Mike Minutes Mastermind 11/22/2024

Ladies and gentlemen, boys and girls, welcome to another Mastermind here for Copilot members. It's Friday afternoon, but as always on the weekend we do the questions on the Mastermind now down in the description of this video. If you would like to leave questions for me in the future, use that link. Also, you can go in the Facebook group for Copilot members at the very top underneath the featured posts. There is a link there as well to be able to submit your questions anytime. And if you post them there throughout the week, I can answer them here on the Mastermind. Now, today is Friday. Tomorrow there'll be some updates of some exciting things coming to Copilot. As most of you know, throughout 2024 we've been really focusing on the infrastructure in the backend, hardening the code base, improving the engineers and the talent on the team. And as we round the corner in 2025, we expect a lot of things that you'll actually be able to see and enjoy and be able to use. And so it stinks that we are a year behind really where I wanted to be at in terms of feature development. However, 2024 was absolutely necessary to ensure the stability of the system as we continue to scale. So we're going to be showing the first glimpse of what that's going to be looking like as we go into 2025, the more immediate things and then also really the first half of 2025 showing what that plan is. And so you'll be seeing that start those actual features starting to roll out later this year and into 2025. The customer advisory board will be able to see those first and get feedback on those in December. And so I'm looking forward to it. So more on that to come. But let's go ahead and jump into the Mastermind for today. All right, Share this screen.

Cool. All right, first question is coming from Will Kelly. Military lawn cuts. Someone backed up our into our truck and left a small hand fist dent in the front bumper. Nothing too major. And it was clearly the other person's fault. Should I file a claim for this or no, because this would increase our premium.

The thing is, it should be going back onto the other person. Like if it's their fault and it's super clear, then you could file a claim because then they're going to go after the other person's insurance. Now, would I even spend the time on this? Probably not. Unless this was like a brand new truck. But if it's an older truck that's worth less than five or ten grand and they put a small hand, fist, dental.

A bump or like a dent in the front bumper and it's not too major. I probably would not pursue this. It might take more of your time than just fixing it with the cash yourself. So that's just my two cents because like this is a distraction from growing the business. So is it really worth it? I don't know. Now that being said, it shouldn't be held against you if you actually did go forward with this because it's the other person's fault. So your insurance would go after the other person's insurance. But make sure it's like very clear that that is it is their fault before you would make the claim. It would be my 2 cents. Colton Webb question for Mike is yes, okay, you might have accidentally submitted that one. Hopefully you're able to submit the one you actually wanted. Adam Burkett, Pristine green lawn and landscape. How would you recommend having employees request days off, leave early, etc. What method of doing this and at what frequency would you make an employee schedule that reflects who is working each day? We have had a problem in scheduling jobs in advance, using budget hours to determine when we have availability on the schedule, but then realized that we have a employee have employees who need off for that week, which caused us to be completely overbooked and have a perpetual cycle of pushing jobs back to the next week. Yeah, so this is something I want to do in the future inside Copilot because right now we have weekly budget hour capacity for each user. It'd be really nice if we could do daily and then also have times where you block off when they're gone. So that way the system would know like okay, there's gonna be less budget hours in this week because this person's gone. We don't have that functionality now, but it's definitely something we will do in the future because you can't try to automate scheduling until that's done where you know daily when people are gonna what their capacity is as well as when they're gone for two days, three days a week, et cetera. So for now you could put this on the schedule though. So if you're looking at the calendar view, you could make this like a to do make a certain color for example, and then just like use as a way to kind of block time off on the calendar. But it's not going to actually be budgeted hours unless you make it a project. I guess you could make it a multi day to do. I think you can do that. I have not played with this on a whole lot. But basically what we would always do is use the calendar to just show because you can just filter down by certain type of meeting or certain type of to do. And then like I would be able to see like, hey, where are people? Called the scheduled time off. And that'd be a way for me to kind of know what my budget hour capacity is for those weeks. So what I would probably do is either that or you could just also look at your budget hour capacity chart inside of co pilot and then just keep a running list of like each week of when people are requesting time off or they have accepted time off that you've accepted for them. You could do that. We have, we have elements of this inside of P5P software that we will eventually probably bring into Copilot way down the road in terms of a lot more like overtime, tracking, requesting time off, et cetera. But for now I would just keep track of it on your calendar so that way you can quickly check like hey, my budget hour capacity inside of Copilot. Like on the left hand side in your calendar view, it'll tell you amount, but it's not going to take into account if someone's gone. So that's a great point. I would also say what we typically do is we just assume that some certain amount of people are going to be gone, call out, be sick, whatever. And that's why we, we are going to go below our capacity in general. So even if I have a 240 budget hour capacity, I'm probably only going to budget for 200, 200 hours because I can assume that one person's always going to be gone for the week. I mean, so that's why like if you see the budget hour capacity chart, when you get within 80%, it goes yellow. I actually recommend you be more on the 80 to 85% level for this exact reason. People calling out, people being sick, people having time off. And then you can't utilize those budgeted hours. So in general, within 80% of capacity is what I'm shooting for. And then that would ensure you don't go ever, ever overbook yourself. But if you want like really specific, it probably would be a matter of keeping track of those days off on the calendar view. So that when you look at the calendar view you have budget hours capacity over the left hand side. Awesome. And then you could compare it with like, okay, there's a to do that. Has someone gone for three days this week, it's going to be reducing my budgeted hours. My Capacity.

