This $2M Business Pays $400K Per Year on Ads! (Coaching Call)

If you're a home service business that does over seven figures in annual revenue, but you're tired of spending a ton of money on Facebook, Google door hangers, a ton of money on ads, this episode is for you. This is actually a one on one coaching call that I had with an owner that did over $2.5 million in revenue doing outside services like softwash, gutters, Christmas lights, etc. However, over 20% of his revenue has been sent on advertising and he had as many as four salespeople out in the field. We're going to fix all that today by fixing all this money spending on management and ads and make sure that he's able to have a 20% plus profit margin business within a matter of a few months. So let's go ahead and jump into it. It's going to be super valuable. A lot of rider downers and things that you can take away to make sure you're not spending money frivolously on your ads, but rather building a profitable business. Morning, Stephen. How you doing, brother?

Good. Good to see you again. So I have one, the biggest problem that I want to tackle is going from the 12% net profit we did this year to above 20. So we're about six years into it now. We started 2020 full time and, you know, did 300 grand, then did a million and did 1.5 million and 2022 and 2023 were the bigger years. We did like 2.2 in 2022 and then 2023 we did 2.5, but we didn't barely profit at all during those years. It was horrible. It was like we did so much in sales but nothing at the bottom. It was horrible. And we had a whole sales team. This is kind of how I kind of grew up onto the Grant Cardone style where you pay people a ton and they go out. And so we were paying anywhere from 10 to 15% of sales to these salespeople and all they were doing was running warm leads. There was, I. I had no initiative for them to knock on doors or do any cold calling or businesses or anything like that. And so inevitably it was 2024 in the summer. I sat down, I'm like, this is not working. I'm going to go broke. Like this winter, I'm going to go broke. And so with the help of some other people, we looked at it and we're like, I read the book Traction and I started to understand that I didn't need to pay these people huge commissions.

More leads. Goodness. 10 to 15% let's go.

Unbelievable. So I laid them all off. I had four of them, and I just. It was so hard for me to do, but I did it. I transitioned them, and I did everything in the office. After watching a lot of your stuff, I was like, this is possible. And I didn't know it would work, but it has worked. And in 2025, we finally hit 12% net profit. And we've never done that much ever in five years in business. So I'm proud of that. And I. I told my wife, I. I go, if I can't fix this profitability problem, I'm not going to do this business. Because I just. It's. It's me. But if I can't figure it out, I'm done, you know, after five years, six years. So now we did it. And now I'm like, we got to get above 20% before we grow anymore. So inevitably, we went from 2.5 million down to 1.5 million. Last year, we did a million and a half at 12%. What was I going with that? But so we took a huge, huge downside on the revenue because I wasn't focused on growing. I was focused on profitability. And we did it. So here we are. I want to go above 20. I know it's possible. I just have to prove it to myself. So I have a few questions around that I do want to share financials. So what's the best way to. Should I send you the PDF of last year's P and L so you can see it and I'll just.

I'll just make it where you should be able to share. One second. Allow participants to share screen. If you do, you have them digitally pulled up right now?

Yeah, I've got it digitally.

Perfect. Yeah, you can just share. Share it with me. That'd be great.

Okay, let's see if this will zoom in enough for you.

Perfect.

And then I have another sheet, just for the question. I have. I have another sheet with our marketing spend and advertising costs, leads cost per lead and everything. So where I want to go with this is actually, this sheet will tell you pretty good overall. So 2023, our ad spend to sales. Right here, the total year, 22%. This was with salespeople.

Wow. That includes their wages.

This does not include their wages. This is only ad spend.

Whoa. That's. Wow. Okay. All right, so it's probably like 35% easily. Mercy. Okay. All right.

2024, 18, a little bit lower. 2025, it went up to 25%. So.

And then your cost, please. 40. What's your close rate? Oh, there it is. There, I got it. 25. Okay. Got it. All right, Makes sense.

So my question for you and just an idea to, for us to look over that I'd like help looking over is of course I went from 2024, a fourteen hundred dollar average ticket with salespeople down to eleven hundred. So it cut off. What was that? 25%. Which, which I knew was probably going to happen because we didn't have the ability to upsell and look at the whole property while we were there. But the co. But the cost per acquisition. 260 from last year, 280 this year. So it didn't go up tremendously without salespeople, but the ad spend of sales did because the, the. Excuse me. The average ticket went down so much. So I'm trying to take that 25% that I did this year. And what's. What's funny, Mike, is if you looked at this, I took out Christmas lights out of here because they're recurring and I didn't want that to skew the numbers. I did that every year, took out all the past Christmas lights and I took out all the big commercial jobs because that's not really marketing spend, it's someone that we know. So this 25% in our profit and.

Loss or will be a little lower. Got it.

It was 22%.

All right. That makes sense. That makes sense.

Yeah. Still very crazy.

Yeah, it's a lot. Wow. Okay. Yeah. Like if you, if you go back here, like even if you look at February, for example, your cost per acquisition is 60 bucks and you had ADD to spend a 5%. We can make a business out of that. Is what August looks like. Just kills you. 425. That'll kill you, man. And seven even the month before. Like 470 on a 1100 ticket. Okay. All right. All right. Good information. Thank you for sharing. Did you want to jump right in? Like, do you want me to start digging or do you want to share more info and then we can start digging?

If you need more info, let me know. But I'm kind of leaving this. You're the professional and I, and I, I realize that I'm part of the roadblock here. So if that's enough information to get started, I, I don't, don't hold back. I'm not, I'm not emotional about this stuff anymore. I would have never showed anybody financials. But I'm not about that anymore. I want to grow, I want to learn, I want to figure out how to get past this stuff.

