Buyers and Builders
00:30:32 · Nathan Lindley
[00:30:32] S1: Yeah. So we we have... Last year, we had an an average transaction or an average call value of $1,477. That was for every call that we ran. Every time we knocked on the door, we averaged $1,477. Now, of course, there's a bunch of those calls where you you walk away with nothing, and then there's, you know, a handful of calls where you make $40.00, right? And but the the blended average across all of those was $1,477 for the year and so, so now, I can overlay that on their call volume and I can say, okay, if you ran 2,000 calls last year and you and you generated a million dollars in revenue, then, you're averaging $500 but I know based off of our performance metrics that we would have done $2,954,000 off of that off of that call volume. And so I have I've distilled it and distilled it and distilled down to just like what what am I actually acquiring here? And why would it be better for me to buy this business than to put money into Google? And and that's ultimately what I've distilled it down to is is that I am buying the opportunity to come into this customer's home and look for problems that I can then provide solutions for. And so that's the distillation of my M and A strategy. But that, you know, that took an iterative process. You know, every time you you do a deal and some aspects of it works really well and some aspects of it didn't work as well. And like, you know, one one thing for us now is if the owner has a very strong customer facing role, that's a that's a a a big issue for us. Not that we won't still do the deal but it's going to be a we know that there's gonna be a high customer attrition due to that fact. Because all the customers are are accustomed to to engaging with the business owner. And and when he steps away, there's gonna, that's gonna be felt. And so, not that we won't still do the deal but that is a strong consideration for us. Versus if the if the owners maybe involved in the like in the in the office and and managing things but he's not on the phone talking with the homeowner on a regular basis. That's a that's a totally different level. If he steps away, the the homeowner might not even ever know. Mhmm. And so that's a that's a big consideration for us.
00:32:51 · Mikk
[00:32:51] S0: You mentioned putting money into Google. How does your funnel work if you if you can share? And who does the calls? Is it technician? Is it people in the office? How are people incentivized? And maybe you can share more about your incentive structure because it's Yeah. It's... It seems to be working so well.
00:33:07 · Nathan Lindley
[00:33:07] S1: Yeah. Yeah. So so first of all, we don't do any advertising. And part of that is because back when I had my publishing company, that was kinda one of the things that ended up kind of ending our publishing company was that we were spending a lot of money on on marketing that didn't really yield as efficient return. And so I just kinda have, like, a bad taste in my mouth about it. But also, there's some really large private equity backed companies in in my markets that I have to compete against, you know, dollar for dollar and it just seems like a horrible way to try and compete for business. And so, oh, so what we do then is there's... So there's that initial layer of value that we're acquiring, which is the active customers. The number of calls that you... That that guy ran last year. Like, let's say he ran 2,000 calls. K? But let's say he has 5,000 customers in his database. Well, that means that at least 3,000 of those customers did not call him last year. And what nobody ever does, going back to the advice that I was initially given when I got into this space was you just wait for the phone to ring. That's terrible advice in this space. And because what can happen is you you just don't get the call because the the homeowners feel like they they need you. So, what we do is there's a there's a second tranche of value that we extract from our acquisitions where we go through and we call all of the customers in the list particularly the ones who haven't called us in the last twelve months and we offer them free service. So, we'll we'll offer em a free tune up or a free maintenance plan. Just to get a foot in the door and so, one of our one of our value drivers is reactivating as large percentage of that list as we possibly can. And and so, you know, to your to your question about incentives, we have 11 CSRs. Four of them are designated for taking inbound calls and then seven of them are full time outbounders And their job is to call everybody in our database and offer them a free tune up, particularly as things are getting hot or cold, that can be a large percentage of our call volume, is the calls that we're able to generate ourselves just by calling the customer who maybe is you know, not even aware that it's that time of year and saying, hey, you know, with... You know, it's been a while since we've been at your home.
00:35:21 · Nathan Lindley, Mikk
We'd love to give you a free tune up just on the house just to say thank you for being a loyal customer, and we're able to fill our board for about eleven months of the year that way. There... February is always just hard. I... We still haven't really been able to crack a note in February. But the other eleven months of the year, any holes we have on our board, we're able to fill by calling people who haven't used us in a while and offering them a free tune up. And the thing is too, this part of the reason this works is because we're very diligent with technical training. And so our technicians are able to spot opportunities better than most. And so that's a key factor in our ability to give away the service. Because if you go into a home for free and you don't find a problem to solve, then that's, you know, it's gonna cost you a lot of money. But our our technicians are are really well trained on spotting problems that might not be obvious to other people. And so we we do full heat load calculations, you know, and and ductwork calculations and know how to, you know, read amp amp draws and things like that that a lot of other people miss. [00:36:27] S0: How did you come up with this?
00:36:27 · Mikk, Nathan Lindley
[00:36:27] S0: How did you come up with this? [00:36:29] S1: You know, I got really, really blessed to make a couple of great hires, which it kinda goes back to... You hear a lot of successful guys talk about like that they, you know, they collect people. That never really made sense to me because I was always more of a process guy. Like, hey, if you have a good process, you know, you you can make average people top performers. And I think that that's true to a point, but there is... Sometimes that process comes from hiring amazing people and then figuring out what it was they did that made them amazing and then trying to reverse engineer that. So I... I've got two guys in particular that I've hired who are just outstanding technicians and they've been able to help me create a process that can take it that it can just educate a technician on how to how to find these opportunities that the way I term them is they're pre symptomatic problems. So the things that are wrong with your system right now that will eventually create a failure but your system might run for a year to two years without you knowing that there's an issue. But it will eventually cause a premature failure. [00:37:34] S0: How many people in the team today?
00:37:34 · Mikk, Nathan Lindley
[00:37:34] S0: How many people in the team today? [00:37:36] S1: We've got about 50 right now. We just just crossed the 20 technician threshold here just recently, which is awesome. And then we've got, like, eight installers in the different markets and we we are also in a third market now. We we've expanded into a town called Victoria which is down in Texas coastline and so now, we're in three different cities. And then, I've got, you know, the 11 CSRs and seven managers. I've got got service managers. We've got an plumbing manager. I've got electrician manager, and, you know, all... And all that. So got a great team going. [00:38:12] S0: When you find those special individuals, special people, those great technicians, which... Who join you, who teach you a lot of different things, do they want to stay as technician or some of them come to the to the holdco to the head office to to manage the... Help to manage the group other technicians? How has it been so far? [00:38:32] S1: This kind of a kind of a mix. You know, right now, all of our manager slots are are full with guys that I'm fairly happy with and so, I think there are probably a couple of guys that would like to be in a manager slot at some point and as we continue to grow and and create need for more management positions, I kinda have my shortlist of of candidates and some of them I'm I'm communicating that with and some of them are are not. I'm just, you know, you don't wanna make a commitment or create an expectation that maybe ends up changing, you know, as time goes on. So