Welcome To The For The Close Experience Episode #6
Tommy Mello is the founder of A1 Garage Doors, a $30 million-plus home service business with over 200 employees in 9 states. He shares what he’s learned at HomeServicesExpert.com to help fellow entrepreneurs scale their businesses.
- Lifestyle changes made moving from Michigan to Arizona [1:50]
- Tommy’s business journey from being in debt to early influences that helped become a successful entrepreneur. [3:40]
- Tommy shares one of his favorite failures and what it taught him. [7:30]
- We get some background to Tommy’s book ‘Home Service Millionaire‘. [14:27]
- Being confident in your business decisions and capabilities. [16:31]
- Hiring the right people that you can hold responsible and delegate your task to. [20:05]
- Very interesting concept of how one “A” player can replace three “B” players. [23:00]
- The process of dealing with negative reviews/feedback and why it is good for you. [29:40]
- Learning to compete in the same field as Amazon, Facebook, and Google. [35:02]
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Ali Mirza: Alright everybody! Welcome to today’s Podcast. I have a very good dude here. Someone that I’ve come to know over a little while know. This fella has grown his company to over $30 million in sales and he’s got over 250 employees in 16 States. He’s barely 35 years old. He’s been recognized as the Best Dealer and Best Service award from Angie’s List as well as Home Advisor. He’s been named top entrepreneur under the age of 35 in Arizona. He’s advice has been featured in publications like Ink, Entrepreneur, Forbes, Huffington Post and he’s also the Amazon Bestselling author of The Home Service Millionaire. I would like to welcome a very special guest on the show today. It is Tommy Mello. Tommy, thank you so much for joining us. How are you doing today, brother?
Tommy Mello: I’m doing great! I’m excited to be on the show, I really appreciate it. It’s an honor to be here.
Ali Mirza: Did you like my intro? I really beefed you up nicely.
Tommy Mello: Yeah! You make me sounded like, “Wow!” So, I didn’t even recognize myself.
Ali Mirza: Yeah. Oh, really? Okay, good. So, yeah I did it good then. Alright, awesome. So… okay so, as I told you before we were getting in before we hit the record button. I did a little bit of research from you. Here’s the one funny question or I hope it’s funny, but here’s a question I got for you. How does a guy go from Michigan, living in Michigan to end up in Arizona. I mean, I feel like this is like polar opposites, right? You hear people from New York moving to LA but that’s like a completely like culture shift. I’d say Michigan to Arizona is as well. True, not true, how does that happen? How did you end up in Arizona?
Tommy Mello: You know, it’s a good question and my grandpa was born in 1910, my dad’s father. Well, actually grow up in Pennsylvania but he raised the kids, 12 kids, 14 pregnancies in Royal Oak, Michigan and he retired in 1977 to Lake Havasu. But when you have 12 kids, he started when he was in 36, he ended when he was 55.
Ali Mirza: Oh dear.
Tommy Mello: When he retired, he retired from General Motors, so he said, where can I go golf 36 holes a day, all year round? And so at 1977, he took half the kids because they weren’t 18 yet. So, a lot of the family moved out here so we’d always come visit and it just made sense for school and everything. So, eventually my parents moved out here when I was 16. I made the decision just I’m all in to do it because I wanted residency and, yeah, I love Arizona. I don’t think I would ever… I planned on having a lot of vacation houses or at least in every [00:02:44.28] [meeting] I go visit.
Ali Mirza: Yeah.
Tommy Mello: But yeah, I really love this State, I really love the weather. I love the lowest humidity and it’s been good to me. Everything’s great, it’s a planned city. Lots of equity going on right now in the city, so good place to be.
Ali Mirza: Okay, all right, okay. So it’s grandpa who got everyone there. Alright. So…
Tommy Mello: He was the man, he was the man. 12 kids, he started when he was 36, that gives me one more year to start. It’s amazing.
Ali Mirza: So you don’t have any little Tommy’s or Tommieyets running around right now?
Tommy Mello: No, I don’t think so.
Ali Mirza: There you go, there you go. Alright, let’s just jump right into it. In doing my research… okay, so you’ve got this story and there’s a lot of people out there that have a very, let’s say “similar story” but yours is actually real. You started your company when you are in debt and now you’ve grown in and so you know we’ve all heard of the… I won’t say any names but we’ve all heard about this Facebook, “Fake Millionaires” that record videos in their garage with their Lamborghini’s and I went from living on my parent’s couch to now being a billionaire. Everyone’s got that story but you actually… that actually happened. Walk us through that a little bit, how are you where you are today at such a young age running such a thriving business. Help us understand that journey.
