[00:00:00.000] - Chris
Wow. How many of you have listened to the Head, Heart, and Boots podcast? I can't tell you that reaction, how much that means to us. Welcome back to the Head, Heart, and Boots podcast. I'm Chris.
[00:00:11.230] - Brandon
And I'm Brandon.
[00:00:12.240] - Brandon
Join us as we wrestle with what it takes to transform ourselves and the businesses we lead. This new camera angle makes my arms look smaller than yours.
[00:00:20.860] - Chris
I'm noticing that, and I really appreciate it. I thought you did that on purpose.
[00:00:24.030] - Brandon
No, I don't. I didn't, and I am not happy with it.
[00:00:28.670] - Brandon
Dude, how are you? I stepped away from the mic there a bit.
[00:00:34.410] - Chris
Bro, I got to say my wife came home Sunday evening, and that was our second three-week stent apart this year.
[00:00:42.890] - Brandon
She's been globe-trotting.
[00:00:44.190] - Chris
Yeah, I had that solo backpacking trip in Cambodia, and then she was on a medical mission. She's an operating nurse for uninitiated.
[00:00:52.200] - Brandon
That was with your mom?
[00:00:53.260] - Chris
Yeah, my mom's an operating nurse, too. They were in Guatemala. Basically, they do like 100 surgeries in a week, cleft palate surgeries and hysterectomies. That's crazy. Primarily. Primarily. Just helping out the local population. Yeah.
[00:01:07.570] - Brandon
You know, Janna's mom did that up until maybe a year ago. Really? For 20 years. Yeah, same with my mom. Very similar. It was like club feet, cleft palate, and they would just do a gazillion of these things over a few weeks.
[00:01:23.190] - Chris
And these locals, they wait the whole year. Oh, yeah. To try to get on a waiting list. And then they spend the first two days, I think of it basically just triaging and screening people, just finding who's able to actually go under the surgery. Then they just, five days of just straight up. It's crazy. Then she stayed another week with my sister and my mom down there. Right on. Yeah.
[00:01:47.300] - Brandon
I don't have the hoodlums and stuff. It was beautiful, actually.
[00:01:54.210] - Chris
I had such an incredible time with our kids while I was gone. I was just so love-sick for my wife. But no, I had just ample time with my boys. The evenings, I'd make dinner every night, pretty much, and then we'd hang out most evenings. Well, my 17-year-old, it was hit or miss, but he was fine. Who can blame him? Yeah, who can blame him? Yeah, but the boys and I each got I took each of them out separately, and we shot guns. That was super fun. My daughter and I had quite a lot of bonding time. Even though I missed my wife, it just opened up some more white space on the calendar, which was great.
[00:02:27.460] - Brandon
Good for you, man. Right on. Well, I'm glad she's home, You were starting to get it.
[00:02:31.590] - Chris
I think so. You were trying to make me crazy. Yeah, and my wife and I are going to this music festival with Wayne and Hunter. Oh, yeah. It turns out Sophia. Yeah, Sophia is going to be there. Yeah, and her boyfriend. But yeah, Under the Big Sky in Montana.
[00:02:47.060] - Brandon
Yeah, which it's crazy, too. Who's all going to be? It's like country to...
[00:02:50.610] - Chris
Well, it's like Mumford & Sons. It's like new country.
[00:02:53.360] - Brandon
Yeah, it's interesting. It's an interesting mix.
[00:02:55.550] - Chris
It's a new country, but Winona Judd is on the final day. Oh, my gosh. She's like, what? 90 years old or something?
[00:03:01.910] - Brandon
Yeah.
[00:03:03.860] - Brandon
Mumford, are they closing? Are they the main?
[00:03:06.700] - Chris
They're Saturday. They're the headliner for Saturday.
[00:03:08.760] - Brandon
Oh, for Saturday.
[00:03:09.350] - Brandon
Cool.
[00:03:09.620] - Chris
But Tyler Childers. It's a mix. Yeah, it's going to be a good show. Then I recently, I'm getting hooked on festivals, Wayne and Hunter, the festival.
[00:03:19.840] - Brandon
Oh, yeah. Until they start having kids.
[00:03:22.190] - Chris
Until that. That'll change. But there's a reggae festival in Central Oregon. I know.
[00:03:27.520] - Brandon
I saw that. You shared that with me. Okay, that one's That was really tempting. Did you see the camping fees and stuff?
[00:03:32.280] - Chris
It was 150 bucks for car camping.
[00:03:34.130] - Brandon
Yeah, for car camping.
[00:03:35.230] - Chris
I think we're going to go for a rooftop tent.
[00:03:37.740] - Brandon
Yeah. I have to come up with a new plan. I don't have the roof fee anymore, but...
[00:03:42.320] - Chris
I'm sure you can figure it out.
[00:03:43.270] - Brandon
Yeah, we got a good canopy that we can... The tickets aren't cheap. It was pretty... It's a spendy little event for three days.
[00:03:51.150] - Chris
I dropped a hell amount of money on that Montana thing, bro.
[00:03:55.240] - Brandon
Okay, so here's the deal. That thing being in... It's in central. It's in Bend, right?
[00:03:59.420] - Chris
Redmond. Oh, it's in Red Man.
[00:04:00.500] - Brandon
Deschutes County Fairground. Oh, it's Dachuts County. Okay.
[00:04:02.750] - Chris
That part makes it a lot cheaper, especially.
[00:04:04.670] - Brandon
It does. It's helpful, yeah. Because you know the event center that they have, the outdoor pavilion in Bend?
[00:04:10.690] - Chris
Yeah, in Bend, right on the Dachuts?
[00:04:12.910] - Brandon
Right on the... Yeah. Do you see how people will pause their paddleboarding and hang out and watch? It's incredible. It's rad. Okay.
[00:04:20.810] - Chris
Dude, the flights to Whitefish, Montana. Yeah. Brother.
[00:04:25.260] - Brandon
On top of the event.
[00:04:26.330] - Chris
Oh, brother.
[00:04:27.110] - Brandon
We didn't commit to that one.
[00:04:29.160] - Chris
You only lived That was my mantra. All right, anyway. Good for you.
[00:04:34.100] - Brandon
Okay, let's get in. We do have a show. We have a show, damn it. You know what? Here's the reality, right? We're on the back of coming out of basically the annual conference circuit, which Chris earned his stripes this year.
[00:04:48.330] - Chris
Well, we're halfway through the annual conference.
[00:04:51.040] - Brandon
Yeah, I guess we've got some later season stuff coming, too. But there's like 60 days of madness, it feels like, that you just got on the other side of. Just commonly, we were hearing both from main stage and breakouts from participants and members, there's some frustration, again, this year in regard to Claim volume, claim size. There's some friction in a lot of people's businesses this year that is being talked about quite a bit. As we're just thinking through that and wrestling with some of that, I thought it would be important for us to just talk very openly about some things that we should be considering right now, maybe some different frameworks in terms of mindset, the way that we should be considering some of the challenges that we're having in our business due to Claim volume or the potential negative impact of that. I wanted to go back and forth with you on just some several different ideas, things that we've implemented, things that we've helped clients implement, and things that we're considering in our own business because look, the economy affects us all to some extent. Sure. Obviously, part of our draw to our industry is that it's fairly resistant movement in the economy, but we're certainly not economy proof.
[00:06:02.970] - Brandon
And so even we are making some of these considerations, right?
