Hello and welcome to the More Cheese Less Whiskers podcast. My name is Dean Jackson and today we have a great episode with Peter Van Stratton.
Peter is a exterior cleaner in Vancouver, Canada. He has a really cool opportunity in that he's been using a lot of the marketing ideas we talk about, a lot of the ideas using direct response and thinking about a before unit to generate new business. He's been using some direct mail strategies with compelling offers to start a relationship with him and he's figured out something that a lot of exterior cleaners have not figured out. We had a great opportunity to talk about how to take that knowledge, leverage it, and maybe introduce it to other exterior cleaners, or take that information and create a new opportunity for him to be the before unit for other exterior cleaners, or even create a whole franchise around it.
This is a great episode that's going to be appealing to you if you've figured out something in your business and you've ever wondered, "I wonder if I could," or, "How I could license this or package this or sell this to other people in my same industry?" It's something I call syndication. It's been one of my biggest winning formulas.
In fact, everything that I've done in the real estate world has followed that model. I started out as a real estate agent, packaged up the things that I was doing to generate new business and started licensing it and teaching it to other real estate agents. It's the same model that Joe Polish used as a carpet cleaner, figuring out marketing for his carpet cleaning business, packaging it up, and teaching it to other carpet cleaners. It's a winning formula.
If you have a business where there are lots of other people all over North America or all over the world in the same business you may have the same opportunity to leverage what you know.
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Transcript - More Cheese Less Whiskers 019
Dean: Peter.
Peter: Hey Dean. How's it going?
Dean: So good. How are you?
Peter: I'm doing great, doing great.
Dean: Well, I'm excited to hatch some evil schemes with you today.
Peter: Super excited.
Dean: Why don't you tell me a little bit about what you're up to and what kind of evil schemes we can hatch today?
Peter: Sure. Basically, I've got a cleaning business. I do like power washing, gutter cleaning, house washing, stuff like that, and I've developed some pretty good, I guess on your words "vending machines."
Dean: I like that.
Peter: Yeah, but the problem is I've kind of hit a ceiling with it where I can only do so much work myself and so I'd like to be able to mail out more and kind of scale them up, but just going about that I'm struggling with a bit, still kind of figuring out like how to license them or leverage them, because I don't really want to have more employees. I more want to have either subcontractors or a business opportunity or something like that.
Dean: Or people who are just using your method. Would you say that one business would do all of the things that you do, or would it be different businesses?
Peter: Like industry wise or ...
Dean: Yeah, would it be one person who could, so let's just list the things that you do. You do the pressure washing and gutter cleaning, and that would basically be in a typical situation, like here in Winter Haven where I am, would I be looking at different entries in the Yellow Pages or would the same person basically do these things?
Peter: Kind of a common umbrella, I guess, is pressure washing, gutter cleaning, window washing, house washing, and then some people do roofs, like roof moss or roof cleaning.
Dean: Okay great. That's great. I'm familiar with all of those and I actually need to get my building pressure washed. I've got a stucco office building, and I need to get that pressure washed. I just was pulling into my building the other day and thought "Okay, that's getting a little, I need a little pressure washing there." That would be one guy, same guy who would maybe while he's there do my gutters and all that kind of stuff.
Peter: Yep.
Dean: There's lots of these people, I mean they're everywhere, everywhere in North America for sure.
Peter: Yes.
Dean: Every town would have multiple of those people. Okay, so this is my favorite thing here is like, and this is very similar to my past, I started out as a real estate agent in Toronto, just outside of Toronto in Halton Hills, and I started out selling real estate, applying marketing to my own business, and when I read The E-Myth by Michael Gerber I got on a really deep level the understanding of this duplicatable model of creating something that could be duplicated 5,000 times. Have you read that book yet by the way?
Peter: Yes I have. Yep, yep.
Dean: Okay, so you know what it talked about, so you're basically, it changes the way you think about it. You start to now look at your business as the franchise prototype, and the reality is in your business you're the guy who's actually doing the pressure washing, doing all of that stuff, so you reach a what Michael Gerber calls a ceiling of complexity that you're limited by you're available hours to be out pressure washing and doing gutters and all of the during unit stuff of that business, but you've figured out the most important thing and that's how to get people to let you come and do their gutters and do their pressure washing, because there's a lot more people who do what you do who are sitting at home or waiting for somebody to call them to come and do the pressure washing. Talk to me about what you figured out and kind of how that journey went. How did you come to that? Well, how'd you figure out what you figured out?
Peter: Well, when I first started it was like I tried knocking on doors. I didn't get very far from there, and then I was like "Oh, I don't like this very much. I'll try flyers", not knowing any marketing at this time, so then I tried a flyer and that didn't work at all. Luckily, my dad kind of has a bit of experience with direct mail and stuff so he kind of turned me on to Dan Kennedy, like bunch of stuff like that, so then I went back, kind of changed it, and then sent it out, started getting results, people calling me from it, and I said "Oh, this is pretty awesome."
Dean: Oh, I know.
