Full transcript10 chapters · 9,883 words
00:00What ShareWillow builds for HVAC and plumbing techs
Ryan Shank: When technicians know exactly how their KPIs affect their pay, they stop watching the clock and they start thinking like owners.
Tyler Martin: Welcome to Profit and Grit with Tyler, where blue-collar owners and insiders spill the real story behind their hustle, building businesses that thrive through sweat and smarts. We’ll dig into their journeys from scaling chaos to growing the bottom line with lessons and grit that pay off big.
Tyler Martin: Here’s your host, the blue collar CFO, Tyler Martin. Hey, welcome back. Today’s guest is Ryan Shank. He’s the founder of Share Willow. His story might surprise you though. While scaling his last company, Phone Wagon, Ryan hit a breaking point he didn’t expect. And the path he took to rebuild himself
Tyler Martin: is a masterclass in leadership. He went through treatment, got sober, rediscovered Clarity and ended up selling his company while in a sober house. That experience changed the way he thinks about people, incentives, and how businesses actually grow. We go deep into the world of pay for performance in home services, why hourly-only systems
Tyler Martin: quietly kill productivity, and how a simple shift to measurable incentives can now add tens of thousands of dollars per month per technician without adding a single tech. Ryan breaks down why callbacks are the silent killer, how visibility changes behavior, and why the best companies are designing comp plans employees actually understand.
Tyler Martin: If you feel like your business is underperforming, this episode will help you build a team that cares about results, protects your margins, and produces more revenue with the same headcount. This one is packed with immediate usable takeaways. Let’s talk to Ryan. Hey, Ryan, welcome to the Profit and Grit Show. How are you doing?
Ryan Shank: I’m doing fantastic. Thank you so much for having me.
Tyler Martin: Yeah, thanks for being here. I’d love to start out just learning a little bit about you. I’d love to learn what do you do professionally to start with?
Ryan Shank: So I am the founder of ShareWillow. So we help companies in the trades create and manage incentive plans for their technicians. So think of HVAC, plumbing, electrical company. Most of them all agree that you need to pay technicians hourly or you need to pay them with incentives and not just hourly. And we help them design and manage those plans fully integrated with Service Titan, Housecall Pro and other systems.
Tyler Martin: Yeah. I love this topic. Before I ask you my next question, I just want a little thing here. You know, my clients are home service companies, so I get a lot of clients in this space. And it’s actually not as common as you would think it would be in terms of pay for performance.
Tyler Martin: There are definitely 70, 60% of clients that come in, they have some plans set up, but many don’t. And what I find is the ones that don’t, they’re usually oftentimes are efficiency issues in terms of labor and production and things like that. So I’m excited to get deeper in that. Now,
Tyler Martin: part two of my questions, just learning about you, what’s a little personal tidbit that you
Ryan Shank: can share with us about you? So I used to love, or I really like pickleball. So that’s a tidbit. And then I just love startups in general. I’m an angel investor in probably almost 40 companies. I just love the game. I love the game so much and it’s so fun. So now as a founder, I’m also
Ryan Shank: sort of like an investor on a lot of cap tables of other founders. So I get to have an inside peek at how they run their business, how they run their monthly investor update, email, when they send it, metrics they’re tracking. So it kind of gives me a little bit of an advantage in just seeing what
Tyler Martin: some of these top companies are doing and how they’re running. That’s super cool. Also a pickleball fan. I actually was at a tournament this weekend. I live in San Jose, Northern California, and I went to Roseville. It was a lot of fun. What’s your duper? So I’m about a 3.6,
Tyler Martin: maybe I’ve been as high as 3.75. I’ve dropped a little bit. How about you?
Ryan Shank: Like a real duper. I’m probably around there too. I think like, I think I thought that I used to hover at a 4.0 and then I would go to like a real, like actual pickleball club and play 4.0s. And I’m like, whoa, I need to get off,
Ryan Shank: get off the court. So I probably like 3.7, 3.7. Yeah. Like a real true 3.7.
Tyler Martin: What I learned this weekend is we played in a 4.0 and I’m definitely not a 4.0, but if it’s older dudes, I’m pretty close to a 4.0. This is what I realized today.
Ryan Shank: Yeah, yeah. Yeah, it’s crazy. Like some of these, like in New York, like I’ll go to this, you know, one club, even Lifetime, and it’s like the four O’s at Lifetime playing indoor with like no weather variability. It’s like, those dudes are nasty.
Ryan Shank: Like just so good. All college like tennis players that have crossed over.
04:50How Adderall and isolation crept in while scaling Phone Wagon
Ryan Shank: Just super good. Yeah, anyway.
Tyler Martin: Hey, I want to start out with your personal story because I think it’s one of the most powerful leadership lessons I’ve heard and even learned from you. You’ve been really open about having an addiction issue and it crept in while you had a company
Tyler Martin: called, you were scaling a company called Phone Wagon. And I want to just kind of talk through that. Take me through that story. I mean, what got you to that point of where, you know, you went to a recovery center and then you’re also dealing with a business that sounds like it’s growing and scaling to the
Tyler Martin: point that you’re selling it?
Ryan Shank: Yeah. So I actually look at it now as a superpower, as long as I can control the superpower and sort of like focus it on the right things. I think it truly is a superpower. And I think back then, I think there was like a few things that I was dealing with that I, or I think I was facing that
Ryan Shank: I had never dealt with. I think firstly, I hadn’t ever dealt with, I had never gone to therapy. Right. So I think I was like confused and I don’t have a great relationship with my mom. And maybe there was like stuff with that, that had sort of just never been addressed. And I think
Ryan Shank: when you don’t have answers and you don’t have like external sort of people to help you get to those answers, you start to just like kind of come up with theories in your head and you’re not really talking it out with a lot of people. Right. And a lot of this stuff I was keeping super close
Ryan Shank: to the chest. So I think when that happens, you prohibit yourself from connecting with people. And a lot of this that I’m about to say, I like learned in sort of a treatment and that’s, and through therapy. But I think when you don’t connect with people, you don’t release a lot of
Ryan Shank: the chemicals that, you know, happen through like natural connection. And then when you don’t connect with people and you’re not getting those chemicals, you seek those chemicals elsewhere. These externally, you sort of need them from a third, a third party, if you will, to provide that.
