Speaker 1So in August, we did 81,000 in revenue. Holy crap, your third month.
Speaker 2And how long have you been at it?
Speaker 185 days. And the crazier part is as we're sitting here, September has just begun. We have $54,000 on the calendar for September. That's wild. I never had an internship. I never got my degree. I had no work experience. I had really nothing. I was driving DoorDash and I don't want to be in that situation. $500 set up and we were ready to go. That was a one-man show. The thing I get personally most excited about, we are in a time period right now where there is an ever-diminishing amount of skilled laborers. Way more people are retiring than there are people that are starting. You have so many service types that have a market rate that is just completely made up by whoever the five people that offer the service are. There's no reason that that costs $10,000. And no one's thinking about it. No. And it will always be overlooked because people, they don't understand it. They think that it is harder or more complicated than it really is. The way I wanted to run this, I'm not licensed. Just have them handle the install part of it, right? And when you do the math on what they're going to make then, they do 16 jobs each and they make an average of $500 a job. I mean, that's a really good setup for them as well. They're going to make an extra $8,000 a month.
Speaker 2Do you ever go there or touch it?
Speaker 1I go there twice a month. I've done it twice a month. I've done it three times a month.
Speaker 2I've done it three times a month. I've done it four times a month. I've done it five times a month. I've done it three times a month. I've done it four times a month. I've done it five times a month. I've done it six times a month. I've done it six times a month. I've done it seven times a month. I've done it seven times a month. I've done it eight times a month. I've done it nine times a month. I've done it ten times a month. I've done it 11 times a month. I've done it 12 times a month. I've done it 12 times a month. I've done it 13 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 13 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month.
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Speaker 2I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month.
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Speaker 3I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month.
Speaker 2I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 3I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 2I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month.
Speaker 3I've done it 14 times a month.
Speaker 1I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. I've done it 14 times a month. size and what do you do about this and in this case and in this area of town all these people have crawl spaces but they're only and you're very quickly like over i'm in over my head and
Speaker 2your business lives or dies on the plumbers yes you're doing all the physical yeah absolutely the customers that's sales yes right that's marketing and sales which you've done before the plumbers is like i have to know enough about this industry to not sound like an idiot because if i don't have good plumbers on my team i don't have a team yes absolutely and then the second
Speaker 1thing was i just old-fashioned way went took the plumbers out for coffee or a lunch sat down man to man face to face and just had a conversation hey this is what i'm aiming to do this is what i've done in the past i don't know everything about water softeners and plumbing and water filtration right now but i'm a quick learner and 30 days ago i didn't know like i didn't even know
Speaker 2what a softener was so why don't you explain to people what it is because it's kind of regional specific yes a little bit in texas like i have under my sink reverse osmosis filter just for taste but that's it i have friends in other places that have a
Speaker 1whole house like what is exactly what are you selling absolutely so the main kind of bundle that we sell it's it's a three-part so the first part is a resin softener that removes hardness or gpg grains per gallon from your water which the easiest way to think about that is there are many rocks not visible but very very tiny rocks that float around in the water depending on where the water comes from that just beats up your pipes your appliances your your hair feels dry your skin feels dry some areas have super hard water some areas have no hardness at all so that's the first component is a resin softener hard water equals more rocks yes okay harder water more rocks more damage more dryness you know more bad okay now then you look at the second component and that's a whole home or what we call poe point of entry okay which just means the water gets filtered at the point that it enters the whole home main yep exactly right yep and it's it's on the private property but it's like right where your central shutoff valve would be yeah for where your water comes into your house okay now then the second element is carbon filtration carbon filtration again is a point of entry system so it's for the whole house and that is what removes the the contaminants we'll call it the stuff that you don't want in your water not rocks but things like chlorine chloramine chloroforms haloacetic acids those are all just buzzwords for stuff i don't want to be drinking yeah right or i'm yeah or on my body exactly the stuff that i you know imagine in your home showering in pool water every day you get out of the pool and you want to shower because you've got chlorine all over you and then you go take a shower and you're in just as much chlorine in your in your shower water yeah so that is what a carbon block or carbon filter does so we our flagship system is resin and carbon to soften and filter all of the home's water and then we also couple that with what you have in your home system which is a point of use system reverse osmosis and that is a either a tank or a tankless system that just goes under the sink draws water through it through a reverse osmosis membrane which is the best form of filtration and then pushes it out a small dedicated faucet directly for drinking water and that's like an upsell yeah we we like to sell it as a bundle and it kind of becomes our our unique value proposition is like hey we charge the same or less than other people and we include the drinking water system and that's just that's just part of our bundle yeah so that's kind of how we sell it makes your close rate go up definitely okay yep what are your price points for these packages so we sell our our flagship which is a single tank a 10 by 54 tank so 10 inch diameter 54 inches tall a single tank that has both resin and carbon in it it's a mixed bed system which just means it has both that tank with the ro or reverse osmosis drinking water we sell it at 26.99 installed okay taxes included install included everything included now is that is that in the ground like at the main it is most often installed in the garage and tied directly just into the water line okay so the water can bury them we can do you know whatever so the water
Speaker 2main at the street comes in right where the shutoff would be it comes to the garage or whatever and it goes there first yes okay yes it looks like a tall skinny water heater yes okay exactly okay it's just
Speaker 1a cylinder and then there's a small little like almost garbage can looking black tank that's called a brine tank okay and you put salt in that that helps the resin softener function properly okay
Speaker 2but 20 and 2700 bucks yep okay how much of that goes to hardware plumber profit Etc so at a 2700
Speaker 1install we will pay about 950 dollars for all of the we'll call it heavy machinery so the brine tank the control valve the actual tank that has the carbon and resin in it and then the ro system so those are all your main components about 950 dollars from there we'll probably spend about a hundred dollars per job on miscellaneous stuff like just pipe fittings you know salt insulation if you're in a cold climate where you need to insulate the pipes things like that so that puts us to what 10 50 and then we'll pay on average I would say about five hundred dollars in total so the plumber to the plumber yep and that that could be as low as 400 that could be as high as 600 650. okay and sometimes we'll add a little bit of markup on top if the install is very difficult or we need to bury a system underground like that's a lot of labor so but on that that classic system I would say probably 450 to 500 to a plumber 10 50 for all materials how long does it
Speaker 2take him to do about four hours okay and so you're shooting for like 40 to 50 gross margin give or take
Speaker 1I would say you know about about 40 percent gross margin okay so let's say you said 2700 right yeah
Speaker 2so 2700 minus so 1500 so call a thousand bucks in profit gross profit how much of that is like
Speaker 1marketing costs or sales costs yeah I mean we're right now acquiring clients for like 175 bucks a client which is really really cheap I don't expect it to stay like that quite frankly it's it's that's I even feel that a client acquisition cost of 300 or 350 is very justifiable I mean you're still running 3x return on whatever you're spending yeah because that puts your net margins closer to 30
Speaker 2percent yeah which is amazing for any business especially home service yeah okay so what are your well before I ask that what what are the geographical areas that need this the most and where where physically is your business because even South Florida Chicago Wisconsin Raleigh yeah