Peter: Then now I kind of have a strategy where I go neighborhood by neighborhood, similar to what you do with real estate, how you target neighborhoods. I do that where usually if I'm brand new in a neighborhood, I'll do like kind of a launch event or a neighborhood event for a few days to get my initial batch, and then I'll keep mining that neighborhood where after that jobs I'll get a testimonial, before and afters, and then I'll go to the neighbors and then I'll get referrals from there and then it just kind of snowballs, so yeah. It's just that's kind of what I do and what I thinks powerful about it is you get such density in the neighborhoods.
Dean: Right. It's so funny with the real estate agents I have something that I calculate with them called their listing multiplier index and that means that with every listing that they get, how many additional transactions do they get because of that. Most of them are just focused on let's list the property and put it on MLS and somebody will sell it and all my listings sell in ten days or whatever, but they miss out on the opportunity to find the buyer who's going to buy that house or find a buyer who buys another house or to get the next listing in the neighborhood and to get a referral from the seller, so you're in that, I love to hear that you're focused on kind of those strategies, that every time you get a client that you start to look and see "Okay, I've got an opportunity to get one of the neighbors or some of the neighbors, to get the referral from the client to leverage this." When you look at a new client, how much extra business are you typically able to generate using your method there?
Peter: I don't have it in like an index form or like 1.5 or something, but-
Dean: What I do, this is an interesting thing and I'll explain this because I think that for anybody, and the reason I was excited about doing this call with you is that they're are a lot of people who are probably in a situation just like you where they've figured something out and they hear me talk about licensing things and syndicating things and creating turnkey systems for people and they wonder "Well, how to I go from here to there" kind of thing, and so having some standardized things, like if I were to say to you "Let's look at your last ten clients" and we say "Okay, of those last ten let's just think about those and look back and see how many extra jobs did you get from this?" Or "What are the possibilities?"
Certainly very similar to the realtors in that you're in a location based situation. You've chosen a neighborhood, you select your target market of the kinds of homes that are your ideal client, you sent your flyer initially and people respond, and you've a got a new client now. Now when you go in there, there's the opportunity to, even if we just take the opportunity to get some of the neighbors or to get a referral or from the client, that could potentially be five transactions that you could get if we say you've got the original job and two neighbors and two referrals would be not out of the realm of possibility. Would you say that that's something that if you were focused on it, that that would be reasonable?
Peter: Yeah. I'd say especially, I feel like neighbor are even easier than referrals in some ways.
Dean: Absolutely.
Peter: I could definitely see that new kind of thing, my last ten for example.
Dean: I'll go through this with you because you'll be able to have this conversation with other pressure washers or other ... What's the category? What would you call you? How would you, that category refer to themselves? Would they say home maintenance? Would they say home services?
Peter: It's exterior cleaning, like home services, exterior cleaning is kind of an umbrella.
Dean: There we go. Exterior cleaners if we take them as a category here, that they would have the same experience that you do and the same opportunities that you do in that they are working with people who have a home in a neighborhood and that they're surrounded by other homes and the client has relationships as well, right? There's those opportunities to get referrals and to get the neighbors. Now most of the time, exterior cleaners would go in, do the job, and then leave and wait for the next call or go on to their next job and not proactively do something to multiply that one job. IF you ask them, if you sat down with them and you said, "Let's look at your last ten clients, last ten homes that you brought on and think back. How many of the neighbors did you get and how many referrals did you get from those?" Most of them will look at you kind of blankly and maybe serendipitously somebody saw their truck in front of the house and saw them doing the pressure washing and maybe walked up to them and said, "Hey, can you come and give me an estimate for my house?" That probably just happened serendipitously without any real strategy around it.
You may find that they will say, "Okay, so out of the last ten, I got two additional jobs or maybe I got five additional jobs out of that. 50% of the time I maybe get a neighbor. That happens that way." If we set a benchmark of saying that our aspiration is to turn one job into five jobs, that that's our stretch goal here, right? Again, it's pretty reasonable to think that that's possible and then we'll use that as the benchmark and say if we look at your last ten, and there was a possibility to get 50 from that last ten, and you got 12 that's a big gap. There's a big delta there. You look at it and say ... What's the average ticket for a job that you do for somebody?
Peter: If the service has multiple services, like not just pressure washing, my average ticket is about 275.
Dean: Let's call it $250 to be conservative on that, right. That would be reasonable to say that? If somebody has ten jobs, the baseline of that is going to be $2,500, right? You see where I'm going with that. Now all the additional things, the four extra jobs that we're looking if our aspiration is there's an extra thousand dollars per job that's potentially there for us. If we take it that out of 50 jobs, there's a potential of $37,500. That would $250 times 50 is? Yeah. Let me get my calculator here. This is where it will come up.
Peter: 250 times 50?
Dean: Times 50 is 12,500. All those jobs could be worth 12,500, but if all they did was the initial job, they got the $2500, but they lost $10,000 by not focusing on getting two additional jobs or two referrals from the client. When you show people that, it kind of lights a fire a little bit. You start to think wow I really am missing out on stuff. It sets everybody on the same path. The way I get that index for it is to take your average, if you say on average over the last ten, I got five additional jobs. I got three neighbors and two referrals on the last ten that I worked with, that brings you a total of 15 out of the last ten and we divide that by ten to get 1.5. That's how we would come up with that. If you're client multiplier index is three, that means that every new client you bring in is worth $750 instead of $250.