Dude. Okay, cool. Let's go. All right. Yeah, this is, this is, this is great. You can, you can stop the screen share. So it's all in the advertising. So I want to dig deep into what you're doing for advertising, what your sales process is, because I truly believe if you're spending 20% of revenue, technically 25%, like, let's just call it 20 because it's on the P and L, I think we can get that under 10% pretty easily. I'm very confident in that. I know your market really well too. So like, I know your seasonality, I know like what, what markets you're serving. So like we can get your cost per acquisition way down. So I want to understand what are your channels right now for leads and what are you doing on each of them. So for example, like Facebook, Google, like give me the whole kind of like what I'm not seeing in the numbers of where that money is going. Okay.

Currently all of it is going into Google. It is Google pretty much a hundred percent. Last year, about 100% was going into Facebook. We were doing, if you look at some of the numbers, we were doing 35 grand in Facebook ads. I mean, it was crazy. Lots of videos, lots of images, and most of our leads came from Facebook. I moved it over to Google. Cause I was like, oh, I'm not utilizing Google. And so many of the guys around me are doing Facebook. So let me try like going all in on Google and see if that affected. Now I'm looking at the numbers from last year and I'm like, well, the ad spend is still ridiculously high, you know.

Yeah. Okay. Are you running the ad yourself, Stephen? Or you have an agency or do you have in house or how do you running. How are you running your ads currently?

As of, as of all of last year, there's an agency in Portland that I've been working with.

Okay.

Who's a referral.

So for the Google thing?

For the Google. Yeah.

Okay. Wow. Okay.

And I was doing all the Facebook myself for the past three years, all of it myself.

And so it looks like from what you did on Facebook versus what they're doing on Google, your customer, your cost per acquisition is relatively the same. Like it's floating around the same. Okay, all right.

Exactly. That's what I've seen.

Okay. And in terms of, wow, it's a lot on Google, man. I think you're over saturating how much you're spending on Google dramatically. I think if you Cut your marketing budget in half on Google, you'd probably get almost the same results. And it's evidenced by the fact that that customer acquisition cost is literally 8xing from month, like from a few months away from each other. It shows there's not enough search volume. And so there's only so many people searching for your service. And so doubling and tripling the amount that you're spending on Google, most of the time, you actually don't get much juice for the squeeze. Whereas you can get 80% of the lead you're currently getting with half the budget. Because you think about Google like it's. It's intent to buy. Like you have to get in front of people when they're searching for a keyword. I'm assuming by the way, they're only doing search. Are they doing like video and banner ads and stuff like that?

Very, very little. It's mostly going to be search.

Okay. I'm pretty confident in saying if you halved your budget, you get 80 to 90% of the leads because you're what you're. As you start to overspend in a local market on Google, it's just paying like your budget per click just starts going through the roof. What you could also do, Stephen, is just like, okay, what are you willing to actually spend for a lead on Google? And then put that as the cap. So you can still have a high budget, but then be like, I'm not willing to spend more than 100 bucks or whatever it might be for a lead. That way you cap it and it won't allow you. Because what's happening right now is you are spending on some people. You are spending over $500 cost per lead because your average is for something like it's to the point where you are losing money. So I would really encourage dramatically capping what your CPA is with your agency. Are they getting a percentage of ad spend or a flat monthly?

It's mostly flat monthly, but there's tiered. So it's not all on like you get ceilings versus before you go up to the next one.

Got it. But it's not percentages. It's just like, hey, as you spend more, there's kind of like tranches of revenue. Got it. Okay.

Yes.

So, okay, I would recommend. How much do you spend. Do you mind telling me how much do you spend on each month from. From a management perspective?

Currently I went with their mother higher SEO packages. So between that and the. I think it's 20 of ad spend somewhere around there, I think it's like $4,400 a month.

Oh bro, okay. We can save so much money. This is great. It is. Love hanging fruit. Okay. So you know, I don't know if you're in a contract with them, I don't know if you, if you're friends with them. But like I would get out of there as soon as possible. That's a lot to be spending on management. If you're spending more than $1,000 on management, it's always because like for example when we do ads for our owners, we have a flat 299amonth for Google because we know that's going to cost. I don't care if you spend 20,000amonth or $1,000 a month. I'm optimizing the site. Optimizing your pretty much the same way. I'm looking at negative keywords, I'm looking at service areas. Like it's the same work. So what I would do if I was you is I would try to get out of that as soon as possible in the nicest way. If you need to pay out a contract or whatever, do it like you can go into upwork, get people that are going to charge you 100 to $200 an hour but have them optimize it once a week for an hour or two. And we're talking about the best of the best because at an agency you're going to get your rep but then the people actually moving the dials are, are low level people. You gonna go on upwork and like hey, here's my account, here's full access. And, and then what I tell them is like I want a video every month of what you're changing. Cause I want to learn it. But I can guarantee you it's not $4,400 a month worth like we can, that's 50 grand a year. I, I think you can get that down to less than five, six grand a year, no problem. And get way better results by having one on one access to an extreme professional on upwork. So going up, interesting. Like here's what I'm doing, here's what I'm trying to achieve. Highly recommend doing that. Like that, that's an immediate that you should not be spending more than $1,000 a month on ad management for just Google. Like Facebook's a different beast because a lot more optimization. I can see you spending more on that. But yeah, like just. Are you in a contract right now?

I don't know. I think it's month to month. But after the first Year it wasn't. So now I'm. Month to month.