Ryan Shank: And that’s why they say, you know, people, if you ask someone that does, I don’t even want to say the word, like heroin for the first time, what does it feel like? Oh, it feels like I’m getting a big hug, you know, a giant hug because it’s releasing not dopamine with that, but that’s
Ryan Shank: releasing, you know, oxytocin and these like sort of love drug chemicals and stuff that most people get through having deep connections. So I think firstly, potentially I wasn’t connecting with people for one reason or another. Right. And so then I was keeping sort of everyone at a distance.
Ryan Shank: And even at my startup, I think like I wasn’t really letting people in and I wasn’t, you know, vulnerable. And, you know, I was kind of had this like maybe front, like, oh, you know, like I got this, I got this that leads to imposter syndrome and all this stuff. And I think from there, look,
Ryan Shank: I think it’s trying to just went down the, and I think a lot of people go, not a lot, but it’s not super unique to myself, but you know, I definitely was on the Adderall train for a while so much. So it’s like Adderall, then you got to come down with something and you go back up and
Ryan Shank: then it’s like, you’re just, you’re just not healthy. And this is like pre COVID dialed up really in like 2018, 2019, really 2019 dialed up. and then like covid was like then you’re like even more isolated during covid and all of that and i was like look it’s i’m either gonna lose everything with phone wagon or there’s like
Ryan Shank: another scenario where like i’m gonna like really lose everything and potentially including my life yeah or i have to like fix this problem that had never been addressed so i was like look i’m just gonna go to this treatment place i went to this place called caron c-a-r-o-n in delray beach
Ryan Shank: Florida Karen Ocean Drive is what it’s called. And it was incredible. And it was pretty much like therapy bootcamp. So when I was going there, I basically messaged my team and our team was probably like eight or nine people. And there was also another, there was a few other things,
Ryan Shank: by the way, that were happening. Like we were competing in like a pretty competitive space, like call tracking, call analytics, right? You know, we were built on top of Twilio. So it was very like commoditized. We were head to head with this company called CallRail, which we could talk more about that.
Ryan Shank: We were in a litigation with CallRail. So like that stinks to be in litigation with anyone. Heck yeah. And it was like a multi-year litigation over alleged copyright infringement on like a few lines of JavaScript. So like, you know, it’s like, it’s like that that is preventing me from like raising.
Ryan Shank: And, you know, so like, then we’re not growing super fast. We’re in this commoditized space. I’m like, potentially dealing with like all this like internal stuff that I’d never dealt with before, particularly like, just like, I’m not connecting with people. Right. I’m like, whatever, regardless, it’s kind of all these things were happening.
Ryan Shank: So I was like, oh my God, like I’m potentially in over my head. So then, you know, and I have a team and we like have a company and we had raised some ventures. So anyway, uh, ended up going to treatment at the end of 2020.
Ryan Shank: It was freaking fantastic. Got so many answers. I was like, oh my God. And then I started to like learn to like really love myself and also be like more confident in myself. And then like also have like forgiveness for like my parents and stuff
Ryan Shank: like that, you know, versus like being like, you did this. It was, you know what I mean? Like I was
09:51Selling to CallRail from a sober house after litigation
Ryan Shank: able to like see them in a different light, not them, but see one of them in a different light. And kind of that brought a lot of like, it lifted a lot of, I think, weight that I like potentially had that I was dealing with. And the interesting, the crazy interesting thing is,
Ryan Shank: So then I, and this is where I’m, I really believe that the universe, like I am favored by the universe. If that even like makes sense, like I get lucky. So like that happened. And then it’s like, I started getting like, you know, 30 days, 60 days of sobriety.
Ryan Shank: Everything starts to become like super clear. You know what I mean? When you start like sleeping well and you’re eating and you’re like just super, super like sober, then you start to be like, oh, like I’m kind of, I’m like it. Like, you know, then I started to get my real confidence back and I’m like, oh, I’m like,
Ryan Shank: this is it. This is like the real Ryan. And I’m like super capable and all of this stuff. Then call rail who we were like, you know, head to head with in litigation with, they’re like, you know, we want to talk about an acquisition and like, look, and then, so I’m like beat
Ryan Shank: up for, and look, maybe this was their strategy. And honestly, it worked for them and it worked for me too. I think everything was great. I think it was a win-win and I liked their team a lot actually, but they were like, basically
Ryan Shank: like, we want to talk about acquisition. And we had been in litigation. We had gone through deposition. Like we were deep. I’m like in this recovery house or like I had gone through, I guess I was, so basically I went through two months of like, like inpatient, like recovery. And then, uh, then you go to like a,
Ryan Shank: uh, like a house to live like a sober living place. So, so it was like, towards the end of that, they asked about that. They actually pinged one of my investors and he asked me, he’s like, you probably don’t want to do this. And I was like, no, no, no, no. I want to have that
Ryan Shank: conversation for sure. So we ended up like talking and it was basically like, they would acquire, like figured out, you know, negotiations and all that, they would acquire us. They would, we would settle this lawsuit, kind of everything happened at once. And then it ended up happening
Ryan Shank: and closing in May of 2021. So that was like a long winded, or I guess it was maybe a long winded answer to that, but that’s kind of like what happened. And then sort of like also what
Tyler Martin: transpired. A lot of good stuff there. I mean, kudos to you for recognizing you had a problem and making a tough decision of, of treatment. I mean, a lot of people just go through life and they never do the treatment or they stumble through the treatment and then they re you know
Ryan Shank: go back and it just is a vicious cycle so kudos to you what i want to know by the way sorry real quick by the way if you’re like treatment’s awesome like i would i would like live at treatment treatment’s sweet you just like do a lot of therapy they cook for you like there’s really
Ryan Shank: i mean the one i went to i loved it super interesting people everyone has awesome stories like there was like really interesting people as part of my like cohort we’ve done like business together now. Cause like the one I went to was like, it was like nicer. Right. Sure. So like
12:29Running the company from treatment with a team in place
Ryan Shank: everyone was like coming from like really interesting stories, backgrounds in the hands and interesting stuff. So I thought it was awesome. Wow. Great place to network too. If you want to raise capital, like just go to fancy rehab. So I wouldn’t suggest having an addiction problem to
Ryan Shank: go there, but if you could slip in there somewhere, it might, it might be worth it. Especially if it sounds like a together one, I guess I’ll use that word in parentheses.
