#140 - Navigating the ServiceTitan KPI Minefield with Danny Peavey

Do you trust the data that you did select? Real problem is, is it accurate and is it actionable? I see it as a huge, huge issue.

Yeah, data's messy.

Managers hate to micromanage and employees hate to be micromanaged. You wake up every day and you ask yourself 2 questions. How are we performing today? And then the second question is, how are we performing against people our size, in our territory, or even people ahead of us?

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Welcome back to Owned and Operated. What's going on, Mr. John Wilson?

Today I'm pumped to have, uh, Danny Peavy back on. Welcome back.

Thanks, guys. How's it been going? It's been, what, 6 months or 9 months? I can't remember.

I—

all I remember is I was skiing in Breck the last time we recorded, so I think that's January.

I remember you coming in from the slopes and Looked like you had a blast.

Yeah, I was made for the mountains, but I live in Ohio. Yeah, yeah, we're pumped to have you back. One of the cool things about like creating a lot of content publicly is that you get to make a lot of friends, which I like making friends. It's been really cool because like wherever you go, you can just like site visit somewhere interesting. So a few people opened their doors, which I was really grateful for. Josh Campbell from Rescue Air and Jimmy Dale from Baker Brothers. So I got to see 2 amazing operations. It was a lot and it was a lot of fun.

We've actually had a lot of our clients go to to your events. And so there's been a kind of a cool—

Oh, nice.

Full circle moment there. But yeah, the people just rave about your events, man. Yeah.

Well, I think, uh, well, first, thanks. Like the ability to go do site visits, like Jack, have you done a bunch of site visits?

Uh, I've done besides yours, uh, only one other one.

Danny, have you gotten to go on site with clients?

Oh yeah. Yeah. And then my, like I mentioned, my family runs a big firm here in Atlanta. So.

Know your way around a plumbing shop. Some of the most impactful, like, days of my career. You know, I spent half a day, I was in Phoenix last year, I site visited Diamondback Plumbing, which was owned by a friend of mine, Amir, and I got to visit Gettle, 2 hours, 3 hours each. And that gave us 18 months of improvements, 4 or 6 total hours. So I know it's hugely impactful for me. And last week when we were visiting Josh and Jimmy, same thing, you know, really like you just sit there and you absorb it. And you know, Baker Brothers is going to do 100 little bit over $100 million this year and just really like try to take it in. And all that to say, we love giving back. So if you're not a total weirdo and you want to come check out our operation, the door is almost always open.

What do you think, John, it is about those in-persons that just dump so much knowledge and wisdom in such a short amount of time?

I could spend hours or, and I have talking on this show about all these different things we're doing, but like until you come in and see, okay, like I'm gonna go talk to their inside salesperson and I'm gonna ask them how exactly their workflow works. Like you're getting my tainted perspective as like the CEO. Maybe that perspective is like rose-colored glasses or maybe it's real, but there's something about the raw, like, no, this is, this is it. Like, this is who we are. I think makes it really impactful.

Yeah.

It removes a lot of that nuance. We talk about that on the show is we tell you how to do these things and we're not worried about competitors going after you. Because they miss the nuance. When you open those doors, you get to see a lot of that nuance and ask those questions that need to be asked to understand a little bit deeper. At least that's what helped me when we were at John's shop. I mean, being able to understand like, hey, you have a production line in your warehouse that, that you package everything up and it goes. But then to see it and to see the list and to see what's on the list, I mean, it—

Well, then you can replicate it.

Exactly.

Yeah, it's application. It's not theory.