You're creating a basis for the conversation here with people. You've got a way to show them how to multiply every job that they're already doing. Which is going to help people, especially when you're in a situation that a lot of times they might not look at investing money in marketing as an opportunity for them when you're talking to going to other exterior cleaners, right. This is a way to start that relationship with them to help multiply what they're already doing and framing it in a way that they're losing money right now because they're not doing it.
Peter: Okay. That makes sense.
Dean: Tell me about the flier or the lead generation tool that you have. If you're picking an area of a thousand homes, how would you choose the ideal area or neighborhood for you?
Peter: Okay. Well, it kind of depends on what stage you're at. For me, now, because I've got so many regular clients it changes just what I do a bit, so I do a bit more of a blanket mailer rather than really targeting, but when I'm starting out, like if I'm brand new to a neighborhood I probably would do like a free driveway promotion where I would have a neighborhood event where I'd say like next week on blah, blah, blah, I'm going to be coming through the neighborhood doing free driveways. Just respond to the letter. That's one thing I do. I've also got a step up from that is that I charge $69 special for a driveway which gets lots of response but depending on the season.
Dean: It's very interesting when you look at it that there's a really good way to think about this. What is your cost on doing somebody's driveway?
Peter: Hard cost is probably, let's say less than $10.
Dean: Okay. Let's call it $10, so that's the really, that's kind of like Joe Polish's free room of carpet cleaning. That's kind of the way.
Peter: Yeah, that's what I thought at the time.
Dean: Perfect. Okay, great. That's the kind of thing, now what you've got with that is a, you've got a relationship now. You have a client relationship. When you've come and you've done something with somebody, you know who they are, you've established a dialogue with them and you've got a way for them to meet you, to see what you're like, and along with that if you're doing all the right things, you're going to turn that into well here's some of the other things that we can do. How would that work for you when you go and do that? What other things are you kind of presenting to them?
Peter: The letter kind of frames it already in their head, so it goes like this is a way to introduce my services to you. If you like the result, I'd be happy to measure out and give you a price on your patios, your walkways, this and that, but only if you choose. It's already in there heads somewhat, so then, yeah, I do the driveway and then it quite easily turns into "Okay. How much to do the rest of the stuff." Especially if you give them just the pressure washing and then sell them more pressure washing, that translates really easily versus going pressure washing to gutters, I'd say.
Dean: Yeah, right. There's so many things when you like at their exterior walls, their decks, all that stuff, lots of opportunity for pressure washing alone, right?
Peter: Right.
Dean: The good news is, with a $10 hard cost on something like that, that sets the benchmark here, so one of the things that I always look at, and I don't know if you've heard the episode of I Love Marketing where I talk about this idea that what would you do if you only got paid when your client gets the result, and that's kind of what you're doing here, is you're delivering a result to people and they want that. They want the driveway done. Everybody, that's kind of a, I'd forgotten about that but then looking at my driveway right now, and I'd love you to come by and do my driveway. That would be a kind of a way, no, but that, I just think about I'm pretty situation here. You would come and do my driveway and now I own this office building that's going to need that, and I can already see that I need to get the gutters cleaned, and that's really, I would love to have the one go to guy for that, and of course your ongoing relationship with somebody, because you've got a client relationship with them now is going to turn into some stuff on an annual basis. Everybody's going to get their the gutters and the windows and all the exterior maintenance stuff done, some of it on a annual basis, and you might not pressure clean every year, or do you? No, I don't.
Peter: For a lot of people. Actually, up here like where I am, it's probably similar to Florida, but it's quite wet and everything gets really green, so a lot of people do do it every year, but every year at least. Definitely over, I'd say over 60%, no over %55 do at least something with me every year.
Dean: That's great, so that's your after unit. You've got a really great business model there, but part of the thing, the way establish for people you said something and I want to maybe see if you have some numbers to back this up. You said that sometimes you do a $69 driveway cleaning versus a free driveway cleaning. What have you noticed is the difference when you do that? Do you get less response at $69 than you do for free?
Peter: For the $69 flyers, I get them unaddressed ad mail or when I first started-
Dean: Yep, which is great. Canada is so great for that, yeah.
Peter: It's so good, so good. Or I'd get somebody to deliver it when I first started, but that's really cheap. When I do kind of more straight sells, like my conversion's usually let's say 1 to 3%, sometimes it's higher like after a month or two, but so if I'm mailing out let's say conservatively 30 cents, so let's just say it's $30 to acquire like a $275 job or something with all the upsells versus free driveway. The problem is I haven't tried it with unaddressed ad mail, I've only done it with first class, so with first class it's like a dollar and then the lowest response rate I've got with a free driveway is %5, so a dollar at %5 so it's $20, so it's cheaper to acquire but then you don't have the initial sell.
