Building a Data Model for Qualified Leads & Metrics for Roofing Companies | RBP Full Course

We're about to go on. Team's ready to go. People should start popping in here soon. Teams ready here. Alrighty. Do we got people jumping in? Hello, everybody. Welcome in. Today we're going to be talking about building a data. Building a data model for your roofing business today. So very exciting stuff. I appreciate you guys all being here. It's early in the morning for me. Seven in the morning. Wherever you guys are, let me know, Kind of hop in the chat if you like to get to know each other. Just kind of let people know who you are, where you're at, what company you work with. So that way people can start to like, get to know each other. It's kind of cool when other people get to connect because you're all learning the same stuff at the same time. And so I just wanted to take a second to say hello, I appreciate it. And I'm going to try and jump right into it this time because we are starting exactly. We're gonna try and start exactly on time. So usually kind of come in a couple minutes early, do some rambling for those of you that pour in. We tried something a little bit differently today. We decided to open it up one minute before and that way, you know, maybe it won't be so, so much rambling at the beginning. I'll just jump right into it. But you guys let me know in the chat if you prefer the. The warm up. A little bit of intellectual foreplay, if you will, or if you guys prefer this, like jumping right into it. Now, as always, when you guys are coming to learn something, what is this? We got roof concepts, Fredericksburg, Braga brothers. Good to see you here. Okay, so welcome to another RBP learning experience. Okay, so before we commence, I want to take a moment to set your intentions. Why are you here? Right. When you go to something like a conference, like a webinar, like a course, you have to understand your intentions. So if you're coming in here, you want to seek to understand, not to memorize. So you're more than welcome to take screenshots and all that kind of stuff. But what I want you guys to try and do is to walk away learning something. And so to do that, take this opportunity, turn off your phones, minimize your distractions, and then just focus your attention on the valuable content that's going to be here. I want to give you guys like 30 seconds to just check your. Check your intentions. I'm going to quickly gander through the comments while I take a few seconds, let you guys just think. All right. So I hope you have your intentions set for being here, Justin. No, the baby is still not here. That little bugger needs to get evicted. I have. We are trying everything and everything right now. But thank you very much for asking. That's super kind. So phone's off, doors closed. Everybody leave you alone. Time to learn. So I just want to introduce who is here today. So obviously me, I'm here. Your moderator today will be Bettina. Bettina works with us, she's our marketing manager and she will help you guys throughout the webinar. If you guys have tech issues, you guys have questions, she'll help direct you with what you, what you need to do. We also have Andy. You can see their, their faces up in the corner. Andy works with us. He's an accounting executive. He has worked all over the industry with all kinds of different tech products in a sales environment. So he knows all the tech that is out there. He's a great guy to engage with in the chat. He has seen me on 10,000 hours of zooms at this point so he can, he can definitely add and nurture some knowledge and hey, Vista Roofing's here. Perfect. Good to see you man. All right, for those of you who don't know me, just for the few that, that are, who knows, it could be a lot, I'm not that famous. But for those who don't know me, my name is Adam sand. I own roofingbusinesspartner.com we are a. We are a business management consulting agency that uses technology as the infrastructure to make our stuff stick. I got my experience driving across the country from for two years with my wife and my dog. We went to the top. We were kind of working exclusively with the top 200 income range roofers. So people 17 million and above. Our largest client was 130 million. That's not to brag, it's just to say that we having the opportunity to build custom CRMs which are like the central nervous system of a business for the highest operators in the country. What that meant is that we got a really good insight into how these businesses run and that's culminated together into a team that is RBP consulting which focuses on tech adoption, training and knowledge. And we've been launching some really cool new products this week. But this is not a sales pitch webinar. I'm not here to sell you anything. So let's get to the bottom line up front. The key to engineering an increase in revenue is data. Right? So the bottom line upfront, it's data. So we're going to teach you this today because it's what allows you to determine what is working so you can do more of it. And then simply doing more doing, when doing more stops working, you can find a way to do it better. And when that stops being effective, right when you just start getting a terminal growth rate, when the effectiveness curve starts to level off, then you'll know when it's time to dry something new and what that new thing should be. As always, the tool does not matter as much as the process and the process does not matter as much as adoption. You will hear me say this over and over and over again. I have every vested interest as a person who sells tools, technology tools like CRM. I have every vested interest in trying to tell you that the tool is everything. But I've been doing this long enough that it's not about me trying to sell more stuff, it's about me trying to help you. And I'll tell you that the tool does not matter as much as the process in which you use the tool and the process in which you use can use the tool or the way it is set up does not matter as much as getting adoption. So you'll hear me say that a lot. You're going to learn as well to stop looking at business as a simple funnel and how to build a true data model for business growth in the long term. Those successful people think on the longest time horizons and that's why you're going to get, that's why you're going to get seeing all the way, you're going to get seeing all this, right? And finally, referrals are our most expensive leads. So I'm going to challenge you with a thought. The rule referrals are your most expensive leads. And so that's going to be at the end. So you want to stick around. Now first things first, for this to work, you need a well set up CRM to measure and thus improve your business. So doesn't matter which CRM, it is just you need a CRM set up properly so that it will measure your data so you can report on it and improve