Dominate Your Market: The Service Business Sales Formula!
Mike Andes (author of Total Business Turnaround) presents a workshop-style YouTube video showing how home-service businesses can double customers without extra advertising by fixing leaks across an eight-step sales process. He emphasizes tracking KPIs (especially close ratio), reducing friction at each step (simple lead forms, fast estimate creation, video notes, follow-up, credit-card-on-file/deposits, scheduling using budgeted hours), and using technology to automate/condense steps. Key diagnostics: close ratio (accepted estimates ÷ estimates sent) and a warning that a close ratio under 25% is a major red flag; many businesses leak customers at multiple handoffs (lead capture, scheduling, on-site assessment, estimate delivery, acceptance, payment, scheduling). Practical tactics include putting a short estimate request form above the fold, creating short estimate videos posted to a shared channel, sending estimates immediately from the property via templates, requiring cards on file or deposits to lock jobs, and using capacity/budgeted hours to schedule dates and avoid losing accepted jobs.
Chapters
In this video, I'm going to show you how you can double the amount of customers you have in your home service business without spending a single dollar on advertising. There are eight steps in the sales process, and in seven of them, you're losing customers every single day and you don't even know about it. We're going to identify where your customers are leaking out of your sales process. We're going to plug them, we're going to patch them, and make sure you get more jobs. My name is Mike Andes, and I wrote this book called Total Business Turnaround. Over the past year, I've Traveled to over 30 home search businesses around the country, and they were struggling or they're about to fail. We turn the businesses around, but for the vast majority of people that watch the show, it's very scary to invite us to come out with cameras and microphones when you're at your lowest point in your business. So that's why I created the roadmap, so you can turn around your business on your own. With all that being said, let's jump in and figure out how you can fix your sales process. Usually when I go to a turnaround and a business that's struggling to, they think, oh, yeah, my close ratio is 50%.
Like, what's your close ratio? Like if you get like four estimates? Like, what's.
That's what I'm saying. I haven't been tracking that either. My, I have not been good at tracking any of my KPIs. So if I had to just, just guess, I would say if I send out four estimates, I'm booking two. So.
Okay, so 50%.
Yeah.
Well, when leads come in, I know it's a different process commercial, but like, what percentage of those do you typically end up closing?
Probably half. Yeah, probably half.
What's your close ratio like if you go out and get leads and you're giving estimates, is like 50, 60% your closing? So my CRM says my close ratio, and it's 65. We were about 39% close ratio. Cool. And approximately what percentage of your jobs that you sent out estimates get accepted, do you know? Approximately, like 50%. So right around there.
But remember, close ratio is just the number of accepted estimates divided by the number of estimates were sent out. Which means I don't track any other stage or step of the sales process in its entirety. In reality, a lot of people, their real lead efficiency of the whole process.
Is more like 20%. It's really important to be in one.
Software mostly, so I can know one.
Number that's close ratio. And for now, until you're in copilot, I would literally have a board that. It's like every estimate you send, you make a little check. Like, just mark them. Because my opinion is right now you're probably closing around 20% of your jobs.
Close ratio is the number of accepted estimates divided by the total number of estimates that were sent out to customers.
What percentage of them show, then what percentage of them do you actually make an offer to? Because they did the assessment, you're actually giving them an offer, and then what percentage of them actually close?
So most of them, when they sign up for the zoom, they make it.
Most of them, like 75%, you think?
Yeah, I would say maybe 80. We have a good. Like, once they get on that calendar.
80% people show up.
Most don't enroll.
Got it.
Most say, oh, this is more than I thought.
Set your close. Okay. So you. Basically anyone that signs up, you are pitching them.
Yes.
Let's just make this two things. Okay?
That's show rate, and then it's how much we close.
Right. So show rate, we're like at 80%.
Of those people that show up, do.
You think 10% sign up?
I would say maybe 20, maybe 15.
Okay.
If your close ratio is under 25%, in other words, less than one out of four estimates that you send are accepted, this is a big red flag.
Then it's just a matter of tracking these numbers. Because what I want to see is like, what. When you change your pitch, what happens to that number? When we do the guarantee, where does it go?