Speaker 1I did want to be able to have a hands-on element to it I think there's a there's something nice for a business like this of just having the option to step into the field shake hands with a plumber a customer so that's in Raleigh North Carolina and to your first question I've I've had a little bit of a mixed experience with this I would have thought that you know the areas that have the worst water would have the most demand but they also have the most people that have already been doing this right yeah so you know you go to an area like let's say in here right Dallas Fort Worth like this area this is going to be there's there's hard water here like there there's absolutely a need you look at maybe a Salt Lake City absolutely super hard water huge need right but there's a ton of companies that have been selling softeners and filtration for a super long time which isn't necessarily a problem but I think what like a market like mine Raleigh we don't really have hard water you know we sell people a softener because it kind of comes with the combo but there's not a lot of need yeah there's a lot of need for the carbon filtration because they dump so much chlorine and chloramine and other stuff like that into our water so what my market might lack in demand it also lacks in competitors so there's there's a lot fewer businesses that are selling this type of service mainly it's plumbers that are like yeah I could also do a softener if you want me to do a softener yeah yeah but they're Facebook ads they're not like really trying to acquire these other stuff anyway yes so your
Speaker 2plumbers aren't your competitors no and Raleigh is has a good economy it's got it's got like good average income so I imagine a lot of what you're selling is kind of fear like they're just like yeah or or like they can afford it they're like why wouldn't I if I've got 2700 bucks and I want my kids to probably have better drinking water that's a good investment yes and that's a lot
Speaker 1of what it comes down to is a lot of people they look at the price and what we do that's unique about our our kind of marketing angle is our best performing ad we closed our first deal on 41 of ad spend and it was just a static image ad that was a photo of our unit and it said 26.99 installed and that was it that was it what was the headline or text or I mean everything was just like whole home plus drinking water 26.99 installed and the entire angle the entire thing we try to do is pick up the scraps left behind by the billion dollar companies like culligans Connecticut leaf home water where they come they do this big in-person sales process it's a really elaborate thing they test the water yes and the price point is six seven eight thousand dollars yeah we're honestly a very comparable system and we just kind of we're like following in their wake like picking up all the people that just got completely priced out yeah you know because there are plenty of people that can't afford that eight thousand dollar system and they'll go with them because they're a hundred year old company that has been doing this forever and they know they're going to get a certain product and a certain experience yeah but there are so many people that just purely cannot afford it or
Speaker 2don't want like i can afford 8 000 i wouldn't pay that no it to me it doesn't have that much value
Speaker 1nope right that it has to match the value yes and a lot of people are just the analogy i always love to use is like we opened up a a chevy dealership next to a ferrari dealership and it's price
Speaker 2anchoring exactly they're doing your heavy lifting they're anchoring so if you put 2700 bucks in the ad you don't need a killer sales guy no which is great because we don't have a sales guy 25 commission
Speaker 1nope you know we we are more like order takers if anything you know we've set it up so you know our whole angle is like imagine you just need to get to work every day and work is far and you're tired of walking and the only place in your city that sells cars is ferrari and you just you can't afford a ferrari so you've just been walking yeah and and you would love to just get a chevy yeah you'd
Speaker 2get a honda and just get to work and get home you didn't know a chevy existed no until you see a
Speaker 1facebook ad yes and in a lot of cases in some markets chevy did not exist yeah there was no chevy dealership and i said wait why wouldn't we open a chevy dealership here there's plenty of people that would buy a chevy if they could and and you know now it's just genuinely just getting awareness because once people know about the product and they have a conversation where they can feel confident that this will solve their problems which again in my area they don't have crazy water problems yeah
Speaker 2it's a pretty easy sale so what are the markets where this is an established industry there is
Speaker 1hard water so you said salt lake yeah i would say salt lake denver is going to have really hard water um out west in general yeah a lot of out west you know you go closer to the mountains and just in general they do a lot of markets in texas do florida has notoriously hard water and you know it's a little it's a catch-22 because you go to a market like let's say orlando and every single home in orlando has a water softener every single home so are they built like that they're not built like that but it's just standard practice like the water is so hard that you just you just thrash your appliances and your skin and your hair and and so they just don't do it nobody doesn't have a water softener and so with that in mind like while those markets are definitely more competitive they're also the tam is a hundred percent every home needs it yeah yeah in raleigh we have three million people probably less than a million of those people have a water softener yeah i mean you know if there's a million households probably less than half of them are even interested in that as a product yeah well how did you land on that price point i think you know it was two things the first thing was that i always wanted to target when i made this step up i said i want to target a thousand dollar net margin that's my ideal price point to be at can i make a thousand dollars in that and that gives me a lot of wiggle room for promos for you know bulk discounts for referral programs for a lot of things and then the other thing that i thought is why wouldn't i just sell as many as i can at this price point and my two options are either it's working phenomenally and we just keep going or if it's working well but the margin isn't strong enough then we can just raise price once we have a reputation that allows us to do it so i just said what's the cheapest i can go where i can still target making a thousand dollars a job and then i can inch my way up from there as i have a review that or a like a reputation that allows me to do so
Speaker 2yeah what what percentage of your customers are you getting from facebook ads 95 what about the
Speaker 1other five referrals yeah referrals and google business profile yep we we have 52 five-star reviews wow um in 80 days i think today is 85 days since we turned on ads wow and i think that's so we we've been i am like a psycho about google reviews like if we do a google review for or we do an install for a client and i've been speaking with zach you know after the job's done i'm going to say zach hey do you mind leaving a review i'm going to get zach to do it i'm going to say hey zach i'm going to be in the area actually later this week i would love to come by drop off some extra water softener salt for you guys would you mind uh having your wife leave a review would you
Speaker 2mind having your brother leave us a review prosody right you're saying like here's some
Speaker 1salt yes can you do me a favor and it's not a if you do this then i'll do this though yes and
Speaker 2that's okay absolutely and i feel like the the higher ticket your home service the more you have to be a maniac about begging for reviews because if i'm a landscaper doing 50 jobs all day like whatever i'm doing a hundred of these a week but if it's a three thousand dollar ticket a three thousand dollar item then you're only going to do so many of those yeah right few a week 10 a week whatever so you've got to get more reviews absolutely and we
Speaker 1are the on the east side of raleigh where our gbp pin is located so i guess like where our physical location is we are the number one ranked water filtration company like if you look up water filtration in raleigh and you are on the east side of town we are number one and how long have
Speaker 2you been at it 85 days all right so let's start so what day did you start the business june 8th june 8th and that's when you you or you probably like you built the website that day or before that
Speaker 1was like that was like go plumber that was go live exactly told the world that you existed yes that was a website isn't really doing no no you know that it's i could have built the web i think i i filed the llc maybe on like may 15th or something and then i spent three weeks like just getting everything ready that was those coffees with my plumbers and getting them onboarded and comfortable that was building out my website building my first ad creative setting up my ads manager little things like that june 8th was the day we said we're live right and that was ads on plumbers were eagerly awaiting work you know and that and that's
Speaker 2kind of what i consider our first day one okay who did your facebook ads i did okay yeah and you had experience with your other businesses yes okay what how many ads did you launch with like one that's still that static image multiple three static images okay no videos nope what were what are like your tips and tricks for making facebook ads successful for this industry i think in water
Speaker 1specifically, you either have to sell like informationally, like providing a client value as to why they should watch the video or read the text or whatnot, or you just have to compete on, on value. And that's what we did. Everything was just price oriented system quality at a low price. And we were again, just trying to pick up scraps. We didn't want to go compete with the established companies and try to say our product is better, or, you know, we didn't want any part of that.
