WEBVTT
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[SPEAKER_00]: You can go on and you can see people like us talking about different numbers.
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[SPEAKER_00]: You can see other business owners saying these numbers, 85% appointment set rate, 35% closed rate or better, right?
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[SPEAKER_00]: But there's really no context there for what that should look like.
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[SPEAKER_00]: So that could discourage many people if you don't really understand the way those numbers vary between different companies, different markets.
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[SPEAKER_00]: As a person new to the business, that could be very scary.
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[SPEAKER_01]: Hello, and welcome back to another episode of The Builds of Wind podcast I'm your co-host Jonathan Weinberg, and I'm here as always with my co-host John Colboska.
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[SPEAKER_01]: Hey, John.
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[SPEAKER_01]: What, Burke?
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[SPEAKER_01]: How's everything?
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[SPEAKER_01]: Yeah, things are, things are busy.
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[SPEAKER_01]: I've been traveling.
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[SPEAKER_01]: I was out in Montana for a week for, for an event.
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[SPEAKER_01]: And thank you for traveling for one of those weeks.
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[SPEAKER_00]: And that's just been summer summer vacation.
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[SPEAKER_00]: Having fun traveling with the family.
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[SPEAKER_00]: Kids are back in school now.
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[SPEAKER_01]: Kids are back in school, back to the usual, back to the grind.
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[SPEAKER_00]: We're in full season, so for many of us replacement contractors, this is the final push before the winter, at least for those of us up in the north, right?
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[SPEAKER_00]: Whether it's changing, right?
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[SPEAKER_00]: Technically, we got a couple more days left to summer as we're recording this, but we're technically, but at night, I mean, this is when you start to see that seasonal that shift.
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[SPEAKER_01]: But there were some twice a lot of days have been out for like a month now, so, but
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[SPEAKER_00]: So you wake up in the morning here to crisp their cool right 50s and 60s now until people are waking up this time to think about hey I probably got to replace these windows it's going to be a cold year this year Even this morning I was I was going to book my appointment for take to get my my boiler checked You know from my annual tune up there you go say so this is for many of us it's the final push
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[SPEAKER_01]: For the year, today we're going to talk about conversion rates, right?
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[SPEAKER_01]: And conversion rates can apply to a lot of different things, but we're going to be pre-specific about it.
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[SPEAKER_00]: The four or five or six mean KPIs that most of us should be tracking in our businesses, right?
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[SPEAKER_01]: And so we're going to be looking at appointment set rates, lead issued rates, demo rates, closed rates, uh, NSLI, or net sales, per lead issued, we're also going to talk about gross, right?
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[SPEAKER_01]: And what's the difference and how are we thinking about how should we be thinking about net sales versus gross sales?
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[SPEAKER_01]: A net close rate versus close, gross, close rate.
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[SPEAKER_01]: So we'll talk a little bit about that as well.
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[SPEAKER_01]: And then at the end of the day, what really matters the most across all of these different metrics.
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[SPEAKER_01]: And then one of the things we were just chatting about before we hopped on is like this is really like replacement contractor metrics, right?
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[SPEAKER_01]: We're talking about like sometimes called specialty as well, but like specialty replacement contractor metrics, which is
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[SPEAKER_01]: Obviously, Windows and doors, it's roofing, it's siding, it's gutters, it's fence and decks, it's floors, it's concrete coatings or epoxy floors, it's those types of industries, right?
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[SPEAKER_01]: As opposed to home services, which is near here plumbing in HVAC and electrical, it's different than your design build.
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[SPEAKER_01]: types of firms.
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[SPEAKER_01]: It's a different set of metrics, right?
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[SPEAKER_01]: And it's really very specific and much more relevant to this specialty replacements ace because of the way that specialty replacement contractors operate and work close that they operate with them.
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[SPEAKER_01]: That's what we're going to be talking about here today in benchmarks and how to think about benchmarks across those different numbers.
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[SPEAKER_00]: And how they vary between different companies, some companies that companies that different sizes, right, different
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[SPEAKER_00]: growing organically, right?
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[SPEAKER_00]: The point is what I've seen, I not only just hosting our own podcast, I watch them too, especially in the very beginning.
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[SPEAKER_00]: You can go on and you can see people like us in the industry, talking about different numbers, you can see other business owners, other specialists to consult, and they'll start, you know, saying these numbers, like, oh, you know, 85% of
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[SPEAKER_00]: And some of them talk at those absolute numbers, but there's really no context there for what really that should look like.
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[SPEAKER_00]: So that could discourage many people if you don't really understand the way those numbers vary between different companies, different markets, stuff like that.
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[SPEAKER_00]: You learn that.
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[SPEAKER_00]: I think as a new, as a person new to the business, that could be very scary.
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[SPEAKER_00]: That can discourage you.
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[SPEAKER_00]: You can think, man, I'm doing terrible right now.
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[SPEAKER_00]: Actually, you're doing great.
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[SPEAKER_00]: Or the obstacle be true.
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[SPEAKER_00]: You could say, wow, I mean, I said, I have a 95% appointment set rate, you know.
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[SPEAKER_00]: X has 60% And you know, I think I'm doing great, but it's just again it depends on your leads So, so we want to just get into What affects those what that looks like at different companies so that you fully understand again at the end of the day You have to track your numbers.
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[SPEAKER_00]: You have to know your numbers.
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[SPEAKER_00]: So you truly know what success looks like That was my feeling as a new contractor and now getting out into the industry going all these different masterminds I see other companies I see all these different numbers and stuff like that and and I've truly understand by talking to other owners
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[SPEAKER_00]: from different markets, different industries, how these things affect these numbers, right?
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[SPEAKER_00]: So don't get excited over everything you hear.
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[SPEAKER_00]: I asked for very little marketing advice from my peers in the industry because one thing that I've learned is, you know, one lead source that works in New York doesn't necessarily work great in Michigan or in Arizona, right?
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[SPEAKER_00]: So I see lots of the mastermind groups like, oh, you got to try this new lead source
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[SPEAKER_00]: 10 people will try to like, what are you talking about?
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[SPEAKER_00]: And we just jump.
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[SPEAKER_01]: What do we start with like the first one in the funnel, right?
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[SPEAKER_01]: And the workflow, which is the appointment set rate.
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[SPEAKER_01]: So that's for a new lead that comes in and what percentage of those leads convert into set appointments.
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[SPEAKER_00]: I'm going to pull up my numbers here.
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[SPEAKER_00]: What do we want to look at?
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[SPEAKER_00]: Months a day?
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[SPEAKER_00]: Do we want to look at year today?
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[SPEAKER_00]: Should we look at year today numbers?
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[SPEAKER_01]: Let's look at year to date numbers.
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[SPEAKER_00]: Pull it up my BP right now.
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[SPEAKER_00]: My sales and marketing report.
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[SPEAKER_00]: Correct.
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[SPEAKER_00]: my lead performance report and build a product.
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[SPEAKER_00]: That's my year to date right there.
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[SPEAKER_00]: All right, these are the major KPIs, right, Johnny?
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[SPEAKER_01]: Yep, these are the major KPIs in your the conversion funnel.
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[SPEAKER_01]: And so you want to tell everybody what we've got here for the appointments that rate?
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[SPEAKER_01]: My appointment set rate is 36%.
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[SPEAKER_01]: Okay, so for some people, that might sounds pretty bad.
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[SPEAKER_00]: Pretty bad, right?
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[SPEAKER_01]: Yes.
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[SPEAKER_00]: But for others, that might sound great.
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[SPEAKER_01]: This is what we're talking about where there's so much nuance and it's so much depends on what your specific processes are like.
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[SPEAKER_00]: So why does my appointment set rate look like 36% right in 2026 if you went back to 2022 or 2021 when I was just starting to grow that appointment separate would have been.
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[SPEAKER_00]: you what let's do it live let's say okay let's go to 2020 this is my business that's this is the year that I went from one point nine million to five million right so there was growth here this is the year I went from one point two to one point nine okay this is the co-ears this is where things started to really pick up this is cooked yes okay so look at that I had nine hundred and thirty five opportunities okay I said four hundred ninety
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[SPEAKER_00]: And John was answering the phone.
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[SPEAKER_00]: No, you were not answering the phone.
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[SPEAKER_01]: The first three months I was.
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[SPEAKER_00]: But I had an appointment set rate of 54%.
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[SPEAKER_00]: Okay.
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[SPEAKER_00]: That's really good.
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[SPEAKER_00]: We set 490 leads.
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[SPEAKER_00]: We issue 436.
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[SPEAKER_00]: I had a lead issue rate of almost 98%.
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[SPEAKER_00]: At a demo rate,
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[SPEAKER_00]: Right, we demoed 95% of all of our leads that were issued, right?
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[SPEAKER_00]: Yeah.
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[SPEAKER_00]: We did 416 demos at a 436 issued leads.
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[SPEAKER_00]: I sold 180 jobs that year, and my NSLI was $2,650.
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[SPEAKER_00]: This is 2020.
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[SPEAKER_00]: Let's go to this year for context.
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[SPEAKER_00]: OK, here we are.
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[SPEAKER_00]: I have $5,471 opportunities.
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[SPEAKER_00]: This is I'm going to be a $12 million company this year.
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[SPEAKER_00]: I've set almost 2,000 appointments here in date.
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[SPEAKER_00]: I've issued about 79% of my leads.
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[SPEAKER_00]: Now, there's a delay in this to be fair, because some of these are booked out today tomorrow they haven't happened yet.
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[SPEAKER_00]: It'll probably be about 80%.
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[SPEAKER_00]: Right?
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[SPEAKER_00]: the year because I've probably got about maybe seven or eight.
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[SPEAKER_00]: Let me be 10 appointments on the calendar down today tomorrow that happened.
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[SPEAKER_00]: I should get.
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[SPEAKER_00]: Maybe you won't even move the needle.
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[SPEAKER_00]: We've issued 1,584.
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[SPEAKER_00]: My demo rate is still pretty good, 90% however, went down 5 points from 95% right?
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[SPEAKER_01]: It was 95% before 2020, I was 95% yeah.
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[SPEAKER_01]: Yep.
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[SPEAKER_01]: Okay.
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[SPEAKER_01]: Now I'm at 90, okay.
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[SPEAKER_00]: Let's look at my lead issue rate, 2020 at a 98% lead issue rate.
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[SPEAKER_00]: All right, now I have a 79, my appointment set rate, 79% the issue rate in 2026 in 2020 at a 54% appointment set rate versus a 36% appointment set rate today.
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[SPEAKER_00]: So you can see, I'm scaling, right?
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[SPEAKER_00]: I'm opened up to more lead sources.
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[SPEAKER_00]: I'm not answering the phone or John's not answering the phone, right?
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[SPEAKER_00]: I'm not out selling.
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[SPEAKER_00]: Look at the closing, right?
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[SPEAKER_00]: Look at the gross close rate, 32% in 2026.
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[SPEAKER_00]: versus 45% in 2020, okay?
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[SPEAKER_00]: Okay, so I'm a great sales person.
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[SPEAKER_00]: At least I tell myself, I was reps all the time.
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[SPEAKER_00]: And I always tell them, I used to close around 40 to 45%.
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[SPEAKER_00]: But it's true, right?
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[SPEAKER_00]: And again, it's not because I'm a great sales person, it's because I'm the owner, right?
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[SPEAKER_00]: Nobody's gonna have more authority in a customer's home than the actual owner.
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[SPEAKER_01]: But you can see the way these numbers are affected at different points.
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[SPEAKER_00]: It's just in my business.
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[SPEAKER_00]: And this is the same industry.
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[SPEAKER_00]: Still stalling windows and doors today.
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[SPEAKER_00]: Like I was back that, correct?
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[SPEAKER_01]: Yeah.
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[SPEAKER_00]: Look at my NSLI back then.
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[SPEAKER_00]: 2,650 versus 3687 today.
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[SPEAKER_01]: That's a key one right there.
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[SPEAKER_00]: I've increased my pricing probably about...
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[SPEAKER_00]: I'm going to guess probably about 50 or 60% since that.
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[SPEAKER_01]: Yeah, and average ticket has gone up as well, right?
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[SPEAKER_01]: The NSLI is kind of somewhat indicative of that as well.
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[SPEAKER_01]: Because you're NSLI, or GSLI, whatever, has gone up.
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[SPEAKER_01]: despite your closing rate going down.
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[SPEAKER_01]: Yeah, so that if your closing rate were held steady, that would be even way higher than it is now.
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[SPEAKER_00]: Let's look at this, right?
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[SPEAKER_00]: So gross versus net.
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[SPEAKER_00]: The numbers that we're looking out here, they're gross numbers.
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[SPEAKER_00]: I still have the box.
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[SPEAKER_00]: It's including all the sold and canceled jobs, right?
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[SPEAKER_00]: So we have that here, right?
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[SPEAKER_00]: If you're looking out back to 2020, this is gross.
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[SPEAKER_00]: If I uncheck this box, it's a feature of build a prime.
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[SPEAKER_00]: Now I see all of my net numbers.
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[SPEAKER_00]: The only thing that really changes here is my closed rate, and my initialized value affected, my net closing rate back then in 2020, went down to a 43% from 45%.
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[SPEAKER_00]: gross right now let's look because again I was mostly selling I had myself and I believe it was two other sales is not a fact yes Scott and Jack so there was three of us out there selling my gross went to 43% let's look at this year so my gross this year's 32% but my net is 27 I've lost five points I'm not out selling right I have much higher cancellations
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[SPEAKER_00]: Today in 2020, so they have much higher cancellation rates, not here, but that's basically telling you there's a hell of a lot more cancellations on my books, right?
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[SPEAKER_00]: In 2026 versus 2020, two different businesses, two totally different businesses, snapshot of a different business, that 2020 right here, numbers probably like most of our listeners, and watchers.
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[SPEAKER_00]: The people that are watching us and follow against, right?
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[SPEAKER_00]: But you could see, these numbers look good.
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[SPEAKER_00]: If I just looked at these numbers in 2020 and said, oh, 54% appointment set rate, 98% lead issue rate, these are the numbers, these are the numbers, and then someone is not performing at a $7 million, $7 million company, the numbers are different.
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[SPEAKER_00]: They may think that they're fairly.
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[SPEAKER_01]: The size of the company is kind of a it's not the reason it's because what a company at that scale is doing right and it's because of the lead channels and the lead sources and the general practices that you have as a business is what is impacting these things.
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[SPEAKER_01]: increased prices is going to have an impact on some of these conversion rates.
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[SPEAKER_01]: The marketing mix is going to have an impact on some of these metrics.
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[SPEAKER_01]: And that might be even the biggest one, right?
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[SPEAKER_01]: It's certainly less going to be less referrals and repeat business, for example.
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[SPEAKER_01]: If you're small business and operating sales or the owners is running all the sales appointments, you're going to need a lot of repeat referral business and that's going to drive a lot of these
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[SPEAKER_01]: And naturally you're going to have better conversion rates, but as you begin to scale and you take on additional marketing channels and lead sources, those things are naturally going to change, but that's not a bad thing.
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[SPEAKER_01]: Those numbers go down, that's not necessarily a bad thing.
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[SPEAKER_01]: Certain ones you're going to want to see.