Dean: Yeah, no, I get it, and the thing is really like this is my insight from that was sometimes, most of the time, it's less expensive to get somebody the result than it is to convince them to give you money to get the result, and that's really a, that's a huge thing. When you start thinking about a, especailly when you can bulk them all, you're doing a whole neighborhood, and you can do a sweep through a neighborhood this Saturday or something, that's really a great way to start the ball rolling, and then when you get that client now you've got all of these strategies to start multiplying them. Is it a letter that you send or a flyer or a postcard or how do you that?
Peter: For the free driveway, the one that I've used is a three page letter, but it could be dropped as unaddressed ad mail to, I just haven't done it that way yet, because you can drop anything in there. It's just plain paper, printed.
Dean: Yeah, okay, and I bet we could do that as a postcard even, the free one. Certainly you could do it as a postcard to get some response there. I think that's a pretty cool situation. How do you have people respond? How do they respond to the offer?
Peter: Either they call, text, email. Typically, most people call. Some people text. A few people email or opt in. Most of the market is older. I find most of my customers are 55 plus and most kind of just prefer to pick up the phone and call.
Dean: I like it. Okay. Then what kind of strategies do you use right now when you get a new client? You get one, and you had said that's kind of your start, is to get into a neighborhood, and then what do you do to leverage that? What kind of proactive things are you doing then? You've got a job, somebody says "Come on over", by the way when you do the free one, what's your conversion to paying? What percentage of people once you do the driveway for them will end up doing something else? Would you say it was about-
Peter: It's pretty high. It's over 90% in my experience.
Dean: Okay, yeah great, and that's the thing, once somebody gets that going there's so much other stuff. I think it's really like important to realize that when you look at the lifetime value of starting a new client that the $10 hard cost that you have in doing it for them is such a great investment in the long term.
Peter: Yeah, see the only worry I have a little, like even myself, I stray away from it a little bit just because it is hours.
Dean: No, I understand.
Peter: When you're thinking about the guy himself doing it, it's definitely the best strategy, but for compliance it is a little bit harder to get people into it, to get the cleaner into it.
Dean: Numbers don't lie.
Peter: Oh, for sure.
Dean: When you go through the same things. Like I've been doing work with a franchise that does mosquito control, and it's the same situation, and in still many ways the best thing, the best way to get somebody started is with a free offer. When you look at, I'm not saying that just because it's easier, I'm saying it because it's more profitable. This is the thing where all kinds of small businesses like that, they get so, they sell themselves short by letting their egos require that people pay money first. They're treating people like they're not five star prospects until they prove that they are versus treating them like they are five star prospects until they prove that they aren't. That whole mindset is like they're thinking "Well, I'm not going out and doing stuff for free", but they don't realize that it costs them more money to convince somebody to give them the $69 than it would cost them to do it for free and get the $275, you know.
Peter: Yeah, it's for sure.
Dean: I don't think that. It's all testing. It's all easy to kind of test from there, but let's say now you've got a new client, what kind of strategy do you deploy to leverage that if we were to say what do you do now?
Peter: The first thing I do, which is a little bit hard to do logistically, but if you're scheduled out let's say two weeks in advance, you send to the neighbors right next to them and say "Hey, on December 1st I'm going to be doing your neighbor. I've got time still to do yours." With that you get a pretty good response rate. It's a bit hard to execute, but that's kind of the first thing. Two is just signage by having either take one or a good, a better sign that just you name.
Dean: Yeah, absolutely. Yeah, yeah. Do you use the take one boxes? I call them info box flyers.
Peter: Yes.
Dean: Yeah?
Peter: Yeah, so I've got that and then take before and after pictures is a big thing. Testimonial, after-
Dean: Do you get reviews?
Peter: Yeah. I mean, as with anything, you get a little bit lazy with it after you have a bunch, but I've even got ones that I send after the fact that get a pretty good response rate, like a little post card that they fill in with a thank you card. Then from there I take that and you can drop kind of letters while you're doing it at the two beside, three across, and then what's kind of nice is if you do the free driveway cleaning, it also lends itself a lot easier to the referrals, to the neighbors and everything. It's a lot easier to refer a friend if you give them a free driveway.
Dean: You're exactly right. You see how it is, now you're talking. It just leads itself to so many different things, right.
Peter: For sure. Then I have given referral cards in the past and also why I do is I just keep back to that neighborhood and go "Hey I've just done 11 of your neighbors. Now I've 20. Would like ..." basically headlines, just "would you like yours cleaned, too? I just did your neighbors, blah, blah, blah." Then just the social proof, my favorite example is I targeted a neighborhood of 90 homes and did the free driveway. I ended up actually cleaning for 65 of them out of 90, and basically now about 45 of them are regular customers, have been customers every year for the past three years, so it's kind of like the-
Dean: You dominate. You dominate the neighborhood. That's what it's all about. You've got your annuity in that neighborhood now. Why would anybody ever go to anybody else, because now you're the guy.
Peter: Yeah. I just send out one letter a year and then it reactivates them every year.
