#141 - Wyatt Smith and Gamifying Employee Retention with UpSmith

I worked for my dad as a kid. He was a pretty tough boss, so you learn how to be a person that puts a lot of hard work in. A lot of the principles are principles that I used when I was a teacher. And if you reward people on performing the work the right way, right time, every time, good things happen. Speed matters, which is why software is so powerful. It creates a better outcome as a result.

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Welcome back to Owned and Operated with your host Jack and not John today. John is out traveling. We have an awesome guest today. We have Wyatt with UpSmith. How's it going, Wyatt?

Doing great. I'm so excited to be here. Thanks for having me aboard.

Yeah, man, we're really pumped. I know John was really pumped to have you on. So Wyatt, we generally start off with trying to understand people's background and where they, they come from and then how they got into what they're doing today. Can you talk a little bit about your background and where you started?

I'm a farm kid from Alabama who's now working as a tech CEO, helping to gamify experiences for skilled tradespeople. So a lot of life under the bridge. But it's, you know, what I think about as a kid who grew up on a ranch in a rural part of the country is that the folks that I went to high school with who went into the military or into the trades are people that are really the backbone of our country. And having a chance to build software to help to make their life better and encourage more people to flourish in what is what I think the most meaningful, high-dignified, purposeful thing somebody can do, which is to be a builder, is something that is deeply inspiring. The quick story on my background is I was a teacher after college. I taught US history, world history to high school students in Birmingham, Alabama. I went to business school to get smart at the intersection of technology and big markets, which I thought was a cool way to get ahead of some big opportunities in the world, and went out to Silicon Valley, worked in the tech sector for several years there, first as a consultant and then at Uber. for several years on the deal team. Uber remains a really big privilege to have been there. And during COVID I sold one of our businesses to a partner, and it freed me up to think about what would come next. And this mission and focus on attacking the skilled worker shortage that people all across this country are facing is one I felt really motivated by. So we formed Upsmith 2 and a half years ago and have been running at it ever since.

Talk about a journey, man, from rural Alabama to a teacher, then to Silicon Valley. I mean, that is a cultural jump. Pretty smooth for you, or were there some pitfalls along the way? Yeah, yeah.

I joke a lot away from the farm than flying cars in Silicon Valley, for sure. I worked for my dad as a kid on the ranch. He was a pretty tough boss. If anybody here is a fan of Yellowstone and John Dutton, that's basically my dad.

Oh my goodness.

Your dad's your boss. You can't fire your dad, right? So you learn how to be a person that puts a lot of hard work in. It builds resilience. And so not every step around the road was rosy, but like, you have a good sense of what you can accomplish if you work hard. you're open to coaching and you listen well and try not to make the same mistake twice, right? So I had some good coaches along the way.

I've been holding the flashlight for my dad at one point in time and you don't want to mess up that task.

Sometimes you can do something really competently, but then when your dad's looking over your shoulder, all of a sudden you just can't get it to work. So the memory I have is hammering nails and I could do it really well until he was standing there and then I couldn't hit the nail for the heck of it, right?

Yeah, right. And there's nothing, nothing like good old country parents totally, uh, giving you a hard time. There's no punches held back in those kind of environments.

Makes you tougher though. Makes you tougher. I think about it a lot now as a dad myself. I've got 2 little boys and I want to help them grow into being good men. And I'm lucky to have had a good dad to learn from, for sure.

And so you, you did this whole journey. Now you're— you said you're back in Texas?

That's right. Dallas is out there.

You're back in Dallas. You started up Upsmith. Talk about Upsmith a little bit.

How long ago did you start it?

And I mean, I know You mentioned that it's learning the trades through gamification. Can you explain exactly what that means?

Our focus is on using software to help to recognize and reward people for behavior that we know is going to make a big difference inside skilled trades businesses. We focus a lot on home service companies where there's a connection between the types of service decisions that someone makes as a technician and the outcomes that happen around ticket size, close rate, ultimately customer success. And if you reward people on performing the work the right way, right time, every time, good things happen. We find that oftentimes is because the technicians that we serve are operating in a kind of a decentralized way away from, you know, headquarters and truck. You don't always have a lot of coaching. And so software is, is pretty powerful and then it can hook into whatever system of record the company uses for monitoring and measuring what's going on. You can use that as a way of helping to really celebrate people when they do the right thing.

