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Join John and Jack as they break down the do’s and don’ts of strategic pricing and why gross profit matters more than gross margin. They’ll also chat about handling discounts, boosting inside sales, and training your team to hit those numbers.
Plus, hear about their crazy year-over-year growth and their open book management style. Tune in for some real talk on making your service business thrive!
Wilson Companies just wrapped up the year in the low $20M range, and they couldn’t be more pumped. Most of the industry didn’t see the same level of success this year, so we're breaking down how to get there.
0:00 Introduction
1:19 Reflecting on Recent Successes
2:46 Budgeting for Growth
5:14 Challenges in Plumbing - Pricing
7:21 Determining Hourly Rates
12:44 Dynamic Pricing Strategies
18:33 Understanding Gross Profit and Pricing
23:20 Commission Structures and Performance Pay
32:05 Open Book Management
41:33 Conclusion
SPECIAL THANKS TO SERVICE SCALERS
When you think about who helped make it happen, Service Scalers is right at the top of the list. Wilson has been working with them for a couple of years now, and they’ve delivered best-in-class SEO, PPC, and dominated LSA and GMB marketing for the company. Service Scalers has been a critical partner in driving Wilson’s impressive 46% year-over-year growth.
Looking ahead to next year, Wilson is aiming for the low $30M range. Service Scalers will remain one of their most strategic partners, helping them stay ahead of AI trends, keeping their SEO sharp, and ensuring they stay at the top—exactly where they want to be.
Huge thanks to Sam and his team at Service Scalers. If you’re looking to level up, check out servicescalers.com.
SPECIAL THANKS TO HATCH
Turn communication into conversion with Hatch and its AI Agents, ready to handle follow-ups, reminders, email blasts, and more for your home service business. Save employee hours and book more leads with the power of Hatch. Learn More About Hatch Here
Owned and Operated Episode #158 Transcript
John Wilson: Pricing should be strategic. Open capacity costs real money.
We had a couple of major pain points. earlier this year, and those pain points were how do we contact our unsold estimates more frequently? How do we book our membership appointments faster? How do we stay in contact with customers and let them know that we have promotions? And how do we run a speed to lead process for Angie's leads?
When looking around for solutions, we saw a couple great, softwares on the market, but our favorite one was Hatch. Hatch's user interface Was so easy. It directly tied into ServiceTitan. It automated the workflow of five or six employees a day.
We're now in contact with hundreds of additional customers. We're selling a ton of our unsold estimates, and it's easier than ever to book our membership follow up appointments. So Hatch has been a really big win for us. In order to book a demo with Hatch, click the link below.
Jack Carr: Welcome back to Owned and Operated with your host, Jack Carr.
What's going on, John?
How are you doing, man? We haven't done one of these, by the way, no guests. No, just John and Jack.
John Wilson: I'm good. It's November 6th and, day after election day, if that matters to anybody. November's been weird, but October was crazy.
October, this year has been a really big ride for us. we invested a ton into growth. We invested a ton into marketing and up, actually 50 percent still, year over year 49. 8 to be exact, percent year over year, which is obviously crazy.
And I know that's not most people's reality right now. and October was just no different. were up a little bit over 50%. And we set a new record in October, which was pretty crazy. Even if we discount the fact that there was 23 working days, our average per day was still, much higher.
Jack Carr: So I'm not, gonna make a big deal out of this or anything, but we're up year over year. estimated by the close of this year, a hundred plus percent. Okay.
John Wilson: I got to catch up.
Jack Carr: The amount of millions is one month of your, revenue generation is, the entire year.
That's still a big win. Like that really, it's cool to see where we were last year. And all of the things that you've been putting into place, the bets, the investments that you know, the big boulders, and now they're starting to pay dividends.
Like it's working.
John Wilson: Yeah. I think, I really do need to re listen, to some of these, but yeah, look, if you want to know how we did it. Listen, cause that's how we did it. but yeah, big year. And then one of the big things we're trying to tackle right now is we're in budgeting season.