I believe you putting the guarantee will.
More than like double that close ratio. What's usually your close ratio? Like, if you, as a general average, are you closing pretty much most that comes in? On the maintenance side, we close everything that comes in. If 90% of close, 90% of people are accepting, like, we can move that price, and that's like an instant fix for the business. Cause, like, if we raise prices on $70,000 and we raise it by 10, $7,000, there's your operations manager. If people are closing at 80, 90%, we have room to raise prices. Even if the market, like the competitors are saying otherwise or people have said that you're too expensive, if 80 to 90% of customers are accepting the bid, we have room to move.
So this is a number we should be tracking.
Close ratio, Right.
So this is why we need to.
Have one day a week at least.
We are not working.
You have to be doing admin work. That admin work is Literally just going to be follow up on estimates, get paid, send out invoices, collect card information, whatever we need to do. And third, it's like track your close ratio. If you're saying like there's almost no.
One saying no, that that does not pair well with, there's so much competition.
I can't charge very much. That makes no sense whatsoever.
If you're like, I only close 20%.
Of my jobs, everyone says no and says I'm too expensive, then I would buy the argument that there's a lot of competition. Your close ratio determines if there's a lot of competition, if you're overpriced.
But if you're saying that, hardly anyone says no. It means we're taking on a whole bunch of unprofitable work and handing it off to a bunch of overpaid team members for our business size. And that makes no sense whatsoever. Close ratio doesn't tell you how efficient you are at turning prospects into customers. It tells you how many leads you turn into customers. To get the full cycle from prospect all the way to customers, I need to track the entire system. There are eight steps in the typical sales process for a home service business. Now the very first one is essentially when the customer raises their hand and said I need service. And they contact your business in some.
Way, shape or form, whether it be.
A web form, a phone call, an email, or an estimate request form from your website. If you don't reduce the leakage at every single step of the sales process, it's extremely difficult to build a million dollar business.
Why?
Because you have a ton of people prospects that are interested in your services, but they never actually become paying customers because they fall out of the system at some step of the process. Excess leakage throughout all the steps of that process will mean that you need so many more leads and so many more prospects to get paying customers to build a million dollar business.
When I look at like a company that wants to grow, there's like several different things that'll be the constraints. And either it's going to be leads, it's going to be capital, it's going to be labor or leadership, right? So any one of those, if there's a constraint, they'll stop growth. And so what you can come up to like, hey, I'm growing, I'm growing. All of a sudden you stop growing. And typically it's one of those four things, right? At three or four leads a month, what you're probably hitting is the fact that your churn like how many customers you just kind of regularly lose is equaling how many people you're just gaining every single week or month. Right. So out of those, say three or four, you're probably adding two or three to the books.
But what's also happening is out of.
Your hundred customers, you're probably losing two or three. So what's happening is now basically how many customers you're losing every week or month is kind of equaling how many you're gaining. And so you'll basically kind of stall out there unless more leads are put in. When we look at the 4L framework.
How to talk to you about if you're this.
So first off, we have a problem and it's like liquidity.
We don't have enough money. That's where we're right now.
Once you solve that problem, usually by raising prices, you have, okay, we got money. Now the next part of the 4L framework is leads. That's.
You're just going to hit that bottleneck immediately because now as soon as you.
Raise prices, you increase liquidity. Great.
We figured out that bottleneck. Well, now we can't book as many.
Jobs because our close ratio went down.
So now it's like, okay, well, what are we doing for leads?
What can we do for SEO? What are we doing for Google and Facebook?
Are we spending anything on right now in terms of marketing or not?
No, nothing. Actually, I just started running Google Ads at like $30 a day.
Now we start optimizing for that because.
I'm willing to spend 500 or $600 a month if I can make $5,000 extra in terms of profit because I.
Raised my prices appropriately.
Okay, so then the leads will become the problem.
And then you're going to figure out leads. You're like, okay, now we're still getting five a day, even with my higher prices. And now we're at 180 or 190.
We got to get another crew.
Now the next part of the 400 framework is labor. That's your next bottleneck. Because you've had John for a long time.
You've had these other guys.
You've done some people kind of under the table. It's like, we've got to figure out labor, right?