Tommy Mello: Yeah, it’s you know, I’ve always been entrepreneurial or whatever, screwed up that word but I’ve always been pretty much. My dad owned American Transmissions in Michigan, lotty works for AMCO. I’ve been always around the business, so I was always like that and I always wanted to work for myself. I started mowing lawns when I was really young. My mom and dad got divorced. My mom works three jobs. If I wanted something she’d get it and my dad would get it but it was hard for both of them. So, I knew if I wanted something I had to go do it. I didn’t want inconvenience them. Don’t get me wrong, I’m not going to tell you like we grow up where like hand me down clothes and stuff but I just, I knew, when I was young I could make money, so I went got a job as a dishwasher when I was 12 because that the guy allowed me to work there under the table because he knew my best friend’s dad. And so, I was making 4.05 an hour, 4.05 an hour four hours a day, three nights a week. It doesn’t sound like a lot of money but I didn’t spend any money. So when I needed something I always had cash and I had a bank account.
Ali Mirza: As a 12 year old, that’s decent money.
Tommy Mello: Yeah, and I make tips here and there if I bust the tables. And then I can go in there make pizzas so I got for all my buddies, so that’s fun. Originally, when Golden Tea came out, so I started on the first year of Golden Tea. But, yeah so that’s where it all started is on unfamiliar side. And then I founded a garage door business because my roommate at the time was actually answering phones and he’s making $55,000 a year. Then my other roommate got a job as a technician at a garage door company and he goes, “Dude. You run a successful landscaping company, check this business out.” So, we checked it right as the boom of the Phoenix market, right before it crashed. We got in the business and we were doing Yellowbook ads, Velpack, stuff like that and we didn’t have a clue on what I know now. I mean, I know what it’s like to be in most people shoes and I’ve made every mistake in the book. I mean, right now, on my audible I just looked before I got on here, I got 757 books. I’ve got a bookshelf here maxed out with everything you could think of. I read a lot and the difference is I don’t tell on anybody, I just implement it myself for a month before I go and try to get anybody else but that really is. I’m not perfect and I still have debt but it’s good debt. I own an apartment complex, I own a building, I own several houses. So, this tag strategy, there’s certain things that work for you but I’m not and behead that. You know, what I mean? There’s a big difference. So…
Ali Mirza: Right, good debt like…
Tommy Mello: [00:06:45.02] [Crosstalk] [Unintelligible].
Ali Mirza: So you have a good debt like a Macy’s card with a whole bunch of clothes on it, right? Like that’s my [00:06:53.24] [Crosstalk] [camp], right?
Tommy Mello: That’s it. [00:06:53.27] [Unintelligible].
Ali Mirza: So you’re telling me that’s okay to have, right?
Tommy Mello: Yeah. Depending on what you do with those underwear, you know.
Ali Mirza: Yeah, that’s true. I guess so. I could make it work for me. Alright, no I hear that, okay. Alright so now… okay, so we come with you on this journey. You mentioned something. You’ve made every single mistake on the book. You’ve learned from your mistakes. I want to know two things from you here. Number one, what was the costliest mistake or the stupidest mistake that you’ve ever made? That’s number one. And number two, I don’t like when people say, “Oh, you have to fail.” No, you don’t have to fail. But, you know, you can learn from your failures but I don’t think people have a system or a process to be able to actually learn from their mistakes and learn from their failures. Can you walk us through number one, what was kind of your biggest or stupidest mistake or costliest mistake? And number two, what is your system for making these mistakes and then learning from them and getting back up and actually applying the teachings?
Tommy Mello: Yeah, that’s a great one and it’s very apparent to me the biggest one is I hate QuickBooks, I hate financials. I love CRMs. I love looking at the sales. I love looking… I’ve been very offensive, not enough defense. Defense as in your inventory controls your… there’s certain KPI’s that you needed to keep an eye on that I don’t like to do so. I’ve had to force myself into things that I don’t like to do and I’ve given way too much trust out and I will always have a lot of trust. My mom, she’s cried to me a million times and she actually works for me and she’s like, “Why do these people burn you?” She’s like, “Why everybody’s got a target on your back for you?” And I’m like, “Mom, there’s so many good things like…” And she’s like, “Well, what if there was just twenty more of you?” I’m like, “Then I’ll have twenty competitors that doesn’t work either.”
Ali Mirza: That’s true.
Tommy Mello: So, I think the biggest thing for sure is forcing yourself into those uncomfortable areas and the way that I do that is I prioritize. We have a Trello Board, so it’s a project management tool.
Ali Mirza: Yep.
Tommy Mello: We create the top 5 things we got to get done. And then we go to the top 30 and keep pulling them in. And sometimes it’s defense and sometimes it offense. What’s going to make the biggest change in your company? Because I could tell you, this is going to sound crazy but a lot of the people here work really, really hard and get nothing done. And I see them, I walk by their desk and they’re busy all day and I’m like… then I’ll see someone else like a book doubled the amount of calls and make it look seamless. It’s kind of like someone on a basketball court where you got basketballs in the background there.
Ali Mirza: Yep.