We still like, again, 18 months of stuff, probably even longer really, because we still haven't done the second half of the Call-by-Call system, which is the inside closer. But now we're getting ready to start like being ready to offer that. Okay. Well, today we're talking about data-driven decisions and, uh, Danny challenged me via text and right before we recorded with, how is it that you make data-driven decisions? I honestly said badly. So I can walk through how we make decisions now, if that helps. And then we can sort of go from there. 2010s were all about like data, like let's get data. Yeah, we're data-driven whatevers. And like, yeah, now everybody's driven by data and you're either like driven mad by it because you're drowning in data, which I would say is where we mostly live. We have so much data and the key problems that we end up having But the data's not there when you need it, or like accessibility is difficult. What I need to lead my business effectively every day is probably 12 to 15 lines. And the problem is the way it all comes together is challenging to look at. And if you want like a pulse check, it's hard to get. So where I frequently find myself, we have so much data and we're always looking at data, but it's like very little of it is meaningful. Do you track average ticket? Do you track sold hours? Do you track number of options? All of those can be good, But in the wrong context, they actually still might not tell you everything that you wanna know, which is quality of those options. So like, you're still like, you're looking at all the data in the world and you still don't have some, the thing that tells you how effective your training is. So if I wanted to know how effective my training is, like I've got all this data and like none of it tells me that. I think data is actually like really challenging and we're continuing to try to get better, but a lot of it's like disparate data sources that you all have to dump into one thing and you're usually behind the ball, whatever it is that you're trying to do. Like, so if I wanted to do a pulse check call center, I could look at my 2 or 3 main data points for call center and then in a month be like, oh, that's weird. And then find out we actually had everything leading up to that moment to tell me it was weird, but I just didn't have quick access.

Yeah, it's not instant.

Well, it's not instant. And the things that are instant are often the wrong numbers. Part of the problem isn't necessarily like, do I have data at my fingertips? Yes. Do I have the right data at my fingertips? Maybe.

And, and is it meaningful? And how long does it take to cobble together? Whether it's a spreadsheet or in a custom report or— and then do you, do you trust the data that you did collect?

There you go.

Yeah.

Do you trust it?

My answer is no. So our data is, you know, we're new to ServiceTitan, so the answer is no. And every day we learn something new on how we should have been using ServiceTitan to drive better data. And then I'm sure down the road we're going to run into John's problem is Hey, we've been receiving data, but it's not been the correct data or we're looking at the wrong thing. So, I mean, I'm 100% with John on this one. I have the benefit of being on this podcast and all of you have the benefit of listening to this podcast so you can hear what data points we're looking at. But I couldn't imagine kind of feeling around in the dark and trying to figure out which data points I should be looking at.

Well, it ends up being so much.

Yeah.

I mean, ServiceTime provides everything. I mean, so much raw data.

It gets confusing when you need stuff outside of ServiceTitan.

Well, that's the other thing is like everything that APIs in, there's so much out there. If you use— we were talking about Podium offline. If you use Podium, your call center, is your call center transferring an API incorrectly? So there's just, there's just so much to it that if you are not actively and intently trying to sift through it to find those data points, it's very difficult.

Well, it's interesting because I think most of the listeners know I run a ServiceTitan consulting company called Home Service Engine. But the number one, one of the top problems I'm hearing from everyone is that we need help tracking our KPIs. We need help tracking our data. You guys said it. Sometimes it's we don't know which KPIs to track. I am not comfortable technically deciding which data modules to drag and drop into a ServiceTitan dashboard. I have this cookie cutter spreadsheet. I have a spreadsheet for my business coaching place that has 5 tabs on it and it takes me 8 hours to fill it out when I want to know where we're at. Sometimes it's, I've got to run 5 different custom reports and mash it together. And then once you do all that work, then it's the question of, is this data right? Is it accurate? I see it as a huge, huge issue.

It's like data basically is messy until you can't afford for it to be messy anymore, and then you clean it up.

Very accurate.

Yeah, data's messy. And, uh, like we have 100-some thousand customer files. We add, uh, 30,000 or so customers a year. It's 30,000 chances to mess something up. And that's just on like customer files.

I, I sometimes think, uh, and then you guys are, I feel like it's safe to say we're all pretty analytical individuals, just kind of who we are as people. But I also think there's a world where, uh, and John, you mentioned this, like looking at too much data can be a problem to where You're almost procrastinating by looking at too much data before making a decision. And I think most CEOs are, like you said, just that gut check on what are the 14, 15, 20 things that I just need a quick read on and how are we performing against goal? And most importantly, how can we get our people to self-manage, to own these numbers?

As you push into this field, right? You're, you're building out this MVP, you have a consultancy. I mean, I would assume that you have some expertise in this area. What are some of those kind of really key metrics that you have seen that have absolutely blown you away, either surprised you and/or you just think like, this is a silver bullet for most owners?

