#240 3 Marketing Mistakes That Keep Contractors Stuck Under $10M

And if you're not getting leads out of a current lead source, like the problem probably starts with you.

And this is probably more for companies that are in their way of scaling. They get spread really thin because something we like, we saw with you and we see with a lot of companies that scale effectively and quickly is they test different channels, but once they find the channel that works, they bleed it dry.

Yeah, I think the easy place to start is, hey, is your GMB good? It affects your LSA, it affects your PPC, it affects your web traffic.

If you got really focused on that channel, yeah, that is a massive—

Yeah, you can move it. Today we're talking about the 3 biggest mistakes that service companies make in their marketing. I'm your host, John Wilson. During the day, I run a $30 million home service company in Ohio, and today I'm joined on the show by Ethan Wright from Service Scalers. So how do you want to start into this?

There's a— it's an interesting, interesting perspective kind of from a marketing company agency side, you know, And then obviously you having on the owner side, operator side, and you have figured out a really good way of working with vendors and whatnot. And so you have a lot of these things really dialed in.

I think, I mean, I think you have to, you have to in order to get big. Like there's only one way you can buy more leads. Yes, exactly.

And, um, but it's funny when you look, you know, where are the 3 biggest holes for someone that is struggling to scale, struggling to make marketing effective?

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I think the number one thing, and one of the things that you're best at, um, is knowing your numbers, right? I think a lot of times, especially when there are companies that are looking to scale but haven't invested as much in marketing or don't have as much infrastructure on their team where they have more people dedicated to marketing, it's kind of this black box of like, I'm told I need to put money into things and then it's supposed to come out.

Yeah.

But in reality, you know, you have to know your numbers through the whole funnel. And, um, the funnel being from the first time you get someone's attention on the internet or wherever it is on a billboard, whatever the, the marketing channel is, to they call in. So how are your CSRs booking and, yeah, having conversations and whatnot all the way through sales, right? And so, um, knowing your numbers is huge. I mean, we were in a workshop yesterday.

Mm-hmm.

And you asked people, how many leads does your business need today? Who knows the exact number? And it was like, oh, someone raised their hand, we need like 10 to 20. You said, well, which one is it?

Yeah, it's kind of a big difference.

Yeah, exactly. And so what we find is when people don't know those numbers, the answer is just, I need more leads, I need better leads, and they don't know where the issue actually falls in the funnel.

Yeah.

And so some things like that are really commonly missed on actually tracking is, essentially upfront lead quality and lead count, right? So one question of how many leads do I need in a day? And again, that follows through your funnel because you have to know, well, if I get X number of leads, our team books X percentage of those, our sales team or our techs then close X percentage of the booked leads, and that leads to—

Mm-hmm.

Why in revenue, right? And so you kind of have to work backwards through that.

Yeah.

Um, and so really knowing upfront, like, what is my booking rate on the leads that come in, right? Um, because you could get delivered 10 great leads and 2 companies could do very different things with those. And I think that comes down to like CSR training, um, a lot of the time. Um, what are like big numbers that you guys kind of lock in on?

I mean, those, uh, number of leads, uh, When, when we bring on a new lead source, like what's the booking rate for that lead source? So there's a different booking rate for LSA versus PPC lead, PPC lead versus like an Angie's List lead. So they all have different booking rates. So I think my quick tips on how to start getting that data is using tracking numbers. Yeah, I don't remember what we use, but people were doing it like CallRail.

There's a lot of the field management software.

Yeah.

Tracking numbers.

Yeah, that's how we do ours. It's through our, through our CRM.

Yeah.

So yeah, get tracking numbers. So every time someone calls through our Google My Business, we know that they called through our Google My Business. Or if they call through our LSA, we know that they called through our LSA. So that's number one is just how do you get the data clean enough that you can actually decipher it? So tracking numbers is the big one. You can have CSRs ask, how'd you hear about us?

But— Doesn't scale.

I don't think it does. Yeah, I don't think it works meaningfully. I know companies really push for that, even big, they really push for that, but I think Like, I think you're trying to make something happen that, yeah, it's kind of irrelevant.