Tommy Mello: You need somebody that’s really talented and they’re not running as hard, they’re going right around people, they don’t have to try and it’s always a swish. And you got other guys that just that they’re trying their best but they’re not getting anywhere. You know and that’s business, so I’m a huge fan of key performance indicators that is black and white. And I know I’m going off on a tangent here but the biggest thing for me was getting more involved in the financials and understanding them and letting the numbers guide your decisions.
Ali Mirza: So, let me wrap that back together. So you’re saying that the biggest mistake or the most costliest mistake that you made was not being close enough to the numbers and not really understanding them? Is that… I don’t want to miscategorize it.
Tommy Mello: Yeah. Well, it was almost like ignorance is bliss. It was like ring in some [00:10:18.17] [Crosstalk] [Unintelligible].
Ali Mirza: The Ostrich Syndrome.
Tommy Mello: You know, you learn a little… it’s kind of like have you ever felt like you don’t want to go to the doctor but you know you’re healthy but it was bad and you’re like I don’t want to hear the… and you never feel like… I’m not talking about strep throat but it’s like I get my blood work done twice a year now. I mean, I don’t know if I supposed to do it more but at the end of the day, it’s just a lot of people don’t like to go the doctor and that’s kind of how certain people feel about maybe it’s marketing. They don’t want to deal with it, maybe its sales training, maybe it’s whatever it is in the business maybe they love being the technician or the guy doing the work.
Ali Mirza: Right.
Tommy Mello: And you get… the old cliché on E-myth is you work on your business instead in your business and you should be working on it all the time. So, the Trello board helps you prioritize and work on things that make a difference because a lot of times you put the biggest things to the back row, or they say I was just busy all day, I didn’t get a chance to get to it but that’s the only thing that’s going to make your business move forward. Sometimes you have to take a hidden… the pocketbook. Or like sometimes you just say I don’t think a lot of people out there could book their phone call as good as me. I don’t think most of my technicians could run a sales hours like I do a conversion right to get as many reviews. But I can’t have hundred… it’s not… so you’re going to take a little bit less or you going to realize you get your time back and get your family back. You know, my girlfriend broke up with me she said, “You work way too much, I’m second, I’m fifth to all your different business.” And I said, “I understand how you feel. I get it.”
Ali Mirza: So you’re a single man now or what?
Tommy Mello: Oh, this was years ago. I’m not married but yeah, there’s always something going, so.
Ali Mirza: This is where on Facebook you got your relationship status as it’s complicated.
Tommy Mello: Yeah, there you go. Do not tag me in this.
Ali Mirza: Okay, then well, yeah. I got you, I got you. Alright, okay cool. So, alright so, you would say that kind of like the biggest thing, biggest mistake was kind of being heading away and then not like you said, right? If I don’t go to the doctor I can’t get cancer, right? So that was kind of like something that you done and so now you’ve clearly… now you got to Trello Board so you’ve corrected that. And so walk me through the second part of that question then and I don’t know if you answered it or not but what is your system? Because it’s clearly seems like, okay, you’re an offense guy and… you watched the movie Gattaca? Have you ever seen that movie?
Tommy Mello: Gattaca. Sounds familiar but…
Ali Mirza: It’s the one with like Ethan Hawke and Jude Law. It’s like… anyways besides the point. I actually know that is the point. It’s this movie where I don’t know whatever but there’s a scene in there where they both swim… him and his brother are swimming out in the ocean and whoever goes furthest wins, right? And so there’s this… man if you don’t, if you haven’t seen the movie. But basically he says like I never saved anything for the way back, right because like when you swim out the ocean you’re going to swim back in, right? So, I feel like you got that type of a mentality where you don’t really say, am I right in that where you like 100% with our convictions? If you believe something you just go after and if you fail, you fail and you kind of fail forward. Is that… how do you have it? What…
Tommy Mello: Yeah [00:13:37.29] [Crosstalk] [Unintelligible]. Yeah, I believe in failure a 100%. And if people see you don’t have to fail but I’ll tell you what, the people that just have it all laid out for them with the golden spoon and all that stuff they don’t know what it’s like to really have success is that you don’t know what winning is like if you never lost.
Ali Mirza: True.
Tommy Mello: I mean look, I get to tell everybody how to get there but once they experienced it and I really couldn’t. But the difference is I always hated the line if I knew then what I know now. I’d always ask my dad or my uncles. Well, tell me, I’m young but it didn’t mean the same experience, it comes everything, okay? So, I got a master’s degree in business and I could tell you I know 10 times more now than I did coming right out of that school just from what I experienced. Like I could write, well I did write a book.
Ali Mirza: Tell us a little bit about the book? Is it The Home Service Millionaire?