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[SPEAKER_01]: uh, continue to perform and an increase, right, that NSLI, then that sells police issues, a good example of one of those metrics that you always want to see that go up, right?
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[SPEAKER_01]: You don't want to see that take a dip.
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[SPEAKER_01]: Okay, so that's just a really powerful, useful, efficient, overall efficiency metric for your business regardless of all of these other factors that we're talking about.
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[SPEAKER_00]: Let's look at 20 to 21, right?
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[SPEAKER_00]: This way we can compare the two, because I had a big jump from 2020 to 2021, right?
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[SPEAKER_01]: There's a lot of nuance to these metrics.
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[SPEAKER_01]: You can't take one person's conversion rate and apply that to yourself as a barometer necessarily.
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[SPEAKER_01]: You have to look at the whole mix of things and use it as a benchmark for yourself, right?
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[SPEAKER_01]: If you have a 40% benchmark,
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[SPEAKER_01]: Look at what you can do to get that's a 45% or 50%.
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[SPEAKER_01]: Don't look at what somebody else is doing.
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[SPEAKER_01]: Look at what you're doing and measure the progress from there to increase it and move those numbers.
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[SPEAKER_00]: So right here, you can see 2020, 935 opportunities 2021.
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[SPEAKER_00]: We did almost 4,000.
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[SPEAKER_00]: My appointment set rate went from 54%.
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[SPEAKER_00]: in 2020 down to 37% in 2021.
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[SPEAKER_00]: Open up more lead sources, right?
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[SPEAKER_00]: But again, I went from 1.9 million to 5 million top one.
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[SPEAKER_00]: Now here's what's important.
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[SPEAKER_00]: The real scorecard is what I may.
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[SPEAKER_00]: That's the first year I made $1 million ever in my life.
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[SPEAKER_00]: I had a 20% net on the business that you're at the 5 million.
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[SPEAKER_01]: It was close to the 1970 or something.
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[SPEAKER_00]: So you could see, you know, in 2021, the lead issue rate was at 98% that remained the same, right?
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[SPEAKER_00]: Are you should 436 leads in 2020?
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[SPEAKER_00]: And then the next year 2021, 1280, right?
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[SPEAKER_00]: My demo rate was 95% in 2020.
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[SPEAKER_00]: It took a little dip down in 92% in 2021.
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[SPEAKER_00]: In 2020, I did 416 demos.
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[SPEAKER_00]: Compared to 1,173 demos in 2021.
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[SPEAKER_00]: So my great closing rate of 43% gross in 2020 went down to 35% oh my god.
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[SPEAKER_00]: You look at that.
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[SPEAKER_00]: You go my god, you're closing rate with down 8%.
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[SPEAKER_00]: Your point of survey went down.
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[SPEAKER_00]: Actually, I made double or three times in amount of money this year.
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[SPEAKER_00]: Then I did the your prior, right?
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[SPEAKER_00]: It's all about the return.
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[SPEAKER_00]: Now if I look at my net, I would 35% to 32%.
16:06.937 --> 16:07.777
[SPEAKER_01]: on my closing rate.
16:07.817 --> 16:12.620
[SPEAKER_01]: Say, one of the key things here is that you're an SLI was pretty consistent.
16:12.640 --> 16:13.980
[SPEAKER_01]: It went up and went up a little bit.
16:14.240 --> 16:19.923
[SPEAKER_00]: But I sold 180 jobs in 2020 and sold and installed the 180 jobs in 2020.
16:20.643 --> 16:23.164
[SPEAKER_00]: The next year I sold an installed 443.
16:23.585 --> 16:25.425
[SPEAKER_00]: So you can see the way the numbers change.
16:25.465 --> 16:28.607
[SPEAKER_00]: Now, I can tell you, I'm not going to share my tax return, but.
16:29.127 --> 16:32.509
[SPEAKER_00]: I've been saying for years, 20-21 was the first year.
16:33.029 --> 16:35.170
[SPEAKER_00]: I sold five million out of 20 percent net.
16:35.410 --> 16:36.010
[SPEAKER_00]: Do the math.
16:36.070 --> 16:37.731
[SPEAKER_00]: You know what that is that I may, right?
16:37.751 --> 16:39.012
[SPEAKER_00]: Yeah.
16:39.232 --> 16:39.512
[SPEAKER_01]: I mean,
16:41.322 --> 17:00.693
[SPEAKER_00]: So $1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
17:10.006 --> 17:12.067
[SPEAKER_00]: It went from 54% down to 37%.
17:12.187 --> 17:14.448
[SPEAKER_00]: I'm like, oh my god, that's terrible.
17:14.788 --> 17:18.951
[SPEAKER_01]: You have your setup here to calculate close rate on leadership.
17:19.291 --> 17:21.832
[SPEAKER_00]: Yeah, it's set that way here in my system.
17:21.912 --> 17:25.714
[SPEAKER_01]: This setting to be able to calculate close rate on leadership is in there.
17:25.734 --> 17:27.035
[SPEAKER_01]: You call it sub-John.
17:27.877 --> 17:35.482
[SPEAKER_01]: John is the one that drove that setting to even even be there because the default is to calculate close rate on demos for each demo.
17:36.363 --> 17:41.586
[SPEAKER_01]: What percentage of those demos did this else rep close and I think we've had this debate before in this argument.
17:41.626 --> 17:43.648
[SPEAKER_01]: I want to see a bit by demo, not by lead issue.
17:44.068 --> 17:58.853
[SPEAKER_01]: you prefer to see it by lead issue because you just want to say like hey all right I gave this I issued this lead to a sales rep and I just care if they close that leader not I don't I don't care if they demoted or they didn't demo it I just want to know for every every lead I give them what do they close
18:00.574 --> 18:07.900
[SPEAKER_01]: My argument for not doing that is you can see your demo rate, right?
18:07.920 --> 18:11.563
[SPEAKER_01]: So you know what percentage of the leads went from issue lead to demo.
18:12.023 --> 18:22.492
[SPEAKER_01]: So you can address any kind of issues or gaps or problems for sales reps that might be have a higher, higher, no demo rate than others and things like that.
18:28.997 --> 18:30.298
[SPEAKER_01]: closing for each demo.
18:31.358 --> 18:33.559
[SPEAKER_01]: That actually counts as a demo.
18:35.040 --> 18:36.441
[SPEAKER_01]: What's the efficiency of that metric?
18:36.661 --> 18:37.461
[SPEAKER_01]: Getting to be closed.
18:37.781 --> 18:44.325
[SPEAKER_00]: Again, it's two different ways, but you know, at the other the day, it's, you know, what does your piano look like, right?
18:44.685 --> 18:44.945
[SPEAKER_00]: Yeah.
18:45.485 --> 18:48.647
[SPEAKER_00]: As long as you're tracking your numbers, I mean, I have a certain way of doing things.
18:48.667 --> 18:54.150
[SPEAKER_00]: Maybe people looking up my closing rate right now and going, man, you know, a 32% group, a gross closing rate.
18:55.148 --> 18:59.051
[SPEAKER_00]: But then, like, if I 20, 26 numbers year to date, I guess I'll go back to that.
18:59.131 --> 19:00.272
[SPEAKER_00]: Then that's pretty funny, right?
19:00.312 --> 19:05.856
[SPEAKER_00]: Like, how many, how many people show you their actual numbers on a podcast?
19:05.876 --> 19:06.597
[SPEAKER_00]: But they're business.
19:06.977 --> 19:10.820
[SPEAKER_00]: But going back to this year, I just showed you the two years, the growth years.
19:11.201 --> 19:15.964
[SPEAKER_00]: But going back to this year, like, you look at my closing rate, you go 32% gross.
19:16.425 --> 19:18.386
[SPEAKER_00]: And then when I uncheck it, you go 20, that's terrible.
19:18.766 --> 19:21.068
[SPEAKER_00]: I mean, are you tracking it the same way I am?
19:21.268 --> 19:23.310
[SPEAKER_00]: Are you tracking those numbers based on lead issued?
19:24.743 --> 19:27.245
[SPEAKER_01]: As if you're tracking it on demo, your number is going to be a lot higher.
19:27.765 --> 19:29.627
[SPEAKER_01]: You have to measure against yourself, right?
19:29.707 --> 19:30.508
[SPEAKER_01]: Know your numbers.
19:31.268 --> 19:32.209
[SPEAKER_01]: You have to know your number.
19:32.229 --> 19:32.989
[SPEAKER_01]: Moving those numbers.
19:33.190 --> 19:37.273
[SPEAKER_00]: In any business, you have to have someone that's going to enter the numbers, right?
19:38.174 --> 19:40.475
[SPEAKER_00]: Independent of the managers, right?
19:40.495 --> 19:43.358
[SPEAKER_00]: So, look, if it's just you, you've got to enter your numbers, that's fine.
19:43.378 --> 19:45.679
[SPEAKER_00]: But if you start growing and scaling to the point where you've got...
19:46.480 --> 19:48.560
[SPEAKER_00]: people managing different parts of the business.
19:49.461 --> 19:55.062
[SPEAKER_00]: You can allow them to just put their numbers in and then just leave it.
19:55.782 --> 19:59.563
[SPEAKER_00]: Is it like, oh, because what do you think the marketing guy is going to do with the sales managers going to do?
20:00.203 --> 20:01.683
[SPEAKER_00]: You think they're going to inflate their numbers?
20:02.403 --> 20:05.064
[SPEAKER_00]: Well, tie some bonuses to it and see what happens, right?
20:05.124 --> 20:06.704
[SPEAKER_01]: And not look again at the end of the day.
20:07.264 --> 20:07.844
[SPEAKER_00]: I've seen it.
20:07.944 --> 20:08.725
[SPEAKER_00]: It happens a lot.
20:08.885 --> 20:10.145
[SPEAKER_00]: Not everybody does it, right?
20:10.605 --> 20:10.785
[SPEAKER_00]: But
20:11.946 --> 20:12.727
[SPEAKER_00]: Yeah, this is what happens.
20:12.767 --> 20:13.628
[SPEAKER_00]: So what should you do?
20:13.908 --> 20:16.350
[SPEAKER_00]: If it's just yourself, you have to enter your numbers.
20:16.390 --> 20:22.857
[SPEAKER_00]: You have to at least get these KPIs and have a good, healthy snapshot of what's going on inside of your business, right?
20:22.897 --> 20:32.005
[SPEAKER_00]: So you have to get your opportunities, your role leads, how many of them are setting, how many of them are issuing, how many of them are demoing, and how many of them are selling, right?
20:32.025 --> 20:34.107
[SPEAKER_00]: Let's just, you need to do that, right?
20:34.928 --> 20:41.399
[SPEAKER_00]: You need to put that in if it's just you, but you have to have somebody to go on behind you to double check those numbers to make sure that you haven't made any mistakes.
20:41.859 --> 20:44.864
[SPEAKER_00]: You have to invest in that because if you're going to make decisions,
20:45.882 --> 20:48.083
[SPEAKER_00]: based off of these numbers, it better be accurate.
20:48.463 --> 20:51.024
[SPEAKER_00]: It better not be like a, well, it's a pretty close thing.
20:51.084 --> 20:52.225
[SPEAKER_00]: No, it better be accurate.
20:52.605 --> 20:54.086
[SPEAKER_01]: This is not supposed to be a sales pitch, right?
20:54.106 --> 20:56.967
[SPEAKER_01]: We're not pitching, but we're sharing your builder prime.
20:57.427 --> 21:02.149
[SPEAKER_01]: It bothers me when you say you have to make sure everybody puts in the numbers and puts in like what they did.
21:02.890 --> 21:05.291
[SPEAKER_01]: And follow that up and double check them.
21:05.531 --> 21:05.611
[SPEAKER_01]: And
21:05.851 --> 21:24.496
[SPEAKER_01]: Yes, to a certain degree you do and you have in particular have a you know a little bit of a different process, but I want this to be automated right this needs to be automated a lot more so then you're working on that are you know it's already is a lot there and and to some some actually John we got to get you to adopt some of the more recent updates and.
21:25.136 --> 21:26.057
[SPEAKER_01]: We get the both insights.
21:26.537 --> 21:34.004
[SPEAKER_01]: We get both insights now that you can ask it, which sales reps are gaming the system, or maybe doing things that are uncharacteristic.
21:34.484 --> 21:36.086
[SPEAKER_01]: And it actually pulls that out.
21:36.406 --> 21:39.909
[SPEAKER_00]: I've been working in build a prime since 2019.
21:40.169 --> 21:41.010
[SPEAKER_00]: You and I, right?
21:41.510 --> 21:45.434
[SPEAKER_00]: I've been working in it before you had all of these wonderful, both insights features.
21:45.454 --> 21:46.815
[SPEAKER_00]: We've built in some of the automations on
21:47.015 --> 21:49.036
[SPEAKER_00]: emailing and texting stuff at the very beginning.
21:49.056 --> 21:56.321
[SPEAKER_01]: Yeah, it automatically moves the lead through the funnel and exit, but it literally, I stopped doing this five years ago.
21:56.401 --> 21:59.983
[SPEAKER_00]: So if you'd added on, I mean, people with my business probably saying, John, it does it though, right?
22:00.003 --> 22:03.285
[SPEAKER_00]: But again, regardless, the numbers have to go in.
22:03.645 --> 22:04.906
[SPEAKER_00]: Something has double checkered.
22:04.926 --> 22:06.707
[SPEAKER_00]: You have to obsess over that, right?
22:06.867 --> 22:13.511
[SPEAKER_00]: And if you have other departments doing that, you have to have checks and ballots because these numbers are very important.
22:13.611 --> 22:15.172
[SPEAKER_00]: That's just a point out of this making, right?
22:15.892 --> 22:16.793
[SPEAKER_00]: You have to add a process.
22:16.813 --> 22:19.497
[SPEAKER_00]: So it looks like I need to build a prime trade mid.
22:19.637 --> 22:19.957
[SPEAKER_00]: I crawl.
22:19.997 --> 22:22.220
[SPEAKER_01]: Oh wait, we need to do that for me.
22:22.240 --> 22:22.720
[SPEAKER_01]: Weinberg.
22:22.760 --> 22:25.564
[SPEAKER_01]: You got to respond to when there's we'll be reached out.
22:25.764 --> 22:26.365
[SPEAKER_01]: No offense.
22:26.645 --> 22:28.067
[SPEAKER_00]: But this is a business on his pockets.
22:28.327 --> 22:30.470
[SPEAKER_00]: That's a $20 an hour task, right?
22:30.550 --> 22:31.972
[SPEAKER_00]: Am I really a three data?
22:32.452 --> 22:33.913
[SPEAKER_01]: Or any more?
22:34.353 --> 22:35.433
[SPEAKER_01]: No, no you are not.
22:35.893 --> 22:39.134
[SPEAKER_00]: Yeah, so I have someone doing it for me or now I even have a eye doing it for me.
22:39.234 --> 22:40.195
[SPEAKER_00]: I might not be aware of it.
22:40.235 --> 22:40.815
[SPEAKER_01]: But yeah, absolutely.
22:40.835 --> 22:47.997
[SPEAKER_01]: I mean, these are these are your most critical numbers as a specialty or replacement contractor.