Yeah. So we, you know, running this service titan as a service type company, we've been surprised At how much KPI work we do right now. For many companies, after their accounts receivable is done, we will pull all of the reports and KPIs for them and then put it, at least for now, into a spreadsheet that we can look at month over month. And it's like what John said, just a quick shot of like how we're doing. Obviously on the company side, you've got revenue to budget, you've got gross profit to budget. But then when you look at the company and the department numbers, you know, high level, of course, revenue, gross profit, Number of jobs, number of zero jobs, and obviously breaking that out by install, service, maintenance, office, marketing, sales. Employee side is interesting because you could still have those same departmental KPIs for the employee, right? Those are the top 4 or 5 that John was alluding to. It's almost like a leaderboard in a way. I think, I think data can be fun. I think there can be a competitive element to this or a reward system or a way to alert employees on what they've done so far, especially with text messaging and email. You guys remember the back of a baseball card?

Mm-hmm.

You had like the photo of the person and then you have like all the stats. You know, we've, we've mostly seen on the employee side where we still have those top 4 or 5 quick hits where the employee goals match the departmental goals. For maybe a tech, I'd say number of members, membership maintenance visits, average invoice, billable efficiency, recall jobs run, recall jobs caused, leads set, leads sold, closing ratio, sales from tech-generated leads, hours sold, hours worked, membership membership opportunities, memberships sold. So where we are trying to build a— in fact, we are launching a scorecard software for ServiceTitan that will automatically suck in the ServiceTitan data. But the interesting part about building a software or building a product, a ServiceTitan product, is what you're saying, which is how do we even visually show this in a way to where it's easy to understand where the data means something? Part of the problem with ServiceTitan's dashboards is that when you look at the numbers, there's no good or bad. It's just a number. If you want a quick overview, you can go see the 4 or 5 things for the company, the department, the employee. But if you want to drill down into the leaderboard of specific things? What are those maybe extra 5 or 10 KPIs or datasets that you're looking to track? And then most importantly, how can you alert everybody about their performance? You know, managers hate to micromanage, and employees hate to be micromanaged. So I think there's a world where you can use data to have better one-on-ones that are more, more authentic, that are productive, that are meaningful. What if you threw a visual scorecard with people's faces on it with performance, and it looked Not maybe like a video game, but it was just easy on the eyes. Maybe you did that before a job interview for a new technician and you said, these are the 5 things that we review every week. It's such a huge— making sense of the data is such a huge need. But what I see as the real problem is, is it accurate and is it actionable? I think that's what we're missing a little bit in home services.

Yeah, definitely. We were talking offline. I know of some private equity companies that are spending hundreds of thousands of dollars to do just that, to look at all the key data points, booking time, down to each individual metric for the employees. And then, John, doesn't your office have kind of that scorecard like rotating up on the screen at all times? It even has their picture, right?

A few months ago, we got our call center on Avoca, and Avoca is an AI call center solution for home service companies just like me and probably just like you. They have a couple of different products, but the one that we like the most is their Coach product, which listens to every single phone call and runs it through a rubric to help our call takers improve. And this is a really big deal because we take hundreds, sometimes thousands of phone calls every single day, and it's just too much for our trainers and managers and leads to keep up with and effectively train. So it lets us do ride-alongs on almost every single call every day. Click on the link below to go to Avoca and make sure you use the promo code OWNED for a special discount. We have scorecards everywhere. I think like the technical aspect of scorecards, more like the frontline team members. So technicians and call center, the scorecard helps. You know, if the team likes it, winners generally like to know what the score is. So that's been good. And I think it's 5 or 6 KPIs that get thrown up there. And yeah, it looks like what you're describing, where it's like a face, name, and KPIs. Is how do we peer compare?

Mm-hmm.

Because that— I was— I have a bunch of friends that run these like PE-backed shops. And every day, they get an email With everyone in their groups, sales, that like their, their 10 to 12 KPIs, everyone sees everyone else's KPIs. And I think that that would be sick because like their entire management team logs in every day and like, how, where did we win? Where did we lose? Where did we win? Where did we lose? And everyone obsesses over the score. 'Cause I think I'm, I'm going back to like ServiceTitan has no number. If there's nothing to compete against.