[00:06:06.460] - Chris
Well, one of the first reactions I have to this whole conversation about reduction in clean volume is, I think part of what the industry is reeling from is that we just always had that gravy train at our front door. A lot of the restores listening to this, and certainly we benefited from this coming up in the industry, is you had things like the State Farm PSP program. That fed our team early days for a while. It was the basis. Yeah, it was the thing that... So a lot of people launched into their restoration company on the backs of these various programs and the different iterations of them over the last 10 years. So many people listening to this are like, Yeah, that's how I got started. And whether or not somebody is still doing TPAs or is as reliant on insurance claim volume, well, I'm sure that runs the gamut. It certainly runs the gamut in our book of clients and the people that we work with and observe. But I think the call to restoration companies today, and really this is going to be the story for the next 10 years, is how do we professionalize our businesses and diversify our revenue so we don't find ourselves in this situation again?
[00:07:17.350] - Chris
Over the last four or five weeks, I've been meeting with restorers all over the country and in Canada. Canada is, I think, a bit of a canary in the coal mine for us. And in fact, even Canadians will refer it this way as they feel like they're a few years ahead of where we're at in terms of the carrier dominance in the ecosystem. I think when I say that, probably every restore in the United States It's like, Oh, that's a good word for it. Again, this is not an anti-carrier, anti-TPA message at all. The reality has always been and will continue to be, that like State Farm used to say, to all of us State Farm agents, our philosophy when it comes to claims handling is we're going to pay every cent we owe, every dime we owe, and not a penny more. But the reality is there's humans adjudicating that process. There's always going to be bias, and there's always going to be at least a baseline temptation to want to minimize severity. We're just going to continue to confront that with carriers all over the country, and this undoubtedly isn't exclusive to the US either.
[00:08:29.550] - Chris
But at At some point, we've got to be really intentional and strategic about how we build out the rest of our businesses so that we're not as dependent on that. Of course, people that follow the show, they've heard this ad nauseam, Commercial is the answer, period. Commercial is the way to do that. It doesn't mean It's the only source of business. It doesn't mean residential is bad, but it just means, and can we also take more control and more initiative in terms of developing our residential referral partner relationships? Of course. We aren't solely dependent on insurance carrier assignments and program work, we can go develop those relationships. Commercial business, of course, is one of the roadmaps.
[00:09:06.980] - Brandon
I think you're right. It was interesting because as we were chatting leading up to this conversation, there's a million different ways that we can go. We can get super tactical, we can address mindset, and I think that there's an opportunity to do a little both. But I think before we dive into some of the nuts and bolts suggestions or some things to just be considering as ways to solve this problem, I just think it's important to highlight something here, and that is is, I think what happens is when we have early success or we have versions of success with what we've considered up to this date, let's say, tried and true systems, ways of doing things. I think part of me hears a little bit of that's just the way we've always done it a little bit with this, and I think that's part of the challenge that we have. This is that time and place where I think it becomes very obvious to us as owners and business leaders that we may have been spending too much time in the weeds and not really considering what our true role is as the owner. What I mean by that is, are we putting ourselves in a position by the way that we're designing our team, by the way that we're prioritizing our time spend, that we really are in that CEO seat, meaning we're looking out on the future and we're beginning to try to find ways to mitigate challenges before they hit us, mitigate the effects of slow or changes in the industry or changes in politics that affect the industry.
[00:10:35.140] - Brandon
I think this is just one of those moments, and this isn't in an attempt to pile on. It's just a good reminder for us where all of a sudden things are challenging and we're reminded that we probably should have been taking some of these things into consideration before they were actually a problem that we were facing. For many of our listeners, this is not your first rodeo. You've been around the planet several times. This is not the first time that you felt the effects of consolidation or the effects of slow and inclaimed volume or any of these things. And yet we continue to repeat these patterns where we got through the challenge time, and then we go back to business as usual, not too long after, when that challenge subsides for a little while. And I think that this is just one of those opportunities, especially on back to back years of slowness in the first six months. I think this is just a good reminder for us as leaders and owners to be keyed in on anything outside of thinking about the future for your company, whether that be vision casting, mitigating challenges, taking advantage of opportunities.
[00:11:46.610] - Brandon
You got to remember that's your job first.
[00:11:48.890] - Chris
Yeah. Well, it seems like, too, one behavior of great leaders is trying to look at all angles of what's happening and what are our options. It's like, I think, when we're faced with a downturn in revenue, it behooves us, like I open with the sales piece, but it behooves us to look at both, well, how can we make more money? How can we sell our way out of this? Is always, I think, an important part of the equation. Then how can we reduce our costs and really looking at both sides of that. And of course, then Wayne, too. All right, among our costs, what are the costs that are strategic in spend and are contributing to revenue growth? And then what stuff is more low-hanging fruit that we could temporarily reduce or eliminate, knowing that we can bring back... It's like eliminating the comfort food from your diet when you're trying to cut weight, right? Yeah. It's like...
[00:12:39.500] - Brandon
You can come back anytime.
[00:12:40.830] - Chris
Yeah, it's like, I think all of us can pretty easily rationalize, all right, I could I'm not going to cut pasta out of my diet, and it's not going to have a deleterious effect on my frame, right? I'm not going to lose muscle from not eating pasta, right? Yeah. But I probably don't want to cut the lean protein out of my diet if I'm trying to lose my weight because then it's going to affect my muscle and whatnot. Same thing with our business. It's like, okay, well, where is the actual fat or carbs I can trim out of our system temporarily? May feel good, people might like it, but what can we cut while still growing and maintaining operations? I think it's an interesting conversation today to look at some of those options.
[00:13:20.830] - Brandon
What are some of those things? I think bigger picture, what I'm hearing you say is, let's be really careful we don't make short term decisions that actually end up having super long term negative effect on us because it felt okay in the moment or we felt desperate or reactive in the moment.
[00:13:37.250] - Chris
Let me say one more thing on the rev side, the sales side, that I think it's good for people to consider. So many of the teams we encounter are not actually tracking attribution for their sales. I think of a team right now that one of our consultants works with. They're doing upwards of $20, $21 million. They have three or four salespeople on their team, and there is zero tracking. The sales team contributes to the overall number and are judged against the overall revenue of the company. It's a mistake that many, many, many companies make, where they're paying a higher base salary, they have very little incentive or bonus, or the bonus is just tied to us as a company hitting our goal, and therefore the sales reps just automatically, Hey, we hit our goal, then everybody gets a little bonus. I understand the reasoning That's why people set that up sometimes, but I also see the flaw now, which is, yeah, when the sales aren't coming in and the growth is not happening, well, what? We just leave all of that sunk cost and that payroll for all of those sales reps on board just because.
[00:14:45.590] - Chris
We're just going to carry them as dead weight, even though revenue is down. If your revenue is down and you're struggling to get back on point with your pro forma, I think it's a good thing to look at and consider is, what are my salespeople producing? And how do I know that they're producing that? And there's a lot of people listening to this that I'm certain they don't really know, but they may very well like their... I get it. They like their salespeople. They're a part of the team. They've been maybe on the team forever, but it's like at some point. I can tell you this, it's not satisfying as a sales rep to not know what you're worth and just to be showing up and clocking in for a job. That's not fun. That's not rewarding. Then as a company, to be carrying dead weight just because we're family or some of the other low-hanging excuses we make. These times where things are tighter is a good chance for us to take a real long look in the mirror. All right, what is this give me the opportunity to look at more intentionally when times are good, I can just ignore.
[00:15:51.160] - Brandon
Yeah, I think you hit it on the head, and that's part of what I want to, I think, shape today's conversation a little bit more around is, look, I think there's things that we can do right now. I think several of the ideas that we're going to share or just express are certainly things that will have an effect in now. But I think more importantly, where I want to really go with this conversation is you're going to get through this. It doesn't maybe feel good right now. You've been around the block several times. You're going to get through this. But what are we learning right now that should shape the way that we make decisions tomorrow? Are there things that in the moment right now where the pain is very present, can we begin building a plan, not react, but can we start building a plan that changes maybe the way that we prioritize and think about our business tomorrow, knowing that we will inevitably be in a situation like this in some way, shape, or form, again, this isn't going to be the last time that something cycles and has potentially a negative effect on our business.