Dean: Oh, that's, yeah, perfect. That's so great, so I think you're really on to something here. Now, what you've got is now the opportunity to license this to other exterior cleaners. Have you done anything like that? Have you broken through to train other exterior cleaners to do the same thing?
Peter: I haven't yet. I've kind of, I wrote an article on this one guy's site that got a fair bit of traction, so the only thing I have from that is guys emailing me and kind of taking what I shared on there. I have a few guys who just took what I said in that article, and who have got pretty good results, but no I haven't like really worked with anyone one on one yet.
Dean: Right. Is there a way, is there anything that connects all of you? Is there an easy way to reach people like that? Are you a member of a association or some sort of, is there a trade publication or do you all ...?
Peter: Well, there's forums. I mean I'm not very active with any of that, but there's forums, I think there's an annual event for like window cleaners and stuff. That's fairly big. You can obviously find them by just doing the manual labor of looking through Craig's List and looking through Yellow Pages and everything like that, so you can find them for sure. It might take a while, but yeah.
Dean: There's the kind of thing where identifying those people and offering to teach them a way of getting new clients. Part of it, do you ever have people refer people to you? Are there sites that you're a part of as an exterior cleaner that you would pay a refer fee to or pay a booking fee to or somebody would say "Hey, we want you to be our guy and we take whatever percent refer fee or a booking fee"? Are there things like that?
Peter: Yeah. There's that like Home Advisor for example and stuff. I've never done them, just because I kind of have the system and stuff and I like being able to pick neighborhoods rather than be driven all over the place, but yeah they do exist. I don't know, I'm not sure how many people use them for exterior cleaning specifically, but they do exist. I talked to one guy, there's a new franchise that basically does what I do, and they're under the 1-800-gotjunk, and I talked to one of those guys the other day, and he said, what did he say, he said he'd pay less for leads but he would pay, I think he said 20%, for a job that closed.
Dean: For a booking, yeah. That's kind of an interesting thing when you look at the way that that goes. What kind of a franchise is it that he has?
Peter: Like what do they do or what?
Dean: Yeah, he's a 1-800-gotjunk franchise you mean or is there an exterior cleaner.
Peter: Well, you know how 1-800-gotjunk has their kind of other brands. It's called Shack and Shine and they basically do what I do, but they're just a new franchise that they're kind of expanding with I guess.
Dean: I got you, yep.
Peter: I see him out door knocking, is kind of how I ran into him. I was doing a job and he was knocking the neighborhood, and I didn't tell him my secrets yet, but I kind of go "Okay, this could be an opportunity."
Dean: Is he the franchisee or a franchiser?
Peter: He's like one of the guys that bought-
Dean: He's the franchisee. One of the franchises, okay.
Peter: Yeah, yeah, yeah.
Dean: Boy it's amazing. That's kind of an interesting thing that they don't have a way of getting that business, that's he's out knocking on-
Peter: The post cards they drop are like ugh.
Dean: So bad right? Yeah. That's kind of an interesting thing. Two ways to go is that you're either in a situation where you can train people how to do what it is that you do and charge them a fee to teach them or package it up as a one time thing where you for whatever, some number, 299, 399, 799, some a one time package, a bundle of stuff, like the way, that's how Joe and I both got started with the stuff we were doing is package it up and sell a marketing kit for real estate agents is what I did or for carpet cleaners is what Joe did, and that's a great business. Where we're different right now than it was 25 years ago when Joe and I were both starting our businesses is that there's really, it's come to a point where it's almost less expensive for you to do it for people than it is to convince them to give you money to teach them how to do it themselves, and it seems so paradoxical but the reality is that you know how to do it so you could, I have complete confidence that you could go to Regina and drop yourself into Regina and be cleaning somebody's driveway this weekend if you wanted to, right?
Peter: Right.
Dean: I mean that's really, you've got the letter, you've got the method. You could pick those homes and go and do it, so you could get up and running and start building a clientele right away, which is something that most exterior cleaners don't have. They're out knocking on doors, hoping to find somebody who they can convince to give them $69 to do it or convince them to give them $275 or whatever the amount that they would charge to do the whole treatment for them. When you look at it that if this guy was saying that they would pay 20% for a job, there's kind of the, it's sets the benchmark for it that that would be, he's basically saying that it's worth 50 or $60 to get a new client for him, right?
Peter: Yep.
Dean: Is essentially how that would work out. Now if you got to where that, you could show them how to do that where you can create, and this is something, I've been calling these like a scale ready algorithms that involves some human automation like how much of the execution of this would be require human interaction? Like for you to go into Regina remotely, which is kind of the great opportunity we have now or into even the next town over from you to prepare and mail a postcard that gets people to sign up for their free driveway cleaning. That would be a very useful thing for the exterior cleaners because it's like part of the challenge when you start trying to duplicate something that you've done is that you have to overcome their inertia in a way. They have to do something to make that happen. What we all know, if you look at it from our profit activator model, selecting a single target market, exterior cleaners and thinking what would be a dream come true scenario for them, right?