Speaker 2We wanted all the people that they left behind. So you, one approach could be, Hey, let's educate the market. Hey, if you have hard water, do this, here's a test. And you're like, listen, we want the people that are already educated, Mr. Algorithm, go find the people that already know that it's cost six to eight grand from the other guys. We're just going to tell them we exist.
Speaker 1This is what we cost. And we almost withheld information on the ads because we only wanted an educated customer. I didn't want the ad to attempt to educate someone. I wanted somebody that would see the graphic and immediately know, Oh, that's a softener 2699. I just got quoted last month, eight grand. I better call these guys. And that was like, no, no one calls us and says, they don't know what we sell. No one calls us and says that they need an explanation. They call us. And the only thing we have to be prepared to, to, to handle is one, a comparison to the other system. They've been quoted on a genuine, honest comparison and how that is relevant to their water. And then we have to be ready to, if like use that the discounted rate as our crutch without leaning on it entirely, because you, you can't say, yeah, pick us over Connecticut because you know, we're going to do something better. We're not, we're going to do something. We have a better system. We won't, we don't. It's really just, we're going to do the same. As far as you're concerned, you will get the same and you'll get it at a lower price. And that was just our whole angle. And, and it really sold quite well.
Speaker 2So do you use advantage plus for targeting?
Speaker 1No, we, we, we, I turn most of that stuff off. In the beginning, we actually started with just a broad targeting, just geo targeting. That was it.
Speaker 2Geo code or, or cities. Yeah, we did kind of radius.
Speaker 1Yeah. More, more like radius. And the way that Raleigh is laid out is it's, it's very sprawling, kind of similar to a DFW where it's all one Metro, but it's, it's big.
Speaker 3Yeah.
Speaker 1So we kind of expanded out that way. We set a couple focal points and then expanded radiuses around those focal points. And then over time, we've just now actually trained a pixel. And now we can actually do a little bit of retargeting and we can, you know, create lookalike audiences and things like that.
Speaker 2But before were you saying Facebook, you know, we want 30 to 60 year old homeowners, or did you just say, this is the radius you go?
Speaker 1Raleigh, 30 to 60.
Speaker 2Age?
Speaker 1Yep. That's it.
Speaker 2Not male or female. Nope. Just not. Male or female. Nope. Okay. And now you're still doing that, but with the pixel that's trained, but with a lookalike audience of people that have clicked or called or purchase.
Speaker 1Correct. Exactly. Okay.
Speaker 2Um, well, it's interesting that you're, you're, are you still using static images only?
Speaker 1Well, not only we have, we have videos, but I will tell you statics are the best performers. It's, it's almost frustrating for me to like carve out a day to shoot a bunch of video ads. And then the statics just take all the spend because we'll put them on, you know, a, a campaign where effectively meta just decides how to spend and it always picks the statics. Yeah. Always.
Speaker 2Are you, are you using AI to make the static images or not?
Speaker 1Yeah, yeah, yeah. We, I, I'm. I'm a huge fan of dolly chat gbt you know I think that's the best for images for images I really do think it is the only thing I use it for yeah images and if if I want to put myself like a person then I'll go for like a nano banana or something that can do a little higher level but if it's just product on backdrop with price and text dolly every time and what type of conversion are you optimizing for we're optimizing for leads so lead and then we just go direct instant form instant form and then it just drops it right in our crm and we're we're on them right
Speaker 2away interesting uh so you don't send them to your website at all no interesting no I've heard the opposite for like higher ticket home service because they need to get more educated and but you said right you saw our thing we don't that's so interesting because you're telling the algorithm without telling them I only want people that are interested and I'm going to optimize for people to give me a lead so if I don't tell them too much information and they fill out their lead then they are interested and they're educated yep yeah they're already educated and they're interested
Speaker 1and so we're just kind of taking out a lot of the it's it's low skill advertising is really what it is we're taking out a lot of the skill and you know probably I would say by October we will be rolling out like a VSL like a classic funnel they go to a sales video of me explaining the product and all of that stuff I think we will probably sprinkle that in but my I don't know if I'm going to be able to do that but I'm going to be able to do that objective is to use that on Google because Google we can't train the same way Google we can pick our keywords like lowest cost softener or you know we can we can target to sell for certain keywords and then when they click dump them right into a funnel with a VSL of me explaining the product because I'm going to assume that the buying intent is going to be lower and the education is going to be lower on Google than it will be on meta with the way that we're advertising
Speaker 2so you're not running Google ads at all right now not at all what about not LSA either
Speaker 1no so for LSA it's very hard to target water filtration specifically so you'd almost have to do plumbing general which then you're just going to I'm going to get a lot of stuff we just don't want and I think the cost per lead is too high to justify say still relatively new yeah and
Speaker 2there's a thousand categories that could be on there but there's only hundreds right yeah they're
Speaker 1just kind of rolling out more over yeah and they don't have water filtration or water softeners they don't have those as categories okay so that's just still like blue ocean
Speaker 2for you like no Angie thumbtack home advisor none of that we just we honestly we haven't
Speaker 1been operationally ready for it yeah we're selling already the maximum amount of jobs that we can fulfill so I just partnered with a third plumber who's now ready to start taking jobs he's actually doing his first job right now I was like good luck because I'm going to be unavailable for a little while but I'm sure he'll be fine and really the the constraint for us has been having product in hand and being able to fill it yeah and and really that that's been it or people not knowing their homes very well which is kind of something I didn't expect to deal with but I asked someone do you have a power supply in your crawl space so we can install in the crawl space yes no they don't and because we don't do an in-person sales appointment my plumber shows up and says Parker there's no power in the crawl space yeah so we've been running into a little bit of that and then we have to push out three weeks because they have to get an electrician in and at the outlet and then we come back and so you know we we we really client acquisition has not been our bottleneck at all yeah so I'm not too excited about I just need to add more client acquisition channels because we don't really need it well every business
Speaker 2has one or two bottlenecks fulfillment sales yep and in my experience sales is usually the bottleneck right so I would rather solve for sales and figure out fulfillment because to me it's a lot easier to figure out absolutely so June 8th first day what do you do in sales and profits in June so in June we did
Speaker 1about I think it was five installs okay we sold our first job on June 8th second lead we ever got we installed on June 10th yes on the phone super nice guy David was his name and he was like yeah I want to your classic flagship system in my garage easy install I just moved in yesterday I just want the system in and I said 26.99 he said great when can you come and we said you know two days so we came out we installed on Wednesday we ended up selling I believe fulfilling four more jobs that that month so 10 grand-ish 15. okay yeah because I think we had one that was about 4 000 it was like a well system and then the rest were all around 2700 so I think it got us right around 15.