22:48.217 --> 22:50.338
[SPEAKER_01]: Actually, there's two other things I really want to talk about here.
22:50.438 --> 22:57.981
[SPEAKER_01]: We said first net profit is at the end of the day, the all end all, right?
22:59.741 --> 23:23.988
[SPEAKER_01]: a lot of this other stuff doesn't really even matter that much as you know at the end of the day you want your your net profit to be your net profit you're shooting for a 15 20% margin then that's what you want to be be looking at and all these numbers should be driving towards that and you have to forecast and plan this out and it's it's going to all these results numbers but these numbers help you forecast yes when you have an accurate set of these numbers when you have
23:25.248 --> 23:53.801
[SPEAKER_00]: at least the years were today to the more you have the even better would you sit down usually around this time of year to plan for next year you put a plan you you can take these numbers and that come into some sort of we have a compass which we use through a wealthy contractor success society in Charlie Gendell he's created it oh they've created a new one but we have a compass we just take these numbers we plug them in right this this is what we do so we put a top line so it kind of gives us a plan says okay when I guess
23:55.506 --> 23:55.686
[SPEAKER_01]: Yeah.
23:56.226 --> 24:02.728
[SPEAKER_00]: We know if we want to do more revenue, plug these numbers in, you can see what all of these numbers look like at the new revenue target, right?
24:03.728 --> 24:07.829
[SPEAKER_00]: And then obviously, if you figure this all out, you should have also a plan for your piano.
24:07.849 --> 24:09.210
[SPEAKER_00]: What's going to drop to the bottom line?
24:10.150 --> 24:14.151
[SPEAKER_00]: Is it 10% as a 15% as a 20% to you have a plan for profit?
24:14.171 --> 24:16.432
[SPEAKER_00]: Like, what does that look like when you're looking for your piano?
24:17.052 --> 24:19.373
[SPEAKER_00]: Because, ultimately, that's your scorecard, right?
24:24.757 --> 24:27.758
[SPEAKER_00]: Without any of these numbers, what do you do?
24:27.958 --> 24:36.441
[SPEAKER_01]: There's one other metric that I think is really interesting that kind of is an end result of all of this stuff as well.
24:36.762 --> 24:37.822
[SPEAKER_01]: And that's your cost of marketing.
24:38.042 --> 24:40.763
[SPEAKER_01]: That's also a piece into your forecast and all that.
24:40.803 --> 24:46.385
[SPEAKER_01]: But your cost of marketing is largely driven by your conversion rates.
24:47.225 --> 24:52.547
[SPEAKER_01]: If you spend a million dollars and convert 50%.
24:54.488 --> 25:02.334
[SPEAKER_01]: to close one deals and that's going to be a lot different cost of marketing than if you only convert 25%.
25:02.614 --> 25:03.675
[SPEAKER_01]: Those are great numbers.
25:04.115 --> 25:07.577
[SPEAKER_01]: Close rate is going to affect your cost of marketing.
25:08.078 --> 25:11.120
[SPEAKER_01]: It's not just how much you spend and how many leads you get from it.
25:12.060 --> 25:33.556
[SPEAKER_01]: Your clothes rate and then going backwards your demo rate and your is you rate and your set rate all of those effects your cost of marketing So if you are maintaining that Consistent cost of marketing that's another that's in your profit model exactly in your profit build on your compass you have you and you compare to your profit model like like
25:34.837 --> 25:38.079
[SPEAKER_00]: Again, this varies, right, industry, size of the company.
25:38.199 --> 25:42.943
[SPEAKER_00]: The average used to be 10%, I think people have increased that's a 15% now.
25:43.063 --> 25:45.705
[SPEAKER_00]: In 2026, there are companies doing it, 3%.
25:46.105 --> 25:50.128
[SPEAKER_00]: Companies, depending 2025%, but it's in your model, right?
25:50.168 --> 25:53.010
[SPEAKER_00]: You take the numbers, you're tracked the numbers, and you compare it against your model.
25:53.670 --> 25:58.294
[SPEAKER_00]: Right, you across the marketing is one number in that profit model.
25:58.314 --> 26:00.155
[SPEAKER_00]: What's my material cost?
26:00.175 --> 26:01.236
[SPEAKER_00]: What's my labor cost?
26:01.276 --> 26:02.217
[SPEAKER_00]: What's my commission?
26:02.837 --> 26:03.858
[SPEAKER_00]: What's my marketing?
26:04.198 --> 26:05.819
[SPEAKER_00]: And then what's all the rest of my overhead?
26:05.839 --> 26:07.300
[SPEAKER_00]: And then what falls to the bottom?
26:08.001 --> 26:08.201
[SPEAKER_00]: Right.
26:09.202 --> 26:12.864
[SPEAKER_00]: These numbers can help you make better decisions.
26:12.905 --> 26:15.206
[SPEAKER_00]: So you have more full to the bottom, right?
26:15.586 --> 26:18.389
[SPEAKER_00]: If you see your numbers, you can make better decisions.
26:18.409 --> 26:21.111
[SPEAKER_00]: So like I said, these better be accurate.
26:23.158 --> 26:36.395
[SPEAKER_00]: I see too many people, and I'm not talking about build the prime, because I've been working with, um, I've been working with some clients in core, uh, the step brand that I've opened up for the marketing solution that are using other CRMs, and I'm not going to mention names.
26:36.996 --> 26:40.000
[SPEAKER_00]: So there's no automation built into the more if there are, they're not using that.
26:41.008 --> 26:45.970
[SPEAKER_00]: I mean, the numbers are just, you're trying to make marketing decisions, you're trying to help people.
26:46.951 --> 26:58.476
[SPEAKER_00]: And you just like, how many new opportunities like them all, you sit in a business that's $15 million and they've got five hundred new opportunities year to date, you're like, who's after these things?
26:58.616 --> 26:59.256
[SPEAKER_00]: It's crazy.
26:59.376 --> 27:00.857
[SPEAKER_00]: So a lot of these things are not set up.
27:00.917 --> 27:07.360
[SPEAKER_00]: So, and I see businesses of all different sizes where the data is just, it's a mess, right?
27:07.780 --> 27:13.202
[SPEAKER_00]: I see it all the time, but first we have to do is figure out a way to get this stuff in there accurately.
27:13.262 --> 27:33.649
[SPEAKER_01]: There's a couple different ways of looking at your conversion rates, which I think this gets a little bit more important as you start to scale and grow more, but there's different ways that you can calculate, for example, a close rate besides just on demo or lead issued, and the way that I've kind of
27:36.810 --> 27:40.753
[SPEAKER_01]: based calculation, or it's a period-based calculation.
27:41.333 --> 27:43.295
[SPEAKER_01]: And again, this is all going to come down to preference.
27:43.555 --> 27:50.000
[SPEAKER_01]: I have this argument with some of our customer sometimes about which one is the more appropriate one.
27:50.180 --> 27:52.321
[SPEAKER_01]: I always gravitate towards the cohort-based.
27:52.922 --> 27:59.507
[SPEAKER_01]: And what I mean by cohort-based is if we're, let's say we're looking at a close rate on lead-asshoot, okay?
27:59.867 --> 28:04.070
[SPEAKER_01]: I want to look at, tell me, like, tell me all of the leads-issued,
28:05.330 --> 28:09.695
[SPEAKER_01]: that, you know, in this time period, if I'm looking at, let's just say last month, I'm looking at the month of August.
28:10.957 --> 28:16.584
[SPEAKER_01]: And I want to know what was my close rate on those issue leads from the month of August.
28:17.585 --> 28:18.887
[SPEAKER_01]: I don't want to know necessarily.
28:20.244 --> 28:23.906
[SPEAKER_01]: Here's my, I had, you know, 100 leads issued and 50 sales.
28:24.066 --> 28:27.147
[SPEAKER_01]: So my closing rate is 50% in the month of August.
28:27.548 --> 28:34.771
[SPEAKER_01]: The issue leads from the month of August, may have a different track than what you closed in August.
28:34.791 --> 28:40.114
[SPEAKER_01]: Maybe you got a lot more, maybe you have a lot more issue leads in August or a lot fewer issue leads in August.
28:40.514 --> 28:42.215
[SPEAKER_01]: We're looking at that cohort, right?
28:42.255 --> 28:48.738
[SPEAKER_01]: That cohort of August issued leads and what percentage of those did I close?
28:49.900 --> 28:55.402
[SPEAKER_01]: So when I talk about cohort-based conversion rates, that's what I'm talking about.
28:55.842 --> 28:57.782
[SPEAKER_01]: Look at that cohort of issue leads.
28:58.342 --> 29:16.688
[SPEAKER_01]: As opposed to the period-based, which to be honest, a lot of our customers prefer, you're looking at, and I'll see you in the month of August again, at 100 issue leads, and 50 sales all the month of August, so my close rate is 50%.
29:17.248 --> 29:26.355
[SPEAKER_01]: problem with that is something like there are instances and depending on the time frame that you look at it or the granularity that you look at it, you could end up with a divide by zero.
29:26.395 --> 29:29.118
[SPEAKER_01]: Like you have a sale but no issue lead.
29:29.838 --> 29:31.439
[SPEAKER_01]: And so you can't see one divided by zero.
29:32.360 --> 29:40.647
[SPEAKER_01]: Or you can end up with 125% close rate because you just had there were more sales in that time period than issued leads.
29:40.927 --> 29:43.569
[SPEAKER_01]: If you're pulling sales from July,
29:44.770 --> 29:47.011
[SPEAKER_01]: Potentially, you're just pulling sales from whenever, right?
29:47.111 --> 29:49.133
[SPEAKER_01]: That's when it was fast forward, yes.
29:49.533 --> 29:51.814
[SPEAKER_01]: So whatever, it could be from a different time period.
29:51.874 --> 29:55.136
[SPEAKER_01]: Ultimately, at the end of the day, it doesn't really matter.
29:55.796 --> 30:00.359
[SPEAKER_01]: You can choose whichever one makes more sense to you as long as you
30:01.279 --> 30:12.750
[SPEAKER_01]: Understand it and as long as you track it as long as you continue to measure against that and continue to Improve your numbers and get your end results.
30:12.770 --> 30:18.055
[SPEAKER_01]: You have to set the know what it is and track it So you're saying cohort based probably a little more accurate.
30:18.315 --> 30:25.761
[SPEAKER_01]: That's how I think about it I want to know that cohort of leads in that particular time period and what happened with those that's going to give you
30:27.182 --> 30:36.467
[SPEAKER_01]: In my opinion, the most accurate way of looking at it, but there are a lot of very looking at the lead sources you're saying individually.
30:36.928 --> 30:45.972
[SPEAKER_01]: Or does it whatever looking at lead sources, looking at sales reps, looking at lead setters, looking overall, looking at product type, looking at everything, right?
30:46.273 --> 30:46.793
[SPEAKER_01]: It doesn't matter.
30:46.933 --> 30:52.416
[SPEAKER_01]: My opinion is the whole work gives the whole work based gives you the most realistic accurate view of things.
30:52.716 --> 31:00.040
[SPEAKER_00]: Yeah, I mean, look, it, like I said, at the end of the day, you can look at, you know, the way different lead sources affect your numbers and stuff like that.
31:00.260 --> 31:05.042
[SPEAKER_00]: And, like I said, when it's set rate 36% for a company like me, that's actually pretty good.
31:05.102 --> 31:11.886
[SPEAKER_00]: Because a company like me, doing the Google, doing Facebook, doing repeat, referral, still have lots of customers that love us.
31:11.946 --> 31:15.828
[SPEAKER_00]: Five star would be doing all the regular stuff that most companies start out.
31:16.408 --> 31:38.133
[SPEAKER_00]: have a call center but then companies like myself and beyond they start opening up the lead funnel to lead aggregators right and we know that you know you get a hundred of those lot less of them said into an appointment just for you know that's just the business itself yeah we know how I feel about my display not past yes which is great great podcast episode go back and look back
31:39.033 --> 31:41.974
[SPEAKER_00]: You start doing things like camisings, shows, and events, right?
31:41.994 --> 31:48.955
[SPEAKER_00]: So those leads is more raw opportunities on the top that come in, but a lot less of them will set into an appointment.
31:48.975 --> 31:50.035
[SPEAKER_01]: We're even sweet stakes, right?
31:50.055 --> 31:51.175
[SPEAKER_01]: Let's sweet-sweet stakes.
31:51.415 --> 31:54.256
[SPEAKER_00]: Like there's lead sources that can still be profitable.
31:54.456 --> 31:56.736
[SPEAKER_00]: You can still be within your range of your cost of marketing.
31:57.136 --> 32:04.498
[SPEAKER_00]: There's just going to be a lot less stuff that you're going to set from the raw inquiry, the appointment, you know, the new opportunity.
32:05.318 --> 32:07.599
[SPEAKER_00]: to the appointment set that could affect that number.
32:07.639 --> 32:11.080
[SPEAKER_00]: It doesn't mean that the marketing is worse.
32:11.860 --> 32:13.380
[SPEAKER_00]: It just means that it's changed.
32:13.660 --> 32:14.001
[SPEAKER_00]: That's all.
32:14.221 --> 32:15.201
[SPEAKER_00]: It's different, right?
32:15.381 --> 32:18.642
[SPEAKER_00]: New lead sources completely different business, right?
32:19.442 --> 32:21.523
[SPEAKER_00]: So looking at my appointment, 7 rate of 36%.
32:21.583 --> 32:29.065
[SPEAKER_00]: People like me that are companies like us that are doing all of these canvassing shows and events lead aggregators, all the things.
32:30.169 --> 32:35.574
[SPEAKER_00]: It might be looking at my employment set rate of 36% saying, but that's great, because it might be 15.
32:36.215 --> 32:46.705
[SPEAKER_00]: Matter of fact, I know by going to these mastermind groups that there are companies that are someone's mind, that are doing 15% of employment set rates with a similar marketing plan to what we have.
32:47.486 --> 32:51.609
[SPEAKER_00]: And there are some doing 45% which is phenomenal, right?
32:52.811 --> 32:53.011
[SPEAKER_00]: But,
32:54.303 --> 33:00.573
[SPEAKER_00]: As you could see, when I was a small company and I didn't have to lead aggregators to run, I think I had some, but I certainly wasn't doing canvassing.
33:00.593 --> 33:01.975
[SPEAKER_00]: I wasn't doing shows in advance.
33:02.295 --> 33:08.284
[SPEAKER_00]: Because those cancel at a higher rate, you set the appointment at the door, you call the confirm, they just cancel.
33:08.364 --> 33:09.426
[SPEAKER_00]: So your set rates,
33:10.267 --> 33:11.328
[SPEAKER_00]: go way down, right?
33:11.528 --> 33:13.529
[SPEAKER_00]: Or issue rates, all of those things go way down.
33:14.110 --> 33:15.191
[SPEAKER_00]: It's completely different.
33:15.411 --> 33:18.153
[SPEAKER_00]: It's going to look like a completely different business on these numbers.
33:18.173 --> 33:20.674
[SPEAKER_00]: You just have to understand why those things are happening.
33:20.775 --> 33:28.160
[SPEAKER_01]: And when you're talking to your friends and peers and in the industry, even if they get a very similar business to you and a similar size,
33:28.820 --> 33:32.183
[SPEAKER_01]: It's like, oh my, my point in set rate is 36 and there's is 45.
