Links Mentioned & Helpful Resources from Episode

• Jon Torrey’s LinkedIn Profile
• Searchlight Digital Website
• The Data-Driven Trades Newsletter by Jon Torrey
• Recent podcast episode on CRM’s

Episode Transcript

[00:00:00] Kevin Dieny: Hello and welcome to The Close the Loop podcast. I’m your host, Kevin Dieny, and today we’re gonna be talking about How Home Service Businesses Can Increase Revenue Flow. We’re gonna get into everything about marketing channels, business operations, efficiency, maybe calls, maybe chats, maybe, who knows anything that’s driving revenue for your business is what we wanna talk about today.

[00:00:23] Kevin Dieny: Especially the things that can help us take big swings and things that are maybe causing things seepage or, or issues, or gaps in our business. So, uh, to help us dive into this topic, I have Jon Torrey. Jon Torrey is the Director of Marketing and Partnerships at Searchlight. It’s a company focused on helping home service contractors improve revenue flow with better attribution data and marketing strategies.

[00:00:49] Kevin Dieny: Jon resides in Raleigh, North Carolina, and previously worked in the automotive industry for over a decade with a focus on digital marketing technology. Jon is also a die hard Philadelphia Eagles fan. So welcome Jon. Thanks for coming on.

[00:01:03] Jon Torrey: Yeah, yeah, thanks so much for having me.

[00:01:06] Kevin Dieny: So to, I guess I always like to start this way to ground us on what we’re gonna be talking about, increasing revenue flow. If you could just quickly give the basics of what we’re talking about, what that means?

[00:01:20] Jon Torrey: Yeah, ab, absolutely. So revenue flow is this term that we came up with because HVAC contractors are very familiar with airflow cuz they have to move air from one place to another in a home. And that’s a very central term for them.

[00:01:35] Jon Torrey: And, and revenue flow is very, very similar in how does revenue flow through your business from a customer discovering your business to landing on your. To submitting a lead to your sales process. Ultimately the installation and then the follow ups with memberships, uh, you know, further service work. So just looking at that big picture from discovery to sale.

[00:02:00] Kevin Dieny: Gotcha, that, that reminds me a lot of, I’ve used, I’ve, I’ve called things the consumer journey, the customer journey, the journey. Unknown to known leads, to appointments, to deals, to customers, to clients, to cancel, like the whole thing, the whole span of like A to Z That’s kind of, It’s very similar to what you’re talking about with revenue flow.

[00:02:23] Jon Torrey: Absolutely, revenue flow is the customer journey for, uh, the HVAC and home services industry. It’s just our little spin to put it in language that contractors are more familiar with.

[00:02:34] Kevin Dieny: Yeah, yeah, all right. Another thing I wanted to ask you about is, you know, just getting my head wrapped around this topic, seeing if there were, I don’t know, like, obviously everyone wants to increase revenue flow.

[00:02:49] Kevin Dieny: Mm-hmm, what is the, what are the big stops hold ups to, you know, going down this path? Uh, anyone who’s listening to this topic, what would they be saying before they’d be interested in, in, you know, going down this path or taking any suggestions or ideas from this episode? And one of the things I ran into first, I ran into it a few times as people basically being like, Hey, I, I already know everything Jon or Kevin could say, What could they possibly say?

[00:03:15] Kevin Dieny: What could they possibly know that I don’t know, Like, what are they gonna say that’s gonna increase my revenue flow? So what is the real impact and, and what is the potential for, for looking at revenue flow the way that you are?

[00:03:29] Jon Torrey: Yeah, absolutely. I think in, in simplest terms, because we, we hear that a lot, you know, I know how to run my business.

[00:03:36] Jon Torrey: I don’t need an internet marketer to come in and, and tell me what to do differently. So what we’re looking at is really monitoring your lead handling and operations process as, as the easiest low hanging fruit to make improvements. You would be surprised, I can promise that just about everybody that listens to this.

[00:03:56] Jon Torrey: There’s room for improvement. It could be as simple as answering the phone. It could be as simple as making sure that you’re getting your form leads and it’s not ending up in a spam folder, and that you have a documented process to follow up. It could be as simple as assigning a specific CSR from your team to answering your chat leads, and then it gets more complex because as we look at revenue flow, we understand the channels.

[00:04:22] Jon Torrey: That help customers discover your business. We understand how they convert on your website. We understand how well they match to new work in the crm, so we could get as advanced as saying in your specific market, you need to invest more in Bing. It’s very undervalued channel right now, just generally speaking, but you’re spending a lot of money on Facebook advertising.

[00:04:42] Jon Torrey: You should really consider adding an online scheduling tool to your website. A higher percentage of those customers want to convert. So you can go from simple to advance pretty quickly, but if you think that you have a really good grasp on your business, that’s awesome. This is a supplement and a reminder to periodically check on how well you’re converting the leads coming in, and not to make assumptions that six months from now it’s, it’s not, you’re not leaking any revenue.

[00:05:08] Kevin Dieny: Yeah, I love the, uh, I love the phraseology used there of the low hanging fruit. Because I think what is easily something that happens to a lot of business leaders is priority overload. You know, what, what should I be focusing on? What is gonna drive my business growth the fastest or the best or the the least costly?

[00:05:29] Kevin Dieny: All those things. There’s so much you could be looking at. So, yeah, you exactly, you have a good understanding of your business, but man, there’s so much that you could do. There’s so much that is out there. There’s so much information. So it’s like, Ugh, what? What do I do? What do I do next? And so that’s where the next one thing I found was okay.

[00:05:50] Kevin Dieny: I love the advice from this episode, Jon, but is managing your revenue flow, meaning I have to go hire a bunch of marketers, like is it costly? Is it a lot of effort? Does it mean I have to look away from running my business a certain way and put a lot of energy and resources into, you know, a totally different, like, do I have to change, manage my entire operation here?

[00:06:12] Kevin Dieny: Basically what I’m getting at is, is managing and increasing revenue flow gonna be a headache?