Tyler Martin: But going back to really where I want to take this is how do you run a company and even sell a company through some, you know, you’re obviously independent from the company at that point. If you’re taking therapy or following the program, you’re probably not readily available all day long.
Tyler Martin: How did you get to that point that you’re the company still running and able to even do it to the point of sale?
Ryan Shank: Yeah. So by the time I went, the company was three years old. So we, you know, we, I had a, a CTO that was like senior. And honestly, I think any company that gets to be three years old, you should have a team in place. Right. So like it was relatively not incredibly dependent on myself. Like we had AEs, we had customer success people, sort of inbound lead engine was kind of going. So like it was able to, and by the way, like treatment is like 60 days usually. Right.
Ryan Shank: I think like a typical, I mean, some people go for a crazy long time, but I think like on average, it’s like a 56 day program, right? Two 28s, 28, 28. So it’s like not that long. The one I went to, we had computers and phones and stuff.
Ryan Shank: So like I was, I was like available. So it wasn’t like I was offline. So it was, and by the way, you, you have downtime. So it honestly wasn’t hard. It was, I was probably more focused then because I’m, you know, doing all this self work.
Ryan Shank: then I get like kind of downtime in this safe space with other people around with like house staff you know what I mean it was probably like way I was probably more productive and then I’d go outside by the pool and I’d sit and be on my laptop like it was like I was actually like
Ryan Shank: probably way more focused there than like in a COVID house you know what I mean then you know
Tyler Martin: like by myself yeah but I mean kudos to you you must have put a pretty strong team around you to be able to hold the company together without you having a constant presence. And you’re really spinning it as a positive, which is cool.
Tyler Martin: It sounds like you got a lot of mental clarity while you were there. But I still have to say kudos to you because there’s a lot of businesses three years in that literally if they lost the founder for a little period of time each day,
Tyler Martin: it would start to unravel.
Ryan Shank: Yeah, I mean, for sure. And also, I think it was a surprise to the team, right? Because it’s not like I’m doing this stuff and sharing it with them. yeah, last night was, you know, I had another one, another night of sleep. You know, it’s like,
Ryan Shank: it’s not like I’m sharing that. So I think it was like, one, they had to like trust that, okay, this is in your best, you know, trust me a little bit. Like, yes, a hundred percent. It’s
15:22Why half a percent of equity means nothing to an installer
Tyler Martin: all the team. Yeah. So I want to switch gears talking about this whole anti-equity type thought process. A lot of times in small businesses, and I know this is common in Silicon Valley, but even in small businesses, a lot of times when we have key players, we’ll think, okay,
Tyler Martin: well, we’ll give them a little piece of ownership and that’ll keep them with us and staying with us and thinking of the same mission that I have as an owner of the business. You kind of have a different philosophy. Talk to me about this whole anti-equity concept and what’s your philosophy on
Ryan Shank: that? I do want to clarify, I’m not anti-equity. I just think, so, and here’s the thing, I think for your key people, your top senior people who are going to be with you and they’re like your senior people at your HVAC and your plumbing, you guys are building a big $50, $100 million business,
Ryan Shank: for sure, have them have equity in the business. Those are senior hires, right? And I think long term and all of that. What I’m saying is by from talking, personally talking to call it high hundreds, not sure a thousand, high hundreds of individual employees, technician level,
Ryan Shank: the idea that I’m going to get half a percent in stock options and at the 409A price, and I’ll have to then exercise it if I leave or if I get it granted to me, now there’s a taxable event. But if the company gets acquired in three to five years, I’ll get the delta between my
Ryan Shank: granted price and the share price, even though those companies are more linear and not exponential. like do you think that moves the needle on a day-to-day basis of the hvac guy installing the air conditioner no like anyone who does anyone who’s preaching like phantom equity and this
Ryan Shank: as motivating on a day-to-day basis for technician level you’re out of your mind you’re out of your mind and you haven’t talked to the customers you’re out of your mind of course for senior people at your company. Like let’s all be aligned and let’s grow bottom line because look, all these
Ryan Shank: businesses trade on a cashflow multiple. Guess what? My guy doing repairs and installs and stuff, he can’t affect bottom line, right? Because he doesn’t know what you’re throwing through the business. He can’t affect how much you’re buying the trucks for how much you’re putting, you know,
Ryan Shank: rent in, you know, rent for it’s like, he almost can’t impact bottom line like that. And bottom line multiples are what these all trade on. So my, I’m not anti-equity. I think equity is awesome. I’ve made my only money that I personally have ever made has been from equity.
