Scaling a $30M Home Services Biz with John Wilson

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The purpose of brand is leads. I'm not like— I'm not even exaggerating. Like the benefit. If we, if we distill brand down to like its core concept as an investment, What we are expecting is sustainable, cheap leads. It's so that someone searches for you by name and skips the entire rest of the competitive awareness funnel and buys you for $2 instead of you bidding on that same lead higher up the funnel for $80. Like, that's it. You want to spend, you know, a lot less money on that lead.

Welcome to Season 4 of Peter Lohmann's Podcast. This podcast is a show about all things residential property management, from property operations to sales and marketing to growing and managing your team. I'm your host, Peter Lohmann, co-founder of RL Property Management. For Season 4, I have an exciting new guest each week.. We go deep into conversation about problems facing professional property managers and the best ways to overcome them. Thanks for listening. Now let's go. Welcome back to Peter Lohmann's podcast. I'm thrilled today to introduce John Wilson, who is back for his second appearance on the show. John, welcome back, dude.

Thanks for having me back on. Sounds like I, we didn't, I didn't do a terrible job the first time, so I got an invite.

No, and actually I believe you were the first ever guest on Owner Occupied season 1, going way back. So that would've been 4 years ago, I believe. Yeah. When Russell Lowery was my co-host. So lots changed since then for both of us. And I want to start today with a tweet that you posted about a week ago, I think, recapping what your business has been up to so far this year, because this is going to give some great context for listeners. Okay. So John, you own a home services business, HVAC, plumbing, some other stuff, I believe. And here's what you said. So far this year, you've spent $1.6 million on advertising. Oh, so that's the last 12 months. 22,850 homes visited in the last 12 months. 6,100 HVAC systems serviced. 3,103 drains cleaned. And 190,000 phone calls. That's the scale that Wilson is operating at. So just to paint a picture, and if you wouldn't mind giving a few-minute background, you don't have to run us through the whole story, but just sort of bring us up to speed. What are you up to today? And, and in summary, how did you get there?

Yeah, I'll keep it brief, but in 2016, we bought my family's plumbing and heating company, and it was 8 people and $1 million. I think even in that tweet we had a picture of the first—

we—

the meeting that we sort of went through those numbers. It's called the State of the Wilsons. So this was our 9th State of the Wilsons. Yep. And I think my— I think my wife came up with that name a decade ago.

State of the Wilsons.

State of the Wilsons. Yep. So in that tweet, there was also a picture of the very first one, which there was like 6 people in the room. And it was 2015. So that was the business then. Now, obviously much, much larger scale. So we'll, we'll land at the mid to high $20 million this year, 135, 140 team members and market leader, which, you know, I could have never said even just 2 or 3 years ago. So a lot's changed over the past few years and we've really anchored ourselves around this $100 million by 2030 target.

Okay.

And we're aiming at that pretty hard, which has been like fun and exciting. That's, you know, that wasn't even something I would've thought was possible. I had hoped for it, but now, you know, in the past 8 years we've 25x'd. So all I'm looking to do now is do a 4x.

Yeah.

Uh, way easier. That's way easier. That's how, that's at least how I think about it. Yeah. So, it is kind of fun. Obviously we've gone through like a tremendous journey and I'm tired most days, but we still really feel like we're very early in a lot of our journey. Like there's, we're still actively figuring stuff out that we probably should have had figured out a while ago. And I think that that's exciting when we solve these like sort of duh problems and we're solving them at the scale that we are. And it's like, well, like that now those, the impacts of those decisions is measured in millions instead of, you know, $10,000.

Yeah. So you're obviously in plumbing and that was sort of the origin story. Sounds like you're in HVAC. Sounds like you're in drain cleaning, which maybe you think of that separately from plumbing. And then any other businesses? Are you doing any kind of sewer? I don't know. You've been in and out of a few things. I just want to get a picture of that.

Yeah, yeah. So plumbing, HVAC, electrical, and then plumbing consists of underground plumbing, which is drains, and above-ground plumbing, which is water heaters, faucets, toilets. Different skill sets, different sales processes, different leads, different technicians. Ooh, interesting. And so we're in those— we consider those different trades, like they have different leadership and everything. And then we also have water restoration. So we go, you know, it's sort of like SERVPRO. So water damage, we find that a lot as plumbers. It's a small part of the business, but it is one of our trades.

Do you do jobs big enough there where you're, you're billing insurance companies?

Oh yeah. Yeah. It's a very different business to our core business, but it'll do about $1.5 million this year, which is cool. It's almost entirely fed off of our, like, in-house. Our plumbers walk into a home and it's basically an added service. Hey, you're here. We're here because you had water damage. Do you want these folks to come out and help you clean it up? Got it. So we launched that back in 2020. It's been slow moving, but it's, you know, getting some legs.

So do you have to use that like special software that the insurance companies want you to use? Yeah, Xactimate. Xactimate. That's what it is. Yep. And what is that about? Because I remember we've dealt with this kind of tangentially just through the property management business.

Sure.

Yeah. I had a claim that I dealt with one time and I just remember looking at the software and a couple things jumped out to me. One, it looked super complicated and hard to use.

Super complicated.

Yep. And the other thing is that the pricing was super high, like really, really high.