Yeah, yeah. So like I'm very confident in saying that if you went on to upwork and like you don't want to risk your whole business on this because so much of your revenue is coming from this. So I would do is I would hire three professionals on upwork, give them all access because again, if they spend an hour a week and they're, you're paying them 100 bucks an hour, we're talking about $400 a month times three, it's $1,200. That's 80% less than what you're spending now. And then what's going to happen? You're gonna find the best person and then you just cut the other two and say, hey, I'm gonna give you more per hour. But now you're gonna be in my account all the time and I expect a video at the end of every month showing me what you're changing.

Are those people also doing Google Ads like PPC and everything?

Oh yeah. Oh yeah. Have you used upwork before or not?

I have very little.

Yeah. So like again, you're looking for the top 1%. So no one under 50 bucks, even 100 bucks an hour is going to be. We're people who have been at Google. People have ran huge agencies and now they're willing to work for 100 bucks an hour. That's a great living for them. They 200 grand a year, you're gonna go to that high premium. You don't want anyone that's done less than like 100 jobs on Upwork. They make it. I always look for people that made at least 100 grand, like this is their job, this is their full time thing. It's not their side gig. And then in your, in your prompt just, or like your job description, like, hey, I want a video every month, like you want all your upfront things. This is gonna be a one month contract. And then I'm gonna, I'm gonna hire someone long term after that. And then I'd get three of those people. And yes, you will waste a couple thousand dollars, which is right now half of what you're spending in management fees. And I can guarantee your performance will go up. And because this person doesn't have a shoe in the game in terms of ad spend, they'll actually tell you what they think, like what the truth is, which is you're boiling a cup of water, like, let's spread this out a little bit more. Let's stop spending so Much. Let's put a cap on your CPA so you don't spend 4 or 5, $600 on an acquisition.

One of my concerns was that if I cut ad spend, my guys, like, wouldn't have work. That, that was like my dumpster fire. How do you go about working through that to make sure that you're not cutting off your bloodstream for the team? Yeah, like, I don't want to go down to 800 grand a year.

Yeah. But that, that fear is what is costing you 50 grand a year right now. And if you just deploy that money towards ads, you'd make up for like any loss in revenue. I would also say when it comes to Google, like, because we do this, like, I'm not, like, I'm not guessing what they're doing on the back end with this Google management, most of the is in the setup and getting it dialed in. They've got it dialed in and they're making four, over four grand a month doing almost like maybe a couple hours a week of work. Like, I know what they're doing. They're doing negative keywords, so they're making sure that you're not getting like, other stuff. They're doing competitor analysis and looking at their keywords and then potentially doing competitor tracking. But, like, that's one to two hours a week. And I know that because we do it all the time. And I just know whenever someone has a monthly, like whenever you spend more, if they make more money, they're not going to tell you the most important thing about Google, which is that if you start overspending, you don't get any more leads because you're capped by how many people are searching for that term. So, so I also know that if. What happens if they drop out of your Google account? You lock them out tomorrow. Like, I would lock them and then I would say you're done, by the way. So they don't go in and they don't delete all their accounts and all your ads so that you can just, you could cancel them tomorrow and your ads will keep running. Nothing changes. It's not like Facebook where you got to keep the creative fresh. So, like, if you cancel them tomorrow, nothing would change for your business over the course of six months. It would slowly deteriorate because you got to do that maintenance. And, and that's the value of having someone do it. But it's not 45, 40, $400 a month. And I truly believe if you got someone up work, they're going to be like, oh yeah, like, let's adjust where you're spending your money in the year, because we know we can adjust for the year, the months we're making $60 CPA versus 500. So they're going to move your budget way around, way more than an agency that's basically incentivized for you to spend more money on ads.

Sure. And when you say that your team does that, are you saying that you have some people in your staff that do the franchises?

Yeah, it's just for Augusta. Yeah. Location. We're just. We can do it so cheap though, because we have all the locations. Right. So a lot of the, the work of like individualization that they give to you, we can just do across the board, like take the winners from the from 100 ads and like, okay, these are top 10. Let's just run these on all of them. So we can do a lot cheaper, but like not going to get anyone for 299amonth, I can tell you that. But like, you can definitely go get someone for a couple hours a week at a hundred bucks an hour. Way over performing these people and their best interest is that your, your ads are performing, not that you spend more on ads.

Are they doing SEO too? When.

When this.

With this idea of upwork.

Okay, so is your current company doing. Running your website?

Yes and no. We built the website, but honestly, they're not doing a whole lot in it, to be honest.

SEO is like, you need to touch it once a quarter, maybe once every six months and just adjust a few things. I don't think that would be a huge issue at all. And the thing is, yes, you can find people on upwork and I would hire them once every six months to do a deep dive on your SEO. Like, hey, what can I change? What? Kind of sounds like you've built the site yourself. Are they telling you what to do right now for this?

I have not pushed for feedback, I'll tell you that. But they're not giving me feedback without me asking. So they're pretty hands off with it, which is something that I've always wanted, which is like, hey, tell me. Obviously I need to go out there and tell and ask them, but.

