Thursday, December 19, 2024

Building a $220M Empire: The Power of Training and Branding

Building a $220M Empire: The Power of Training and Branding written by John Jantsch read more at Duct Tape Marketing

The Duct Tape Marketing Podcast with Tommy Mello

In this episode of the Duct Tape Marketing Podcast, I interviewed Tommy Mello, a visionary entrepreneur and founder of a $220 million home services business operating across 20 states. As the author of Elevate: Build a Business Where Everybody Wins and host of The Home Service Expert podcast, Tommy has dedicated his career to helping others achieve business success by focusing on recruiting top talent, optimizing branding strategies, and delivering exceptional customer experiences.

During our conversation, Tommy shared his journey of scaling a business from a small operation to an industry leader in the home services space. He emphasized the importance of investing in training, aligning core values, and leveraging performance pay systems to build a thriving team and long-term customer loyalty.

Key Takeaways:

  • Recruit Like You Market: Tommy treats recruiting like a marketing campaign, creating a continuous pipeline of A-plus talent. He focuses on identifying the right candidates by defining the ideal “avatar” for each role and using targeted ads to attract them.
  • Performance Pay Drives Results: Transitioning to performance-based pay not only motivates employees but also improves KPIs like booking rates, conversion rates, and customer satisfaction, driving both team and business success.
  • Branding is More Than a Logo: Tommy’s brand overhaul, including visually striking vehicle wraps and a unified brand voice across email, billboards, and yard signs, elevated his company’s visibility and customer trust.
  • Optimize the Call Center: A well-trained call center is critical. By focusing on empathy, responsiveness, and problem-solving, his team converts more leads into loyal customers, maximizing ROI on marketing investments.
  • Blue-Collar Jobs Are the Future: With skilled labor shortages increasing, Tommy sees a bright future for tradespeople, emphasizing the financial and personal rewards of working in the home services sector.

Chapters:

  • [00:00] Who is Tommy Mello?
  • [02:14] Optimizing Recruitment and Service Quality
  • [04:05] Branding Goes Beyond Your Logo
  • [07:26] Motivating Employees to Perform
  • [12:37] Recruiting vs. Creating A-Players
  • [15:52] Using Marketing to Recruit

More About Tommy Mello: 

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John Jantsch (00:01.24)

Hello and welcome to another episode of the Duck Tape Marketing Podcast. This is John Jantsch. My guest today is Tommy Mello. He's a driven entrepreneur who's built a 220 million home services business with over 700 employees across 20 states. He's also the founder of Home Service Expert, where he's dedicated to helping fellow entrepreneurs achieve the same level of success. He's also the host of a popular Home Service Expert podcast and the author of

Elevate, build a business where everybody wins. So Tommy, welcome to the show.

Tommy Mello (00:35.662)

Thank you. Really excited to be here.

John Jantsch (00:37.004)

So I got looking back at this, think this is at least your second appearance on the show. And I got looking back and the last time you were on the show, it was 2020. were in the throes of, or maybe just starting to come out of the pandemic. And the home services business was really kind of crazy at that point. A lot of folks were in turmoil. A lot of folks were really having trouble finding skilled labor. So.

Fast forward to 2024, what's the state of the industry today?

Tommy Mello (01:08.962)

Never been better. You know, we were deemed essential during COVID. And the fact is, there's always this teeter totter. You need more leads or you need more great people. I learned in 2017 how to build my own technicians. So right now we graduate from my training school right next door, about 50 technicians a month. But it's kind of, I view recruiting like marketing.

John Jantsch (01:11.608)

Yeah, right.

John Jantsch (01:19.032)

Right.

Tommy Mello (01:36.506)

You got to really define who your avatar is and make sure it's the right person because if you're not converting leads getting the right reviews getting the right opportunity job averages You know people are always like I need more leads and I'm like well You must be booking every phone call. You must be converting every Booked call to a paid customer and they're like, well, what do you mean? And I'm like, well your marketing dollars are going to waste because your call centers Not working out very well. Your technicians are not converting very well. You don't have a rehash program. So

I'm kind of jumping around here a little bit, but the most important thing is you got the right people showing up to the right leads. And you should be ranking your leads and ranking the people showing up to the leads.

John Jantsch (02:11.202)

Okay.