Yeah. Yeah. So Xactimate is basically the software for what insurance will pay for whatever the damage on the home is. So that's basically the agreed upon price. Now it is very complicated. I have no idea how many SKUs are in there or line items of price. I'm sure it's in the tens of thousands. It's ridiculous. So you have to hire Xactimate consultants or you, if you know, shops that are large enough, which we're not, you know, it's a 6-person team. They'll have an in-house Xactimate consultant because the water mitt is like there's a labor component because there's a, there's an incident, right? So we just had really heavy flooding. Maybe a month ago, 2 weeks ago. So, you know, I have a foot of water in my basement. So water MIT is I'm going to pump that water out, I'm going to remove the damaged contents, which is like furniture, you know, boxes of storage, whatever. I'm going to remove the damaged property. So that could be what's called a flood cut. So, you know, they'll remove 18 inches of drywall so mold doesn't grow up the walls, and they'll remove carpet, sometimes some wood depending on how— what the state of the wood is. So there's a labor component and then there's also an equipment rental component, which it takes days to dry that out. Concrete is really porous, so it's sort of like a sponge. So, you know, you have a foot of water and that concrete's gonna get really spongy. So you put in dehumidifiers and fans and air movers and all that stuff to basically dry the heck outta the basement. So the way that business works is, there's a labor component, so you get paid for that, and then you also essentially rent the equipment, right, to the insurance company by the, by the day.

Yeah, we do this for our clients too, actually. When we have kind of a minor water incident, we have blowers and dryers and dehumidifiers that we rent to our clients.

Yeah, that makes sense. That's a good idea. But yeah, so then the way it's priced is Xactimate, and the billing side is really interesting because It's just like a totally different game than, than like our core business where like you'll send an invoice to whoever the insurance provider is and then they'll just like— and then negotiation begins. So you really, you don't actually know what you're going to get paid. You don't even know the value of the job until, uh, 2 weeks after you finish it, a month after you finish it. So, you know, you'll go in and you'll be like, I think this is a $10,000 loss. And just based off how much of equipment and, you know, the rough labor, but most, most of its equipment, like 80%, is equipment rental. So then you submit the invoice to insurance or through your consultant for Xactimate. They haggle. So it's literally just negotiations like, oh, we don't like this line item.

Yeah, you coded it this way. That really should have been coded at this cheaper option. Yeah, it's like, it's like health insurance billing or something.

It really is. It's like, it's so weird. It's so weird to us. We're used to it now, but the first, like, year I was like, what do you mean? They're— they just are going to pay half. Like, what are you talking about? Yeah, but yeah, so Xactimate's complicated. But yeah, that's the restoration business. It's a small business for us and it's basically just grown with the company.

All right. And then do you have like a septic too?

Yeah. So septic is a part of underground plumbing.

Okay. All right, cool.

Yeah. So we'll pump septics, replace them, replace drains. Do pipelining. That's a fun new service addition that we just did.

Mm-hmm. Okay, awesome. And then do you have like a GM of each of these trade lines, or like how is it organized?

Yeah, org structure is complicated. It's simpler now. So we used to— these used, you know, we bought a bunch of these, and then last year we combined them, which has been awesome. And so now it looks just like a It looks like a normal pyramid org structure. Now, there are decisions that we're making right now which have been really helpful. When an organization gets bigger and bigger, we're basically going through a reorg, and I think it's going to continue to happen. We've done a few of these over the years, but this most recent one is like, how do we reduce friction and increase focus to the tune of 135 people? And like, how do we do that? In verticals. So it looks— yeah, it's just a pyramid org structure now. And the way it used to work was each trade had an ops manager that would handle that trade, and then underneath that ops manager, they would have frontline managers. So that would be a service manager, an install manager, a dispatcher, and each one was dedicated to that specific trade and those team members and those customers. And some of the pain points that we experienced there were like friction. So, hey, if I'm working with electric as a customer, if I'm working with electric and I have to bring in HVAC, or if I have to bring in plumbing for that same project, a generator would be a good example where like electric's on it and plumbing has to do the gas. It feels like I'm working with two different companies because the way the structure was, was laid out. So we had that structure because we bought these businesses and they each came with sort of their own respective leaders. And then over the past couple of months, we've been unpacking that and separating them now into specialty. So, hey, if you're service or sales, this is your vertical. You're going to report to this director. If you're install, you're going to report to this director. And then the frontline managers are still by trade.

Okay, got it. So the analogy in property management is we call it like departmental, where everything is very individualized versus a portfolio style where you'll have a property manager who's responsible for, say, 10% of your whole portfolio, but they do everything for that 10%. So yeah. Okay. So some growing pains.

Yeah, I think what— so there was a couple of pain points and like organization design is a— it's a fascinating and like ever-changing Because you'll, you build out these teams or like role or, you know, whatever. And so you build out this role or multiple roles inside a company and then where it starts could be totally different from where it lands. And, and for any number of reasons, it could be to reduce friction, it could be to like maximize impact. So, you know, we have a team called SDR, 2-person team. And they're now moving, and you know, this sounds chaotic, but they've been really great, but they're now moving to their third vertical that they're sliding over to because each, and each one has been a tremendous impact because each time we move them to the next vertical, whatever friction they had is, you know, reduced or they're able to, you know, dive deeper into some process or like the results are bigger. So it started off in marketing because it was tied to leads, and then we tied it into call center, and now we're sliding it over to our— basically our external leads team.

I've been spending a lot of time recently thinking about role design and the accountability chart concept from EOS and both how to optimize our existing structure And then also thinking about and planning for future growth and what, what are the new roles, what roles are combined, what roles are getting separated out. And it's challenging. And I know you've talked about not over-indexing on process too soon because it's inevitably going to change as the company grows. I've always appreciated your perspective on that because it's kind of like the yin to my yang because I'm like a super process and systems guy.

But it adds a lot.

How are you thinking about that these days? Are there any parts of your business where you're like, okay, this is going to be kind of the same, or it's going to be copy paste as we scale, so let's get the process right? Or do you still just do the bare minimum process with the assumption that, hey, this is going to change next year anyway, so let's not overdo it?