This is the first time we've ever budgeted. it never seemed relevant because we were always growing so fast. but what I have since learned is you can just budget for growth. we are aiming at about 34 million next year. That's our on budget target. And, we believe we have all the different mechanisms to get there.
And delightfully, all we have to do is repeat October, a bunch of times. October actually, despite being a giant month for us, didn't feel like this, like ungodly press to hit numbers. Like it just happened naturally because now we do, the daily budgets, 130 grand a day.
Jack Carr: Day, which is pretty fun
John Wilson: We're aiming at about 34 million next year.
Jack Carr: It's interesting to see because I remember the processes that we were talking about early on, like when we started this almost a year ago and the processes were different.
You were dealing with still building and now it's just implemented and now it feels like you said, it feels a lot easier. given, don't get me wrong, there's, still everything that crops up and refocus and all this kind of stuff. But, in a world where a lot of companies are having a lot of trouble.
does feel good to do well. we had an awesome October also. it felt like everybody that didn't buy in June and July because they didn't want to finally pulled the trigger. So we had a huge amount of sales in October. not record breaking, but over, I think 140 percent of last year over year for just a month, which is awesome.
We're just going to try to continue that and we're ramping up. yeah, people and processes and vehicles to try and match that. So it's, it's definitely something, so the, big rock that we're moving right now is price. Do you want to dig into some price today?
How we get there, what that looks like and when to give discounts, all that kind of stuff.
John Wilson: Yep. I actually think it ties pretty neatly to budget cause that's how we think about this. and this is something that we've gone back and forth on. I would say the problem that you're trying to solve, we have spent most of this year.
Working on, I don't think we're perfect, but I think, like we've spent a ton of time on this. So I feel pretty comfortable. So how about you describe the problem and then we'll, we can start riffing on it.
Jack Carr: Yeah. So, the, problem originally started in plumbing. So HVAC, we have no problems.
We were, I think we're really close to market rates. people are happy with their pricing. Our guys are happy with their pricing. There's no issues. We're with pricing on the HVAC side. We are still building the plumbing department and we had pricing set in based on our worked hour average to generate our flat rate.
But within the mix, something got messed up and we entered in a bunch of prices wrong and it made it a nightmare for everyone. So we said, okay, here's what we're going to do. We're going to go ahead, get Pricebook Pro. They have some great features. We're not sponsored by Service Titan. Yet. We still always have a chance, Service Titan, if you're listening, but, we utilize the feature.
It's great. Like it really helped us get to a baseline, but now what are, it's not so much now the price exactly, because I think, I still think we're priced accurately for the market in plumbing. Yeah. Cause I know what other plumbing companies are doing from secret shopping. but now it's like how, to make it so that pricing does not become a sales issue.
Does that make sense? Like, how do you get your team behind the pricing structure? Because I think this is what we in the trades actually, across all the trades, I know I had this conversation two years ago in HVAC. It's like, how do you justify to your team a 300 p trap when they know that the part's 40?
And so then they try to discount it and discount it to 90 and you say, guys, you cannot discount a 300 part to a 90 part. Just because you don't believe that it should be that, or you can't sell that based on you're not providing value in other ways, shapes, and forms. So that's our world right now.
And I know a lot of other plumbers, are on the same page with me. I've talked to a few guys about this and same issues. So what's the magic bullet? Is there, a silver bullet here?
John Wilson: No, I don't think there's a silver bullet. I think there's a lot you can do though.
Jack Carr: Can we start off on what was your mindset and framework around setting your work hour average. I don't need to know the number, but why that?
John Wilson: Yeah, we backed into it. setting pricing, in the trades per hour. can be anywhere from like 80 an hour to like some, companies charge like 900.
it can be anywhere. and it, there's a few factors that you take in mind. One, what's your cost of doing business? Like literally what's your overhead? How do you cover it? and then how many hours a day to actually expect each technician to be hands on the tools, which is efficiency.