Yeah. And that's by source is really important, like you're saying, because, um, you know, cost per lead is something we can talk about too, but it— that doesn't live in a vacuum because you could pay twice as much for a lead on, you know, Google versus Angie's. Yeah. But you can close 70% more leads. Yeah. On Google. So yeah, the math works there.

Yeah.

That's something people also get stuck on is just, I need my cost per lead It's got to be lower.

I showed our chart yesterday and it was, it was like, I think, eye-opening for a lot of people because cost per lead is a consideration.

Yes.

But it's only a consideration because it makes ROI harder to achieve. Like, that's it. Like, that's the, that's the only thing that matters. But if you're actually getting ROI— so ROI is return on investment. And if I bought $1,000 of leads How many sales did I get from those leads? So did I get 5,000 sales? So I got 5 times ROI. Did I get 10,000 in sales and I got 10 times ROI? But yeah, like we have lead sources that we pay $400 for a lead and we have lead sources we pay $30 for a lead and like ROI could be the same. ROI might be better for the $400.

Yeah. And especially when You know, a lot of people will just say, I need to get the cheapest cost per lead.

Yeah.

No matter what it is.

Yeah.

That can be pretty easy to achieve.

Yeah.

If I start to opt for leaky faucets versus—

Yeah, worse leads.

Water heater installs or lower— yeah, Facebook, Meta, fine lead source, but usually lower intent.

Yeah.

And so you're usually going to have to work them longer. You're not going to close as many of them. And so again, cost per lead's not in a vacuum. It's something important to track like that. Um, booking rate per vendor, cost per lead per vendor. But even within that, what type of lead is coming out of each of those and what, what is a lead?

I mean, that's like sold rate is how we track that. So we do this for every lead source. So number of leads, uh, cost of the lead, cost of total lead, cost per lead, total sales, booked job percentage, canceled job percentage, demo rate or sit rate, which is like how many of them did we actually run?

Yes.

So if we bought 10 leads but 2 canceled, then we get an 80% demo rate, sit rate. That's really good. Yeah, that's like a really good sit rate. And I don't know that we're actually achieving that. Like, like usually it's like 30, 30% is like good. And then what's ROI? Yeah, but yeah, those are all the numbers. But it starts with like the hygiene of how do we know where that lead came from?

Yeah.

So knowing your numbers.

And I think all, everything you just mentioned is something people should be tracking those numbers because kind of going back to the first point is you can have a leak in your funnel that affects that last number of ROI. But a lot of people just look at what was my cost per lead or one metric. And if my ROI isn't good, it must be that problem.

Yeah.

But when you look at it, it could go actually great quality leads at a fine cost. That are not getting booked by our CSRs.

Totally. You—

people don't listen to their calls. And if you don't, you don't know who needs to be trained, what objections need to be handled, or it can be good leads, booking well, sat jobs, we're not closing.

Yeah.

And so where in that funnel are you actually leaking from? And most people don't know that because if they're not tracking, they just kind of go, well, marketing itself doesn't work. Or someone, uh, yesterday we were talking to, he goes, Angie's Leads, I've always heard, or any aggregator or lead partner doesn't work. I've always heard that. And then you come in and you say, yeah, we still use different aggregator partners and different lead partners, and we know the cost for each, the booking rate for each, all that. And that was really eye-opening to him because he's like, we actually might be able to use it if I actually know my numbers. If you knew the data. Exactly.

And I think a more extreme example, And then I'm gonna ask about the second, but we had someone in the group and they were paying $150 a month for Yellow Pages.

Yes.

And he was tracking the leads from it. And because he knew that, I think it was like 30 leads a month for $150.

Yeah.

Like, so his one, he's getting leads at all. 'Cause I would assume, I would've assumed no leads. Just if I had no data, just the vacuum of we're paying anything for Yellow Pages, First assumption was no leads.

Exactly.

But he's like, no, we have 30 leads a month and it's really great. And I'm like, well, yeah, like at $3 or $5 a lead, almost anything is easy to achieve ROI there. So like, yeah, that's a, that's a pretty big win.

Yeah. I told him, I was like, if I, if, if usually if people would come into that business and just do an audit really quick without the numbers, they go, hey, $150 a month, just throw it out. It's Yellow Pages. But he knows where his leads come from, what they cost. So that's The big one. Know your numbers by source.