Yeah. So I would say it probably depends on team. I'm a maximizer. I just really get excited about these like 1% improvements. Yeah. And just continuing to make 1% improvements. And like, if you look at— if you look at like the history of my career, like you can point out decisions that was like, that was a 1% improvement and sometimes ends up being far more than 1%, but I like that stable step-by-step increase. So some teams you don't really want to mess with. And like, I don't think— depends on where you're at and like you're, you know, in your growth story. But I tend to not want to go in and blow things up unless the team is really— needs to be blown up. So a lot of our work over the past year or so for most of the teams has been driving process and consistency across them depending on the team and the way we're thinking about it, which in some ways is right and in some ways is wrong, is once we get, let's say, 2 or 3 of the same person, like that role really needs to be dialed in. And I think it's— I personally find it challenging to drive a ton of process through one person. Just because there's no— it's a single point of failure. So it's like it will fail. Like wherever there's a single point of failure, it will fail. But like once that becomes a team, that's when process starts to become a lot more important. There are teams now that like accounting would be a great example. Accounting's 5 people and not a significant amount is going to change between accounting accounting at, you know, mid-$20 million to accounting at $40-something million. More people, more transactions, more—

more AR, but more of the same.

Yeah, pretty much. And like, and even more people, like, not that many more, right? Like, we could probably do double the volume and like add a person in accounting. So accounting is really going through a process year as we try to drive down, like, what does this really look like and how do we function every day to, to have, you know, perfect payroll, perfect books. So I think a lot of it's company growth and I think it's also department growth because if the department is going through, let's say a department is tripling in a year and we tend to think about it by department and because I think that's easier because there's some part of your organization that is probably really stable, like 90% of your organization is probably process driven. Otherwise you wouldn't have gotten anywhere meaningful. But, you know, maybe marketing just went from 1 to 3 people. That team just tripled. And now you need a lot more structure around that team in order, in order for them to do their job successfully. That's our story with accounting right now, too, where, okay, we just grew it a bunch, took it from 2 or 3 people to 5. What does that look like? What does proper execution look like? How do we scorecard it? How do we, you know, have Looms to the knees.

In Notion.

Yeah, in Notion. Well, see, we're really excited because Slack just dropped a Notion-like feature.

Oh.

Because we've used Notion for years, but what I've always, I don't know why, I think just simplicity is great. And I think it's really hard, every little thing you add adds a new layer of something.

Couldn't agree more.

Yep. Yeah. And when you go to like the easiest way to manifest for us is how many apps are on my technicians' iPads?

Correct.

Like, that's it. How many apps? Because that's us telling our team members how complicated we want your life to be, right?

Yeah. So yeah, I mean, if there's ever an opportunity to reduce that number by one, even if you're giving up a little bit of functionality, that's usually the right decision in my experience.

Yeah, 100%. Yeah. And I think we've always fought hard because it is just so easy to overcomplicate. It is like, it's unfortunately the easiest thing in the world and everybody wants to do it. Yeah. So, so you constantly have to fight it. But Slack just came out with something that we're, that's going to allow us to drop Notion. So we're, we're really excited about that because it's basically like we always wanted Slack to just be like our intraweb basically where you could log in and there's the homepage and here's the newsletter and here's the like links to whatever. And they finally dropped that feature. So, so we're excited.

Cool. Same vibe to Notion. Yeah, I'll be curious to follow along with that.

Yeah, I think it's Pages, like Slack Pages is I think what it's called.

We're heavy Notion and Slack users here, so I'll follow that with interest.

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Now, are you guys still running on EOS, or have you kind of outgrown that?

We're still running on EOS. I think we're still running on EOS. I think EOS is a good— this comes up, I don't know why, but I'm going to, I'm going to, I don't know why it comes up, but I'm in a few of these like CEO text groups in industry, not in industry. And EOS comes up like once every 6 months.

And like, it's so true.

Yeah. I'm just like, I really don't, I really don't know why. So like, we've been on EOS since 2021. And like, my answer is always the same. Like, look, yeah, like it's a good thing. It helped us. EOS is a way that you communicate. It's a way that you roughly hold accountable and it's a way that you have meetings and like share vision and like those are really good things. Like they are. But sometimes I think people are too, like, prophetic about it where they'll, they'll just like, ah, it solves all your problems. And I'm like, no, it literally doesn't. Like, it teaches you how to talk to each other.

Yeah, it doesn't have anything to say about strategy. It has very little to say about marketing. There's almost there's nothing in there about sales.

Yeah. So all that to say, I, I don't think you outgrow learning how to talk to each other.

Yeah. I've heard some folks who are getting up to around your size, or at least one CEO I'm familiar with and respect a lot, yeah, he moved from EOS to Scaling Up.

Yeah, most people move, okay, around this size. We haven't— it hasn't been a priority for us. Don't fix it. Basically, I do think like some of the friction that you have later on is, hey, if you're running like 18 L10s a week, yeah, there's a lot going on there. And like, is that juice worth the squeeze? Like, are you getting the real impact out of the commitment of wages and time and lost productivity from 18 L10s a week? Like, you'd never hear me say that about 4 or 5 L10s, but like 18, I'm like, okay, like Sure. We might have lost the plot here. Yeah.

Yeah.

Okay.

All right. So I want to— I admire your operational chops and I love your approach to like 1% improvements. You and I are very aligned in a lot of sort of our philosophy around growing businesses. I love to dive in for a minute to talk about the phones. Now, the metric you gave, 190,000 phone calls in the last 12 months.

Yeah. And that's literally just phone calls, right?

Not emails.

Yeah, that's not inbound. That's not messages. Yeah. Like we would clip half a million.

Yeah. Insane.

It's so amazing.

It's amazing.

So we do a lot of perspective. That's, that's probably tripled the 12 months before that.