Ryan Shank: Like I don’t really make money from salaries at companies. You know what I mean? Sure. So like I’m not anti-equity. I just think that in the trades, if you want to motivate and incentivize on a day-to-day basis to do the certain actions that you need that move the needle for your business collectively,
Ryan Shank: it’s cash. It’s cash for the techs. And when I’m at trade shows or I’m talking to guys, even on the streets, I do tons of street interviews. Do you think, what do you think they say? If I’m like, what do you want every
Ryan Shank: month? Do you want like, you know, this piece of paper that says you have this, but you have to be at the company and maybe five, 10 years when it sells that you can’t really do anything with right now. Do you want cash every single month that you could take and buy more groceries, maybe buy a
Tyler Martin: trip, maybe buy cleats for your kids. Like which one do you think they’re saying? Oh, cash. Well, two things that I’ve known from running my own small businesses, money, number one, and then time is number two. So those are the two things usually most people on the front lines want.
Ryan Shank: Exactly. So that’s my perspective there. And again, it’s from talking to customers. If they’re like, no, this moves the needle, I would have a different perspective. But I develop conviction through customer interviews and talking to customers.
19:01Cash bonuses and the gong that beat closing the deal
Tyler Martin: Yeah, that’s good stuff. In fact, you know, Ryan, one of the most, just to reinforce your point, we used to have a commission plan paid, my top guy made like six or $700,000 a year. So very lucrative commission plan. But the thing that caused the most incentive
Tyler Martin: was a hundred dollar cash bonus that people would get weekly if they hit certain thresholds. And we do them in the meeting and they’d either get a hundred or 200. So typically, it was literally cash. Like we’d put it in our payroll and record it correctly,
Tyler Martin: but I’d literally go out and get like $2,000 cash every two weeks. And I would be handing out $100 bills. And it was one of the biggest motivators, even more than sometimes closing a deal, as sad as that sounds, just because people love the idea of that one,
Tyler Martin: the getting in front of their teammates cash, but two, just having, you know, five to $600 cash that they got from some, you know, deal they closed or something.
Ryan Shank: That reminds me at my first company, M Helpdesk, we, after you close the deal, so there the sales floor was bigger. We probably had like maybe like 15 people kind of at one point. Right. So you’d get to walk up to the gong. So just even the walk up. So it was like, oh, shit, like you made a sale. Right. Then you hit the gong. Everyone cheers. And then we had the wheel. So even just the walk up and gong, you get to you get to ring the gong in front of everyone to get the clap. And then you do the wheel and then you get the prize. So it’s like the recognition, I think, is something that people care about. They care a lot about it.
Tyler Martin: Yeah, it’s huge. So let’s talk about this pay for performance type system. Like, what do you guys advocate, Sherwillow? What does that look like? And let’s keep it in the context, of course, of home services and HVAC in particular, I think is a great topic. How do you how do you set it up? What does that look like?
Ryan Shank: Okay. So when I say performance pay, what I actually mean is hourly plus incentive. I think, so I launched a bunch of ads recently and I say performance pay in the ads. And I think a lot of,
20:51Hourly plus incentive at Black Hawk Heating and Air
Ryan Shank: and firstly, there’s a lot of engagement in the comments. So that’s great for ads, but it’s not the best engagement I’ll have to say. And I think, you know, when I’m saying performance pay, I think a lot of people interpret that as pure performance. I know there’s some
Ryan Shank: companies, I believe Tommy Mello’s from A1 Garage Door Service, I believe they’re pure performance pay, right? They don’t get any hourly. Most of our customers and the way that we build our plans, mostly, some of our customers do pure performance, pure kind of the variable pay, right? Most of our
Ryan Shank: customers do hourly plus bonus, which is like what we’re calling incentive pay, right? So that’s what we advocate for. So, so I’ll give you an example. So we’re working with a Jim Hawk, Black Hawk, H-A-A-K, Black Hawk Heating and Air from Appleton, Wisconsin, a hundred technicians, right? So
Ryan Shank: they’ll have a bunch of different plans. Let’s just talk about like an installer plan. So the installers might have a plan. So they might get a base and I might be butchering this. Let’s just call it 25 an hour, 30 an hour. Let’s call it 25, right? So they’ll get 25 an hour and then they get
Ryan Shank: their incentive based on, you know, call it average ticket size. Did you sell a maintenance contract or a membership? Did you get a five-star review number of hours it took to complete the job and maybe like one or two other metrics. And if you get sort of like max on all of those,
Ryan Shank: you can get an extra, call it 2k, which divided by number of hours, that can be an extra $10 an hour. So your effective hourly rate will go from 25 to 35, right? You’re a $35 an hour person,
22:25Callbacks are the silent killer of net new jobs
Ryan Shank: technician versus a 25 when you kind of factor in everything. But that’s typically how we build the plans. And again, for the business, we want to say, hey, you’re only going to pay that extra 10 bucks an hour, that extra 2K if you get your average ticket size. Oh, and callbacks. Oh my
Ryan Shank: God. If you reduce your callbacks. So that guy, maybe some of these guys were running 10, 12% callback rate. And I’ll just give you an example of this. And sorry to go on a rant, but-
Tyler Martin: Oh, this is great stuff.
Ryan Shank: let’s say I do 40 jobs a month, 40 gross jobs, 40 total jobs, which on a 20-day month, that’s two per day. But 10 of those jobs are callbacks. I had to go back to the job, right? So I’m actually only doing 30 net new jobs, right? So 30 net new times 1,000 average ticket size is
Ryan Shank: 30K. If I can reduce my callbacks and I’m only doing five callbacks, I’m doing five extra net new jobs per month per technician, five net new jobs, even at the same average ticket times a thousand. That’s an extra 5k per technician per month. That’s 60k per year. Well, guess what?