And then you're going to fill out labor.
You're going to have this great manager. You're probably growing the business 800,000 to.
A million things are good. And guess what? Then the next last one, leadership. Now you're going to hire someone that.
Can actually lead a team meeting can.
Do one on one Meetings can read an efficiency score. Look at close ratio, understand the numbers. Different skill set, different bottleneck. So it'll never be like, where the.
Business, like, works perfectly.
You'll just keep going in that cycle.
Yeah.
Because now you hire that leader, and guess what?
They cost a lot of money. Straight overhead. You know, that causes a liquidity problem.
Yeah.
And then you start the whole cycle again.
Okay.
As you grow the business, it just is just going from one bottleneck to.
The next to the next to the next.
To fully understand the efficiency of your whole system, I needed to look at the leakage at every single one of those eight steps. For example, in step one, we just.
Assume, oh, no, leads are coming in.
When reality, they can't even start stage one because you have 20 different fields on an estimate request form on your website. But we just assume no one wants any work done when reality, we haven't looked at every single stage and step of the sales process to ensure we're not getting any leakage at the handoff.
I do believe the lead bottleneck is what you'll hit right away.
Right now, the notion is I will.
Dump money on marketing. We have done that in the past, and it has not worked. Yeah. And so then it's a matter of.
How are you going to solve that problem? That will be the next constraint.
If you put money in the business because you have, like, liquidity, if you.
Inject a bunch of capital in this.
Business, the next thing you will need is leads.
Yeah, I'm not worried about that. And I'll tell you why. Because I just know too many people. As soon as I start making phone.
Calls and I say, then that's the strategy. Go do that. Go get an admin person. Get someone to go run the landscape jobs.
If you think you can, like, I.
Can drive $2 million of landscape jobs.
If I just have a phone, then.
We should be doing all of our time on that.
If you're good at that, you enjoy it and everything else.
Despise, then delegate everything else.
I landscaped all to pay my way through school, and I said I'd never do it again because I was like, I didn't want to be. There's a bit of a negative stigma connected to landscaping. You know, I wanted to have an office job and be leadership and such, but then I kind of missed physical work. Actually, after a while, like sitting and doing emails, man. After a while, like, that's kind of what my job became for after. For a long time. When you're in a coordination role. I was like, oh man, it's like death by email.
I generally believe you could double the leads from the website with a couple little changes. You'll be fine with it now because that's. Someone else is taking the phone calls.
Yeah, they have to request a form or coming to someone else.
You don't feel like, oh, I've got to open up my email.
Like, that should never be in your stomach.
Oh, I have that all the time.
So like the first thing I would say is like no email on your phone. The most important thing about step one is make it easy for them to give you their information. Put your estimate request form right at the top of your website. Most new customers are coming to get an estimate, so make it easy for them to do that. And don't have like 30 fields and asking for their Social Security number and their shoe size on the form. Just get the relevant information. You need to be able to give them a quote.
If you had the estimate request form right here immediately, they know what to do. Fill out the form, get a quote.
So get your instant contact here. Probably get a quote because like that.
Button requires them to go different page. You're gonna drop off. Like, I basically want that. What that is the inquire thing. I want that right on the homepage. Like right, right there. This gets moved over to the left side. I submit request form on the right because people are going to come to this site wanting a quote.
And I think we got like, I don't know, I could check the traffic, but I think it was like over like 200 people visited. And like, no, no leads.
No leads. Yeah.
Like, seems, I don't know, maybe that's normal.
Well, the bottom line is like people are coming to a full service site to get a quote, right? We want to make that as easy as possible. And that is get a quote above the fold on the homepage. Not where you have to click a contact page or a get a quote page and switch to a different URL immediately. You're gonna have some sort of drop off.
Keep in mind through this whole process, the goal of the customer is actually not just to get an estimate, it is to have their problem solved. So I want to get from their problem to their solution as quickly as possible, making a whole bunch of additional steps. They gotta click on a different page, scroll down to the very bottom and fill out a massive form. Is only going to add friction in that process.
And do most of your leads right now come through your website?
Do you do ads?
Like, what's your marketing?