Yeah.

All the way through the funnel.

Yeah.

Yeah.

Fascinating.

Yeah.

What's number 2?

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I would say secondly, and this is probably more for companies that are in their way of scaling, but they get spread really thin between marketing sources. They have an allotted amount of budget in a month, and they've heard, well, I've gotta be on LSA, obviously I need to run PPC too, I've gotta be doing Angie's and Thumbtack 'cause I heard great things about 'em, modernize, whatever it might be. Uh, oh, I've got the Yellow Pages going too. And on top of that, I need to do Facebook ads. And what about my website SEO?

Yeah.

And that's fine if your marketing budget is robust enough.

Yeah.

That there is enough dollar per— dollars per channel to make them effective. But I so often see people who are in, you know, a sub— let's say, you know, it's a business doing $1.5 million a year.

Mm-hmm.

And their marketing budget is just way more constrained.

Mm-hmm.

Um, and so I always sit down with them and we look and we go, so what are you spending on? And it's usually a mix of those things I mentioned. And then even some of these like more, uh, branding plays like, well, and we've also got the billboard outside of town and, uh, we've sponsored the newspaper forever. Um, and we just look together and it's like, you Do you know your numbers? Usually not. And then my question would be, if you did, what's your highest ROI channel? What, and what channel can actually scale?

Yeah.

Um, because something we, like we saw with you and we see with a lot of companies that scale effectively and quickly, yeah, is they test different channels. Um, but once they find the channel that works, they just—

Yeah, you run it.

They bleed it dry.

Yeah.

Um, in a good way. They're gonna see, okay, if LSA works in my area, the cost per lead is great. We close a good amount. ROI is great on it. That's the budget I'm upping and focusing on and just getting super dialed in on instead of, well, you know, LSA's got $200 a month to it, pay-per-click's got $500, all these other aggregators. So it really is, obviously you have to test things, you have to find where the ROI is, you need to track it.

Yeah.

But as soon as you find that, I think there's this idea of diversification, which is good at a certain point, but you don't usually have the budget to to diversify. And you're often way better served by finding the channel that works, going all in on it, and then using that to then build, hey, we're going to get reviews from the people that we work with. And so that's going to help with our SEO.

Yeah.

That's going to help with word of mouth. That's going to help with these other things. Eventually diversifying out as you need more leads, as you find that you've hit a cap. But just so often people want to spread themselves really thin and it's kind of shortsighted, or it will just take you a lot longer to achieve what you could if you found kind of the best lead source and ran with it.

Yeah.

Because you guys, for a long time, you found one.

Yeah. I mean, LSA, we just ran LSA till it was dry. So now, just like everything, every lead source is a game that you can win. And if you're not getting leads out of a current lead source, the problem probably starts with you. what are you doing wrong? So that's where I would start instead of blaming the lead source.

Yeah.

But yeah, like LSA, at one point we were spending $100 grand a month.

Yeah.

And like, that was like 2024. That wasn't even like 2021 when it was crazy. That was like recent.

Yeah.

Uh, now we've— we have since diversified a little bit, but we still like push that really hard.

Yeah.

Uh, but yeah, if you find something that works, run it dry.

Yeah.

And I, I think that people start— like, when I see it happen is they go to some seminar or they like read how they need to do their marketing plan for next year. So, you know, it's August, we're approaching Q4, and people are like, well, I gotta start planning for next year. So I think it's coming from a good place.

Yeah.

We're like, all right, I'm doing my marketing plan.

I'm thinking about growth next year.

I, you know, I'm thinking 8%. Where do I put it? So they're all just sort of like shuffling around, and I think they just get lost in their own heads a little bit.

Well, and I mean, especially, I mean, people who listen to podcasts and go to those seminars, right? They hear you have a guest on or they hear a guest and yeah, we scaled through Facebook ads, we scaled through pay-per-click. Oh, here's this great hack for XYZ. And right, it's out of a good place. And like the idea of diversification is a good one, but it only when you have the budget to actually effectively use each channel.

Yeah.

I so often see like just a specific example. of Facebook ads where people want to run them and they've just got a really limited budget and they're paying someone to run them. So there's a fee involved plus $1,000 a month in budget.