John Jantsch (02:17.282)

Yeah. So, it's interesting because I think a lot of business owners, doesn't matter what industry, kind of think of hiring as an event. I need people. I'll go out and hire some people. I'll run some ads. I'll hire some people. And the way you're talking about it is more like we would think of traditional marketing. You've got to know who that ideal customer is. You've got to have the right message. You've got to constantly build pipeline to get those folks. And I think of a lot of businesses treated recruitment that way.

They'd find a lot more success rather than just always firefighting.

Tommy Mello (02:52.122)

Can tell you this What if I told you like I want you to the old Pareto 80-20 rule what I'd love people to do is look at their top 20 % I said what if they were able to multiply that by five so that what that means is They take the top 20 % of their working staff and either you got to train them up or out to get into that 20 percentile and Unfortunately when you're a small business

John Jantsch (02:58.776)

Right, right.

John Jantsch (03:15.918)

Mm-hmm.

Tommy Mello (03:21.582)

like I was for a decade, longer than that actually. I didn't know what good was. And you know what I used to tell people, John, I used to tell people, if you got a garage, you're my client. And I've quickly, over the last, I'd say seven years, realized that not everybody with a garage door is my client. The people that are price shopping, you could only have three things. My dad taught me this. You could have the cheapest, the best quality, or on your timeline.

You can never give all three. It's impossible to give all three. So I decided a decade ago, I'm not going to be the cheapest. I'm going get out there today when they need me the most and I'm going to do a quality job with a drug tested background, trustworthy person that can be alone with your wife and kids. And that's what we've done. And I think to be the cheapest is a race to the bottom.

John Jantsch (04:11.726)

Yeah. You got to throw all that other stuff out. Right. So you, you talk about in your writing and, and when we talked before, you know, about kind of struggling a little bit before you kind of turned the corner and, and, you know, figured out how to really scale was that, there any, were there any kind of pivotal moments or pivotal things that really made you, you know, you feel like, you know, kind of made the light bulb come on and, know, really lead to success.

Tommy Mello (04:41.112)

Yeah, this right here, I know not everybody's watching, but the way my trucks were branded, this was my original truck. It was just a white truck with stenciling on it. Then I got a better wrap that was pretty good. And then I got this one that's absolutely phenomenal. And this other, the brand new wrap I got, and this had to be about five years ago. It was done by Dan Ancinelli from Kick Charge.

And it doesn't have a lot of logos like the BBB and Yelp and Angie's List on it. It doesn't have anything. It doesn't even have a phone number on it. It's a billboard. People can only read five words as they're driving by. So anybody that puts these 18 words on there and says, you know, call now to get your appointment and this QR code, they're driving by. So once you get your brand dialed in and now my signature on my email looks like my catalog.

John Jantsch (05:10.02)

Yeah.

Tommy Mello (05:33.626)

Looks like my website, looks like my yard signs, looks like my billboards. And then I've got a jingle that's the same everywhere. So that was a big piece of it. I think people don't understand a part of marketing is your brand. And brand is, you know, some people take them and they differentiate them a little bit, but I think it starts with your brand. And what is your core values and what do you stand for? What can you prove you're known for? Like you can't say I'm the best. You can say out of the last thousand jobs, 998.

Started on time and two of them got rectified within 48 hours and those are facts and your kpi should be driven towards the consumer Obviously your financial department's going to have kpis like what's your conversion rate and average ticket or what you know balancing income statement and all a lot of great Data about what's good for us, but we need to start thinking about what's good for our clients and The biggest thing i've Is most companies i've invested in most companies that i've coached

I find most of their opportunity in their call center, where their leads are coming into. My mom used to answer phones for me, John, and she, sometimes I felt like she was having phone sex. She's never, I don't think had phone sex, but she'd be like, my God, honey, I am so sorry. It was like crazy. She'd be like apologizing and empathy and just, honey, I am so, we're gonna get this fixed. I'm gonna send out my best technician. This is like 15 years ago.

John Jantsch (07:01.624)

Ha

Tommy Mello (07:01.914)

I show up to these houses John and the people would give me a hug and they'd be like this is the best company I've ever talked to like Whoever that lady was she would never say she's my mother, but she brag about me She's I'm gonna send out our best technician this guy. He's a handsome devil and shit, she never says she's my mom and I show up and there was putty in my hands like the client would say whatever you guys say to do We're gonna do it. We've never heard of anybody take a call like that

And so I think the contact center, there's a lot of opportunities. And that's operational, right? But marketing needs to go through all the way through to where I collect the cash. And even after I get the review and we do business to get in the future. And I think people miss that.

