Copy This 9-Step Flywheel For Compound Growth

One of our partner companies grew from 3 million to 4 million in 12 months. And over the next two years, they grew all the way to $8 million and sold their business. They did this by implementing this nine step framework that helped them grow faster and stronger over time. In this video, I'm going to break down this nine step flywheel that when you implement it in your business, it will help you compound growth. This home service business was stuck at $3 million for two years. They didn't know why they were stuck. They tried a new marketing company, they tried to hire two new salespeople, but they couldn't figure it out. When we put this nine step framework in place, it illuminated all the issues that they had and it helped them start growth in their business. Number one, lead count. Year over year. Most businesses don't know how many leads that they're generating, so it's hard to know if you're actually growing. So what you want to do is figure out how many leads that you're getting in the business, how many web forms that you're getting, how many calls that you're getting, how many ad requests you're getting from different ad platforms that you might be using. Then you want to look at year over year. So this January you got 100 leads. This last January you got 80 leads. So that's a 20% growth in leads. The beauty of this is that now you'll be able to know how many leads that you're getting. If you want to generate more leads, there's literally only four ways to get more leads for your business. First, you can do warm outreach to people that you already know. This could be prospects or customers or people in your database. The second thing, you can post organic content online, whether that's videos, content on social media, that kind of stuff. The third thing you can do is cold outreach. People that don't know you reach out to them and say, hey, do you want to work with us? And then the fourth thing is running paid ads, taking some of that social content you're creating, running paid ads so that people can learn about you and turn into customers. Once you know your lead number, then you need to set up a lead management plan. And a lot of times they go hand in hand because not necessarily a lead problem, you just don't know the leads that you're getting. So it's hard to track them all the way into a sale. Now, just because you generate leads, who cares? You don't know if they're the right leads because you don't know if they're actually booking, which leads us to step number two, which is booking rate. Booking rate is effectively how many leads that you got and how many people that you booked into an actual job. The reason this is important to track is because are your leads bad? Who knows? Are your CSRs or Customer Service representatives not booking? Who knows? That's why you need to track your booking rate. So all the leads that go into your business, again, web forms, calls, ad platforms, messages, you want to track all those and then figure out how many are converting into actual jobs, that's going to be your booking rate. So what is a good booking rate? Service Titan did a report on all of their home service businesses and they found that the average booking rate is 42%. On the low side they're around 30% and on the high side they're around 62%. Now, if you're a business that's more demand driven, I have no heat. And you're trying to get out there, usually you can be around 70, 80%. If you're a business that's giving estimates over the phone, your booking rate is going to be a lot lower, usually around 40, 50%. Based on how well you are at selling over the phone, how can you increase your booking rate? So we had a company that they were booking at 40% and we helped them go to 61% for a 21% booking increase that increased their revenue by 51%. They didn't even generate any more leads. And what they did was they implemented three specific things. First, they set up a script, a call script. So that way, anytime someone called in, their customer service representatives went through this script. Second, they set up a lead management plan. Anytime a lead came through the business, whether that was from a web form, a call, or these other platforms, they set up text messages, emails, and automation. So that way, now they're nurturing the leads all the way through. And then the third thing that they did was they hired a customer service rep training company called Power Selling Pros. And I made videos about them before. Basically, it's a company that comes in, audits your current script, audits your current game plan, and gives you a blueprint to help you scale your business from a CSR booking rate perspective. So if you can't figure out your booking rate or your calls are not tracked, here's a simple way to back into it. And that leads us to number three, job count year over year. Just because we got leads, great. Just because we booked them, great. We want people that are actually running real jobs. So that's why we want to track our job count year over year. Last January we did 100 jobs, this January we did 80 jobs. So we're down 20 jobs. That's not good because we need more jobs because that's how we grow our business. So how can you increase your job count? First, increase your booking rate. If you book more leads into jobs, you're going to get more jobs on the books. Second, do appointment confirmations and lead up to your actual appointment. And so anytime someone comes through and books a job, they need to get emails, calls, texts leading up to the appointment. So that way they show up and they're ready to roll. And then the last thing is cancellation follow ups. A lot of times there's cancellations that happen, but no one follows up with them to get them back onto the schedule. Now if you give estimates over the phone before you do the job, or you go out to the job site and provide estimates, this number right here is the game changer for all home service businesses. And that's number four. Estimate count year over year. The simplest way to grow your business is to generate more estimates because more estimates are more at bats and opportunities to grow your business. So what you want to do is look at your estimate count year over year. This is going to be a very good measuring stick to know if you're actually growing your business. If you're more of a demand driven business where you go out on service calls and then you upsell from there, a good benchmark is 30 to 50% of those calls should turn into estimates. A very easy way to generate more estimates for your business is this. First, incentivize your technicians out in the field to generate estimates. Any estimate that closes that you generated, you'll get a percentage of that estimate. Now they're incentivized to create estimates because they don't have to be the ones selling it on site. Second, you want to set up this rehash and follow up sequence. So every estimate that gets set up now you need to be following up via email, calls, text, and working these estimates. And the last thing is, you want to make it so easy for your technicians to generate estimates for you. So what I recommend is create a separate landing page on your website with a form, then create a QR code that they can scan in their truck. And all they have to do at the end of the job is scan this QR code, put the customer's information in and it will go over to the salesperson. Once you do