your company. Now wisdom begins with the definition of terms. So for those of you don't know what is a CRM? It is customer relationship management keywords. Okay? The ability to manage and in doing so measure the relationship you have with your customers. Think about that. A relationship with your customers. What does a relationship translate into? Right? You have to look at CRM through that lens. This is about a relationship with people that you can Maintain over time. Because a relationship is built on reputation, and reputation translates into brand. And a brand is what makes you last long enough to build a real business. This is our understanding of how businesses grow through the breakpoints. So the breakpoints like 0 to 3, 3 to 8, 8 to 15, 15 to 25, 25 to 45, 45 to 75, 75 to 125, very predictable problems and solutions at every break point. Because when you just start your roofing company and you're under 3 million, you're just figuring out what you do. Do you do roofing and siding? Do you roofing and gutters? Do you just do roofing? Some guys go and get into everything. Some guys stay really focused. You do storm, do you insurance? Do you do retail? Do you do commercial? Do you do repairs? Right. Once you figure out what you do and you get enough of the product to the market, fit. So you fit your product, your methodology, your attempt to go to the market with a product or service offering. Once you find a fit that allows you to get to 3 million and you're doing at least $650,000 revenue per head that is in the business, not including the installers, just the people including you, that make the business run, then you will focus on the who problems. You will have to solve the who problems, which is who is going to help you, right? Because you can't grow the business, you will not get more hours in the day. If you're working more than your half of your waking hours and your business is not growing at a rate that excites you, you're not. You're not going to get more hours. You're working on the wrong. You're probably going to get people to help. And the only thing that gets you successfully through the who stage is creating processes. Right. And getting them adopted. And then you go from 8 to 15, which is the how phase. And that's where you figure out how you're going to grow the business. And the only way you can grow the business is that once you get more than eight to 10 people, you cannot keep them all straight. Every time you try and get your ducks in a row, you're going to turn your back and one of those little is going to wander off, okay? So you have to get core leadership in place so that someone else can be there to help you lead. And it goes on and on and on. But I suspect most of the people on this call are either in the what, who, or how phases. So let me know just so we kind of have an understanding who's in the chat, if you're in the what, who, how phases or if you're beyond it. So what, who, how or beyond? Leave your comment in the chat. But knowing this data is important and we should start tracking it now because if we know that eventually technology and data at the, at this level is important, we should start at least getting a little bit of a principle of that in our business. So what, who, how and beyond. If you're beyond 15 then you're beyond. Right. So 033 to 88 to 15 or beyond. Now let's talk about how do we define a data model is it is the volume and goals of the business of volumetric. So this is the counts of things, how many things. Right. In our business. So this is, this is very industry agnostic. But roofing a volume would be number of leads, number of roofs, number of squares, number of Google reviews, volume. Right. Then conversion rates and targets. Right. So this is percentages. So this is you know 80%, 80% show up rate to appointments, 35% close rate, 10% of our customers leaving a Google review, that kind of thing. So these are percentages, that's what we measure the data there and then time, service level, objectives. So how long do things take? 5 minute response time. We we were open 24 hours a day or whatever. Right? What, how long are things going to take? It's measured on the continuum of time. Right. So measured in minutes or seconds or hours and or days. And how do we collect that data? Right. That's the next question you have to answer is okay great. Well we have to synthesize it meaning to create and combine in a meaningful way. The way that you do that is with a tool, right? A measuring stick of some sort. Your CRM is like your measuring stick but the tool does not matter if we cannot follow a process that delivers a consistent variable and a consistent control. Because if we can't get our people to adopt it, the data is just going to be diffused and therefore useless. Remember the three million dollar breakpoint. This is where you start to figure out who is going to help you grow your business. So once we start to figure out who is able to meaningfully help you, we can define processes and get adopted. And along the way we should be measuring that. When we have a process being followed we could then begin to disseminate, right. Or spread that data around to many places. That's all disseminate means just spread it around to the places and the people within the company to make better decisions. Because by getting asking better questions that we can answer, by reporting on what happened, we can eventually start trying to identify trends and we can get faster feedback loops so we can understand what happened. Hindsight, right to insight what is happening. And from there we can get to the point of being predicting, which is foresight. And that is the holy grail, foresight. Who thinks by voting the chat? Would you be more successful if you could see around corners and predict the future? So let me know. Your fingers work and you're paying attention. So would your business be more successful if you could predict the future? Yes, yes, yes. It should just be yes, yes, yes. And wise. Thank you so much. All right, here's the problem. Okay. Most roofing CEOs, this is why we can't do it, okay, Is that most roofing CEOs are simply reporting on what happened and they look at their business like a funnel where a lead comes in and a dollar comes out. But we can never forecast or predict what is going to happen. And worst of all, because we're not getting adoption, our process is so disjointed. It looks like this, where the customer journey is painful and arduous. This is why when we built rbp, we set our mission up to making work more rewarding. So our missions make the work of the employees of our clients. So business owner hires us. We want to make the employees of that business owner's work more rewarding through engineering better customer experiences. Because we know if we do that, if we make the work better and we make the customer experience better, the owner