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In the competitive world of home service businesses, it can often feel daunting for smaller companies to go up against industry giants with massive budgets and resources. But in this episode, John and Jack share that there are strategic approaches that small businesses can take to not only compete but thrive in the market. By embracing community engagement and employing creative marketing strategies like guerrilla marketing, small home service businesses have the chance to compete against industry giants and stand out.
Episode Hosts: 🎤
John Wilson: @WilsonCompanies on Twitter
Jack Carr: @TheHVACJack on Twitter
Looking to scale your home service business? Service Scalers is a digital marketing agency that drives success in PPC and LSA.
Discover more growth strategies by visiting Service Scalers: https://www.servicescalers.com
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The Owned and Operated Weekly Insights Newsletter
John Wilson, CEO of Wilson Companies
https://www.wilsonplumbingandheating.com
Jack Carr, CEO of Rapid HVAC
https://rapidhvactn.com
Owned and Operated Episode #102 Transcript
John Wilson: I'm John Wilson. Welcome to Owned and Operated. Twice a week, we talk about home service businesses, and if you're a home service entrepreneur, then this is going to be the show for you. We talk about our own business in residential plumbing, HVAC, and electric, and we also talk about business models that we just find interesting.
Let's get into it.
Hey, this episode is sponsored by Service Scalers. So Service Scalers is actually a brand that I've used personally with our companies for a little bit over a year now. Uh, they've helped us manage our digital advertising. Frankly, they did a lot better than our last agency. Leads went through the roof and cost per click went way down.
Check out Service Scalers if you're a plumbing, HVAC, or electrical home service company. That's what they knock out of the park and they did a great job for me.
Jack Carr: On this episode of Owned and Operated, we deep dive the workshop, what we're going to be talking about and why you should join us on our next one in June, as well as talking about overcrowded markets, what to do, how to build community and what I personally am doing to guerilla market my way to the top. Enjoy.
John Wilson: Welcome back to Owned and Operated.
Jack Carr: Welcome back.
John Wilson: How's your week?
Jack Carr: Yeah it's been good. We finished out February. I'm not where I wanted to be, but not unrecoverable.
John Wilson: But you survived.
Jack Carr: And we minimize damage. Number one thing, minimize February damage. And of course, like March one hits and I think we closed on like almost our yearly goal or assuming our monthly goal of what we need, like everything just waited to not touch in February and then March hits and we have, I think like seven or eight jobs closed and some of them are doubles and triples.
So like just wild how mean February was to us, but we're going to have a good March.
John Wilson: Yeah, I mean that tracks with our last day of February and first day of March. closed days of business the last day of February. It was wild. but Yeah, February was good. We hit budget on the nose, which was really exciting. And then another huge year over year jump. It was like 72 and a half percent year over year which is just like insane.
Jack Carr: For me, just you hitting budget is the key, right? I don't care if you are flat in February or even, just 2 percent up. If you hit budget, February's a win, hands down. And not only that, my son was out in shorts the other day. Like, it is a mild February in Nashville. Everyone's struggling, at least in this market.
John Wilson: We a training last week plumbing, HVAC, electrical contractors from all over the country. I think we were the only one there out of 20 some contractors that hit budget in February. Everyone was feeling it all over the place, 67 degree February.
Just, yeah, tough time for everybody.
Jack Carr: Yeah, it is what it is, though. Keep chugging on, get it back in March, April, and then off to the races for summer. Excited.
John Wilson: Yeah, and then it's finally March, so we're pumped up, because in a couple weeks we have our first, breaking 5 million workshop, which has been pretty cool. I think we ended up selling out, which was awesome, and like a fun surprise, so we're gonna launch dates for the next one, which will probably be in June or July here coming up.
But I know we had a couple of questions from the audience on like what exactly was involved. We can spend a couple of minutes there and then dive into the topic for the day.
Jack Carr: Yeah, I personally had a few questions. They maybe have read online the outline of what's going to happen, but I think it'll behoove everyone to go into some really high level detail. We don't want to give away all the secrets, but really we're just digging in. We're starting in on one of the most important things and that's proper business setup, location, fleet.
There's one more. Help me out here, John. Don't leave me hanging.