So how much is your efficiency and the downside of, being a home service company is efficiency is actually low because you have to drive between jobs. So you might be a 30, 40 percent efficiency. And if you need 2, 000 a day to cover your time and you're only working for four hours, then you might be at 450 an hour, which obviously sounds like a lot of money because that's what attorneys charge, but attorneys get 10 billable hours a day. Plumbers only need two. But efficiency is the big nut to crack here. So you take your overhead, you take your efficiency, and you figure out what you need per hour.
Jack Carr: And so is that the, basic formula? Basically, yeah. How do you determine what do you need per hour?
John Wilson: Basically, It's efficiency, what's your overhead, and what's the tech's earnings. That's going to be like the big things that determine what you charge an hour. And you could be good at 200 an hour, which might sound like a lot, but if you're only working hands on the tools for three hours a day, that might just be 600 a day, which isn't a lot.
Jack Carr: To quote Ellen Rohr though, right? Shouldn't it be, it really shouldn't be your current overhead. It should be the overhead. If you were able to offer what you want to offer your team, so that means the vehicle right? The 401k package the benefits.
Because the minute that you change and you add more overhead, you don't change your worked hour average, then you start losing. So you, create this, you come up, I'm just going to arbitrary number 400, right? So you're 400 based on your efficiency, your overhead, everything.
And that's how you price your jobs. You have members, they get 10 percent off. You have a matrix for what happens when we don't have calls on the board, right? That you offer between zero and 20 percent off you have people on site who are allotted in a special amount of price reduction to help generate a sale.
So how does that function? Because realistically, if you start to stack a lot of these, you can get to a point where. The tech went out to the site. It was a member. So they got 10 percent off. They offered him additional 100 bucks off and now your, inside sales team is calling them two weeks later saying, Hey, I'll give you another 10 percent off.
And so that absolutely has destroyed that number.
John Wilson: Yeah, So the idea, like the big one is, are you pricing right? So I think you might need to be priced higher than you are. So if you're 150 an hour flat rate, realistically, maybe you have to be 300, which I know sounds like a lot,
So if I open up your company and I dive into service Titan, I bet you think that you're 60 or 70 percent efficient. And I bet you're actually 30 or 40. so on one hand, you have to get better because you're forcing a customer to pay for your lack of ability to run an efficient business, which I don't think is fair to the consumer.
So you have to get better, you have to figure out your routing, you have to figure out supplies, whatever it is that is preventing you from running an efficiency based model, you still have to be priced right. So we'll add the calculator, but let's say that we're working off of 300 an hour flat rate.
and your efficiency is 30%. So 30%, which I would say is actually probably okay. So 8 hours times 0. 3. So 2. 4 hours a day of, time. Times 300 bucks an hour. So that's 720. a day of revenue out of that truck, which is low. the things to work on there is like average ticket or, whatever.
So that's 3, 600 a week. I personally would not be excited about those numbers, even at the high price. What you do in that case is you teach them how to sell more stuff, do sales training, that type of thing. Or you get their routes more efficient because they obviously need to ramp up because charging more doesn't really solve the low efficiency.
but you figure out what your price is. You figure out what your price has to be. And then once you figure that out, let's say it's this 300 an hour. Let's just keep using that example. If you go down to, 270, because you're, they're a member discount, and then you have to give another 10 percent off because, you have open capacity, then yeah, you're down at the 210s, and maybe your break even per hour is,
So maybe in this case, 300 isn't enough. So when we're working through breakeven, we want to be working through what's our breakeven by hour and what's our breakeven by month. Because most of the time when we're making strategic pricing decisions, that's really the nut that we're trying to crack.
So I'm going to take this hourly example. I'm going to blow it up to a month. So my overhead every month is 700, 000 real number, 700, 000. That's my overhead. So I have to, in order to be profitable, I have to drive 701, 000 of gross profit dollars, ignore the margin, ignore anything else.
I have to drive 701 gross profit dollars. Okay. in order to be net profitable. So all that we're trying to figure out with an hourly is like a condensed version of that. So if I'm 700, 000 and I'm going to do 2 million of revenue, and I run at a 45 percent gross margin, was I profitable? Let's figure it out.