will get what he wants, which is usually a boat or a farm. I don't know what it is about roofers, boats and farms, but that's usually what they want. We also know that we're going to create. We also know that your customers are craving better customer experiences. So we know that by building it this way, we always get the owner of the company what he wants. More revenue, more profit, more boats, and more farmland. So the smarter way of looking at something like that, like this, is a data model. And I've shown this in a few slides and throughout the last week. All right. And the smarter ways to look at something like this, it's a data model, right? And visually, this explains what our customer life cycle is. And it's on the longest possible time horizon of forever, right? All the possible things that could happen in a life cycle. And this bets on the benefit of thinking this way in the form of we're going to try and get more reviews, try and get more Testimonials, try and get referrals and repeat business that ultimately will feed the business for free in the future. This is why we have a $60 million client with a 1% of revenue, marketing cost 1% and doing 16 million a year and growing. So the sooner we start doing this, the sooner we get there. It all starts with a lead, right? A lead. But what is a lead? Right? This is something I see so loosely defined in the industry and that is what we are here to do today is create a standard communication matrix for discussing these points of data so that we can all compare in meaningful ways. Because the, the, the industry is so loosely defined in this that we don't, we aren't able to communicate with each other and truly get advice from each other and connect to each other. So in this community, right? And hopefully the industry at whole, in this community, we are going to standardize the language, we're going to standardize the way that we measure things so that we can start to collaborate and grow using this standard operating model for how we measure things. So what is a lead, right? Is it someone who clicks an ad or is it a phone number? Is it a door you knock? What about an email address? Is an email address a lead? Is a Facebook comment that tags a friend a lead. And what if it's someone who says their friend needs a roof? Who is the lead? Is that someone? Are they the lead? Right? The real answer is that a lead is simply and only someone you can contact. But ask yourself if all leads are considered equal. So if A equals B and B equals C, the transitive value properties rule says that A also equals C. So if the simple. If we agree that a lead is just someone that you can contact and all leads are equal based on the fact that you can just contact them, would you pay $150 for a lead if it just had meant you had the ability to contact them, but nothing else. So because in this example, ripping a page out of the phone book, typing it into an email and sending it to a roofing business owner as a marketer could be getting them leads if that's all a lead is. So the obvious answer is no. To which the next direction is. The, the next obvious direction is that lead quality matters. And I see roofing business owners trying to figure out who can help them. Because remember, the three to eight million dollar phase is fair. Who is going to effectively help you, right? And they're getting people to help them with marketing, but they're not letting that marketing agency know what qualifies as a lead that they would pay for. And they don't have any way to report back to the marketing agency. Who and why? Leads are not considered to be marketing qualified. So if you want take a moment and think about your ideal customer avatar, right? Who your best customers are. What would you pay for a lead if they always met your criteria? So if they always met your criteria for an ideal customer avatar, what would you pay for them? Because then you wouldn't have any wasted leads. In theory, right? If you're good at selling grandmas, then that should be your ideal customer avatar. Grandmas, right. I typically work really well when I'm selling to people who are engineers and stuff like that. And the really data people. When I was selling roofs in my roofing company, I always loved those guys that had a printout of like 38 questions because I knew I could answer the guys every one of the guys questions. And then that guy was just like, I like that guy. Right. He had answers to all my questions. I love the discerning buyer. Some people hate that guy, right? And they want the person who's just building on trust. You like widows. You know, like one of my, one of my sales guys worked really well with widows because he could really empathize with their circumstances because his mother lost her, his dad, right? And he could communicate with them and say, I know your husband always like the older widows. Like I know your husband used to make all these decisions for you and now this whole thing, you don't want to get taken advantage of and blah, blah, blah. So what is your ideal customer avatar? What would you pay for them? This is how we create a marketing service level agreement, which is where you agree on the level of service from your marketer, whether it's in house or an agency or vendor. So whether it's someone you hire or it's a vendor you work with, you can identify and agree on the level of service that you're looking for in the terms of quality of leads and what you're willing to pay for them. You can get a company that will agree to a marketing service level agreement. So you only pay for engaged leads. These are people who might want your stuff because they are defined in criteria and thus you define them as a marketing qualified lead, not just elite. So now we've got two terms you need to know lead and marketing qualified lead. So next step. This is going to be fun. I have something coming up and there's a prize. All right. And the prize is this. Anyone we're gonna pick Three people who are going, wow, I can't get my, my books to show up. There's a book in my hand. There's three of them. And we're gonna pick three random people. We're gonna send them the books. They are very heavy and they're coming from Hawaii and they will take a time to get there, but we will send them. So you want to participate in the next section because it's going to be fun. All right, let's play a game because we want to demonstrate this. I have a lead for sale. I'm going to share with you details about that lead and you are going to comment in the chat and you're going to continuously bid and tell us what would you pay for that lead? I'm not a marketing agency, but I think I have a pretty good idea as to what a good lead is. So I want to see what you guys would pay for this lead. Because this is important to understand the third term. Because remember, we talked lead, we talked marketing, qualified lead. There's a third one. We got to know the difference. All right, so introducing the Sabinskis. And this is all. If this was all you knew about this lead because you could just contact them. So this is just a lead at this point, right? You know the email is K. Zabinsky columbiauniversity.gov and you know the phone number. What would you guys pay for the lead? Let me know in the chat. We gotta have fast fingers today, folks. $0, $100, $152. Got some low bids here yet. You guys are paying your marketing agencies more. So look at, make sure you are also holding your actual marketing agency to this because I'm selling you a fake lead and I have no intention to do your marketing right now. But 150 bucks. 