Okay. And, you know, phones are slowly dying, right? People are moving away from phone calls, but they're still a huge part of business.. And as property managers, we have incoming calls from our residents, we have incoming calls from our property owners, and we have incoming calls from our vendors. All of them need to be dealt with and handled quickly and appropriately. But I know that you guys have taken this way to the next level because I'm guessing that a lot of your new business comes from phone calls and it's the type of thing where if they call, It goes to voicemail or it rings for a minute or two, they hang up and they call the next guy in the phone book, so to speak. So, and I remember being in awe of hearing you describe like you went into this department and I picture you just like tearing into everything and you're like, this is, we got to get this down to like 7 seconds or less. Or I remember hearing you talk a little bit about this one time.

I don't remember if it was like an in-person conversation, but like, it's all, I mean, so far this is all real.

Yeah. So what did you, when did this? First get on your radar and why, and then what did you do and what happened?

Yeah, I'll start off with, we don't feel like we have this fully figured out, which to me is exciting because I've put an insane amount of work into it. And if I haven't fully figured, and I'm like, I'm relatively intelligent, I'm an average intelligence, maybe slightly above, right? Like, and we're big. So like, if we aren't fully dialed on this, then the people that we compete with are on like, they're not even on the ball field. Yep. So we find that very exciting.

It's like ringing the owner's cell phone still.

Yeah, yeah, yeah, yeah, yeah. We think we're at like a step 4 out of 10. We don't think we're best in class. We do think we are leagues ahead of where we were, but we still think that we have a long way to go. But yeah, tons of stuff through phone calls and Obviously, that is complicated. It is. There's a lot to unpack there. But the volume came from us getting better at marketing. So you invest all this money in marketing, $1.6 million in trailing 12 months marketing. And like, for whatever reason, our industry is still driven by phone calls. In some ways, I wish it was by text. That would be easier. In some ways, but the technology isn't even totally there yet because the industry is driven by phone calls, not me, the industry.

Well, totally. And like, there's something about, as if I put on my sort of customer hat for a minute, I'm at home, the kids, it's dinner time, right? Suddenly water's pouring out from under my sink, or suddenly I noticed the furnace hasn't run all day and I look at the thermostat and it's 60 degrees in the house and it's going to be below zero tonight. I am reaching for my phone and not to text. I'm reaching for my phone and I'm like, I need to call somebody. There's something very primal in that moment of emergency of home service where you're like, I need to get on the phone.

Yeah. What people think it's a speed. And you said, I think you said this. I'm going to, I'm going to quote you. This is great. Just quoting each other all day. This was years ago. So, you know how, you know how impactful it was because I really— this rolls around rent-free in my head. But if it's not important, not urgent, you send an email. If it's— and it was like email, text, phone call, there's like a chart I have.

Yeah, it's like it's actually our communication style that we recommend for our team.

Yeah. I think about that all the time. Like, honestly, twice a week. And that was like 3 or 4 years ago. But I think it's the same thing. Like, someone is— they want to know, like, their home was just threatened. It was infiltrated by water. They don't have power. They're feeling insecure because it's 0 degrees tonight and I don't have heat. Like, they need to know that they're taken care of, that I'm good to go. And a text is not very satisfying because there's a 2 to 3 minute wait. There's some back and forth bullshit. And like 30 minutes later, you finally have an appointment booked. Like that works if you're like trying to estimate something, but like if you have water coming through somewhere, like you want to know that your family's taken care of, and a phone call, you'll, it'll be done in 60 seconds. Like you'll know, oh, okay, they picked up, I'm good to go. Yep. So I, I think it's definitely a component of that. And I think it's also just how leads are driven. So the leads are driven via phone call. Yeah. Because that's what Angie's List pushes. That's what Google pushes. That's what they all push. So as much as I would wish it would change, uh, just because our, like, our contact per CSR would be higher and our, like, we would look better. But I wish it would change, but it's still pretty driven by phone call.

There's really something there. It's like, I'm picturing, you know, there's a problem with the house. My wife tells me about it. And then 5 minutes later she goes, hey, did you, like, what's going on with that? And I'm like, well, I texted somebody. It's like, it's just, it's not the same as like, yeah, I called them. They're, you know, we got an appointment set. We're good. I texted them.

They didn't text me back yet.

I know.

Like, I thought you were handling this. I know. Yeah, it's a good visual. It's good. So yeah, we've been pushing texting for years and it works. We obviously, you know, I don't even know, thousands of texts a day with our customers, but our, like, our customer activation, the vast majority is still phone call. Yeah. But what you can optimize just the hell out of that, which I think has been a lot of fun. Like, hey, how do you— like, a project that we're working on right now, which I think is like, I think is interesting, is we interviewed a friend of mine and he runs this AI call center solution called Avoca. And we're trying to like— it's all about if you have team members doing something, you want those team members to be doing the highest value thing. Correct. Right. Like from Top to bottom of the org chart.

Doesn't matter where you sit. John Matzner talks about pushing work down, like, to the lowest.

Yeah.

But like, getting the highest and best use out of everybody.