Tommy Mello: Yeah, so it’s a 2 year project. I pulled in every contributor that really would make a difference. So, I got the CEO, a service titan, they’re $1.65 billion company. The COO of Home Adviser who owns Angie’s List. I got the CEO of Velpack that little blue mails that come into the mail. I went out and I reached out to people that were just experts in the home service field. So, I got a guy named Darius Lyvers, he does 55% of his business on finance and he’s the best in the air conditioning business, by far the highest margin. We had a guy that has 14,000 service agreements, his name is Jamie Demonaco. And they all contributed 3 to 5 pages in the book and I’ve got 12 total. Al Levy teaches how to build systems, get your manual set up, get an orchard, set up to your debt chart. So, I pulled in all these experts and then I write about four things in the book. Basically, Find Out Your Why of Simon Sinek but it’s different because it’s a home service business. And in the home service business, a good enough why is that I don’t want to work with somebody else. That’s not a true why. So we explained that in the book.The next big thing is, I’m going to show you all about setting up a CRM, setting a manual, setting up a business and getting key performance indicators and I’m obsessed with them. I’m obsessed with these tools to let the black and white numbers make through this [00:15:53.12] [Intermittent] [solutions]. And then number three, I talk a lot about turning on sales. Because without sales and marketing you’re shit. Let me just tell you this, sales will mask any problems within your company. They can fix everything.
Ali Mirza: Great.
Tommy Mello: If you’re great at sales I don’t care what, sales is the Trump of everything. And the final thing is how to hire superstars because the hardest… the number one question is if I don’t do it, no one can do it. I’m the only guy that could get it done right. And that mentality will keep you and your business forever and it will never let you grow. And then you just got a job. I always ask people this; if I ask you today, if you could come to Hawaii with me in the… We got to leave in 3 hours; we’re going for a month, okay? I’m going to pay for you and your wife, your kids, I’m going to bring your pets, I’m paying for all the alcohol, the volcanoes, the dolphins [00:16:42.14] [Audio cut off].
Ali Mirza: You know, I can’t hear… You put yourself on mute there.
Tommy Mello: So business will click when you get back. And most of the time their business will completely crumble, 99% of people out there. I was gone for about 8 days recently and I came back we got record numbers. So, I’m not saying that I’m… I’m not bragging by any means because there was times in my life that I would come back and probably be burned down.
Ali Mirza: Right.
Tommy Mello: So the systems to me, I believe in systems, I believe in people and I believe in technology. But the systems dictate the technology and they dictate the people. How are you getting people? Most people go on Craigslist. They post an ad out in Deed, they go out to CareerBuilders, ZipRecruiter, they put an ad on LinkedIn, they spend a few hundred bucks a month. My top producer brings me $60,000 a month in service and I’m going to only spend $300 to get another 10 guys. Why wouldn’t you spend marketing is just as hard to market for people that you’re trying to get into the door. And the biggest mistake I see is the unemployment is low, okay. Why not go recruit? Why not go find the people and build the training that molds them into your business. Why not find somebody that works at Circle K or that just came out of an associate degree at a community college and take the personality, look for the personality type. Look at their Yelp account, see if they’re leaving in 5 stars. If they leaving in 5 stars so they’re a happy person. Find out everything they left on Glass Door, if it’s 1 star, bitch, bitch, bitch, they’re probably not going to let go your company. Find out what they’re posting on social media, are they this die hard freaking… I won’t go politics on you but just anti-woman, whatever it might be.
Ali Mirza: Right.
Tommy Mello: If you do your research and you do the hiring process, right? So, I will say if you want good apple pie, you got to buy good apples and you got to know where to buy those apples. So, anyway…
Ali Mirza: No, I love it. Okay, so you said two things that were really important there, right? If you don’t hire superstars, that’s going to keep you and your business forever and then you gave us the example of you left for 8 days and you guys hit record numbers. I hear all the time where like I hear exactly from you and frankly if I’m being honest, I was a victim of this too for up until probably 6 months ago where a friend of mine actually called me I’m a bullshit. Actually, it was probably a little bit longer ago, but anyways, I was just like, yeah, no. Like there’s these certain things in my business that I have to do. And he said, “No. You’re just telling yourself that.” And as soon accepted that, I actually started putting those systems together. So, you gave us some really good tidbits and I really like that, the part about the Yelp. Check their Yelp to see if they’re leaving 5 star reviews, they’re probably a happy person, that’s awesome. So, okay so, that’s one way we can find superstars. I’ll come back to that but what’s the system? Walk us through, I don’t know maybe if your system is perfect for everybody or maybe it is, I don’t know, you tell me. But what’s the system for replacing yourself because everyone wants that, everyone wants more money and less work, right? How… okay.
Tommy Mello: Okay, this is the reason why everybody should be listening to this podcast because I’m not… it’s taking me a long time, 10 years to figure this out but it’s what’s in it for them? I call them up and what’s in it for me? So, every time I negotiate with a vendor, every time I negotiate with any advertiser, any time I’m hiring somebody. Let me give you an example with the CSR, right? You understand the call center rep?