250 bucks. A fraction of a penny from Owen. Wow, you guys are a hard audience. Okay, fine. Let's give you some more juice. All right, now we know that there's a view. Hop onto Google and you see that the address is a two story country home 25 minutes out of town. Okay, two story country home, 25 minutes out of town. What are you guys paying? You guys bidding up? You bidding down? Do you not like maybe your ideal customer avatar isn't out of town? Maybe you love the out of town leads because less roofers show up, you get better close rates. So let me know. Oh, Silvano just went to zero, Michael. Still zero. We got some fib. At least. Owen went to more than fraction of a penny.gov is at a good school. You're right. Yep. This is, this is a. This is probably. You can probably make some guesses about this. All right, so let's give you a little more juice. We now look at the address and it's 420 Country Square Ravine Estates. That was the most fancy email address I could come up with. 420 Country Square Venus dates going up a little bit. All right, let's give you guys a little more. You can see she's starting to creep out. She's starting to creep out and you're going to send a little more. A little more info about her. All right, now you look at the street view pictures and you see it's a big house with good access. It's a mixture of 812 and 412. Little bit of complication to root out the rats and roaches that don't run good roofing companies. It's got old gutters. You don't have to worry about damaging the gutters and you have no fancy landscaping to worry about. Justin would have sold it already. What are we paying? Are we going up? This is an inbound lead, Owen. So this lead is that you are slowly starting to learn more about inbound lead. Someone who reached out to you, which is a good question because that is very literally the next step because we're a little further down in the email. So put your bid in the chat. So we now know that, that the, the Zabinskis, right, the husband and wife will both be home for the appointment. They have teenage kids living in the home and they have a combined income of 256,000 per year. What are you paying for this lead now? All right, now can this lead get any better? Can this lead just possibly get better? Well, maybe. Final offer. Okay, who would pay for this lead? Because they want to upgraded laminate shingle from a certified roofer to. For the product that you are certified in at your level of certification. Gennaro still at 100 and 150 bucks. Jim's paying 1500. He knows he's got this deal in the bag. 300. Top line offer. Okay? So my team will pick the winners. But at the end of the day, you all lose. Game over. Because Karen Zabinski is the PTA mom at your kids school and she wants a better price. All right, all this to say not all leads. All leads are not created equally. Okay? A lead is not a lead. I, I gave you guys a hint, by the way. Like you can see that shadow coming out, but not all Leads are created equal, right? Lead quality matters. And we should put as much control as possible over the quality of leads we are getting by defining them. So what comes after a marketing qualified lead? All right, this is where we begin to define the next life cycle stage which is sending them some kind of proposal. This is where you ask them to do business with you. So whenever you give them a proposal, it becomes a sales qualified lead. It means sales is determined that this qualifies as a good lead and thus they should be measured against sales qualified leads. This is where they should have all their efforts measured if they provide a proposal or ask. This is where the sales rep has an opportunity to actually turn into a contract or commitment of some kind from the customer. To truly measure sales reps properly against one another, we should measure them against their close rate of sales qualified leads, not leads. Think about all of you in this chat. If I was trying to sell you something, right? Well, everybody here is here for different reasons. I don't know what size roofing company you have. I don't know what your motivations are. I don't know what you want to do in your business. But if you say, hey Adam, I want your stuff and then you meet with Andy and then Andy gives you a proposal, well really, what does Andy have control over? He only has control over that experience that he has with you. So he should not say, well, Andy, you showed up and there's 50 people in the chat today or however many people are here, 37. So you're 37 people here today. You have 37 leads. What's your close rate, Andy? It's not fair. So don't do it to your sales reps either because this is the one step we have actually have the impact for accrued revenue. Not cash, but accrued revenue. And that's, that's a lesson for another day. But the real magic in your business comes from preparing for the next side because this is the effectiveness of your sales. There's an effectiveness of the next side of your business because as you grow, not every roof will turn into a build. You will eventually get a backlog of customers. Customers will cancel, customers will go with someone else. I have a client who has a six month backlog. And then all of a sudden the insurance company started saying they had to get the roofs done by January 1st because there was a big, big fire in this area. And then they, they started telling homeowners they have to get done. So now they're losing roofs, but they're increasing their prices and selling new Roofs for better prices. So they lose some. But not every customer will become a build. This is something we need to measure. And, of course, not every build leaves you a review. We should. We should know how often it happens. So who here knows their percentage of penetration from roof to Google review? How many roofs do you do versus how often do you get a Google review? I'll give you an average, a good average in our client base, which, again, they figured a lot of this stuff out because they're from 17 to 130 million. Average, I would say, is around 30, and their average is 15%. The highest I've seen is hovering around 40%. Mr. Braga, getting 85 to 90% of your customer sleep Google