Harold Williams Quality Lawn Professionals the question is about the software, the texting function. Does the software port my business number in as the two way texting number or is a different new number for the text line that I will have to manage when managing it? Am I able to do through the COPA app as well as the desktop? All right, so there's a few questions here. First off, you cannot port your business number in as the two way texting number. The number has to come separately from Twilio down next year. There'll be some optionality around this in terms of where you can get Twilio set up yourself. I'm not 100% sure whether or not you'll be able to do port a phone number then, but as for right now we get your Twilio set up for you and we're we don't have the option to port in. That'd be the first thing. Second thing, you don't need to manage it other any from anywhere else than just inside of the Copilot app. It's very like think of it like you will never see that phone number. It's just what your customers will see. So it's really just a matter of going to the texting tab inside Copilot and all the messages. It's like an inbox so you see the scent that you see the ones that are received, the ones that are not received, opened, etc. And then you can get it from the mobile app. I am 99.99% sure on this, but yes, I'm pretty confident because I remember I used it back in the field myself and so I know you can do on the desktop and I'm very confident you can also do it on the mobile app. Right inside of the app just go to texting. So.

Next question is from Derek Polar, Palermo Palermo, Sorry. Grow green weed Control was the optimal number of touches when mass texting customers for marketing purposes. I've noticed that the more frequent contact increases brand awareness. It can also lead to higher customer cancellations, particularly in the lawn treatment industry, which is my business, whenever I conduct mass marketing, especially via text, I typically see a few customer cancellations. My concern is finding the balance between generating quick revenue through marketing efforts and maintaining the lifetime value of customers who may cancel due to remembering that we exist. What strategies or frequency do you think would strike the right balance? We've kind of found that anything more than once a month is too much in terms of annoying the customer. I would also say if you're having this problem, just Be strategic in terms of when you send it. So I'm not going to send it during a time when they're on a recurring basis and it's in the middle of the summer, for example, for mowing. I'm not going to send them as much marketing if I'm booked out six, eight weeks and their grass is not growing. And I'm just reminding them of that when I send them a message. So I'm going to be trying to be very specific and timely with it. And so in terms of timing, we've seen anything more than once a month, you start to get a little more unsubscribes, people marking you as spam, etc. So they can always just click stop. Type in stop too, and it prevents any messages from coming through. But you're saying they're basically being reminded that you do service and they're canceling. So I would probably reduce this down to once a month. Anything more than that, you do start to become a nuisance. They'll either unsubscribe or, to your point, potentially cancel.

But I think a lot of people will shy away from marketing because they're like, well, I don't want to, like, be too salesy. Well, if we take this to the extreme and you don't do any marketing, you don't get any customers and eventually even churn. Any sort of churn will eventually erode your business to nothing. So, like you, I would rather default aggressive on this than, like, not post at all. Because, like, I text them and two people canceled and therefore I will not do marketing. It's like, yeah, but you gained five more customers, right? So the only reason I would not, I would, like, prevent this is if I lose more customers than I gain.