33:32.203 --> 33:33.704
[SPEAKER_01]: What are you doing differently than me?
33:34.064 --> 33:35.545
[SPEAKER_01]: That's not the right question to ask, right?
33:35.726 --> 33:40.189
[SPEAKER_01]: The right thing to ask is like, hey, you took your appointment set rate from 45%.
33:40.910 --> 33:41.570
[SPEAKER_01]: What did you change?
33:41.630 --> 33:45.773
[SPEAKER_01]: Or what did you do to increase your appointment set rate for different channels?
33:45.793 --> 33:48.115
[SPEAKER_01]: There may be things in there that you can learn and apply to you.
33:48.155 --> 33:54.320
[SPEAKER_01]: But still the outcome of that or the impacts of that and the effects of that may be different.
33:54.800 --> 33:56.702
[SPEAKER_01]: But that's, that's the more interesting place to
33:58.095 --> 34:08.683
[SPEAKER_01]: to think about and to compare against like, what are your processes like to get you from that got you from this previous stage to this new stage?
34:09.124 --> 34:13.347
[SPEAKER_00]: Comparing these numbers without any context, right, understand it, right?
34:13.467 --> 34:19.172
[SPEAKER_00]: Then this is the mistake that a lot of newer companies, business owners like myself, they do, right?
34:20.130 --> 34:22.132
[SPEAKER_00]: It's a mistake, that's the point of this episode.
34:22.673 --> 34:27.397
[SPEAKER_00]: Know your numbers, use Bill the Private Bold and sites make sure it's all automated because then it makes it really easy.
34:28.158 --> 34:28.858
[SPEAKER_01]: We're guys like me.
34:29.219 --> 34:31.501
[SPEAKER_00]: Know your numbers, make sure they're accurate, right?
34:31.761 --> 34:34.584
[SPEAKER_00]: And see why, you know, understand why those things are.
34:34.864 --> 34:35.785
[SPEAKER_00]: Right?
34:36.426 --> 34:38.628
[SPEAKER_01]: White business numbers look different at different stages.
34:39.013 --> 34:42.875
[SPEAKER_00]: So every time we get on, we don't even come into these podcasts anymore with a plan.
34:42.895 --> 34:43.735
[SPEAKER_00]: We just start talking.
34:43.755 --> 34:44.636
[SPEAKER_00]: And then like, oh, that's great.
34:44.656 --> 34:45.676
[SPEAKER_00]: We start talking.
34:45.997 --> 34:47.037
[SPEAKER_00]: Let's discuss that.
34:47.057 --> 34:49.859
[SPEAKER_00]: So we were talking about your experience, right?
34:49.919 --> 34:54.241
[SPEAKER_00]: You work with multiple companies at different sizes in different industries.
34:54.321 --> 34:56.662
[SPEAKER_00]: We talked, we showed the example of a size difference.
34:57.002 --> 34:59.944
[SPEAKER_00]: And how these numbers change over the same company that scales, right?
35:00.044 --> 35:00.904
[SPEAKER_00]: From 1.1 or 12.
35:03.023 --> 35:04.264
[SPEAKER_00]: What are you staying in other industries?
35:04.284 --> 35:06.125
[SPEAKER_00]: So you work in concrete coatings.
35:06.266 --> 35:08.267
[SPEAKER_00]: So I'm a window indoor contract, right?
35:08.327 --> 35:10.609
[SPEAKER_00]: So what are two of its re-euldering industries that you work with?
35:10.869 --> 35:15.493
[SPEAKER_01]: Our biggest one's windows and doors, concrete coatings, one day bath, fencing.
35:15.993 --> 35:17.995
[SPEAKER_01]: And then there's like, there's a bunch of others as well.
35:18.015 --> 35:19.296
[SPEAKER_01]: So let's just go to concrete coatings.
35:19.436 --> 35:20.737
[SPEAKER_01]: Okay, different business.
35:21.638 --> 35:26.982
[SPEAKER_00]: What are these numbers typically look like the differences between a window company and a concrete coating company?
35:27.567 --> 35:28.968
[SPEAKER_01]: What do you typically say?
35:29.108 --> 35:33.773
[SPEAKER_01]: First of all, it's really hard to, again, you can't really compare a lot of these numbers.
35:34.193 --> 35:39.218
[SPEAKER_01]: A window job is going to have a much higher average ticket than a concrete coding job.
35:39.858 --> 35:43.041
[SPEAKER_01]: That's probably going to impact things like close rates and things like that.
35:43.341 --> 35:47.505
[SPEAKER_01]: Another thing that we talk about, another thing that's different, is just in terms of the...
35:48.406 --> 35:53.287
[SPEAKER_01]: the type of job that it is, uh, Windows and door sometimes it's a little bit more of a need.
35:53.307 --> 36:00.649
[SPEAKER_01]: All right, not always, but sometimes it's more of a need, you know, broken windows or their drafty, or I, I don't want to deal with this anymore.
36:00.809 --> 36:04.110
[SPEAKER_01]: Whereas concrete coatings is a little bit more of a luxury thing.
36:04.130 --> 36:06.410
[SPEAKER_01]: It's like, okay, well, no, I just want to, I want to upgrade this.
36:06.430 --> 36:07.430
[SPEAKER_01]: I want to make it look real nice.
36:07.590 --> 36:09.651
[SPEAKER_01]: I want to have a really, you know, beautiful garage.
36:09.831 --> 36:12.074
[SPEAKER_01]: It's a little bit of a different kind of customer sometimes, too.
36:12.094 --> 36:20.783
[SPEAKER_00]: You talked about the average ticket, a concrete coding guy, and I believe we had a lotia on, and he said that his average ticket was about five grand a fair remember correctly was a five grand?
36:20.863 --> 36:22.325
[SPEAKER_00]: My average ticket is 15 dots.
36:23.814 --> 36:24.014
[SPEAKER_00]: right.
36:24.375 --> 36:27.317
[SPEAKER_00]: So again, that affects your closing rate, right?
36:27.337 --> 36:31.661
[SPEAKER_00]: And I've seen this with gutter companies to gutter companies, gutter protection companies.
36:32.502 --> 36:35.785
[SPEAKER_00]: I mean, you're asking for $5,000 on average, you're going to have a much higher close rate.
36:35.885 --> 36:40.128
[SPEAKER_00]: Similar run companies with large scaled-out sales staffs, right?
36:41.029 --> 36:48.476
[SPEAKER_00]: Similar to mine, similar sales number of similar operation, they have 45-50% that, compared to me being 32 to 27.
36:49.957 --> 36:53.881
[SPEAKER_00]: because it's a, it's much easier investment for the average home, right?
36:54.241 --> 36:57.524
[SPEAKER_01]: And on top of that, like I say, I think it is also a little bit of a different customer too.
36:57.624 --> 36:58.765
[SPEAKER_00]: So it's a different customer.
36:58.885 --> 36:59.126
[SPEAKER_00]: Yes.
36:59.346 --> 37:00.847
[SPEAKER_00]: And then you see your NSLI, right?
37:01.088 --> 37:03.270
[SPEAKER_00]: So their NSLI is in 3600 bucks, maybe.
37:04.176 --> 37:06.078
[SPEAKER_00]: to Greg, maybe 1800.
37:06.378 --> 37:10.121
[SPEAKER_00]: I don't know the numbers, but so you'll see those things.
37:10.142 --> 37:20.631
[SPEAKER_00]: So if you're in a window business and you're talking to your buddy who's in the gutter production business, he starts talking numbers, you better be aware of the differences, because he's a, what's wrong with you?
37:21.032 --> 37:23.254
[SPEAKER_00]: I've got a 45% net closing rate.
37:23.794 --> 37:26.355
[SPEAKER_00]: He said, well, there's a demo or leadership, no, it's leadership.
37:26.375 --> 37:27.495
[SPEAKER_00]: You're like, I'm doing things the same.
37:27.595 --> 37:28.295
[SPEAKER_00]: Why do you have foot?
37:28.655 --> 37:29.816
[SPEAKER_00]: You need to understand the context.
37:30.036 --> 37:37.818
[SPEAKER_01]: And not only that, the lead channels that are going to work for concrete coatings, versus lead channels that are going to work for windows and doors, those might be different in none of themselves.
37:37.918 --> 37:38.658
[SPEAKER_01]: It's so hard to compare.
37:38.878 --> 37:42.139
[SPEAKER_00]: Anything else that you're seeing, the difference, the nuances between concrete coatings?
37:43.079 --> 37:48.801
[SPEAKER_00]: You know, replacement like windows, doors, kitchens, bats, one day bats, it's mostly those things, right?
37:48.901 --> 37:50.221
[SPEAKER_01]: It's going to be with your average ticket.
37:50.301 --> 37:51.562
[SPEAKER_01]: It's going to be one of the biggest things.
37:51.922 --> 37:56.083
[SPEAKER_01]: Is this a need versus a want and the type of customer that you're working with?
37:56.163 --> 38:02.125
[SPEAKER_01]: And the type of lead sources that are going to convert the best and general work, the best and are available for the customers.
38:02.185 --> 38:03.385
[SPEAKER_00]: How long have you been in business?
38:03.405 --> 38:07.507
[SPEAKER_00]: The longer you've been in business, the more customers you have, you should have a higher repeat referral rate.
38:07.587 --> 38:08.467
[SPEAKER_00]: I work with the company.
38:09.147 --> 38:09.847
[SPEAKER_00]: in Pennsylvania.
38:09.887 --> 38:13.870
[SPEAKER_00]: I mean, they've been in business for 25 years and half of their release are repeated referral.
38:14.290 --> 38:16.211
[SPEAKER_00]: So those, those are going to set pretty nicely, right?
38:16.251 --> 38:18.492
[SPEAKER_00]: They have an advantage for being in business that long, right?
38:19.072 --> 38:21.214
[SPEAKER_00]: They're well known within their market.
38:21.234 --> 38:23.675
[SPEAKER_00]: So it's all these different variables that can affect these numbers.
38:23.715 --> 38:26.036
[SPEAKER_00]: So the point of this podcast is don't get excited.
38:26.617 --> 38:27.317
[SPEAKER_00]: Don't get too high.
38:27.337 --> 38:27.977
[SPEAKER_00]: Don't get too low.
38:28.017 --> 38:30.439
[SPEAKER_00]: Don't get depressed when you start hearing other people talk numbers.
38:30.519 --> 38:31.199
[SPEAKER_00]: No, you're numbers.
38:31.319 --> 38:34.641
[SPEAKER_00]: And when you know them, you'll know how well you're doing, right?
38:34.721 --> 38:35.561
[SPEAKER_00]: And at the end of the day,
38:36.802 --> 38:42.729
[SPEAKER_00]: The score card is, and I profit, the bottom line, and I always say it, the bottom line is the bottom line.
38:43.129 --> 38:45.993
[SPEAKER_00]: So, Johnny, I think we've covered it.
38:46.073 --> 38:52.400
[SPEAKER_00]: I hope our our viewers and listeners, and I hope I hope they like this one.
38:52.600 --> 38:53.161
[SPEAKER_01]: I think they will.
38:53.501 --> 38:55.843
[SPEAKER_01]: It's, uh, it's another great one.
38:55.943 --> 39:01.368
[SPEAKER_01]: So thank you for everybody, uh, who tuned in and look forward to being back with you again the next time.
39:01.768 --> 39:06.933
[SPEAKER_01]: Like, subscribe, share with your friends, and we'll, we'll see you again here soon.
00:00.111 --> 00:03.974
[SPEAKER_00]: You can go on and you can see people like us talking about different numbers.
00:03.994 --> 00:10.579
[SPEAKER_00]: You can see other business owners saying these numbers, 85% appointment set rate, 35% closed rate or better, right?
00:10.639 --> 00:13.261
[SPEAKER_00]: But there's really no context there for what that should look like.
00:13.301 --> 00:21.847
[SPEAKER_00]: So that could discourage many people if you don't really understand the way those numbers vary between different companies, different markets.
00:22.147 --> 00:24.789
[SPEAKER_00]: As a person new to the business, that could be very scary.
00:27.017 --> 00:35.683
[SPEAKER_01]: Hello, and welcome back to another episode of The Builds of Wind podcast I'm your co-host Jonathan Weinberg, and I'm here as always with my co-host John Colboska.
00:36.083 --> 00:36.523
[SPEAKER_01]: Hey, John.
00:36.543 --> 00:36.943
[SPEAKER_01]: What, Burke?
00:37.123 --> 00:37.744
[SPEAKER_01]: How's everything?
00:37.764 --> 00:39.505
[SPEAKER_01]: Yeah, things are, things are busy.
00:39.685 --> 00:40.345
[SPEAKER_01]: I've been traveling.
00:40.365 --> 00:43.227
[SPEAKER_01]: I was out in Montana for a week for, for an event.
00:43.347 --> 00:45.669
[SPEAKER_01]: And thank you for traveling for one of those weeks.
00:45.789 --> 00:48.210
[SPEAKER_00]: And that's just been summer summer vacation.
00:48.270 --> 00:50.072
[SPEAKER_00]: Having fun traveling with the family.
00:50.132 --> 00:51.172
[SPEAKER_00]: Kids are back in school now.
00:51.533 --> 00:54.715
[SPEAKER_01]: Kids are back in school, back to the usual, back to the grind.
00:55.636 --> 01:05.343
[SPEAKER_00]: We're in full season, so for many of us replacement contractors, this is the final push before the winter, at least for those of us up in the north, right?
01:05.944 --> 01:07.485
[SPEAKER_00]: Whether it's changing, right?
01:07.505 --> 01:16.711
[SPEAKER_00]: Technically, we got a couple more days left to summer as we're recording this, but we're technically, but at night, I mean, this is when you start to see that seasonal that shift.
01:17.332 --> 01:20.894
[SPEAKER_01]: But there were some twice a lot of days have been out for like a month now, so, but
01:22.075 --> 01:44.808
[SPEAKER_00]: So you wake up in the morning here to crisp their cool right 50s and 60s now until people are waking up this time to think about hey I probably got to replace these windows it's going to be a cold year this year Even this morning I was I was going to book my appointment for take to get my my boiler checked You know from my annual tune up there you go say so this is for many of us it's the final push
01:45.888 --> 01:48.911
[SPEAKER_01]: For the year, today we're going to talk about conversion rates, right?
01:48.971 --> 01:53.696
[SPEAKER_01]: And conversion rates can apply to a lot of different things, but we're going to be pre-specific about it.
01:53.917 --> 02:01.745
[SPEAKER_00]: The four or five or six mean KPIs that most of us should be tracking in our businesses, right?
02:02.165 --> 02:13.191
[SPEAKER_01]: And so we're going to be looking at appointment set rates, lead issued rates, demo rates, closed rates, uh, NSLI, or net sales, per lead issued, we're also going to talk about gross, right?
02:13.211 --> 02:17.854
[SPEAKER_01]: And what's the difference and how are we thinking about how should we be thinking about net sales versus gross sales?
02:18.074 --> 02:21.016
[SPEAKER_01]: A net close rate versus close, gross, close rate.