Okay. Sorry, I'm just looking through your site. Yeah. So if someone's doing SEO for you, there's not a lot of changes. Like, again, we do hundreds of websites. I know we need to address our SEO every three to six months. If you're changing it more than that, you're just like making busy work. So I don't Think they're doing anything anyways, to be honest with you, if you wanted to get an SEO professional in here every six months, be like, hey, what can I improve? I have a few things right off the rip. But like again like you could just get someone every, every instant quote I see. Instant quote just goes to your, it goes to your phone number. Yeah. So there's a lot in here actually, like little accession, more design stuff. So I don't even know if SEO is what you need. Soft Washington Vancouver, Washington yeah, there's a bunch of blank. Yeah, most of the things I'm seeing, Stephen, are actually design stuff that can be improved to increase conversion. There's SEO, which is great, but there's also just conversion optimization. And that's where like an SEO people, they usually fall off the cliff. Like they don't know what's going on. That's the part I'd be actually thinking about. So if you did hire some people on upwork, I would actually be looking at a conversion rate optimizer to a croat and then in addition to an SEO person. But if you had them look at your site twice a year, you'd probably be good to go. I think from a design perspective, look at the sites we build at home service web design. Go to the our work page and copy some of the things. There's several things in here that aren't like, from a design perspective aren't great. But like if you, if you talk to a CRO or an SEO specialist twice a year, you're going to be fine and, and you'll actually understand what's going on. In addition to them being able to like just like tell you what to do?

Sure, I like that. So when you look at the ad spend, how do I then optimize what I'm spending With the new system of alleviating some of this, some of these management fees. Because 4400, I'm still spending 15 grand a month on ads. So when essentially you've seen like the line over the whole year, each month I'm like almost spending the same. But there's the off season, their shoulder season. Like the summertime isn't so great for us or the January, February. So do I, do I just tone it way, way back in those months?

Yeah. So like from a Google perspective, I'm more focused on capping at a certain dollar amount because you know you're losing money, you're spending 6 or $700 on 1100 dollars service. Right. So I would first cap it because I would Rather just not do any work if I'm going to lose money. So more profitable, we spend less on marketing. The jobs you do get, we actually make money on. So like that's the first thing. If your revenue drops down to, you know, 1.3, but you're 25% profit, you're not going to complain. No, I will also say I don't. I think that your ad spend is so big, like you can get way more juice because like first off, Google, I believe that they're going to have more than half your budget and it's not going have a meaningful impact on the leads you're getting, in addition to the fact that you're going to have the management probably reduced by 70 to 80% in terms of cost. So in terms of the management, I think we go from like 50 grand a year to, to 10 grand. So there's 40 grand savings now in terms of the additional, let's call it like 130, 150,000 or more. 150 plus that we're spending on ads, man, there's a lot of juice there. Um, so I would do the same thing if I was you with Facebook ads. And you ran ads in the past. Did you do agencies there or you ran that all yourself?

Pretty much ran it all myself. I had a couple small agencies. I had actually a couple people on upwork that would help me, but I still had to do all the content and everything for them.

So yeah, it's much more intensive. It's much more intensive. The advantage is you can be interruptive and you can get leads for way less if you do them right. And so again, if you do upwork, again for whether you Google or Facebook, don't go after people that are 20, 30, 40 bucks. They're not worth it their hour if they're 200. I've spent 600 plus an hour on people on upwork to learn something. So like when it comes to like financing or debt rounds, like, or anything like that, I'm always like, I don't care if it's a thousand dollars an hour. If you can send me a bajillion, like it doesn't matter. So I will say you could probably do the same thing on Facebook and get, get better help. But, but more importantly is the seasonality of your offers is really important. And I know you kind of, I've seen some of your ads but like you can absolutely get leads on Facebook for 20, 30 bucks. They're not going to be great quality. And then you've got to Create the sales process to weed people out. Right. And so you might only have a 10% close rate, but if you get leads from for 20 bucks, that's a $200 cost per acquisition, not 600. And so a lot of that will come down, what you're saying in the ad and what your offer is and making sure that like, what you're actually offering is very time sensitive. So like I'd be looking at August. Cause that's kind of like your off season, honestly, as like, what, what's happening in August? Well, it's, it's bone dry. Nothing. Like, there's no like, that's what that I'd be figuring out what am I offering during that period of time. And I think the biggest thing that I would actually be looking at is instead of trying to say, oh, I need to get a great offer for ads, I would actually be looking at how do I pool all the demand from my current contact database into the months where I know it's hard to get ads to perform at the level I need. And so like right now, how many people are in your contact database?

20,000 leads.

Oh, okay. How many people have you done? Either an estimate for like some sort.

Of service service, about six or 7,000.

Whoa. Okay. Oh, dude.

Over the past six years, five years.

Oh, man. Okay. How often do you text them?

Never. Not text.

Oh, bro, let's go. We can cut your ad budget in like, like 90%. Okay, so what are you using right now for like CRM or like any sort of like mass messaging? Do you do email?

House Call Pro is the CRM and then email would do mailchimp.

Cool. Okay, awesome. You're already in mailchimp. So in mailchimp, it's gonna be a lot of money, but it's a whole lot less than 15 to 20 grand a month. And that's gonna be sending out text messages. So you can do it like tomorrow inside of mailchimp, and that is just turn on sms. Now keep in mind, when it comes to looking at the cost, it's going to say like 20,000 credits a month is like $400. A good text message is probably three to five credits. So it's gonna cost you a pretty penny to spend that many text messages to all of your customers. But looking at the number of leads you're getting, you will get lead. Like if you send a well timed, well, craft text message to all of your customers every month, you will likely not, like, I won't say you won't need to spend money on Ads. But I think you can reduce your ad spend by 70%, 80%.

When you say sending it every month, it kind of ties into another question I have. I don't know if this is the right time, but this, the work that we do is a lot of folks see it as hey, I do it once in a while like for roof cleaning. It's not something you, you don't treat your moss. The treatment that we do, you don't treat it every year. You do it every three years. It's, it's. So how do you gutter cleaning can be done every year. There's Christmas lights that are every year. Power washing sometimes every year. Some folks can wait and they see it. So how do you do that where it's not recurring for these customers? You know when you say every month. I'm trying to, I'm trying to understand how they can take it and be valuable to the customers.

