Full transcript10 chapters · 9,427 words
00:00From radio kid in Ohio to running a home-services agency
Adam Rich: Every contractor wants to go big game hunting and get the big install, the high ticket item, the HVAC system, the plumbing system, whatever. But the challenge is turning low barrier to entry service call into a long-term lifetime customer and taking the brand promise that you make and delivering on that promise every
Adam Rich: step of that process so that you earn the right to have a long-term customer. Today, we’ll talk about how you do that and ways that you can put your marketing dollars to better use.
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. Trades business owners often think their marketing problem is getting more leads. But what if the real issue is what happens after those leads come in and how your entire system is set up to handle them?
Tyler Martin: Today, I’m joined by Adam Rich. He’s the founder of Rich Ideas, who has spent over a decade helping home service companies turn marketing into measurable growth. In this episode, we break down what actually drives the results. the biggest mistakes contractors make with agencies, and how to get more out of the marketing
Tyler Martin: you’re already paying for. Let’s get into it with Adam now. Hey, Adam, welcome to the Profit and Grit Show. How are you doing today?
Adam Rich: Good to be here, Tyler. Excited to talk to you. Happy to share any information I can.
Tyler Martin: Dude, super excited to have you. I am very pleased to have gotten to meet you through Drew Cameron, who was in, I just published this episode last week. It was episode, I think,
Adam Rich: 55. I’ve known Drew for a long time. He’s a good guy. We’ve worked on a lot of projects together.
Tyler Martin: Very few people have any kind of industry insight like Drew has. He’s amazing. We, I mean, we talked for 45 minutes and I felt like we didn’t even touch like, like an inch of what we could have
Adam Rich: talked about. You get Drew and I on a call together, who knows how long that call might go.
Tyler Martin: We talk about a lot, but it’s fun. That’s awesome. Hey, so I want to learn about you. Tell me a little bit about what you do professionally. And I’d love to have a tidbit
Adam Rich: about you personally? Sure. So I run Rich Ideas. We’re based out of Richmond, Virginia, a full-service marketing agency, essentially like a fractional CMO is a good way of saying it for most people. Mostly home services, HVAC, plumbing, electric, et cetera. I’ve been doing this for 15
Adam Rich: years. I came up in the media business. My dad was a disc jockey back in the day in the Ohio region and then made his way up the ranks. So I came up around radio and TV, thought it was awesome, Still kind of cool business.
Adam Rich: Me personally, wife, three kids, super happy. Coach basketball, big sports guy, you know, like working out, trying to keep my mind level with all the craziness of business. But that’s me in a nutshell, man.
Tyler Martin: That’s awesome. That’s really cool. Hey, I want to start like where I’d love to start is you brought up fractional CMO. And I’d love to talk about a little bit. What’s the difference between a fractional CMO and a marketing agency?
03:21What a fractional CMO does that an agency alone won’t
Tyler Martin: I mean, from an owner’s standpoint, what does the owner actually get? How do they see it differently?
Adam Rich: Yeah, and there’s some interchangeability between that. We are an agency, but we act as fractional CMO for most of our clients. I think a fractional CMO is more who’s accountable at the end of the day, who’s leading the charge. When you hire an agency, you could be hiring any type of agency.
Adam Rich: There’s a traditional agency, a media placement, a creative firm, a digital that does SEO or PPC or AEO or what have you. What a fractional CMO would do is act as a traditional marketing director without the liability, cost, some of the baggage that comes along with that.
Adam Rich: And I really think that the fractional CMO is sort of the leader of the marketing team. Right at the end of the day, we would hold all vendors accountable. right internal people marketing coordinators admins what have you it’s basically a marketing director that’s just not there so there’s pros and cons to that right not in office with the you
Adam Rich: know all the clients we have all over the country but at the same time we have our own teams and we have our own experience and industry experience it’s they’re they’re somewhat interchangeable to a degree i think when you hear the term fractional and you would probably attest to this and what you
Adam Rich: do, there’s some misconceptions about that. You know, is it a good thing or a bad thing? Right. But we’re doing our jobs and we know our industry, the fractional element far is undershadowed compared to the benefit that the business would get.