those things, you need to make sure that you track this number, because if you generate more estimates, you get more at bats, and that's how you grow your business. And by the way, if you are home service business doing over a million dollars and you feel stuck and you're not really sure what to do or how to fix these problems in your business, that's exactly what my company does. You can set up a meeting. Worst case, you get some best practices to help you grow your business. Best case, we help you get unstuck and, and start a compound growth in your business. So, okay, yeah. Just because you create an estimate doesn't mean you're actually going to close it. Which is why we need step number five, which is our close rate. Close rate is how many estimates did you do versus how many did you actually sell? That's your close rate. A good close rate, specifically in home service is around 40 to 60% of your estimates should close. And once you get all those estimates, you need to have that rehash process in place. So that way you actually close the estimates through your sales process. And here's what a good rehash process looks like. Over 14 or 21 days, you want to text and email, add some value, share some information about other customers that have done this exact process, educate them. Frequently asked questions. And a pro tip is add an expiration date on your estimates. That way, as they're going through this nurture sequence, it says, hey, you got 10 days left, five days left, two days left, and we're trying to get to a yes or no faster. This will ensure that you're not just leaving things untouched and it just fizzles out. You're hopefully getting to a yes or no. Even if you close 100% of these estimates, the next thing has to be true for you to actually grow your business. And, and that leads us to step number six, which is your average ticket. Were your sales actually profitable? This is why you need a profitable price book that your whole company is operating on. How can you make sure that your average ticket is higher? First, obviously, you want your techs to be incentivized to increase the average ticket. Second, you want to make sure your CSRs are throwing alley oops for your technicians. How can they do this? They can say, hey, while your technicians out there, be sure to ask them about X, Y and Z. Or on their call, they can say, have you been noticing that X, Y and Z has been happening? Or while they're out there, do you want them to do this free inspection of blah, blah, blah, blah, Blah. Basically, you're making your csrs assist all of your technicians. And if you wanted to get really spicy with this, you could give your CSRS a cut of whatever they set up for those technicians out in the field. And the third way is email marketing. By doing email marketing to your database, you're educating them on all the opportunities that you can offer them. You are agitating saying, hey, are you experiencing X, Y and Z? Well, maybe you are interested in this service. Remember that appointment confirmation sequence that I mentioned before? Here's where you can layer in opportunities for your techs to upsell. Be sure to ask this in the home. If you're experiencing this, you might want to ask about this. It's a very subtle way to increase your average ticket. So those six parts are the nuts and bolts of how you grow a home service business. These next three parts are how you get that flywheel effect of compound growth. Step 7 Campaign Summary Report Once you know all of this data, leads, booking rate, jobs, sales, and you have the information available, you need to zoom out and look at your campaign summary report. We got all these leads, we got these jobs, we got these sales, all that's good and well, but where did this actually come from per channel? Did it come from Google, Google Search ads, Google lsa, Facebook, Yelp, Organic, Google Business Profile? There's a bunch of different places but you want to have that zoom out so that way you can see what's actually working and what's not working. One really important part about this is that you need to have attribution dialed in. This means that someone needs to be pushing every single month to make sure all your lead channels are tight. You can't have random things out there in different lead channels all over the place because then your data is not accurate. And how can you make marketing decisions without having accurate data? And we all love return on ad spend data, but who cares if it's not new customers? Of course we can get returning customers coming in all day, but we want our new customers. Which leads us to step number eight, which is our new customer report we want to see year over year. Are we getting more new customers in? Because new customers coming in is lifetime value increase and new customers coming in is what we're actually after when we're looking at putting fuel on the fire. From a marketing perspective and growth. It's not just returning customers coming back into the funnel, but where are those new customers coming in. That is the honey hole for marketing because now you know who is going to drive revenue on top of what you currently have. Once you get to step eight, you can start to look at all the numbers and say, okay, $3 million business. I got this many leads, this many jobs, this many estimates. This is my average ticket. So if I want to go to 6 million, I just need to double my number of leads, or maybe I need to increase my booking rate, and my number of leads can go down like this. And now you're looking at numbers and just plugging and playing the different numbers to figure out how you're going to get that growth. This leads us to step number nine, and this begins that whole flywheel sequence. Step number nine is customer acquisition cost. And this is the holy grail of numbers that everyone looks for when it comes to marketing. Because when you know your customer acquisition cost, now you know how much it costs to get a new lead in your business that's going to actually generate money because you have the campaign summary report, the new customer report, and now you have your customer acquisition cost. Customer acquisition cost is basically the amount of money that you spent on marketing and how much new customers came in. Per the amount of money that you spent, you spent $1,000, and you got 10 new customers. That means it costs you $100 for a customer acquisition cost. This is actually pretty good. Another good barometer for customer acquisition costs is usually it should be 5 to 10% of your lifetime value of a customer. So if your customer is spending $6,000, lifetime value, 5 to 10% of that is 300 to $600. And that's what your customer acquisition costs should be Once you get that number dialed in. Now it gets really fun, because now it's just about, where do I need to spend this money to get new customers to come into the funnel? And. And this flywheel just keeps on spinning. So I know a lot of businesses struggle to get these numbers, which is why they want to work with a marketing company that actually dives into the data to help them pull these numbers out and helps with attribution because it can be so murky on your website, on these ad platforms. And how do you truly know your customer acquisition cost? If you want to see this playbook in action, we did it for this company right here that doubled their revenue in 12 months. And if that one's not out yet, check this one out.