[00:16:55.010] - Brandon
I think that's the pocket that I want to hang in or that I want to shelf some these suggestions in is that, again, this may not fix your problem today, but can we consider these for tomorrow so that the next time we're in a position like this, we're one of the teams that can have a ton of hope and confidence that this will pass because we've done this other work.
[00:17:16.770] - Chris
We've learned as a team how to behave in a Spartan manner. We've learned how to ratchet back when needed.
[00:17:23.430] - Brandon
It's really a skill. It is. I think, too, it also speaks to the of us as an entity, as an industry, iterating around this idea of things like VAs, virtual assistance, offshore labor, AI. We're all clamoring to learn more about these tools because I think we're fearful that it's going to take something from us. If anything, I think this is a good reminder that these are things that we can deploy on behalf of ourselves and our clients to create more efficient experiences and ensure that make sure that the funds and assets and resources are going to the highest return on investment elements to the business. Again, I really want to shelf this more as, this is a positive way for us to take advantage of the lessons we're learning right now and doing something with them tomorrow. So high level, I think there's a couple of different categories I want to hang in. One, I do want to talk about virtual labor, offshore labor. I want to talk a little bit more about leveraging partners as a way solve problems without us anticipating or creating all the cost ourselves. I think that we under leverage our partnerships, and it's like we don't really look at that as an element of guerrilla warfare to really maximize spend and return.
[00:18:44.830] - Brandon
I think that at a high level, I'd like to just look very quickly over fractional partnerships, like what those mean and how we can better deploy those and be less afraid of something that's in quotes not in-house. Then I think you hit the nail on the head, but just this idea of really formalizing and diversifying our sales operation. I think one of the things that you and I talked about, I think we're going to do a deep dive, not like a commercial sales overview, but a real nuts and bolts deep dive in the near future of outlining what it really takes to create a sales program inside your operation. But I think we're going to stay fairly high level today. We were introduced, Mark Davis introduced us to a really sharp man, and you had an opportunity to interact with him at the last conference that you were at. And I think he's a great example of where the opportunity lies in terms of offshore or VA-type support for our team. So we have stage set this. We have several teams that we're working with right now that through their prior experience, leverage this right away, and they have done it super effectively.
[00:19:52.410] - Brandon
And so that obviously has opened our eyes to the reality that more in this can be done in our space and that it's not white collar jobs only. But then, of course, you having these conversations with Sadiq and what he's doing with all talents, they are really covering some critical roles inside our organizations. And it's super cost-effective. I mean, unbelievable.
[00:20:16.840] - Chris
It's pretty wild. I think a lot of restores, particularly in bigger markets or in the storm prone zones, are accustomed to having restoration specific white label labor teams.
[00:20:28.750] - Brandon
Temp labor.
[00:20:29.170] - Chris
Temp labor teams I see Kevin Duhly up in Canada has a team that provides mitigation support, and there's others around the country. Yeah, Siddique and his team are developing those in-house roles that don't require people to go out physically in the field, like the Job File Coordinator's estimators, AR specialists, etc. Pretty powerful. It really got my attention when he mentioned a full-time estimator on his team, cost 1,400 bucks a month.
[00:20:59.300] - Brandon
Oh, my Gosh, people are scratching out numbers, carry the one.
[00:21:06.210] - Chris
Clearly. Now, it'd be one thing if that was just a Mickey Mouse solution, but they've got a really robust internal training department that they're onboarding and training these people with specific skills, taking them through Xactimate training, etc, in their first 90 days. It sounds really robust. I think we're going to have an opportunity to talk with some existing clients that have been working with them as we get to know Sadiq and his team more. But it seems really promising. Yeah. Of course, it's worth saying that this is the hard part is because, okay, so I can get an estimator for $1,400. Well, I probably already have an estimator on my team, or I may, that I'm paying 75 or 80 or 90 or 100,000 bucks.
[00:21:48.290] - Brandon
Yeah.
[00:21:48.800] - Chris
And of course, it's one of the worst or most difficult decisions that all of us have to make as leaders. It's like, okay, we'll have a real person here that is making their livelihood being a part of the team. And at the end of the day, these are the kinds of decisions ultimately we have to face. But I just think it's interesting now that we have more and more of these options to approach our business in a less conventional way and potentially recapture some profits that we've seen leaving our business.
[00:22:21.200] - Brandon
Here's the thing, though, that I think, and it's interesting that you hit that first right out of the gate of this is potentially us as business leaders or owners making over, let this person go add this resource. I agree with you that that inevitably could be part of the hard decisions that you have to make as owners. It is, right? But I think it's similar to the AI conversation where it's more of a... Instead of looking at it and saying, I'm going to ask somebody on my team now and onboard this cheaper solution, I think it actually, if we're not reacting and we're actually responding and thinking about this clearly, I think it's an opportunity opportunity for us as decision makers to, again, go back to the highest return on investment or where should this person that is paid a higher income level, where do I focus their attention?
[00:23:13.140] - Chris
Yeah, it's like, can we make them into a project director, a job-side sales leader on the team.
[00:23:17.670] - Brandon
Or it's like what losses they're engaging in. We talk a lot in our teams. If we just think about the average claim volume in most of our businesses, how many of you, every other job, are going out to a full burn or a six, seven-figure loss? We're not. Nine out of 10 of our jobs of the average restoreer in the nation is seeing your smaller residential claims in mass, as an example. Well, it could be that in order to expand and grow and take on some of those more administratively heavy but smaller contracts, we leverage some of these more scalable, cost-effective resources. We really prioritize spending wisely into those buckets, knowing then that we save the high talent, been around the industry long term, highly relational for the folks that we need to go out and put in front of other people. And so, again, I just want to make sure as we're talking about a lot of this is that it's not either or in a lot of cases. And we're not saying, go ax this and spend less. We're saying, be more intentional about your decision making and way more options because there are more options available to us.
[00:24:31.620] - Brandon
We slip into this mindset sometimes where we ignore things or have slipped into a thought process about a service offering, a partner, or a strategy that years ago didn't make any sense or it didn't tech wasn't far enough along or whatever. We're still using that same brain to make decisions today. I think what you're highlighting is all talents didn't exist several years ago, not to the level that they are now. Look what they're to solve that problem. We're not talking only about people that are, let's say, uneducated or unequipped to really be able to handle some more complex responsibilities. These are highly educated individuals that are getting equipped and trained with the best tools and resources, and they're able to solve problems at scale for a significantly less cost. That's pretty cool. Then we were maybe deploying before. And so, again, I think it's just a matter of look at some of these things that you've maybe thought about prior and be more aggressive about properly vetting them in a current set of lenses and make sure you're giving you and your team the opportunity to make a decision with current data. We've leveraged VA partnerships and virtual assistance in the past.
[00:25:44.370] - Brandon
We continue to do that as we grow.
[00:25:46.360] - Chris
It really helped us. It filled a gap for us. Yeah, there's pros and cons to it, just like there's pros and cons with hiring a local person at full salary and everything else. But I think the opportunity for our industry is to become professionals at it. We're going to figure out as you start to explore some of these options, you're going to figure out how to implement them in the best way for your business. That's right. And inevitably, you're going to bloody your nose a few times, figuring it out and figuring out a good source for this talent and what companies are great to work with, what aren't, and so forth.
[00:26:19.890] - Brandon
Well, and I think if we go back to that beginning mindset that we said is that some of this stuff isn't going to fix your problem today, but it's going to better prepare you for tomorrow. Let's use this offshore labor example and just walk through a process. Like today, can you onboard these folks tomorrow? Maybe not. Maybe you don't have enough systems in place. Maybe you don't have enough automation in place. Maybe you don't have enough consistency in place so that the lift trying to onboard a team like this, it makes it sound impossible for your company. Well, if you've been exposed to it now and you know that these costs can be a fraction of what you're currently paying, how do you prepare yourself over the next 18 months to be able to take advantage of this resource in the future. Well, example might be all those things that you're doing inside your company based on tribal knowledge because you haven't taken the time to prioritize creating a system or memorializing how you do things, that is why you can't onboard offshore labor. That's why you are struggling to use fractional support or vendor partners.