Yeah. Even at the lowest, like, are they being productive? And how do we increase their productivity? Because if I can increase their productivity, I can increase their output, which means, like, my investment goes further, or I can reduce, like, team size, or, you know, whatever it is. There's— but a project we're working on is a home service company, let's say I get 1,000 phone calls a day, which is about the number. So I get 1,000 phone calls a day and 50% of them are like not customer calling. So not a potential lead. So you have two different booking rates in home service. You have what's called a raw booking rate and you have a booking rate. So the raw booking rate is what was the percentage of calls that I booked over my total volume of calls. So that could be if I get 1,000 phone calls and I booked 100, my raw booking rate is 10%. It's not meant to tell you much other than 90% of your calls were bullshit. So like, maybe figure that out. So, so then it's like, okay, what, what's the bullshit? You know, like, so you start unpacking that because what the net result of that is 90% of your phone pickups are CSRs wasting their time, not revenue generating. And if we like unpack that even another layer, like what's the downstream of that? That means that I have to have more CSRs. And because I have to have more on bullshit calls, I can't pay them the maximum wage that I would like. So I'm capped for the total skill level that I can bring into my organization from this one problem of like Oh, I'm getting a lot of BS phone calls. So you start to unpack this 1% change of like, how do I impact that? Because if I can reduce or steer these 90% phone calls away and I can maximize the time on phone for my CSRs, I can upskill my CSRs, I can hire better, we can pay better, and we can like all these amazing things. It's nirvana down there, Peter. It's, it's incredible. So a project we've been working on is this like right call, right CSR project. And we're trying to— we have like 300 phone numbers and we've like triaged them out. So that way the calls that are the most likely to be leads skip over, like they go directly to CSR. So like, hey, this phone call is a 90% chance of being a lead. It's going to get sent to this team. Which has a 95% booking rate on leads. So we're gonna maximize their output and we're gonna try to get them to 70 booked calls a day, whereas a home service company on average might book 15 a day per CSR. So we wanna 4 or 5 times that. And then the rest of the calls, like you filter them out to maybe Philippines or maybe like an AI agent handles it, or you can use an AI receptionist, which is what we ended up doing. We're like the bulk of the phone calls by phone number. We know which one's going to give us the leads and which one won't. We're going to filter that out to an AI receptionist to then basically throw that phone call wherever it has to go. Like, hey, I'm calling in because I have a question on my bill. Great. We're going to send you over to accounting. Hey, I'm calling because I saw you had a job ad. Great. You're firing off to HR.

Okay. I have a bunch of questions already.

Yeah, great. But we're still only like a few weeks into that. But that's an example of this, like 1% change that will turn into millions of dollars of like gained productivity, but also like our impact by CSR will be big and they personally will win like financially, like they will make more money because we can now afford to pay them more money because we need less and we need better talent.

Alex Hormozi has been talking a lot about the importance of sending your best leads to your best people. Yeah, it results in the best economic output for everybody. Yep. And that, it was reminding me a little bit of that when you were talking. So the, the AI receptionist, is this just like, what, what is this? I'm, I'm curious about that. So they call in and an AI answers with a human voice. They don't know it's an AI necessarily and like routes them to the right place.

Right. So I'm, I'm really passionate about us under 7-second pickup. Don't know why, but that's the number I like. It's like 2 rings, basically. I want to pick up in 2 rings because if it's faster than that, it feels weird. And if it's longer than then, are they going to pick up? So we have the AI for 60% of our phone numbers pick up at that 7-second and just like, hey, thanks for calling Wilson. How can we help you today? I don't actually remember what that scripting is. For most of the other ones, it's how can we make you smile? And then if it's, hey, I need to book a lead, great, they fire it over to the call center. Hey, I need questions on accounting, they fire it over to accounting.

What's the name of that AI receptionist?

Do you remember? So it's called Avoka. It's not meant to be used this way. So if you're calling, like, they'll do it. They helped us with it. But just tell Tyson that, that you want what John did. Okay, cool. Because it's like I had him on the show and like the podcast like 2 months ago or something. And we're talking about like, okay, what do the best call centers look like? Because The call center is like, there's a lot to unpack there and it only gets more complicated. Like we're like 30-some people inside that team. Like it's complicated and it's complicated, but the mission is simple. We just have to book calls, right? So we're asking him like, what do the, what does best in class look like? And he started describing, oh, well, the best in class, you know, they're really focused on right call, right CSR, which we're really passionate about. Right tech, right job. And we have been for a decade. That's the right lead, the right opportunity, all that stuff. We have never thought about that with the call center. So that was a total unlock. I can't take credit for any part of that idea. I'm grateful Tyson, like, shared that because that then, like, the next 2 months was like, holy smokes.

Yes. How do we do it?

How do we do it? Because the impact will be measured in the millions. Like, this is going to work and it's going to be big. So how do we do that?

I remember talking to you a couple years ago about when you first started tearing into the call center, and back then, this was long before AI was big on the scene, I remember you telling a story, something like you go in there and you realize that like 20% of the calls are being missed and half the calls are taking like more than a minute or some horrible metrics. And then you went in and you're like, hey, what's going on? Why? What's going on? And they were like, oh, we don't have the budget to hire somebody. And you're like, well, we're fixing that right now. Like, I just— you told the story about the kind of initial efforts and turnaround, and did I get any of that right?

Yeah, a lot of it. And I would say that that's a common story for when you acquire a business. So if you— like, scaling a business is removing constraints over and over and over and over and over, and many of those constraints are self-imposed for any number of reasons. Like, it could be potentially budget. Often it's the owner's comfort level is the constraint. Like, I am not comfortable doing this next thing, or like, it's a big financial investment. So the way that manifests early on, like sub-$5 million usually, is call center, because it's non-revenue-producing employees that, you know, you don't want to hire more. And you'll hear these like complaints from people of like, I don't have enough leads. That's always like the leading indicator for you probably do. And like Rich Jordan has a, has a funny story of he bought this business in like 2019 or 2020 and they had like 3 people and it doubled or I don't even know what in the first 12 months. And like the biggest impact thing that he did was hire a second CSR. Mm. Like, that was it because that was the self-imposed constraint. They were already getting the phone calls. They just didn't even know it. They weren't tracking it like because a CSR can only take like 80 phone calls a day. If you're taking on more than 80 phone calls, then like That's your constraint, your cap. Got it. And like, maybe they can go superhuman, answer 100, whatever. But like, if you're getting 200 phone calls a day and there's one person on the phone, like, you have the leads to do more than double your volume. Like, they're already there and now you have to remove that constraint. And then the next constraint is capacity. Like, you have to hire techs, right? But yeah, no, we see that all the time because people don't want to bring on overhead, which like I I get not like immune to that, but if you bring on that overhead, then you're removing that constraint. You're increasing capacity in call center, which then you have to increase capacity in your field labor.