Speaker 2so 15 grand in sales your first month how much profit well I mean if you're looking at operating
Speaker 1profit it was probably about 800 bucks a job but if you're looking at real profit it was zero because I front loaded inventory and you know reinvested everything so but I'd say operating profit probably probably about three thousand dollars okay and then July July we did just under fifty thousand dollars of installs so we did it was 16 jobs um it ended up being like 49.8 like just shy of 50 000 and again our I would say our operating profit would have been slightly lower than that that first month because we were kind of figuring out some of the sales side and I was struggling because I was a one-man show I was struggling to follow up with leads and the big thing that was different about this industry was I mean we have a 25 true closing rate which is very high once you get them on the phone no or true closing rate like 25 lead to close 25 super high yeah but the problem is we don't get a client on the phone normally within the first like four or five touch points so we've got to call them for a week or two weeks and then we're like okay we're going to call them for a week before we even get to speak to them once we speak to them we close at an extremely high percentage like we're closing probably 35 of the people we actually speak to wow but I was only speaking to a very small percentage because I had to call them when they opted in and they didn't answer and then the next morning and then the next evening and then the next morning and the next evening and we had automations running but I was just getting inundated with leads too many leads I didn't have the time to call everyone so our CAC went up because we were spending we had too many leads in the pipeline and people weren't dealing with them but still probably let's say 650 I would say is probably a pretty good 12 grand in profit yeah I would say something something around there probably 11 to 12. and what what were you paying per lead to meta
Speaker 2it's always ranged between 30 and 40. per lead yeah okay it is crazy because I have a like a backyard sport court business and then a tree trimming business and those instant form leads can be so geek oh yeah like sometimes you call them like who are you what I don't know what you're yes yes bro this was you submitted this 45 seconds ago yes speed delete is everything right what do you do
Speaker 1about that you just keep calling yep yep remind them we we will we live by a mantra in my business and my my uh operations manager Jack could attest to this until the lead either ops out of conversation or says leave me alone yeah it's it's incessant like we we are we are ruthless with it because if you filled out my form and you tell me that you didn't fill out my form fine whatever we'll remove you from the CRM there's 10 of meta leads that's just how they are yeah I don't understand it it's got to be an algorithm problem but we get that all the time we call and they're like why are you calling me I'm like you filled out a form yesterday and I've just been trying to get a hold of you I never filled out a form I don't know what you're talking about yeah that's not even my name I'm like okay sorry and have a nice day you know but everyone else it's a yes or a no we don't take not answers that's that's not an option but there is a correlation between how
Speaker 2many times it takes you to follow up with someone and the chance that they'll ever actually answer
Speaker 1right of course a month from now the the likelihood drops way off but what we saw and I looked at my numbers before coming on here so I could be well educated as we talked about it when I brought my operations manager in I brought him in on like the third of July or of August because July I got overrun I was like I need to bring somebody in originally brought him in just as a sales guy I was like just follow up with the leads call the leads and and sell jobs it didn't really work very well in that regard because there was too much disconnect because he had to also con you know have conversations with the plumbers about special installs and scheduling and you know get service agreements or things like that and I was like okay I'm gonna you're gonna be an operations manager and you're gonna just own it end to end right lead to job completed you need to own that process and that's worked much better for us so I gave him the first two weeks he basically just called old leads we didn't really spend anything the first half of August because we had so many old leads in the pipeline and I I wanted him to get his feet underneath him August 15th we
Speaker 2go back to 200 a day of spend I meant to ask what were you spending per day in June and July June it
Speaker 1was probably a hundred dollars a day on average you spent two two grandish yeah something like that okay um and then in July it was probably three hundred dollars a day for the first 10 days then four hundred dollars a day for the middle 10 days and then like nothing for the back half because I was just overrun with work too well yes exactly yeah and uh so I bring in Jack and uh he starts August 15th is when I consider his first real like he's in the big leagues now leads are flying everything is we're going and we're at we're at full steam ad um 200 a day of ad spent he just sent me the readout from August 15th to August 31st so about 17 days we got 89 leads those are fresh leads not yes not old ones new leads 89 leads
Speaker 2all right so we're talking like four leads a day
Speaker 1or three, three to four. Yeah. Something like that. Yeah. Four, even five some days, you know, and you know how meta is some days it's two and then it's eight and some I'm sure were duplicates, but let's say 89 was the actual number on the meta ads manager. We actually connected with 70% of those leads. So 30% of them, we never got ahold of texting phone. Do you count a text? You know, we actually prefer text. Are they as effective? I think that text is just as effective because so many buyers are so averse to calling that our intro is not speed, delete, immediately call. It's speed, delete, immediately text. When is a good time for us to talk? Okay. So you're setting up a call, but texting first. Yes. And so always they opt in and it'll be, Hey, Kevin, this is Jack with Raleigh water pros. I got your form. When's a good time for us to chat for five minutes so I can get you a quote on a, on a whole home system. And is that automated? Yes. Yes. Okay. So as soon as the new leads created that, that message gets automated sent out. And then the majority of our customers will text and respond and say, let's say 50% of our customers will text and respond and either say now or in a week or Monday, or who is this? I don't even know what you're talking about. Right. And then we'll schedule the calls from there. Then we have another flex 20, 25% that don't respond to the text. And then they just go into the call cycle. We're just calling and texting them, trying to get some form of life from them. So on your followup.
Speaker 2Are you texting them over and over until they respond to get them on a call? Or do you text
Speaker 1them once and then you start calling? Then we start calling. Yep. So we text them and we'll give them about an hour to respond to that first text. And then they get called and texted after
Speaker 2that. And the call is manual. Yes. Okay. You're getting a trigger and GHL or whatever. Then a
Speaker 1human's picking up the phone. Yes. Correct. So we're doing that. And then, so we had about 70% connection rate. So 30% of leads, we never got a response from text or phone text or phone. They, they were, or they just, Stopped it out immediately. Right. Of that 70% we closed 20% of the full 90 of them. So I think that would be, you know, it was 18 leads out of what would that be? 60. So, you know, it was a good percent, about 30% of the leads that we actually closed that we got on the phone with.