Mm-hmm.

Then how do you win? And like, you're either competing against your coworkers or you're competing as a team against other teams.

Yeah, we— so I think peer comparison is huge. And I will say that is something we're building into our product, right? Because of what you're saying, every company, no matter if it's home services or not, you wake up every day and you ask yourself 2 questions. How, how are we performing today? And then the second question is, how are we performing against people our size in our territory or even people ahead of us? You could probably argue outside of How's my wife? How's my kids? It's that question about performance is in the back of your subconscious. I don't want to get too philosophical. Business is the biggest contact sport, but it is. I mean, we all love sports. We love hunting. We love fishing. There's something a little deeper to all of this, which is a different podcast episode. But the ability to compare yourself against peers— imagine a scorecard that would drop down and say compare against other companies doing $50 million or $100 million. But here's the other part that I'm interested in personally that we're going to, we're going to be working on. With AI coming, you guys know that conversations like this are going to be more and more meaningful. I mean, John, you were talking about the in-person shop tours. Eventually things are going to get— I don't know if it's going to get creepy, but it's going to get kind of weird. How can another home service CEO talk to another home service CEO? Like, I think the community aspect, and you're already doing this now, but being able to have that community built into a scorecard. Let's say you're doing $5 million as an HVAC company. You see your KPIs, you see your scorecard, your guys are all getting alerts every day about how the company is performing.

Yeah.

You're having better one-on-ones. Well, what if you jump into a group and you go visit each other's shops? What if you instantly know, like, okay, our, our return on investment for Google Ads is this. What is this person's? That's, that's what it's all about.

Yeah, I think I even said that right before we recorded, but one of the benefits of like making friends on the internet is we get introduced to just all these amazing people. But LinkedIn's not that bad.

Ouch.

And you need a little— I know. Where, where, where, where, where? You're gonna need one of those.

I know, I know. I You know, I, I'm not ready to take back everything terrible I said, but I'll take back a few of them. But I've really been able to meet just amazing peers. Like, I have a great friend, Luke, in Chicago, and we just met a maybe month or two ago now. But he's getting ready to launch plumbing, and we're trying to improve HVAC, and we've really been able to collaborate on both ends. And you know exactly what it's like to run a mid-$20 million company. And the globe just gets smaller. Especially the bigger the business gets, 'cause there's just not that many. It's just not that many of us. So like, uh, it's good to be able to like, you know, collaborate and really, yeah, really communicate.

And connecting around performance, I think, is, is the commonality there.

When anyone knows what's possible, you're like, then what? Why aren't we doing it?

Or where do I stand?

Recently we discovered that we've been buying HVAC equipment badly. We grew, HVAC grew really fast. So like the size of the account grew, whatever. But most of our peers, their percentage of equipment on an HVAC install is 22%. Our percentage of equipment has been 30%. A million-dollar difference over the course of a year.

Huge gross margin difference too, from a percentage base.

Like, that's like 48 to 56. Yeah, absolutely ridiculous swing in material expense. So we find that out and then we find out, oh, their average ticket is the same as ours. So the only difference is that they buy better than we do. Being able to take that information from peers, confirm it with other peers, which is this like data point that I, I had never heard before. 'Cause every industry has always said like 25, 30. So finding out that a lot of people drive 22, that saved us $1 million. And so now we're trying to figure out like, what else are we missing? Hey, if you buy better, like this can happen and maybe this is how you buy better. But it all started from someone mentioned that their equipment cost is 22% on HVAC. And, and I like blinked 'cause I was like, What, what do you, what do you mean?

I'm also reconsidering my entire life right now just hearing you say that, because I think we are pretty close to 30 as well. We just went through a huge—

30 is industry standard. Yeah, 30 is industry standard. So then you find out that all the PE shops run at 22. It's like, well, how are they running at 22? Oh, they have better deals. Yeah, but I'm bigger than their portco, so like I should be able to go get that deal. Turns out you can. Are you looking at the right data? And is that data like— what does that data get back to you? Because if all I was doing was looking at gross margin for HVAC installation, that wouldn't give me the data. It'd be really meaningful, I'd be like, oh man, these guys are performing better than me. Like it would at least have urged me to ask the question of like, break that down for me.