[00:06:17] Jon Torrey: Yeah, that, that’s a good question. And it’s kind of funny because related to the first question, I’m already doing the things I need to do to manage revenue flow for my business. You’re probably already doing and executing a lot of these things.

[00:06:30] Jon Torrey: You just need some data behind it at a high enough level to know if you’re on track or you’re off track. And my recommendation always is, you know, you, you should hire for the things that you don’t like to do or that aren’t your focus area. So you don’t need to hire an in-house marketing team. I think that you can find vendor partners that you now know how to qualify by asking them questions like, How do you help me measure, measure and monitor my revenue flow?

[00:07:00] Jon Torrey: And do you provide metrics such as cost per book job? My match? My return on ads been closed. Are you measuring the number of conversions through different tools like phone, chat form? Are you able to measure the revenue generated through channels like Google, Bing, organic ppc, Facebook, and all of the above?

[00:07:20] Jon Torrey: So I think if you can just get more educated in knowing what are some of the metrics to ask for from a vendor, then you can get that high level data and you know, That if your match rate, this is a benchmark from our data falls below 25%. I’ll just explain it quickly. Match rates, the percentage of leads that match to a new opportunity in the crm.

[00:07:41] Jon Torrey: If that falls below 25%, you’re below the average. There’s probably something wrong. And you know, to then ask your vendor, Hey, can you dig into this more? And it might be that, hey, you’re not responding to chat leads fast enough. A lot of great leads are just not being responded to. And then you can take action.

[00:08:00] Jon Torrey: It’s not a headache, It’s just getting the right data and having a marketing partner to help you understand it and take the actions that you’re probably already taking. But now you’re just more informed of where, like you said, Kevin, to prioritize those activities.

[00:08:15] Kevin Dieny: Yeah, and I think what’s really interesting what you’re saying there is, to choose a golf analogy.

[00:08:21] Kevin Dieny: Hah, like I’m on the tee, am I aiming for like the tiny hole on like the golf course? You know, way like 300, 400 yards out? No, I’m basically just like first aiming for like the fairway and then when I’m there it’s like, okay, maybe now I could take my approach shot. Now I’m aiming for just the green. And then when I’m on the green now I’m aiming for like getting it close or in the hole on a putt like.

[00:08:42] Kevin Dieny: Each step along the way has its own sort of like degree of how, how minuscule, how specific we are looking. And you mentioned some of the metrics there that a business could be considering. Okay, I’m, I’m on course. I’m at least heading toward the hole, or I’m going in the right direction. I’m not ending up in like the woods.

[00:09:00] Kevin Dieny: Or the sand trap or whatever to, again, to compare it to golf. So like, yeah, those metrics that help them know they’re on the right path or that they’re narrowing in on a very small, specific, really like positive target are critical. So the question then, from this, right, is the last one, the last objection, probably the biggest one I heard against, you know, taking a look at your revenue flow and your customer journey was. Look, I’m not, I don’t want to be focused on the tiny metrics or all these.

[00:09:29] Kevin Dieny: Averages and what everyone else is doing. I just wanna focus on my business and take big, big swings. Like I don’t, yeah. I don’t wanna focus on, okay, my cost per click went up by 50 cents and now the, you know, the, the sky is falling. Like the, the last objection was, I wanna take big swings. So is rev is focusing on revenue flow.

[00:09:50] Kevin Dieny: How is that helping a business? In the macro, like grow its revenue. How do, how does it translate from the things you’re talking about, the different channels, the operation? How does that, in the overall sense, really impact revenue flow?

[00:10:03] Jon Torrey: Yeah, absolutely. So to go back to the golf analogy, because I think that this is a good one, right?

[00:10:08] Jon Torrey: You get up to the tee and you got your driver out and you wanna take that big swing, you want to try to reach the green, but you’re aiming in the wrong direction and you hit it way into the woods. Is that not a bigger headache? Then taking the, the extra time to properly align yourself. So what revenue flow can help you do is it can help you understand when, when you wanna take a big swing, you’re probably spending some money to do so.

[00:10:34] Jon Torrey: So I wanna adopt an online scheduling tool. I wanna put $10,000 a month into ppc. I’m gonna hire this $5,000 a month sseo agency to get the at bats so that my team can sell $20,000 install tickets. If those leads are hitting the floor, so to speak, or you’re leaking revenue and, and you’re doing a big spend on Facebook and most of those customers are converting via chat, but you’re taking 35 minutes to respond and they’ve gone elsewhere.

[00:11:02] Jon Torrey: You don’t even get to settle up at the tee box. You’re, you’re, you’re gone before. That’s like losing your, that’s you lost your driver before you had a chance to take the. By using this type of data, you can really understand as you invest more in your business, if you are maximizing the opportunities coming in.

[00:11:21] Jon Torrey: And we’ve had it. I mean, look, I if, if you look at ACHRI’s installation data. And, and I think everything moves in cycles. It’s about 15 years, every 15 years. Demand seems to cycle back to a very similar point. For example, in 2005, the number of installations for AC’s is very similar to what it was in 2020, but we saw Covid kind of push things out.

[00:11:43] Jon Torrey: We’re due for a demand retraction. Now there’s, there’s headwinds with, you know, uh, federal programs for heat pumps and things like that. But when you start to see my, your lead volume is going, going down, and your revenue numbers might be going down, or it just feels harder. These metrics can really help you figure out, like we said earlier, the low hanging fruit actions to take today before it gets harder.

[00:12:08] Jon Torrey: And that’s part of the process of working on your business and grow.

[00:12:14] Kevin Dieny: Wow, that’s, that was fantastic, Jon. And so succinct about answering that because, uh, Yeah, I mean, it’s, it can be such a whiff to to be totally, you know, hitting like, again, golf analogy. You’re hitting in the, the one direction, then hitting back and then hitting back.

[00:12:30] Kevin Dieny: You end up with like very high scores when you’re not able to just, you know, get there. It saves so much time and a headache to get there the right way. In terms of, originally you said, Okay, revenue flow is all about monitoring and measuring and looking at your customer consumer journey and figuring out how your business needs to grow, wants to grow.