Speaker 2Let's say hypothetically between August 15th and 31st, you got a hundred leads of those you connected with 70. And then what was the next step down the funnel there? So the best way
Speaker 1would be we got 90 leads. We connected with 60 of them and then we closed 20 of them. Wow. Okay. So
Speaker 2you close. Yeah. I mean 20, a quarter of all you, all of your leads, which is what you said a few minutes ago. Yep. At an average ticket of 3,000, 3,300. Okay. Yeah. Cause we, we sell a lot of,
Speaker 1a lot of people are eager to buy the upsell when they see how valuable the main is. Yeah. They're like, wow, I was, I was really about to pay five grand for this. So now that it's 2,700 sure. I'll buy the $500 upsell thing. No problem. So what were your August sales then? So in August we did 81,000 in revenue. Holy crap. Yep. Your second full month. Yes. Or your third month. 81,000. And the crazier part is as we're sitting here, you know, and we're September is just begun. We have $54,000 of installs on the calendar for September. That's wild. And that's all from
Speaker 2August ad spend. Yeah. Yeah. Right. So of the, 80 81,000, how much was profit? So 81 installs was generated by
Speaker 1about 25 jobs roughly. And 25 jobs are net margin. It went up because we did better with the CAC, but it went down because now I pay Jack for every closed job. Sure. So Jack gets $200 per closed job, not a percentage of sales. Cause I don't want him selling product that people don't need. Right. So he gets $200 flat plus his base salary. So the gross profit per job kind of, ended up back around like seven 50, 800. Yeah. Beautiful. Yep. So, so 27 jobs in grand. Yeah.
Speaker 2Give or take something like that, man. Yep. Your third, your second full month. But again,
Speaker 1we didn't take any profit. I haven't taken a dime out growing it. Like you want to build, and we're buying so much inventory because one of the biggest bottlenecks that we really faced in, in the third week of July and in the second week of August. And that 81 grand that we did was with zero installs in the second week of August, because we didn't have product. We were waiting for inventory to come in. And that has been a recurring issue for us. And so I finally was just like, I'm done with that. I'm done with that game. I want to have way more than I'm going to need of every system that we're going to sell so that it's too expensive. It's way too expensive to not be able to install it. Where do you store it all? I have a 10 by 20 storage unit. And it's 50 a month, 200 a month. Oh, 1 25. Yep. Jeez. And it is a remote access. So my plumbers, I have a smart lock on it. Every plumber has their own access code and then they all have the gate code. And, uh, and my delivery driver has his own access code. We do all of our freight LTL and it's, we had the same driver. And do you ever go there or touch it? I go there twice a month. Yeah. And I just, and honestly, the only time I go there is to break down deliveries because they come in pallets and they're shrink wrapped and all that. So I go spend a couple hours sweating out in the sun, breaking everything down, getting it organized, clearing out all the trash that the plumbers are leaving behind. Um, but other than that, there's really
Speaker 2not much. What, uh, where do you get your hardware from?
Speaker 1So we have two different distributors that we buy from one is actually here. And then one is, uh, based in Indianapolis, but they're just like OEMs. They're just manufacturers of systems. I mean, the, really the important thing to the end customer is the valve, which there are two main brands of valve that we install. One is Hanks craft and then one is clack. And then the actual, um, material or the media is what we call it inside of the tanks, which that's the resin and the carbon and the gravel. And cause that's really it. Otherwise it's just a fiberglass holding tank and you just screw a valve on top and you fill it up with media. So what matters is where did the media come from and what brand is, is the valve. It doesn't really matter who assembled the tank. We could buy the product from anywhere. Commodity. Yeah.
Speaker 2So that's why my reverse osmosis tank tastes like resin the first time. Yes. I needed to flush it out
Speaker 1more. Yes, absolutely. And it, it definitely had most of the most RO systems are either five or seven stage. And one of them is resin softener ones. There's normally two carbon blocks. And then for taste, you definitely have one that does something called re mineralizing, which means this
Speaker 2is a little bit of a water snob. Like I can taste it. So it's delicious. Yes. And a little bit nerdy
Speaker 1science for you on it. Let's say the average, what we call TDS or total dissolvable solids. These are, are the micro micro micro particles in the water, right? There are some that are good, like electrolytes, right? Those could be deemed TDS, calcium, magnesium, things like that. And then there are some that are bad like PFAS or forever chemicals and that micro micro plastics, that type of stuff. So that's, unfortunately that's it's indiscriminate in an RO filter. The RO just says, Hey, if the TDS is a hundred, it means there's a hundred mini particles floating around in this unit of water. I'm going to try to get that to zero. What ends up happening then is your water tastes flat. It tastes off. It tastes wrong because it doesn't have the stuff you're used to, which is trace sodium, calcium, magnesium, these minerals that you, you are used to having in your water. So the good RO systems will then re mineralize the water. And the last stage before it comes out, your faucet is it actually passes back through a membrane that adds the minerals back in, but only the ones that you want after the ones that you don't have already been removed. Gotcha. Okay.
Speaker 2When it comes to plumbers, how does someone find a good plumber?
Speaker 1This is a, you know, my experience has been more straightforward than I think most people would. What I did, I went to indeed, I made a sponsored job post. I said, Hey, I'm looking for a plumber. I'm looking to pay between 75 and 125 an hour. And I need you to be licensed independently, have all your own supplies and be ready and willing to take at least two jobs a week. And this is what you're going to do. You are only doing whole home softener, carbon filtration and point of use drinking water. That's it. And I ran that as an sponsored indeed post $90 a day budget for four days. I got four, four qualified leads. I hired three of them and I was done.