Yep. So your whole objective in the tech message is to activate customers who are cold because you have 20,000, I'm going to go on a limb and say 8,000 of you have a text, like a phone number. But even the from the email side in mailchimp, like we'll go over like how to design the offer in a second. Okay. But like what you're trying to do is activate them back into a one time service so that you can then change your upsell process. Because right now, yes, you only need three once every three years. I agree with you. But if you made an offer so good they can't refuse and you did it annually, they wouldn't turn you away. Because the problem is in three years you have to reactivate them. They don't even remember who did their moss. And so what I would recommend doing is if you did, let's do moss treatment. You're like, well they only need it every three years. Great. How much is the mosh treatment? Like on average 1100 bucks.

800, 900 bucks.

Cool. Okay, Mr. Jones, you just paid 900 bucks. If we sign up now for your to get this done annually, it's going to be 450 bucks. And the reason is because you know that it doesn't need it annually. But if you get ahead of it, it is also provides value to them. They don't have to wait till it's mossy again. They don't have to wait for it to be looking bad again for you to show up. So you're willing to take a way lower like price. You're like, well we can't get even, get out there for 450, you know you're going to get up there and do spot treatment. Mm. And so you can just once someone's paid $800 and you say, we will do this again for 400, as long as you sign up for an annual commitment and we get you on the schedule today, you start building that recurring. It takes a while, but the whole objective is that every single one time service is converted into a recurring quote unquote annual service. And you're able to give them way lower price. Because right now, like let's say it's every three years. Like, well, I'm literally kind of my, my, my, my, the value of the service in half. And if they ever have like an Objection, hey, Mr. Jones. Like the reason we're able to do it at 450 instead of 800 is because when we come annually, it's not as bad. We don't, we don't have to spend as much time we can do, we can do more spot treatment. So it's way cheaper for you and you have to worry about it looking bad before you give us a call again and then trying to work your way onto the schedule when we're six weeks booked out. So the whole objective, I love it, is getting every single one. I don't care if it's pressure washing, I don't care if it's gutters, I don't care if it's anything after that service. We're immediately trying to get them into a recurring recurrence. Even if it's annual. And you can offer way bigger discount, like huge. And you can make it where they have to be dumb, where it's like, okay, thank you for paying us 800. Would you like this again for 400? Yeah. And so why not from a comp perspective for your team out in the field? I would, Instead of getting 10, 15% to salespeople, I'd be giving comp. Usually flat dollar amounts are great for technicians of do they convert into the annual package. I'd be tracking what percentage of one time jobs are able to go into that recurring by service to optimize the offer for each service. Going from one time into recurring.

Man, that's gonna be a whole nother call for that one. That's a good one. So I currently have a three year.

The other part is like when, when you get on the property again, you sell them other stuff. So like when you come annually now, now to the property three times instead of once over the course of three years. When you show up every single time, yes, you get the 450 bucks, but you also are going to say, hey, you need pressure washing. Hey, you need window cleaning. Like all these other things. You upsell them into Christmas lights. So, like, you want to be on the property as much as possible. So you have a three year guarantee.

You say though, on the roof? Yes. A lot of our customers love it. A lot of the people that I've talked with are just like, why do you offer a guarantee? You know?

Yeah. So off. I would offer a guarantee if they sign up for the annual package. So it's like, hey, it's $450. It's way less than you just spent with me. And by the way, it's guaranteed. And I don't know what you're guaranteeing. Are you guaranteeing, like, they don't see the moss? Are they guaranteeing? Yeah, they don't see moss.

Exactly. Three years. Three years is like, we know the treatment will last three years. Sometimes it doesn't. On some roofs, that's fine, but sweet.

So you're just forget the guarantee. No one cares about three years. They just want the problem solved. It's like you just prove that it happened. You say, hey, Mr. Jones, if you know, going on a recurring, recurring service, we guarantee that moss will never show up as long as your annual subscription, it's 450 bucks instead of the 900 you just paid. And most people, when it comes to services like moss, they think it needs to be done annually. They just assume that. And so you can play into this whole notion of, hey, instead of spending 900 bucks every single fall with us, let's go get you on this, this package. It's 400, $450 annually. And we, if you're signed up for this, we guarantee you'll never see moss. And if you do, give me a call. I'll be here within 24 hours.

Love it. I think that's immaculate. Do you think that one. Does this tie into the whole? I assume it does, but I'm assuming you're, you're tying this hole into the marketing spend too, because we're able to get this way to.

Okay, so within 24 months, the objective is that 70 to 80% of your revenue is on the calendar before January 1st. I got you right now. You're just on this treadmill of spending money on ads we need to create. It's going to take you a while. Like this year might be 20%, they might be 40%. Like it's going to Take you a few years to get the point where you make like you really dial in the process of upselling these people. So that way most of your revenue is guaranteed.

Would you consider, would you think that a monthly agreement for us to come out quarterly to make sure everything's always clean? Like, would that be something that would spark your interest when you're in the mowing business?