I was net profitable by 200, 000 that month. So I might, in that case, be a little bit froggy. Maybe I can get dynamic with pricing because, maybe I have two days left in the month. I did a 10 percent net profit month. I feel good about that. And I'm like, okay, my guys have nothing on the board tomorrow.
I'm already 200, 000 over my gross profit need. I covered my overhead. I'm net profitable. And any additional dollar is just going to go float to the bottom. So sure, I'll take that 50 percent off job or 40 percent off job because it keeps my guys moving. I'm gross profitable for the month. And if you take the hourly conversation and the worked average hour and you blow it up to monthly, like it's the same math.
Can I take a big swing down and get froggy with pricing because I've covered my break even?
Jack Carr: Yeah. So you can get more dynamic and get more flexible after you reach that, specific number.
John Wilson: Describe how we use this
Jack Carr: That's helpful.
John Wilson: So I need 700, 000 of gross profit dollars in order to cover my nut. And that's an important number to know because once you know your breakeven and your breakeven is consistent, those are the two most important parts. Then you have all the information you need to make good decisions because if I cover my break even or if I'm close to covering my break even and it's the 20th of the month and I'll be in the black in a day or two, I can take 40 percent off.
so the way that we use this. Is, one, how do we make sure we can be dynamic with pricing? So we try to run lean. Because the lower you make your break, even the more dynamic you can run because you can take bigger swings.
So right now we can take a 50 percent revenue drop to October and I would have still been net profitable, which like that's a superpower. That's amazing. How do you control pricing? And like, how do you use that as like part of your decision making?
So if you're priced right, You should be able to take 10 percent off or 20 percent off to fill the board Because you're tracking towards your gross profit dollar target Wilson just wrapped up the year in the low 20s and we were pumped most of the industry did not have that same level of success top of the list was service scalers We've been working with service scalers for a couple 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. And one of our most strategic partners is going to be service dealers.
So make sure you check out service scalers. com Sam and his team over there. It's just a bunch of killers. So thank you.
Service scalers for your partnership.
Jack Carr: So do you take those swings early to try and front run some of that gross profit dollar though? So like week run one, you have a light board. Will you take that swing? Cause Hey, I need to take that swing now to just get some profit dollars, even if it's at, 10, 15%.
John Wilson: Thinking about it zero.
John Wilson: We don't do this by hour yet, but like by day, our daily budget is 125, 000. Our daily break even is 70. So I can swing down to 70, 000 and I should be good as long as I run at an appropriate gross margin. Now if I start like really getting crappy with margin, then like my break even goes up.
And we use a daily tracker to know where we sit. what are materials? What is, labor for the month? And how do we be able to respond?
Jack Carr: Ironically, all these conversations lead back to the same point, which I tried not to talk about today. It was gross profit and gross margin.
John Wilson: The mistake that small companies make when I see this happen is they get very caught up in gross margin versus gross profit. Gross margin is a percentage and a percentage is really important. You want to be North of 50 percent gross margin to run a healthy business.
Ideally much higher, right? Like 55, that'd be great. 60 would be amazing. but gross margin doesn't pay overhead. So if my need, I'm going to use my overhead again, 700, 000. so let's say that I run a 60 percent gross margin month, but I only did half a million dollars of revenue. That didn't do shit for me, because doesn't matter.
My rent is still 20 grand a month , and it's due on the first, so sorry, landlord, I only knew 30%. I ran a 60% gross margin, but my gross profit, I only did gross. Nobody calls $300,000. So divorcing those two concepts is really important because when you start playing the gross profit dollar game and you understand the nut that you have to crack every day.
That's when pricing starts to make more sense. So the people that tends to be the most like rigid in their pricing are people that don't understand it. They went to some training, they went to some something and somebody was like, you have to stick to your pricing. You got to stick to your guns on this.
You need that 50 some percent margin. And they have crews sitting. For no reason, because they just don't understand that like gross profit dollars is what keeps the lights on.
Jack Carr: Let me pivot though a little bit.