John Jantsch (07:45.604)

You know, I listen to you talk about, mean, obviously your mom was very invested in the success of the business, in your success personally. How do you get employees to feel like, I'm an essential part. mean, a lot of times people answer the phone, they're like, hey, I'm just putting in my time. You know, I don't get to see that profit necessarily. mean, you know, all the things people can delude themselves with. So how do you get people, you know, everybody bought in it? Cause I know that's been a big part of what you've really preached.

in terms of really building a company culture.

Tommy Mello (08:19.514)

There's a simple phrase called what's in it for them. And I'm not into tenure. I'm not in an hourly pay. I'm in a performance pay. And if you set the guidelines and it's fair and it's distinguishable, meaning that it's not based on somebody's opinion, performance pay, what'll happen? And I want to be very careful here for your listeners. If you switch to performance pay, you'll probably lose 80 % of your staff because they'd like to get paid hourly.

They love to get paid, you know, come and do my job and be done. But when you come up with ways to say what's in it for them, how can I have them win more? And look, everybody's like, how do you even start that? Well, you just take your historical data. Like this person's booking 62%. At first, you got to know KPIs and have data accuracy. There's got to be some type of data compliance to make sure that it's accurate. And see, if I got them up, like right now we'll do 300 million, right, next year. For every percent we increase,

John Jantsch (09:14.328)

Mm-hmm.

Tommy Mello (09:16.346)

The booking rate, that's $3 million of revenue to the company. At 20%, that's an extra $600,000 to the EBITDA. And so I'm a mathematical guy, right? So I'm always doing math and coming up with formulas and saying, does this get the right behavior I'm shooting for? And if I share some of it with them, the company and, you know, I win really big, but I allow them to feel like they're winning really big too in comparison. Because if you're making $17 an hour, I can pay people $45 an hour.

and still be winning. And how easy is it, do you think, for me to recruit A-plus players when I can pay that much? It's like taking candy from a baby. It's like, why would he pay that much? Well, he's getting people to set him up for success. And that's so important. It's just smiling on the phone and empathy and really caring. And you know, I heard this from a buddy of mine. He said, if you ever go to the Four Seasons, you'll notice that they hire people that genuinely

John Jantsch (09:52.973)

Right.

Tommy Mello (10:16.238)

Genuinely do care like they don't just say hey, how are you today sir? Nice to see you. See you later They say listen is there anything I can do to make your stay better I'll tell you this I got to stay it for seasons and in the past They might tell you a story to say it was so magical for me and my family After that day I knew I wanted to work here and my goal is to make sure that this is the best experience you ever have to look you in the eyes They'll walk you to the bathroom if you ask for a question

John Jantsch (10:17.763)

Yeah.

Tommy Mello (10:43.108)

They'll open up a restaurant that's closed to make you something themselves that they have the opportunity to do that. And that's what I think is that we talk so much about marketing, about making the phone ring. And I talk about stacking the deck on the other side by recruiting A plus people on your team.

John Jantsch (10:59.214)

Talk a little bit about that concept of recruiting versus creating, you know, A plus team. Obviously, if somebody is already a proven superstar salesperson, they're, you're going to pay for it, right? You know, to recruit them perhaps. Whereas I know you spend a lot of time and energy actually training and teaching and creating A players. Talk a little bit about that, the difference between those two ideas.

Tommy Mello (11:28.288)

I do think there's certain things that look for I hire for personality. So I contact tonality. Can you tell a great story to you smile a lot when I take you and your wife or husband out to dinner. But I find that you guys get along well because if there's problems at home there's more likely going to be problems when you come to work because you're trying to kind of put yourself out of a fire that you just got into at home. But what we do is we train train train train train we role play.

John Jantsch (11:32.664)

Mm-hmm.

