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In this live Q&A session, we dive into some of the most pressing topics for home service business owners. From crafting competitive compensation packages and building impactful training programs to exploring how AI can transform call center operations.
We also discuss strategies for managing seasoned teams, creating scalable HVAC business models, and attracting top talent with strong benefits. Plus, we touch on simplifying processes to pave the way for smoother growth.
For more in-depth discussions, tune in to our exclusive FB group and don’t miss out on future live sessions.
0:00 Introduction
2:00 Hiring - Best Practices
4:29 What's the Best CPL and CAC Across Channels?
5:32 Effective Employee Training
9:37 Incorporating Mission and Values
11:54 Commission Pay Structures
13:47 Leading People Older or More Experienced Than You
17:03 Simplifying Processes for Growth
23:04 Cost-Saving Strategies Pre $10 Million
26:16 Service Packaging Strategies
30:05 Conclusion
HUGE SHOUT OUT:
In a year where many in the industry faced challenges, we’re thrilled to have hit the low 20s, outperforming expectations and driving serious growth. A huge part of that success is thanks to Service Scalers.
For the past couple of years, Sam Preston and his team have been invaluable partners, helping us achieve:
✅ Best-in-class SEO
✅ Top-tier PPC campaigns
✅ Dominance in LSA and GMB marketing
Because of their support, we’re celebrating 46% year-over-year growth—a milestone we’re incredibly proud of. As we set our sights on the low 30s for next year, we know Service Scalers will continue to be a strategic partner, keeping us ahead of AI trends, optimizing our SEO, and helping us stay at the top where we belong.
If you’re in the trades and ready to level up your marketing, do yourself a favor and check out ServiceScalers.com. Sam and his team are nothing short of killers.
Special Thanks to Avoca AI Coaching and Training
Looking to train your call center and technicians back on their calls? Get better performance today with the power of Avoca AI, as your staff learns their pain points and improves end-to-end. We have a special promo code available if you schedule now: ‘OWNED’.
Click here to schedule your demo today.
Owned and Operated Episode #157 Transcript
John Wilson: People are clearly going to care about compensation a lot, so your compensation has to be top of the industry or close to it.
Here's our core values. Here's how we live them every day. Here's what we look for. Here's what winning means to us.
Wilson just wrapped up the year. And we were pumped. Most of the industry did not have that same level of success. And when I think about who was a huge partner for us, like top of the list was Service Scalers. We've been working with Service Scalers for a couple of years now, and they've helped us drive best in class SEO, best in class PPC and dominate LSA and GMB marketing.
They've been a huge partner for us, and we're really grateful for that partnership because it's helped us to take down 46 percent year over year growth. As we think about our budget next year, we're aiming for the low thirties. one of our most strategic partners is service dealers.
They're going to help us stay ahead of AI. They're going to help us keep our SEO relevant. They're going to help keep us on the top, exactly where we want to be. So thank you service scalers for your partnership.
Okay. Welcome, to another live, for owned and operated. I think this is our third or fourth one. I appreciate you joining us. If you have any questions, just throw them into the comments and I'll read them off, if we have time. otherwise we have a bunch of questions that come in from the newsletter and the Facebook group, so we just work through those questions.
I will prioritize the ones that come in through comments. So that I can be a good resource, for you. First question. I think this actually came in from Twitter because we were talking a little bit about hiring and hiring around, attitude. So what do you ask during a job interview?
what don't you ask? Good question. what don't you ask is really pretty straightforward. We don't ask the stuff that it's illegal to ask . Not allowed to ask about kids or family or, any other potentially discriminatory.
I really just think Google that talk to your labor attorney on what you cannot ask What we do ask I read something I think Mike Gurley said it on Twitter the concept was The best way to tell what someone will do is look at what they have done so that's usually most of my questions when I'm interviewing Hey, whatever you've done in the past is the most likely scenario of what you're going to do for me.