Ryan Shank: You’re probably going to attach maintenance plans higher because now you have five additional chances to attach a maintenance plan. So let’s say we sell one more maintenance plan or a membership, right? We’re probably going to move average ticket size from a thousand to 1200. How do we do that?
Ryan Shank: Well, if it’s installation, it’s going to be a lot higher, but let’s say there’s a service. sure guess what if you just use the templates like in service titan showing a good better best we know that if we just use the service titan estimate templates the average ticket size
Ryan Shank: increases what happens a lot of these guys will just default to like oh here’s the cheapest plan or one so it’s like you’re going to now have more net new jobs because callbacks is down your average ticket size is going to go up because you’re going to use templates whatever it is right
Ryan Shank: and then you’re going to sell more memberships you’re going to get more five-star reviews which and reinforces more jobs. So it’s like, just by doing this, it’s not unreasonable to add 10K per month per technician in revenue, which is over 100K per year per technician, right?
Ryan Shank: It’s like so doable, right? We just have, you have to incentivize. Charlie Munger said, show me the incentive, I’ll show you the outcome. You know, it’s completely tied to it. So that’s what we’re doing.
Tyler Martin: Do you, is there some modeling that you’re doing on a per client basis where, because I know a lot of clients might say, wow, man, if I pay an extra $10 an hour, I’m just not going to make, I’m not sure I’m going
24:44Keeping labor rate under 18 percent and stopping oversell
Tyler Martin: to make that back. Like, do you kind of model that out? Like you just said it all verbally, or do you get that pushback? And how do you deal with it? If you do,
Ryan Shank: we model everything out. So we kind of know now, now that we have almost 300 home service companies, and each company could have a few plans. So we have thousands of plans and we know which ones are working, which ones aren’t, but we’ll create the sort of incentives. The other thing I didn’t
Ryan Shank: mention is there can be a threshold that needs to get hit in order for anything to pay out. So that kind of de-risked the business from that. But the other thing that we do is we run historicals and then even projections through it and say, hey, here’s what you would pay out.
Ryan Shank: Then we also take a look at the labor rate for that job type. And we say like, all right, we’re trying to sort of back solve and not ever have a labor rate higher than call it maybe 18% with incentive and base, right? So here’s our hourly plus incentives is this all in right here.
Ryan Shank: Does that labor rate make sense? I think it won’t make sense. So what you’re saying is like, well, if I’m paying an extra and that makes my labor rate 50, 60%, like that, that’s what kills it. But it’s like, no, no, no. Everything else is actually increasing. The labor rate is,
Ryan Shank: is correlated to that. It’s never going to jump that. Right. So those are the important things that we’re doing and thinking about all day, every day. And that’s why I say, you know, we’re an inch wide and a mile deep. We’re thinking of all these different scenarios
Ryan Shank: for all these different types of plans for a few different types of businesses. And that’s where we are able to actually nail it.
Tyler Martin: So you kind of touched on it a little bit in terms of the callbacks trying to reduce them. But one of the pushbacks I’ll hear on paid performance, we’ll call it, in the case where there’s an hourly rate and then we’re giving them a piece based on performance, of quality issues.
Tyler Martin: People get worried that they’ll just try to bang through jobs or the quality might suffer because the more they get done. Give me some examples how that can get minimized in this type of model.
Ryan Shank: Well, firstly, I think if you minimize callbacks, if they just try to… This is the thing with hourly. Firstly, it’s funny. Hourly, either you just drag your feet, right? And you just try to… Because you’re incentive. You get your money off the hour, so you don’t care.
Ryan Shank: Or you just try to bang out, close all your tickets for the day, whatever it is. And if you have to go back or someone else has to go back, it doesn’t really matter. Whatever. I did my assignment for the day. So I think to kind of offset the potential in incentive pay is to include callbacks.
Ryan Shank: And by the way, callbacks is such a massive metric. Every one of our customers uses it. I wrote a newsletter, blog posts, callbacks is the silent killer in home services, all of that. Everyone will 100% agree. So one callbacks, like if you do a bad job, you have to go back.
Ryan Shank: I also think like customer satisfaction. So whether I think there should be two factors, because like the customer leaving a review, sure. A lot of people are paying on that. And even some are paying if there’s a picture with the review. So I think the review, the customers have to be happy.
Ryan Shank: If the customers feel like they just got sold something, look, I hear a lot of feedback in the counter to why you shouldn’t do incentive pay. It’s like, oh, then everyone’s just salesman. Customers are going to get sold stuff they don’t need. Right. Super valid, super fair.
Ryan Shank: Hear that loud and clear. And that’s why we aren’t commissioned. Like this is not, I’m not trying to put together a pure commission program, right? I think that there’s ways to offset that. if the customer feels like they got ripped or you were kind of coming at them hard
Ryan Shank: to buy this thing that maybe isn’t nice to have and they didn’t want it, you’re going to hear that in this other portion of the incentive pay, right? That should offset that. And that should ultimately disincentivize them from pushing something that the customer doesn’t need.
Ryan Shank: So I think that there’s ways to sort of counteract that and put together this really nice incentive plan that has KPIs that, sure, some of them are going to be, and that’s the thing. look, I think just asking, I actually worked for a company for one year called Asurion.