Most of them come through my website.
I've been, I've been to get a few with calls when I started running Google Ads. I think another reason I'm getting more mowing leads is obviously because the first thing you see when you go on the website is book your mowing right now.
Book your mowing. Yeah, yeah. Then it's a matter of how do you make it easier for projects like you?
Right now you make it really easy.
To get a mowing estimate. Hence you're getting five in one day. Yeah. Fantastic. If the focus is landscaping, it's a matter of, okay, let's not make it about mowing.
Let's make it more of like where.
They can choose between mowing and landscaping in the form of. Okay, right. So it's like they still like. I like the fact that like, right when you get. It's above the fold, it's right there.
But can we make it more where.
It'S more landscaping friendly? So this is, this is the part where I'm concerned. This is the only part in the entire website where it gives me any inclination of roof repairs, maintenance, etc, and that's where we make all of our money.
So if I came here, I would.
Potentially say, oh, I have a leak. I don't see anything on here about leaks. And yet that's where all of our money are coming from. We got, you know, booking an estimate. We got shingle roof, metal roof, etc. And the quote thing, which I used last night is great, but it's all for new roofs.
So you have quite a bit of room here. Like.
Right. I would first off, focus more on your brand. The top dogs thing is great. This picture is like, this could be any roof in the world. Who cares? You four sitting on the side of.
A truck that has top dogs will.
Crush versus this random roof.
Because right now, if you think about.
It from a business to business perspective.
Yes.
What's different about this whole business? There's one thing, and it's you and the connections you make with the inspector, the contractor, etc. It is not a roof.
Right.
And honestly, we don't even want to sell this roof.
We just want to sell that.
That ridge cap is missing and we're gonna go spend two minutes and make 500 bucks because everyone else is showing a random roof too. Like, is this your picture or is it a random one off Google? So I don't even know, right?
As the customer, I'm like, okay, great.
They took a picture off of Google.
They threw this site together. They're Gonna funnel me into this sales.
Process, to this instant quote thing, and then sell my lead off to someone else else. Because there's a ton of companies that.
Do that you guys are going to prove. Hey, first off, we're in Walker. We're local, born and raised, still working in Walker, Louisiana.
Picture of you guys, they're like, great local guys. I know the faces are going to be showing up at my property. And your trucks are your brand. Like, you just spend a bunch of money on them. Might as well throw them all over this website because that's what makes you different. That is, like, the distinguishing factor. This whole business, in my opinion, is like, the brand is, like, actually really, really good. Now.
Last year, I got you guys a website, generates a ton of leads. When I was transferring over to Copilot, I kind of went through all the leads that I got and never responded to for small projects and maintenance accounts. And there was 200 and something.
There was 200 leads you didn't respond to?
Yeah. So did you see them or you were too busy?
I'd see them and then I'd be.
Like, oh, I gotta call them.
And then something would come up and I'd go handle something, and then it'd be a week or two later.
Year.
We have 200 leads we didn't service.
This year that were free, and none.
Of those are from Yelp and all from the website.
And so it's just a matter of.
Like, why would we go spend money.
On Yelp if we're not servicing the.
200 that came in?
Like, well, it's the time of the year. Let's build the system to make sure that we can service those 200, build.
A backlog and still stay busy throughout the slower season. That's what's beautiful about, like, the website and Google. We, once we set it up, it's done. We don't have to spend any time doing it. Now if you have time and you don't have enough leads, we're gonna do door hangers, right? And because we know we can, for 50, 60 bucks, get hundreds of these things and we can go knock out doors and get leads that way. My goal is that even while you're out working, you're getting leads in from the website. Because what's happening right now is when.
You get busy, you stop putting out.
Door hangers, and guess what? No work comes in. So you're on this roller coaster of still going. It's still going. While you're working, it's still working.
So you work five days a week.
On Saturday, you have 10 estimates to go do.
And you didn't have to go do.
Three days worth of doing door hangers to get them.
Stage two is when your office or admin reaches back out to the customer once they've got that lead information and sets up the appointment for you to meet the customer in person. Many times when it comes to scheduling the appointment with the customer person that can get the estimate in the hand.