Sales training in terms of pricing. So I think this is where we are actually having the issue and like to all everything we talked about. Yeah. I'm with you on that one. A hundred percent. That makes sense. I'm with you.
We're working on getting our gross margins weekly so that we can actually make these decisions. Like all this stuff is the playbook that we've been discussing. But from a sales perspective with people out in the field, I guess my question is, how do you allow your team to make those discounts on site?
And what do you do about objections from your team that your prices are too high.
John Wilson: I'm going to first start with, I know I just said you can get dynamic with pricing and I know I used froggy a few times. I think that's a funny word. I also think I said strategic a few times too, because pricing should be strategic and everything should be strategically dynamic.
And what that means is you have control over it. out of control discounts is a problem. Correct. But dynamic pricing to fill the board is strategic. And those are two different things. I think it is fair game to completely lock discounts from your team's capability. that's what we just did.
I think that's completely fair game. And I think stripping commissions down to the bone, if they don't sell to retail, I think that's also fair game. Like their job at the end of the day is to sell to your price book, that's it. And your prices are probably fair, unless you're charging 2, 000 an hour, like your prices are probably fair and market.
Yes, pricing should be dynamic, but it should be strategic, and if people are discounting your margin, and without your say so, then that's when it needs to get sliced,
Jack Carr: So then how do you handle the training portion on that?
Because, part of the reason we went with price with pro is they actually have a regional pricing tool in there that tells you how close you are to the people around you in your market. And so we're using that kind of as a proof to just say, Hey, like we are the average price.
Look at Yeah. This, culminates all the data, but what does the training look like around that? Because we've gone through the training on like, why we have to be priced this way. What's the training to, maybe it's like an objection overcoming price objection training or, overcoming like your mentality of putting yourself in the customer's shoes.
Like where, does that training start and finish in your world?
John Wilson: You do need to do some of that. So it's no big giant surprise that other things cost a lot of money.
Jack Carr: Yeah. I have two phrases for this. So one easier to force people to do their job than ask them. Yeah. So take away the rights. Hey, great. Can't trust you with this.
No problem at all. You will not be able to discount. Happy to do it. Let me know when you're ready to, earn those rights again. Cause they know, like they're coming from somewhere else that's more expensive than you. They're just throwing up objections so that you try to make it a little bit easier on them.
But it really doesn't matter. if this was 10 years ago and everyone was like, Oh my God, flat rate. No, it's 2024. Everybody understands how this works. let's stop bullshitting around. We have people come to us from shops charging, literally twice and complain about our pricing. And I'm like, I know that, I know they're hourly.
it's literally twice a month. I know their owner. So my typical way of change management is going to be carrot than the stick. the carrot is here's why this works for you. Here's why this is a win for you, the customer, the company.
And the stick is you're just going to do it and that's, it's usually my progression.
Jack Carr: It sounds like we're doing the right things then because that's what we've, moved forward with.
I think the issue came back to like when you allow those discounts to run rampant. What we were seeing was this feeling like allowing people to discount combined with performance pay without any kind of guardrails creates this really bad situation where we've had that.
John Wilson: Why I feel like all the gurus will be like, "Did you do sales training?" "Did you do whatever?" And you're just being taken advantage of. They were in a shop that was charging 400 more dollars an hour than you.
They know all of it. They're just throwing up a stink because you haven't docked their commissions yet. You dock their commissions and boom, it goes away.
Jack Carr: Yeah. So we started that this week actually is letting if the amount,
And that is your commission structure, unfortunately. So it sounds like we're making all the moves are just in the early stages of it. Performance pay and allowing discounts and all this kind of stuff. this is definitely one of the pitfalls.
We have felt it for the past few weeks and now we're not going to feel it anymore.
John Wilson: Six months to get there, we had, cause we had full, we had people like getting full commission on like 20 percent off and it's yeah, I mean that sucks. Now I don't think they need zero. but again, and they were just taking advantage of the system too.
but yeah, but again, everybody knows it's just we're going to pretend to throw up a stink. We're going to pretend, Oh no, that's not fair. I think like they pretend to be dumb, but like they all get it.