02:21.316 --> 02:23.297
[SPEAKER_01]: So we'll talk a little bit about that as well.
02:24.057 --> 02:29.862
[SPEAKER_01]: And then at the end of the day, what really matters the most across all of these different metrics.
02:30.162 --> 02:36.907
[SPEAKER_01]: And then one of the things we were just chatting about before we hopped on is like this is really like replacement contractor metrics, right?
02:36.927 --> 02:43.172
[SPEAKER_01]: We're talking about like sometimes called specialty as well, but like specialty replacement contractor metrics, which is
02:44.273 --> 02:56.484
[SPEAKER_01]: Obviously, Windows and doors, it's roofing, it's siding, it's gutters, it's fence and decks, it's floors, it's concrete coatings or epoxy floors, it's those types of industries, right?
02:56.704 --> 03:05.071
[SPEAKER_01]: As opposed to home services, which is near here plumbing in HVAC and electrical, it's different than your design build.
03:05.431 --> 03:06.011
[SPEAKER_01]: types of firms.
03:06.051 --> 03:07.252
[SPEAKER_01]: It's a different set of metrics, right?
03:07.272 --> 03:18.196
[SPEAKER_01]: And it's really very specific and much more relevant to this specialty replacements ace because of the way that specialty replacement contractors operate and work close that they operate with them.
03:18.216 --> 03:23.098
[SPEAKER_01]: That's what we're going to be talking about here today in benchmarks and how to think about benchmarks across those different numbers.
03:23.378 --> 03:29.380
[SPEAKER_00]: And how they vary between different companies, some companies that companies that different sizes, right, different
03:34.742 --> 03:35.903
[SPEAKER_00]: growing organically, right?
03:36.363 --> 03:43.867
[SPEAKER_00]: The point is what I've seen, I not only just hosting our own podcast, I watch them too, especially in the very beginning.
03:44.407 --> 03:58.154
[SPEAKER_00]: You can go on and you can see people like us in the industry, talking about different numbers, you can see other business owners, other specialists to consult, and they'll start, you know, saying these numbers, like, oh, you know, 85% of
04:04.595 --> 04:10.937
[SPEAKER_00]: And some of them talk at those absolute numbers, but there's really no context there for what really that should look like.
04:10.957 --> 04:21.300
[SPEAKER_00]: So that could discourage many people if you don't really understand the way those numbers vary between different companies, different markets, stuff like that.
04:21.320 --> 04:22.120
[SPEAKER_00]: You learn that.
04:23.140 --> 04:27.445
[SPEAKER_00]: I think as a new, as a person new to the business, that could be very scary.
04:27.465 --> 04:28.386
[SPEAKER_00]: That can discourage you.
04:28.407 --> 04:30.469
[SPEAKER_00]: You can think, man, I'm doing terrible right now.
04:30.869 --> 04:31.670
[SPEAKER_00]: Actually, you're doing great.
04:31.851 --> 04:33.392
[SPEAKER_00]: Or the obstacle be true.
04:33.873 --> 04:38.679
[SPEAKER_00]: You could say, wow, I mean, I said, I have a 95% appointment set rate, you know.
04:40.100 --> 04:54.043
[SPEAKER_00]: X has 60% And you know, I think I'm doing great, but it's just again it depends on your leads So, so we want to just get into What affects those what that looks like at different companies so that you fully understand again at the end of the day You have to track your numbers.
04:54.063 --> 04:54.884
[SPEAKER_00]: You have to know your numbers.
04:54.904 --> 05:09.387
[SPEAKER_00]: So you truly know what success looks like That was my feeling as a new contractor and now getting out into the industry going all these different masterminds I see other companies I see all these different numbers and stuff like that and and I've truly understand by talking to other owners
05:10.187 --> 05:16.432
[SPEAKER_00]: from different markets, different industries, how these things affect these numbers, right?
05:16.472 --> 05:19.294
[SPEAKER_00]: So don't get excited over everything you hear.
05:19.735 --> 05:32.445
[SPEAKER_00]: I asked for very little marketing advice from my peers in the industry because one thing that I've learned is, you know, one lead source that works in New York doesn't necessarily work great in Michigan or in Arizona, right?
05:32.525 --> 05:37.048
[SPEAKER_00]: So I see lots of the mastermind groups like, oh, you got to try this new lead source
05:40.139 --> 05:42.100
[SPEAKER_00]: 10 people will try to like, what are you talking about?
05:42.160 --> 05:42.880
[SPEAKER_00]: And we just jump.
05:43.321 --> 05:46.762
[SPEAKER_01]: What do we start with like the first one in the funnel, right?
05:46.802 --> 05:48.623
[SPEAKER_01]: And the workflow, which is the appointment set rate.
05:48.723 --> 05:54.406
[SPEAKER_01]: So that's for a new lead that comes in and what percentage of those leads convert into set appointments.
05:54.966 --> 05:56.407
[SPEAKER_00]: I'm going to pull up my numbers here.
05:56.467 --> 05:57.247
[SPEAKER_00]: What do we want to look at?
05:57.307 --> 05:57.887
[SPEAKER_00]: Months a day?
05:57.948 --> 06:00.249
[SPEAKER_00]: Do we want to look at year today?
06:00.589 --> 06:01.789
[SPEAKER_00]: Should we look at year today numbers?
06:02.210 --> 06:03.330
[SPEAKER_01]: Let's look at year to date numbers.
06:03.590 --> 06:05.111
[SPEAKER_00]: Pull it up my BP right now.
06:05.191 --> 06:06.412
[SPEAKER_00]: My sales and marketing report.
06:06.792 --> 06:07.112
[SPEAKER_00]: Correct.
06:08.722 --> 06:11.123
[SPEAKER_00]: my lead performance report and build a product.
06:11.263 --> 06:12.944
[SPEAKER_00]: That's my year to date right there.
06:13.724 --> 06:16.245
[SPEAKER_00]: All right, these are the major KPIs, right, Johnny?
06:16.725 --> 06:19.647
[SPEAKER_01]: Yep, these are the major KPIs in your the conversion funnel.
06:20.127 --> 06:24.369
[SPEAKER_01]: And so you want to tell everybody what we've got here for the appointments that rate?
06:24.689 --> 06:26.670
[SPEAKER_01]: My appointment set rate is 36%.
06:28.730 --> 06:35.733
[SPEAKER_01]: Okay, so for some people, that might sounds pretty bad.
06:36.334 --> 06:37.194
[SPEAKER_00]: Pretty bad, right?
06:38.490 --> 06:38.750
[SPEAKER_01]: Yes.
06:39.210 --> 06:40.771
[SPEAKER_00]: But for others, that might sound great.
06:41.571 --> 06:48.792
[SPEAKER_01]: This is what we're talking about where there's so much nuance and it's so much depends on what your specific processes are like.
06:48.812 --> 07:01.235
[SPEAKER_00]: So why does my appointment set rate look like 36% right in 2026 if you went back to 2022 or 2021 when I was just starting to grow that appointment separate would have been.
07:02.328 --> 07:29.346
[SPEAKER_00]: you what let's do it live let's say okay let's go to 2020 this is my business that's this is the year that I went from one point nine million to five million right so there was growth here this is the year I went from one point two to one point nine okay this is the co-ears this is where things started to really pick up this is cooked yes okay so look at that I had nine hundred and thirty five opportunities okay I said four hundred ninety
07:31.365 --> 07:33.227
[SPEAKER_00]: And John was answering the phone.
07:33.347 --> 07:34.488
[SPEAKER_00]: No, you were not answering the phone.
07:34.548 --> 07:35.549
[SPEAKER_01]: The first three months I was.
07:36.450 --> 07:38.652
[SPEAKER_00]: But I had an appointment set rate of 54%.
07:39.112 --> 07:39.473
[SPEAKER_00]: Okay.
07:40.174 --> 07:40.834
[SPEAKER_00]: That's really good.
07:41.135 --> 07:42.536
[SPEAKER_00]: We set 490 leads.
07:42.896 --> 07:44.077
[SPEAKER_00]: We issue 436.
07:44.218 --> 07:46.380
[SPEAKER_00]: I had a lead issue rate of almost 98%.
07:46.400 --> 07:47.661
[SPEAKER_00]: At a demo rate,
07:49.415 --> 07:54.059
[SPEAKER_00]: Right, we demoed 95% of all of our leads that were issued, right?
07:54.499 --> 07:54.739
[SPEAKER_00]: Yeah.
07:55.400 --> 07:56.801
[SPEAKER_00]: We did 416 demos at a 436 issued leads.
07:56.821 --> 07:58.122
[SPEAKER_00]: I sold 180 jobs that year, and my NSLI was $2,650.
07:58.142 --> 07:58.482
[SPEAKER_00]: This is 2020.
07:58.502 --> 07:59.703
[SPEAKER_00]: Let's go to this year for context.
07:59.883 --> 08:00.424
[SPEAKER_00]: OK, here we are.
08:00.444 --> 08:02.225
[SPEAKER_00]: I have $5,471 opportunities.
08:02.245 --> 08:04.206
[SPEAKER_00]: This is I'm going to be a $12 million company this year.
08:20.378 --> 08:23.580
[SPEAKER_00]: I've set almost 2,000 appointments here in date.
08:24.580 --> 08:26.942
[SPEAKER_00]: I've issued about 79% of my leads.
08:27.182 --> 08:33.045
[SPEAKER_00]: Now, there's a delay in this to be fair, because some of these are booked out today tomorrow they haven't happened yet.
08:33.646 --> 08:34.806
[SPEAKER_00]: It'll probably be about 80%.
08:34.826 --> 08:34.986
[SPEAKER_00]: Right?
08:36.375 --> 08:38.315
[SPEAKER_00]: the year because I've probably got about maybe seven or eight.
08:39.036 --> 08:42.496
[SPEAKER_00]: Let me be 10 appointments on the calendar down today tomorrow that happened.
08:42.516 --> 08:42.956
[SPEAKER_00]: I should get.
08:43.236 --> 08:44.357
[SPEAKER_00]: Maybe you won't even move the needle.
08:44.897 --> 08:46.557
[SPEAKER_00]: We've issued 1,584.
08:47.377 --> 08:51.818
[SPEAKER_00]: My demo rate is still pretty good, 90% however, went down 5 points from 95% right?
08:52.458 --> 08:54.178
[SPEAKER_01]: It was 95% before 2020, I was 95% yeah.
08:54.218 --> 08:54.519
[SPEAKER_01]: Yep.
08:54.559 --> 08:54.739
[SPEAKER_01]: Okay.
08:54.799 --> 08:55.679
[SPEAKER_01]: Now I'm at 90, okay.
08:55.699 --> 08:59.299
[SPEAKER_00]: Let's look at my lead issue rate, 2020 at a 98% lead issue rate.
09:02.832 --> 09:17.800
[SPEAKER_00]: All right, now I have a 79, my appointment set rate, 79% the issue rate in 2026 in 2020 at a 54% appointment set rate versus a 36% appointment set rate today.
09:17.820 --> 09:19.921
[SPEAKER_00]: So you can see, I'm scaling, right?
09:20.121 --> 09:21.962
[SPEAKER_00]: I'm opened up to more lead sources.
09:22.082 --> 09:24.864
[SPEAKER_00]: I'm not answering the phone or John's not answering the phone, right?
09:25.404 --> 09:26.585
[SPEAKER_00]: I'm not out selling.
09:26.625 --> 09:27.605
[SPEAKER_00]: Look at the closing, right?
09:27.625 --> 09:29.166
[SPEAKER_00]: Look at the gross close rate, 32% in 2026.
09:32.077 --> 09:34.738
[SPEAKER_00]: versus 45% in 2020, okay?
09:34.918 --> 09:37.440
[SPEAKER_00]: Okay, so I'm a great sales person.
09:37.980 --> 09:39.661
[SPEAKER_00]: At least I tell myself, I was reps all the time.
09:41.222 --> 09:43.883
[SPEAKER_00]: And I always tell them, I used to close around 40 to 45%.
09:44.323 --> 09:45.244
[SPEAKER_00]: But it's true, right?
09:45.564 --> 09:48.445
[SPEAKER_00]: And again, it's not because I'm a great sales person, it's because I'm the owner, right?
09:48.745 --> 09:52.227
[SPEAKER_00]: Nobody's gonna have more authority in a customer's home than the actual owner.
09:52.414 --> 09:55.057
[SPEAKER_01]: But you can see the way these numbers are affected at different points.
09:55.137 --> 09:56.098
[SPEAKER_00]: It's just in my business.
09:56.398 --> 09:57.660
[SPEAKER_00]: And this is the same industry.
09:57.880 --> 09:59.802
[SPEAKER_00]: Still stalling windows and doors today.
10:00.042 --> 10:01.524
[SPEAKER_00]: Like I was back that, correct?
10:02.105 --> 10:02.305
[SPEAKER_01]: Yeah.
10:02.505 --> 10:05.328
[SPEAKER_00]: Look at my NSLI back then.
10:05.469 --> 10:08.612
[SPEAKER_00]: 2,650 versus 3687 today.
10:08.692 --> 10:09.873
[SPEAKER_01]: That's a key one right there.
10:10.454 --> 10:12.656
[SPEAKER_00]: I've increased my pricing probably about...
10:13.898 --> 10:16.760
[SPEAKER_00]: I'm going to guess probably about 50 or 60% since that.
10:17.481 --> 10:20.483
[SPEAKER_01]: Yeah, and average ticket has gone up as well, right?
10:20.503 --> 10:24.026
[SPEAKER_01]: The NSLI is kind of somewhat indicative of that as well.
10:24.226 --> 10:28.129
[SPEAKER_01]: Because you're NSLI, or GSLI, whatever, has gone up.
10:28.890 --> 10:31.911
[SPEAKER_01]: despite your closing rate going down.
10:32.491 --> 10:38.593
[SPEAKER_01]: Yeah, so that if your closing rate were held steady, that would be even way higher than it is now.
10:38.834 --> 10:39.834
[SPEAKER_00]: Let's look at this, right?
10:39.994 --> 10:41.274
[SPEAKER_00]: So gross versus net.
10:41.354 --> 10:43.715
[SPEAKER_00]: The numbers that we're looking out here, they're gross numbers.
10:43.795 --> 10:44.516
[SPEAKER_00]: I still have the box.
10:44.576 --> 10:47.597
[SPEAKER_00]: It's including all the sold and canceled jobs, right?
10:48.117 --> 10:49.737
[SPEAKER_00]: So we have that here, right?
10:50.118 --> 10:52.498
[SPEAKER_00]: If you're looking out back to 2020, this is gross.
10:53.099 --> 10:55.239
[SPEAKER_00]: If I uncheck this box, it's a feature of build a prime.
10:55.259 --> 10:56.660
[SPEAKER_00]: Now I see all of my net numbers.
10:58.291 --> 11:08.165
[SPEAKER_00]: The only thing that really changes here is my closed rate, and my initialized value affected, my net closing rate back then in 2020, went down to a 43% from 45%.