Ryan Shank: So they’re the cell phone insurance, right? And they also do like extended warranties on products. And what they found is that the commissioned salespeople in those, Hey, buy it, buy an extended warranty, buy it made the experience horrible. Like Best Buy, I think originally had
Ryan Shank: commissioned salespeople. Anyway, they stopped it and they, they realized if you just ask the question, it will automatically attach at 20%. You don’t need the commission people to like be pushing it, pushing it, you actually don’t even get that big of an uptick and it kills the customer
Ryan Shank: experience. And I think similarly here, it’s like, do you want to buy a membership? So we’ll come out twice a year. We’ll clean it. That’s could prevent more of these thousand dollar like repair calls. Sure. I’ll buy a piece of mine, 300 bucks for the year. You know what I mean? So it’s like,
Ryan Shank: there’s things that you can do that will make it. So it’s not a bad experience for the customer. Like by just saying like, you know, do you want, some people want the better quality system. Like I did a podcast interview with this lady, Lacey Coleman.
Ryan Shank: She owns a $9 million revenue HVAC company. And she was telling me, she’s like, look, the really high-end systems, she’s like, if you’re outside and you’re having a barbecue and you’re around it, it’s going to be soft, right? Versus like, you know, sometimes you’re outside, you’re by the AC.
Ryan Shank: It’s like, you can’t really hear, it interrupts. And by the way, I told her, I was like, wow, the way that you created a story out of that and made me put myself having a lemonade and iced tea in my backyard with my family.
Ryan Shank: And it’s like this quiet AC unit over there. I thought that was amazing. But like some people will pay up for that. You know, if it’s like an extra couple grand, it’s like, they’ll do that all day. And especially certain types of customers
Ryan Shank: will do that all day. So I think it’s really like, you know, if you incentivize on it and you then have training kind of on top of that and say like, hey, just present the options and maybe storytell and, you know, let them decide.
Ryan Shank: But it’s like really just giving the customers a choice.
Tyler Martin: Yeah. Are you finding, let’s say HVAC in particular, is there kind of a formula to this, if you will? Like, does everybody kind of have, are you finding everybody’s going to kind of have a similar type plan or does each company have their own nuances that make it somewhat unique
Tyler Martin: to each company?
Ryan Shank: In general, most have similar type plans. I think it gets nuanced. It does get a little nuanced. I think it gets nuanced into like the roles of the business, right? Like some might have, you know, a crew or a helper that sort of floats.
Ryan Shank: So then it’s like, I have to then be able to allocate certain hours per job for this pro rata based on number of hours worked, right? If you have a helper that floats around, some people have salesmen that will go and sort of present and sell, but not perform.
Ryan Shank: Then some people, you know, then some will have sell and perform, perform only, right? So it’s really just creating the rules for their particular business on how they’re running their business. And then like, how do you grab the data from Service Titan? The other element of all of this
Ryan Shank: is that this all has to be coming in from a field service software product seamlessly. We didn’t have integrations six months ago. It’s like you have to have the integrations. You know what I mean? You have to show the employees almost in real time where they’re at,
Ryan Shank: tie that reward to the behavior, reinforce it, all of that. You can’t expect people to do manual data entry. So I think like, so it’s like, they’re generally the same, except the dynamics of the business and roles that they have. And some have installers and service people, and then some would be just the maintenance people.
Ryan Shank: And then they’ll have like a helper that’s kind of in training, but then they’ll like, they’ll float between vans or trucks. And then it’s like, then how do you grab the data out of service Titan to kind of map it? Because that’s the last final key, not just the integration, but mapping the data into the incentive plan.
Tyler Martin: Does that get a little bit messy though, in terms of, because, you know, garbage in, garbage out type thing. Do you have a challenge in, by the time it’s getting to, it maps back through you that sometimes data isn’t getting entered correctly or that can be a challenge in getting the computations?
Ryan Shank: So we used to, and we actually had to build like a separate piece of software that we call an integration hub. So instead of just going Service Titan, flow it in, in Service Titan, there’s like actually all these different reports. There could be, you know, revenue by month, but then there could be attributable revenue.
Ryan Shank: If you want to attribute, you know, there’s multiple people on it, but you want to attribute it, there could be adjusted revenue. And then there’s a bunch of different reports by different categories. So at first we were like, oh my God, this is crazy.
Ryan Shank: So we actually built like an integration hub. So we’ll feed the data into there. Then we actually kind of like normalize and even do calculations on it over here. And then we push it and map it in. And so we realized we needed this like middle layer in order to basically like kind of take all this data that we’re getting from all these different reports within Service Titan and different endpoints, clean it up and then map it back so that it’s like it’s super clean.
Ryan Shank: And like and customer just sees like this beautiful like line item, but it’s like they don’t understand like that’s coming in from like a bunch of different places and there’s like different sort of calculations on top of it.
Tyler Martin: Yeah. And one thing I want to circle back to that you mentioned, having somewhat current data, it may not be real time, but close to it, is so integral to the incentive plan being important. Because if you’re giving some, I remember I used to interview people that were incentive-based and I’d ask them what their comp plan was and they’d say, oh, I don’t really know.
Tyler Martin: I don’t know. It’s really complicated. I don’t know how they calculate it. I just get it once a month. That kind of like defeats the purpose of the whole plan. Like people aren’t getting some excitement over what they’re earning.
Ryan Shank: Completely. That was also the big unlock for us is when we realized like we’re actually building and trying to serve the employee. When we realized if we can impact the employee, right? If they know where the incentives are, what’s their progress, how much they’re getting, that’s where the behavior changes.
Ryan Shank: That’s when the end customer gets a better experience. the employee understands everything. And then the business is ultimately better for the business. So once we changed and we realized like the visibility component of this is incredibly important and we need the employee to be able to easily understand, right? Like we have a bunch
Ryan Shank: of customers and they’re using, you know, like configurable payroll and service Titan or something. Right. And it’s fine. And it’s like very, it’s more on commission basis, but it’s, you can configure and do some kind of commissions for some stuff and price book and all of that.