Speaker 2So not a lot of leads, but good leads. Yes. What types of people are these? Are they business owners? Are they employees? They're all private business owners. They all
Speaker 1own Chuck and a truck. Yes. All of them. They're all, you know, website Kevin's plumbing company. And maybe they have a website. Maybe they have a van with a cool decal on it. And, you know, but they just can't stay busy enough. Yeah. And we, I personally am not a fan of hiring people that are in a place of struggle. And I know that could sound insensitive, but it's just the reality. I don't want to hire the plumber who is like, Hey man, I'm like about to get evicted. I can't get any work on, but I don't, you also can't hire a plumber that has busy seven days
Speaker 2a week, thousand five-star reviews. Yeah. It's never going to have a bunch of wrapped trucks,
Speaker 1a bunch of crews. No, I need a guy who's really good. And I need a guy who's really, really good. And what he does and he's busy 30 hours a week, but he'd love to be busy 40, 50 hours a week. And the way that I view it, I mean, we we're we'll do in September, we better do 150,000 plus, which will be call it 47 installs. That's I think the number we've set out for 47 installs. That's two and a half plumbers. I mean, that's not even full capacity for three plumbers. And when you do the math on what they're going to make, then let's say it's three plumbers. They do 16 jobs each. And they make an average of 500 bucks a job. I mean, that's a really good set up for them as well. They're going to make an extra $8,000 a month. month. Yeah. No, nothing impeding on their schedule. You know, they don't have to do anything outside of a comfort zone. They don't have to buy new equipment. They don't have to stock inventory. They don't have to run ads, sell jobs, do estimates, none of it. I mean, if I'm a plumber, I'm going to do this exclusively. Right. And, and many of our guys come in and they start to trend towards that. Yeah. We, the first guy that we hired, he was like, yeah, you know, I can maybe take two or three a week. He does like nine a week for us now. Cause it's better
Speaker 2than fixing a toilet. Yes. Like he can't get better work. I mean, he makes on average a hundred
Speaker 1dollars an hour working for us and I keep his schedule as full as he'll let me. Yeah. How many competitors do you have there? It doesn't seem like really any at this point. I know we do have them. Google, you have them. Yeah. Yeah. It's strange because I think I almost don't consider like an eco water or a Culligan or a Connecticut or leaf. I don't even really consider them to be a competitor because he just runs such a different business. It's opt-in, we need to come to your house, elaborate sales process. Like it's all that. Right. And they sell to a very specific high income demographic or like eco water, for example, they do, I would guess 80% of their revenue is from Costco. Right. So they're a competitor of ours, but they're just sitting in Costco and people just, it's just lay downs. Yeah. And, and that's the nature of their business. So the people that do what we do in my area, there's probably, probably five legitimate businesses that aren't a competitor. Yeah. And, and that's the nature of their business. So the people that do chuck in a truck and that aren't a Culligan, Connecticut billion dollar company. And of those five, are they on Facebook ads? Some of them are, I honestly am not the type to really go sleuth around. You don't need to. Yeah. If my, if my cost per acquisition went way up, then maybe I would start looking and say, Hey, are these guys running my same ads or what's going on? Yeah. But in the, in the meantime, I'm just honestly trying to get ahead on reputation. Cause that's the biggest thing is everyone in my area, they're all pretty similar newness. Maybe they were started in 25, but nobody that's selling at $2,700 price point has been around for five years. Yeah. So it's completely up for grabs in terms of who becomes the gold standard at our price point. Yeah. And that's what our sole focus has been. How quickly can we get to 500 reviews?
Speaker 2I almost think this could do even better in, uh, in a market where everyone has hard water, right? Because like I had a name for it. I can't remember what it is, but like if, if I wanted to start an amazing five-star barbershop, I would start with a five-star barbershop. I would start I would go to Austin where all the best barbecue restaurants are. If I wanted to start a dessert shop, I would go to Provo, Utah where all the dessert shops are. Cause that's, that's the culture that's understood. People want to try the new thing and they're already educated, right? Back to education. Like I feel like the ads could do even better there, but it's encouraging to me that you in you're in what might be a harder market and crushing it. Right? So this is,
Speaker 1this really could be done in any market. I 100% agree. I think the only thing that you have to do is, um, it's, it's labor availability and it's the number of, you know, people that are, are advertising, right? When, when I do a competitor analysis, I don't look at how many companies sell the service that I sell. I look at how many people are actively legitimately advertising. Cause those are my only competitors. If you're not advertising, you're not my competitor. Yeah. You will get your market share and mine will be totally different. Nobody that was going to buy from me is going to buy from you instead. And, and nobody that was going to buy from you is going to buy from me instead. You know, the, the referral based legacy companies, they will have their market share forever and they'll slowly bleed it out, you know, from a pinprick, but they'll be fine. I'm looking at the new school companies that are doing something similar to what I am at a similar price point with a similar customer experience. Yeah. What are you seeing in the
Speaker 2industry of how people are acquiring customers that are not called Facebook ads? Like what are some other good acquisition channels for this industry? I think Google ads will be phenomenal.
Speaker 1I think it's really just all about not fighting for the densest keywords because that is where your big billion dollar companies, that's where they pump all their money. You know, if you look up water filtration, Raleigh, like it's going to be Coligan, Connecticut leaf, eco water. It's going to be all the big boys. Right. But discount water softener. Right. I think there are back door keywords that are still 100% up for make hard water soft. Yes. Yes. Like
Speaker 2I had a guy that does forestry mulching and his competitors were bidding on forestry mulching, but what consumers knows that phrase, they want their kudzu removed. Yep. Right. Cause in that part of Ohio, everyone had kudzu. So he started bidding on kudzu removal. You need forestry mulching for that. He crushed. Yeah. So a lot of, a lot of it is like, what would people actually search for? Not what is my industry called? Yeah.
Speaker 1I mean, I think it's a lot of different things to think of or, you know, drinking water system, you know, that could be one that's bid up, but there's a lot of different backdoor angles with AdWords. So I think that's definitely one. I think a huge one is the referral game. You know, we, it's interesting, but because we are a discount service line, we sell to a lot of Asian and Indian customers. Right. And that's just, it just is there. They're looking for a good discount rate. Right. I think we can all agree on that. And they're also huge. Huge referral communities. I mean, I have had a singular customer come in and they, they, they might haggle me for a good price, but when we do it and we nail it for them and we gave them a great price that they couldn't get anywhere, they are itching to tell everyone on their street, the guy. Yes, absolutely. And oftentimes they all live in the same neighborhood. We did three on the same street. Yeah. In, in July, we did three on the same street, two in one day, one the day after. And it was literally boom, boom, boom. We got, I got a Facebook ad from one of them haggled me. We went back and forth for forever. I finally gave him a great deal on it. And he was like, all right, both of my neighbors want the same thing. And I was like, all right, great. Now you made it worth my while. Um, but referrals, I think are huge. We have also started, and this is something I'm toying with the idea of, um, we have started to do like little, uh, freebie packages when we do an install. I think it's a high enough ticket to justify it, but I'm looking at maybe a nice, like insulated cup or mug that has our logo on it. When you get your drinking water, when you get, when you make your beverage and you think of us, because the other thing people forget is while this feels like a one-time service, it's really not. It's an every five to 10 year service, which young people like myself, they think 10 years from now, that's basically a one-time service. It's really not. Yeah. You do good work and you stay in business. You will get a lot of customers. And once you hit year 11, you will now have an endless supply of reinstalls based on the work you did over the first 10 years. So you just need to swap it out every 10 years. Yeah. A lot of the systems just, they, they just don't last forever. And it really depends on how hard the water is. It really depends on how much wear and tear on the system it makes, but they don't last forever. The valves go, the media just gets used up. Right. And, and over time they need to be swapped. Can you not just swap the filter on these? So it's, it's not a filter in the traditional sense. There are filters that need to be swapped, right? It's the tank itself. It's filled with resin and carbon and the water flows down through it and then back up and out of the tank. Eventually every, every gallon of water that goes through the tank uses up 0.001% of the carbon. And so over 10 years, you will use up 90% of the carbon. And now your chlorine levels are going to start to rise and they need more carbon put in the tank. So either that's a tank refill or in a lot of cases, we're so we have such a good price. You