Ali Mirza: Yup.
Tommy Mello: We brought up a program where we look at 5 major things for their pay. We pay them either minimum wage which is $10.50 in the State of Arizona or they make the commission. It’s either one or the other. Now, what happened was four of my call center reps got paid minimum wage last week and probably three of them are going to quit and one of the is going to arise. But here’s what happened, one person made $30 an hour. So we look at what you’re call booking rate, how many mistakes did you make, what was your cancellation rate, what was your score card and there’s another one, I don’t have it in front of me. But the point is, why wouldn’t I match what’s important to me with my call center reps and with my dispatcher? You know what happened with my dispatchers? I started giving them up. Any ticket that’s over $700 basically any job they get paid a bonus $10. Under that they get paid $3, under $200 they don’t get paid anything. They still get paid a little bit more than minimum wage because it’s a harder job. But guess what their job is now? To maximize the schedule, they’re changing things around. They’re making sure the best guys get the best jobs, they’re calling the customers, they’re giving great service, they’re asking for reviews. And if you would like, so write down on a whiteboard. I got a white board, there, there, I got two in my kitchen, I got one against this wall, I got them in every room.
I whiteboard and I say, what do they want? Some other time, you know, what some of them want? They want to work 6 hour a day, so they get… that they hit all their goals. They’re out of there 2 hours early, they didn’t take a lunch, they didn’t take any breaks. Some of them want to work 4/10’s, some of them want a weekend shift, they don’t work every other week. Find out what’s important to them, find out what makes them tick, find out what their goals are and make sure they’re compensated for it in time and value and acknowledgement. Some of them just want to have be employed them with a parking spot. So, find out what it is and make sure you align your goals with theirs and make sure it’s black and white because there’s a big gray area. And everybody gets lost in the gray area; it’s got to be black and white. Steve Jobs, said it the best… he said that for a lot of his staff at the end of the year I’m going to overturn 20% of you meeting that. Meaning that you got to know all going up in the November where you’re at. You’re going to know the middle of December and the 20% would leave. They pack their bags, it was a fair equation they knew they had to leave. It was fair for everybody and it breeds A players. And let me just tell you this. An A player equals three seed players or A equals three B, I’m sorry. A equals three B. So if I got three B players making $15 an hour, one A player will make $30 an hour and I’ll save $15
Ali Mirza: [00:22:59.12] Replace them all.
Tommy Mello: And this will create the best atmosphere because they’re just busy all day, everybody loves them, they’re not making mistakes. But when you watch somebody screwing off in my call center with the 20 of them out there and they’re going, “I get paid the same as this person, how is this fair? I work… I barely take breaks, I answer every call, I’d only… you know, my cancellation rate is less than anybody, my scorecard’s perfect. Why are we making the same?” So pay for performance whether that’s a commission, whether that’s not making mistakes, whether that’s fixing a job like if you’re fixing transmissions. That you have to have a bad transmission come back. How long would it take you to do it, so piece work? But this takes some time and you really got to think about it and you got to make changes as you go. But you got to be careful with people’s pay but what I tried to do is before I roll out a program like that I run it up four weeks to show them where they would be.No one should know they’re getting a pay change this week, no one should know they’re getting fired this week unless they’ve been written up with a verbal warning unless you lie, cheat or steal. Maybe a lot to this stuff but I’m telling you, the number one things. I worked out a deal with a vendor I’m saving $70,000 a month. I wrote down on the board everything I can get to do for him then I called his boss to find out how he gets promoted. Then I found out what the company mission and vision was. And when I acknowledged all this stuff I said, “Whoa! If I just went up to them and told them what I want or what I was going to do for him.” It doesn’t even match up close to what they want. So, I repositioned everything. And they said…
Ali Mirza: No. That’s…
Tommy Mello: That’s it man.
Ali Mirza: No. That’s beautiful because the what’s in it for me. I mean, and this is the thing that would always trips me up is when everyone’s always… you got to give value and they always look at it from their own lens. And it’s like, here’s a case study, here is this, here is this, it’s like what’s valuable to me may mean nothing to you and to your point where we’re able to save the 70K a month from this vendor. You were very objective about it. You wrote it down, you analyze it and you did you proper research and you figured it out and then you were able to align your message and then you do the same thing. And I always tell everybody, not in a 100% in these situations but probably 85%, 90% of situations, you can pay for performance. You can pay somebody because if you cannot in 85% of the jobs that you are employing for could create performance metrics that they can monetize on, that person is probably useless to you. Meaning if you can’t figure out what that person’s supposed to do and how to pull those levers, why is that person there for? Right? How does that make any sense? So, I think that you’re 100% on it. And then running that four week projection showing them like, “Hey, in four weeks we’re going to change this and this is how much you’re going to make allows them to buy into it. I think that that’s beautiful. So you mentioned a little bit regarding getting the right people there. I’m assuming that breathes into your culture. Correct?