So do you have a track record? Tell me about action steps you've taken. Tell me about improvements that you've made, through your department. Walk me through your day to day and how that fits. the best indication of what someone's going to do for you is what they did for somebody else. Can an HVAC business be successful with a different model such as new construction as a focus?
Obviously, I actually think we answered this one last time too. Yeah, of course, we had someone on the show, I think two months ago now, my good friend, Matt Ballard, 65 million HVAC new construction business. He runs circles around me. He's an awesome operator. The business is incredible.
I find new construction to be playing on hard mode. So we really try to avoid it. And we recommend other people who are not ready to plan hard mode also avoid it. What is best in class cost per lead and CAC for new install leads across channels? Cost per lead, a lot of it depends on like where you geographically are.
So what market are you existing in? My cost per lead in Cleveland is going to be very different than a cost of lead in Phoenix, which is also different from rural Florida. we're all going to have different cost per leads.
So if I have a job that's 10, 000 and I can afford to spend 10 percent on marketing, and my close rate is 33%, that means I can spend 330 on each lead because I'm going to close one in three leads for a total advertising cost of 1, 000,
best in class is just, are you hitting your numbers? Or can you get down to 5%? That's best in class. There's some companies right now, like big companies that are really struggling. they're spending 30 to 40 percent on marketing and that's just not best in class. it could be competitive pressures, but, I would say best in class is running below 5 percent marketing and still maximizing your opportunities, but up to 10%.
When you were much smaller, how did you run or structure employee trainings? Technical and non technical. Did you mainly leverage supplier trainings and or certain path? If it is manager led, did the manager come up with the curriculum? As the leader, how did you make sure the training was as effective as possible?
We structure training in, two ways. One is, non technical training. So that could be sales training customer service training updates on the iPad financing in any number of non technical subjects, could be handled with that training. And the way we do that is we just calendar it out.
We used to do it 10 weeks at a time. Now, I think we're at 52 weeks We know what the next year of training is going to be. we've already assembled the links for the videos and it's repeat. the nice thing is when you schedule that far out, you just repeat it.
It takes seven repetitions to really get something into someone's head. when you're doing trainings, it's okay to repeat it. If you're gonna, if you talk about options and the importance of options and how it works in week one, you will need to repeat it by week four or five.
Like you're just going to want to keep hammering that in. So when you're prepping to create a training program, the most of the focus is this is the basics just over and over again. And all you're doing when you get big is getting really good at the basics over and over again.
So you can run a 13 week training and just repeat it four times, basically once a quarter. every first week of my training, I'm doing options every second week. the explore stage. you just repeat it when you're done.
It doesn't need to be that complicated. The second part of this question was, do we, leverage supplier trainings. absolutely we do. we do a fair amount of technical training, this is a big area of improvement for us because our technicians are asking for it more.
So clearly we're not delivering yet. But I do love that they're giving us that feedback. I think that's really cool. the way we do technicals, we lean a lot on our suppliers. a really good example is, there's a new refrigerant coming out, we have to get our service techs and installers up to speed so we can safely handle this new refrigerant.
we've been sending them to trainings, we've been sending them to courses. And it means a lot of downtime, or it means mornings, we'll have April Air come in pretty frequently, talk about their products, and the idea here, it's two fold, like one, we want safe, team members that know what they're working on, so we can be really effective technical experts, and two, it does just increase sales.
If people understand the product lines on a deeper level, they will talk about them more, whereas if they don't understand it, they will never bring it up. Something like sewer lining is a new technology. It's confusing, it's not as simple as let's dig a hole and replace a pipe.
your drain techs aren't going to feel comfortable bringing that up as an option. If you're not training them on how that works, when it's a good fit, when it's not we do leverage our suppliers significantly for training. probably to the point of one training a week is held by a supplier and we're looking to ramp that up more.
As we add more technical experts to the companies. What are ways you incorporate your mission and values across the company? What are techniques you've used to get everyone on the same page? This is something I feel we're a work in progress on. We're better than we were, but we're not where I want to be.