Tyler Martin: Yeah. Okay. And when you, you know, what are some, like, I know you would never say this,
04:55Why commission-based agencies push you to spend more
Tyler Martin: so this is me saying this a lot of times with marketing agencies, I have a real bad taste in my mouth. If I’m being really honest, it is very common. Yeah. I mean, I just, you know, client comes to me, the same thing. It’s like, spend more, spend more, spend more.
Tyler Martin: I mean, a real world example, client was spending $6 million a year business, spending about $40,000 a month on advertising. Advertising agency just said, keep spending more, keep spending more. And it wasn’t coming out in terms of return or, I mean, it’d be one thing if
Tyler Martin: you’re spending $40,000 and you were getting like, you know, 6X on your money or 5X or whatever. It’s nothing like that. 90% of the business, do you know where 90% of the business was coming? 20-year-old business, 90% of the business was coming from a current client.
Tyler Martin: Fast customers, of course. It’s like, okay, why am I spending $40,000? And this is like the type of thing I hear all the time. So I guess my question to you is like, how do you feel about that when you hear this? It sounds like you kind of are aware of this.
Tyler Martin: And how do we know if we’re out in the audience when maybe it’s not serving us well?
Adam Rich: So a couple of things. Very common. I would say as hard as it is to hear that about the industry that I’m in, it’s good for guys like us and the business we run. We are mostly a retainer-based agency. We don’t increase prices just randomly.
Adam Rich: We have built-in escalators, which are based on longer term. If we get to 12 months, if we get to 24 months, here’s how it’s going to work. I would throw caution to the wind on several things relative to the traditional agency model, per se.
Adam Rich: Anyone who is commission-based, meaning they earn on what you spend, is naturally going to have an incentive to, one way or another, convince you to spend more money. And sometimes that means it’s because it’s working, and sometimes they’ll convince you of that. Because marketing agencies are notorious for skewing data one which way to show what they want you to see.
Adam Rich: Look at all these impressions. Look at all these clicks. Look at our rankings. And those things are important, too. But I came from a media sales background where it was all commission-based. No salary, all commission, hustle, hustle, hustle. It’s great. I came here 15 years ago.
Adam Rich: We gutted that immediately. It was like, we’re a retainer-based agency. We’re a relationship agency. I don’t care if my client spends 10 bucks a month or $10 million a month. If it serves their needs and it grows and we can track the ROAS or the ROI
Adam Rich: or whatever terminology you use, that’s great. If it’s not, we need to be good stewards of the budget. And so there’s a huge gap between how retainer-based agencies operate and more commission-based. And the taste that you’re speaking of often are digital agencies with pay-per-click campaigns.
Adam Rich: That is a notorious black hole and black eye on the agency business. Doesn’t mean they all do a bad job, they don’t. But inevitably, as the cost increases, they keep telling you to spend more money. And sometimes it makes sense and sometimes it doesn’t.
Adam Rich: So I think that, you know, for me, honestly, the way we approach it, that experience with most agencies is a good thing for me. Because when we come in and tell them our methodology and our strategies are like, oh, great, that’s different than what I expected to hear. That’s a different strategy. So it’s pretty common though, unfortunately.
Tyler Martin: Yeah. Yeah. Okay. That’s good to know. Well, not good to know, but at least you understand the problem. It’s common. Yeah. You know, in terms of like CMO, tell me if I’m articulating this correctly. So like, to me, the CMO kind of manages the agency in terms of, because a lot of times
Tyler Martin: agencies are coming in and I think they mean, well, I don’t think all agencies are bad. I agree. I think they come in and they’re like, okay, we’re going to get you ranked highs at LSA, local search advertising. We’re going to do all this stuff. And they just kind of just,
Tyler Martin: they want to show you they’re doing something. So you can do all this stuff, but there’s really like no strategy. There’s no reason to rhyme. They’re so trained to try to prove to the owner that they’re getting return. It’s just very haphazard. Is it fair to say the
Tyler Martin: CMO comes in and directs that traffic and goes, hey, this makes most sense?