reviews, you are a record holder. We'll see if you can hold that up to your $30 million range, because you will have a bajillion reviews, and that's a real number. Bajillion. Take it to the bank. All right, so what if you get some of your reviews to also record a video testimonial? Someone's got zero. Okay, Jim, we got to help you with that. What if we had some percentage of our reviews to also record a video testimonial? This is a question I got actually on Winning Wednesday. So he said, how do I get our customers to record video testimonials? What is the process? And so we gave him a process for how to ask, how to set it up, how to ask the questions, how to find a videographer. So you definitely want to be coming to the Winning Wednesdays, because this is your chance to get a full hour of me just answering people's questions. Everybody who left there said that that made them feel better. And we have a prize for one of our people, Trey, if he shows up and actually took action on his stuff. I'm excited to see Trey come back if you're in here. But we should measure the different activities that we take against this goal so that we understand what actually causes a good effect. So eventually we get referrals. Right? It's a gold standard of happy customers or repeat business. This is how we measure the effectiveness of our production department. Are we creating raving fans or not? Are we de risking the business against future downturns by measuring and improving our actions that drive future business? Because if you're doing a great job here and a terrible job here, it is just a matter of time before you are done. But if you're doing a great, good job here and an amazing job over here, this will eventually feed itself. So Ask yourself, what if you could never spend another dollar on advertising ever again? You can never reach out to another customer. Like what if the socialists won and there was advertising was banned? I bet you would start to treat your customers like gold if the only way you could get customers was from a vote from another customer. So even though this isn't the case, what if we started acting like it anyway? What would we do for our businesses? So therefore we should be measuring it and not just the volume. I got X Google reviews. But what is the conversion rate? So you see volume, conversion rate and the delta of time. So, so how many do we want in each one of these buckets this year? What is the conversion rate needed to make sure that we get that many people in these buckets? And then what is the delta of time from which we want to get from here to here, here, here, here to here, here to here? And how long do we want to wait for this to happen, for that to happen? Right, because once we start to measure it and determine what's happening, we can do more of it. Because remember my consulting methodologies find constraints, then find out, use data to find out what's working, do more of it. When we can no longer get a benefit from doing more, do it better. When we no longer can benefit from doing it better, do something new and look at it through the lens of what's easy to do that has a big impact, what's hard to do that has a big impact. And, and what is easy to do that has little impact. And then as soon as you try and think about going to do something hard that has minimal impact on the growth of your business, you stop and you go figure out what is the main constraint in the business. This is the RBP consulting methodology, but it depends on data, which is why I have to get everybody to understand that we have lead, mql, SQL, sold, build, review, testimony, referral, repeat. And we have to measure volume conversion rate and delta of time. This is the data model that we're going to have. And somebody might say, well what about insurance? What about knocking on doors, right? This, because this works for everybody. It's just a different way to change the words because this is where it goes wrong. People will call, get messed up when they start talking about leads and homeowners met and stuff like that. Because technically if a door does not open, you don't have a lead, you have a, you don't have a prospect, you have a suspect, right? Because sometimes accolades, I think it is as like leads, prospects like as the language is different, but this neighborhood is huge, right? And that is a suspect, that is not a lead even. Right? Because if every door was a lead and you sort of measure your salespeople again, it. That'll be really mean, right? So it's an immeasurable quantity. So we have to have measurable quantities, and that's what we start at when we can contact a person. So this data model matters because what gets measured can be improved, and we can improve. Unless you plan on logging and creating a system and creating a process around that system, you're not going to be successful. So going back to here, I hope you guys can see, let me know in the chat if you now see the value that defining a data model is to aim to not only define the customer life cycle and then fill it in with our volume metrics and goals, conversion rates and targets, and our expectations around the time so we can measure against it. Because when we do the math, it turns out that referrals are the most expensive leads we have. And who would like to know why I have the audacity to say such a thing? Who here believes that referrals are the most expensive leads we have? I'm just loading up a spreadsheet so I can prove it with math. That's why they call me the credible Hulk. They'll show up with facts and figures. Okay, so boring spreadsheet time. Try and keep, try and keep your eyes open. All right? I'm going to try and make this as entertaining as possible while we go through a spreadsheet. So this is the data model. Okay? This is a data model built out right here for everybody to see. And it uses a spreadsheet that's used to try and calculate the volume, the conversion rate, and the delta of time. So delta of time, we're not putting that on here just because it's too, it was too many numbers. I wanted to keep it easy to see so we could put in our cost per lead and our average price per roof. So if we get a thousand leads and 80% of those people that we get to download a guide or put their, put their business card in a fishbowl at a conference, they become marketing qualified leads and say they want our help. And 99% of those people, we get out and provide a quote for, and 25% of those people say yes and buy. And then 60% of those people, right, they leave us a Google review, 80% of those people leave us a testimonial, and 30% of those people give us a Referral. Well, the cost as you start to say that, because you got 28 referrals for a cost of $3,300,000. Because you spent a thousand dollars, you got a thousand leads at $300 a lead. And by the end of it, you got 28 referrals for your advertising. So