[00:27:23.340] - Brandon
It's because you don't have the thing in place that would make that tool or that resource viable. If we're thinking about preparedness for the next time we face some challenges in claim volume or claim size or whatever the case may be, what would you need to do strategically over the next 12 to 18 months to be prepared to onboard a partner like that? I don't want to go into detail on a client example, but we have a client that uses predominantly offshore labor for a lot of their administrative and coordinator support staff. Well, they've had to create very robust email templateations, check sheets, like check sheets, process maps. Because they've done that and or they're doing it, the effectiveness of their offshore labor, it's fantastic. It's consistent. The communication is consistent. How they're being communicated with is consistent. From all intents and purposes, the client is having one of the best customer experiences they've ever had because the consistency, the methodology, is sound and systematic.
[00:28:27.200] - Chris
They have a clear operating system.
[00:28:28.750] - Brandon
It's very clear. It's not a failure to be able to use offshore labor. It was we didn't equip or put the thing in place to make that a viable solution. Again, my push here is do some investigating now on what would need to happen inside your company to use this labor force in the near future and begin strategically taking a bite out of that apple over the next year so that when this thing happens again, you're like, Yeah, well, we reduced our cost by 20% last year because we've found a way to systemize and automate and support offshore labor to help us facilitate some of the more day-to-day, administratively heavy tasking and interactions with the client, as an example. I think some people, when they hear that, then there's a little bit of a challenge around America first. I get that. I'm all about, I want manufacturing in the US as well. I love that. I'm all aboard, right? Sure. And though, I also know that us as entity owners and leaders, we can struggle to have motivated personnel that want to do certain jobs and certain tasks. I think what it allows us to do, just like we can with AI.
[00:29:47.200] - Brandon
Well, sorry, I'm boring you, brother. My dude's like, yarning. I guess I'll move on here. It's similar to the AI conversation where it's like, they're taking jobs, they're making sure that when we deploy, let's say, again, local labor, it's relational heavy roles. It's the ones where they have to go get face to face with people. They have to have English as a primary language. They've got all these things. It doesn't mean we don't have those people. It just means we continue to prioritize them on the things that are best suited for their skillset. So again, I don't want to beat any dead horses, but now is the time. Let's look into offshore labor and partner vendor partnerships, and let's see what resources and assets they already have in play. Let's offset that with our strengths, and let's begin doing some things and shaping strategy so that next year When this happens to you, you can deploy offshore labor, or you can have that resource in play already because you were proactive about it. I think it comes down to most of these options were not viable when we are trying to do it through the old school way of throw somebody in a truck and hope they figure it the fuck out.
[00:31:05.290] - Brandon
That's why we can't leverage cheaper alternatives to create a better experience, really.
[00:31:09.930] - Chris
Well, I was just going to say relative to this whole outsourcing thing, when you think about it, like another place that we tend to leak money is with our technicians or our initial response. There's a lot of companies in our industry that operate with a MIT PM that will go out and, quote, sell a job, stabilize it, then call in the technicians based on what they're seeing, the severity of it. Whereas the way that you and I learn to operate, and I still think it's the gold standard, is we were big believers, and you really built the whole operations team around this, that with some intentional training and onboarding, we should be able to bring somebody in who's a greenhorn. Within 45 days, get them responding to a loss. Your basic loss,Basic. Not a large cat, but your basic run-of-the-mill, $3,000 to $10,000 average residential jobs Just stabilize, explain the work authorisation, collect the work authorisation, and direct their helper to begin setting equipment. Then if we needed to pull other people in on the loss because of severity, then you invite them out, right? But then a technician fully trained, she will handle all that.
[00:32:16.660] - Chris
There's no need for the additional cost burden of a mid-PM or a mid-salesperson or something like that. No, it's a cop-out. It's an unwillingness to move away from on the job, Hey, just watch Bob, training method, and instead really provide some dedicated training. Within a month and a half, you should have a technician that can go sign, seal, and deliver that job. It's a huge source of cost that a lot of companies Or the owner is running around with their hair on fire, having to see and put eyes on every job, sell every work off. And answer force. We tend not to give the attention to our call and take that I think we really ought to have as stores. And of course, one of the biggest challenges we have with our call intake, whether it's an in-house receptionist or a service like answer force, is what do you do when your receptionist goes out to lunch? Well, answer force makes that very easy to solve for. They're 24/7. You have a receptionist or a call intake person that's out for maternity leave, out on vacation, et cetera, et cetera. Answerforce has a solution to all of those things.
[00:33:21.370] - Chris
And I think, too, it also solves for us having a very consistent repeatable call intake process. We all know how important that is. A hundred %.
[00:33:29.890] - Brandon
And the cool thing is actually we just hung out with these guys and they let us know, let us in on some big feature updates that have recently been pushed through the system. So first, verified contacts, right? So verified contacts, basically it allows the system to understand that this is a repeat caller, and then it allows them to auto capture and fill those details as part of the intake process. So smoother, more professional intake, much easier to give that client that impression. That's awesome for commercial. This isn't the first time you've called, right? Yeah. We'll listen to the rest of these sets because I think that are super applicable to our commercial opportunities. So specialized scripting, okay? This is great because this is everything from holiday shifts, after-hour shifts. I mean, you name it. There's different reasons, right? Or different layers of the cake, if you will, just based on What's going on in terms of call volume, what's going on time of day. And so with specialized scripting, the script then will match that. And so it's shifting live, if you will, along with that richer context of what's actually happening in the business.
[00:34:28.290] - Brandon
Then this other thing, I thought this was cool, is dedicated phone numbers. Going back to that repeat client or that key client or customer, we now can associate a specific phone number to them. What happens is, is they get received very uniquely. I can imagine creating a custom script for that client. We now can recognize a repeat caller and autofill and speed up their intake. Then on top of that, there's a specialized number that's dedicated to them. You really get to marry up that professional service offering that we're promising, if you will, during the prospect.
[00:35:03.640] - Chris
Right from the jump, if you've got a commercial client with specific needs or specific expectations, build that into the script to call intake.
[00:35:10.420] - Brandon
It's beautiful.
[00:35:11.600] - Brandon
Super powerful. Another one is just access to information wherever you are. I don't know how many of you are already currently using answer force. You should take it seriously in terms of getting a demo and checking them out. But if and when you shift over to them as a partner, the cool thing is now is that you've got access to all this data, all this the information on the go from anywhere on your mobile device. You can literally check inbound outbound calls. You can listen to recording. So actively coach the team midstream, right? And so, again, just a ton of efficiency, a ton of automation, and just higher levels of customization coming out of answer force.
[00:35:48.770] - Chris
And it is so stink and affordable. This isn't just for big multimillion dollar companies. This is for you that's still working out of your home shop, your garage. And it's also for you that are running a $25 million operation with four locations. It's pretty extraordinary. They work with some of the biggest companies in our industry and many of the smallest ones as well.
[00:36:08.810] - Brandon
Actionable.
[00:36:09.850] - Brandon
So, guys, we have talked about our friendship and relationship to these guys for a long time.
[00:36:15.020] - Brandon
Many of you know in the recent, probably, year and over the last several months, just this hyper focus on the efficiency and quality of our estimating. At the end of the day, our cash flow is heavily impacted by our team's skill and competency around writing a really comprehensive sheet and really making sure that the scope is accurate. One of the powerful things that Actionable has is their actual Xactimate profile. This profile is a live AI tool that's monitoring you as you write the estimate and as you're implementing specific wine items, it's helping you be sure that you've really taken into full account all the individual elements and line items associated with this element of the scope that you're trying to accomplish. And I'm not going to highlight any specific teams, but we have heard robust numbers from teams using this. We're hearing anything from 5%, 6%, even 8% top-line growth, specifically from the quality of their estimates increasing.