Yeah. And the analogy here is like leads per week for our BDM. So we call our salespeople our business development manager. BDM is kind of the lingo in our industry. So we get about— so our property management gets about 40 leads a week right now, 40 valid leads. And I believe we're probably approaching— yeah, it's great. We've had a really good marketing guy has been crushing it. Yeah, I believe we're approaching the limits of one BDM, so we may need to hire a second one soon. I'm actually kind of just realizing this as we're talking through it.

Well, and then this is where we go back to 20 minutes ago where like, when do you start really driving process through a team? Process matters a lot with one person, matters much more when you have 2 or 3 because now it's like, hey, these the, the measurables have to be real and we have to know not only know the measurables, but we have to know the inputs that are going to get those measurables that we want. So how do we like codify that into what we do every day? Yeah. So that's, that's where it starts to get complicated.

Today's episode is sponsored by Planomatic. My team recently started using Planomatic for all new listing media. By the way, we have around 25 rental listings at any given time, so we're doing a lot of volume. They love how fast Planomatic is and the direct integration with our property management software. If you haven't heard of them, Planomatic provides automated listing media services for rentals nationwide. But what does that mean exactly? Well, listing media includes professional photos and editing, floor plans, and 3D. They make this process so fast and simple that it's one less thing to worry about when we're trying to finish up a turn and get a property listed for rent. Plus, it makes our owner clients so happy when they see how professional everything looks with floor plans and amazing photos and even those really cool like Zillow 3D tours. I'll tell you, we've tried a bunch of different photo services locally here. We've also tried having our staff use their iPhones or a digital camera. My team tells me this is the best solution yet, and I agree. So go to planomatic.com to learn more., and thanks again to Planomatic for sponsoring today's episode. What you've been articulating over the past few minutes, this sort of theory of constraints as applied to a home services business, and, you know, kind of diving deep into a specific department, rooting around, figuring out what's holding them back, figuring out what mindsets are at play, and sort of right-sizing it and right-mindsetting the folks in that department and the department head. And then I picture you kind of zooming back out and then taking a broad view and then picking another department, kind of zooming in on that for a while. And I remember you've told me before that like, this is something only an owner can do, that the skill set of having this broad, high-context, high-caliber view, like HD view of the business as a whole, and then thinking hard about the constraints And then diving in and bringing ideas about like driving work down and all of these things is like a very owner, the owner kind of has to own this function. And I think I mostly agree with that. I'm curious if you still have that thought process and is it still you who's doing that for Wilson? And is that going to be true at $100 million?

Yeah. I think I would take this back to role design and, and EOS a little bit. I'm going to throw a punch or two at EOS. I obviously like what, what my days look like now are really different than even 3 or 4 years ago when we first met. I think our business was still in the $4 million. So we've, you know, we're I don't even know, a lot larger. And so what that looks like changes a lot. I still roughly agree with that, but like my mindset, probably from when I first said that, I don't remember when I said that, but like I thought that a lot at $2 or $3 million. And then I thought that you grew out of it for a certain amount of time. And it was only until the last year or two that I really like regrabbed that. And was, and like it clicked a little bit deeper. And I think I'm going to blame EOS a tiny bit here, or maybe my interpretation of EOS, because I think the way, like the way they lay out roles, they talk like Brandon and I, Brandon's my president and I sit in the CEO role. And like, as you're growing a business, A lot of it is what is the next step? And like, what is the— like, what should I be working on as the leader of this group? And I'm here to tell you, most people don't know. I don't know. Like, I've gotten better at figuring it out, but a lot of my job is like figuring out what's next. Like, what is that next change that we can drive? And hopefully the changes I drive are meaningful and worth the time investment that I'm putting in. But when Brandon and I were growing the business from like the $3-4 million range to what it is now, we were looking for like, what's the model? Like, where should my time be focused? Where can I have the biggest impact? And EOS talks a lot about visionary and integrator. Yep. Which I think at its core is a flawed concept. Mm. Because if, like, a visionary— like, the word— and I've always been vocal that I hate the word visionary. I hate it for a number of reasons. One, I don't want to call myself that. And two, it implies aloof, which the business owners and operators that I know that run $100 million businesses are more tied into their business than I am today. Like, I feel like I have to be deeper than I am today and not visionary aloof. So over the last— Brandon and I are growing on this business and we're trying to like discover like, where do we fit? Like, what are the strengths that I can bring to bear? Which the strengths you think you have at $3 million might end up being totally different than what, what your actual strengths are. And he and I really like struggled until probably 2 years ago to like, where do we fit? Inside the organization. We're really comfortable with it now, but that took a while because we kept trying to be like, all right, you're the operator and I'm this thing, or you're the integrator, I'm the visionary, and this book tells us we're supposed to do this. And instead of just like, hey, you know, who are we and like, what can we bring to the table? So I think that when you're deciding on where you fit inside the CEO seat or inside the president's seat, a lot of it's going to be personally dictated by one, what are you obsessed with? Like, what are you going to watch whether or not it's inside your vertical? Like, what, what are you always going to be looking at? Because you should probably head up that department if you're obsessed. Because whoever you hire, like, you're just going to be butting heads all day. Like, just have that in your vertical. Like, I'm always going to look at money. Like, that's it. I always will. Accounting has to be in my vertical or I'm going to piss like 10 people off every day. So like, what are you obsessed with? And then I ended up gaining not an amazing but a strong competency for marketing and lead gen. Maybe hand it off one day. I used to think I was terrible at it, so now that reports to me. And then after that, you know, I think the question was like, do you feel like— do you ever hand over sort of that, like, zoom in, fix a problem, zoom out, zoom back in? I don't think so. I think what ends up happening, and we're still on this journey a little bit, is how do you solve the problem? And getting comfortable with this idea that, hey, I'm— our org chart is like 6 or 7 layers deep. At this point, we have supervisors, we have field team members, we have multiple levels of management. And like, I have to solve problems through other people because I am just capped. I got nothing left to give. So, and that's, that's been hard for me because I am like drawn to solving the puzzle. I want to solve it. Like, that's all of this is like a game and a puzzle of like, how can I get a little bit better every day? So it's, it's challenging to not be able to Brandon says drive a cruise ship like a jet ski. So I would say I still do it with a bigger emphasis on who is going to fix the problem. And when I'm looking at problems now, I'm not saying I'm perfect at this because I'm not, but really trying to nail down, hey, I'm automatically going to look at this issue and I'm going to figure out how to solve it, or at least in my brain, start like nailing down those pieces. The call center illustration I gave earlier was a great example of like, oh, okay, 90% of our calls are bullshit. Let's break— let's like zoom out, zoom in, however we want to talk about that. Let's get in there, let's solve it. But like, that's a 4-month project and I have 135 other people that like rely on me to do other things every day. So it's been a bigger emphasis on like who's going to help me solve that problem. And like, where do I find the perfect human being that already knows the answer? An example from recent history, not the call center, is we have this problem in HVAC sales right now where our gross margin isn't what it should be. It's a multifaceted problem through like sales design, material ordering, vendor relationships, and install labor management. It's like kind of a big problem. And like the difference between doing it well and doing it badly is a literal million dollars a year. So like big problem worth solving. And I could never make headway on it. Like I just couldn't, like big problem worth solving and just like can't get anywhere because anytime, and this isn't like, oh, John, you're too busy. It's like, no, I'm doing my actual freaking job. It's just the thing that I was ignoring was I should have hired the right who to solve that problem. Like, that's just it. I should have gone out and recognized that, hey, this is a big problem worth solving. Therefore deserving a budget, deserving of my attention. And my attention, instead of solving it, needs to go towards hiring the person that knows the answer, that can solve it in 2 weeks instead of solving it in 2 years, which is what we did. And he literally solved it in 2 weeks. Amazing. Like very literally. So it's almost aggravating that it took me a year to like get my head out of the ground.