technically, that's the most expensive. Well, except for repeat, to get that customer to buy again costs you 52,000. Now, this is a funny way of doing the math, but it's important to note that in this example, we're paying 9.47% for marketing. It is rigged. It was rigged to show you that if you build, if you only get these numbers to go along the way. But I'll show you how it's rate because I'm going to show you the backside as individual outcomes. So, Jacob, stick around for a sec. But all it's doing, you can see the calculation up here. It's just multiplying. You got a thousand leads, 80% of them become 899% of that becomes 7, 2. So it's just multiplying this times this to equal this. That's all it's doing is bringing that number over. And then what it's doing is it's then dividing this number. So it's saying, well, if we had $300,000 spent on a thousand leads, $300 a lead. Well, when we divide that 300,000 by 800, it becomes 375. When we divide that 300,000 by 28, it becomes 10,005, 22. Because we paid this marketing budget once, and at the end of the data, we got 28 referrals. So if we could never spend another dollar on marketing again, technically that referral costs us $10,522. Think about this from another lens. This is why I talk about the door knocking, right? And why guys who knock doors, the salesman that you guys have knocking doors doing the 1050, 50s, why these guys are really losing money on their time. Because we have to think, what is the cost of door of a knocking a door? What is their daily time value? Let's say they say, I wouldn't get out of bed for 300 bucks or less, and they go knock on 100 doors, 10% of those doors open. So they go from suspects to lead custom. 30 bucks for each one of those people, right? Because if they get 10 doors to open in that day, well, those 10 leads that it cost them, they basically they spent $30 to get those leads. And then if that require the Three of those people, right? Say, yeah, you can get on my roof. Well, then now they spent a thousand bucks, because those three people, they're not going to get them all done in a day, because again, their daily time value, they just spent their whole day doing this. Now they still have to get up on those roofs. And so if we try and look at is what is your time value worth by the time they get a customer, they're really spending in their time worth 2500 bucks. Okay? And so when they go through this whole profit split. And again, I know we're working on a spreadsheet, so I'm trying to just not have you guys try and look at every number. But when we look at the thing where we get the 45% gross profit margin, the house keeps 10%. So then you split that profit, and each person gets 5050. So the sales guy gets 3300. Well, if it costs him in theoretical time value for his time to take care of it, he's really making a profit on his time of $850. Because if we switch to a canvassing model where he would pay a canvasser to do it for. For him, and he would pay that canvasser $150 per lead, he would actually pay less because he would really be paying 379 per proposal given and 1500 dollars per customer. If they bought it 25%, which means the profit on his time would go up. This is more of a salesman's way of looking at different compensation plans. And compensation modeling is something we'll teach in another one. But I want to talk about this. They're the backside. So the back side of the business, meaning the stuff that happens after the customer, is individual outcomes. So in the first spreadsheet, what we did is we said if 35% of customers became a review, and then 15% of those became a testimonial, it was technically taking this number and reducing it, and then this number and reducing it. In this example, we're hypothesizing that some customers might leave a review, some customers might do a testimonial, some customers might do a referral, and some customers might do repeat. So it's just saying that they could be individual outcomes. In this example, spending a thousand leads at $15,000, a roof at $300, a lead that close at 25%, we're going to have a revenue of just about $3 million. We're going to be spending 10% of our revenue on marketing. Okay, then if that results in these Referrals. This is how we show the referrals are not your most expensive leads. Because we have to think about the longest possible time horizon, right? If we think about them on a short time horizon they're expensive. But on a long time horizon they're very, very valuable. Because if next year are still, we're still paying $300 a lead. Inflation has caused our roof to go up 10% so now got 16,5 because we are getting a bump in sales qualified leads from the reviews, the testimonials and the repeat business. Then we're going to have a better close rate on those leads which is going to generate more revenue and sales from that. So we start immediately just by improving our close rate because of having reviews, because of having testimonials, because of having referrals and repeat. Our cost of Marketing goes from 5.2 million at 5.7%. Now it goes down to 5.3%. You do this for a long time, your cost of marketing continues to go down. This is why the most yes customer acquisition cost is really the number that matters, right? So using this as a way to continuously drive down the cost of marketing and yes by association the cost of customer acquisition, you're going to improve your business over time. And this is why the most successful business owners I've met think on the longest possible time horizons where they are willing to pay for that expensive lead, that referral, that repeat. Because they know on the longest time horizon close rates go up and it starts to become this big thing. But we have to measure it so we can improve it. So this data should be measured somehow in your CRM. So go to your CRM place that you are working with and say I want to be able to measure the difference between a lead that is just contact. I want to be able to work with a. I want to know who is a marketing qualified lead, someone that actually want, I want to get find out who we did proposals, what our close rates were between all these. Then how many people do actually build. And I want to have a way to measure who leaves us a referral. It could just be a button and you could just measure the total number of sold customers we built a roof for divided by two categories. People with the button checked, people without the button checked and then figure out the percentage. And the same thing for testimonial, the same thing for referral and the same thing for repeat business. So I don't know where I'm at for time. Okay, 7:40. So we got some time for some Q and A. I hope you guys enjoyed this one. I tried to make data as fun as possible because I know not everybody's a nerd like me. So let me know what you guys got. Patina. If you have some instructions for people, go ahead.