Jack Carr: Yeah, which is fair
John Wilson: I have just such little patience for if you're genuinely a new tech, I'll be super excited. I'll be really happy to walk you through it and explain how this all works. But if you've been at a few other shops and the other shops are more expensive than us and you're just trying to play games, like my tolerance is almost zero, for that just cause it's you've been trained at four shops now, the one trick exercise, you think you're going to take advantage of it.
Just shut up, very low patience for that, for that type of bullshit.
Jack Carr: Yeah, it's, fun going through these, lessons. Do you think though, bullshit aside, what are some like really good.
sales training exercises that you provide your employees that you feel like, whether HVAC, just really general now that have these exercises have really opened their eyes or shown them like, Oh, I think explaining
John Wilson: the value that we bring. So Hey, we bring 20 year tradesmen. They're like, this is their craft.
like this is what they do. We bring, For trades, we bring all the expertise. We bring capacity, which is a big deal. They don't have capacity. So yeah, they might be half the price, but they won't be able to fix your toilet or water heater for a month.
we can do it in an hour. and that's a big deal, but. Open capacity costs real money. scale costs real money. Like our ability to be there and be there fast. our ability to pick up someone's emergency phone call at any time costs me 100, 000 a month. And I think we talked a little bit about this with Ellen, but we've started doing open book management partially for this reason.
Like guys, this is this is real money. This is real. I had to spend 130, 000 on marketing last month. no, that was 130, 000 out of our bank account. Call centers, a hundred grand a month. that's just what it costs. I don't have to tell you.
The value prop we bring is we can pick up your phone call 24 seven or seven day a week shop. We have capacity that nobody else has. We can solve virtually any licensed mechanical problem in your home. And we have incredible tradesmen to solve those issues.
John Wilson: That should be expensive.
Jack Carr: Yeah. And we'll take care of you. There's so many half baked Chuck and truck set, we go in behind and fix their issues because they just never answer the phone call for you again. We at least solve your through your problem. So that that's good. It sounds like it's less of a training and more of just Hey, really high level.
This is it. this is our value. And it costs money. Yeah.
John Wilson: I think it's both, I think also explaining like we have technicians that really want to understand Hey, where does the business need to be at? And I think this is just like, how much do you share?
Like the more opaque it is, the more like fight you're going to get, but we'll just tell people like everyone in the company can just ask. and be like, what's our labor percentage have to be? What's it's up on the TVs. it's just up there. We put gross margin trackers up there. Hey, our, materials has to be like 22%.
And if we're over it, like people are scrambling. so that trap exercise earlier, like most of the company would be able to look at that and be like, yeah, we're over on materials. duh, that's a pricing problem.
Jack Carr: Interesting. And yeah, I know we, touched on it with Ellen, but like, where's your stopping point for people who are thinking about going into that? Like myself, if I want to open the books and where do you, like where's off limits?
Where do you keep, where do you put behind the curtains?
John Wilson: We've just started doing down to net with our leadership, just cause it feels relevant. Yeah, but it's also like we're tying people's bonuses to it. depends on where you sit in the company, your weight of your bonus is different. And the weight is going to be based off of revenue, gross margin, EBITDA. And your EOS rocks. So maybe we do a whole interview, talk just on like management bonuses, but those are the four things that we wait leadership bonuses on.
So if you're a frontline manager, like service manager, install manager, 60 percent of your bonus is based on gross margin. Did you hit gross margin or gross profit targets? 30 percent is based on EBITDA. Did we run, were we successful as a business? Like we should all care what our earnings was every month.
And the final 10 percent is did you complete your rocks? we're at EOS company. So did you do what you said you were going to do? One of our core values is accountability. So we tie your compensation to it. So those are the three ways that our frontline leaders and that's 100 percent total.
If you're a senior leader, then it might be 60 percent EBITDA, 30 percent gross margin, 10 percent ROCKS. So it's like where you sit inside the company, determines, like how much weight each portion of that has. If you're a salesperson, you have a ton of gross profit control. So if you discount, Your commission gets discounted because, your revenue, mainly, and then gross profit second, because you do control gross profit.