Do you, do you API into like ServiceTitan? Then what you're doing is you're, you're API into ServiceTitan, you're pulling records out, and then what's the next step to actually gamify that process? Do you put that back on the The business owner, or is it like another portal or something like that where techs can go into and see and try to hit goals?

And you got it, man. Exactly. So, um, we integrate really seamlessly in the background. We hook into Titan. We will send text messages to people that say, awesome job. Like, you just helped this homeowner get to a really big decision. You offered 3 options for service. Because you offered 3 options for service at this marker, here are 500 Upsmith points that are now driving your total on a leaderboard. You can see how you're doing relative to other peers in your company or across other branches, you're moving up that board, setting off a lot of good-natured, you know, razzing across the team on who's, who's really crushing it and who's, uh, who has to catch up. That creates a tool for coaching. So now service manager can go in and say like, hey, awesome work, you followed the protocol the right way at the right time for the last 5 times. Like, I want to give you a high five and celebrate that. Or looks like you weren't able to get that done this time. Like, let's talk about what happened. Let's use that as an opportunity for improvement. What's really cool about it is it, because you're integrated with a system of record like ServiceTitan, which is a data-rich platform, you then can also link it to revenue outcomes. For the companies that we serve, it's really clear how it made a financial impact for the business. And because it tends to lead to then higher performance for the individual, more take-home pay, greater wages, a more successful outcome for them too.

Talked about this. So we had Evoca on the other day. We were dealing with how best practices that they're able to see in the background, how they're dictating the revenue generation from those best practices. Are there any best practices that you see Since you guys have access to all this data that you are focusing on, hey, we really need to keep gamifying this portion because this is driving revenue for business owners.

I just alluded to one of them that I think is a really powerful one that everybody has, has, you know, in their control, which is how many options for service do you offer a homeowner on that visit? And what's really cool about it is if you're rewarding the input, did you offer a good, better, best option? Did that show up in the ticket? Every time you do that, You can increase the rate at which someone is performing that best practice. And we see a 10 to 15% lift in average ticket. We see an 8 to 10% lift in close rate across several thousand interactions. Helps to inform, gosh, if you could just make sure that happens that way each time, like better outcomes are going to happen relative to if you only offered one or fewer options for service for that, you know, buyer.

Yeah, definitely. We saw that in our business that that key was a huge unlock for us in understanding that number of options drives revenue. across the board, good, better, best, whatever you want to call it, just the number of options and then earning those options the right way through proper questioning and opening up the customer. Were there any that surprised you? Because that one surprised me. I mean, makes sense logically, but at the time it was a big unlock for us. Were there any that you saw that you just went, wow, this is weird, this is, this is kind of cool?

So one that's really interesting is a lot of people experiment with spiffs and commissions. That's a very common tool for moving a specific SKU or a specific product at a given time. But often less attention is put into the timing of how that gets delivered. And so, okay, there's one company we were serving who the actual stip would show up maybe 4, sometimes 6 weeks later, whenever somebody in the controller's office like trued up all the data that was in the Excel file. And it was to the point where like the team couldn't remember what they had done and why they were getting the reward. And so you've just invested in a reward and you completely wiped out any efficacy for it at all because I can't even remember what it was for. And so the insight there was like, The immediacy of the feedback really matters. And if you can shorten the time between behavior recognition, even if you're not offering any incentive pay, just the act of acknowledging that the right thing happened, that's how you change ultimately.

Do you have like somebody who's a psychology person on your team that is messing with these things to try and figure out the gamification? Because I mean, that makes sense logically, right? That the immediate stimuli of the reward very close to the actual action that takes place would result in the action happening more versus 6 months later or even I mean, if you were to exaggerate for example purposes, if you were to get something, you know, a $5 spiff 2 years later, like you would just wouldn't care.