Tommy Mello: You know, it’s tough when you roll out a program like this because you burn a lot of bridges, people get upset but the true performers love it. They see the new board and they smile and they go, “Huh.” Because true winners like structure, they like to know the goals to hit. How am I supposed to win the game if I can’t keep the score, okay? So, I’m really good at that. If I told you to take a 700 now and I want you to hit this one mile, just hit the ball one mile. Or if I told you let’s do this, let’s play a round of 18 holes. I’m going to count how many times you hooked it, sliced it, how many fairways you hit, how many greens you hit, how many putts you take, how many sand, how many water. I want to know exactly what’s going on with your swing. Which way do you think you’d get better at?
Ali Mirza: Probably the second way because more systematic.
Tommy Mello: Yeah! And there’s more metrics. I could tell you so many more things. I could say here’s the first thing we have to do. You’re losing all your rounds on the putts, let’s focus on that first. So by having KPIs in a structure that’s super easy to analyze. This is also another big mistake that people make is they build these really nice formulas and everything. They take 10 days to build it and then they go holy shit, it’s going to take me 10 days to do this for [00:27:09.25] [for six weeks]. So you got to make sure there’s much time I work on a system. I spend way more time figuring out a fast way to make that system. So for me my time is super valuable. So, if it takes them five more hours to make all the system and there’s checks and the balances that I got to pay more for labor but I could have payroll done at this time, at this minute like my time is important. So, I’ll spend more time on the way I’m going to track those KPI’s then I will on even the KPI’s I’m staring at. Because some of them is like holy shit, I got to go in here, I got to figure this out. I didn’t even think about this. So you got to do it for a few weeks and say, this took me 18 hours. I didn’t get this done in three hours.
Ali Mirza: Right.
Tommy Mello: So that’s another big problem is, how much time, what your time works?
Ali Mirza: Right.
Tommy Mello: So make sure the KPI is aligned with what they bring to their table, the whiff off? What make sure you’re not spending a ton of time out of paychecks and balances? The depth chart make sure that everybody knows if this person doesn’t show up today business will still run. That’s why huge companies doing over 100 million, they don’t necessarily need a key man ensuring it’s because the business will run on its own. It gets a higher multiplier even with that. Because they got all the systems that were done and it’s in place versus a $5 million company that will only get [00:28:25] [Intermittent] [Unintelligible] depending on what the profit is but right around those in the homestead.
Ali Mirza: Right. Yeah, I mean if…. and that’s also how you go and try and sell your business and then you get golden handcuffed in there and it’s just like my business is worth 0 without me and now I’ve got a job for the next five years and I got to work with this transition and then, your payout is based on profit and this and that. And it’s just like…
Tommy Mello: Yeah.
Ali Mirza: I mean, that’s just taking it from both ends and it’s a shit situation. So, I agree with you there. So, you hit on something and you quickly glazed over and that was one thing that I really want to make sure we touch on. But you said, your people are working really hard, they’re getting reviews and etcetera. You are a huge proponent of reviews and that’s like a big thing that’s your constantly always pitching talking about you. Obviously, everyone knows you should get great reviews, you should go and ask for them, solicit and everything. You got some really cool techniques about that and people can go and find out on their own about then. I want to know how do you deal with negative reviews, right? Because you got the saying where you got to stand up and take that bullet to the chest, right?
Tommy Mello: Yeah.
Ali Mirza: So walk us through negative reviews, how do you deal with them? Hit me, school me on this.
Tommy Mello: Negative reviews are a good thing. I’m telling you it teaches you so much about your business. Now, I try to get in front of them. The first way you get in front of bad review is you send every customer a survey. So that should be automated through Survey Monkey, or a CRM. You want to know if they had a bad experience and you want to reach out to them before they get a chance to review. So that literally, when my guy gets done with the job, the customer gets a text message, he hits finished, the customer gets a text and it’s simply, would you use it again, yes or no? No, means you call that customer; you get in front of it. Yes, we need you to be to do a happy call and say, “Hey, I wanted to make sure everything worked out.” And then we could talk to them about where to find us online and what we would help with those.
Ali Mirza: Okay, so this… Okay, so are you happy, yes or no? They say, “No.” What’s your process, what do you do?