John Jantsch (11:50.532)

You

Tommy Mello (11:56.174)

And we just focus on these attributes of like believe in yourself. The first thing you need to do is believe in yourself. And that's what eye contact tonality smiling is, is believing in yourself. And I'm not Starbucks. I can't hire people to save them, to start looking through their lens differently. It's so hard to do that. It takes years. It takes years. Sometimes people go into the military, very unorganized, come out very, very organized, but that takes sometimes four to eight years. So I try to find the right canvas.

And then I try to teach these things like the words we use. We never say, this is how much it costs. We say the investment would be this. It is an investment. It's the number one ROI on your home. The number one investment more than your kitchens or bathrooms is your garage. Remodel magazine six years in a row, an unbiased third party. So we teach them the words to say, we monitor this. We've got systems that record the whole conversation in the garage with the client. That's for the client's best interest, but it's also to coach.

We say kneel down when you're doing when you're presenting you don't want to be above the customer because you make them feel inferior There's a lot of things that we try to do and when I played football We did two a days we practiced ten times a week to play one game So in business, why shouldn't we do the same thing or should we go after you train? You're just gonna go practice on the customer's house forever And I don't know about you, but I like nice things that last I've gone with the cheapest

to fix my house when I did a remodel in 2012. I'll never go at the best price again. Because I had to redo the roof after five years. I'm on my third AC unit. I just want the best. I don't want to have to worry about it. think homeowners are smart. They're like, you know what? What's the... And what if you had a magic moment where you said, you know what I care about the most? I care that my kids could go to school. And I care that my wife makes it to work on time. Because that's what we miss today.

So you called the best option. This is to keep the kids coming to school on time and make sure your wife gets to work. And there's these magic moments and you title the estimates exactly what the client cares about. And you title it, this is the one that'll give you the best investment for moving in five years and making sure you're graduate or last. Because they say, I'm gonna move in five years. So you say, listen, we don't need you to do the Taj Mahal. Out of the five options, let's do number four.

John Jantsch (14:03.428)

you

John Jantsch (14:27.62)

I actually recently put in two new garage door openers and it's been a while since I had replaced one and they've gotten a lot more technical. There's a heck of lot of bells and whistles in those things. mean, the price range is, you know, three, four X. You you can buy the cheapest one to the Taj Mahal. It's gotten a lot more sophisticated, hasn't it?

Tommy Mello (14:51.352)

Yeah, now you know, that's the deal. They got the my queue. The the opener's got a brain. And the brain will tell you know we've we've worked out a pretty good opportunity with the manufacturer that will know if you got a problem before you do and will just come out. We guarantee one hour service that if something it's got this thing called a force adjustment, so if it comes down on something or comes off track, will know about it. And.

John Jantsch (14:54.936)

Yeah. Yeah.

John Jantsch (15:11.736)

Yeah. Yeah.

Tommy Mello (15:17.464)

That's gotta be nice for you because before you know that you got a problem or showing up saying let us look at everything and make sure everything's okay.

John Jantsch (15:24.324)

Yeah. My favorite attribute is I know when the door opens. And so, you know, I'll be in here and I have my office in my house and my wife will go grocery shopping. I know it's time to go down there and get the groceries out of the car. I don't even have to hear it. Talk a little bit about skilled labor. mean, people, you know, people aren't coming out of high school today thinking I want to go be a carpenter or, you know, whatever electrician.

Tommy Mello (15:38.36)

Yeah, that was great.

John Jantsch (15:53.39)

nearly enough, I think, to meet the demand. So what have you done to, really kind of shore up that you hire for, like you say, you know, personality or fit, but they still have to be able to install something. They still have to be able to fix something. What are you doing to kind of shore up that, that end of it?

Tommy Mello (16:11.874)

Well, we spend 12 % of our revenue on marketing, okay? So if we do 25 million, we're spending a few million dollars a month in marketing. So we're in Val Pak, all over website optimization, we, Clipper Magazine, the newspaper, PFP Deals, Angie, every lead aggregator out there, we're on TV, radio, billboards. The idea is why not put the recruiting ad into some of these?