[00:12:54] Kevin Dieny: So how does a business understand and monitor what’s going on in it, in, in the business? Like what, how does it know and monitor those steps, those big, let’s say, points along the path so that it knows. Okay. I have leads, I have booked appointments, I have, you know, job scheduled. I have jobs completed. I have received, How is a business first?

[00:13:16] Kevin Dieny: Measuring all of that and understanding it, you know, like, I know it’s a big question, but it’s sort of like a big one I think we should tackle here.

[00:13:23] Jon Torrey: Yeah, I, I think it’s really important. So let’s just talk through some of, some of the metrics that, that make up revenue flow. So, leads is, is at the top right?

[00:13:32] Jon Torrey: It’s somebody came, most likely to my website, they might have clicked an ad, uh, you know, called Google, click to call, but somebody has contacted my business. Then the next step after that is, are they in my CRM customer relationship management tool with the new sellable opportunity? So I’m gonna pause here quickly because a lot of what’s talked about today is cost per lead, which is not a revenue flow metric.

[00:14:00] Jon Torrey: So cost per lead. Is, is a calculation that could include customers who already have an appointment and they just want to confirm the time. It could be from somebody outside of your service area. It could be a vendor trying to pitch you a service. It could be your, your tech calling in to check on their next appointment.

[00:14:19] Jon Torrey: I, I’ve heard those calls, those leads are never going to turn into revenue for the business, so that’s why what we wanna look at, Is the percentage of those leads that match to a sellable opportunity in the crm that is match rate. That is the first thing that I wanna understand about the leads that are coming into my business.

[00:14:39] Jon Torrey: Are they actually turning into something that I can sell into? And then the next step after that, to keep it really high level, is your booked job rate. So of those you know of the leads that have come in, what percentage of them turn into a sold or closed job? Because when you start to understand that cost per book, job metric behind it, and you can, you can start to say, Okay, I wanna lower that.

[00:15:05] Jon Torrey: How do I lower that? I have to improve my match rate. So let me look at my, my operations and make sure that match rates for specific conversion tools meet the right benchmarks. But the other thing might be I need to adjust my marketing strategy. I, I can’t keep spending so much money on branded keywords, which are people searching for your business name.

[00:15:24] Jon Torrey: I need to start cert, I need to start bidding on things like AC repair near me. So I think those are the core. I mean it, it’s really high level, but it’s just somebody comes to your website or they contact your business another way. Do they end up in the CRM with an opportunity for you to sell or, or complete work?

[00:15:43] Jon Torrey: And how well are you booking those jobs? And then really the final piece is how much of those customers spending. So once you know your cost per book job, And you know how much they’re spending, you know, the return that you’re getting on that and you know your goals. If it’s 25% ebitda, you need to be above a four x on those numbers.

[00:16:01] Jon Torrey: And there’s different levers that you can pull intelligently. So if you’re getting a cost per book job under $300, that’s great, but if your average ticket is $150, you’ll have to, your, your vendor should adjust the marketing strategy to focus less on, on service. And then the, the, when it gets really, really, Is if you think about, okay, I want to, I wanna grow my business.

[00:16:22] Jon Torrey: I’m already doing really well. I’ve got my driver. I didn’t lose it. I’m aimed the proper way. I’m good, Jon, how can you possibly help me? Well, I tell, I tell you exactly how is when you start to look at the way that customers convert on HVAC websites, when you start to look at the channels that are bringing in revenue, when you’re looking at the average tickets, the match, You can start to see the wave as it’s forming and you don’t try to catch it when it’s crashing.

[00:16:50] Jon Torrey: When I specifically mean, online scheduling is a great example of this. I’m seeing the wave form. More and more people are starting to use online schedule tools. Phone is still gonna dominate. It’s still 78% of closed revenue is converted through phones from ppc. Absolutely. But if that drops by even 3% because customers are choosing to book online because it’s more convenient.

[00:17:12] Jon Torrey: That’s a 3% advantage to your business. If you see that trend happening now and you dial in your process ahead of time and people know that you offer that, that’s just an example.

[00:17:21] Kevin Dieny: Yeah, I wanted to also, and that’s really great, really awesome explanation and there’s a few things that came out of that.

[00:17:26] Kevin Dieny: Mm-hmm. that jogged a few things in my memory that I also wanted to share to connect it with how real, how big swings these, these types of things that you’re talking about can have. Uh, we’ve had instances where a business has come to us and been like, we’re doing. Excellent. Everything’s great. And then here’s just a couple examples from a customer that has said that who’s come to us.

[00:17:48] Kevin Dieny: They’ve said, the first one, we first, one example I could think of is we help them realize that over 60% of the calls leads, they were getting went nowhere. Like you said, spa folders. We saw it going where they went to hold, they went on hold and then the call never got picked up. . Yep. We saw, we saw.

[00:18:07] Kevin Dieny: Absolutely a ton of leads. Tons of leads were going nowhere, and they were still doing really well with the ones they had. So we just pointed that out and then they were like, Okay, well that seems like a big deal to us. We’re going to, you know, hire a few more handlers, hire a few more people to take the calls, so, Less are going into the no man’s land.

[00:18:28] Kevin Dieny: And they just exploded from, they thought they were doing great now. They were doing awesome. Mm-hmm. . Now, the other example, very similar to match rate. We look at, we have two things that we, we categorize. One of ’em is like booked. Yep. And the other one is prospect. So just quickly, a booked bookable is very similar to how you described it to us.

[00:18:48] Kevin Dieny: It’s like, could the call, could the lead have turned into an appointment? The other one is prospect, which. Are they even serviceable? Mm-hmm. , are they even capable? Or is this just a tech or a family member calling in, you know? Yep. So like the combination of those twos is very interesting because. If you have like, maybe like hardly any prospects coming in that tells you the quality is off, if you have hardly any books, bookable opportunities, maybe they’re calling and saying, Oh yeah, I gotta go really fast.