Yeah. We, we think a lot about behavioral psychology. It's funny, like a lot of the principles are principles that I used when I was a teacher. If I, you know, would give a, an assignment, an assessment to my students and they were to perform the assessment, if I didn't grade it within 24 hours and give it back to 'em, I might as well have not graded it at all. Right? Because it, as more time goes by, you don't exactly remember what you were thinking when you answered a certain question a certain way. Speed matters, and the immediacy of any type of either correction or reinforcement really matters, which is why software is so powerful, because you can automate that in a way that shows up in someone's pocket in the moment it happens and creates a better outcome as a result.

And so with that, along that same vein, right, so it's rewarding the tech or letting the tech know that they missed an opportunity via text message. What is it doing for the business owners that provide— do you provide like a report that comes weekly or is there a portal that somebody goes into and then can turn on and off what they want? Like, what does that look like?

Yeah, we think a lot about the user experience for the manager and the business owner because that's how they have visibility on what's going on across their team. Again, like these businesses, for the most part, you know, you're not able to be sitting beside on a ride-along your technician every time they're in the field. Getting a sense about what's happening in the field in real time matters. And then being able to see the aggregated view of, hey, we rewarded these points Here was the attributable outcome that was downstream of that reward. Did we increase tech generate leads? Did we increase the number of people signed up for our maintenance plan? Did we increase the ultimate close rate, ticket size, key metrics that they're running the business on? We try to empower them in that way too, so they can make a business case about why investing in this product might make sense.

Well, I never thought I would say this, but I actually started to like Facebook again. So we started a Facebook group a couple of weeks ago and it's been growing really fast. It's like 50 to 60 members a week right now, which has just been awesome. Engagement's been awesome. We're learning, people are sharing really valuable stuff. Honestly, it's just been a lot of fun to be able to engage so closely with people in my industry. It's something that I miss, missed a lot. So if you're interested in talking to other folks from home service, primarily plumbing, HVAC, and electrical, check out our Facebook group. So it's Plumbing, HVAC, and Electrical Business Growth hosted by Owned and Operated, and check the link. Love.

What is the biggest— like, what's the KPI that when you go out to, you know, if you're, if you're going to meet with one of the, you know, A1 Garage Door and you're going to say, hey, like, you need to get on this, here's the KPI that absolutely will blow your mind. What is that KPI, whether it be internal to the software or overall to a company? This is what somebody has done with your software.

I'll just share a case study we have. It's fresh. We, um, are working with a quick-service oil change company in Texas, which 6x'd their return in 6 weeks working with us over the last 2 months. And so for this group, they've put roughly $4,000 of prizes and software fees in an investment, and they've generated $30,000 of net impact on that investment in the last 2 months. The reason for that, though, isn't because of anything novel that we were proposing. These were all things that they were wanting to encourage in the past. It was that the speed of the communication, the transparency of the data, And the reliability of getting that to the technician right away changed the behavior. Before using us, this would've been done on a whiteboard, phone call, with a text message. Like everyone wants it to work, but it's not happening seamlessly and everybody's time constrained. And so being able to bring a partner like us on, that helps to make that work much more smooth.

Yeah. Do you find that there's any kind of reduced impact of your software because it's coming from kind of an auto generation, right? I'm trying to imagine receiving a text message saying, hey, good job, you offered 3. You know, offers, for example, and that coming from a software seems to be a little bit less personable than, than kind of coming from a manager or the boss or the owner of the company.

Yeah, no, it's a great insight. And also a learning we have is that if you, if you have something automated where it doesn't change each time, you drown it out over time. So you're going to tune it out rather. And so it becomes important to do things like screenshotting that message and having someone come over the top. Or recording a video and integrate that into the way that someone got celebrated. Have a hyperlink in that text message that takes you to leaderboards so you can see how you're performing relative to other people. And then that is kicking off a second conversation, typically over a group chat or over some other, you know, internal message board that the company's using on Teams or over WhatsApp. That's been pretty powerful too, because that's what's actually driving the culture of the team. The memes, it's the emojis, it's the good-natured, you know, razzing that they're doing with each other. And almost in every case we deployed this, like that happens organically. And that really is where a lot of the magic lives too.