I feel that way about, uh, we hired a marketing guy. He started July 1st. He's killing it. And he's knocked out projects that have been on my list for literally years. Same thing. The Who Not How, you know, great book. You get the idea just from the title, but it's worth, it's worth a read if you haven't read it. I think sort of maturing as a leader, as a CEO, is recognizing those who, not how problems where you're like, oh, I can see the outline of a job description in the problem that I'm looking at right now. And like trying to figure out what's the job description, what are the outputs, AKA metrics that, you know, if, if I put it on an accountability chart, what are the 2 or 3 metrics tied to this role? Then how do I create the job description? How do I find that person, hire them? That muscle is so useful once you get good at it. Now, not everything is a who problem. You've talked about parts of the business where you went in and did solve the problem.

I think that's a part of this is like sometimes you are the who. Yeah, like you are. Or what I've been like really CEOs figuring out what they're supposed to do next is funny because I think like nobody really talks about it. But like, guys, we don't know. Like, I don't know. Like, I, you know, I pick it sort of month by month or quarter by quarter. But, but because there's like infrastructure now, this problem is going to go away for me and the savings should be about $1 million a year. Like, it's kind of ridiculous. Or another, another example of would be we worked on weekends, we launched weekends. We didn't, we didn't have weekends until December and we just launched them. So it's a new thing for us and our output on weekends is $40,000 to $60,000 a weekend. Now, as a multimillion-dollar change to our organization with a relatively simple idea of like, hey, maybe we should, you know, be there when emergencies happen. Like, really big deal. Skeleton crew. We staffed it, we invested in it. And that's an example of like when you're not working on some of these problems that you shouldn't be working on, like you get to work on a problem like that, which is a— that ended up being— now, I didn't execute that thing from start to finish, but I pushed and we got it off the ground and we hired and like it was a big part of my focus. And the difference is millions.

And I think I've heard you talk about like only the owner or only the CEO has this sort of cultural power to push through some of these larger changes and bigger ideas.

We call it moving mountains. But yeah, I think like there are times where another way to say it is like somebody has to break something. And I'm going to give somebody else credit for this quote. It was Mark from Permanent Equity, but he said managers don't grow businesses, they manage businesses. And I'm like, yeah, that— okay, that makes sense. Like, the title alone tells us, right? Because they don't— because their job is not to break it. Their job is to literally take what you built and, like, be efficient and effective. But somebody has to move mountains. Somebody has to break something, or somebody has to, like, figure it out. So last year, a lot of my work was around how do we take something from ideation to team. So, hey, I, I want an inside sales team. Great. Like, who can you hand that project to that will get it done in a way that matters quickly? And like, somebody could get it done. Like, you probably have somebody smart, but like, it'll just go faster if we do it. And then you hand it off to somebody who's better at managing it. The difference of the inside sales team is about $5 million of revenue this calendar year from creating that inside sales team last November. I don't take credit for that whole thing, but I broke a bunch of stuff in order to get it there. Budget has to come from absolutely nowhere in order to create these teams. I'm sure there's like, at $100 million, we'll be more strategic, we'll be more organized about it. There'll be a committee or something like that. But like at the stage we are currently, somebody has to kick the door down and like fuck around and find out. Mm-hmm. Yeah, I still believe that.

Love it. Okay, awesome. Yeah. So zooming all the way back up to the top of the episode, your marketing spend is larger than the whole annual revenue for a lot of listeners, almost including myself.

You know, I think you— that was just the trailing 12 months, right? Yeah. This calendar, we won't clip 2, but we'll be really close.