John Wilson: Yeah. I mean, it's physical location, fleet, how you buy them software stack. Then we start diving into recruitment, how to fill the seats. talk how the org chart should look. At what point should it look different ways? Obviously, we talk about that a lot here on the show. When to hire managers, what those job descriptions look like. There'll be some sample job descriptions for techs, for salespeople, for managers, dispatchers, all those key roles as you keep going.
Talk a lot, almost the whole second day is on driving demand. Whether you're working with homeowners or working with businesses, how to drive new customers.
Jack Carr: Yeah, we also talk a bit about pricing how to make sure to get your pricing correct, as well as moving from there into com structures. Like you said on recruitment, we have some really in depth stuff on call center. I know we touch on call center a lot on the pod and we do some pretty deep dives, but we are going real deep in on call center. I think we have a decent portion of the day on call center too, just because it's an extremely important key to really clicking and getting that business to 5 million. So I know that's a huge thing We go over scripts and have sample scripting sample streamlining sample how to split so we really are diving deep on all of these subjects to try and give you the playbook on getting there.
John Wilson: Yeah. A hundred percent. So it should be good. I don't remember if there's any seats left, there might be one or two at this point, but if you're not able to make this one, then we're doing another one over the summer. Just go to owned and operated. com. There's a button for workshops and you can just check it out and then you can check out the dates for the one coming up.
Jack Carr: Awesome. I'm really excited. It's going to be fun. It's helped me a ton. We're going to bust through five this year for sure. Hopefully hit six and I don't think I can do it without this. Like this is just opened it all up. So really excited guys. On a side note, segue, I'm historically great at just terrible segues into what we actually wanted to deep dive in on this episode.
A big one that I know we wanted to talk about, we've had on our list for a while is how to stand out in a crowded market. John, I think we'll start off with, like, I know you have some big companies in your area. You're kind of a suburb of a large Metro.
How did you think about this? How are you intentional when you started growing from, that 3 million plus?
John Wilson: Yeah, I think the game has definitely changed a lot in the last six or seven years. So some of the stuff that I did six or seven years ago wouldn't necessarily apply today.
Jack Carr: Fair enough.
John Wilson: I'll get to the answer but like I think a lot of small companies attempt to compete in the same way that I attempt to compete and I think when I've in the past given like I'm not really sure why these guys are doing this at all it's not like why are they in business?
It's more like why are they attempting the same playbook? It just doesn't make a lot of sense to me. So to a friend of a mutual friend of ours Nathan a couple of weeks ago and he's down in DFW. So very crowded market he's competing against milestone and Baker brothers and these huge companies.
And he was at some thing with Jimmy from Baker and someone asked the question, exactly that question. Like, Jimmy, how can I compete against you And the real answer is that you can't. Like, you can't actually compete against a company that's, 50 times your size in the way that they are competing.
Jack Carr: Yeah, you scared me for a second.
John Wilson: No you can't try to go head to head. And that's the mistake that I keep seeing folks trying to make.
Jack Carr: Yeah, let's break that down for people too. So just as from like a numbers perspective, I ran some of the numbers yesterday in Nashville and we have six or seven companies in our area that we're directly in competition with that are over 50 million in revenue. So if you say 10 percent of that budget which is the standard goes towards marketing. That would be 5 million times what six, I said, six, seven companies. So there's 35 million being pumped into the Nashville market through your traditional means, which they're all competing with each other. They're going for the same LSA.
They're going for the same Google ads words. They're going for the same Facebook and traditional means. And so, when you're competing against that as a 5 million company with 5%, 10 percent of your revenue being marketing, I mean you are less than 1 percent of what is out there kind of dollar wise.
So when you go head to head with them, they are going to drown you, or drown your customers out with their name over yours.
John Wilson: Yeah. Absolutely. And the thing that I've said on Twitter is I spend more in marketing a month than many of my competitors make in revenue a month.
Jack Carr: Yes.
John Wilson: And I'm not that big. So like that's what you're competing against. And I have the same concerns.
Like if a larger competitor came in or a PE shop really started pushing, I would have the same concerns of them pushing as much in marketing dollars a month that I push in revenue. So that's what you're competing against, but there's an advantage that small companies have that big companies don't.
And that's, how you can like get alpha and that's how you can get somewhere. So when some of these companies like using Jack's example, Nashville is a super crowded market and DFW and Houston and all these areas where you do have a several to a lot of 30 to 80 million companies.