[00:19:18] Kevin Dieny: Mm-hmm. then, or maybe the op maybe it never gets to that point. Maybe the, the, the conversation’s lasting a half hour talking about something irrelevant. , Yeah. Then all of these are problems that even just one adding one sale a month is huge. and if you can, you know, move those numbers up, the 3% that you mention does represent a lot of revenue potential, easily left on the table.

[00:19:42] Kevin Dieny: Businesses already spending money on the marketing, already spending money on the team. Mm-hmm. , you know, so it’s like without doing a whole lot, A lot of these examples showcase big swings, big revenue leaps ahead simply by having the data maybe, or looking at it in a way they never had before.

[00:20:00] Jon Torrey: I couldn’t agree more.

[00:20:01] Jon Torrey: And a lot of what we focus on is talking about just get 1% better each month. If your book job rate increases by 1% and you do a hundred, you know, uh, sole jobs a month, that’s one extra job, like you said. And if your average installation ticket is $8,500, when, when, when you think about that each month and then it, it grows, it compounds, and then you sell memberships and things like that.

[00:20:26] Jon Torrey: Earlier when people say, Well, well, I, I, I’m, I’m generating revenue flow. I don’t, I don’t need any help. But what if, if you could get 1% better each month and then that’s, that’s 12% over the course of a year, and even more as it compounds. That’s, that’s the, the sort of secret sauce of you get into some of this data.

[00:20:45] Jon Torrey: Like you, you can really fine tune and bring your cost per book job down. You can increase your average ticket. You can add the right tools to your website to allow your customers to convert. You can pick the right marketing channels. You can see when certain marketing channels become less effective and others become more effective because not as many people are using it.

[00:21:07] Kevin Dieny: Yeah, that’s huge. And we’re talking about a lot of really cool insights mm-hmm. that the business could become aware of and then act on it. So that leads me to the, another big question here, which I’ve found from my experience, I mean, I’m, I’m a little more data savvy. . Yeah. So, and I’ve, and even I run into this all the time, which is, okay, I have, let’s say I have all this.

[00:21:32] Kevin Dieny: So why is it so, why is it difficult? Why are businesses struggling to turn data into actionable insights? Like I, let’s say I’m advertising in a bunch of channels. Why is it hard to know what channels are working, what channels are not? Like, why is it so difficult to turn, to turn? What, what does feel like a mess of data into okay, actionable insights?

[00:21:54] Jon Torrey: Yeah, that’s a, uh, that’s a pain point for a lot of people. Uh, I think one of the, the, the biggest issues and, and biggest gaps, and this is why we decided to solve it, is that there’s a lot of shopping activity happens online. But in home services, the purchase and the sale happens in the home, and there’s a disconnect of, well, what did this person, where did this person come to my website from?

[00:22:21] Jon Torrey: What did they do on the website? What did they say when they called? What did they put in the chat? What did they put in the form and how long did it take for us to, to get to that person? Did they, did they go through multiple estimates? Did they, They book right away there. There’s just a lot of lag time between that online shopping activity and a lot of the time.

[00:22:39] Jon Torrey: What’s also interesting about home services is that a, as a business, your goal is to get consideration in a moment of need. So it’s, it’s more rare that a customer is going to, to listen to your podcast necessarily, and I don’t like traditional ads, but even see your TV ad or listen to a radio ad. That and, and their AC units working fine, Their furnace is working fine, and they’re gonna say, You know what?

[00:23:03] Jon Torrey: I, I need to like, take action. Now, a lot of what happens is it’s, it’s the middle of winter and their, their furnace isn’t turning on. And they need somebody now, and they go, they go right to the search engine to, to do that. Now obviously there’s cases, you know, with Facebook and, and things like that where it’s, you know, you, you can convince people, but it’s, it’s certainly very much like right now, I, I need this.

[00:23:26] Jon Torrey: Like, you’re an essential business and I, I need it.

[00:23:29] Kevin Dieny: Yeah, I think what’s is so interesting, and something I’ve had to grasp is there’s. Very, very different types of services, you know, and one of the big examples of this is for plumbers or hvac. It’s like when something, when your AC goes off in the middle of a heat wave. Yet you’re calling sort of out of desperation, you know, a plumbing pipe breaks, you’re calling again out of an emergency, desperation, you’re upset.

[00:23:54] Kevin Dieny: There’s like an emotionally charged event is fueling this, this charged go. And it’s in that moment, it seems less about you, every other thing going on. It’s like, who can come here right away? Yeah, who can fix this problem? I, I mean, price depending on the, the customer. It’s like certainly some things that a business is doing and it’s marketing and it’s business seems like irrelevant in that moment, but there’s still that.

[00:24:21] Kevin Dieny: Like, am I gonna be that business that they think of to call or that they find when they want to call? Yep. That when they do call gets handled appropriately and and correctly and you know, their needs are met with what they’re looking for. You know, So a lot of it that, that goes on where every consumer journey is not exactly the same.

[00:24:41] Kevin Dieny: Mm-hmm. just kind of like what you’re getting to. And was there anything else you want? I mean, just of what I said right there, is there anything else that helps a. Manage, like, yeah. Okay. If, if every consumer journey is different, that seems, again, overwhelming and crazy. And how, how am I gonna monitor and measure all these tons of different probabilistic touchpoints along the way?

[00:25:04] Jon Torrey: Yeah, I mean, look, there, there’s an analogy that I, I, I like to think of is you don’t wanna scratch the customer’s record. So I’ll elaborate, right? Like say it’s sold tired. Records are kind of coming back. You’re listening to record. You’re, you’re grooving with your favorite song and you’re, and you’re in that mood and nothing’s stopping you, and you’re kind of in your comfort zone.

[00:25:21] Jon Torrey: And then the record scratches and it totally breaks the thought pattern. It interrupts it, and it causes issues. So I think about the same thing on, on a customer journey. Is your goal is not to try to predict the exact five things that I’m going to do before I call your business to get a replacement or an installation or service, or whatever it is.