Yes, this is like the 2.0 version. Like when you start doing the upsell thing, you're gonna start figuring that out, dialing in, how that's done. I, I think that what would works really well for your industry is and because you have multiple services is you say, hey, Mr. Jones, we just did your mosh treatment. It's $900 if you come. If we, if you get an annual, it's 450. We come out here every single year and do the same treatment and we guarantee it and we can rock and roll. Oh, yeah, that sounds great. Okay. By the way, if you want, we can do a $99 per month package. What that includes is. And you just have the massive. The mother load. Right. Because they just agreed to an 800, a $900 service one time, and now you're saying you're going to all this other stuff for a few hundred bucks more. Because again, they think annual. They always will think annual for something like moss treatment, Christmas lights, etc. So like, you can always lean into this, but I would have to two packages that you upsell people into. And the, the whole objective is that like literally 70% plus of one time jobs get converted into a recurring service. And if that's the, hey, we're just gonna come back and do the same thing next year for half the price. Who would say no to that? Oh, and by the way, we'll guarantee it'll never show up again. And then the second option is, do you want the mother like you, you brand it. So like the Northwest softwash, like I would call it something around that, like the Northwest. Northwest experience or something. Or the Baker, like Around Baker or Rainier or something. The Evergreen, like the Evergreen special.

And there you go.

And Evergreen special allows you to have $99 a month. Includes pressure washing your roof wash. Like you can just put the works on there.

It would be a little front loaded.

Correct.

Meaning that we would do a lot of the labor before the revenue hits.

Not really, because you just, you just finished the service. Their house. Oh, sure. So you just did the big service that they really were wanting. Hey, by the way, it's nine. It's 99 bucks a month. And then what you tell them is right below that when they're like, yeah, that sounds interesting was include you put all the services on the months that you know you can't get new leads for a low cpa. So in August we're doing all the house washes so we don't have to go spend money on ads because we know it's going to cost us eight times more in August compared to February.

Absolutely.

The real objective of packaging like this is not so much the fact that you have to spend money on the ads, it's not that. It's the fact that you get to control the scheduling. So when you are in the 99 package, you just show them the month that you're going to come for. Doing the Christmas lights, doing the pressure washing, doing the housewash, doing the mosh treatment like you do like your core four of the Evergreen special. And you just put it on the month so you know your CPA is high.

Yeah.

That way also you increase your capacity during your spring rush when otherwise you're busy doing recurring or you're doing work for people that have already in your database. I want to flush all those people out of my spring rush.

So essentially, essentially you're saying, hey yeah, we just got the roof cleaning done. Next year we could do it for half off and it would just be a half off, like forever. Essentially, like as long as you sign it. Would. When you say one year agreement, is that really a one year agreement or is that a like a would would we have an agreement that they'd sign? Like hey, this is for one year or they just pay it for next year? I mean how would you.

Yeah, you say hey, like by the way, we just did for, for $900. If we, if we do it annually, it's 450 and we guarantee everything. All we require is today 50% down payment. There's no contract you have to sign. We'll show up here next year at this time and then after the job is done, you'll be. The other 50% will be due.

Currently we do cards on file and the 10% deposit for our current jobs. But it makes it super easy. They already have card on file.

Run the car, the revenue for 12 months.

I'm definitely going to do that. So for the now back to the.

Like, that one's low hanging fruit, Stephen. Like the whole like let's sell you in the next year, collect 50% and like really ironing out that. So that's low hanging fruit. The harder one, which is like the 2.0 version is, how do I then take them up to the next level? Which is more of a monthly subscription with bundling a bunch of services into it. And the reason I say that is because, like, I think you get most of the revenue with the first one just by getting on the property more often and upselling them again. But if you want to take away the hassle of having to upsell them other stuff every month.

Yeah.

Then you just sell them the recurring package.

And that would be like, a monthly payment, something of 80 to 120 bucks a month, depending on. And this is. I've already kind of ran through these numbers. My brother mentioned something like this. I'm like, man, what would that take? And it's funny that you bring it up. Yours is way more in tune. So, okay, yeah, 100 bucks a month. And then maybe we do quarterly. Like, maybe. Or maybe not even. Maybe twice a year, we go out there and make sure everything's. Everything's perfectly clean. Right, Is what you're saying.

Yeah, I do your core four. So that's basically gonna be about 300 per service. Again, every time you go out there, you're gonna sell them other stuff, but you're gonna do your core for, like, what are the four major things people are always asking for you. We do all four of these. You know, you have three other services. You're gonna upsell them throughout the year as needed, but the Core 4 is included. You just show them, like, you have to really nail down the design of the upsell. So it's like, hey, next year, here's the offer swipe. Okay. By the way, if you want those and these other services, it's 99 bucks a month. And these are the months we show up. And you have already prescribed, you know which months you need to fill in. And some people are going to say no to that, but you'll get better and better. Like, why did they say no? What was the objection? And you'll hone in the offer. And what's cool. What's cool, Steven, is you have their card and file already when you're doing this offer. So you don't. They don't have to, like, give you money. You just like, okay, so you wanted us to come next year for half the price. Awesome. We'll charge you 15% now, and you'll get that receipt today. And then we'll show up here again, and you'll get a notification a week before and two weeks before reminding you next year. And then you just set up the visit for next year with automated reminders prior.

So I should cut the three year guarantee? Just cut it, see what happens. Yeah, nobody cares.

No one will care.

They'll sell basically the same amount.

Yeah, they don't. And they usually. What sounds better? Three year guarantee or. I promise you you will never see moss. And if you do, call me and within 24 hours we'll be here. Right? So like the three year thing is like so out of their mindset to even think about that. Just guarantee it forever. You will never see moss in your roof. That's what they want to hear. Like to you it means something because you know the industry lingo, you know that your treatment's really good at last three years. Sometimes it doesn't though. So like let's not even go down that path of like arguing about three years and them reminding like who, I don't even remember who I used three years ago at my property. I'm never. It has no value. But if you just told me, hey, for half the price annually, which I think I have to do, Moss annually, I will guarantee you'll never see green. And if you do see green, I'll be there within 24 do 72 hour guarantee or whatever like that if you wanted. That sounds a whole lot better because like what as a homeowner also when I hear three years I'm like okay, so at two years am I gonna have to like bend their hand over, you know, arm wrestle these guys to come out here and have to take pictures and all this stuff? I don't want to deal with that. Just tell me you'll never see moss again.