Speaker 2know, point that they'll just get a whole new system because if you just do a carbon refill, your valve could be super old and that could be close to a mechanical failure. So why wouldn't we just do a refill or do it, do a whole tank swap for you? I know what you're doing is working brilliantly. I would be so curious to see what would happen if you AB tested ads where one of the ad advertise like a free in-home test and you actually sent someone in there to do a test just because that the visual of like your water sucks. Look at this little strip is
Speaker 1so powerful and I absolutely you could offset that cost more than that cost with a higher price as well. We, we, we 100% could. I think for me it just becomes an operational weight. Sure. It's like how many guys do I want to manage? How many people do I have to train and babysit and fire and you know, things like that. A lever you need to pull now, but eventually all markets get more saturated. Absolutely. And in time when once again, it's part of the reason why I love our, our advertising strategy. Over half of our customers already had that experience. Yeah. Connecticut already came in their home, showed them the test. You didn't have to pay them. And I didn't have to pay anyone, you know, and they already know they have a water test and they're like, look, I saw how bad it is. I need this fixed, but I can't afford it from them. Do you have any data on specifically what percentage of your previous paid paying customers had someone in their home? I don't have the exact number, but I could have very confidently say it is over, over 35%. Wow. That's wild. Yeah. Just anecdotally what based on what people are saying. Just based on the pure number of people that send us a water test, which you don't just have a water test laying around, right? That means somebody came and did a water test for you. And we always say on the call, do you have a water test? Did you get one done? And then if they say yes, we say, great, send that over. And then now we're on even terms with eco water or whatever it is, because we have the same information in front of them. They already had the shop. They, we can, even if we don't see their pricing, but we know exactly what eco water knows. So there's no knowledge gap. and now the in-home visit has no value. They already had the shock value, which we can piggyback off of, and we have the test results. So there you go. Now we're on even terms with whoever already quoted them and our price is cheaper. Or if they say, no, we didn't have a water test done. Can you come and do a water test? If it's a private well, we will do a water test or send them to someone else to do a water test, like a third party, the county, whatever, because wells are a little bit more intricate and you don't want to prescribe the wrong well system. But the majority of our customers are city water systems, in which case I can say, you know what? You might've been told by someone that they need to come out and test your water. That's really just kind of a sales gimmick. I'm not a fan of that personally. I'd rather save you your Saturday afternoon and save you the cost of a sales rep. Just pass that savings on to you. I can pull up the EWG water report, public government database, and I can tell you exactly what's in your tap from the second that it left the water filter, the water. Treatment center.
Speaker 2Yeah.
Speaker 1And people love that. They eat that up.
Speaker 2So it's a great sales tool, but can you do anything with previous test results? Like what does it change about your operations? Like, is it, are you putting a different system in there based on what it's just system
Speaker 1prescription?
Speaker 2Okay.
Speaker 1It's just me being able to say with absolute certainty, I see the numbers in front of me and I know with 100% certainty, this system will solve your problem versus if there's no test, I can say based on publicly available data, it's just not as strong. It's just not quite as strong. And if you already got. The test, why would I not sell on the authority that that test builds in?
Speaker 2Yeah. What have you done wrong in this business that you could have done differently?
Speaker 1I wish I had more inventory. You know, I, that's been a bottleneck for us endlessly and it's, it's a good growing pain, but it's still a growing pain. That's definitely the first one. The second one, I would say I probably, I probably would have focused a little bit more on the backend and the recurring side of the business up to this point. We haven't sold a single backend client. And. This one. I'm in filter swaps annually, salt services, a, if you get a UV disinfection, which is like a light bulb, that bulb needs to be changed annually. Pre-sediment filters need to be changed every six months. There are small, low ticket things. And this one I'm a, I'm a, in a bit of a rock and a hard place with, because I think it's part of what causes us to sell at such a high clip. Is that we advertise not just as the cheapest front end system or one of them, but also the lowest cost to maintain, because we are not going to nickel and dime you, you can change your own filters. We're not going to pretend that you can't, right. You can do your own salt. We're not going to pretend that you can't. Whereas so many custom companies will also sell, Hey, it's $5,000, but it's also $500 a year for us to come out and do all your filter changes and flush the system, even though the system flushes itself. So, you know, and that was a big selling point for us is yeah. We're cheaper on the front end, but we also have a system that you can totally self maintain. You don't need me involved at all. And I'm not going to charge you anything unless you call me and you tell me you want to add something on, or you no longer want to handle a service. Now we're at a point where we've sold a hundred jobs, you know, or closing in on a hundred jobs sold and we don't have a single penny of recurring where maybe if I want to push filters a little bit harder, we probably could have sold on just upfront price and then matched competitor recurring pricing and built a little bit more value in our book. But that's really probably the only other thing.
Speaker 2What, uh, have you ever had a, an install that just went completely off the rails?
Speaker 1I wouldn't say completely off the rails. We've had installs that it's taken us four tries to do it. We just had one where we went out, we planned the install. We went to do everything and then the outlet wasn't working properly, so we couldn't do it and the customer was like, well, can you just leave it set up? And I'll just plug it in when I get the outlet fixed. No, we can't do that. So we had you. Pull out a lot of the components, let them get an electrician in, come back. We come back. Oh, it's still not working properly. Now it's shorting when we're plugging it in because they hired some cheap handyman electrician, pull our stuff again, they get a real licensed electrician. We come back a third time. So we've had some jobs like that that just like it drawn out for weeks and they're just like painful for the plumber and for me hurt margin, you know, things like that. But we really haven't had anything go completely sideways and as part of the reason why I love the model so much and it's because these plumbers, it's not that they just really care about me and really care about my reputation. It's not my reputation, it's their reputation. It's their license, it's their insurance and you know, they understand that a bad install will reflect much more heavily on them than it will on me. Yeah, I'll get a one star review from it, but they're going to get the insurance claim. They're going to get the infraction against their license like these guys take this work very seriously. Very, very seriously.
Speaker 2How can people avoid the most headache when starting this business or accelerate their success?
Speaker 1I think accelerating your success. If you're going to sell jobs and you're not going to have inventory, take a deposit. It'll stop people from walking if your inventory gets delayed.
Speaker 2Okay. Take deposits?