And if you guys have any questions, feel free to drop them on the Q A box for Adam to address them. Also, if you guys have any comments, you can drop them on the chat box below. We're gonna give you guys a few moments. I know there was a lot of information here. I have also shared Andy's email on the chat. If you guys want to grab the Excel sheet, just shoot an email to Andy, and he will be able to forward that document for you guys and Adam. We have shared. Also, we're gonna do a spinning wheel for us to select the winners of the books. And this should be fun.

Oh, yeah, right. The wheel winner.

We're gonna save that one for the end. So if you guys have any questions, we also have a feature here for you guys to raise your hand. So I know that some of you might not want to. So if you want to share a question through the chat box, just feel free to use the Q and A box. But if you want to raise your hand to chat with Adam, we can also use that feature. If you go on the bottom of your zoom, there's a button that says reactions, and you can just raise your hand, and we'll be able to ask you guys to unmute, and then you can talk to Adam. So this is. This is the space that you have right now to ask any questions, anything related to the topic that Adam just asked. So you guys feel free to go ahead.

I love the Q and A, guys. I love the challenge. I love it. Test me. I didn't show up. Perfect.

Okay. Luke is asking, do the low marketing percentage spend companies spend more as percentage on supervision to drive better customer satisfaction?

Yes, they spend. Actually, I would say they do spend money on supervision. So I'm glad that you asked the question. So roofing companies who spend less on marketing do spend money on supervision. However, that supervision becomes a whole other lead channel. Because we talked about what happens from the customer side, right? Does the customer do a referral? Does the customer repeat? Does a customer leave a testimonial? We didn't talk about what that supervision could do to generate leads. So if you were in our course, the production octopus, you would see that that supervision is actually another lead source. So if you want to know more about that, we're going to be doing another production Octopus soon.

We also have a question from Gennaro and he's asking how you distinguish an MQL from an SQL?

An SQL is someone we give a proposal to. So if we show up to the customer's house and the customer has a thatch roof like a Hawaiian hut and they want us to do more grass thatch on their house and we're not in the grass thatch roofing business, we're not going to give them a proposal. So therefore the sales guy really shouldn't be measured against it.

I hope that was helpful. Jenna R. Now we gotta have a question from Mika. I hope that I'm pronouncing the name right. Micah. Sorry. My apologies. For a business that is at 50 million plus with 500 to 1000 build a year, what do you think is the referral percentage?