I think Chad Peterbrand does a really good job. if you listen to his podcast, he does a better job than I do. he talks a lot about it. he runs a geographically dispersed, business. So I think they have 10 or 11 locations now.
he's had to be much more, Deliberate in his communication we talk about it a lot. We put them on the walls everywhere. We hire and fire by them. We give awards based on our core values every quarterly.
We talk about, who's the core value, person, who in your team lived out our core values the most? What's an example? It comes up a lot during our praise. if we're giving public praise, we'll often talk about which core value they really hit.
Where we would like to get with it, which I've seen some companies deliver well, is at the start of every meeting they hit their core values. here's our core values, here's the one we're focusing on right now. Here's what this means to me. I was at a place, maybe a month or two months ago and every single meeting that this company starts, it starts the identical way.
Hey, we're X name. Here's our core values. Here's how we live them every day. Here's what we look for. Here's what winning means to us. And like every meeting, like it doesn't matter if it's senior leadership, executives, tech training, every meeting starts the same way, which I really love that level of execution on core values.
I feel like, we're a work in progress. Hopefully in the next year or two we will be best in class, but I don't think we're there yet. How do you factor in commission pay? What happens if the quality of work requires a return service visit? When do you pay out the commission? we just did a short on this the other day, but there's basically, the spectrum.
Three main options, but you can be a spectrum in between there. One is like full hourly. There's no commission at all. The middle is hourly plus a commission. So usually what we see or hear and what we've done is like 30 to 45 dollars an hour with a 3 to 4 percent commission on their performance.
And then the final, option is full commission. So those are the three basic buckets that you can pay. My personal preference is somewhere between the hourly and 4 percent commission or the full commission because it, aligns your goals. What happens if the quality of work requires a return service visit?
Honestly, that's pretty straightforward. If someone did a bad job, They should be docked for it. One of our core values is accountability, which is we do what we're saying we're going to do.
if we're doing a bad job or if we're not doing what we said we were going to do, it's our core value that you're held accountable to that. And that's how we live that. Some companies, don't, and I think accountability gets thrown around a lot, but we really believe in it and we try to live it.
If the quality of work requires a return visit, then that commission's gonna get docked. when do you We pay out commission once a month for the hourly plus commission, and we pay it out every payroll, which is every two weeks for the full commission, people.
How have you gotten comfortable and confident in leading people who may be older than you or have more years in the industry. Any tips here would be appreciated. I think that's just time, and probably respect. I started running the business when I was, 23.
And everyone in the world had more experience than me. if you come into that with an open mind, and with respect for how much more experience they have than you, then you're probably going to do okay.
I think if you come in cocky, then it's probably not going to go very well. I remember when I was 26 and it was my first, acquisition that we merged into our primary business. I was 26 years old and the business went from 13 employees to 27 overnight I was the youngest person in the business.
I think the next person was like 10 years. the vast majority of the team members were in their late forties to mid sixties. So roughly double my age. It was weird, at first, but the weirdness went away pretty quick. they did a great job of treating me with respect.
I feel like I gave that respect back. I asked a lot of questions. if you can approach things with a heart of humility and really try to understand where someone's coming from they know the answer. They just know better than you.
They've been doing this for longer. And just asking a lot of questions. And I feel like, you can see me live that out now. That's the whole point of the podcast I get to bring on people that I respect and admire who have way more experience than me, and I get to ask them questions on how they did it.
if you listen to how that goes, that's how I did it 10 years ago when I was new. I still feel like I'm learning and still a junior. the only tip I can give is be humble. You probably know almost nothing. And, just ask a lot of questions.
The next question is talking about simple is scalable. A few months ago, we got our call center on Avoca. And Avoca is a AI call center solution for home service companies just like me. And probably just like you. They have a couple different products, but the one that we like the most is their coach product which listens to every single phone call and runs it through a rubric to help our call takers improve.
this is a really big deal because we take hundreds, sometimes thousands, of phone calls every single day and it's just too much for our trainers and managers to keep up with and effectively train. So it lets us do ride alongs on almost every single call.
