeah, cool.

Awesome.

Thanks, John. 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.