Should be the referral percentage. So okay, let me think about a customer that's in that income range. I so we know that the actions dictate we measure it. And so one customer, the way that they really improve the referral percentage was they would send out a thank you package after from they would like have a person hand deliver a thank you package. In that thank you package was some referral cards where if they scan the cards, sent a referral, they would get, they would get money for it and then there was some candies and stuff like that. They would hand them personally the written warranty from the company. They'd put the lawn sign in, they take the I love my new roof picture and and they posted on social and they had probably the highest percentage of referrals which kind of bangs around 15 to 25% depending on seasonality because there's times when there's a rush, but it's around 15 to 25% of customers would send a referral which is a part of their crazy low marketing budget. But it takes time folks.

Do you guys have any other questions? Okay, well I'm going to share with you guys the links for the upcoming webinars that we have next week. So on Monday we're going to have a webinar for marketing, specifically HubSpot posting and scheduling. That's going to be with Adam. It's going to happen at 12pm this Monday. On Wednesday we're going to have a value extraction call webinar course and also on Friday we're going to have a process mapping with bpmn. This is about processing and how can that influence your revenue and sort of have a better understanding what you're doing wrong. What you might be missing in your business. So we have those three upcoming next week. So the links are here below if you guys want to go ahead and register. But now I'm going to. I'm going to let Adam do the fun. The fun spinning well to see who won.

Okay, so Adam, you mentioned something in the comment and I want to actually point that out. The, the. The hand delivered thank you package. The reason we did that was because when we called it a walk around or quality control check or quality assurance or whatever, it just turned into the customer treating it like, okay, time for my walkthrough. And they would get picky. And so we called it the handy that. We called it the thank you package delivery or just the tip. And that's where we would give them just that there was no quality control or anything because what's a 20 year old kid in a polo shirt going to tell a roofer about how to do their job? So what's he doing to show up there and quality check? He's there. Just hand deliver a thank you package. So key part of making it work is not opening yourself up to a bunch of garbage anyways. Yes, yes, yes, yes, yes. Perfect, perfect, perfect. All right, we're going to pick our winners. All right, who's our first winner book? I've never done this before. This is how we choose to run meetings in some place in the company. Brian F. You are the winner of 100 million dollar lease book. Okay, so we're gonna remove him. This is so fun. This is so fun. I can't believe I get to do this now. I'm so happy to work with like a high volume of roofers now because I get to do fun stuff like this. All right, winner number two, Michelle wanted by a nose. All right, number three, Owen with the question. Okay. Yes. You got it. You got it. All right, so we will get those out. Tara. My EA will probably have to send me some kind of shipping label. I am terrible at like this. So we're gonna do our very best. It might even be cheaper just to buy them off the website and send it to them directly than trying to get me go put these things in the mail. But we're going to get these to you. I promise. We will get it done.

Oh, wait. Owen is asking for us to draw again because he already has three books.

Oh, really? Okay, well, all right, perfect. Let's go again. No, no, I thought we were. I'm gonna remove him. I thought I removed him. Okay, bam, we're going again. We're Going again. Oh, and you're a lucky guy. Go buy a lottery ticket today. Is that Joe Odo from overgroofing? If that's Joe Odo from overgroofing, that's funny. Not over. Oh, Joe. Joseph Otero. Okay. Yeah, I know. You too. I know you too. All right, all right. Okay, we'll get these out to you guys. Thank you so much for playing along. That was fun. We should do shit like this all the time.

Guys.

I don't see any more questions. Thank you very much for everybody in here. Make sure you get your emails to tara@roofingbusinesspartner.com she can probably find them in the CRM. We have you guys as registered attendees for this. We're going to make sure. But if you guys have funny emails that you guys registered for, not your actual emails, that might help. Hope you guys learned something. If this helped you, help me and tell people this was good because I want to make sure this works. I want this to be fun. I want this to be exciting. I want to be helping people. Oh, and Jordan Rieger, how can we set up the best HubSpot reports for lead source? We enter on lead intake form. So, Jordan, in your next Rev Ops meeting, because you are a Rev Ops customer, talk to your integrator, your consultant with us and they will talk to them about the life cycle stages. The life cycle stages and set it. You want to get it set up like the data model that Adam talked about and we will get you on it because again, this is something I've been fighting forever. In fact, we talked about this at the Rev Ops mastermind about. I'm trying to get everybody to do this. So this is great. It's a good opportunity and you're at the right time. So, yes, great question, Jordan.

Well, folks, thank you guys so much for participating. I see that we don't have any more questions. Like I said, I've dropped the upcoming courses here, so I'm going to give you guys a little bit of time to scroll up if you want to go ahead and register. Now, they are not automatic, so you do have to go on the link and register for those individually. Andy has also dropped his meeting link below if you guys want to have a chat with him or if you want to request for the Excel sheet. His email is andy roofingbusinesspartner.com and he's going to be able to help addressing any questions. In terms of my revenues at this stage, I don't know if I fit in for platform for the free CRM. So you guys feel free to reach out to him and he's going to be able to help you. But otherwise, thank you guys so much for participating. I hope that was fun and you guys have a great weekend. Thank you all.

Bye Bye.