A dream come true for them would be that they get a call and somebody says, "Come over and clean my driveway." That would be a dream come true. They didn't have to do anything but go and do the driveway. They don't have to learn anything. They don't have to do anything other than go and do the job. That would be pretty much what they would really like, right?
Peter: For sure.
Dean: When you look at that, that creates the opportunity to do for them at scale what they would find it hard to do on their own.
Peter: Yeah, I've been listening a lot to what you've been going over the last while really trying to think about this like easy button results in advance and I've been working on it. I guess there's different levels to everything where at the furthest out I would pick the neighborhood, like do absolutely everything. Pick the neighborhoods and stuff. I think like a step down would be they fill out a form with the neighborhoods. After they've done a job they just press a button and then I get their information so then I can hit all the neighbors with all of the follow up materials.
Dean: Exactly, you're on the right track. Let's even think about it one other way. What does it take to get into this business? How much does it cost to become an exterior cleaner? What do you need kind of thing.
Peter: The cheapest you could do it is if you would start out by just renting. You could buy probably, roughly I'd say, two hundred dollars worth of equipment, that's hard to rent and then just rent the rest and buy as you go. You could get into it for probably under $500 and then if you wanted to buy outright let's say under three grand.
Dean: Okay. So for $3,000 you could get all the equipment that you need, which would be the pressure washer. How much of a learning curve is there on getting good at it?
Peter: Not that much. Obviously, you get kind of faster with time, but you can be pretty good I'd say if you, I was thinking about this exact thing, trying to say okay, if a brand new guy you say "for $200, just buy these few things that you can't rent, rent the machine, do like your family and two other friends. You'll get three jobs under your belt and you'll feel pretty good about that. Take before and after pictures, maybe even get testimonials from them, insert them into the flyers, and you're ready to go basically, to start."
Dean: Is this the kind of thing that would be, is it a seasonal things, like you're doing it in the summer basically? I mean you're in BC, right? Is that where you are?
Peter: Yeah, I'm in Vancouver, yeah.
Dean: Okay, so is this, you're a little different, but if you were in Regina is this the kind of thing that you would do in the summer kind of thing?
Peter: Probably. My busiest season is basically March until end of July, or even February, middle of February, to end of July, and usually there's a bit of a lull in August because people are away and stuff, and then September's kind of a bit weird, but then it picks up with gutters around this time of year, and other things, but if you were in Regina, you would just sub in a different service, like snow removal let's say from December on. The home owners always have certain stuff they need done in a way.
Dean: Yes, exactly. Well, that's the thing is once they've got a person there, it's kind of an interesting thing, so when you look at the possibility of either building this out as a business or building it out as a franchise potentially, does that kind of, what's your aspiration with all of this? What would you like to see happen?
Peter: I keep going back, like when I filled there to be on there, that's kind of my problem. I keep going back and forth. I don't think I want to sell it as a kit, because then it's kind of one off and done, and it probably doesn't get very good compliance. On the far end would be to almost be an Uber sort of thing where you do everything and you get the jobs for them. I'm more towards the Uber side of things, but part of me kind of says that's going to, that's a little bit harder to execute just because of the margins. It's just a bit tighter and takes a different capital and stuff versus making it a little bit more that maybe you get them started, like how you talk about get them that win so now they're playing with house money.
Dean: Right, that's exactly right, yeah.
Peter: That you could get them a little bit of house money and then after that, then they start paying in advance for the materials let's say on a monthly basis, or tell mail out let's say x amount per month or something.
Dean: Right, exactly. You know, you start to look at now building out. We've just talked about your before unit, so what you've got, a great way to start the relationship with somebody. We talked a little bit about the during unit, how to multiply those into additional jobs in the neighborhood, and by referral, and then the after unit, the annual kind of relationship with the client, that recurring revenue that you can count on, is kind of a cool opportunity. I think that's really pretty, it fits because it's really once you've created the algorithm, it's something that would be completely the same in Vancouver as it is in Portland or in Denver or wherever. It's all the same psychology, it's all the same stuff, and here I am in Florida just saying I need to get somebody to pressure wash my office building, and my driveway. There's so much. It's like every household has a cool opportunity there, and the real, I would really start thinking about potentially the relationship with the homeowner as the asset, really thinking outside of the box of we're just pressure washers or whatever. Just like you said, there's so many things that go into exterior maintenance. I ran a painting company for a few summers with a friend when I was in college, and when we had, it was a franchise at the time, College Pro Painters, and we created another company called Name Droppers, and we hired college girls to go out in the evening and on the weekends in the spring to go and do surveys in neighborhoods where we were asking if people were planning on doing any home improvement over the summer. We had a, they had clipboards with a form with a checkbox for getting a new roof, new siding, new eaves, new windows, doors, driveway paving, driveway sealing, landscaping, deck, fence, pool, all the exterior home improvement projects that they could do, and so we were doing that and making a profit on our lead generation, because all we were looking for was people who wanted to do painting, and so when we'd find somebody who wanted to get a quote on a roof, we were selling those leads to, we had a little network were we had a roofer and a fencer and a deck guy and driveway, so we were selling those leads to those businesses and we turned our biggest kind of expense into a profit center, and-
Peter: That's awesome.