Yeah. And the technicians would say that, correct?

Like yeah, because I'm assuming you're not on the job sites, right? So you'd have to have some sort of presentation and I would have a, probably a small, medium and large for each of these things. So each service and then your, what your subscription would be for like the monthly thing you could kind of have, you know, small, medium and large tiers. They would know going into a one time job, which one they're showing. And then they would be compensated on a one time basis of if they get people, someone new into an upsell. And I just have two, two offers for every customer. Get them on, get them on the low hanging fruit and then like hey, by the way, I want to save you more. And I, I noticed that we, you know, you kind of need pressure washing. Why don't we get you on this, here's the months we show up like you, you have to train that. And if you've had four salespeople, you know how to train in sales a little bit.

Yeah, it was crazy, but it was, it was a good learning experience for sure. So for your, if you don't mind moving just a little bit over, because I'll probably end up looking another. I want to, yeah, I want to dive into that a little bit more, but I can put in the work on my end. The, for the, for your locations, one of the next big things that I'm running into is how do you know when that location is at the cap? Like are your locations growing significantly or do they have to get into a new territory to do it? I'm, I really don't know what that is and I don't know how much farther can I go in this area? You know, can I go to 5 million? Can I, can I go to 2 million, 3 million, 4 million? I don't know. How do you determine that?

Yeah, mostly what you're capped by is the number of new leads coming in. And so the reason for that is because otherwise you start like you are doing, spending gobs of money per acquisition because there's just not enough people in that market that want your service. And so the easiest way to do it is go into new service area because you immediately are starting from no leads. Like your first few leads online are always your cheapest and as you get to hundreds, as you're seeing it starts getting expensive. And so the fastest way is a new market. It's also the least efficient way from an operations perspective because you start burning money. And so the balance is twofold. One is growing to the size where you don't have to spend money on advertising and you can replace churn with organic traffic, whether it be from your website. That's like why we talk about SEO. And that's why like I do think you can probably increase your conversion rate by about 30%. I think increase your SEO drama, you know, a pretty good chunk with the website stuff. But the bigger play is taking existing customers and making them recurring because that can keep growing. Like your recurring revenue will slowly keep building. And if you have the same number of leads, if you still had 150, 200 leads a month coming in, your revenue could keep going up, up, up, up, up. The problem that you're hitting, everyone hits on one time projects, they hit this cap of like 2 to 3 million a lot of times because simply they have to be on this treadmill of getting new leads. The whole objective is to reduce your ad spend by half. But then every single customer you get, you're tacking on this recurring revenue that slowly builds over the course of time until one day you say, okay, we have 2.5 million in revenue of recurring work and I could turn my ads off. And you're like, well there's, there's Churn. People will cancel. Great. That's when you use text and emails to replace Churn with simply reactivation of customers like those texts and those emails. It sounds like you've been doing email. Have you doing email blasts or not?

Not regularly, but I'll, but I have been the last couple months. Like I did one in November, one in December, haven't done one January.

So like I would highly recommend making those very conversational. Instead of putting pictures and video and 35% off and book today. It is very simple. It's like, hey, Merge tag Bob. Hey Bob, is Stephen over at Northwest Softwash. This time of year we're offering discounts to our existing customers only. They've been loyal for us for many years. That way you beat the spring rush. And we're not six to eight weeks booked out. We're in your area next week if you want to quote, let me know, I'll get sent over to you. That will get a super high response rate and open rate because you won't have text, you, you won't have a bunch of pictures and video and links. You just have just straight up text, no images, nothing fancy. That's on email. It'll get through spam filters. Text, same thing. That's why the text kick butt. And I haven't used like mailchimp. It'll send you back, it's okay. Ideally there's that two way communication though, so you can just open up the conversation with a very organic message. Instead of being like this is Northwest software. For the next three days we're offering 30. You will get blocked, you'll go to spam and people will not respond. But if you just open up a conversation, those are all leads and out of 20,000, let's just call them 8,000, you have an actual phone number. I know. Just from the math perspective, if you do this timely, a timely offer in a, a conversational tone, you will get 100 leads. You just will. And you're thinking that's half your leads you're spending for right now. And by the way, these people, you have credit card information on file or you've done for service for them in the past.

That's Right.

So you will have to probably spend on mailchimp. Let's assume out of the 20,000 contacts, 10,000 have a phone number. Like you're going to spend three to 400 bucks per text. It's not cheap.

Like 300 bucks per text.

No, I mean like to send it to everyone.

Oh, oh, okay. Yeah, I have 20,000 numbers. I have 20,000 of everyone, email address.

Cell phone numbers and then 8,000 are verified like you've done service for them.

Exactly, yeah. About six to eight we've actually done work for.