Tommy Mello: So I’ve got a guy full time, his name is Bruce that gets in front of them, go out. And first he calls the technician, gets a little bit of the details so he knows what he’s talking about. Because there’s only really three reasons they’re mad. Number one, it didn’t go technically like the door still makes noise or there’s… the paint didn’t turned out right or there’s a scrape on it and it’s banged up. Number two, is the time frame, was it done. And number three, I feel like I paid too much. And a lot of times you’ll have the same answer from all other guys. Most people get mad about the ones that they say you paid too much. But I care it’s done technically, I care that we show up in the windows. So what I did for a long time is I call the customers, they taught me a lot about my business and I call them up and I said, “Look, this is my baby. I work nights, weekends and this is my reputation. I want to do whatever it takes to make this right by you.” And I get mad out of my buddies that won’t pick the ones that would have a bad experience on Yelp or whatever because I’m like. The honor’s reaching out, they want to make it right, everybody has a bad night, everybody has a technician that doesn’t do. It’s sad when you only got three technicians or something but you know it teaches me something and I say genuinely, the first thing you do is you listen to them. They really want to be heard. So you just ask them question then I would go, “Wow! You got be kidding me. Just so you know that’s not good in my book. I don’t accept that and not only that I’m going to come out myself and fix it and trust me I’ve got managers to the list now in every single city. But I’m involved with this, I care about my business. You’re going to be getting this, this, this, I’m going to solve it and by the way not that this is your problem but I’m going to send you the copy of the signed right up. Just to let you know, after three write ups you’re gone. This is not tolerated by my company and that’s the truth.” And I must have sent out about maybe a hundred write ups to customers just to prove that I’m serious and I’m not just BSing them. So obviously there’s times that the customer’s wrong. You’re going to get that 1% then it’s always 1% for me that you can’t please somebody that just going to bite I will destroy you on social media. I’m going to write a rip-off report, all the stuff. I’m like, “What do you want? What did you find a people hair in your food?” And I’m not talking about food but you know, the people that will always just BS, so.
Ali Mirza: So, okay. So, hang on. Okay, so you just said something absolutely fantastic and not to put you in the spot here but like I don’t know like with, I don’t know whatever I won’t say it. But like, here’s the thing like sending out that write up, right? That’s genius, right? Hopefully it’s cool or whatever but like sending out that write up is because that shows the person that like you took it seriously because 9 times out of 10 when I’m arguing with someone on the other end and I’m pissed off about something, I’m actually just… number one, I don’t really want anything. I just want to voice my frustration. I’m pissed off so I want someone to acknowledge that I was wrong. So, when someone listens but you don’t really know whether they’re actually going to do anything about it and sometimes that help, that feeling of helplessness angers you even more. And then so, when I know I’m getting that person. It’s not that I’m calling to get that person in trouble but I know that this was actually dealt with and the company took it seriously. That makes me feel like I’m actually doing business with a legit company here. So, I think that that’s, I mean that’s awesome. But okay, cool. I gave you your props on that, what do we do when like I’m on the other line with that 1%, right? With that 1% that they know you’ve got a great customer service policy and they’re just trying to screw you and get their money back or get their whatever it is that they paid $600.
Tommy Mello: You pay them. My manager came in, the guy came in the other day and he goes, “This person wants effing $600 back, they’re ripping us off. He goes, and he talked to Adam, my general manager, I’m not paying it and I go, “Bring me the check right now. I’m signing the check.” He goes, “Dude! This is… you can’t let him handcuff you like that.” I go, “It’s the cost of doing business, bro.” I’m like, “You know those people exist, they plan on doing this. Put them on the do not serve list” because we got a whole list of customer we won’t go back out to but I’m like, “Do you know how much money we make out of Yelp and Angie’s List and Google because of our reputation? You think $600 when we do yesterday $167,000? Means it’s drop in the bucket and I plan on that budget.” One day, he came in, my desk was lined it was like a month worth of checks out but I’m looking at them, one is $23, the next one is $16, one is $178. So we got a policy where I’m always giving people money back because quite honestly it’s hard to compete when they go on Amazon these days becoming a commodity. I’ve got an argument with my buddies last night, I said, “Dude, you don’t understand. That we got a few years left. Amazon, Facebook and Google are taking over everything.” And they say, “No, no, no. They will always be gone. They wouldn’t be able to diagnose this if they said right now we get 10 calls a day from Amazon.” They’re taking every KPI, what time we’re showing up, they’re checking the background on the guy. They’re going to have trackers on the phone to know how they did, we’re going to have what’s the average we’re spending and they’re going to say, “Yours costing more money than this one. You’re not giving the customer the best experience. It’s going to take analytics to what time of day, how much it should be, how much you guys need to make.” And they said, that’s not even possible. I said, “Dude, within 5 years you’re going to have a thing in your vein that tells you your heart rate, that tells you how well your blood level is. Everything about you. And I said, “If you had a chance to give your baby something that could save his life”. And tell you everything and save it from brain cancer, anything else. Just like a vaccine shot is what I told him, would you do it? And they were like, “Yeah, I guess so.” And I’m like, “That’s what they’re coming out with. What do you think these satellites are launching and these things they’re putting to monitor different things? It’s happening.” So, the people that deny it they said, “Well grudgers will be around forever”, I said “Why? Uber’s going to come to pick up. Why would you want a car when you get it in Uber? Well it’s cheaper than you could pay it for gas.