The thing that they can't do very well is like, get extremely narrow. The best way to think about how you can compete against a Goliath in your market is by owning your own backyard. And that was Jimmy's example too, in his story to Nathan. It's really hard for me to own someone else's backyard.
And it's like that for a couple of reasons. Like one, have a lot of marketing dollars to spend like network and personal relationships is a real moat bigger companies have a hard time getting around. Because our job is like, okay, if I have a million dollars to spend or a million and a half dollars to spend in marketing, like we're looking for the best bang for our buck, we're looking for the most amount of people that we can reach.
We're looking for brand awareness. We're looking for direct leads. So that means covering wide areas of market. And like, yeah, we'll pick some zip codes to try to get deeper and denser into. But if you're out there as a small company and you're driving like face to face marketing and you're knocking or like you're inside peer groups or you're working with HOAs directly, that is hard to compete against from my perspective.
Jack Carr: Very community oriented. Yeah.
John Wilson: That's challenging because yes, we have money, but we don't have time. That is one of the benefits of being smaller is you can afford to be more personal with your customers. Now, as businesses do get larger, like you get more community engagement.
And we're starting this now too but for us, community engagement looks like engaging a little bit with a lot of communities of engaging a lot with one community or two communities. I really think that owning your backyard is the best way to compete against like me or someone larger because there's just too much money, being poured across the whole market to try head to head with that
Jack Carr: Yeah, I mean, there's a perfect example in our market so, Northeastern Nashville is a company that owns a small city. It's about 62, 000. I want to be in this market. Everybody wants to be in this market. It's 62, 000 people. Decent, average household income. So very, middle class, upper middle class market.
There is one company in that market and every big company has tried to go into that market and they've gotten stomped out, completely stomped out of the market. And these are 100 million plus companies that are trying to get into this market that just give up. They give up. I'm going to name drop them because they're great.
Dairy Berry. They have a funny name. Dairy Berry is in Gallatin Tennessee. There may be a 8 to 10 million company. HVAC plumbing. I think only HVAC plumbing. Or maybe just HVAC alone. But anyway, they have a spot directly centered downtown. They have a giant building. They sponsor every single high school team and every single middle school team and every single element.
Like they sponsor all the sports teams in all the Gallatin. And then on top of that they're throwing community parties and they're at every time they shut down the square, they have a big parade and a float and they just do everything possible to own that market. And guess what?
Everybody in Gallatin buys from Dairy Berry. They don't even get second bids. They don't get third bids. And from what I've heard, it's all hearsay. So sorry if someone's listening from Dairy Berry, but the company's actually not ran that efficiently. Like this pretty mediocrely ran besides for their community engagement.
And that community engagement has kept out the big boys, kept out private equity, kept out everybody cause they truly double down on it.
John Wilson: We're launching a community engagement campaign. And for us, like, that's a team. So it's going to be its own team of people that go out and do community marketing. And we're going to do exactly what you just described. But the problem is we have 80 communities that we have to serve.
Yep. So as I think about this, it's a full time team of two or three people. They're going to be going out, like we're thinking of as branding, community awareness, and direct lead gen. They're going to be alternating which community is the core focus. Cause we have, let's say 10 core zips that we want to really drive home.
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Jack Carr: Let me ask you a question real quick. So do you lose value though? Do you lose that community engagement value when you go to multiple communities? So we had this conversation in house is we have a few locations and one of the locations is 60 miles. The two football teams don't play each other.
But the question came up was, do you sponsor both football teams? Because if they know that you're sponsoring multiple football teams. Competitors, are you really like it's an us versus them mentality? Like that's the goal is to build a these are our guys. This is our team. This is our tribe.
And if you're out, multiple different communities. Do you lose some of that?
John Wilson: Yeah, I think you do. 100%.
Jack Carr: I guess the real question is, what's the way around? Is there a way around it? Or do you just try to do different things?
John Wilson:We’re not deep enough into it. What I do know is that a lot of the big PE shops that I'm seeing are beginning to follow a similar playbook. So everyone is trying to drop community engagement. And they have the same limitations that I'm going to have. Which is, there's too much community and there's too little people to do it. So, the way we're thinking about it, is every home and garden show, every farmer's market, every, everything we're going to try to be at, but you know, there might be 15 farmers markets a weekend. So like, which one are we going to be at? and it's going to be driven by our core zip code. I don't really know.