11:11.794 --> 11:37.024
[SPEAKER_00]: gross right now let's look because again I was mostly selling I had myself and I believe it was two other sales is not a fact yes Scott and Jack so there was three of us out there selling my gross went to 43% let's look at this year so my gross this year's 32% but my net is 27 I've lost five points I'm not out selling right I have much higher cancellations
11:38.257 --> 11:46.400
[SPEAKER_00]: Today in 2020, so they have much higher cancellation rates, not here, but that's basically telling you there's a hell of a lot more cancellations on my books, right?
11:47.101 --> 12:00.886
[SPEAKER_00]: In 2026 versus 2020, two different businesses, two totally different businesses, snapshot of a different business, that 2020 right here, numbers probably like most of our listeners, and watchers.
12:00.966 --> 12:02.887
[SPEAKER_00]: The people that are watching us and follow against, right?
12:07.107 --> 12:08.889
[SPEAKER_00]: But you could see, these numbers look good.
12:09.470 --> 12:23.748
[SPEAKER_00]: If I just looked at these numbers in 2020 and said, oh, 54% appointment set rate, 98% lead issue rate, these are the numbers, these are the numbers, and then someone is not performing at a $7 million, $7 million company, the numbers are different.
12:23.768 --> 12:24.770
[SPEAKER_00]: They may think that they're fairly.
12:25.190 --> 12:40.272
[SPEAKER_01]: The size of the company is kind of a it's not the reason it's because what a company at that scale is doing right and it's because of the lead channels and the lead sources and the general practices that you have as a business is what is impacting these things.
12:40.652 --> 12:44.554
[SPEAKER_01]: increased prices is going to have an impact on some of these conversion rates.
12:44.955 --> 12:49.837
[SPEAKER_01]: The marketing mix is going to have an impact on some of these metrics.
12:50.118 --> 12:51.538
[SPEAKER_01]: And that might be even the biggest one, right?
12:51.578 --> 12:54.940
[SPEAKER_01]: It's certainly less going to be less referrals and repeat business, for example.
12:55.020 --> 13:04.906
[SPEAKER_01]: If you're small business and operating sales or the owners is running all the sales appointments, you're going to need a lot of repeat referral business and that's going to drive a lot of these
13:07.307 --> 13:19.672
[SPEAKER_01]: And naturally you're going to have better conversion rates, but as you begin to scale and you take on additional marketing channels and lead sources, those things are naturally going to change, but that's not a bad thing.
13:20.173 --> 13:23.154
[SPEAKER_01]: Those numbers go down, that's not necessarily a bad thing.
13:23.674 --> 13:25.115
[SPEAKER_01]: Certain ones you're going to want to see.
13:26.195 --> 13:35.505
[SPEAKER_01]: uh, continue to perform and an increase, right, that NSLI, then that sells police issues, a good example of one of those metrics that you always want to see that go up, right?
13:35.525 --> 13:36.786
[SPEAKER_01]: You don't want to see that take a dip.
13:37.387 --> 13:47.838
[SPEAKER_01]: Okay, so that's just a really powerful, useful, efficient, overall efficiency metric for your business regardless of all of these other factors that we're talking about.
13:48.130 --> 13:49.911
[SPEAKER_00]: Let's look at 20 to 21, right?
13:50.231 --> 13:55.374
[SPEAKER_00]: This way we can compare the two, because I had a big jump from 2020 to 2021, right?
13:55.675 --> 13:58.977
[SPEAKER_01]: There's a lot of nuance to these metrics.
13:59.217 --> 14:07.182
[SPEAKER_01]: You can't take one person's conversion rate and apply that to yourself as a barometer necessarily.
14:07.442 --> 14:12.605
[SPEAKER_01]: You have to look at the whole mix of things and use it as a benchmark for yourself, right?
14:13.085 --> 14:14.406
[SPEAKER_01]: If you have a 40% benchmark,
14:15.927 --> 14:19.209
[SPEAKER_01]: Look at what you can do to get that's a 45% or 50%.
14:20.050 --> 14:21.731
[SPEAKER_01]: Don't look at what somebody else is doing.
14:21.791 --> 14:27.634
[SPEAKER_01]: Look at what you're doing and measure the progress from there to increase it and move those numbers.
14:27.894 --> 14:30.336
[SPEAKER_00]: So right here, you can see 2020, 935 opportunities 2021.
14:30.356 --> 14:31.096
[SPEAKER_00]: We did almost 4,000.
14:31.116 --> 14:32.317
[SPEAKER_00]: My appointment set rate went from 54%.
14:38.798 --> 14:42.301
[SPEAKER_00]: in 2020 down to 37% in 2021.
14:43.062 --> 14:44.823
[SPEAKER_00]: Open up more lead sources, right?
14:44.963 --> 14:49.026
[SPEAKER_00]: But again, I went from 1.9 million to 5 million top one.
14:49.687 --> 14:51.348
[SPEAKER_00]: Now here's what's important.
14:51.528 --> 14:53.070
[SPEAKER_00]: The real scorecard is what I may.
14:53.230 --> 14:56.993
[SPEAKER_00]: That's the first year I made $1 million ever in my life.
14:57.013 --> 15:00.095
[SPEAKER_00]: I had a 20% net on the business that you're at the 5 million.
15:00.115 --> 15:03.458
[SPEAKER_01]: It was close to the 1970 or something.
15:03.598 --> 15:10.962
[SPEAKER_00]: So you could see, you know, in 2021, the lead issue rate was at 98% that remained the same, right?
15:11.002 --> 15:12.523
[SPEAKER_00]: Are you should 436 leads in 2020?
15:12.563 --> 15:14.824
[SPEAKER_00]: And then the next year 2021, 1280, right?
15:18.445 --> 15:20.206
[SPEAKER_00]: My demo rate was 95% in 2020.
15:20.246 --> 15:22.068
[SPEAKER_00]: It took a little dip down in 92% in 2021.
15:22.108 --> 15:22.869
[SPEAKER_00]: In 2020, I did 416 demos.
15:22.889 --> 15:24.029
[SPEAKER_00]: Compared to 1,173 demos in 2021.
15:24.049 --> 15:26.732
[SPEAKER_00]: So my great closing rate of 43% gross in 2020 went down to 35% oh my god.
15:26.752 --> 15:27.492
[SPEAKER_00]: You look at that.
15:27.532 --> 15:30.815
[SPEAKER_00]: You go my god, you're closing rate with down 8%.
15:47.680 --> 15:48.901
[SPEAKER_00]: Your point of survey went down.
15:48.921 --> 15:54.186
[SPEAKER_00]: Actually, I made double or three times in amount of money this year.
15:55.087 --> 15:56.789
[SPEAKER_00]: Then I did the your prior, right?
15:58.531 --> 15:59.732
[SPEAKER_00]: It's all about the return.
15:59.752 --> 16:03.095
[SPEAKER_00]: Now if I look at my net, I would 35% to 32%.
16:06.937 --> 16:07.777
[SPEAKER_01]: on my closing rate.
16:07.817 --> 16:12.620
[SPEAKER_01]: Say, one of the key things here is that you're an SLI was pretty consistent.
16:12.640 --> 16:13.980
[SPEAKER_01]: It went up and went up a little bit.
16:14.240 --> 16:19.923
[SPEAKER_00]: But I sold 180 jobs in 2020 and sold and installed the 180 jobs in 2020.
16:20.643 --> 16:23.164
[SPEAKER_00]: The next year I sold an installed 443.
16:23.585 --> 16:25.425
[SPEAKER_00]: So you can see the way the numbers change.
16:25.465 --> 16:28.607
[SPEAKER_00]: Now, I can tell you, I'm not going to share my tax return, but.
16:29.127 --> 16:32.509
[SPEAKER_00]: I've been saying for years, 20-21 was the first year.
16:33.029 --> 16:35.170
[SPEAKER_00]: I sold five million out of 20 percent net.
16:35.410 --> 16:36.010
[SPEAKER_00]: Do the math.
16:36.070 --> 16:37.731
[SPEAKER_00]: You know what that is that I may, right?
16:37.751 --> 16:39.012
[SPEAKER_00]: Yeah.
16:39.232 --> 16:39.512
[SPEAKER_01]: I mean,
16:41.322 --> 17:00.693
[SPEAKER_00]: So $1,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000
17:10.006 --> 17:12.067
[SPEAKER_00]: It went from 54% down to 37%.
17:12.187 --> 17:14.448
[SPEAKER_00]: I'm like, oh my god, that's terrible.
17:14.788 --> 17:18.951
[SPEAKER_01]: You have your setup here to calculate close rate on leadership.
17:19.291 --> 17:21.832
[SPEAKER_00]: Yeah, it's set that way here in my system.
17:21.912 --> 17:25.714
[SPEAKER_01]: This setting to be able to calculate close rate on leadership is in there.
17:25.734 --> 17:27.035
[SPEAKER_01]: You call it sub-John.
17:27.877 --> 17:35.482
[SPEAKER_01]: John is the one that drove that setting to even even be there because the default is to calculate close rate on demos for each demo.
17:36.363 --> 17:41.586
[SPEAKER_01]: What percentage of those demos did this else rep close and I think we've had this debate before in this argument.
17:41.626 --> 17:43.648
[SPEAKER_01]: I want to see a bit by demo, not by lead issue.
17:44.068 --> 17:58.853
[SPEAKER_01]: you prefer to see it by lead issue because you just want to say like hey all right I gave this I issued this lead to a sales rep and I just care if they close that leader not I don't I don't care if they demoted or they didn't demo it I just want to know for every every lead I give them what do they close
18:00.574 --> 18:07.900
[SPEAKER_01]: My argument for not doing that is you can see your demo rate, right?
18:07.920 --> 18:11.563
[SPEAKER_01]: So you know what percentage of the leads went from issue lead to demo.
18:12.023 --> 18:22.492
[SPEAKER_01]: So you can address any kind of issues or gaps or problems for sales reps that might be have a higher, higher, no demo rate than others and things like that.
18:28.997 --> 18:30.298
[SPEAKER_01]: closing for each demo.
18:31.358 --> 18:33.559
[SPEAKER_01]: That actually counts as a demo.
18:35.040 --> 18:36.441
[SPEAKER_01]: What's the efficiency of that metric?
18:36.661 --> 18:37.461
[SPEAKER_01]: Getting to be closed.
18:37.781 --> 18:44.325
[SPEAKER_00]: Again, it's two different ways, but you know, at the other the day, it's, you know, what does your piano look like, right?
18:44.685 --> 18:44.945
[SPEAKER_00]: Yeah.
18:45.485 --> 18:48.647
[SPEAKER_00]: As long as you're tracking your numbers, I mean, I have a certain way of doing things.
18:48.667 --> 18:54.150
[SPEAKER_00]: Maybe people looking up my closing rate right now and going, man, you know, a 32% group, a gross closing rate.
18:55.148 --> 18:59.051
[SPEAKER_00]: But then, like, if I 20, 26 numbers year to date, I guess I'll go back to that.
18:59.131 --> 19:00.272
[SPEAKER_00]: Then that's pretty funny, right?
19:00.312 --> 19:05.856
[SPEAKER_00]: Like, how many, how many people show you their actual numbers on a podcast?
19:05.876 --> 19:06.597
[SPEAKER_00]: But they're business.
19:06.977 --> 19:10.820
[SPEAKER_00]: But going back to this year, I just showed you the two years, the growth years.
19:11.201 --> 19:15.964
[SPEAKER_00]: But going back to this year, like, you look at my closing rate, you go 32% gross.
19:16.425 --> 19:18.386
[SPEAKER_00]: And then when I uncheck it, you go 20, that's terrible.
19:18.766 --> 19:21.068
[SPEAKER_00]: I mean, are you tracking it the same way I am?
19:21.268 --> 19:23.310
[SPEAKER_00]: Are you tracking those numbers based on lead issued?
19:24.743 --> 19:27.245
[SPEAKER_01]: As if you're tracking it on demo, your number is going to be a lot higher.
19:27.765 --> 19:29.627
[SPEAKER_01]: You have to measure against yourself, right?
19:29.707 --> 19:30.508
[SPEAKER_01]: Know your numbers.
19:31.268 --> 19:32.209
[SPEAKER_01]: You have to know your number.
19:32.229 --> 19:32.989
[SPEAKER_01]: Moving those numbers.
19:33.190 --> 19:37.273
[SPEAKER_00]: In any business, you have to have someone that's going to enter the numbers, right?
19:38.174 --> 19:40.475
[SPEAKER_00]: Independent of the managers, right?
19:40.495 --> 19:43.358
[SPEAKER_00]: So, look, if it's just you, you've got to enter your numbers, that's fine.
19:43.378 --> 19:45.679
[SPEAKER_00]: But if you start growing and scaling to the point where you've got...
19:46.480 --> 19:48.560
[SPEAKER_00]: people managing different parts of the business.
19:49.461 --> 19:55.062
[SPEAKER_00]: You can allow them to just put their numbers in and then just leave it.
19:55.782 --> 19:59.563
[SPEAKER_00]: Is it like, oh, because what do you think the marketing guy is going to do with the sales managers going to do?
20:00.203 --> 20:01.683
[SPEAKER_00]: You think they're going to inflate their numbers?
20:02.403 --> 20:05.064
[SPEAKER_00]: Well, tie some bonuses to it and see what happens, right?
20:05.124 --> 20:06.704
[SPEAKER_01]: And not look again at the end of the day.
20:07.264 --> 20:07.844
[SPEAKER_00]: I've seen it.
20:07.944 --> 20:08.725
[SPEAKER_00]: It happens a lot.
20:08.885 --> 20:10.145
[SPEAKER_00]: Not everybody does it, right?
20:10.605 --> 20:10.785
[SPEAKER_00]: But
20:11.946 --> 20:12.727
[SPEAKER_00]: Yeah, this is what happens.
20:12.767 --> 20:13.628
[SPEAKER_00]: So what should you do?
20:13.908 --> 20:16.350
[SPEAKER_00]: If it's just yourself, you have to enter your numbers.
20:16.390 --> 20:22.857
[SPEAKER_00]: You have to at least get these KPIs and have a good, healthy snapshot of what's going on inside of your business, right?
20:22.897 --> 20:32.005
[SPEAKER_00]: So you have to get your opportunities, your role leads, how many of them are setting, how many of them are issuing, how many of them are demoing, and how many of them are selling, right?
20:32.025 --> 20:34.107
[SPEAKER_00]: Let's just, you need to do that, right?
20:34.928 --> 20:41.399
[SPEAKER_00]: You need to put that in if it's just you, but you have to have somebody to go on behind you to double check those numbers to make sure that you haven't made any mistakes.
20:41.859 --> 20:44.864
[SPEAKER_00]: You have to invest in that because if you're going to make decisions,
20:45.882 --> 20:48.083
[SPEAKER_00]: based off of these numbers, it better be accurate.
20:48.463 --> 20:51.024
[SPEAKER_00]: It better not be like a, well, it's a pretty close thing.
20:51.084 --> 20:52.225
[SPEAKER_00]: No, it better be accurate.
20:52.605 --> 20:54.086
[SPEAKER_01]: This is not supposed to be a sales pitch, right?
20:54.106 --> 20:56.967
[SPEAKER_01]: We're not pitching, but we're sharing your builder prime.
20:57.427 --> 21:02.149
[SPEAKER_01]: It bothers me when you say you have to make sure everybody puts in the numbers and puts in like what they did.