Dean: Yeah, so when you start thinking about the relationship with the client as kind of the piece of mind like everything, all the exterior maintenance kind of things with somebody, there's a big opportunity there, you know.
Peter: Yeah, and that's definitely something I haven't tapped into but I've thought a lot about about, and I mean yeah. There's just so much in the after unit that you could do there. I haven't really done to much in the way of like, your world's most interesting post card would be perfect too, that you could kind of, you could even have other services on there.
Dean: That's exactly right, yeah. You start to think like all those people, your doing their things. A chimney sweep would be a good person to have in your Rolodex. It's almost like you've got the whole opportunity to kind of lead up that category and elect yourself to be the mayor of the category called exterior home maintenance. They've got that relationship and you're looking at all of the things because you don't do chimney sweeping and you don't do roofing and you don't do a lot of this, but you're all looking for the same person, and a lot of those people that you've already got a relationship with. This is where the thing really comes down to it is that the asset that you're in the business of building is the trusted relationship with your clients for a particular category. How many clients do you have? How many clients do you have in your roster?
Peter: I'd say regular repeat is probably, I would say around 500 that are pretty regular.
Dean: Yeah, and that's great. I mean that's really, that's a nice thing. Would you say that you've got a full practice kind of thing?
Peter: Kind of. That's why a lot of these things I don't do. I don't do free driveways as much anymore just because I already have so many hours.
Dean: You don't have to.
Peter: And I don't have to. I kind of just do blanket mailers to keep a little bit-
Dean: What stops you from hiring other people to do the same thing?
Peter: One thing is I'm going to have to move in the next little little bit here, so there's just that, but also in the past it's been, with employees-
Dean: What if, assuming that you had, if you were to build somebody, like there's part of the thing whenever you're doing this is to create something that can survive you, where if you're moving anyway it would be interesting for you to say "Can I slide somebody else in here but keep the business, still maintain the business?" That you've got an asset now that you could still kind of remotely run. Where are you moving? Are you going somewhere within Vancouver or are you moving far away?
Peter: My fiance is a dentist in the military, she's just finishing school, so who knows where we'll end up in Canada, somewhere.
Dean: I mean talk about, what a great opportunity for military, coming out of the military into a business like this where you've got such a great opportunity for them. Kind of an interesting thing, you know.
Peter: Yeah, yeah. I think it is a pretty good opportunity for a lot of people in a way. It's similar to College Pro, it's pretty good for university kind of graduates, because it is kind of hard labor. I mean it's easier the better your equipment is and stuff, it becomes a lot easier, but it's hard to do if you're not physically strong.
Dean: I'll tell you one of the very first things that in high school, my friend and I started a driveway sealing business. We didn't have the spray on equipment and stuff, but we would go door to door. We had flyers. We would do the thing and we would sell people on the idea that we used the brush on method which was so much better than the spray on method, because we didn't have the sprayers, so we convince them that, most of these guys they just come and spray it on, but we used the brush on method which really gets it into the, really does a better sealing job. That was hard, that's hard work, but it was something that, I've always had that kind of entrepreneurial spirit, you know. That was one of the things that we would do is get that stuff, but very funny. That could be, it could create a franchise type of operation like that. It's my favorite thing in the world just to think about scale ready algorithms like that and to build little business unit, but I'd be looking to see how quickly we could get you out of actually doing the pressure washing and get you into running a business that does the pressure washing, you know.
Peter: Right, yeah. I mean, in the past, the only thing I've kind of run into with, the reason why I kind of like the subcontractor sort of model is that they have a little more skin in the game. I have had guys do work for me before and I just ran into problems a little bit with them caring as much. They just don't treat it the same way when they're not the face of it, they're not the side. That's just the biggest problem I've found with employees. With Uber, let's say, everyone has a review, so it's kind of dependent upon you.
Dean: Yeah, that's such a great ... Yeah, yeah. It is isn't it, but kind of there's a more rapid kind of cycling on that and it's not like you're building a clientele like you're doing here, but it's all very exciting, so tell me what's the thoughts that you've had since what we've been talking about here. What's the take away?
Peter: I think you helped cement for me to focus on probably the more done for you side scale, like the easy button side. Executing that is just going to be the thing that I kind of have to figure out if I go all the way. I guess I'm struggling with whether it's like you have it all under your brand or you just do all the work for them and they all have these sub-brands and yeah. I think a lot of people probably don't.
Dean: So much of it is in the model. So much of it is in the model, and that's where when you, either that depends on how you set it all up, but it's not the magic of the brand or the name that's getting you the result, it's the offer. It's the offer, and that's the thing. I could make that same offer to people, so it's the brand system. I look at creating things like the way we do it with our real estate agents is it's not, it's kind of brand agnostic. It doesn't matter what company your with or what real estate brand you are, this will plug into your existing business, is the way that I do it, but I could just as easily build, I could build an organization around it. I could build my own brand with it because it's the system is what the value is.