The faster you go, the faster you're going to win. If it takes 3 months for you to change whatever part of your business because you didn't have the data, I mean, I think that's where a lot of people get stuck.

But yeah, so we did the State of the Wilson. This was my 9th State of the Wilson this year. And one of the things that like we took a market dominant seat from dozens of incumbents that just moved too slow. We passed the market incumbents as if they were standing still, and they've had a leading position for decades. And it's like, oh, these decisions, these core decisions were made bad or too slow. I don't know that it needs to be instant because like the bar is not very high.

Even just, yeah, simple things like profit. I mean, I know CEOs where they run a company 30 years, they want to pass it on to the kids. There's no reason why One day you just wake up and you say, well, we're not profitable. How do I go fix that? I mean, there's just a lot of business—

Or what best in class is like.

Yeah. Or what, what there are. Yeah.

There are companies at scale running a 20% cash flow, like at scale scale, like north of 50. And like best in class is considered 17.5. So if, but like, I'm not there because of the pace you move, you can move too fast. Like, We are, we consciously are attempting to slow stuff down, but we seem to tend to make the right decision. And the right decision seems to always add $5 million. You just keep doing it over and over and over. Like we went through the last 12 months during our State of the Wilson this morning. And it was like, okay, we added inside sales. That was a $6 million this year increase in our sales, $6 million. That's insane. Or like SDRs. Added hundreds and hundreds of phone calls a month to our call board. Insane. So like all these weekends, that was $4.5 million that will benefit. We talked about that on the show for the first time in November. I'm like, hey, we're adding 7 days a week, guys. That added $4.5 million. Like, and we decided to do that a few months ago on this show.

Right. It, what, what's really interesting is, you know, I, I wonder if it, all this kind of ties back to that data is we are able, like a lot of these best-in-class ideas and stuff came from 10 years of operating back from 2010 or 2006 to 2016. Then we get this introduction of huge amounts of data, AI, and now the— it's important to move quickly because we have all this data and all these tools. And if you're moving too slowly, you're getting passed up by people actually utilizing these tools, dashboards, gamifying, the whole 9 yards. And so it's interesting. I, I only think that this ability that you're— this muscle we're, we're growing here on the podcast and that you're growing personally, it's only going to continue to be more and more important as that changes. And then in addition, I mean, we've seen huge changes in the industry from price increases to—

Yeah.

CO2 to, you know, just EPA regulations, refrigerant changes, just in HVAC alone. I mean, abilities to move quickly with the correct data It's going to be extremely important and more important as, as the years go on.

I, I'd be as bold to just predict, and again, that's, you know, shameless plug, what we're trying to do with Home Service Scorecard is build CEOs, especially ones on service side, and make real-time data-driven decisions with accurate done-for-you service side KPIs, but do that in a way that's fun, that's actionable, but in a way that involves community. I do think the CEOs that decide to you know, get their head out of the sand, to, to, to get engaged, you know, to do everything you guys have been leading the way on, to show people like, it's not about holding things close to your vest, it's about things sharing, right? It's, it's about sharing with peers. It's about hitting goals together. I mean, just even you, John, saying, you know, you have a State of the Union, even just asking guys, go get the data for the SDRs, go get the data for the weekends.

Mm-hmm.

I mean, just even that desire to go do it is so different than obviously You know, certain folks you talk to that may not even know what their KPIs should be. You know, there's just a wide range and it, the, you know, the ones that are really, really going to win are going to be what you said, Jack. They're going to be in that mindset.

There's going to be no middle. Like you're either going to be tiny or you're going to be big. I don't know. Whereas like the industry sort of has thrived off the middle. Feels like it's going away. You're dropping a scorecard. When does it come out?