Do you have any examples where a specific process became too complex as you grew, and you needed to take a step back to simplify in order to grow forward. I would say a good example, we actually just did this, I'm sure I can think of a few more too, something that we just did maybe two months ago was we were really struggling with our job types.
So our call center over the last year went from roughly four or five call takers to 20 I think we're down to 15 right now. It got really complicated because we were trying to get granular detail by job type. we had 90 job types, four or five months ago and those 90 job types, got us really good detailed information on okay, this is an AC repair or this is an AC service each trade had 30 job types, which is a lot Fixed faucet, fixed toilet, there's a lot going on there. And Brandon, my president, did a really great job of seeing, hey, this is a problem. Like with 90 job types, what that does is if it worked perfectly, and if we had total control and it was amazing, we would have the most granular details ever.
But the reality is it doesn't because it's really hard to train call takers on what's the difference between these different job types and how do you booked into the right one. So we actually spent a tremendous amount of energy rebooking job types, fixing book jobs and like backtracking, which slowed down the entire rest of the business
Who's the right tech for this job type. Who has the right skills for it? Who's capable of taking this on? because we kept making mistakes, we'd send the wrong type to the job. So we simplified our job types and I think we're down to six to eight per trade. we went from 90 to 20, which was a huge change.
What that ended up doing was shortening our call booking time. our average call went down. Our number of mistakes went way down, which was a huge improvement. Feedback from the technicians was better. Simple, more crass way to put this that I've heard is build your company as if an idiot is going to run it or an idiot is going to be in every single position because one day they will. The polite way that we try to put it is how can we document this job in such a way that someone in the Philippines could do it?
How can someone on the other side of the world perform the tasks? if it's too complicated to explain over a few minutes in a loom and a standard operating procedure, then it's probably too complicated and we messed it up. we're really in a state right now where we're constantly reiterating on our processes because we are continuing to find that our processes are huge bottleneck.
One that we have a big pain point on right now is install coordination. A huge bottleneck causes a ton of backlog, causes a ton of slowdown, and it actually decelerates revenue, significantly, like to the tune of a hundred to two hundred thousand a month. just so we're not able to complete the amount of administrative tasks a day, in order to, stay on top of our, install coordination process.
So that's one that we're currently attempting to unpack how do we shorten it up or how do we add a software here. how do we create looms? we keep coming back to how can someone on the other side of the world do this? Because if they can, and they could do it with a few minutes, a checklist, a few minutes of a loom, then we nailed that process.
Does a company need to have health, vision, dental, and 401k benefits to get top talent in this industry? What are the most important benefits to get top talent? I would say that the only benefit that you missed, is what's your compensation?
Like it has to be top comp. So people are clearly going to care about compensation a lot. your compensation has to be top of the industry or close to it. You generally know you're doing well with compensation when your competitors call you and ask you to stop, which has recently happened for us, which I thought was funny.
They explained to me that I did not have to pay. have top compensation. That helps a lot. And then, health vision, dental 401k. if you want the best in the industry, then you have to treat them like the best in the industry.
You have to give them good stuff. Hey, we want the best and you are the best. So let's treat you like the best. I really think, the benefits that were just described. were basically table stakes. if you really want to attract top talent in the industry, you should be figuring out what your benefits look like outside of, health, vision, dental, and 401k.
What does your PTO look like? What's your holidays look like? What does advancement look like? How do you continue to grow inside the organization? What does training look like? How effective? How often will you invest in that person and what does that look like? What was your biggest move to save on expenses pre 10 million?
I feel like my experience pre 10 million was not most people's. I would say these days it would be a lot of overseas hires. And as much AI as possible. People are your biggest asset, but people are also your largest expense. Payroll is your biggest expense. anytime you can reduce the total burden of payroll, and continue to grow, that's a good thing.