[00:37:14.980] - Chris
I remember when they rolled this out to you that one of the use cases or part of the value that they were trying to hit on is the ability for us to bring up a new estimator quickly up to the standard and competency and the results ultimately of the more experienced estimators on the team. This is an incredible onboarding and training tool to get somebody up to where they're very, very competent and producing quality estimates just that much faster.
[00:37:40.980] - Brandon
Way faster. Just one last thing I want to hyper index on is they have just an absolute boatload of white papers and F9 supporting notes. This is something that you could participate in being a member with Actionable Insights. But guys, we all know that getting our estimates approved in that negotiation phase is hard right now. It just feels like every carrier is significantly understaffed. They're fighting for error, we're fighting for error, and anything we can do to reduce that friction is better. The better we are at providing really good support for what we're calling out in our scope and the way we're calling for it, the better. And so these white papers, these F9 support notes are super powerful.
[00:38:21.250] - Brandon
Man, it's been a little while, but we've been refueling the relationship with CNR quite a bit lately, and that's been good, man. I think both teams got so busy.
[00:38:30.850] - Brandon
We had a tough time locking in and getting some FaceTime together. But the team over at CNR has been great for our industry, you guys. We've often referred to Michelle as a friend of the industry. She really is keyed in on giving us what we need in terms of tools, communication, intel on the industry. And so we just continue to encourage you guys, participate, make sure that you're receiving your quarterly copies and that you're getting all the online content that just comes in boatloads from their team. Cnr magazine, guys, pay attention, make sure that you're participating and getting your intel from that team as well. Liftify, bro.
[00:39:06.490] - Chris
Yeah, Liftify. It's interesting. Yesterday, I was just seeing one of our clients was getting awarded their 750 Google review trophy, and they were already talking about hitting a thousand. A thousand, that's right.
[00:39:20.230] - Brandon
Which somebody has done.
[00:39:21.540] - Chris
Yes, one of our clients has done. It's remarkable, and I think the most remarkable thing that people are discovering, and we're seeing this every single day with our clients, is that When you start upping the volume of Google reviews you're getting consistently week after week, the recency. When you're getting the recency dialed in and just meaning every week you're adding Google reviews to your profile, dramatic jumps in organic phone calls in lead gen. And of course, who doesn't want that? Every single one of us, including floodlight, we want that. And that's why we've index on. We use Liftify to build up our Google reviews. So it's a simple turnkey service. They've really created a process Process for capturing the most quality Google reviews from the jobs that you're already getting. So if you want to get more work, grow your revenue just off of the existing work you're already getting, Liftify is a big part of how to do that. And it's simple. It's very, very cost-effective. From our experience with Liftify and what we've seen with our clients, significantly better value and better results than many of the other platforms that some of you might already be trying.
[00:40:27.120] - Chris
So if you're not happy with the number of Google reviews you're getting, You need to reach out to Liftify. And I think as a point of reference, it's worth us saying, Liftify expects 20 to 25 % conversion. So think about that within your own numbers. If you're doing a thousand jobs a year, you should be adding 200 to 250 Google reviews to your profile every single year. If you're performing under that, you owe it to yourself to reach out to liftify. Com/ floodlight.
[00:40:53.710] - Brandon
One last thing to add to that as part of their more recent integration of AI or advancing that integration AI, one of the big focuses for their team is gathering more live project data and analytics for you guys. And so really what this is focused on is equipping all of us to create better customer experiences. So not only are they keyed in and driving Google reviews for us, but now they've actually turned the corner and began developing toolkits for us that use Liftify to actually be getting information that can help us modify our service delivery to create better client experiences. Midstream. Super powerful. Midstream. We're talking mid-job. Yeah. Super powerful. All right, liftify. Com. All right, guys. Thanks for hanging out with us.
[00:41:38.220] - Brandon
Let's get back to the show. Guys, you know this. You hear this from us all the time. We're not acting as if we've got it all figured out. We're just sharing where we've gotten our own bloodied, where people are... That's it. We're just sharing ideas. There's no judgment. But I think what you're hitting on as an example is, again, it's coming back and asking ourselves where we invest money. Because I think that when we really consider the long term benefit of where we're spending money, all of a sudden that spend becomes more beneficial in its return. Like an example, I think what you're talking about is we often find ourselves when things are going great, that it's too hard to train. We got to just get somebody in the field and have them start making some money because the work's there. Well, this is that time you begin to hit some resets strategically. If we don't have the high claim volume and we're not fighting to just get another tech that can breathe on board and get them out in the field, what can you begin changing now in the way that you're equipping them?
[00:42:39.610] - Brandon
So like example, it might be that the real cost return that you get in the near future is not necessarily a reduction in cost, but maybe it allows you to say yes to more work tomorrow with a more cost-effective model. So you're not going to get the hit this year, but next year, the return is to you is in spades. I think just giving a little bit more detail on the example that you gave. We're talking, again, going back to the eight or 9 out of 10 claims. When the average claim that we handle is fairly simple and it can be fairly prescriptive and we have lots of templates that we can use and the estimates all look very similar. That's that time and that place to automate, simplify, use templates, use checklist, use process maps, use something like know-how to reduce the time it takes to equip someone to be effective. There's a major opportunity there. If I don't have to pay several layers of middle management and I can give that revenue to the person that can go out and produce the work, that's a better use of my money. We reduce headcount, which helps in our overall GNA and our overhead spend.
[00:43:55.610] - Brandon
Then we're making our COGS much more efficient and return a higher rate of return because we're getting the most that we can out of our core personnel. Another example of this, and this was something that you and I began leveraging really early on, is we wanted to find a way to expand and retract with workloads load based on storm, based on events, all the things. This was one of the reasons why we leaned so hard into what we're talking about, is that we knew there was plenty of different ways to flex our labor force with these labor partners, some some national, some local, and regional. But the only way that we could really do that effectively is that we had to make sure that our internal team, our core team that was on payroll all the time, one, we couldn't be heavy because then it's too hard to sustain that when things get a little light. But then we had to be sure that our hiring decision brought someone into the roster that had no reason they couldn't advance all the way to the point where they could work with some temporary labor support and get a job done.
[00:44:59.540] - Brandon
We We couldn't have demo dogs on the team. I couldn't have an entire roster of people that can't drive, all the different things that prevent them from being a full-blown lead tech. We just said, no, we didn't hire them because they didn't fill our mission of being prepared to expand and contract back to our core people when the volume wasn't there. Maybe that's something that you guys should be reconsidering your business. Again, it may not fix anything today, but it's going to better equip you for tomorrow is, how are Are you hiring? Are you hiring people with a fundamental understanding that they are going to become a lead tech once they process through your training plan, which that in and of itself is a whole 'nother' show? Or have you made the mistake of putting people that can breathe on your roster that have a ton of limitations, they can't get to jobs independently, you can't trust them to do most of the work on their own without a ton of oversight? Because if that's your place, you are putting yourself in a position that limits your options when stuff gets skinny like we're facing right now.
[00:46:04.400] - Brandon
This is just probably a good reminder to consider your hiring practice and ask yourself if everybody in my tech staff can actually continue to develop into a lead. If the answer is no, what can you, again, start to do over the next year to be prepared to do it differently if and when this comes later on down the road?
[00:46:26.230] - Chris
Yeah. One thing you're touching on, right, is the in-house trades.
[00:46:30.080] - Brandon
Yeah.
[00:46:30.760] - Chris
A really common flex point for a lot of businesses, and you got to decide, is the benefit of us having in-house trades worth the fact that I'm carrying them when we have downtime?