So we're going to start a beta in about a month. Probably by the time this releases, it'll be out. So yeah, if people are interested, so again, if somebody finds themselves, you know, CEO of a home services business, you're running ServiceTitan, you are tired of either trying to figure out what reports to run internally, you know, assigning certain people on the team to go pull the KPIs, maybe you're Googling and looking in Facebook groups for which KPIs I should track. Maybe again, you're with a coaching cohort, and they give you these spreadsheets that take hours to fill in to understand performance. Maybe you're mashing together a bunch of different reports. Maybe you just don't trust the data. Even if you're kind of a geek like me and you like making, you're interested in making real-time data-driven decisions. Yeah, people can go to homeservicescorecard.com. And right now we're just taking beta clients. We want, we really want this to be a valuable tool for people. We want people just to get in, connect their data from ServiceTitan and just start using it, right? Provide feedback on the product.

Yeah.

So I think by the time this releases, we'll be in that phase. You know, again, setting goals, seeing performance, Seeing leaderboards, like booking shop tours, having a community, all that stuff's going to be the things we're building long term. But we really, you know, this is all about, you know, not to be cheesy, but like home services to me is about family, right? This is, this is all family run. And, you know, if we can provide a tool to help people understand how profitable they are, where they're at, how they can get better in a way that just doesn't take hours, it doesn't cost tons and tons of money. I feel like that would be doing a good thing in the world.

Yeah, sounds like fun. Just add the peer comparison. Because otherwise, I gotta build it. like hacking together some bullshit Excels. Because I'm, I'm determined after all. Yeah, I have all these friends owned by like P groups. And they're like, yeah, dude, every single day I get my competitors, as in like people inside their groups' numbers. And I'm like, oh, I would, I would pay for that. I would, I would put that up on a dashboard. We would be like, our daily huddle would be like, you see that bullshit? Like, you see that?

Honestly, getting up, getting your Cup of coffee, hitting the gym. And again, if you could, I mean, you know, again, not to keep selling this, but like—

Bullshitting on Jack's numbers.

Yeah. Yeah.

I mean, you know, the plumbers down the street, man, how did they beat us yesterday?

That sounds great.

Oh, we gotta get it.

Like, honestly, it just sounds fun. Well, especially when we win.

Well, and you don't want to— exactly. Yeah. You don't want to look at a white paper of data like, oh great, this, here's a percentage. Like, no, it needs to be fun. That's kind of what we're going after.

So, all right. So beta's in a month if you're interested. Folks are interested in checking it out. How do they get ahold of you?

Yeah, so obviously on, on Twitter or X. So, hey, Danny PB, if you ever want to talk, obviously great community over there. But yeah, if people want to go to homeservice scorecard.com, it's a pretty straightforward name. They can join the waitlist and sign up for the beta. And of course, obviously folks that need service, tight help more on the services side could still go to homeserviceengine.co and reach out to us.

All right. If you like what you heard, check out Owned and Operated. .com, owned and operated. Uh, I think we have workshop coming up. Podcast is dropping the Legends series, so that should be a lot of fun. That's starting to pop in. Those are gonna be really good.

Facebook page. Um, Facebook page.

Facebook page.

Join the Facebook page.

Honestly, like, that is kind of growing, dude.

I love the Facebook page.

It is continuing every day to be shocked by the size of that Facebook page because every day it's like 5 or 6 new members, which I know doesn't sound like a lot, In, but given that we started like 3 months ago and we're about to cross 500, that, that's what I was gonna say is there's a difference between once again getting 5 or 6 new members and it's just being garbage and nobody's active or nobody's writing.

Yeah.

Versus like 5 or 6 plumbers and HVAC people.

It's good. Like I, I get value out of that daily. Yeah.

No, it's good.

It's wild.

And the question, the questions are good too in that group, I think. Yeah.

Yeah. The questions are good. I think, yeah, group quality's really good. I don't think, uh, I mean, we're not planning on tight, Loosing it up anytime soon. I think it'd be fun to have, which now seems more possible than ever, like a five, six thousand person Facebook group of like just a lot of home service operators because I think it sounds fun. Like I know I get a ton of value out of Profit Rocket Victor Rankor's group, and I know I get a ton of value out of Tommy Mello's group. And ideally, we provide the same amount of value to our community. So yeah. It's good. Ownedandoperated.com.