Ali Mirza: Yeah.
Tommy Mello: It doesn’t even make sense. I’m like, what? Where would you want to make that available space now, the garage? There’s a shelf life to everything. So I’m a little bit in an extreme because I think technology takes little but longer than I’m saying but I do know one thing, Moore’s Law says exponential growth. We doubled the capacity of my phone I’m on right now, it’s doubled from two years before the capacity that what it could hold, the processor to the memory, everything, the speed and Moore’s Law is exponential. So, I would take ten steps exponentially, I’m in the other room. I mean, just linear here, I’m in the other room. If I take 10 steps exponentially, I’m five miles away and that’s what nobody understands is right now with the way technology is moving and data they’re collecting, everything is going to change. And right now, Google could book a better phone call than you could book because he know your voice inflexions and knows what you like. It knows stuff you watched and that’s only the beginning. In two years they’re going to have super computers that cost $60 billion, that they’ll be able to know everything about you from when you go to Chinese food, to what you watch tonight, to the sites you go look at, to what you buy on Amazon and dude, they’re going to know everything. And I just get really, really excited but really worried but the algorithms will be able to predict almost everything about you based on your historical data.
Ali Mirza: That’s crazy. I’m there with you. I mean, I think, I completely agree. I mean that there’s one of our client… I mean it’s… when was that, I think it was like in 2004. One of our clients is one of the guys that was on the team of Target. Target’s team, like Target the department store. It was on their team when they got into trouble for… you ever heard that story about the girl that was pregnant?
Tommy Mello: Tell me about it, there’s a few occasions.
Ali Mirza: She was pregnant, the dad didn’t know. Target was sending her like stuff that you would send like expecting moms, like coupons. The dad got all pissed off. He goes into the Target store, and he’s like, “Why are you advertising this to me?” Turns out she was pregnant and the dad didn’t even know. Target knew before the dad found out. And she was like, I don’t know, like 13 or whatever the case was. But long story short, like that was in 2004, all right. And it was that case study was in the power of habit and I like I love that as soon as I read that book.
Tommy Mello: [00:38:47.16] [Crosstalk] [Unintelligible]. Yeah.
Ali Mirza: And then could come out find out like this past year, one of our clients, I’m just talking to him and he’s got this AI platform which is absolutely fantastic and I should actually talk to you about that off air. But besides the point, he was telling me he was on that team and that was like back in 2004 and I’m like, damn. Can you imagine where we’re at today like all the stuff that the NSA and all the government has that we don’t even know about that’s slowly come to the market? And like, people who live with their head in the sand, I mean whatever. I mean, look, Chief Wiggum said it best, not my job to keep you from killing yourself, right? If you don’t want to learn that’s on you.
Tommy Mello: Hey, I tell you what. I’m meeting with a company today that works with the NSA that when you hit a page, you give a crypto it’s called… it’s this weird signature and you don’t have to fill out any form. But then they sell this crypto thing to this other company that gives you the data, then you sit into this other company that they guaranteed 90% fulfilment because they own the ISP and then they got four companies involved. So, instead of capturing, 6%, 7%, 10% of the traffic, if you’re doing good in the conversion rate. Now, they’re capturing all of it and here’s the deal, retargeting cost like a 100 of what it cost. So when you’re following pixels or retargeting on Google, if you could load that information in its expects you in to buying decisions longer than like, like I’m calling to get a repair in a garage door. It’s just nuts and I’m… the good thing is by talking to guys like you, being on my podcast, always reaching out listening to books. I’m on the cutting edge for garage doors. Let’s put it that way.
Ali Mirza: Okay man. Hey! At least you know where the spade, right? I mean, some people are just confused but you know your world, so I appreciate you.
Tommy Mello: Yeah.
Ali Mirza: But you know man, hey! Thank you so much. I mean like a got a ton more of questions but we’ll have to talk offline but I got a direct line too. How can people find you? Where can they look you up because you dropped some serious knowledge on here and I know people are going to want to get in touch with you. Hit us with your links.
Tommy Mello: Okay, so you got the HomeServiceMillionaire.com, The Home Service Experts is my podcast and you could just do email@example.com as a good email. And my phone number is not hard to get, it’s on my Facebook, it’s on LinkedIn. I mean I get a lot of calls but the people that call me are pretty good people. I don’t normally get like they’re actually like good to connect with, so it sounds like crazy that I would advertise the app but you’d be surprised, networking has been the best thing I’ve ever done and I’m getting better at it and just meeting people like you, I mean it’s just great things you know.
Ali Mirza: Alright, I appreciate you brother. Well, thank you so much for stopping by and everybody listening please link… why do I always say link? Like… I don’t know man, I’m an idiot. Anyway, so like, comment, share, subscribe, do all that jazz until next time. Thank you so much for listening to the For The Close Podcast.