[00:46:41.860] - Brandon
Yeah. What could we be doing to equip subs?
[00:46:45.290] - Chris
Developing those sub-relationships. Right.
[00:46:47.650] - Brandon
Yeah. Maybe, again, you're right. It's recruiting. Do you have one sub in every category? Are you desperate? Are they holding you hostage? That's a challenge. Did you try to solve that by hiring your own an in-house cruise for construction, that might not have been the best move. That may not be the best move. Maybe some more proactive engagement around having several subs in each trade class, partnering with them in a more meaningful and two-way way. Instead of treating subs as someone that's lucky to do work with you, what if you actually had a mutually beneficial relationship where there was synergy between the two entities? Maybe you have a leadership competency strength in your company. What is your team doing to partner with your sub-relationships to help them create that same level of leadership competency? What value would that have for them in their regard to relationship with you?
[00:47:40.990] - Chris
Yeah, is there an opportunity to bring your subs to one degree or another under your wing? And mentor, share some resources. That's right. Help them grow, help them be more profitable.
[00:47:50.610] - Brandon
That's right. A lot of the things that you may be wanting to coach and teach them make them a better supplier for you, and maybe then gives you more trust to allow them be more hands-on on your projects without you necessarily having to be looking over their shoulder every single day. Again, these are just things for us to be considering. They're not going to fix it today necessarily, but man, can they put you in a different position tomorrow? So maybe you look at your construction team and you go, Hey, we're going to prioritize punch list guys that can help me make sure that jobs don't have these long tails that go on for weeks and weeks to handle putting on a couple of electrical outlet covers and maybe re-hitting some trim with some paint. That's what your guys do. They come in, they bust out those little punch list items, they clean up a job, put the bow on it, leave the note, leave the special, right? But then you leverage your subs for the vast majority of that work. For some of you, that's all you've ever done, and this is a da. But for all of us, that's not necessarily the truth.
[00:48:52.270] - Brandon
This could be something that you could shift tomorrow. Again, it's just proactive. It means you invest your time and energy differently to create different options in the future versus doing it how you've always done it just because, is the dead horse that we're going to continue to be. Fractionals. In the early days, we weren't super aggressive about this, but as we've grown and As we started working with larger and larger companies, we started to see all these inflection points where they're at certain growth phases and thresholds in the company where certain types of strategic guidance and support needed to be on board, but they couldn't afford a quarter million dollar salary. They're not in a position yet financially to onboard some of these roles, but the benefit to them in the organization is really profound. We started to build more of these friendships and relationships. We obviously refer them more often now than ever before. Then obviously, our team has taken on trying to solve the fractional sales leadership role for folks. We're really excited about that service offering. But that's not what this is about. It's the getting you to think as a business owner, as key leaders, are there some core talents that would help me be better prepared for tomorrow that a fractional solution might be the right cost return ratio that you're looking for.
[00:50:17.700] - Brandon
Many of these kinds of roles are centered around the finance and sales side right now. But I think that we're not that far from seeing other operational support. I think in many ways, as a consultant consulting team, we believe that we can be the equivalent of a fractional strategic leadership role within a company, and you're not paying not even the same sport of what you would for a C-suite leader to help solve these problems with you.
[00:50:46.100] - Chris
I think eventually we're going to see the fractional GM role start to become...
[00:50:52.250] - Brandon
Yeah, maybe more COO-ish.
[00:50:53.740] - Chris
More customary, right? A fractional operations manager of some sort, right? It was interesting. I I was watching one of the Facebook groups yesterday, and a guy posted for a GM and estimator role. I ended up actually replying on the post. I'm like, Hey, it's worth considering if you're hiring... It's cool to have a GM who has the skill and competency to step in and write some sheets. You were one of those GMs at one point where it's like you could come in and help take some load off of your PMs as needed. We have big influx or a huge cat event, right? That's awesome. Yeah. I would venture to say that many, maybe even most GMs in this industry have some amount of estimating background to be able to do that.
[00:51:41.230] - Brandon
Yeah, very common.
[00:51:42.200] - Chris
But hiring a GM that is also going to be a dedicated estimator, I said, probably you're going to end up disappointed in their performance in both, is the reality.
[00:51:52.820] - Brandon
Yeah.
[00:51:53.520] - Chris
But so, yes, the whole fractional thing. I think, too, the fractional thing when we're in an environment like right now allows people to fully execute on a revenue strategy without onboarding all the overhead.
[00:52:10.150] - Brandon
All the pieces.
[00:52:11.120] - Chris
All the pieces, too. All the pieces, too. To get the skill and talent to build out a sales team. Now, granted, those of you that are doing, you're in that sub 5 million range, you're going to be a little limited just simply because of operating cash flow to be able to afford to do some of this outsourcing and bring on some of these experts. But boy, those of you that are in 7 to 10 million, you're now approaching a point where, assuming you don't have a lot of other cash problems in your business, you can afford to start leveraging for some of these roles. I think that's just relative to what we're talking about with Claim volume being down, people not on pace with their pro forma's, fractional might be a solution to come in and jumpstart these different areas of your business.
[00:52:54.890] - Brandon
That's right. I think what we can't underestimate, too, is the value value that they bring for helping solve the problems long term. Well, we just released a show with Backbone, and we have a really close partnership with Kiwi. That was an awesome chat. That does fractional CFO service offerings as well. What we're seeing with those kinds of relationships, there's two things that make the fractional support viable and profitable. Just so you guys know, just for the sake of definition, fractional, what we're saying is a high-level strategic leader in a certain category of your business, whether it be finance, operations, sales, but they work with your team part-time. Essentially, instead of you paying a quarter million plus and trying to find some exceptionally high-level leader, you get to share that burden with several entities. The cost becomes all of a sudden way more reasonable and realistic for people to exercise earlier on in their business journey. Then, of course, the major thing that I think we underestimate is how hard it would be to find people that do these things well. Then what does ramp look like? You hit on that is like, do you want to ramp a key leader and key influencer and test that at the same time that you're testing BDs and testing methodology?
[00:54:10.370] - Brandon
That's a lot of variables to take a chance on. It's a lot. This is a way that cost-effectively, you get to solve a problem at a high level. You get to onboard some leadership competency to begin sharing some of the workload that you may have as the owner, thinking about tomorrow, preventing and mitigating problems of the future. But you're doing it a fraction of the cost, and you're getting somebody with a vetted reputation. You don't have to spend them up on your own. An example, we have several clients, for instance, that have hired or onboarded a fractional CFO. A lot of people, as In fact, we refer to this in that episode with Backbone, is differentiate between, let's say, a controller, an office manager, and a CFO. Really, one of the biggest things that stood out to me as part of that was the looking into the future and modeling what is potentially going to happen. Where did we start the conversation today? We talked about leaders being more keyed in on what are the strategic things that we can start doing today that will set us up for tomorrow and change the way that we interact with financial issues or challenges in the future.
[00:55:16.680] - Brandon
Well, a fractional CFO might be a really solid way to start that, depending on size and scope of your company. But their job is to model and to look out on the distant horizon and say, Things like this are happening in in the environment. Things like this are happening in the industry. There's challenges like this in regard to cash flow modeling, and the pipeline seems to be a little light right now. What does that mean for us in six months? There's these powers that come If you come from somebody who's done that tradecraft for a long period of time, and they've done it at a high level, and literally for a fraction of the cost, and you don't have to take the chance of spending somebody up all on your own, they can begin having a real impact on your business for tomorrow. Again, these are solutions that you may want to begin considering in your strategy to help for the next time. I think you and I are incredibly excited about the fractional sales leadership, and I think we're going to have a lot of opportunities to talk about that later. But we believe it'll essentially do that.