Adam Rich: Most definitely. The CMO ultimately is solely responsible for the success of the marketing campaign and is responsible for holding all parties involved accountable, whether internal or external, right? And so you would want a CMO to look at the contract, the terms, the scope of work, the expectations, the dashboard, all that stuff, and call it for what it is,
Adam Rich: Right. And so when you hire an agency and you don’t have anyone leading the charge internally, but whether that’s your marketing director or your CMO or your fractional CMO, how do you really know who’s holding these people accountable other than the business owner who’s
Adam Rich: hiring an agency because he or she does not have time to manage this, nor interest or skill set or experience or know-how. And so they’re responsible for evaluating the information and the results that the agency is producing without a right-hand man or lady to say,
Adam Rich: whoa, whoa, whoa, whoa, whoa, that dashboard is BS. And those numbers are not what we expected. And those are not what we talked about. What are you going to do to produce at a higher level? Or is that reasonable, right? And so all of those things fall under the purview
Adam Rich: of the fractional CMO, the CMO, or the marketing director. And so you really do need someone solely responsible for leading the charge. And I’ll say this, in our business, when I came in and started sort of building our direction in home services, I vastly underestimated the amount of time we would spend managing vendors
Adam Rich: and vendor relationships, right? It is a huge part of our job. If we’re not doing the SEO, we’re not doing the PPC or the website or whatever, we’re working people. Sometimes our clients have those people in place and that’s great. Sometimes they don’t.
Adam Rich: But managing them and calling what it is and directing them is a huge part of our focus. So we want to take the burden off the business owner. So the business owner can do whatever he or she is supposed to be doing and
Adam Rich: sitting in on endless digital meetings on dashboards and listening to, you know, the KPIs that digital agency is producing is not what the business owner should be doing.
Tyler Martin: So Adam, I have a confession. Three years ago, I would not have advocated for a CMO. I don’t think I really even understood what a CMO is if I’m being really honest about it. I spent, no, no, this was three years ago. So I spent my whole career working with businesses in
Tyler Martin: that like one to $20 million a year range. And, you know, I always saw marketing agencies and always felt like, man, they’re just so missed. I just don’t get it. I don’t see the return. I don’t understand. And about three years ago, I ran into someone at the size type of business
Tyler Martin: using a CMO. I started working with them and I’m like, wow, this is so different than any experience I’ve had when working. Usually I’m always like the enemy with an agency because I’m coming in going like, show me, like, help me to understand the return, you know, help me to,
Tyler Martin: help me to really see that. And as you keep peeling the onion, the numbers just don’t add up or they’re just, you know, they’re like you said, you’d mentioned SEO, you know, Hey, we got you ranked number one on a keyword that gets two hits a year. You know, I mean, this is, so anyway,
Tyler Martin: my point is, is now it just, I see the power of it. How do you convey that to clientele and people that you’re working with that maybe are like me and don’t really get it until they actually have
Adam Rich: a firsthand experience? It’s hard to convey that depending on the depth of their prior experiences, because there’s brick walls that people put up and go, I’m not falling for that shit again. Right. A lot of times they’ve been sold a package of goods by either a marketing agency, or in many
Adam Rich: cases, local marketing people, radio, TV, billboard, direct mail, a lot of times digital, unfortunately. They have preconceived notions on what it is or is not. I think the way we approach it is very in-depth needs analysis.
12:44Contract length and agencies that hold your website hostage
Adam Rich: I’m super blunt and direct with people, which I think is different than what a lot of marketing people do. We don’t really sell. We just ask questions and provide solutions if they make sense. But I think it is a hard thing to overcome.