Of the customer the fastest wins the game.
So when it comes to scheduling my estimator to go out to the customer, assuming I need an in person appointment, I can give one and two hour windows of time for the customer to know that's when I'm going to show up. Instead of getting a precise at 11:30, I will show up up. I'm going to tell them between 11 and 12 o'. Clock. Giving me that estimate time window allows me to stack estimates up without disappointing the customers because of weather, because of.
Traffic, and because my schedule getting behind.
Step three is when you actually go to the customer's property and assess what.
They need done on the project.
This is when you're going to get all the information about the job and be able to ensure you get an.
Accurate quote put together. Because that sales position is like, that is the bottleneck to all of your revenue, like all your revenue has to come to that person. So their close ratio is 30% and you hop in there and all of a sudd, you have more accurate estimates and your close ratio jumps to 60%. Yeah, you just doubled your business. When we're talking about like potentially damaging someone's house and taking out power lines, like you're the one that needs to be doing that.
In step three, the sales process, when I'm actually with the customer in person, I'm going to show that before I leave the property, I make a video of all the relevant details on that job. This ensures that I as the estimator never have to return back to the property again to show the crew the work. And that might mean four, five, six weeks from now, the job's accepted and on the schedule. And I'm going to forget a lot of details. I want very detailed notes and I can make my estimate very quickly. If I have that as a template, then I'm going to make a video to ensure that any other details between the estimate notes and the estimate video are completely clear to the crew.
So like every time you go to an estimate, at the end of that estimate, you talk to Mr. Jones, you're talking about a 10, $15,000 project shoot a three minute video of what that project supposed to look like. Okay. Okay. You're gonna have a separate WhatsApp channel called Estimate videos. And you're gonna post that video with the last name of the customer attached so that in four weeks when it's.
On the schedule, he's gonna pull it up alongside the estimate notes and have exactly what he should be doing as a foreman. And then the expectation is between the estimate notes and the video that I shot right after talking to the customer.
I should never have to go back to the property as the estimate. Yeah.
And if you do, there's a breakdown in that system.
And what's nice about the WhatsApp group.
Is now he has every single project.
A short video of each one. It's compressed so it doesn't take a.
Whole bunch of space. He can search by the last name of a customer inside WhatsApp and immediately pull up their job. And if it's five weeks ago, you're not having to go to the property.
Remember what's going on.
You don't even remember what the job.
Was five, six weeks ago. When you're in the middle of spring rush. Right. For example, there should be a video made on every single time you've been doing it.
I've been doing it. That was the first thing I implemented this year. The reason I haven't been able to use the video as much is because the guys I'm working with don't know any English. So I have to be there and I show them, I point to, I actually like. What I'll do is I'll touch each thing we're doing. Because when I was just pointing, oh, do this, do this, they didn't understand. So I'm like, this, do this.
I'll grab the bush.
This bush has to be trimmed.
Then we actually know they can get done.
But then again, as you scale, you're.
Going to hit all these issues of you being the bottleneck for everything Right now for mowing, you're still micromanaging all the callbacks. That's impossible if you have 500 customers. Yeah, right.
If you just take everything to the.
Extreme, you'll figure out where all the bott xr.
Like if what you're doing at 170. If I had 500 customers, can I.
Do all the callbacks? No, I see.
If I had three project crews, would I be able to go and show.
Them the projects in the morning? No.
So figure out those bottlenecks now, otherwise you'll Just hit that extreme. Eventually, as you grow the business, always ask, like, if this was taken to the extreme, what would break? Otherwise you're just going to constantly, as you grow your business, be banging your head against the wall.
I see.
Why can't I make money on mowing? Well, because you used to be out.
In the field mowing and you made sense of it.
And in 2021 you're like, good money.
That's exactly what it was then.
You hired people, your margin gets massively compressed and all of a sudden the pricing at 40, 50 and 60 bucks an hour doesn't work.
Yeah.
And she's like, mowing doesn't work. I'm going to go to landscaping. And the exact thing's going to happen when you stop managing those jobs. You're going to get an operations manager or a project manager here.
You're going to get a guy to.
Be able to manage those guys, the.
Hispanic dudes that can't speak English.