Yeah, we were talking about that today in our company as we meet regularly once, twice a week to go over numbers. And that good-natured razzing is in the friendly competition intercompany is huge to, to really drive the want and the need and the culture of the company. I find it to be an amazing tool to motivate and to keep people Kind of going in the right direction.

What stops you from doing things like this all the time?

Yeah, that, that's what I'm contemplating at the moment. So we do utilize competitions quite often. We do use a lot— utilize SPIFF structure, especially if we're trying to move a specific product or trying to get the word out about something, drive leads, drive flips, drive whatever. We, we do a lot of competition comparison, intercompany, interdepartment comparison. To really drive that competition. I'm wondering for myself if we could take that a step further because we find it to be extremely beneficial to us. So looking at something like this to potentially say, hey, well, it's working for you now. If you were to create a leaderboard where they could actively check that regularly and have a point system for the different items, because Our, our point system is revenue generation, right? But that's not the only point system that we want. We want good reviews. So if you get, you know, 100 points for a review or something like that, that becomes a very fun game as well, kind of from a holistic standpoint. Don't get me wrong, generating revenue is the point of a company.

Yeah.

That being said, um, there's more to it than just that. Doing the right processes and getting the right scripts in and then following procedure correctly is also extremely important.

100%. And then also like 5-star reviews and the number of times that, you know, people follow your protocol the right way. And it's going to reinforce that too. I'm curious also about how, I mean, there's all sorts of technologies you guys are deploying. You're really innovative in that respect. I'm sure that there typically though is like a checklist on does it make sense to deploy this technology right now? Is it going to be too much change at any given time? How do you guys think about that as it relates to like where you make your bets?

Yeah, I mean, I think a lot of It initially is just I didn't know that something existed out there like this. So that's you know that's that's why I love this podcast in general is we get to bring on myriad of people doing things in the industry and it's really fun to meet all of you. But it's also super fun to see things that we can implement in our business that will really drive and that take very little lift. I can't imagine that this is a huge lift item to implement, right? Because some some of these items, right, to get you know we bring people on that. They, they want to transform your entire business via going to a different CRM, and it's just something that's not possible, or it takes a lot of lift to get there. But this sounds like it's a fairly easy implementation. Is that, is that kind of correct, or is there a decent onboarding process?

No, our goal is you could turn this on in less than an hour. So really all we need is the roster. Here's the technicians. You know, we need some sort of direction from you about here's an example of a competition that I want to run, or We have a set of templates too you can choose from. But then like once we're holding, you know, the API key and we have the roster, we hit go and enroll people via text message. They click the magic link on that text and they're off and running. So I think the goal, just to react to your contractors, are really time constrained, right? It's not like they're sitting on their hands. They're solving a bunch of problems over the course of the day. And for technology to work and really drive impact for them, it has to work in the background. It has to fit the workflow that they are using already. And so as a technology provider, our job is to listen really well and design this so that it fits the workflow for our customer and that it can show up for them in a way that's going to make their experience better. If you meaningfully can increase the value of someone's experience and you can do it in a way that doesn't require material behavioral change, that's where the sweet spot lives on creating an impact. That's what my team tries to accomplish each day.

Yeah, I mean, that's really neat. And so are you guys doing this? I mean, it sounds like the software is fairly not specific to a specific industry? You know, you talked about oil change locations and things like that. Is there any industries you won't touch, or is this— so we, I mean, we focus primarily on HVAC, plumbing, and electrical industries here on this podcast, but we do get fencing contractors. We, you know, a lot of the material that we utilize on marketing and stuff is applicable to any kind of home service company, whether that be pest control, gutters, you know, the gamut. Is your software the same where it can kind of go just anywhere, or is it home service specific?

Well, the place where we have the biggest impact is a technician who has some type of revenue influence over the work that he or she does. There's lots of skilled trades businesses where the technician is actually responsible for selling anything. They're there to perform a task. Commercial construction is a good example. Machining is a good example. So the metrics that matter most there are safety, throughput, cycle time, and less around Revenue attribution to the thing the person did. Now we can use our software to help to make those people's lives better too and run competitions that are about those metrics. But the, the business case for the business seller is so much tighter when you can show an increase in revenue tied to the performance and the behaviors that the person ultimately put into place. So that's where we focus our time.