Adam Rich: One thing you would want to watch out for and one thing to advise on someone considering hiring a marketing agency, right? Look at the length of the contract and the terms of the contract. Anyone who’s trying to hold you to a 12, 24, or 36-month contract, I wouldn’t say it’s a red flag, but it’s pretty damn close, right?
Adam Rich: The way we do it is I say, give me three months to prove to you whether we’re worth the shit or not. And if we can do that, fantastic. you’ll know in the first couple of weeks, whether we’re a good fit and how we communicate and all
Adam Rich: the stuff that you’re no longer having to manage. First couple of months, it’s crazy because we’re still asking questions. Well, who do you do for this? And how do I access that? And what’s your process for this? Why did we do this last time versus that or whatever? But pretty quickly,
Adam Rich: you fall into that rhythm of one. Oh, wow. These people are doing, or this person is doing a lot of stuff that I was previously doing. But to me, I think that the contract term would be something of concern to focus on. Why would someone need to hold you to a 12 or 24 month contract?
Adam Rich: Right. And usually it’s because they’re kind of milking it and they’re not being held accountable month to month, day to day on their performance. And there’s, there’s risks to that. Right. But when there’s a bad month, everyone’s looking at me or our team and going,
Adam Rich: what’s going on. Right. And so, but if you, if you’re communicating and you have the plan and you have the accountability, you’re going to ride those waves, especially in businesses like HVAC, which are majorly seasonal, right? So that’s something to look at, but yet it is a major challenge.
Adam Rich: And it’s good for us. Again, sometimes it’s great for us because we approach it from a totally different perspective. But that burn sometimes was so deep that it’s hard to overcome and people go after it.
Tyler Martin: Yeah. What about on the contract terms? Does it concern you or do you think this is the norm in terms of the ownership of the website? like uh some of these companies their language is basically says hey if you leave us you’re
Adam Rich: leaving the website too that we designed you have to run far away from that that is a huge red flag the way we do businesses i’m like why would i want your website anyway the only reason i would want that is to hold you hostage and to make you stick with me because of i own all your stuff that’s
Adam Rich: that’s ridiculous uh when we’re interviewing vendors that’s one of the first questions we ask is, are you market exclusive? Tell me about the terms of your contract, the length of your contract, who owns what, right? And if something goes awry in the first six months, three months, whatever,
Adam Rich: what does that breakup process or cancellation policy look like? Vendors do that. Well, we’ve got proprietary knowledge that no one else can have and our tools are unique and different. And maybe that’s the case from time to time. We have not seen that to be the case, right?
Adam Rich: Right. That’s just bullshit at the end of the day. Right. So I would, to me, the client business owner should own all of their assets and have complete use of website, social media accounts, Google business, LSA, photos, videos, creative assets. That’s their material. We’re just the conduit to create that and take it to the market and execute their vision.
Adam Rich: So to me, no, major red flag. I would be concerned about that. And usually when they do it, sometimes an agency will do that, particularly for building a website to say, we’re not going to charge you up front for your website. But what we will do is basically amortize it
Adam Rich: over a 12 month period. And then after that first 12 months, you own everything. All that is, is a 12 month contract under different terms. You just don’t pay up front. You either pay now or you pay later. But basically they’re saying, I’m locking your ass down for 12 months.
Adam Rich: and I get it. Most digital agencies do that on the website side. We don’t, and the people that we recommend don’t. And so, you know, I want to hold people accountable and, you know, that’s not really holding people accountable. If three months into a 12 month contract, you know, they stink and
Adam Rich: they’re not producing. What do you do then? Right. And more months of poor performance and that’s
Tyler Martin: going to kill your business. Right. I had a client come to me and they became a client, but when they came to me, they made this comment. They were just a prospect. They said, they said, oh, I’m signing up with such and such company. And I said, oh, I said, you know, the only
Tyler Martin: challenge with that company, and just I want you to be aware of this, is they’re going to own the rights to your website. Like if you stop working with them, you’re walking from your website. You know what he said to me? This actually made me kind of sad. He said, dude,
Tyler Martin: this happened to me three times now. I know. I just live with it. And I start all over again. I said, but each time you’re doing that, it’s costing you X amount of dollars to have to start all over. He’s all, what am I going to do, man? What am I going to do this the way it is?