[00:25:41] Jon Torrey: Your goal is just to make it as easy as possible for me to discover your business. To make sure that you offer me what I need to get in touch and when I do get in touch that you’re taking care of me. So that at the highest level, because this home services is growing, I think it’s been underserved, overlooked.

[00:25:59] Jon Torrey: I think the pandemic accelerated. You see a lot of private equity firms coming in the space because these were essential businesses. And what I saw this happen in automotive, like you, you start to see some of the aggregators. Improve their customer experience, and I won’t name them, but they’re getting in between you and your customer because they’re, they’re focused on just making it easy to find what they need.

[00:26:22] Jon Torrey: So my advice here is you don’t need to get complicated. You don’t even necessarily need to get into the data, although it’s very helpful is if you obsess over your customer experience, your customers experience. And if you pretend to be a customer and go to Google and do a search, go to Bing and do a search, go to your website.

[00:26:41] Jon Torrey: See how easy it is to navigate, call the business. How quickly do they, do they pick up the phone? Do they have a greeting that that says, Hi, this is Jon from Jon’s HVAC located in Raleigh, North Carolina. And once you start to obsess over that, a lot of things fall into place. And inevitably you’re gonna wonder, Well Jon, I’ve been obsessing about this for three months.

[00:26:59] Jon Torrey: Is this working or not? And that’s when you can look at the revenue flow metrics to see how it’s changed, and then you can get more specific and tactical from there.

[00:27:09] Kevin Dieny: Yeah, okay, so this is really, really solid. I, I wanted to kind of open up your experience a little bit here. Do you have some examples or stories or anything you could share on a few of these examples, just so it makes it a little more salient for people?

[00:27:26] Kevin Dieny: That if they’ve, that where they could have gaps, let’s say, or a bottleneck or, uh, something that’s leaking in their business and maybe an area where it’s under undervalued. Right. The potential it has been there. Yeah. And in either case, they figured it out. What did they do about it? Cause I, I’d like to, at the end of the day, Lean toward like, okay, insights are awesome, data’s great.

[00:27:49] Kevin Dieny: Yeah, monitoring, measuring is so fantastic, but what do you do about it?

[00:27:53] Jon Torrey: Yeah.

[00:27:54] Kevin Dieny: At the end of the day, you know?

[00:27:56] Jon Torrey: So I, I’ll give you an exam, I’ll give you two examples, but this is an example of where they, what they don’t do, what they didn’t do that was important. So we, we had a client that had a chat tool and they were not convinced at all that chat leads were quality.

[00:28:15] Jon Torrey: That they were gonna drive any type of installation jobs. And during a heat wave, there were some forest uh, fires in their area and it rose temperatures in that, that specific area. And there were a lot, there was a lot more demand for people thinking, I need to get an essential AC installed into my home, or I need to solve this problem.

[00:28:37] Jon Torrey: And what we found, and don’t quote me on this, I don’t remember the exact numbers, but it was pretty close. To 80% of the closed revenue during those, those two or three summer months was coming in from forum and chat leads, which is totally the opposite of what would normally happen. Whereas phone calls drive about 80% of of revenue, and that’s gonna largely stay the same for a while.

[00:29:00] Jon Torrey: Um, but just in this case, with all the excess demand, I think what was happening is I, I think their phone lines were busy. So customers were kind of going in through, you know, chat and we, we had, I mean, we collect everything. We could see the transcripts and all of that. So we, we were seeing people effectively go through a sales process.

[00:29:17] Jon Torrey: Do you have this equipment? When can you install? What’s the range of price? Bam, let’s set the appointment. And it, it, it generated that revenue. Now, astute people might come back and say, Well, what happened when the demand went down? It continues. To be a conversion tool. Again, doesn’t drive as much as phone calls, but it drives significantly more than the monthly fee to have the chat on the website.

[00:29:39] Jon Torrey: So in this case, they did not cancel. They kept it on the site as an added way for a customer to get in touch with their business. And we kind of proved to them like, Yes, you do get installation leads from this $15,000 tickets coming in through chat . So that’s one example. Another example, right? Um, you know, this, this is something that, I mean, it happens more than you think.

[00:30:01] Jon Torrey: I think you reference this as, you know, a customer spending five figures on a PPC budget and their automated greeting was looping through without giving an option to press one, two, or three to connect with somebody. So we were seeing customers on hold 15 minutes. Which is crazy. People are saying on that long, but, But their match rates are extremely low, and that was a clue to us that something was off.

[00:30:29] Jon Torrey: So it was as simple as fixing the automated greeting and making sure that there’s an option for a customer to leave a voicemail or that after two minutes it says, Hey, you know, we’ll call you back. Or just something, as just two tangible examples.

[00:30:45] Kevin Dieny: Wow. So the first one with the chat and calls, we see something so interesting.

[00:30:52] Kevin Dieny: We, we’ve seen this, uh, something kind of similar, but a different angle I wanted to spin on it is we’ve seen businesses who are like chat, I don’t know about that. Mm-hmm. , a website chat. Like, like that’s just gonna bring in a lot of fluff and weirdness. Yeah. And , one of the other objections we heard on that.

[00:31:12] Kevin Dieny: you know, who am I gonna have, man, this thing. Mm-hmm. , like I, I don’t want a bot to be there. I mean, bots are fine, but I don’t want a bot to be there. I want one of our staff to be there, and that’s just gonna take them away from calls, which are like, you’ve mentioned more important to me. Mm-hmm. and I like having the call, the person there in real time.

[00:31:28] Kevin Dieny: But what we really found is that a chat or a text, Is not really like a stop gap for a call. The way that the A chat works, yes. You wanna be there right away. You gotta respond right away. Cuz if you’re not spreading within, like, think it’s like 16 seconds, they’re out of there. Like they, they put something in the chat, no one responds.