Ryan Shank: but like there’s no employee experience, right? And I was talking to a bunch of companies. They’re like, yeah, we basically do all these calculations and they get it on their paycheck. They don’t really know how or why or where it came from. And it’s like, that doesn’t impact the behavior at all.
Ryan Shank: Some of them don’t, they don’t really know all the calculations, especially when there’s like tiers and levels and like, you know, I get this for this. And if there’s too many things that, you know, basically it’s like as if you had nothing. So yes, I think the visibility component
Ryan Shank: is incredibly important so that they can truly understand, you know, where that carrot is and
Tyler Martin: what they need to do in order to get it. Yeah. Well, you mentioned that there might be multiple type incentives per one company. How many, using HVAC as an example, how many different types of
Ryan Shank: incentive plans are there for one company typically? At least four. So like typically,
35:34Four plan types and 10K per tech per month in revenue
Ryan Shank: like your installers will have, and you got to think because the installer’s average ticket size will be different. And it’s just like a different type of job versus the service. So it’d be like installer service, maybe maintenance, but maintenance might be into service. And you’d
Ryan Shank: mark that as like a $0 job and whatever. So let’s just say installer service and typically a service manager who usually gets actually comped on all of the jobs within their direct reports or within their service department. And usually they’re responsible for a margin number. So there’s
Ryan Shank: like a margin threshold. And then their number might be like, you need to grow top line, but also grow margin at, or margin also has to be at least at call it 18%, 20%. And then if that happens, then you’ll get a potential max bonus of call it 5% of the margin. So if the margin is 20K,
Ryan Shank: 5%, cool. You might get up to a thousand. Those numbers aren’t big enough, but you know what I mean? 200K, 10,000. I get it. Yeah. And then sort of then their rules from there. And then the final of one is CSRs. So it’s like CSRs, service managers, installs, and service are like kind
Ryan Shank: of the four buckets, at least some of them will have more. And CSRs is typically like a booking rate. And then there’s some other metrics. Like, did you assign it to the right person? Like, was there, you know, I forget some of the other CSRs. Main thing for CSRs is booking rate.
Tyler Martin: Okay. And then I just, I’m trying to get my head around this. So you’ve got these various plans. Everybody’s getting a little bit of piece of action is what I’ll call it. Is your software rolling up all these numbers in terms of like, hey, if you make one install
Tyler Martin: sale at this level of threshold and these metrics are made, this is what you’re going to pay. And that’s what your your labor relative to your sales going to look like. Is that what your software is doing to that level of degree, adding, combining all of
Tyler Martin: them or all the different scenarios?
Ryan Shank: I think in theory, and I think most of the time, yes. I think there’s some times that we don’t get that level of data. That’s like what we’re working towards though. I think like, again, some of that depends on, you know, what we’re pulling in from service
Ryan Shank: tight. And I think sometimes a lot of their like maybe job costing and stuff might live outside of it. I think short answer is like, yes, that is what we’re kind of showing them. Hey, if you do this job and all of these things that you want to happen, if they’re the
Ryan Shank: the max payout for this would be this, but your callbacks are lower. All of these other great things are happening. So yeah, I mean, there’s a, there’s a case study actually on the service Titan blog, Darius livers. He’s kind of like a legend in home services. He was COO of FH fur
Ryan Shank: and he, you know, he was nervous. He switched his HVAC service over from hourly to performance pay. And he says on the blog, we doubled revenue in the first year. Like there was so much money just sitting on the sidelines. They doubled the revenue and without increasing technicians,
Ryan Shank: like that’s crazy just by flipping from hourly to performance pay.
Tyler Martin: Yeah. A lot of times the pushback I’ll get on any type of changes is, man, we’re just so overwhelmed. We got so much going on and now I’ve got to try to figure out how to explain this to my team. Yeah. I want to make more revenue, but we’re already having, you know, operational
Tyler Martin: bottlenecks or whatever. Do you ever get that type of pushback and what would be your feedback if
Ryan Shank: you did? So look, I think everything we’re doing is inbound. I think customers are coming to us and not inbound, like they’re wanting to buy sharewillow. Some of them are just downloading a free template off our site, looking at our bonus calculator, but it’s all inbound leads for us.
Ryan Shank: Then we’re trying to like say, Hey, you should use sharewillow. So I feel like most people get it. I think there is, there is some hesitation around how will this be received? And we are helping that we actually provide training documentation, talking points, things like that. We actually
Ryan Shank: join a lot of the employee rollout meetings for like the go lives and will help message this. And it’s like, look, your owners like partnering with best in class company, share Willow, who only does this and has visibility into all these other companies that are doing this and all their
Ryan Shank: technicians are making more money per hour. Right. I think most of the times these employees, these technicians, they want, they want the upside. They want the ability to be competitive. It’s fun. It’s like, you know, they kind of chirp each other. And like, I just think, uh,
Ryan Shank: They almost want to be in a system that allows them to thrive and have that upside.
Tyler Martin: What’s your data saying so far in terms of when someone adopts this type of incentive pay, what they could expect in terms of results? I mean, doubling obviously is awesome, but that’s probably not the norm. What would you probably say to a company you could expect to see?
Ryan Shank: I like to pad it. 10K, an extra 10K per month per technician in revenue. So on a percentage basis, it kind of depends on what they’re normally bringing in, right? Sure. 10K per month per technician after, call it six months, right? It has to, you know, you got to give it time for the behavior to change, for it to roll
Ryan Shank: out, for the numbers to really roll in. But after six months, you can expect 10K per technician per month in incremental revenue, right? And so you’re paying for that extra 10K, probably 1K per month. Or yeah, 10K per month. Yeah, maybe 1K per month.