21:02.890 --> 21:05.291
[SPEAKER_01]: And follow that up and double check them.
21:05.531 --> 21:05.611
[SPEAKER_01]: And
21:05.851 --> 21:24.496
[SPEAKER_01]: Yes, to a certain degree you do and you have in particular have a you know a little bit of a different process, but I want this to be automated right this needs to be automated a lot more so then you're working on that are you know it's already is a lot there and and to some some actually John we got to get you to adopt some of the more recent updates and.
21:25.136 --> 21:26.057
[SPEAKER_01]: We get the both insights.
21:26.537 --> 21:34.004
[SPEAKER_01]: We get both insights now that you can ask it, which sales reps are gaming the system, or maybe doing things that are uncharacteristic.
21:34.484 --> 21:36.086
[SPEAKER_01]: And it actually pulls that out.
21:36.406 --> 21:39.909
[SPEAKER_00]: I've been working in build a prime since 2019.
21:40.169 --> 21:41.010
[SPEAKER_00]: You and I, right?
21:41.510 --> 21:45.434
[SPEAKER_00]: I've been working in it before you had all of these wonderful, both insights features.
21:45.454 --> 21:46.815
[SPEAKER_00]: We've built in some of the automations on
21:47.015 --> 21:49.036
[SPEAKER_00]: emailing and texting stuff at the very beginning.
21:49.056 --> 21:56.321
[SPEAKER_01]: Yeah, it automatically moves the lead through the funnel and exit, but it literally, I stopped doing this five years ago.
21:56.401 --> 21:59.983
[SPEAKER_00]: So if you'd added on, I mean, people with my business probably saying, John, it does it though, right?
22:00.003 --> 22:03.285
[SPEAKER_00]: But again, regardless, the numbers have to go in.
22:03.645 --> 22:04.906
[SPEAKER_00]: Something has double checkered.
22:04.926 --> 22:06.707
[SPEAKER_00]: You have to obsess over that, right?
22:06.867 --> 22:13.511
[SPEAKER_00]: And if you have other departments doing that, you have to have checks and ballots because these numbers are very important.
22:13.611 --> 22:15.172
[SPEAKER_00]: That's just a point out of this making, right?
22:15.892 --> 22:16.793
[SPEAKER_00]: You have to add a process.
22:16.813 --> 22:19.497
[SPEAKER_00]: So it looks like I need to build a prime trade mid.
22:19.637 --> 22:19.957
[SPEAKER_00]: I crawl.
22:19.997 --> 22:22.220
[SPEAKER_01]: Oh wait, we need to do that for me.
22:22.240 --> 22:22.720
[SPEAKER_01]: Weinberg.
22:22.760 --> 22:25.564
[SPEAKER_01]: You got to respond to when there's we'll be reached out.
22:25.764 --> 22:26.365
[SPEAKER_01]: No offense.
22:26.645 --> 22:28.067
[SPEAKER_00]: But this is a business on his pockets.
22:28.327 --> 22:30.470
[SPEAKER_00]: That's a $20 an hour task, right?
22:30.550 --> 22:31.972
[SPEAKER_00]: Am I really a three data?
22:32.452 --> 22:33.913
[SPEAKER_01]: Or any more?
22:34.353 --> 22:35.433
[SPEAKER_01]: No, no you are not.
22:35.893 --> 22:39.134
[SPEAKER_00]: Yeah, so I have someone doing it for me or now I even have a eye doing it for me.
22:39.234 --> 22:40.195
[SPEAKER_00]: I might not be aware of it.
22:40.235 --> 22:40.815
[SPEAKER_01]: But yeah, absolutely.
22:40.835 --> 22:47.997
[SPEAKER_01]: I mean, these are these are your most critical numbers as a specialty or replacement contractor.
22:48.217 --> 22:50.338
[SPEAKER_01]: Actually, there's two other things I really want to talk about here.
22:50.438 --> 22:57.981
[SPEAKER_01]: We said first net profit is at the end of the day, the all end all, right?
22:59.741 --> 23:23.988
[SPEAKER_01]: a lot of this other stuff doesn't really even matter that much as you know at the end of the day you want your your net profit to be your net profit you're shooting for a 15 20% margin then that's what you want to be be looking at and all these numbers should be driving towards that and you have to forecast and plan this out and it's it's going to all these results numbers but these numbers help you forecast yes when you have an accurate set of these numbers when you have
23:25.248 --> 23:53.801
[SPEAKER_00]: at least the years were today to the more you have the even better would you sit down usually around this time of year to plan for next year you put a plan you you can take these numbers and that come into some sort of we have a compass which we use through a wealthy contractor success society in Charlie Gendell he's created it oh they've created a new one but we have a compass we just take these numbers we plug them in right this this is what we do so we put a top line so it kind of gives us a plan says okay when I guess
23:55.506 --> 23:55.686
[SPEAKER_01]: Yeah.
23:56.226 --> 24:02.728
[SPEAKER_00]: We know if we want to do more revenue, plug these numbers in, you can see what all of these numbers look like at the new revenue target, right?
24:03.728 --> 24:07.829
[SPEAKER_00]: And then obviously, if you figure this all out, you should have also a plan for your piano.
24:07.849 --> 24:09.210
[SPEAKER_00]: What's going to drop to the bottom line?
24:10.150 --> 24:14.151
[SPEAKER_00]: Is it 10% as a 15% as a 20% to you have a plan for profit?
24:14.171 --> 24:16.432
[SPEAKER_00]: Like, what does that look like when you're looking for your piano?
24:17.052 --> 24:19.373
[SPEAKER_00]: Because, ultimately, that's your scorecard, right?
24:24.757 --> 24:27.758
[SPEAKER_00]: Without any of these numbers, what do you do?
24:27.958 --> 24:36.441
[SPEAKER_01]: There's one other metric that I think is really interesting that kind of is an end result of all of this stuff as well.
24:36.762 --> 24:37.822
[SPEAKER_01]: And that's your cost of marketing.
24:38.042 --> 24:40.763
[SPEAKER_01]: That's also a piece into your forecast and all that.
24:40.803 --> 24:46.385
[SPEAKER_01]: But your cost of marketing is largely driven by your conversion rates.
24:47.225 --> 24:52.547
[SPEAKER_01]: If you spend a million dollars and convert 50%.
24:54.488 --> 25:02.334
[SPEAKER_01]: to close one deals and that's going to be a lot different cost of marketing than if you only convert 25%.
25:02.614 --> 25:03.675
[SPEAKER_01]: Those are great numbers.
25:04.115 --> 25:07.577
[SPEAKER_01]: Close rate is going to affect your cost of marketing.
25:08.078 --> 25:11.120
[SPEAKER_01]: It's not just how much you spend and how many leads you get from it.
25:12.060 --> 25:33.556
[SPEAKER_01]: Your clothes rate and then going backwards your demo rate and your is you rate and your set rate all of those effects your cost of marketing So if you are maintaining that Consistent cost of marketing that's another that's in your profit model exactly in your profit build on your compass you have you and you compare to your profit model like like
25:34.837 --> 25:38.079
[SPEAKER_00]: Again, this varies, right, industry, size of the company.
25:38.199 --> 25:42.943
[SPEAKER_00]: The average used to be 10%, I think people have increased that's a 15% now.
25:43.063 --> 25:45.705
[SPEAKER_00]: In 2026, there are companies doing it, 3%.
25:46.105 --> 25:50.128
[SPEAKER_00]: Companies, depending 2025%, but it's in your model, right?
25:50.168 --> 25:53.010
[SPEAKER_00]: You take the numbers, you're tracked the numbers, and you compare it against your model.
25:53.670 --> 25:58.294
[SPEAKER_00]: Right, you across the marketing is one number in that profit model.
25:58.314 --> 26:00.155
[SPEAKER_00]: What's my material cost?
26:00.175 --> 26:01.236
[SPEAKER_00]: What's my labor cost?
26:01.276 --> 26:02.217
[SPEAKER_00]: What's my commission?
26:02.837 --> 26:03.858
[SPEAKER_00]: What's my marketing?
26:04.198 --> 26:05.819
[SPEAKER_00]: And then what's all the rest of my overhead?
26:05.839 --> 26:07.300
[SPEAKER_00]: And then what falls to the bottom?
26:08.001 --> 26:08.201
[SPEAKER_00]: Right.
26:09.202 --> 26:12.864
[SPEAKER_00]: These numbers can help you make better decisions.
26:12.905 --> 26:15.206
[SPEAKER_00]: So you have more full to the bottom, right?
26:15.586 --> 26:18.389
[SPEAKER_00]: If you see your numbers, you can make better decisions.
26:18.409 --> 26:21.111
[SPEAKER_00]: So like I said, these better be accurate.
26:23.158 --> 26:36.395
[SPEAKER_00]: I see too many people, and I'm not talking about build the prime, because I've been working with, um, I've been working with some clients in core, uh, the step brand that I've opened up for the marketing solution that are using other CRMs, and I'm not going to mention names.
26:36.996 --> 26:40.000
[SPEAKER_00]: So there's no automation built into the more if there are, they're not using that.
26:41.008 --> 26:45.970
[SPEAKER_00]: I mean, the numbers are just, you're trying to make marketing decisions, you're trying to help people.
26:46.951 --> 26:58.476
[SPEAKER_00]: And you just like, how many new opportunities like them all, you sit in a business that's $15 million and they've got five hundred new opportunities year to date, you're like, who's after these things?
26:58.616 --> 26:59.256
[SPEAKER_00]: It's crazy.
26:59.376 --> 27:00.857
[SPEAKER_00]: So a lot of these things are not set up.
27:00.917 --> 27:07.360
[SPEAKER_00]: So, and I see businesses of all different sizes where the data is just, it's a mess, right?
27:07.780 --> 27:13.202
[SPEAKER_00]: I see it all the time, but first we have to do is figure out a way to get this stuff in there accurately.
27:13.262 --> 27:33.649
[SPEAKER_01]: There's a couple different ways of looking at your conversion rates, which I think this gets a little bit more important as you start to scale and grow more, but there's different ways that you can calculate, for example, a close rate besides just on demo or lead issued, and the way that I've kind of
27:36.810 --> 27:40.753
[SPEAKER_01]: based calculation, or it's a period-based calculation.
27:41.333 --> 27:43.295
[SPEAKER_01]: And again, this is all going to come down to preference.
27:43.555 --> 27:50.000
[SPEAKER_01]: I have this argument with some of our customer sometimes about which one is the more appropriate one.
27:50.180 --> 27:52.321
[SPEAKER_01]: I always gravitate towards the cohort-based.
27:52.922 --> 27:59.507
[SPEAKER_01]: And what I mean by cohort-based is if we're, let's say we're looking at a close rate on lead-asshoot, okay?
27:59.867 --> 28:04.070
[SPEAKER_01]: I want to look at, tell me, like, tell me all of the leads-issued,
28:05.330 --> 28:09.695
[SPEAKER_01]: that, you know, in this time period, if I'm looking at, let's just say last month, I'm looking at the month of August.
28:10.957 --> 28:16.584
[SPEAKER_01]: And I want to know what was my close rate on those issue leads from the month of August.
28:17.585 --> 28:18.887
[SPEAKER_01]: I don't want to know necessarily.
28:20.244 --> 28:23.906
[SPEAKER_01]: Here's my, I had, you know, 100 leads issued and 50 sales.
28:24.066 --> 28:27.147
[SPEAKER_01]: So my closing rate is 50% in the month of August.
28:27.548 --> 28:34.771
[SPEAKER_01]: The issue leads from the month of August, may have a different track than what you closed in August.
28:34.791 --> 28:40.114
[SPEAKER_01]: Maybe you got a lot more, maybe you have a lot more issue leads in August or a lot fewer issue leads in August.
28:40.514 --> 28:42.215
[SPEAKER_01]: We're looking at that cohort, right?
28:42.255 --> 28:48.738
[SPEAKER_01]: That cohort of August issued leads and what percentage of those did I close?
28:49.900 --> 28:55.402
[SPEAKER_01]: So when I talk about cohort-based conversion rates, that's what I'm talking about.
28:55.842 --> 28:57.782
[SPEAKER_01]: Look at that cohort of issue leads.
28:58.342 --> 29:16.688
[SPEAKER_01]: As opposed to the period-based, which to be honest, a lot of our customers prefer, you're looking at, and I'll see you in the month of August again, at 100 issue leads, and 50 sales all the month of August, so my close rate is 50%.
29:17.248 --> 29:26.355
[SPEAKER_01]: problem with that is something like there are instances and depending on the time frame that you look at it or the granularity that you look at it, you could end up with a divide by zero.
29:26.395 --> 29:29.118
[SPEAKER_01]: Like you have a sale but no issue lead.
29:29.838 --> 29:31.439
[SPEAKER_01]: And so you can't see one divided by zero.
29:32.360 --> 29:40.647
[SPEAKER_01]: Or you can end up with 125% close rate because you just had there were more sales in that time period than issued leads.
29:40.927 --> 29:43.569
[SPEAKER_01]: If you're pulling sales from July,
29:44.770 --> 29:47.011
[SPEAKER_01]: Potentially, you're just pulling sales from whenever, right?
29:47.111 --> 29:49.133
[SPEAKER_01]: That's when it was fast forward, yes.
29:49.533 --> 29:51.814
[SPEAKER_01]: So whatever, it could be from a different time period.
29:51.874 --> 29:55.136
[SPEAKER_01]: Ultimately, at the end of the day, it doesn't really matter.
29:55.796 --> 30:00.359
[SPEAKER_01]: You can choose whichever one makes more sense to you as long as you
30:01.279 --> 30:12.750
[SPEAKER_01]: Understand it and as long as you track it as long as you continue to measure against that and continue to Improve your numbers and get your end results.
30:12.770 --> 30:18.055
[SPEAKER_01]: You have to set the know what it is and track it So you're saying cohort based probably a little more accurate.
30:18.315 --> 30:25.761
[SPEAKER_01]: That's how I think about it I want to know that cohort of leads in that particular time period and what happened with those that's going to give you
30:27.182 --> 30:36.467
[SPEAKER_01]: In my opinion, the most accurate way of looking at it, but there are a lot of very looking at the lead sources you're saying individually.
30:36.928 --> 30:45.972
[SPEAKER_01]: Or does it whatever looking at lead sources, looking at sales reps, looking at lead setters, looking overall, looking at product type, looking at everything, right?
30:46.273 --> 30:46.793
[SPEAKER_01]: It doesn't matter.
30:46.933 --> 30:52.416
[SPEAKER_01]: My opinion is the whole work gives the whole work based gives you the most realistic accurate view of things.
30:52.716 --> 31:00.040
[SPEAKER_00]: Yeah, I mean, look, it, like I said, at the end of the day, you can look at, you know, the way different lead sources affect your numbers and stuff like that.
31:00.260 --> 31:05.042
[SPEAKER_00]: And, like I said, when it's set rate 36% for a company like me, that's actually pretty good.
31:05.102 --> 31:11.886
[SPEAKER_00]: Because a company like me, doing the Google, doing Facebook, doing repeat, referral, still have lots of customers that love us.
31:11.946 --> 31:15.828
[SPEAKER_00]: Five star would be doing all the regular stuff that most companies start out.
