Kyle Mallien explains why route-based service businesses like pest control and HVAC are built to last. They keep customers locked in with recurring maintenance plans, which means steady revenue and high client stickiness compared to one-off service work.
This could be true for pest control. That's a route based business. That could be true for H Vac and a service. Right. A service business side of the H Vac business. Plumbing could be the same thing there. That's a crisis business. Right. You don't call the plumbing company when things are good. You call the plumbing company when your toilets overflowing and it's midnight and the first person that answer wins. Right. And so that is a crisis marketing scenario. How do you stay in front of those clients? Well, you get them on a reoccurring maintenance plan. Does anybody here have an H vac or a plumbing company on reoccurring maintenance that comes out and looks at the filters and does a thorough annual inspection? Right. That, that's a very common technique, but it's designed to keep the customer engaged, to keep you front and center, designed to get you to run a route and so that you can come in and service repairs. When you're doing that maintenance stuff, it's going to turn into a classic example. Janelle just did this the other day. Oh, it turns out I need this, this and this for my water softener. And I need to replace the filter for the fridge. And the filter for the fridge, which hasn't been done since I bought the place. It's this, it's that. Next thing you know, it's a $4,200 bill from $100 a year maintenance plan. Right. And so that's how they make their money. And if you look at these businesses and these 30 categories, it's all kind of the same thing. If I was in carpet cleaning, if I was in epoxy, if I was in landscaping, that's another great example of this. What is if my pay, my landscape are $180 a week or $180 a month to come out here and mo blow and go on Wednesday at 10am for 30 minutes. Right. What does it cost him to get a customer and what am I worth to him as a customer? That landscaper came with a house, right? So he's been my landscaper by default. It's a very sticky business, right? Because of the geography, because he knows the plants, he knows the product, he knows everything about it. Why would I switch that if I moved into a new house they like? Same thing with the pool company, right? Pool maintenance. You're not, when you move into a new property, you're not going to go find a new pool maintenance or you just love your pool maintenance person, you have to bring them over. You're going to go with the person that's known this pool, because this pool, they've been servicing it since 1995. Right. That's why the things that we're looking at is so sticky. And that's what I'm looking for. And the reason that we're buying a, you know, an existing business is because I get all of these things. I get the house that's been under contract since 1995. You get. Yeah, we don't have a contract in place, but we have. I'm on a texting relationship with the pool guy, right? So, like, I'm not. I have no desire to change. If I was going to change, what would that save me? $30, 25. Like, who cares? Like, it's not even worth it as a homeowner. Right? So that is what we're looking for. I always said in the electronics recycling business, I would never get fired. I always had Google, lg, Panasonic, all these companies, right? But that is a business that is so forgettable, you know, like, the only way you lose that business is if you do a horrible job and do something colossal and break something on their property. Like, they have no reason to fire the garbage man. I mean, it's just. It's impossible to lose a business. And so when I look at these things, I go, how sticky is a client? And then, how am I going to ramp these businesses up based on that? What's my marketing method to get new people in? Now, your first thing is going to say, well, I want to get. You know, Kyle, I just talked to the seller, and they said that everything's been word of mouth since 1995. And you might think that that's an advantage, or the seller always thinks that it's an advantage. It is potential upside. But you're still gonna have to spend money in R and D, what I call R and D, research and development, to understand what offer works, what marketing methods work. Is it pay per click? Is it Yelp? Is it Facebook ads? Is it who is gonna run that do to know where and how to get clients on demand. The businesses that I'm looking at, I want to be able to get clients on demand, right? And I need a gas pedal in the business.