Ryan Shank: Okay. In incentive pay. Yeah.
Tyler Martin: So you’re easily talking 10 technician shop. You’re talking a million dollars a year.
Ryan Shank: 100%.
Tyler Martin: Wow. That’s good stuff. Okay. Good stuff. Hey, just in terms of where I would like to wrap up on this, I’d love to know, is there some type of mantra or guiding principle that kind of keeps you grounded as an entrepreneur?
Ryan Shank: I love saying action creates opportunity. I don’t know if that keeps me grounded, but I just think, you know, so many people fall into analysis paralysis when they’re like looking at a new idea. And it’s like, just do something. And when you start to do something, you uncover, you know, someone might, oh, you should talk to
Ryan Shank: this person. Oh, they see you doing something, you know, or you go into this conversation, maybe at this one angle, you learn something, just do stuff. When you do stuff, opportunity presents itself. And it also increases your luck surface area. So I think action creates opportunity
Ryan Shank: is something I really live by. Like I’m not afraid to go big, swing big and just go for it because like I just know that like other things are going to happen, you know, when I’m creating that action.
Tyler Martin: Yeah, that’s a good one. That’s a powerful one. So your website, sharewillow.com, sharewillow.com. I’ll include your LinkedIn and then the Instagram links and my show notes at profitandgrit.com. If people wanted to reach out to you, is LinkedIn the spot to go or is there anywhere else you’d like them to go?
Ryan Shank: Email me, ryan at sharewillow.com. Go to the website, download a free Excel template, go to our bonus calculator for free, try Sharewillow. You know, I would just end this in saying like, look, if you’re on Service Titan, Housecall Pro, Jobber, specifically Service Titan though,
Ryan Shank: you know, we have a beautiful integration with them. And, you know, if you want to do, if you want to increase revenue without increasing the number of technicians, potentially if you have 10 technicians an extra million dollars a year like this is going to work
Ryan Shank: this is not something that you know we’re thinking might potentially work it’s working for all the big guys the fh furs are doing performance pay tommy mellow’s doing performance pay all the big guys are doing this and we’ve now created a platform and system to basically allow any company
Ryan Shank: that’s in home services that’s on service site and those other platforms to roll this out get your technicians more money and ultimately get your customers a better experience because they’re going to get taken care of by the technician that’s now aligned with the company goals.
Tyler Martin: Yeah, that’s great. And I will advocate to go to your website because I went there and that’s how I got connected to you. Ultimately, you guys have a lot of really cool tools. I mean, you obviously are following that giveaway, good stuff, giveaway, good stuff, people get hooked and then they’ll
Ryan Shank: want to know more about us because you do give some really good tools. Amazing. Yeah. And we do a weekly newsletter that’s custom written every single week. And we’ll have like, you know, an offer on it, but then it’s like a, you know, just something we’re hearing or from one of my
Ryan Shank: podcast episodes. So yeah, we try to just give value, value, value, and then say like, look, we know that we’re giving away so much value that we think it’s going to come back.
Tyler Martin: One last question. Sorry, I said I was going to wrap up, but you brought something up that made me think of it. Is there a way for people to dip their toes in this? Let’s say they say, oh man, I don’t know if I’m ready to roll it out everywhere. Can they do it just in one area?
Tyler Martin: Like maybe they say, I’m just going to do it in installs first. Is that even possible?
Ryan Shank: 100%. We have a lot of people that do that. And internally, we call that land and expand. Like, look, give it a shot for this team. If you have multi-location, this location, service department only, give it a shot. And then you can see how it’s received, how your employees are behaving differently.
Ryan Shank: And yeah, absolutely.
Tyler Martin: Very cool. Okay, man. Hey, thanks for being on the show. Super appreciate it. Love what you’re doing and wish you the best of success.
Ryan Shank: Thank you so much for having me. I really appreciate it.
Tyler Martin: So here’s my takeaway with my conversation with Ryan. A lot of times as business owners, we think we need more technicians, more trucks, a bigger ad budget to grow. But most companies don’t really have a staffing problem. They have a performance problem. When techs don’t see how
Tyler Martin: their daily decisions affect their pay, they default to this hourly syndrome behavior is what I would call it, I guess, where their mindset is all around hourly, getting paid per hour. When they do see a bigger picture, everything changes. Fewer callbacks, higher average tickets,
Tyler Martin: more memberships, and it builds a better customer experience. Ryan’s story also reminds us that leadership is about clarity, clarity in your own life, clarity in your expectations, clarity in how people win on your team. When employees understand the score, they rise to it. When the business aligns with the right KPIs, revenues go up without burning
Tyler Martin: out your people. If your numbers are muddy, your results are probably too. And if you want to see what those numbers are really saying, whether you’re fighting thin margins, shaky labor efficiency, or unpredictable cash flow, that’s where a guy like me comes in. I help entrepreneurs build
Tyler Martin: financial systems that support growth instead of chaos. You can grab an intro call, no pressure, just easy, quick conversation at cfointrocall.com. That’s cfointrocall.com. Or check out cfomadeeasy.com and you can book a meeting there. Thanks so much. I appreciate you listening. Have a great one.
Related Episodes
- 8 Steps To Book More, Charge More, Lose Less – Brigham Dickinson
- The Hidden Revenue in Your Pipeline You’re Not Capturing – Ryan Fenn
- The $1M Revenue Leak: How Chiirp Fixed Home Service Follow-Up – Ryan Fenn
- The HVAC Crisis That Built a $5 Million Business – Jack Carr
Tyler Martin works with owners on the numbers behind these stories: a fractional CFO for HVAC contractors. For where your business sits right now, read the $3M to $15M scaling breakdown.