I'm not at the moment wild about sports teams, but it's probably because I'm not in this town like Gailton where I can own the whole town because for me, sponsoring a sports team would just be cutting a check. And that would be it. It really doesn't matter. Like I'm not that much of a part of any of those communities.
Jack Carr: So just to put in perspective, we drive probably I don't want to say it's huge, but maybe 6 to 10 new customers every season in football and then the customers we do support, like they say, we called you because we hear your name whenever you guys score a touchdown, which it's one of the best football teams in the area.
They say that this touchdown was brought to you by rapid response.
John Wilson: Oh, that's cool.
Jack Carr: Yeah. So it's really cool. So they really lean into it. And then next year, what we're planning on doing and trying to work with them is we want to do a halftime show race. So we're rapid response. If you can beat the rapid mascot on a 50 yard dash or something, 20 yard dash, you get a t shirt.
And then maybe once a year for homecoming, we're going to do a big giveaway. And so I have kids race and have one of our fast guys, it's probably gonna be me trying to like chug on just losing the company money because I can't make it fast enough. I'm getting old, like, that's the community engagement, right? You see it on both sides
John Wilson: And it's hard to compete with that because like from my perspective. So our budget for 2024 marketing is around a million and a half dollars. Our job is to How do we go deep on a channel? It is really challenging when you're spending a million and a half dollars to have like a 200, sports team sponsorship and like have 20 of those. It's just too much to manage. It's just too much time.
Like our job is to find a channel that we can put a half a million behind or 200, 000 behind.
Jack Carr: But that's also the opportunity
John Wilson: And that's the opportunity for smaller companies if we literally don't have the time.
And from my perspective, our marketing budget isn't that big. I'm talking to these other companies and they're spending four or 5 million a year. I'm able to do things that they're not able to. It's like the same thing. Like, because we're smaller and a little bit more nimble, we can do things that they can't do, but for them, they have to find channels like their lowest channel might be 300, 000 because they have to be able to invest it, right? So you do have an advantage in that you can do exactly this type of thing and really own a community In a way that larger companies just can't because they don't have the capacity to get that deep
Jack Carr: Yeah I think the biggest issue with this whole conversation ends up being it's not scalable. So you grow, you own a community, you get to that 7 million, 5 to 10 million mark. At some point, you have to back out of that community to grow if you want to go any bigger.
Jack Carr: You could always own it to some extent and love that community, but I think it's very hard to recreate that somewhere else too.
John Wilson: It is. So is probably the one thing that is a little bit does follow our corporate timeline a little bit you know when we were and building and whatever, those first 55 years were very dense inside one or two zip codes, like very dense. Most of our work, and I mean like 60, 70 percent was inside two zip codes in one part of Akron and we didn't really do team sponsorships or billboards or like carpet bombing or like, it wasn't this intentional thing. It's just like the entire company. Most of our customers were inside these zip codes. Really? It's just one zip code that is such a big bulk. And even today with the company, the size it is, that zip code is still our top zip code.
And it's not super close. That one zip code drives 30 percent of our revenue. So it's still big.
I think the way that we accidentally did it the way that other companies should intentionally do it, which is we built a really good base inside one community and we weren't as intentional about it as we could have been, like how much further would we have been if we did this, if we dove into sports teams, if we covered all the schools, if we carpet bombed it intentionally
Jack Carr: And then If you went down to Columbus, Ohio and started up another location to create that community focus would be very difficult.
So that's what I mean.
John Wilson: We would struggle to break. But yeah, I think that's basically the how of how you compete against like if you're up against a bunch of big boys like Focus, it's same as the pool route thing that we talked about a few weeks ago. Focus denser, try to own one community, one zip code, one little area, and then build out from there once you own it.
Cause that's much harder to compete against when a lot of what we're trying to do is spread over zip codes or, you know, in multiple zip codes, cause the budget's just too big.
Jack Carr: I think from here, I would like to ask you a question. So we did a huge marketing exercise led by me in one of my core beliefs with how we also grow in this community. So most of our work is in a single zip code as well. We own a single market. And that's why I bought the business cause this market was a solid market.