[00:56:16.950] - Brandon
It's going to solve a competency problem. It's going to mitigate the load on you to find that person, and the cost is a fraction of what it would normally be. Okay, AI, I'm going to openly admit right now, I feel like because there's such a demand for AI-driven content, or excuse me, AI topics and content that I feel like everybody in their dog is trying to talk about AI, and I'm going to be brutally honest and say, most of us should not be headlining the conversation around AI because you using it in your email does not make you a specialist.
[00:56:51.900] - Chris
Yeah, it's clever. It's like we're in this renaissance period where it's really cool to talk about AI. Yeah. Every industry show that I was at the last four weeks and that you were at, there's an AI panel. And not to take away, there's some... I was sitting in on a panel at Access, and I'm not kidding you, every single person on the panel actually admitted at the outset, my knowledge of AI is somewhat limited, but I found this cool app. Or it's like, well, okay, I think the reality that we're probably on the precipice of is that AI is going to fundamentally rewire how darn near every aspect of business is done in very short order. And we just haven't... The curtain hasn't been pulled back yet for us to understand just all the ways it's going to show up. Right now, it feels as though we're primarily limited to the Grammarly type of applications. Okay, so our technicians can communicate their 12-hour job reports a little bit more effectively. Our GMs, us as owners, our communicate to the downline is a little more professional, a little more culturally supported, sounds better, all that stuff.
[00:58:05.810] - Chris
But what has been moving the needle, I think, is leveling people up in accelerating people's performance, not their learning, but their performance in certain key tasks. We originally had Mark Watley on and Seth Harrison back in the day, like a year ago, talking about their Xactimate profile, the Actual Insights profile, and just how for a few hundred dollars a month, they were going to be able to level up new estimators and get them to the point where it was as though they've been doing it for six months or a year right out of the gates. I think we're going to see more of that. Certainly, one of the things we're highlighting today is cost-cutting measures and stuff like that. But the fact that you can bring somebody in who's green and have them producing competent sheets, maybe they're not catching everything, but Maybe you've got one lead estimator that's very experienced and you're having to pay for it. But then you've got junior estimators that are just learning the craft, and they're able to get 80% there, and then you have one reviewer that's highly experienced. That's huge. There's a big cost savings.
[00:59:18.040] - Brandon
You're tapping into something that I think needs to be the arc, if you will, of how we should be thinking about most of this. Again, I think you nailed it perfectly. Ai is not replacing people per se yet. I mean, in certain industries or aspects, maybe in quotes, there's replacement. But I think the way we need to look at it right now is more from an efficiency perspective. Can we do more with less if we invest time and energy in gaining a better understanding of some of the widely available AI tools in front of us right now, and instead of looking it as being a victim to inevitable change, let's come back again and say, Look, we're in a frustrating position this year because of X, Y, Z reasons, claim volume, blah, blah, blah. Is there something I could be doing over the next 12 months as it relates to AI to begin creating more efficiency with my team or more productivity with the same number of personnel. That's my encouragement. We're not going to dive into all the different AI solutions or pretend like we're AI specialists because we're not. However, our team is learning how to shorten time between sessions with clients, how to make sure that we're better tracking the relationship and leading that relationship for high value in the relationship.
[01:00:40.030] - Brandon
What does that net us in return? If our client stays with us longer, I'm going to make more money long term. I'm going to spend less on marketing and advertising and bleeding, trying to earn a new client, and I'm going to continue to be in a strategic partnership of value. It doesn't fix my business today, but it makes me more strong tomorrow when there's these inevitable economic shifts. I think that's the opportunity. We have a ton of clients, Steve out at FP. I don't know if you guys know who FP Restoration is based out of Florida. He's been a long-time client and friend of ours. The guy is always in motion, and he's working heavily on AI automations right now inside his business. It's not replacing people, but if a project manager is worth a lot to us as an organization, what can we do with AI to shorten their workload, to offset some of their or automate some of their workload? And again, keep them focused on the relationship element, the most complicated part, the part that gives us the highest return, and just be more efficient with our work source. And so, again, we're doing a 30,000-foot drive buy.
[01:01:45.900] - Brandon
But it's just mindset. What are you actively pursuing and understanding of AI right now? Are you dragging your feet into commitment? Do you feel like you're being forced? Or are you looking at the current economic situation and saying, You know what? This Next time, next year, if I were to take some time and energy and invest in understanding more about how I can apply AI to my company, I may get more out of the same team, which means, again, saying yes to more work without increasing your spend. It may not fix it today, but it could totally change next year.
[01:02:17.250] - Chris
We are just doing a flyover. Yeah, we really are. Obviously, but something, too, that teams, and especially bigger teams, so let's just say a team that's 5, 6, 10 million and up. One of the really expensive parts of our sales and marketing spend that we do is conferences, trade shows, association events, getting a vendor booth, like a senior living convention, hotel and lodging, restaurant associations, certainly multifamily associations, property managers, BOMA, all of these things that oftentimes we're having a presence at Very, very costly. And one of the things that we've seen some of our teams effectively do is really prioritizing their spend based on what converts actual sales. And I think what a lot of people are finding is they have a massive sunk cost with these events, and those events don't necessarily create a lot of sales opportunities because it's just a me-to event where everybody slinging cards, doing drawings and everything else. And I think when we are in a situation where we're having to pull back on the expense line of our business in order to preserve our profit, keep the train on the tracks, really taking a fresh look at our marketing and sales spend and asking ourselves, Okay, what are we getting for that $5,000 booth or that $10,000 thing at PLRB or whatever?
[01:03:52.820] - Chris
And is there a different way for us to deploy half of that money at the event in a more high touch way that generates actual leads and scheduled meetings, which is ultimately the outcome we're looking for. And we've seen teams effectively do that where maybe instead of us having a booth, we have two or three people attend the conference. We've got a small budget for peeling somebody off to one of the resort restaurants or something to have a sales meeting where we pick up the lunch tab for 50 bucks. But in the grand scheme of things, our cost of that event-Let's be more realistic. 150 bucks. Our cost, thank you, tariffs and all that, right? Exactly. There's really practical ways to look at that. Again, this points to the fact That we, as owners in our downline team, when the getting is good and we're flourishing and the work is just coming in and pouring in, our tendency is to spend more willy-nilly. It's just it's human nature. We do it in our own personal budgets. We start making more money, we start spending more money. Therefore, I think, again, it comes back to the skill of how do we look at what we're currently doing, look at it differently and say, Okay, is this spending actually still generating-It's huge.
[01:05:18.500] - Chris
The results we're looking for. If not, it's a wonderful opportunity to say, Could we do this cheaper? What's a way we could do this in more guerrilla-style warfare, like we might have done five years ago when we weren't as flush with opportunities? That's right. What would we have done then to accomplish the same result? It's good. Well, and we probably would have, and you and I did this some, where it's like, Hey, do we get the booth or do we just peel off a few of our leadership team to go amplify our presence at this event? That's right. Let's focus on getting into as many one-to-one networking conversation we can. And we come out of those events with more opportunities and stuff than we would have had standing in a booth collecting business cards. And so those are real ways in our experience, that you can save by the thousands. And if you're looking at each area of the business in this way, those thousands can add up to tens of thousands in your monthly burn rate.
[01:06:13.270] - Brandon
You're spot on. I think the other piece that mirrors that, and I'm having thinking back to conversations with guys like Mark Springer and stuff, is the way we manage our cash when we're kicking ass is also part of the strategy to be able to wear through the storm when they inevitably come. You're right. We tend to give less attention to detail the better we feel business is. But an example of behavior we can start again today, knowing it better sets the stage for tomorrow, even if we're reaping, the relationships are hammering and we've got the work coming in, well, maybe we push our net profit up as high as we can make it realistically and still protect culture and customer experience. Because we know inevitably hard times will come.
[01:07:00.990] - Chris
And we need operating reserves.