Adam Rich: Well, and here’s bringing it back to your original point, right? So that’s happened three times and he’s the one farming out the RFPs, the proposals or searching out who do I call or going to forums, going which HVAC or plumbing guy or whoever
Adam Rich: digital agencies I call. That’s where you need someone that’s a fractional CMO, a marketing director or a CMO to go, there is a better way. Let me find out. Here’s what our experience is. You don’t have to go through that again, right? And I would hope over time agencies learn from cancellations and bad feedback, but they don’t.
Adam Rich: In most cases, their contract and terms are in their best interest, not in the best interest of the client. And that’s something that you would want someone to protect.
Tyler Martin: Yeah, makes a lot of sense. Okay, good stuff. Good conversation. Thanks for educating me on that. I want to go into talking about numbers, metrics, the ones that matter. So I want to talk about a few of them. I think a lot of times we hear things, owners will think certain numbers are more important, which may or may not be true.
Tyler Martin: They may not even know any numbers.
18:32The handful of KPIs worth tracking before the big dashboard
Tyler Martin: So can you kind of go through like what are some common metrics that you would say are pretty important you should be thinking about? And if there’s an industry benchmark, feel free to share it. If you think it’s too in the weeds, that’s cool, too.
Adam Rich: Yeah. And obviously, every industry and every situation is slightly different. But I can tell you this, if you’re a business owner and you don’t have a sophisticated CRM or dashboard management system of some sort, or if you’re on service time, you don’t have a searchlight or something of that effect.
Adam Rich: We would recommend starting with sort of the most essential KPIs, right? Okay, that’s inquiries, right? What is the cost per inquiry? That’s not a lead. Someone calling you is not necessarily a lead. That’s someone who could be a lead. What’s the cost per lead, right?
Adam Rich: How many leads are you getting? And obviously there’s projected and there’s actual. So we’d have to work through that. There’s your cost per appointment, number of appointments, right? There’s your close rate on appointments to sales, clearly. Revenue, average cost per ticket, and either ROI or ROAS, right?
Adam Rich: If you don’t focus on any other numbers, you can strip out everything else. That’s pretty solid, right? What you want to avoid, and we’ve seen this a lot lately is this overwhelming, massive dashboard of 800 KPIs that you’re tracking and going, this is, I don’t really know where to start.
Adam Rich: I would start with what is most critical to the success of my business, right? You could argue cost for marketing in there, ROAS, and those are sort of an inverse of the same number, essentially, right? Obviously, you want overall revenue and sales and whatnot, but we want to tie the marketing
Adam Rich: directly to those numbers. So this fluffery of impressions and clicks and rankings, while I want to know that, at the end of the day, as a business owner, I’m going, that’s great. That just gets me to this dashboard, right? Everything else is I don’t really care about. That’s the marketing guy’s problem, right? I’m going to tell you what I expect to have happened and what I’m willing to pay for a lead.
Adam Rich: The lifetime value of a customer long-term would be something that you want to work in there. Customer acquisition costs gets a little bit more complicated, but also really good numbers. But there’s so much you can extrapolate from just that basic information. And then use that for three, six, 12 months, get comfortable with it, and then go, now we’re ready to take it to a different level of integrating six or eight more KPIs.
Adam Rich: And ultimately, Tyler, the interesting thing here is who’s responsible for populating that data? who’s responsible for managing, reporting, and strategizing and recommending pivots, right? Just having the data presented doesn’t really mean shit, right? You have to do, go, okay, what does this mean?