[00:31:46] Kevin Dieny: They’re, they’re like, this isn’t, what is this waste of time? Okay. But having someone responding didn’t take away from their ability to be on a call at the same time. Mm-hmm. . So it was really interesting. , it’s expensive to man phone calls. You need people, you need them train, you need to know what to say.

[00:32:04] Kevin Dieny: They had to have some sales skills and some customer service skills, and they’re handling a lot, uh, but a chat a little bit less, a little bit less intense. And so they could do both simultaneously. Mm-hmm. and that actually made them go, Oh yeah, I’m all about chat now. Yeah. Because it’s easier and my team can be handling multiple conversations at the same time.

[00:32:26] Kevin Dieny: That is, that’s huge for them. So that was a. For me and for most of us here, unexpected outcome of of chat and calls and texts and texts were the same thing. That it’s a little bit more, let’s say, culturally acceptable that a text isn’t responded to within a split second. Right? It’s not like you text and B comes right back.

[00:32:45] Kevin Dieny: There’s a little bit of a delay, and that delay allows for a person to be on multiple combined like conversations at the same time. Mm-hmm. , so it actually widens. Ability to, you know, communicate, which was something that we found that was really interesting. Yeah. Uh, in having, you know, a business that opens itself up to multiple mediums of, of interacting with customers.

[00:33:06] Jon Torrey: Absolutely.

[00:33:08] Kevin Dieny: Now, the, the other thing I was gonna kind of get to here is, okay, revenue flow ends in some. The customer, but it doesn’t really. Right. You kind of want a customer to come back over and over. Absolutely. You want them to return. Absolutely. So that we’ve talked a bit about lead to sale. Well, what about repeat customer, past customer, you know, maybe one that didn’t work out.

[00:33:34] Kevin Dieny: You know, the book, the appointment came, but then they didn’t, they didn’t, they didn’t sell. So how can a business take advantage of the information from, let’s say, near sale to onward? Right? So if you could talk about that, Jon.

[00:33:46] Jon Torrey: Yeah, absolutely. So another revenue flow metric is looking at revenue potential.

[00:33:53] Jon Torrey: Which is specific to home services. So you have open estimates, sold jobs, and closed jobs, and then you look at the gap between open estimates, sold jobs, and closed jobs. And one of the things that you could do today is get a list of open estimates, which again, we do that automatically. I know some people say, Hey, it’s so hard to get this, but you can follow up.

[00:34:12] Jon Torrey: On open estimates that are a week or older, and you can call those customers and you can reach out. You not, probably not gonna get a high percentage of them, but it, it’s certainly some percentage that, you know, you’ll, you’ll be able to, to bring in. And then as you think about repeat customers, and you know, because look, a lot of companies will tell us, you know, all of the roads to growth.

[00:34:38] Jon Torrey: Come from installation because you know, new customers tend to spend the most money with us in the first 90 days. We know the equipment’s gonna last 12 to 15 years. But we do track that. We can see when, when people come back. And there’s just been some interesting, I’ll give some anecdotal, you know, just, just examples.

[00:34:55] Jon Torrey: Like we, we’ve seen people get a furnace replacement that come back four weeks later for a hot water heater replacement. If you, if you’re offering both of those services and we look at the percentage, uh, of membership sold into some of those jobs, and we can track the lifetime value of a customer. And I, and that’s where I think.

[00:35:16] Jon Torrey: It might overwhelm some people when you start, Well, I have to manage this, then I have to manage that. Again. It, it’s, the data is, it’s made to just be simple so you can monitor what’s happening and that you’re trending in the right direction. And then when you work on your business and you want to get into the specifics, if you feel as though, Hey, my benchmarks are showing lead handling is good.

[00:35:38] Jon Torrey: I’ve got the right conversion tools on the website. I feel good about the marketing strategy. And it’s always gonna be there. It’s always being monitor. So I’m comfortable then to put my focus on, okay, let’s do some email marketing to customers with older equipment. That aren’t on our membership program or as we start to, you know, offer some, some fall discounts or we offer some spring discounts.

[00:36:02] Jon Torrey: Our customers coming in from those campaigns and are they doing service with us in the next season? What percentage are, are, are doing that and how can we do a better job? And again, it all goes back to this obsession over the customer. It’s if you’re obsessed with a customer and you provide a good experience and you can leverage, it’s much easier.

[00:36:20] Jon Torrey: Uh, to leverage the marketing tools at your disposal. When you, when you call an open estimate and you’ve done a great job, uh, when you’re in the home, you might have a, a higher likelihood, right? They might have just forgotten or they’re just still debating or whatever it is. Or if you’ve, if you do some sort of fall, you know, furnace tune up and you’re getting in the home and you’re giving a good experience, maybe you don’t sell the membership right there, then in there and you’re looking, Hey, this customer hasn’t come back within a year, let’s do some outreach.

[00:36:46] Jon Torrey: If you’ve done a good job at providing them a good experience, you’re probably more like, To, to get them in the loop again. And there’s a big discussion in, in home services about monthly recurring revenue. Annual recurring revenue. Um, so just, it, it’s really is revenue flow at the end of the day. I know it’s that customer journey, but it’s just allowing you to understand how, how they’re doing business with you so you can obsess over it, make it better for them, and get them as repeat customers for a lifetime and their friends and neighbors, right.

[00:37:13] Kevin Dieny: Yeah, so that’s, that leads me to, an interesting insight. After attending some conferences from reading everything I can within the marketing field. Right now, there’s a lot of, there’s been a lot of like return surveys and polls about in marketers everywhere, and this is not just home service, this is every business.

[00:37:33] Kevin Dieny: One of the really shocking things I saw was the personalization or being obsessed about the customer. Mm-hmm, and wanting to be very person trying to deliver personalized marketing, which is very difficult to do. It was something like 70% of businesses at all levels, even the biggest ones who have tons of resources, weren’t even really bothering with more than, Well, I slapped the name on an email.

[00:37:57] Kevin Dieny: It says, Hey, Kevin, you know, in an email, Hey Jon, in an email, and that’s it. Mm-hmm. And that’s as much as they were segmenting their information. So there are interesting things like you just described a few segments that I wanted to just highlight. You’ve described potential customer information, right.