I talked to companies that are, five to eight million dollars in. They'll often have a similar level of complexity with some of the issues that we have, but they don't have the budget to hire for it, and that sucks. all of these tasks still need to be completed. Someone has to install coordinates, someone has to purchase, someone has to run a warehouse.
when you're, a ten million dollar shop. You have 15 people that can participate in that. So move as much as you can to softwares and Philippines, and then bring in office, your most important, roles and responsibilities. That's how we think about it. Accounting is really important.
So we're going to have a lot of that in house, but for the things that are a little bit more tactical, like accounts payable, or AR, collection calling, yeah, sure. Send that to the Philippines. That's great. Save a lot of money. our experience, why you went with it, expectations going into it and what you've gotten out of it so far.
I have nothing but awesome things to say. About working with Nexstar. Before we were with Nexstar, we were with, a best practice organization called CertainPath. I also have great things to say about CertainPath. CertainPath is a really great organization to help you get from, I think the organization started with the concept of getting the owner out of the truck.
Two to three man shops. I think their average contractor is probably like three or 4 million. it was really great. we learned a ton from it. We professionalized a lot of our practices and, it was very helpful. Where we started to struggle is once we crossed that 15, 16 million mark, and we just didn't have the tools we needed to succeed at the new level we were playing at,
Absolutely. Nextar has been a big win. We've learned a ton. hired the right people. And even more importantly, we've gotten connected to a ton of amazing people inside the network, that are really helpful. a lot of our learning has just come from being connected with other people inside, Nextar.
if Nextar is an opportunity for you, go for it. I highly encourage it. We get a ton of value out of it. Certain path if you're the right size is also wonderful. Rebecca's got a great thing, over there and I really admire what they built. Just probably depends on where you're at inside your business. Service packaging, what to know, how to approach it. Have you found a particular series of words that work well? Good, better, best, bronze, silver, gold, basic, standard, deluxe. We're putting a ton of energy into our packages right now. Timely question.
I'm going to start with we have six core services or that's how we think about our business. we've been thinking about it that way for a little over a year. if all we did was these six things, the business would move forward.
It now becomes job to do these six things. What we've been doing is designing packages around those six things. how do we build a water heater package? How do we build a generator package and HVC replacement package, water filtration package, panel package. Sewer replacement package and it's been a lot of fun.
I'll give the names, but I'll talk about how to approach it a little bit more. Cause I think that's going to be really valuable for people. the bottom option, can be good, or whatever I personally like five options.
That's what we've been running with is four to five. It should be stripped down to value. You could almost call it the landlord special, which we literally did. For the first two months of packaging we called it the landlord special because it was, the cheapest thing. We do have this option and it is available to you.
I think that's probably the biggest benefit of packages and how to think about it and when to offer it you want to be a company that anybody can work with ideally. you want to be able to have an option that fits the bigger you get.
But we want to be. presented as, a premium option, but we do have an option that fits all budgets. That's how our bottom tier option looks. Landlord special, one star, whatever you want to call it, is fair game. And then the further you get up, whether it's four or five total options, the differentiators, become much less technical and much more quality of option, like quality of life.
Option three is gold or whatever you want to call it is good. Like it's close to best in class equipment. But what's really starts sets the difference. from the top options to the middle options is the warranty, prepaid maintenance, those are the big wins, for both the customer and for us.
So we set ourselves apart with our topmost options by, hey, how do we give you a lifetime warranty? Or how do we give you a 20 year warranty for this product? And also give you the best in class product. So that's how we approach packages. Landlord special to very best in class with lifetime warranties.
So how do you make the most overbuilt, you will never have to think about this again, option all the way down to this is the cheapest thing that we could possibly offer with zero bells, zero whistles, but it'll give you heat.
Naming it, you can pick your names. we've done bronze, silver, gold, basic platinum. Optimum. I think you can pick it. I don't know that there's the perfect naming, structure.
It works and sales do increase and customers are happier, with it because they get a lot more, bang for their buck. Lifetime Warranties is a really big deal. Like it's a big deal. It's a big winner for everybody. Okay. That was our live. So I appreciate you tuning in. If you are interested in hearing more and seeing what else we have going on, check out owned and operated.
Thanks for tuning in.
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