Adam Rich: And I’m looking back at trends from 12, 24, 36 months prior. How does this trend compare to what we saw previously? And why is that, right? And so we often see business owners know they need KPIs. They don’t always know what they are.
Adam Rich: Often they’re being manipulated or misled into thinking certain things matter that don’t. We want throughput, right, from anyone. The other stuff, we hire them to get that done. And if they can’t get that done, strip all excuses aside, after a period of time, you
Adam Rich: go, this is just not what we expected. We need the benchmark to be here. You’re here. How do you get from here to there, right?
Tyler Martin: Okay. Yeah, it’s a pretty good starting point for someone not using anything. I got a question for you. Awesome answer. Love all those data points. I’m an owner, I own a $6 million business. Wake up Monday, kind of tired, long weekend. Get sit down at my desk, open up my email.
Tyler Martin: What’s the dashboard I want to see on Monday morning, every week with the most key marketing data?
22:13What your agency should send you Monday morning
Tyler Martin: Like what, if I have an agency, I own this business, I have an agency and I sit down, what is my agency should be sending me on Monday? Should they be sending me something weekly? Should I have access to something weekly that’s easy?
Adam Rich: You should have access to something all the time.
Tyler Martin: And what is it? Like, what should I be? Is it those numbers?
Adam Rich: Yeah, I mean, I would want to have a plan. You have accountability. What are the expected leads, appointments, inquiries, what have you, by a service line? Or within that, I need service leads, I need repair leads, I need install leads, what have you.
Adam Rich: What is the revenue for each of those things? And how are we trending, right? Week one, week two, week three. What you want in looking at these, and the data points I suggested earlier would be a great starting point. inquiries, leads, all the cost pers that go with that, appointments, revenue, close rate, ROI.
Adam Rich: But what you want is someone who’s proactively seeking this data instead of reacting or proactive going, hey, you said you needed 300,000 in sales this month. It’s one weekend and we’ve only got 25,000 in sales. Let’s talk about this. Is there something we can do within the month
Adam Rich: to adjust those numbers? Or is this just like, hey, we’ve been looking at this for six months. We always suck the first week for whatever reason. Or the first week of April, everyone’s on Easter. Don’t worry about it, right? A lot of that stuff, Tyler, is excuses, but some of it’s real, right?
Adam Rich: When you start talking about holidays and travel and all that good stuff. But it’s as important what the numbers are as to what you do with the numbers and how you respond to those. And often we find that they’re either people drastically overreact.
Adam Rich: Oh, my God. You know, one weekend of the month, we’re pacing at 15%. Go spend a bunch of money, right? Which is not usually what you want to do, right? Or they don’t react at all. And they’re like, oh, we’re good. It’s cool.
Adam Rich: And then you get three weeks into the month and you go, we’re having a terrible month. Why didn’t my marketing team do something about this, right? So what are the data points we’re tracking? How often is it reviewed? Should be all the time, as much as possible.
Adam Rich: And who’s responsible for inputting, managing, strategizing, and doing something about the data if there’s something to do? And sometimes there’s not, right? But that’s what I would focus on. And I’ll tell you, man, some of these dashboards are insanely powerful and kind of overwhelming,
Adam Rich: right? But the thing as a business owner, I would tell them is whoever’s in charge of the marketing and the sales needs to understand what you as a business owner expect of them for each one of these categories and who’s responsible for owning those things.
24:42Having a code red plan before the month goes sideways
Adam Rich: And often it’s a collaboration effect, which means, as you know, no one ultimately is responsible for anything. And so everyone just kind of hides behind some other person’s problem. So I’ll be very clear with that.
Tyler Martin: Yeah. So using your example, I think a lot of good stuff there. I’m that owner again. I’m looking at my dashboard. I’m 15. I’m way off for this week. It’s early in the month. Yeah. Are you giving me a, I’m shooting you an email.