And say, at A1 Graduates, you've always known us for great service, blah, blah, blah, blah. Now we're looking for more. You want to do two in one. You want to do the marketing and the recruiting in the same message. And then you want to have this massive funnel that chops, chops, chops, chops. Every time it chops down to this smaller amount, it's refining, refining, refining, refining. Here's what I do know. Artificial intelligence and robotics are not going to replace

Garage doors HVAC plumbing electrical roofing anytime soon. No one's gonna come out with a robot and install windows But I'll tell you what this camera stuff we're working on the the drones and the different things They're all gonna be AI AI is gonna fix everything left brain AI is like handling here soon Development coding everybody said hey go into coding go into coding. Well AI is gonna fit you're not gonna have a job So these blue collar things that were shit on for a long time Like man, it was embarrassing if you were H a

John Jantsch (17:17.166)

Yeah.

John Jantsch (17:31.299)

You

Tommy Mello (17:39.194)

I do. a plumber. Now it's like you're beating your chair. You're like, I'm a plumber, baby. It's like our day. This is our time. And I think the word's getting out there. Like the average plumber is 49 years old. And now you got this amazing amount of people going, look, I don't think I was cut out to go to college and go into debt for $200,000 because I don't really know if I want to go into economics or accounting. And I don't know if my future, what the future holds there. So I do know that

John Jantsch (17:42.82)

Yeah.

Tommy Mello (18:09.238)

No one's going to be fixing anything on the home at least for a decade. I don't think this robot's going to be coming out and doing it for a while. So I think people are starting to understand that and they're starting to say, I don't want to go into debt. We pay to train you. You come to work for A1, you're to get paid a very healthy living to get trained. then if you can't make two grand a week, shame on you your first year. If you can't make three grand a week on year two, shame on you.

We're going to give you the tools. pay for the tools. We're to give you a brand new van. We're going to give you training. We're going to give you role play. We're going to make you, you know, we're going to give you a flexible schedule. We're going to make sure your wife and kids are bought in. It's typically a man going out to do the work. We've hired over 20 female technicians. Unfortunately, it's a harder job on the body than most realize, but it's a really rewarding job. And I think the more we can share the stories, we've got a full-time dream manager. Their job is to help people dream.

John Jantsch (19:06.02)

Hmm.

Tommy Mello (19:09.21)

What do you want out of life? Do you want to go on that big vacation? Do you want to buy a home or a second home or a third home? What does that mean needs to happen? Well, it means these need to be your KPIs. And when I talk to you, I just say, listen, you ever you told me you want to take your kids to Disney World First Class, let's skip all the lines. Do you realize if we just if you had a little bit higher conversion rate and I'll show you exactly what you need to do to do that, that you would make that happen this year? So you talk about

What's in it for them again? they don't care that, hey, Tommy sits down with them and he wants to make more money to the bottom line and you're gonna be on a performance improvement plan. No one cares about that. They care about like, what about me? What about my family? What about the people I care about? Like, I took a chance working for you. Why don't you teach me more? But you gotta remind them. You gotta remind them about their why and what it means to their life in the future. And hopefully you'll hire the right people that have plans. Because some people go through life

I just say I'm okay being mediocre.

John Jantsch (20:11.268)

Well, Tommy, run out of time, but I appreciate again, you stopping by. Very inspirational as always. I appreciate you taking a moment to stop by the Duck Tape Marketing Podcast. there some place you want to invite people to find out more about? I know you've got a variety of different interests and things you're involved in, but what's the best way for people to find out more about what you're doing?

Tommy Mello (20:32.514)

Yeah, if you just go to Tommy mellow, there's no w at the end of my name. So Tommy e l l o dot com. You see all my social media, my books, everything's there. And if you go to Tommy mellow dot com for slash shop, you can do a shop tour. I don't charge anything. If you ever get find yourself in Phoenix or want to come out here. It's a great experience. It's a way to pay it forward like everybody did for me when when I was coming up in the home service home improvement space.

It's a way for me to brag on the team and it's a way for me to help you because I do believe that if you help people it comes back tenfold. I think that Zig Zayler said you could have anything you want in life if you help enough people get what they want. And I'm a true believer of that. I really am. So if anybody needs anything reach out to me. I got 80 ways from Sunday to reach me. I've got a full-time team, a massive team these days that make sure that it gets that I'm aware of the comments and questions. So

I appreciate this podcast and I'm looking forward to having you on.

John Jantsch (21:34.583)

Likewise, we're gonna record back to back today. again, thank you for taking a few moments to share with our audience and hopefully we'll run into you one of these days out there on the road.

Tommy Mello (21:44.42)

Sounds great, appreciate you.

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