Speaker 1I do not because I have inventory so I just install right away. Okay. Like if you said yes today, I'd say, can we come tomorrow? You know, that's how we operate. Yeah. Yeah. So you're not going to have inventory on hand and you're going to get a customer to say yes, sign a service agreement and then you're going to order inventory, wait for it to ship in all that, which a lot of people want to do if they want to cut costs in the beginning. Take a deposit. It stops the customer from just walking because they get bored of waiting or because they're, they got a better offer from someone else. Right? Yeah. That's the first thing. And then the second thing I would say is do not stress at all about any of your sales or marketing. You're not going to be able to do a lot of marketing data until you're at least a month in. We actually looked at the numbers of that closing of those 18 jobs that we closed. Only one of the 18 jobs from that 90 leads we talked about earlier, only one of them was closed on the day that they opt in, opted in on their first call. Yeah. One. That doesn't normally happen. 17 of them were closed at least one additional touch points. Okay. And 10 of the 18 were closed. 10 of them were closed outside of three days after their first touch point.
Speaker 2Okay. So keep following up. Don't be depressed if they don't pay on the first day because most people won't by nature of how expensive this is.
Speaker 1Yes. And even like getting the first touch point actually with them, like understand you might have to contact a lead eight times before you even get the conversation and then the timer starts then. Yeah. So it still could be two weeks until they pay after that. Our longest lead to close cycle so far was 49 days. Wow. And there was probably two dozen touch points in there.
Speaker 2Most people are going to quit on them by then.
Speaker 1Most people are 100% quitting on them by then. And when you do the math, quitting on them makes no sense. Even with that customer that we waited 50 days and had 20 plus touch points, the average touch point costs you 60 seconds. A non answered phone call, a non answered text costs you 60 seconds. Yeah. So 20 minutes of time. Plus let's call it three real lengthy days. Okay. Yeah. So 20 real lengthy conversations of 20 minutes. It's an hour and a half of your life to close that one customer and we made a thousand dollars
Speaker 3on it.
Speaker 1Yeah. Like it still makes a lot of sense. People just get very discouraged. And it's almost why I don't like saying I one call closed my second lead on $40 of ads. It's not realistic at all. Yeah. And we have one call closed like five customers since then. Yeah. We have two, three, 10, 20 call closed. Five times as many.
Speaker 2Yeah. Before I asked you, before I ask you where we can find you, is there anything I should have asked you about what I didn't? Anything interesting about this industry?
Speaker 1I think the most interesting thing is the fact that the model has nothing to do with water filtration. That's I think the thing I get personally most excited about. We are in a time period right now where there is an ever diminishing amount of skilled laborers and people that are really, really talented at. What they do. I mean, way more people are retiring than there are people that are starting. And what's, what's, what's happening is effectively between that and the giant PE entrance into this space. You have so many service types that have a market rate that is just completely made up by whoever the five people that offer the service are like the fact that the going rate for this service was $8,000 has nothing to do with water filtration. Yeah. I guarantee you, if you spent a weekend, you could find six to 10 more services. You know, if you want in the electrical, like an MPU, a main panel upgrade, you know, that I guarantee you that that is a $10,000 price point. There's no reason that that costs $10,000 and no one's thinking about it. No. And there's just a shortage of good electricians and people that can bring leads in and in, you know, make it make sense for a customer. I think there's so many of these opportunities that exist in the trade. In HVAC, in electrical, in plumbing. And it's not a, this isn't a water filtration business model. Water filtration is the product and the service, but it's not the water filtration that made it special. It's that gap that exists in so many of these high ticket, very skilled trades.
Speaker 2Yeah. Well, Jeff Bezos used to say your margin is my opportunity. That's kind of what you're saying. Yeah. And I always say on this podcast, there's over a thousand home service industries, but you're saying like the industry is the product within the industry. So if any given industry like plumbing has, let's be conservative and say five, like higher ticket offerings within that, water heater install. I know a guy that only does water heater installs. He's not a plumber. He subs it out to plumbers. Then there's 5,000, 10,000, 20,000 sub-industries of just offering one high-ticket service within a bigger industry. And how many entrepreneurs out there even have those on their radar to compete with you? They're vibe-coding apps, right? And so you're saying like, cool, that's cool. I vibe-code apps too. But the more people that are doing that, the more opportunity there is for stuff like this.
Speaker 1Yes. And it will always be overlooked because people, they don't understand it. They think that it is harder or more complicated than it really is. And I think they think that they don't understand how high margin some of this blue-collar stuff is. They think all the margin is in tech. They think all the margin is in these fancy new school businesses, SaaS, that has 100% margin. Yes, you're not going to do water heaters at 100% margin. But that, $8,000 water heater is 70% margin. You can come in and not really even be very good at sales or marketing. Just put your price in the ad. And just wedge the market on price and deliver a good service with a high quality, especially if you can do a licensed installer. I mean, and that's a business and it's really not. It's a website and a chat GPT ad and a decent sales script. And then just enough product knowledge to hold a conversation with an installer.
Speaker 2For me personally, one of the biggest takeaways from this is just putting the price in the ad for a high ticket home service and finding the people that are already educated. I'm sitting here wondering, one of the first things I do after you leave my house is I'm going to log into my meta ads manager and I'm going to go to my backyard fun house Facebook ads where we sell sport courts and pools. And I'm going to make an ad that just says it'll have a picture of a sport court painted with pickleball and basketball. And it's going to say $29,000 sport court. And I'm only going to find those random people that know that that's actually a $40,000 sport court. I'm going to call that guy. Like why wouldn't the same principle apply? Fewer people that need a sport court, of course, but there's still people. Meta can find them.
Speaker 1Absolutely. I mean, that is exactly, I think the thing that was so mind boggling to me, because I think a lot of people know that home services advertising is either founder focused or offer focused. That's what I've found works, right? It's either about you and the brand and your locality and all of that, or it's about the offer. Buy one, get one free, you know, great price, et cetera. Why try to force a good offer in an ultra competitive niche? Just go find a niche that is lacking people with a great offer. And then that is the sales and marketing.
Speaker 2The whole is the offer. Yeah. That's brilliant. Parker, this has been amazing. Where can people
Speaker 1find you and or your businesses? Yeah. Parker J. Smith on everything. So that's Parker J. A. Y. Smith, Instagram, LinkedIn, TikTok, Twitter, X, whatever. And then at Parker home services on YouTube and upload twice a week on YouTube posts every day on short form and everything else. And I help people start home service businesses, grow existing ones. And I love them. I've been constantly building my own for three years. I plan to keep doing it for another decade. So
Speaker 2beautiful. Thank you, Parker. Absolutely. Thanks for having me. Hey guys, if you're still listening to this, it's probably because you haven't had a chance to take your AirPods out. You're still mowing the lawn. You're still driving. You're still doing your job. You're still doing your job. You're still driving. What have you, if you're still here with me, I would really, really love and appreciate a five-star review on Spotify, Apple, or wherever you get your podcast. It would mean a lot. If you want to go the extra mile, share this episode with a friend that might have an interest in starting a business. It would mean a ton. Hope you have the best day of your life today.
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