Tyler Martin: Hey man, our numbers are way off. Are you a CMO going, dude, stay the course. The trending is said we’re normally slow in the first week of the month in this particular month. Next week. Like, well, I mean, are you leading that charge in terms of your capacity?
Tyler Martin: Are you kind of leading that charge of like, it’s time to spend more? Or no, let’s just stay the course. This is normal. Like, what does that look like, that interaction?
Adam Rich: It is client specific. Sometimes we have clients that call every hour and want to have a status check. And others are like, I don’t need to hear from you. You give me the report. You tell me what you think we should do. What I would like as a CMO type is we’re in charge of the data.
Adam Rich: We agree upon what it is up front. We have a code red plan. If something’s amiss and we’re one week into the month, here are the agreed upon spends, the channels, the offers, and the levers and buttons we press if we get to that point.
Adam Rich: Now, what I would do in that situation, Tyler, is I’d call clients, hey, client, remember that thing we talked about? We’re seeing it. Do you want to move forward with the plan? And they’d say, yay or nay. Or I’d say, depending on what authority I’d have, we’re doing it.
Adam Rich: Right. And I’ll take the heat on this because we agreed upon this up front. And that’s my job. Right. Now, some clients will say, I’m not comfortable with that, you know, especially early on as we’re building trust with people. They’ll go, hey, man, before we get to like you just spending a bunch of money, give me the green light to rubber stamp that thing.
Adam Rich: I totally get that, too. But ultimately, what we don’t want is the client is exclusively responsible for analyzing data and calling their agency and saying, I got a problem. If you’ve got a good relationship with your agency and it’s built up front, the agency should be equally responsible, if not more responsible for calling you client and saying something doesn’t look right.
Adam Rich: But here’s the problem, Tyler. Most of the time, agencies and marketing people as a whole will shy away from that conversation because that’s a scary conversation. And the conversation is the shit I put in place ain’t working right now. not always is that the case. Most of the time it’s not. But when things are rough, we need to
Adam Rich: call it. And for any marketing people listening, you’d be surprised how well people respond to you owning it and saying, I take responsibility for whatever’s going on here. It may or may not be marketing, but I want to fix this. Here’s the problem. Here’s what I recommend we do. If I
Adam Rich: don’t hear from you by the end of the day, we’re doing it. And so business owners almost universally respond positively to that kind of push. They go, these dudes aren’t messing around. They’re going to get it done. And I’m willing to take the risk because I know what the problem is and what they
Adam Rich: recommend. A lot of times, Tyler, here’s what it sounds like. We got a problem? What do you mean? Oh, I haven’t looked at the data today. I haven’t looked at the data this week or the next last couple of weeks. What do you want to do, client? And the client’s like, I hired you to tell me
Adam Rich: what to do, right? Now, some businesses are different and are a little bit more controlling, a little bit more micromanaging and passionate about that. And that’s okay, right? But you need to, we need to have that understanding upfront of what that process looks like. And you may or may
Adam Rich: not be surprised, this comes up all the time, all the time. Why didn’t you guys react? What’s going on? Why did you wait for me to approve something? You should have just done it. So in order for that
Tyler Martin: to happen, we need to have those parameters agreed upon early on. Yeah, that’s good stuff. That’s really good stuff. Okay. I want to, next one, I want to talk about memberships. So it’s obviously
28:37Why memberships die at renewal and how to reinforce value
Tyler Martin: a hot topic. Everyone says, let’s build a membership. You know, I get a bird’s eye view with many clients coming to me and get to see their memberships. Very few actually execute on this very well, or if at all, whether it be from an accounting standpoint or just an execution
Tyler Martin: of selling memberships. Kind of want to just know your thoughts around memberships. Where do you fit in as a CMO slash agency in that process? Yeah, what are your thoughts about that?