[00:38:12] Kevin Dieny: But it it’s associated with Okay, they, they, they bought from us a long time ago. Mm-hmm, so their equipment might be getting old, They may have purchased, purchased a furnace. . Okay. Would that make them a good candidate for an email about a water heater? Mm-hmm, that’s a segment, segments that purchased product or service xyz.

[00:38:28] Kevin Dieny: You know, they don’t have our membership plan. Yeah, they do. You know, all of these are kind of groupings or segments that are, to me, generally found within a crm. Right. Or generally found within some sort of marketing or database, or could. Hopefully not be in an excel in a spreadsheet, but , you know, at the end of the day, it’s like thinking about different ways to talk to your audience can give you like that competitive edge.

[00:38:52] Kevin Dieny: Mm-hmm. . It can come from, I think a couple sources we’ve mentioned, improving my operations and my business, improving my, what I’m gonna do with the information I have, focusing on the channels that are working for my business. Nailing my phone calls. Chats. Mm-hmm. , making sure that I. Very aware of what’s going wrong in the, having tabs on what’s going could be going wrong, so that I know if anything starts to drop.

[00:39:19] Kevin Dieny: And I think another one would be, okay, what I have done right, how can I get more out of it?

[00:39:25] Jon Torrey: Yeah, and you could take more time. I mean, and, and that this, this is the way too, is we get into some of these discussions with. Some of our clients, like, like I mentioned earlier, right? Um, you know, marketing, the, the, the whole goal of it is, is to get consideration in a moment of need.

[00:39:41] Jon Torrey: And a lot of these customers, it’s, it’s very much a strong moment of need. I don’t have heat, I don’t have ac Now obviously there’s a percentage that they’re booking out ahead and they’re planners and they’re this, and they’re that. Uh, but you can be a little bit more patient with and thoughtful about the, the follow ups.

[00:39:57] Jon Torrey: Like, again, I, I, I like process and I, I think one of the, a specific example is if you do an installation for a new customer, You have the opportunity to to win all the business in that neighborhood, right? If they talk about you. But you might take the time to think, if this were my son, if this were my best friend and I just installed this over the next 12 months, what are the things that I would wanna communicate that to them about?

[00:40:23] Jon Torrey: You know, hey, change, it’s time to change your filter, right? And people call it email drip campaigns, but, But is there some communication that you can do? We just installed this and here’s where we go from here. And hey, it’s year two of owning your equip. You know, here’s some messaging about that that you could be a little more patient on, right?

[00:40:40] Jon Torrey: Because you have some time to figure that out. And that’s why, again, if you use revenue flow to really dial in the urgent they want it, now they’re, they’re hunting, We’re gonna lose the business if we’re not on top of this. And making it easy for them to convert. And then you can sit down with their team.

[00:40:55] Jon Torrey: And that’s the fun part, because this is what you’re good at, is thinking about what value can we communicate on a monthly bimonthly basis. That we would communicate to our friends and family about their new equipment or somebody that just got their, their spring tune. And just, Hey, it’s time to change your filter.

[00:41:13] Jon Torrey: Just a friendly reminder. Now, I think some of that’s, I think equipment will have smart furnaces and smart acs that’ll start to communicate some of those things automatically. But if you educate your customer, again, because a lot of people, I still think, yes, my, my, my car might tell me that I need service, but I still go to a trusted dealership because they’re the ones that are gonna do the work on it.

[00:41:33] Jon Torrey: So, it’s your chance to, to build that relationship is, is at the end of the day, it’s, you’re, you’re building a, a partnership with your customer for the, for their home comfort.

[00:41:43] Kevin Dieny: Yeah, that’s really interesting. I, I thought I could, You just brought to mind a couple examples I thought I would share. Mm-hmm. , one of them was when we, when I first got moved into our house, I got some stuff in the mail that was like, Hey, you’ve just moved in.

[00:41:55] Kevin Dieny: Mm-hmm. we’re your neighborhood. Plumber kind of stuff. Mm-hmm. , Another interesting one I got was there was a fire nearby and then I think it was like a month later, took a little while, but it was a month after I got somebody saying, Hey, there was a fire in the neighborhood. Maybe you should check your filter.

[00:42:10] Kevin Dieny: Mm-hmm. , here’s, here’s xyz, um, hvac. Mm-hmm. . Another interesting one was I got from a, a termite company. They said, Hey, We just cleared out some termites in the neighborhood, just so you know. That probably means they’re in your area too. Mm-hmm. , it didn’t necessarily have to be true, but you know, there’s, there’s some really interesting ideas that there and, and come off of what you’re saying, Jon, I, I love the actionable takeaways here that a business could be be going.

[00:42:36] Kevin Dieny: Yeah, that’s an interesting idea. I like that. Yeah, I could do that. So, lucky. One of the sort of final questions here. Yep. What’s required? For a business to do everything we’re talking about. I, I feel like I’m gravitating more toward, you know, a business owner could do this, uh, maybe at bare minimum be looking at a lot of this important stuff.

[00:42:58] Kevin Dieny: But, you know, it sounds like it’d be also very helpful to have a marketer either in house or outsourced or something, or a partnership with an agency. You know, someone who comes in and every once in a while and does some, you know, pulls this information together annually, consultative wise. So what kind of, what’s, what’s essentially required?

[00:43:19] Kevin Dieny: You mentioned crm, I know that’s the tech side. Yeah, definitely. What’s sort of essential and required for a business to sort of get around this and get going with this to make sure they have, if they have a checklist. Okay. Check 1, 2, 3. Check the boxes here. What’s basically required to do, to increase revenue flow?

[00:43:35] Jon Torrey: Yeah, I, I mean, at the end of the day, if, if you’re looking to, to measure this accurately and, and robustly, you obviously need the crm, but you need a company that can put a pixel on your website and connect all the data. If you’re using, you know, a different ch you know, you’re using a chat provider, a web vendor, an online scheduler, an advertising provider and SEO agency.