He's going to come along and take all the profits that are currently in landscape. And you're like, there's no money in landscaping.
I feel stupid that I didn't do any of these things in the first place.
No, dude.
It seems so simple.
But I spent five years and the only reason I came up with estimate videos is because I was spending the first three hours of my morning going from project to project, walking the job site with them of a project that was accepted six weeks ago. And I'm still trying to refresh in my brain what it is doing right now.
And so we'd stagger start time. So I was like, okay, we're having a 7A crew. We're gonna have 7:30 crew. We're having an 8:00 clock crew and.
We'Re gonna have an 8:30 crew. So I'm literally my first three hours.
Just bopping around super inefficient. I'm trying to remember what the job was about.
I love what.
When I drive around and I literally see like a guy walking with three people behind him project. And I can see a landscape truck. I know what's happening. That's the estimator showing all the crew what's going on. Yeah.
A video does the exact same thing. But now you do the video after.
Every single estimate, regardless if they accept or not, you're doing the video, posting it to the channel with their last.
Name, and you never ever think about it again. Even that chat, that, that chat is.
What you're, what you're going through for.
And that is if Someone misses a day, they know how to stay back.
On track by listening to that meeting.
During step four, you create format and send the estimate to the customer. This gets all that information from the in person visit you put together, get the pricing, put it in your CRM and send it to the customer via email or text message. In step four, when I'm creating the actual estimate and putting the pricing together, I want to ensure that I use templates and I have my pricing standard standardized.
By doing this, I can get the.
Estimate done in a matter of just a couple minutes. Even 10, 20, $30,000 projects, those estimates can be created with detailed notes and sent to the customer within a matter of minutes before I even leave the property of the customer. Why? Because I have standard templates. With standard pricing, I get to the customer very quickly. Faster you get to that customer is the higher chance they're going to accept your bid instead of a competitor. So for us, our managers are not allowed to leave the property before having.
The estimate submitted because I know as.
Soon as they leave that property, whether.
There is after the estimate that evening or next weekend, it will take them three times longer to make the estimate. So there's some. When you say submit, they're sending it to the client. We're submitting the notes. Submitting the notes to the office. So DVDs have command center.
Yeah, but the office can like literally.
Think of him as your command center with when he gets that notification. And you can set up automation. As soon as you click done on an estimate that is like hey ding, there's one ready to send out. Great. This is exactly the command center. They immediately go in, copy paste price, send. It'll take one to two minutes tops. And now you just say, hey, look, treat those notifications like a call, which is when they come in, I want you sending them out right away. Because if you do that, you'll now take your estimate lead time from 48 hours or three days down to a literally couple minutes. Because you're at the property, you just click submit. All of a sudden the customer's like they just left 10 minutes ago and I got their price except this. So it'll help your your close ratio dramatically. That makes a whole lot of sense actually.
If your business is struggling and you want me to come out, fly out to your location and help you turn around your business, go to mikeandys.com turnaround on there you'll be able to see testimonials from other businesses that we've helped turn them from failure into success. And if you don't want to be on the show, but your business is still hurting. Go to mikeandys.com course and it's completely free online course that you can use.
Turnaround around your business.
They literally might have one question about.
One type of bush on your design.
But because we never followed up with.
Them, they just never get around to it and they just take the next.
Guy who comes along and follows up with us. Like, hey, were those bushes the right ones?
Yeah. Number of estimates accepted divided by number of estimates that were sent. Right.
That that percentage is so important because.
I believe by tracking you'll see, oh, if we do offer Monday, Wednesday, Friday, and the only thing it's estimates within a day, we can get the close ratio from 25, 30% to 50%.
Yeah.
Having a process for follow up to.
Make sure they actually open up the email. Also really important. They have to spend a single dollar more in marketing. They have to buy, get more admin.
They have to buy more trucks.
We just doubled our business by going from 30%. Now we have 60% close ratio. Just double her business just doubled your business.
That's crazy.
She's thinking throughout every single step of the sales process, we have not taken care of the customer. We have not solved their problem, problem. And by doing that, it means that a competitor can swoop in, grab the customer. And that's why sometimes you show up at a customer's house and say, sorry.