When we're, sharing our results each month, hey, did we hit our net margin target? Yes. No. Do we hit our gross margin target? Yes. No. Did we hit our revenue budget? Yes. No. And then each person, they have a calculator that they can figure out how much they made off of that.
So we think sharing openly is needed because we're basing their compensation off it. And we want people celebrating when we hit 20 percent net margin months. Not just me as a part of the ownership group, but we want everyone to be like, yes, we did it.
Jack Carr: That's a real thing.
John Wilson: We did 22 last month.
Jack Carr: Sweet, man. That's super helpful. I think that gives me some direction here today and hopefully helps out the listeners who are also doing pricing issues.
John Wilson: I would say that this is something we've been working and it became way more relevant because we added inside sales. So all the way up until late last year, we were that small company that was really rigid with pricing because we didn't understand. that an empty day is the worst enemy.
It's like an empty plane seat is the worst enemy.
Jack Carr: Yeah.
John Wilson: Because an empty plane seat, like it costs X amount of dollars to fly that plane so that's, the enemy of, success is just like what could have been. we try to fill all our plane seats.
So we only got this dialed in because inside sales really accelerated it. And then HVAC sales. has really, also accelerated a lot because that's a little bit more of a sales driven thing than plumbing and electric. but as we've gotten better at it, we've dialed in commissions, we've negotiated materials, we've nailed down the inside sales program.
We've figured out more capacity. So if I'm open tomorrow, what does that mean for my discount? If I'm open two days from now, what does that mean for my discount? Cause ultimately the only thing that we have to hit every day is daily budget and filling the board.
Jack Carr: Let me ask you one last question. Super nuanced tactical specifically for myself, just because I'm selfish here. so inside sales versus performance pay, right? So you've started an inside sales program or, you've tasked somebody internally in your company to do inside sales, your frontline team, your service techs, they're paid partially based on commissions of sales, right?
So what does your inside, like the dynamic between how does it flip over to inside sales? What's the timeframe if you don't mind saying this live or on recording, but what, is that timeframe and then what does the commission change to? Is it changed to a spiff? Does it just completely go away?
what does that look like? And then, how does that affect flips rather than, like unit flips and large ticket flips versus, sales?
John Wilson: Yeah. So our, it basically flips at 24 hours. everyone says they're going to follow up, but like we need control over that because the job is to fill the board.
Like ego just doesn't matter. And, if we discount, we take gross, we take off of anybody in the company, like we're going to take some percentage off. So inside sales, maybe it's a three to one where if they discount it goes from 3 percent to 2 percent to one, but yeah, we discounts get discounted commission.
Jack Carr: Okay. that's what we figured. I can't imagine a system that works in any other way. But I just want to make sure I'm not out of left field, plus I'm pretty sure most anybody that does inside sales does it some way similar to that timeframe changes, percents change, but essentially that's the root.
So if, you go out and you flip a water heater, you don't sell the water heater on site, but you flip it over to a salesperson, plumbing comfort advisor or project manager. They still get the flip percentage, no matter how long that goes out.
Correct? So I just wanted to make sure that we weren't off and being a bunch of assholes.
John Wilson: Awesome, man. This was a good conversation.
Jack Carr: I like it. We, hit a lot of tactical, we hit a lot of nuance, and then we also hit a lot of high level on kind of theory and how you should be doing stuff from, Kind of 3200 foot.
So that's, awesome, man. Good for you. October was awesome. I'm excited.
John Wilson: October was good. And what's been really fun is like November is going to be a little bit weaker than budget. unless we can really go crazy and turn it around. but because we've like really nailed down our breakeven and overhead, like we're still going to be great.
Yeah, which is really nice. Very cool. It's been working towards that for about a decade, Yeah, eight. success Overnight. Only eight years. Yeah. Awesome, man. Thanks everyone for tuning into Owned and Operated. If you what you heard, check out ownedandoperated.com
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