We have two competitors that are not even close to us. Like we own one city and we're expanding to two other cities and taking over market share. And it's been great. Growth has been a difficult thing because it's hard to get more without the community aspect, so our core belief here is that we have to think outside the box and do things that nobody has ever done and really capitalize on the same thing I look at social media apps and everything else there, we have to capitalize on attention without like in a gorilla way. So some of the few ideas that we're coming across are to create a brand that is a hundred percent in attention getter. Like I think I use other words over text to tell you what we were going to be. But essentially attention maniacs, that's how everything needs to be surrounding our business.
What do you think about that? Just kind of framework to start. Am I shooting in the right direction?
John Wilson: I think so. The strategy that you're thinking about can only be done by like two different sizes of business. It's either a small business or a large business, but like most businesses are in the middle, so they can't compete with what you're talking about doing.
Like we're creating a content machine, hiring all these internal people and we're doing all this stuff. And like the only type of business that could compete with what we're about to do is a very small business because they're the only ones that have, like, it's the owner out there doing it or the owner's, spouse or partner or whatever doing it in the same way that we're about to do it. So creating a ton of content, doing community engagement events, doing all these things. Cause it either takes like a lot of the owner's time or it takes a team which requires budget. So Yeah. I think what you're describing gives you a big moat. It's stuff that most of your competitors are simply unable to do because they're too big for their attention to go towards it.
And they're too small for their budget to go towards it. So I think that strategy is good. Like, I think that's a way to compete against most of the people you compete against.
Jack Carr: Yeah. So hear me out this idea, this is an example of it for everyone out there came from actually Service Titan. So service Titan sent me something in the mail. the mailer, but your mailers normally, when you look at a mailer, it's a postcard. You get so many of them from every single company. I know that it works for some people.
Great. Congratulations. I find that it doesn't work very well. And why doesn't it work very well? Because they're just like everyone else. They have the same 49 service, 15 service. You know, the customer. Unless they need it at that exact moment it's not grabbing the attention. So what our idea was and what service Titan did is they sent us a big ass card.
I'm talking about it barely fit in our mailbox. It was a 14 by 12 or something like that. And it was huge. Like it was a hard cardboard, big card and you had to physically like toss it in the fireplace to get rid of this thing. You weren't going to throw it in the trash. And so the idea is there's mailers and they're cheap.
Big companies are doing them. Small companies are doing them. Everybody's doing them. But what if you wanted to do it from an attention grabbing side? You send these giant mailers. And so we said, what would be the biggest mailer that you could send? So we're looking into, even if it's just a folding fold out piece, right?
They're probably going to be a dollar, 2 and we'll pick very select neighborhoods. Like, could you do a light, like an actual size unit that folds out, you fold it out and it's like a cardboard fold out of a unit. And so those are the kinds of ideas we're trying to wrap our head around and you hit the nail on the head though.
Budget, right? So this would be unique. It would be wonderful, but it takes my time to drive around and to do the research and to find a neighborhood that actually makes it worth it. And two the budget for those, instead of sending 15 cent mailers, we're sending 2 mailers. So they really need to work, but we're hoping to send, have a big QR code on it.
It's the size of a unit and it says, take a picture with this, upload on social media, tag us, and we'll give you. A thousand bucks off, 500 bucks off.
John Wilson: I think that'd be interesting.
Jack Carr: Yeah, it'll be interesting to see if one people actually take pictures with it to try and get money off or a free service or a free whatever.
But I try to stay away from the free stuff. And two, if people like it it's a big unit, maybe that's the wrong thing to send, but the idea of the big mailer is what we want to try.
John Wilson: Yeah, I think that sounds sick. Like, I look forward to hearing how it goes.
Jack Carr: Yeah, that'll be fun one. I'll post all the details on the HVAC jack Twitter x. It'll be a good content machine either way.
John Wilson: Yeah, 100%. Yeah, I'm looking forward to it. Man, this was good. Alright, so that's basically how, one, attention getting, 100%, getting guerrilla as hell with it, and two, owning a community. And that's how you compete against companies that are bigger than you. Like, that's the way to win, and you can still win.
Jack Carr: Yeah, I love it. Sweet.
John Wilson: Thanks everyone for joining us on Owned and Operated today and tune in for our next one.
Thanks for tuning in to Owned and Operated, the podcast for home service entrepreneurs. If you enjoyed today's episode, please hit the like button and subscribe to the podcast. If you have any questions or topics you'd like us to cover, feel free to reach out. You can find me on Twitter at at Wilson companies.
I'll see you next time.
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