Peter: What's kind of your thought process for your system for example? You could be the guy mailing it out and generating leads for all the realtors and stuff.
Dean: I've come full circle on that. When you figure out something, I have higher aspirations for people than they often have for themselves and I know what they could do. For years, I have been sharing this vision for people of what they could do and they get all excited about it and they want to do it. They are inspired by it but then they run into the reality, the logistics of it and the fact that they're running their business and all the complexities and that they don't know quite how to do something and they don't do what they could do. That's always been kind of a frustration of mine that I see it and I just see how they could do it if they would just execute, but they don't and it's like I heard Mike Tyson once say everybody has a plan until they get punched in the face. That's really how everybody's got this vision but then they get back into their own business and reality sets in.
My thing, I have to go down to the level of what they will do. I'm showing them what they could and then I have really found the thing that I can rely on the most is that level of what will they do and I know that what real estate agents will do is they'll accept a phone call coming into their office from somebody who wants them to come over and help them sell their house. They will accept a phone call from somebody who wants to get together with them so they can help them buy a house. I know that that's the level that they're completely happy to comply with. I think that when we look at your guys in the same way, exterior cleaners, what they will do is they'll accept a phone call from somebody saying can you come over and clean my driveway and give me a quote for the rest of my house or whatever.
Peter: Yeah. I think even a step forward is that like when I was talking to the franchise guy, he's like, "Oh the thing I love about the franchise is the systems and the fact that I don't have to answer the phone that much." He really valued the call center. I'm like, "Well they probably don't even want to answer the phone."
Dean: Right, exactly. That's what we found with the mosquito guys is they want their dispatch sheet to show up and say here's the houses that you're going to treat today. It's the same thing with your guys, if you can get to the dream come true for them of here's the list of people and they just go out and do it that's what they really want. The good news is that you just said it for three grand, you could duplicate yourself as the during unit in your own business first. That's what I would really ... That would be my takeaway for you is that you've got this system. You've made it work for you but you're an integral part of it right now. It's your charming personality and your way of winning people over and stuff like that. There's some X factor of that.
The true test of this now, is to pick another neighborhood, a neighboring thing, have an opportunity to do what we call an n of one study. Like an experiment where you're going to see can I set up a system that gets people to call and schedule a free driveway cleaning and can I send somebody out equipped with here's what to say. Here's what to do. Here's what to give them like the materials that you have to show the before and afters and the describing the services that you offer is can you train up one person to do that and that becomes your scale ready algorithm then because if you can do it for one person, then it's the same thing to do it for a thousand people.
Peter: Right, that makes sense.
Dean: I'm very excited. I think this has been fun. I think you're on the right path there.
Peter: Yeah, you got me excited. This is great. I'm hopeful.
Dean: That's awesome. Okay. Thank you so much for being on the show. I think anybody who's in that situation of thinking, "Hey, I'd love to leverage what I've figured out here," this is going to be an inspiration for them.
Peter: It was just really helpful for me clarifying a lot of these ideas that I've heard you talk about like the easy button results in advance and stuff like that. I definitely have way more clarity on that now.
Dean: Now you understand how did the psychology behind it. Right, and you've gotten experience of it. You know that more people will let you come and clean their driveway for free than when you charge them $69. You've got an actual experience that that's true. They still turn in to the $275 client at almost the same rate.
Peter: Well, even better in a way, yeah.
Dean: Yeah, exactly right. It's like why not. That's kind of totally there. Your big opportunities in the after unit too. Expanding the relationship with people.
Peter: Awesome.
Dean: I love it. I've had fun Peter.
Peter: Yeah this was great. Thank you very much.
Dean: Thanks, I'll send you an email when we're up and running.
Peter: Perfect. Well thank you very much.
Dean: Thanks Peter.
Peter: Have a good one. Take care.
Dean: You too. There we have it. Another episode of More Cheese, Less Whiskers if you'd like to continue the conversation, you can go to morecheeselesswhiskers.com and download a copy of The More Cheese, Less Whiskers book. One of the cool things about this episode was the idea we started out with let's figure out how to duplicate what Peter had figured out in his business one time. Even though you're going to ultimately scale to perhaps hundreds or thousands of people using the information that you have, the prototype that you have, you've still got to start with being able to duplicate it once. Once you can do that, once you've got something that you can, with your supervision, run and let it operate, create the result without you actually doing the work, that's your magic ticket. You've got what we call the scale ready algorithm. You're ready to just add the rocket fuel and take it as big as you can imagine. Whether it's licensing it to a handful of other people or using it as the basis to build a franchise organization or a big company around what you do. It's all the same. It's got to start with that scale ready algorithm.
I'm excited that I got to share that episode with you. If you've got something that you think would be a scale ready algorithm in the making, why don't you come on and let's be a guest on the show and we can talk about it some more. Just go to morecheeselesswhiskers.com and click on the Be a Guest link. There's a space where you can tell me about your business and I can invite you to come on and we'll hatch some evil schemes for you. Enjoy your week, and I will be back next time with another great episode of More Cheese, Less Whiskers.