Yeah.

When you're running these paid ad sources, there's a lot of testing, there's a lot of variables to find the hook that works, the visual that works, the creative, and it constantly changes. And so people who win at those games have enough budget to actually test those things consistently. But when you have such a limited budget, you can only do so much testing before you're done for the month.

Yeah. I'll give my quick framework on testing because this might help people. But you can do this in one of two ways. You can do this with number of leads or you can do this in time period. So number of leads would be like, I need to buy 100 leads and that's a big enough dataset. Or time period, which is how we do it, 90 days. So first month, did I get a single lead? If I got a single lead, it's worth continuing into the second month. Second month, did I sell a single lead? So I got the lead and it was quality. If I sold a single lead, I'm good to go into the third month. And the third month is, did we achieve ROI?

Yeah.

So that's how we think about testing, is we're like, we test, I don't even know, 2 to 4 channels a month.

Yeah.

So that's our framework. Did I get a single lead? Did I sell a single lead? Can I sell this profitably?

That's smart. Yeah. Just giving it actual time to work.

Yeah, it works.

Um, number 3. Yeah, number 3. Um, this one, depending on, you know, what part of the internet you live on, it might sound like beating a dead horse, but people still— we see it all the time— just, uh, not investing in or neglecting your Google Business Profile. Yeah.

Oh yeah.

Um, and there's a lot of ways that can happen.

Well, I don't think people understand how, especially in the past couple years, SEO, it went from like, it went from on-page SEO and on-page SEO is still really important.

And that's like when it's direct, like directing traffic to your website. Yeah.

On-page SEO is on the website. So like blogs, service location pages, on-page SEO. Local SEO is now this new discipline and it started, I really think as LSA became a bigger thing and LSA and GMBs became the same thing. Suddenly, hey, is your GMB good became really important. Uh, and now quality GMBs is like, it affects your LSA, it affects your PPC, it affects your web traffic. Like it affects everything. It affects ChatGPT and how you show up in those searches.

Yeah, exactly. And even in the past few years, like coinciding with all this, the map pack, like it has, it wasn't always the first organic result, right? There used to be a few websites that showed up.

Yeah.

And then the map pack. But now it is as soon as you're past sponsored, there's your—

There's your map.

There's your map. And more and more people, like there are certain companies that track this, but like more and more people who are organic searchers who don't, don't click on sponsored ads, their main source of traffic for a local search.

Yeah.

To find a business, whether it's a restaurant or a plumber or a, or a dog groomer, is through the Google Business Profile. And there's, there's a lot of ways that we see it, you know, quote unquote neglected.

Yeah.

Um, I think one, and I think it's one that sometimes people pat themselves on the back and say we're doing a pretty good job, but I always challenge like, how could it be better? Is just the simple practice of like capturing reviews.

Yeah.

Yeah. Um, and that's another number to track is job completion to review percentage. And you can—

How many a week?

Exactly. If I do 50 jobs in a week.

Yeah.

Am I getting 5 reviews or am I getting 15?

Yeah.

Um, that's a really big deal for a couple reasons. One, you grow your review count. That's extremely helpful, obviously, for, um, the SEO traffic directly from your GBP, but it's going to help your LSA account be more effective. Like you said, even searchers who come through pay-per-click, if they want to do a quick search on you to find out, yeah, if they're good, they're going to go to your reviews, right? And if I see someone with You know, 70 reviews, that's like 4.7 stars, and the guy below him is, you know, 2,500 and 4.9.

Yeah.

It's, it's a big difference. Um, but also this idea of like review velocity, like how often, often am I collecting reviews? Because Google does care about that.

Yeah.

So you could have less total reviews than your competitor, but they're getting 2 a week, you're getting 10. Google sees that as, okay, these people are doing a good job consistently with the, the consumers that we're trusting them with.

Yeah.

Um, and you know, a lot of people, we were talking yesterday and like, yeah, we've got some sort of incentive program. Like we pay our, yeah, I pay my techs $10 for a good review. And I just ask, how does that work? And they say horribly.