So I would, I would be very careful with sending the 20 because you get blocked by carriers pretty quick if they don't know who you are. It's now spammy. If you send a message to people that have in the past done service with you, you won't get marked spam if you're conversational. If you send out to 12,000 people that you have never done service for, you will likely get carrier blocked. So AT and T T Mobile, they block like so when we send a message for example from copilot, like that message goes out, we send them to the carriers. The carriers though block based upon spam rates and so you can, you can, it can look like your messages are going out. You're like nothing's working. It's like yeah, you're getting all the carriers are blocking you and they individually do that. For example, like T Mobile which is quite popular in your area, is one of the like the hardest to get through. And so if you start, if you 12,000 messages, your, your number will almost immediately be canned. So I would recommend doing it to just your 8,000. Uh, but then when you do that, you're not a stranger. This is Stephen over at Northwest Softwatch. Wanted to thank you for 20 on a great 2025 and to honor you for all your commitment to our business. We want to make sure we get you on earlier than the usual schedule so you beat the six to eight week backlog that happens in the spring. And if you do it before February 1st, you're going to get 20% off. You get 100.

Yeah, there's so many, so many low rabbit holes. Don't want to go down too many. Call me crazy, I'm not a huge discount guy.

Think of it as an offer for you to get on the property because I would rather give 10% off to a customer just for the sake of saying thank you again. I'm not making anything besides thank you. You've been a committed customer. We're getting 10% or 100 bucks off. Because I would rather do that and spend 5, 4 or $500 for a new lead. Yeah.

That's the tough part.

Like I don't think the discount is the thing that is the needle mover. I usually throw that in a way to sweeten the pot and make the thank you meaningful. If I say hey, thank you for being a loyal customer, you can absolutely do this. Which is thank you for being a loyal customer. We get crazy busy in spring. If you'd like to do the service now, let us know and we'll get you on the schedule and prioritize you. We'll give you priority treatment for being a loyal customer. That definitely works. It's the 10% is more or less like we just want to say thank you. Like that's our thank you thing. But like you don't have to have that. You will still get a huge amount of leads if you take discounts out. But the reason I would justify the discounts, especially right now when you have so many people in your contact with that that are very cold. Like I would be trying to get on all of these people property and getting them set up for service. Like all of these are sales opportunities that you're going get paid for. Yeah.

So many people that we paid tons of money for. It's just sitting there.

Yeah. Like I do. I genuinely believe tomorrow you can get your management fee by 70 to 80%. And I think your. Your ad spend this year can be 30 to 40% less next year. More than half of it gone simply by focusing on this recurrent. That that's more like the long term strategy. But I. To convince yourself, Stephen, if you really like, hey, I don't like this is a big. These are big levers to pull.

Yeah.

Get on mailchimp and spend 500 bucks on sending one text message that's well crafted to the 8,000 people you know. And watch your schedule book out for next three weeks. Like it just happens. Like this is why like our location locally we don't spend money on ads. We. We just send texts and emails out to people.

Wow. Is that how. How much of that is like recurring work versus like one off project? Is that like a cleanup or what would that.

Yeah. So it just depends on the time of year. So every year we have. You can pre plan your whole year of what messages you're gonna send. So it's a season specific offer for a season specific service. So I'm not gonna. And if I'm trying to pull them out of season I'm, I'm giving them the preferential treatment of not having a backlog. So for example, no one's thinking about spring cleanups in January for our service. They all think about it in April. Great. So in February our message is, hey, for being a loyal customer, we want you to beat the rush and get ahead of it. We'll come on your property and we'll do it now. If you want that, let us know. And then when we hit the spring rush, I would be focusing exclusively on recurring mowing. It's like that's all I'm focusing on. Then treatments like, then one off stuff. Like corrections. Like you can mix in one off stuff with the recurring stuff. So I usually use the one off stuff to pull demand for like move demand. So people are less likely to get a recurring service when they don't need it. But if they a one time service, I can make sense of it because I know there's a rush coming or there is. Like for example, like you know, with Christmas lights, if they're willing to do it in September, let's go. Because they, they beat the rush. So you're just trying to pull all that demand forward and if I have to give a discount, fine. Otherwise it's just like let's assume you have 7,500 people that don't do Christmas lights. You message them all in September and like, hey, we get crazy busy in November if you want preferential treatment and we'll get your, all of your lights installed in October. Like that's where you can pull your demand in different directions. So you don't spend money in those months. Otherwise on ads, that's huge.

So at 12% margin net profit right now in 22% ad spend, if I cut that in half, I'm already at 25, almost 25, 20 to 23.

Yeah. And eventually you'll get under 5% your ad spend. You won't have to, you know, you shouldn't have to spend money on ads. You have too many contacts. You've paid for a bunch of them. They're activated customers, 8,000 of them are. There's no reason whatsoever to be spending money on ads.

Essentially. Just, I'm going to, I'm going to just, it's January. I'm going to cut it, I'm just going to instantly cut it in half right now.

Well, if you just got a good management company, immediately they'll tell you to cut in half because you're overspending.

Yeah, they haven't told me that. Even though I like them a lot.

No, but a good management company that's not incentivized based upon you spending more. Like, if you were only spending a thousand dollars a month, they wouldn't be able to make sense of their $4,000 a month management.

Exactly.

If you use a professional, they'll be like, oh, yeah, let's cut this ad budget down to three grand a month, and you're gonna get 70% of the leads still. And then you, by the way, will actually tell them we need to reduce ad spend because we're booked out three weeks already with the work that's coming in from the text and the emails. And then over the course of time, you start selling those people that you get on those texts and these emails, this recurring service, and all of a sudden your schedule is mostly booked with.

Recurring work that would change the business forever. Have you seen any other power washer guys do the. The recurring model?

Like. Yeah, I just talked. I just talked to a guy yesterday out in New England. Downspout Services. Downspout Outdoor Services. Really good guy. You should connect with him. He's gonna get good, dude.

I see we're out of time. I'll have to. I'll have to book another call with you because there's. That was very, very helpful, and that's what I wanted to want him to know. So next time I talk to you, we'll be at 25.