And I'm assuming the customers aren't leaving because of the text, they're leaving because they were reminded of your service. And so I would also then be like, okay, well, what can I do about my service? That when they're reminded of the service, they don't want to cancel. But I do believe this is much more a matter of if you were gaining 10 customers and losing two, I would keep pushing that button because you went up net 8.

But we've seen anything more than a month, people do start to get a little more annoyed.

Also depends a little bit on your billing cycle. If you're doing weekly or daily or monthly. Pristine green lawn and landscape. You've been talking a lot recently about how you think business owners should spend more money on marketing than they need to.

And don't focus enough. Oh, okay. Oh yeah, I gotcha. I gotcha. Okay. And don't focus enough on upsells and cross sells to existing customers. For me specifically, I want to, I want mowing to make up the bulk of our revenue as our entry level service and cross sell our customers to to our other services, mulching, bed maintenance, cleanup, mowing, et cetera. At what point should you determine at when it makes sense to go out and market to get more mowing customers to then cross sell them over services versus when you should shouldn't need any more new customers? Is there a value, an annual value per customer target that I should be shooting for? I want to make sure that we are maximizing each customer value, but I also want to ensure that we can capitalize on the short window we have for mowing marketing in the spring to generate that our cross sells can keep us busy throughout the entire year. Very good. So this is how I look at it. Let's assume that your. So this again comes all back to capacity based growth. So capacity based growth is essentially saying that I can grow my business up until a certain point, mathematically speaking, before I have to buy more trucks and hire more employees. So whatever that dollar amount is for you is your capacity right now, let's just say 60% of that 70% is making up a mowing. You have to fill the other 30 or 40% of your capacity with these other services. What I would recommend or what I have seen work very well is just keep focusing on marketing your primary service to where instead of 60 or 70%, it's making up 90, 95% of your revenue is coming from that service. That could take several years.

Then what's really easy to do is upsell the the last little bit of capacity. So for example, if you reduce capacity, you could immediately have a higher percentage of your revenue coming from mowing. Because now when a job is accepted for an upsell, you have to book it out further into the future because you have less budget hours to be able to get the job done. So for example, if you have 120 budgeted hours of mowing and your capacity is 200 budget hours, that means it's per week, right? So 120 budget hours of the mowing every week you have 200 budget hours capacity. That means I have to put 80 hours worth of projects, upselling, etc. Now what I think you could do is potentially like sell a truck or let an employee go and all of a sudden now Your capacity is 140 now, now I only have 20 budget hours that I need to fill every single week. And so the same amount of work, if I sell the same amount of upsells, I only need to sell 20 budget hours worth instead of 80, which means the same amount of work sold will get me four times as far booked out at capacity. So my goal is always to fill to capacity. And so what I would recommend in this case is like keep marketing mowing, getting more and more of your jobs more and more as a function of percentage of your budget hours being made up of mowing, then it'll be easier and you have to spend less money on marketing to be able to fill the rest of your budget hours inside of your capacity with those other services. So I think that answered the question. Let me just make sure there's not really an annual value per customer that you're shooting for. Bottom line is you want to increase that as much as possible. Like the equation as to whether or not you should keep marketing comes down to how much are you going to make from this customer. And so there is never too little or there's never too little of how much you can make of lifetime gross profit from a customer. I always want to be maximizing that because if I can maximize. If a customer to you is worth $5,000 lifetime gross profit, and to your competitor, it's only worth $1,000 lifetime gross profit, who do you think can afford to spend more on customer acquisition cost? This is why ultimately the person that is able to spend the most to gain a customer will take over market share because they can simply spend more than every other competitor and still make sense of it financially. And so the goal is not necessarily to drive down customer acquisition cost, although we try. But the bottom line is you, you spending going from a $120 customer acquisition cost down to $110 customer acquisition cost through optimization is spending time and effort. I think that would be far better spent time on increasing the lifetime gross profit of your customer from $2,000 to $3,000. So instead of trying to save 10 bucks, why don't we go try to make an extra thousand? How do I do that? You know, sending out the bulk text, sending out the bulk email, doing door hangers on your existing customers, using the upsell feature inside of Copilot so that your custom, your employees have three or four options every single time. It's going to fire off a text message or an email to your customers whenever there's a service needed on the property. Like I don't want that happen Great. In your settings, make it where you have to approve the upsell email or text messages before it goes out. It'll show up as a little handbag on the dispatch board and you can send out to customers and approve or deny those upsells before they go out. That is how you take the annual customer value and increase it. They that's how you take the lifetime gross profit of the customer and increase it. And if you do that, marketing all of a sudden makes sense even at a higher rate. This is why the best companies usually have very high customer acquisition costs. The reason they have such high customer acquisition costs is because they afford to do that, even though even the reason they can. Despite having a high customer acquisition cost, they're able to get 5, 10 times more revenue from the customer over the course of their lifetime. And so therefore they can make sense of spending a lot more per customer.