[01:07:02.070] - Brandon
We need operating reserves. You know what I mean? We've got to have that pocket money to get through those times with less stress and anxiety, to be able to keep our key players, to keep our team. Well, how do we do that? I think that you gave a high-level example of this, but is your marketing team doing a budget for the year based on their relationships, based on programs and events that they want to participate? And are they articulating in a very clear and concise way the way the value of your company participating the way that they're saying we should participate? Who does that put them in front of? How much air time does that give them? Are they going to have fixed audience? Are they going to have captivated audience? What are they going to do? Our team uses a business development blueprint methodology. When we start working with a commercial sales team, our fractionals will actually, as part of one of their first one-on-ones, is they start building the plan. What's the first thing they do is they review the budget for the year and they begin asking the teams to put out in the future, where do you want to go?
[01:08:05.340] - Brandon
Why do you want to go there? How much it will cost us? If you start doing that today and we continue that when we're making more money, it means you'll keep more. If we keep more, we've got the reserves to hold on. I think the other thing you started, and I just want to make sure we take a couple of minutes before we close up, is you opened with this idea around diversification of our sales channels. Again, this ain't going to fix you today. But if we go back When we look to the long-term plan here, the strategy and thinking about it, many of us get our launch with some TPA support, or we built the first tier of our company, the first few million a year on plumber referrals. Then we just slide into this space where we just keep doing the same thing. Then we get blindsided or frustrated when something changes that revenue channel. I think that it is hard work to invest time and energy in creating a new sales channel. But if you do it incrementally and strategically, year in and year out, when stuff happens, it normally affects part of the revenue streams.
[01:09:13.000] - Brandon
It doesn't normally affect in spades everything.
[01:09:16.090] - Chris
Not in our business.
[01:09:16.960] - Brandon
Not normally. We're lucky. Yeah, we're fortunate. Yeah. Examples, and again, I know we're not saying anything that people haven't considered. Plumming, HVAC, and subcontractors. What are you doing Are you pursuing those in any meaningful way? Do you have a battle plan around that? Have you considered the value of it? Where that work would come from? What it means when things are moving based on loss volume or consolidation? Is it better? Is it worse?
[01:09:45.330] - Chris
Who's doing well in your local economy? Totally. Who's still spending money? There's just like, when we are focused on building our own direct sales relationships versus overrelying on referrals. On these other sources. We end up with more control over our business during those difficult times. I think, yeah, we don't talk about that enough. The reality is most of the successful enduring companies we've seen, controlling your expenses and rolling back expenses is part of it. But most of the companies you really admire, they're like, Okay, how do we sell our way out of this problem?
[01:10:23.400] - Brandon
What are we doing?
[01:10:25.050] - Chris
Because if I'm going to divert my energy from the selling and growing part in In order to save 500 bucks here, 2000 bucks there, and I've really got a half million dollar problem in front of me for the year in terms of reduction in claim volume, if I've got a half million dollar problem, I'm probably not going to meet that problem head on with cost cutting.
[01:10:47.790] - Brandon
Not without it getting deep.
[01:10:49.000] - Chris
Not without it going real deep. Also, the time, effort, and energy to find that money on the cost side of the business. What if a portion or a A lot of that effort and energy was going into orienting our team around growing and selling our way out of this problem. I think most of the successful, bold, winning leaders that you and I encounter, they put more emphasis on the how do we sell our way out of this? Because if we can get really good at that, then it's a matter of just diverting our attention into a more appropriate place when business dies down in a particular area. I I think we can't emphasize that enough, and we take that to heart. Also, I feel and understand the tension of when things have been really good and business is just rolling in. I'm not trying to make that sound easy. We're a sales organization, and inevitably, we have these patches where all of a sudden, the work isn't just showing up and lining up in front of us. It's the same principle. It's like we has a company, we always have to make sure that that sales focus, that engine is primary.
[01:12:05.940] - Brandon
It's like, I think every year, again, for tomorrow, I think every year, looking at a new potential revenue stream and saying, Hey, we're going to focus some strategic time and initiative around developing this thing. Maybe right now you've got a nice TPA base, you've got some multifamily experience, and maybe you're working with some plumbers. Well, what's What's the next here? What is something else that you're going to begin focusing on and developing? Are you going to move into senior living? Are you going to move into hospitality? Are you going to maybe start working with some larger general commercial contractors? Where do you want to go? Yeah, make a plan.
[01:12:44.760] - Chris
Yeah, Yeah, that's it. Make a plan. It's like two because you may not have a fully developed sales team, and that's okay. We didn't always either. Then how do you do it? Well, you look at your key leadership team, and first of all, you let go of all the, I'm not a sales guy. That's not my You just let go of all that bullshit. All that bullshit. The reality is we got a problem. We can solve this problem with sales because you can solve almost every problem with more sales, literally. Let's come together. Hey, my lead estimator who kicks ass and has been in this industry for 20 years, you're going to focus on our adjuster relationships. You know how to speak to them. You know what they're looking at. You know what annoys them. You know what makes them happy. So let's go do that and let's create some KPIs. What does that mean to reach out to the adjusters on top of our extra workload? Hey, recon department manager. You're going to go through and you're going to vet and look up the list of all the commercial clients we've done work for in the last three years in Quickbooks.
[01:13:49.960] - Chris
You're going to find that, and we're going to set up some KPIs of, you're going to reach out to so many of them per week. And then at our weekly leadership meeting, we're all going to come together. Chris, head of sales. You're going to go over and da, da, da, da, da. As a team, we come up with a plan. How are we going to sell our way out of this? You and I have done it before, and we've helped other teams do it. It's realistic, it's doable. It just requires some discipline. But I think it's a good way for us to wrap up because at the end of the day, all these things we talked about, outsourcing, significant potential savings, but not a 90-day turnaround thing, but a sales initiative on the team, very well could be a 90-day turnaround.
[01:14:30.880] - Brandon
It can have immediate return. I think, again, long term, it will inevitably return in spades, right? That's right.
[01:14:37.690] - Chris
You think about it, if you've got a $20,000 or $30,000 a month bleeding problem, think how quickly you can fix that with sales in this industry. You've got a half million dollar problem, that's 40K a month. That's the problem you have. How quickly can we potentially, with some focused efforts, solve that problem? It's an interesting way to look at it.
[01:14:59.200] - Brandon
It is. Okay, Okay, so let's just give a concrete example, and then we'll walk. How do we do what?
[01:15:03.730] - Chris
I got to jump on my two o'clock here.
[01:15:04.980] - Brandon
How did we do what you just described? We identify all the roles by job title. Don't worry about personality in the organization, and ask yourself, who do they interact with? The most. The most that directly and indirectly can benefit sales and revenue growth. By each role, by title, identify the target and create a very, very simple daily or weekly thing that they can do consistently, not take them from a non-sales-oriented individual to a pro-salesperson, but cadence of text messages, cadence of emails, cadence of check-in phone calls. What can they specifically do on a daily or weekly basis, and then rally the team around updating and reporting on how that's going. Then you as key leaders and owners, be willing to go side by side with your people and help coach them and equip them through that process. That could be doing a stop in. It could be doing five by fives with your project managers. It could be making some phone calls with coordinators. Get each person by job title doing a simple thing to contribute to sales growth. If you do it consistently, surprisingly, revenue will change, and it's normally for the positive. Yeah.
[01:16:26.450] - Brandon
Okay. All right, gang. There we go. Thanks for hanging out with us. See you. All right, everybody. Hey, thanks for joining us for another episode of Head, Heart, and Boots.
[01:16:36.660] - Chris
And if you're enjoying the show, but you love this episode, please hit follow, formerly known as subscribe, write us a review, or share this episode with a friend. Share it on LinkedIn, share it via text, whatever. It all helps. Thanks for listening.