We already got the work done. Why?
You move too slowly in that sales process and they leaked out of that process at one of those key steps.
The thing is though, once you change from 3 to 4 leads a week to 10 to 12, the whole dynamic of the business has changed because you will have to change operationally what you're doing. That, that, you know, 12, 13, 14 leads a week, that becoming okay, you're going to basically be doing that probably, probably three or four hours a day. You're probably going to be, you know, drawing up those estimates, doing a lot more paperwork, sending out sales proposals, meeting with people a lot more. And that's when like the whole hierarchy and like the structure of the business has to change then. Right?
But, but what a lot of people will do is they'll come up with.
The care, they'll put the cart before the horse and they're like, oh, I need to change like the structure of the business and like I need to be full time sales. One's like, no, no, no, you got to fix the leads problem because it's like capital, leads, labor and then Leadership.
The fifth stage of the sales process is when the customer receives the quote and accepts it. Ideally, they're clicking on a link, they're inside of a customer portal, and within.
A click of a button they can accept the quote.
They don't have to call you, don't email you back. Ideally they just click a button to accept and initiate the job getting done. At this step in the process, you might be inclined to add a contract with the sign a two or three page document outlining your terms of service. Be careful with this because this is another step in the process. Process that could add friction. Not to say you shouldn't do it, but just know it is going to decrease the amount of people that get all the way through your sales process. The close ratio only really tracks the number of estimates that were sent and then the number of estimates are accepted. That's only between step four and step five. That's the only leakage in the sales process that's measured by close ratio. When I go do a turnaround on a business, I use close ratio as a quick diagnostic of where the business is at if they don't have a lot of cash. But yet 70, 80, 90% of their estimates are getting accepted. I know we can raise prices and increase our profit margins.
If you had to guess, is it.
Like five leads a month from the website?
Just in general?
Oh, in general, yeah, they come in.
So I'm terrible at marketing in the sense that I've, I. People say, oh, you need to get more Google reviews or you need to do this. And I'm like, why? I always have more work than I can handle always. So I'm like, what's the point of doing all this stuff?
Well, it's also a matter of if you have so many leads coming in, you know what you do, you raise your prices.
That's. And that's. I didn't do that. I realized, I was like, okay, I should be doing that.
If your close ratio is under 25%, in other words, less than one out of four estimates that you send are accepted, this is a big red flag. If you have 10, 15, 20% close ratio, it means that your customer acquisition cost starts to get very, very high because you have to get so many leads in order to get a new customer. To break it down, make it simple.
It'S two things, right? We are trying to increase the number of leads by telling your story, by pushing them towards a guaranteed result instead of just like a supplement. We hope things work out so everything.
Goes back to the leads.
100% money solves everything. That's right.
And then the secondary part is retention, and that is making sure that our team members are incentivized to get more butts and seats.
Now, the job has been accepted, but stage six of the sales process is now I need to reach back out to the customer and notify them of what day I'm going to be on their property to do the services they accepted. Now, I should be able to do that way in advance of scheduling the job, assuming I use something called budgeted hours. In other words, how long should the job take? Now, when it comes to scheduling, in order to get that level of accuracy, I've got to have budget hours for every job, every task, and every to do. And I need to know how many budget hours my capacity is for my crew.
You're saying you're booking out six months? Sometimes, yeah.
Almost a year Sometimes.
Yeah, yeah.
So then you have to get lazy, like focus on scheduling. You should be able to book down to the day in six months when I'm going on the schedule. And how you do that is using budgeted hours.
So you could, you could just know.
Okay, If I have five full time.
Guys and they're working 40 hours a.
Week, I'm not going to assume that you're going to get 40 budget hours done. There's gonna be waste, there's gonna be.
Job overages, the weather's gonna get bad.
I'm gonna assume 30 budgeted hours or a 75% efficiency score. Three out of every four hours they work will actually be getting work done. Now I have a baseline. 105 people times 30 per week is what I can accomplish.
And now when I get an accepted job, I'm simply going to look at my spreadsheet like, okay, 150 this week, next week, hey, we're booked for this week. 120.
That's when we'll start.