31:16.408 --> 31:38.133
[SPEAKER_00]: have a call center but then companies like myself and beyond they start opening up the lead funnel to lead aggregators right and we know that you know you get a hundred of those lot less of them said into an appointment just for you know that's just the business itself yeah we know how I feel about my display not past yes which is great great podcast episode go back and look back
31:39.033 --> 31:41.974
[SPEAKER_00]: You start doing things like camisings, shows, and events, right?
31:41.994 --> 31:48.955
[SPEAKER_00]: So those leads is more raw opportunities on the top that come in, but a lot less of them will set into an appointment.
31:48.975 --> 31:50.035
[SPEAKER_01]: We're even sweet stakes, right?
31:50.055 --> 31:51.175
[SPEAKER_01]: Let's sweet-sweet stakes.
31:51.415 --> 31:54.256
[SPEAKER_00]: Like there's lead sources that can still be profitable.
31:54.456 --> 31:56.736
[SPEAKER_00]: You can still be within your range of your cost of marketing.
31:57.136 --> 32:04.498
[SPEAKER_00]: There's just going to be a lot less stuff that you're going to set from the raw inquiry, the appointment, you know, the new opportunity.
32:05.318 --> 32:07.599
[SPEAKER_00]: to the appointment set that could affect that number.
32:07.639 --> 32:11.080
[SPEAKER_00]: It doesn't mean that the marketing is worse.
32:11.860 --> 32:13.380
[SPEAKER_00]: It just means that it's changed.
32:13.660 --> 32:14.001
[SPEAKER_00]: That's all.
32:14.221 --> 32:15.201
[SPEAKER_00]: It's different, right?
32:15.381 --> 32:18.642
[SPEAKER_00]: New lead sources completely different business, right?
32:19.442 --> 32:21.523
[SPEAKER_00]: So looking at my appointment, 7 rate of 36%.
32:21.583 --> 32:29.065
[SPEAKER_00]: People like me that are companies like us that are doing all of these canvassing shows and events lead aggregators, all the things.
32:30.169 --> 32:35.574
[SPEAKER_00]: It might be looking at my employment set rate of 36% saying, but that's great, because it might be 15.
32:36.215 --> 32:46.705
[SPEAKER_00]: Matter of fact, I know by going to these mastermind groups that there are companies that are someone's mind, that are doing 15% of employment set rates with a similar marketing plan to what we have.
32:47.486 --> 32:51.609
[SPEAKER_00]: And there are some doing 45% which is phenomenal, right?
32:52.811 --> 32:53.011
[SPEAKER_00]: But,
32:54.303 --> 33:00.573
[SPEAKER_00]: As you could see, when I was a small company and I didn't have to lead aggregators to run, I think I had some, but I certainly wasn't doing canvassing.
33:00.593 --> 33:01.975
[SPEAKER_00]: I wasn't doing shows in advance.
33:02.295 --> 33:08.284
[SPEAKER_00]: Because those cancel at a higher rate, you set the appointment at the door, you call the confirm, they just cancel.
33:08.364 --> 33:09.426
[SPEAKER_00]: So your set rates,
33:10.267 --> 33:11.328
[SPEAKER_00]: go way down, right?
33:11.528 --> 33:13.529
[SPEAKER_00]: Or issue rates, all of those things go way down.
33:14.110 --> 33:15.191
[SPEAKER_00]: It's completely different.
33:15.411 --> 33:18.153
[SPEAKER_00]: It's going to look like a completely different business on these numbers.
33:18.173 --> 33:20.674
[SPEAKER_00]: You just have to understand why those things are happening.
33:20.775 --> 33:28.160
[SPEAKER_01]: And when you're talking to your friends and peers and in the industry, even if they get a very similar business to you and a similar size,
33:28.820 --> 33:32.183
[SPEAKER_01]: It's like, oh my, my point in set rate is 36 and there's is 45.
33:32.203 --> 33:33.704
[SPEAKER_01]: What are you doing differently than me?
33:34.064 --> 33:35.545
[SPEAKER_01]: That's not the right question to ask, right?
33:35.726 --> 33:40.189
[SPEAKER_01]: The right thing to ask is like, hey, you took your appointment set rate from 45%.
33:40.910 --> 33:41.570
[SPEAKER_01]: What did you change?
33:41.630 --> 33:45.773
[SPEAKER_01]: Or what did you do to increase your appointment set rate for different channels?
33:45.793 --> 33:48.115
[SPEAKER_01]: There may be things in there that you can learn and apply to you.
33:48.155 --> 33:54.320
[SPEAKER_01]: But still the outcome of that or the impacts of that and the effects of that may be different.
33:54.800 --> 33:56.702
[SPEAKER_01]: But that's, that's the more interesting place to
33:58.095 --> 34:08.683
[SPEAKER_01]: to think about and to compare against like, what are your processes like to get you from that got you from this previous stage to this new stage?
34:09.124 --> 34:13.347
[SPEAKER_00]: Comparing these numbers without any context, right, understand it, right?
34:13.467 --> 34:19.172
[SPEAKER_00]: Then this is the mistake that a lot of newer companies, business owners like myself, they do, right?
34:20.130 --> 34:22.132
[SPEAKER_00]: It's a mistake, that's the point of this episode.
34:22.673 --> 34:27.397
[SPEAKER_00]: Know your numbers, use Bill the Private Bold and sites make sure it's all automated because then it makes it really easy.
34:28.158 --> 34:28.858
[SPEAKER_01]: We're guys like me.
34:29.219 --> 34:31.501
[SPEAKER_00]: Know your numbers, make sure they're accurate, right?
34:31.761 --> 34:34.584
[SPEAKER_00]: And see why, you know, understand why those things are.
34:34.864 --> 34:35.785
[SPEAKER_00]: Right?
34:36.426 --> 34:38.628
[SPEAKER_01]: White business numbers look different at different stages.
34:39.013 --> 34:42.875
[SPEAKER_00]: So every time we get on, we don't even come into these podcasts anymore with a plan.
34:42.895 --> 34:43.735
[SPEAKER_00]: We just start talking.
34:43.755 --> 34:44.636
[SPEAKER_00]: And then like, oh, that's great.
34:44.656 --> 34:45.676
[SPEAKER_00]: We start talking.
34:45.997 --> 34:47.037
[SPEAKER_00]: Let's discuss that.
34:47.057 --> 34:49.859
[SPEAKER_00]: So we were talking about your experience, right?
34:49.919 --> 34:54.241
[SPEAKER_00]: You work with multiple companies at different sizes in different industries.
34:54.321 --> 34:56.662
[SPEAKER_00]: We talked, we showed the example of a size difference.
34:57.002 --> 34:59.944
[SPEAKER_00]: And how these numbers change over the same company that scales, right?
35:00.044 --> 35:00.904
[SPEAKER_00]: From 1.1 or 12.
35:03.023 --> 35:04.264
[SPEAKER_00]: What are you staying in other industries?
35:04.284 --> 35:06.125
[SPEAKER_00]: So you work in concrete coatings.
35:06.266 --> 35:08.267
[SPEAKER_00]: So I'm a window indoor contract, right?
35:08.327 --> 35:10.609
[SPEAKER_00]: So what are two of its re-euldering industries that you work with?
35:10.869 --> 35:15.493
[SPEAKER_01]: Our biggest one's windows and doors, concrete coatings, one day bath, fencing.
35:15.993 --> 35:17.995
[SPEAKER_01]: And then there's like, there's a bunch of others as well.
35:18.015 --> 35:19.296
[SPEAKER_01]: So let's just go to concrete coatings.
35:19.436 --> 35:20.737
[SPEAKER_01]: Okay, different business.
35:21.638 --> 35:26.982
[SPEAKER_00]: What are these numbers typically look like the differences between a window company and a concrete coating company?
35:27.567 --> 35:28.968
[SPEAKER_01]: What do you typically say?
35:29.108 --> 35:33.773
[SPEAKER_01]: First of all, it's really hard to, again, you can't really compare a lot of these numbers.
35:34.193 --> 35:39.218
[SPEAKER_01]: A window job is going to have a much higher average ticket than a concrete coding job.
35:39.858 --> 35:43.041
[SPEAKER_01]: That's probably going to impact things like close rates and things like that.
35:43.341 --> 35:47.505
[SPEAKER_01]: Another thing that we talk about, another thing that's different, is just in terms of the...
35:48.406 --> 35:53.287
[SPEAKER_01]: the type of job that it is, uh, Windows and door sometimes it's a little bit more of a need.
35:53.307 --> 36:00.649
[SPEAKER_01]: All right, not always, but sometimes it's more of a need, you know, broken windows or their drafty, or I, I don't want to deal with this anymore.
36:00.809 --> 36:04.110
[SPEAKER_01]: Whereas concrete coatings is a little bit more of a luxury thing.
36:04.130 --> 36:06.410
[SPEAKER_01]: It's like, okay, well, no, I just want to, I want to upgrade this.
36:06.430 --> 36:07.430
[SPEAKER_01]: I want to make it look real nice.
36:07.590 --> 36:09.651
[SPEAKER_01]: I want to have a really, you know, beautiful garage.
36:09.831 --> 36:12.074
[SPEAKER_01]: It's a little bit of a different kind of customer sometimes, too.
36:12.094 --> 36:20.783
[SPEAKER_00]: You talked about the average ticket, a concrete coding guy, and I believe we had a lotia on, and he said that his average ticket was about five grand a fair remember correctly was a five grand?
36:20.863 --> 36:22.325
[SPEAKER_00]: My average ticket is 15 dots.
36:23.814 --> 36:24.014
[SPEAKER_00]: right.
36:24.375 --> 36:27.317
[SPEAKER_00]: So again, that affects your closing rate, right?
36:27.337 --> 36:31.661
[SPEAKER_00]: And I've seen this with gutter companies to gutter companies, gutter protection companies.
36:32.502 --> 36:35.785
[SPEAKER_00]: I mean, you're asking for $5,000 on average, you're going to have a much higher close rate.
36:35.885 --> 36:40.128
[SPEAKER_00]: Similar run companies with large scaled-out sales staffs, right?
36:41.029 --> 36:48.476
[SPEAKER_00]: Similar to mine, similar sales number of similar operation, they have 45-50% that, compared to me being 32 to 27.
36:49.957 --> 36:53.881
[SPEAKER_00]: because it's a, it's much easier investment for the average home, right?
36:54.241 --> 36:57.524
[SPEAKER_01]: And on top of that, like I say, I think it is also a little bit of a different customer too.
36:57.624 --> 36:58.765
[SPEAKER_00]: So it's a different customer.
36:58.885 --> 36:59.126
[SPEAKER_00]: Yes.
36:59.346 --> 37:00.847
[SPEAKER_00]: And then you see your NSLI, right?
37:01.088 --> 37:03.270
[SPEAKER_00]: So their NSLI is in 3600 bucks, maybe.
37:04.176 --> 37:06.078
[SPEAKER_00]: to Greg, maybe 1800.
37:06.378 --> 37:10.121
[SPEAKER_00]: I don't know the numbers, but so you'll see those things.
37:10.142 --> 37:20.631
[SPEAKER_00]: So if you're in a window business and you're talking to your buddy who's in the gutter production business, he starts talking numbers, you better be aware of the differences, because he's a, what's wrong with you?
37:21.032 --> 37:23.254
[SPEAKER_00]: I've got a 45% net closing rate.
37:23.794 --> 37:26.355
[SPEAKER_00]: He said, well, there's a demo or leadership, no, it's leadership.
37:26.375 --> 37:27.495
[SPEAKER_00]: You're like, I'm doing things the same.
37:27.595 --> 37:28.295
[SPEAKER_00]: Why do you have foot?
37:28.655 --> 37:29.816
[SPEAKER_00]: You need to understand the context.
37:30.036 --> 37:37.818
[SPEAKER_01]: And not only that, the lead channels that are going to work for concrete coatings, versus lead channels that are going to work for windows and doors, those might be different in none of themselves.
37:37.918 --> 37:38.658
[SPEAKER_01]: It's so hard to compare.
37:38.878 --> 37:42.139
[SPEAKER_00]: Anything else that you're seeing, the difference, the nuances between concrete coatings?
37:43.079 --> 37:48.801
[SPEAKER_00]: You know, replacement like windows, doors, kitchens, bats, one day bats, it's mostly those things, right?
37:48.901 --> 37:50.221
[SPEAKER_01]: It's going to be with your average ticket.
37:50.301 --> 37:51.562
[SPEAKER_01]: It's going to be one of the biggest things.
37:51.922 --> 37:56.083
[SPEAKER_01]: Is this a need versus a want and the type of customer that you're working with?
37:56.163 --> 38:02.125
[SPEAKER_01]: And the type of lead sources that are going to convert the best and general work, the best and are available for the customers.
38:02.185 --> 38:03.385
[SPEAKER_00]: How long have you been in business?
38:03.405 --> 38:07.507
[SPEAKER_00]: The longer you've been in business, the more customers you have, you should have a higher repeat referral rate.
38:07.587 --> 38:08.467
[SPEAKER_00]: I work with the company.
38:09.147 --> 38:09.847
[SPEAKER_00]: in Pennsylvania.
38:09.887 --> 38:13.870
[SPEAKER_00]: I mean, they've been in business for 25 years and half of their release are repeated referral.
38:14.290 --> 38:16.211
[SPEAKER_00]: So those, those are going to set pretty nicely, right?
38:16.251 --> 38:18.492
[SPEAKER_00]: They have an advantage for being in business that long, right?
38:19.072 --> 38:21.214
[SPEAKER_00]: They're well known within their market.
38:21.234 --> 38:23.675
[SPEAKER_00]: So it's all these different variables that can affect these numbers.
38:23.715 --> 38:26.036
[SPEAKER_00]: So the point of this podcast is don't get excited.
38:26.617 --> 38:27.317
[SPEAKER_00]: Don't get too high.
38:27.337 --> 38:27.977
[SPEAKER_00]: Don't get too low.
38:28.017 --> 38:30.439
[SPEAKER_00]: Don't get depressed when you start hearing other people talk numbers.
38:30.519 --> 38:31.199
[SPEAKER_00]: No, you're numbers.
38:31.319 --> 38:34.641
[SPEAKER_00]: And when you know them, you'll know how well you're doing, right?
38:34.721 --> 38:35.561
[SPEAKER_00]: And at the end of the day,
38:36.802 --> 38:42.729
[SPEAKER_00]: The score card is, and I profit, the bottom line, and I always say it, the bottom line is the bottom line.
38:43.129 --> 38:45.993
[SPEAKER_00]: So, Johnny, I think we've covered it.
38:46.073 --> 38:52.400
[SPEAKER_00]: I hope our our viewers and listeners, and I hope I hope they like this one.
38:52.600 --> 38:53.161
[SPEAKER_01]: I think they will.
38:53.501 --> 38:55.843
[SPEAKER_01]: It's, uh, it's another great one.
38:55.943 --> 39:01.368
[SPEAKER_01]: So thank you for everybody, uh, who tuned in and look forward to being back with you again the next time.
39:01.768 --> 39:06.933
[SPEAKER_01]: Like, subscribe, share with your friends, and we'll, we'll see you again here soon.