[00:43:56] Jon Torrey: Uh, a CRM that’s six, seven different companies, you need to find a partner who can tie that, that data together. Now, obviously that’s what we do. That’s why, that’s why we built it. We haven’t seen anybody do it. Um, so, so there’s always that option, right? But, but beyond that, we do see a lot of companies, they, they do either hire for this or they find somebody internally who’s interested and spends some of their time analyzing the data from the crm.

[00:44:21] Jon Torrey: I’ve, I’ve heard a lot of stories. I wanna pull my hair out cause I can’t get the accurate data and I don’t have this full picture. Uh, but if you, if you can start to just look at some of those higher level, if you’re at least thinking about. And you know, you’re looking at what revenue am I bringing in monthly?

[00:44:37] Jon Torrey: What am I spending on marketing? It doesn’t mean that that’s the roaz, cause not every job that comes in is going to be from a marketing channel, but you wanna make sure it’s accurate. I mean, that’s, at the end of the day, this is why it’s so hard because I, you know, my on, I don’t think there’s a simple checklist that says you can get all of this today.

[00:44:54] Jon Torrey: Um, because I did it, I, I did it for, for over a year. I mean, I. To call, I tracked every single lead for a few clients. These were thousands of leads in a year to see where the information was accurate and accurate and how to make decisions. And unfortunately, it was very inaccurate because of the disconnect of activity that happens on the website and, uh, you know, the activities in the crm.

[00:45:16] Jon Torrey: Uh, and so there’s a disconnect there. But I, I think one of the simple ways that you could, could just do this to, to test is to call your, have a friend, call your business, and just listen. You know, are, are they following some of the steps that you’ve taught them? Fill out a form on your website. See if somebody responds to you, go to your website, check your website.

[00:45:37] Jon Torrey: Page speed, you can just Google website page speed. Uh, you can plug in the URL and you, you can see if it comes up all red, then, then there’s an issue there, . Uh, and you can have somebody internally sort of, and you can go through CRM data and there’s a lot of stuff that you can get out of it. It’s just double check that it’s, it’s.

[00:45:53] Jon Torrey: Um, but I think if you’re at least thinking about it and you’re asking your vendors to provide some of the data, uh, then you’re on the right track. It might not be perfect, it might not be the robust solution, but you’re at least on the right track of, Hey, I don’t care about cost per lead or cost per click.

[00:46:08] Jon Torrey: How many book jobs did this drive? What’s my cost per book job from these channels? Start there. That’s one thing. Start with that. Instead of cost per lead, cost per booked job.

[00:46:17] Kevin Dieny: No, that’s really good. So, again, just to kind of put a bow on any of this, did, is there anything that we didn’t mention we haven’t talked about yet?

[00:46:25] Kevin Dieny: Anything you were like, Oh, I gotta mention this. Anything at the end here you’d wanna mention before we, we kind of close out?

[00:46:30] Jon Torrey: I look, I, I think this is pretty robust. Uh, I think that what you’re gonna see happen is there’s going to be more attribution technology. It’s a logical next step. We’re not, I mean, I think we’re one of the first to really dive, dive into it, but I, I know it’s not going to be the last, As you start to dive into data and you start to think logically about it, and you get, you know, more comfortable with.

[00:46:55] Jon Torrey: You’ll ask the right questions, it won’t feel overwhelming, I promise. And the industry standards will continue to increase for this type of data and this type of insight. So I guess the point there is if you’re feeling a little behind or overwhelmed, take a deep breath. You have a business like that, you know, tough business to do, and the industry is catching up.

[00:47:19] Jon Torrey: If you’re listening to this, you’re already on the right path of thinking about things. Just a little bit differently.

[00:47:25] Kevin Dieny: Wow, that’s really great. I love them. I love ending it in sort of like a positive way. . Exactly. A little bit of what we talked about is like, oh man. Um, this is a lot. So Jon, thank you so much for coming on.

[00:47:36] Kevin Dieny: Can you tell us, share with our listeners how they can connect with you, find more about you, find more about Searchlight and what it is you guys do if they’re interested?

[00:47:45] Jon Torrey: Yeah, yeah, so you can always head over to our website, searchlightdigital.io. But if you’re really interested in the data, if you’re kind of thinking, Okay, I, I kind of get what he’s saying.

[00:47:56] Jon Torrey: I’m a little bit overwhelmed that I wanna read a little bit more about this. Head over to thedatadriventrades.substack.com. I said one email a week where I highlight insights from the data and we document questions to ask and things like that. And look, if you wanna email me, jon@searchlightdigital.io, if you have questions, you need help with this always available.

[00:48:22] Jon Torrey: Uh, our, our goal is to help move this industry forward through better data and actual insights. So, you know, always looking, looking for feedback, questions, things like that.

[00:48:31] Kevin Dieny: Awesome, so again, recap, We’ve gone over what’s driving rev, What is revenue flow? What’s driving it, maybe what’s leaking it? What is, what areas the best a business could be thinking.

[00:48:42] Kevin Dieny: Okay. Areas to capitalize on, Not just keep it as data insight, but turn it orchestrated into actions. Ideas. We’ve talked about, ideas we, you’ve highlighted some things they could be doing in. 30, 60, 90 days. Some suggestions that, not necessarily checklists, but here’s things they could be doing, they could do, they could put together, they could be thinking about to get themselves moving in that direction of increasing revenue flow and really growing their business, keeping things simple.

[00:49:10] Kevin Dieny: Mm-hmm. again, is something, another thing you’ve highlighted. Um, and, and at the end of the day, I think we’ve really. Tackle this topic of how home service businesses can increase our revenue flow. So I really appreciate you coming on Jon and sharing all this with us and our audience.

[00:49:24] Jon Torrey: Yeah. Thank you so much for having me.

[00:49:25] Jon Torrey: I really appreciate it.

[00:49:27] Kevin Dieny: Thanks for listening to the Close the Loop podcast and catch you again next time.