Yeah, the ultimate, the ultimate distinguisher right there is revenue generation. So no, I get it. That, that makes sense to me. Is there a next step that you guys are kind of, I mean, I obviously, you know, you're getting on podcasts and you're, and you're, It wasn't something that I was completely aware about. I can't speak for John. Obviously he was. We don't have the time, as you mentioned, to kind of go in and really meet with these fun businesses that really can have an impact on us. Is there a next step for you or a next step for Upwork in terms of, are you guys expanding into anything? What's the next step?

No, it's a great question. I mean, we wanna keep serving people really well, right? So it's about sharing what we're learning, using that as a way to help make people's lives better as it relates to the business that they're running, and just keep doing that a bunch of times.

Right?

Because if you serve people well, like that compounds and you can grow the business and have a bigger impact with time. Don't get me wrong, like we've got a big roadmap here about improving the way we can help coach and upskill people. So you can see folks in the contest how they did it, how you can target ways to help people better and ultimately perform in a way that's going to increase their take-home pay and revenue for their company. We have things we're doing that are around thinking through the next opportunity for the company. So like here's a place where if you went into this SKU or offered this product, Exactly. It would really benefit helping grow. So we're, we're building that into our roadmap also. These competitions can also happen for people in call center and dispatch and install teams. So like thinking through what are the input behaviors that are going to have the biggest impact on revenue in those functions. And we're looking to expand our impact that way too. But honestly, it's just listening to customers and being a really good partner as they're thinking about how technology can help to drive a productivity outcome. That's our, that's our mission.

Yeah, I mean, I see a great use case here because John and I talk about it a lot. We talked about it last 2 episodes. Coaching is an extremely difficult portion of this business, and this gives you the data to be able to make those good coaching choices and to help out the team to take home better revenue and to take home— or to help the business grow on the whole. And coaching is one of those areas that's just very difficult because there's a data input function. And then on the back end, there's an actual coaching function of going through and changing that behavior. And this sounds like you get a little bit of both on that. That's really neat. I like this product. Tell us where people can find you, where people can find Upsmith.

I appreciate the invite. Yeah, we're at upsmith.com. Come check out what we're building. We have a really active blog. We have a lot of resources there about how it works, people that have used it before. Check out the Untapped with Upsmith podcast. We'd love to have you guys on reciprocally. And we're sharing resources that can help contractors as they're growing their businesses there. We're super active on, on X. Both the company @Upsmith, but also my personal.

Don't call it that.

It's Twitter.

It's always Twitter to the end of my life. It's going to be Twitter. I'm going to be the old bald guy saying, back in my day, we called it, it was a bird app.

I used to call it Twitter, but look, I'm an Elon fan and if it's X now, I'm going to call it what they call it, right? So I think Twitter is a really cool way to like meet people that are doing important stuff. Like I all the work you guys do. I think you guys put a lot of great content out. I think it helps to speak also for people that want to grow businesses and learn. Like, it's a great place to learn. And so I'm always looking to connect with more folks there and would love to hear from any of your listeners who had thoughts about how to do gamification more effectively.

What was your Twitter handle just so people can find you?

Yeah, Wyatt_H_Schmidt. Wyatt underscore H underscore Schmidt. And then AdOps Schmidt is our company.

Okay.

They can find me there too.

Awesome, man. Well, thanks for coming on. If you like what you heard today, Minus John, feel free to leave us a 5-star review. I have to get— put my punches in when he's not here, cuz I mean, he's, he's too much when he is.

Um, we should run that A/B test. We should run the A/B test. We'll see what the 5-star rate was without him. Exactly. Give us some feedback. Yeah.

You know, I'm gonna go in and I'm just gonna hire one of those, those, uh, you know, fake follower accounts to just come and blast this episode so that it has 10 times more listens. But if you like what you heard today, feel free to give us a 5-star review. Find us on ownedandoperated.com. Next month we have the workshop. Taking a look at the workshop, I highly recommend it. It's a lot of fun. You get to meet us, you get to see John's stuff. It's very valuable. Thanks for listening, guys.