The reason knowing this is so important is because again, until the customer see the date of service, they have not accepted the estimate. They could still potentially get the bid of another competitor and accept that before you actually lock them in with a date of service. Now, the seventh step of the process is important because I want to get paid. I either need a credit card on file, which you might require if you have a recurring service or a big deposit or a down payment on a large project, like 50% of the job is paid up front or 25% before the job gets started.
Your thinking is that if we change this to we're going to keep Credit cards on file. If you don't want to charge that credit card, then you can pay check or cash on the day of. But if it's not done, then we're going to run the car. Can we do it that way?
You could do that way.
You say, hey, look, in order to business us, we do require a card on file. We will only charge, like if someone's.
Like, oh, I don't want my car charged, great, we need a check before.
We leave the property.
We will only charge the card at.
The end of the month if you haven't paid your bill. But we require it to be on.
File because if we run a card and I'm again, I was the person that's like, I don't want to charge the customer a processing fee. And she, and she made me do because she's like, everywhere else charges a damn processing fee. You need to start charging processing fees.
Why not just put it into your rates though? Like you're charging 80 an hour.
You know, charge 85.
And, and I've looked, I've looked at it like that because here, here's my thinking on it.
Right.
I'm very transparent.
Yeah.
So I just showed you transparency by charging the, the showing that you're getting charged a processing fee. If I hide it, it's like a, it's like a car salesman. Right. So I'm like, they just hide all.
That's how, that's how Walmart, you go.
To Walmart, you don't think about it.
But it's built into all the cost.
It's all in the cost cost. It's just cost of doing business extra.
2 or 3%.
The reason you do card processing and.
You'Re willing to pay the 2%. And it is a deal of a lifetime to pay 2% because I don't.
Want to be having that money sit for 90 days without collecting.
I can get it tomorrow in my bank account and I'm willing to pay 2 or 3% for that to happen.
And the customer is usually willing to pay an extra 2 or 3% in order to be able to charge a car and so write out a check. I hate checks.
If someone does business checks, I am.
Not going to do work with them. You're attracting the less the customers that you don't even want. I am happy to pay 2 to.
3% to get that money in my bank account tomorrow.
Because guess who's not going to wait.
Two weeks to get paid? The employees, The Christmas light manufacturer. Like, they're not waiting.
You're Paying them today on a card. Right.
If right now I can push a button, get $80,000 and pay what, $2,000 in processing fees we do in a heartbeat.
It's important to have this money, but I don't want to add friction. I don't want to have to email the customer or call them and ask them to send a check. We made it where you have a deposit deposit threshold, you have credit card requirements. So that way before the customer even accepts the bid, you can make requirements that cards are already on file and they already had to put a 50% down payment or any deposit for a big project. This allows you to be able to schedule the job immediately when you get a notification that says an estimate was accepted. No back and forth or waiting for a check to get sent to you.
The deposit is already paid once you get notified.
In my opinion, a job is not truly scheduled and accepted until it's actually on the calendar and the customer knows exactly the date of service. And if you require a deposit or a credit card on file, that needs to be done as well. So just because they clicked accept inside of your client portal does not mean you've actually got an accepted estimate. Someone else could still swoop in and grab that customer. After the first seven stages, I can finally move to the eighth stage, put the job on the schedule and get the work done. But I need all those other steps done probably. And there's a leak at every single one of those steps. There's times where customers don't put their credit card on file, they don't pay the deposit, and you lose the job. And although we want to plug all the leaks in this sales process, we also want to think about how can we use technology to completely eliminate or skip these steps altogether. Can I have a form on my website that actually collects credit card information that actually gives them the prices? Can I do estimates over the phone so I don't even have to go visit the customer's house in person? There's a way to be able to reduce these eight steps down to three or four if we use technology correctly. This is why at Augusta Lawn Care, we spent hundreds of thousands of dollars developing software AI to answer the phone 24, 7, because I don't want to miss leads at 2 in the morning. None of my other competitors are answering the phone. But if I answer the phone, give them pricing, collect their card information, I can get a customer while my competition is literally sleeping. Ultimately, the more streamlined your sales process is, the more prospects become customers.