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You know, and, and, uh, say it was kind of like, okay, raise your hand if you have something similar. Yeah, it's $20, it's $15. Is it working? No. Um, and so figuring out specifically for your team how to unlock it is a big deal. Um, because incentivizing is great. Some people are incentivized by like the individual, hey, you can You know, increase your, your, your pay per hour by X amount if you got this many reviews. Um, but some companies that we talked to, like, it works better when there's like a bigger overall, you know, reward to get. So instead of paying all your techs X number of dollars per review, it's, hey, we just bought a Blackstone and the guy with the most reviews at the end of the month gets the Blackstone or gets the Milwaukee toolset or whatever it might be. But I think, uh, you know, Jack actually mentioned it when we were talking yesterday, but a big point was Incentivizing is great, but also it's their job to get them. And so hold them accountable to what you're asking. So instead of just, hey, well, we will pay you if you get them, it's go get them and let's track and make sure you're doing it. A few other things on the GBP, and we don't have to get super deep into all of it, but there's a lot of different spots on your GBP that you can be updating and filling out information and using it to get keywords. for your services and locations in it. So there's an update page, there's a products page, Q&A page, even in the way you respond to people. You know, hey, thanks for trusting us with your water heater install job. We're so happy that we were able to help you in, you know, at your house in Stow, Ohio yesterday. Like, we look forward to serving you again, right?

Yeah.

Where can I get all those little mentions in there so that one, it's just, indexing. Um, but 2, also, like, when you talk about ChatGPT or any of these AI models, when you, when you ask them, like, why they recommend certain businesses, so much of it goes back to the Google Business Profile, and they— it will scrape the actual reviews. And so, oh, I saw that someone mentioned the area you were in.

Yeah.

That you were on time, trustworthy, dependable, things like that, left photos. So all those things are super important. Um, And so just neglect of GBP. A lot of people think I'm getting some reviews, we've got a good rating. I always challenge people like, could you be getting more? Could you be doing more just to fill that out? Because it is— I mean, it's such a powerful review or lead driver nowadays. So yeah, that's a big one.

Yeah, I think the easy place to start is Google plumber near me, HVAC near me, and whoever the biggest is in your area, like look at what they're doing compared to what you're doing. Yes. And what's usually pretty interesting, and I'm curious how like the person that's not thinking much about their Google, I'm curi— like, it's hard for me to get in that like meta framework. But like if they're up against someone with like 5,000 reviews, like, I mean, reviews are clear, like review is pretty like indicative of revenue.

Yes.

So hey, someone's $100 million or $80 million, like you're gonna see 20,000 reviews. Someone's $30, you're gonna see 5,000 reviews. So it's really aligned, which I think is kind of funny. So yeah, I would just try to copy what the big guys are doing. If they're giving daily updates, maybe you should figure out how to do daily updates. If they're like—

How are their services listed?

Right. How are their services listed?

What products are on there?

Are they doing coupons? How many photos? How many reviews a day or week? Yeah, all that stuff matters a lot. And they got big because GMB has been such a central focus for the past decade.

Yeah. And we talk with people people all the time. It's like, if you could, you know, maybe you're getting 15 calls from your GBP a month right now.

Yeah.

If you could do a few things and could double that count.

Yeah.

In a reasonable amount of time, think about what you would have to pay for 15 calls.

Oh yeah.

And those organic calls.

Yeah.

Are much higher close rate, much higher intent. They've already researched you, they already looked at your reviews. And so, yeah, go look at like, even if there's someone in your town, it's like, man, they always get people to leave photos with their reviews. They're, you know, They're leaving long descriptions with people are mentioning keywords. It's like, that's not by accident. There's a way that they've trained their techs or their CSRs that follow up of, hey, your review means the world. If you could leave a picture, if you could mention your area, like people do that. And, um, I, it's something that can seemingly get lost in, you know, the sauce of just everything you're trying to do.

Yeah.

But if you, if you got really focused on that channel.

Yeah.

Like that is a massive—

Yeah, you can move it.

Yeah.

Yeah. Heck yeah. This is awesome. So those are the 3 biggest mistakes we're seeing in service businesses. If people want to get a hold of you, where can they find you?

You can find us at servicescalers.com or you can find us on X at the same @servicescalers.

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