At what point should you determine as when it makes sense to go out and market to get more mowing customers than cross sell?

Yeah, so basically you're going to get to this point where you have so much of your revenue coming from mowing. Like you actually stop upselling customers. And then what happens is, let's say you have some attrition going into the summer. Slows down a little bit. Great. Now I'm going to that's what I'm going to start upselling because all I have to do is fill in that extra layer of my current member budget hours on the schedule versus my capacity. And so if I can compress that by simply adding more mowing. So Now I'm doing 180 hours worth of mowing per week. And I have my same capacity, 200 budgeted hours. I only fill 20 budget hours a week. And so by you increasing the number of mowing customers you have, what you're really doing is decreasing the amount of time you have to spend on upsells every week. And therefore, by restricting the amount of capacity you have for upsells or other projects and other services, it makes it way easier to be able to fill your schedule out into the feature.

We did this recently with one of my locations. We reduced capacity, sold a couple trucks off. All of a sudden, within one week is a week and a half, seven to ten days. The crew went from like three to five days booked out to six weeks booked out. Like what happened? What changed? Did you get more leads? No, we stopped marketing. The reason that happened is because all of a sudden we brought capacity down by selling some trucks off and we only need to fill a little bit of the schedule because everything else was recurring services. And so it makes it very easy to book yourself out in the future. And you're like, well what if the recurring side of my business comes down? I don't have 80, 90% of it filled up with mowing. That's when you start to use your upsells and you sell those recurring customers and get them into other services. I think that's it for today folks. 7. Oh no, there's one more. We got one more question. Sorry, I almost missed it.

Let's see here. Joe roth from Rothco Ltd. What is the best way to calculate our attrition rate whilst in our first year and what do you aim for? Thanks.

So this is a KPI I want to track inside the.

KPI dashboard and I have a bunch of verbiage on how to do this. It's a little bit tricky because a lot of times people do. You'll go in there and you'll cancel or pause and they'll get messed up a little bit. So to get those accurate is a little more challenging. And you can really only do attrition based upon recurring services. But then sometimes people will cancel a service and then start it back up in the, in the winter, in the spring. But what we did last year is made where off seasons abound. So the reason I did off seasons, we did the, you know, installed those last year is because that way you can leave on a service and they can be active throughout the off season. So that will set us up for down the road being able to track attrition inside of copilot because you don't have to pause or cancel service at the end of the of a season. That was the biggest reason. That being said, in terms of a good attrition rate, anything under 25 to 30% is very, very good. The reason for that is because in most markets 15 to 25% of your customers are moving every year. And so if you're under 30%, it's kind of like my benchmark. You're doing really good. What do I see as average more along the 40 to 45% marker. If your attrition is starting to escape into like 50 and 60%, you got a problem. You just generally do. You got to be able to keep a customer around that three year marker at least. Typically it depends what industry you're in and how much you're charging and what your prices are, etc. But I'm shooting for at least three years. Ideally I'm more on that four year marker, which would imply a 25% attrition. But some markets, you don't have as much population growth. People aren't moving in as round as much potentially. And, you know, people might be staying in their house 15 years on average. Then your churn rate every year is only like 6 or 7% from people moving. So you might be able to get that even lower. But in fast growing markets where people are moving, people are moving in, people are moving out, you have appreciating real estate. A lot of times 15 to 25% of houses get are getting sold. And that can be challenging. That can be very challenging in terms of churn. All right, everyone, I hope you have a fantastic rest of your weekend Thanksgiving ahead. Hope it's amazing. And we'll see you next week on the Copilot Mastermind. Take care.

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