Yeah. And I know you've, you know, the classic saying with marketing is, I know at least half my budget is wasted. I just don't know which half. You know, I'd love to shortcut some of the learnings here. What have you tried that didn't work? What's working? You know, where's all that money going?

Yeah, I think. Couple different ways to unpack this. I will— the way to start is the only thing that matters is leads. And if you can drive that into your, like, into your bones, then marketing gets easier.

What about brand value?

In, like, the purpose of brand is leads. I'm not, like, I'm, I'm not even exaggerating. Like, The benefit, if we, if we distill brand down to like its core concept as an investment, what we are expecting is sustainable, cheap leads, and that's it. Yeah, we want people to search for us by name because we hit them at the top of the funnel. So branding, if marketing is this funnel and the top up by my hair, is prospects, people who have never heard of us, never used us, but are potential customers. The next, my forehead, is engaged prospects. They've heard of me. The next is active old customers. They've used us 5 years ago. Current customers, members, down by my chin. So if that's like the funnel of marketing, then you want to hit each section of that funnel. So my members, I want to hit them with phone calls. I want to hit them with text messages. I want to hit them with whatever to remind them, hey, you've got this Annual tune-up coming up. The next one is active customers. Same thing. Maybe it's emails, maybe it's postcards. These are direct, right? It actually ends up eating up like a very small portion of your budget because the lower down that funnel you go, the cheaper the leads are because you're already engaged with them. Like even the difference between a prospect, which is someone that you've— has never heard of you but could be a customer and an engaged prospect, the cost of lead is probably 2 times. Like very big difference because they already know who you are. You don't have to like build trust in the organization. Like they know you exist. So if we distill branding down, all that we're trying to do with branding is take the top two sections, people who have never heard of us and never used us, and people who have heard of us but never used us, and turn those into leads easily. So it's still just leads. It's just leads because that's all that matters. So if you're thinking about a branding play, the goal needs to be leads driven and leads like I'm working on a sports sponsorship thing right now. I don't know if we'll actually do it, but I'm working on it. And two different ways you can do it. You can put a sign in the outfield which is branding, you know, but like, what is the measurable impact? Probably not a lot. Or you can, you can go deeper, but it's just more complicated. So like, hey, I want to send emails to your ticket holders base and offer them promos for plumbing, or I want to set up a booth every other Saturday game and drive community awareness and direct leads in person, or I want to do scratch-off tickets when they walk in with a coupon for Wilson, one free furnace. Like, it's easy to cut a check for a park bench to put sponsored by Wilson, but it's complicated to go to the next step, which is where the actual value is found. So when you're driving brand, the big message is like, nobody cares about your brand. The only purpose of brand is to drive cheaper leads. It's so that someone searches for you by name and skips the entire rest of the competitive awareness funnel and buys you for $2 instead of you bidding on that same lead higher up the funnel for $80. Like, that's it. You want to spend, you know, a lot less money on that lead.

That's, that's all it is. And so when you're planning out your marketing and you're thinking through some of these different opportunities, I mean, how much of it are you relying on your intuition and how much is it like you're tracking the ROI, you're tracking the cost per lead by channel, you're, you're using prior marketing exercises to inform your future spend? Because a lot of this, it's really hard to say because what they see your name and they just Google your name. They're not necessarily clicking or using the QR code or calling the special number and Yeah, yeah, it's, it's challenging.

I think there's a few ways to measure brand, and the easiest is just like literally how many times is your name Googled? And that's brand, because all that we're trying to do with brand is people skip the discovery process where they could potentially be suited by other competitors. We just want them to search for us. Because they trust us. They've, they've heard of us. So that would be how you measure like impact of your branded marketing. I'm getting searched for, you know, 1,000 times a month on Google. So you can just look that up. That's helpful. There's that. And then everything else is tracked to the hilt. I mean, there's a reason earlier I said we have hundreds of phone numbers. There's a reason we have hundreds of phone numbers. That's crazy. It's tracked to the hilt. Now granted, there's obviously like some mix. There's some, like, some of it is fluid. There's a concept called last click. So like, okay, they clicked on this page, which was a call button or a lead form or whatever. And it was on this page on our website. But like, you really can't give credit to that page. Like maybe the page did some work, but like, they could have also heard about us from branding. So some of it you have to make some assumptions, but a lot of the direct lead activity you can track. Mm-hmm. And if you can't, then like you should be working on like the software stack to get it trackable.

Yeah. What's the software you're using for— I guess I'm curious about like your VoIP software, your call center. And is that the same thing that's creating and issuing all these different phone numbers?

So we put all the phone numbers through ServiceTitan. They have like that capability and then we can pull a bunch of reporting by phone number. And then we're using Aircall for our VoIP.

Okay, got it. And does that have like an integration with ServiceTitan in some way, or—

uh, I think so. If it is, it's shallow, but I think so. Okay. I, I don't even think it's an integration. I honestly think it's just like a call forward.

Okay, sure. Yeah, yeah, we do something similar with RingCentral. Yeah. Well, John, we're, we're at time. I feel like I could do another hour with you because I've got a whole bunch of stuff that we didn't even touch. I appreciate you coming on and sharing some of your knowledge and expertise and, and growing and scaling home service businesses.

So thank you. This is fun. I, it's not often that I get to get like super nitty gritty. But yeah, I think it's a good time. Like it's a fun challenge running these things at scale.

Yeah. For folks who want to follow along with Wilson and everything you're up to, John, where's the best place for them to do that?

Honestly, I would check me out on LinkedIn. I hate to say it, but I take back at least a third of the terrible things that I've said about LinkedIn.

All right. We'll drop your LinkedIn in the show notes. You also have a great newsletter called Owned and Operated and a podcast. That's all awesome content and home service focused.

Yes. If you like that, check out ownedandoperated.com.

We're dropping stuff on the week. Beautiful. Thanks again, John.

Thanks.

I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, peterlohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.