Adam Rich: So memberships to me, hugely important. Monthly recurring revenue, predictable revenue, solid customer base. These people are paying to be part of your club, so to speak. To me, I think where it falls short often is how we sell it or don’t sell it, right?
Adam Rich: Like it’s sold often based on the initial savings. If you go with this membership today, you can save $89 today and then you’re just on the membership. Or we install an HVAC system and you just get a membership for two years as part of the install,
Adam Rich: which allows you to close the install, which is great. But after that, the value of the membership is not reinforced. So thereby, there is no value to the membership. So when it comes to time to renew, people are like, I didn’t even know I had that thing.
Adam Rich: What? Why did I need that in the first two years? The damn thing’s brand new, right? So first off, there needs to be a clear membership plan, not based on features, right? You get a 32-point inspection and you get priority service. That stuff is important, but all the membership plans sound like that.
Adam Rich: So now we’ve devalued the entire industry by saying they’re all kind of the same. Who gives a shit? It’s all the same, right? So what problem are we solving first and foremost by addressing and even recommending a membership plan? how easy is it? How convenient? Speed of service, all this stuff’s great. And we have some of these,
Adam Rich: unfortunately, and some of them still work where it’s like, we need to talk about the air coil does this and we change that. We come out twice. I get that to some extent, but moreover, I think the challenge is how we present it, how we hold techs accountable
Adam Rich: and spiff them and what that whole process looks like. As a fractional CMO, Tyler, we would either build the plan or revise the plan and help see it through every step of the process. Now, obviously, I wouldn’t be on every service call, but we would want to have a process in
Adam Rich: place and contests and SPF programs and what have you. But just as important as getting them on the membership is retention on the membership, right? Which is often badly overlooked. We’re all hamsters on a wheel trying to get, we’ve got a KPI, we’ve got to get 300 new
Adam Rich: members this month. Like, great. How many members just leaked out the back door that same month? And at the end of the day, we’re net neutral. So like, what are we actually doing? If that’s happening, it’s because the membership plan sucks. We sort it the wrong way,
Adam Rich: but we’re not reinforcing the value of the membership all the time. It can’t be you just get a call when it’s time for your service. Oh, you got your service. I want to come out and come out. You’ve got two services this year.
Adam Rich: They’re like, oh, okay, great, right? And then what happens at the end of the year, Tyler, as someone goes, I don’t remember doing this thing. I didn’t even need y’all. And you’re like, wasn’t that the point? You didn’t have a major problem, right?
Adam Rich: So what we try to do is really reinforce you made a good decision and communicate to those customers constantly. That is your best group of customers, not necessarily most revenue positive group, but your best group. They’re paying to be on the membership. So we got to constantly reinforce you made a good decision.
Adam Rich: You’re getting stuff no one else is getting, parties and exclusive events and early access. Think about like what Amex does. Use this example all the time, right? Amex gives you access to go buy concert tickets before everyone else does. and regardless of what you are not paying
Adam Rich: and all the rewards points that you get and it’s tied to Amazon, all these different things they have, you get kind of ingrained in, I can’t imagine not having my MX and look at all the cool stuff I get. So, you know, Discover card calls me.
Adam Rich: I’m like, I’m not even looking at that. There might be a much better plan. I don’t even know, but there’s no way I would even think about leaving these guys. Our membership plan needs to be that of that effect. And I think a lot of times, Tyler,
Adam Rich: once we get them on a membership plan, everyone takes that customer for granted and says, oh, well, we got that customer. We’re good. But so you got to be looking at conversion rates on new memberships. How many are you presenting? How many are you converting, right?
Adam Rich: And then you got to look at retention rates on existing memberships and be honest with yourself. If it’s one in the same, it’s not a real, it’s something’s not right with your plan. So do some customer analysis, do some surveys and focus groups, find out what they expected
Adam Rich: versus what they got, right? And are they leaving the membership entirely and going somewhere else? or they just go on, this thing isn’t worth it. I don’t care. I don’t need it, right? So to me, it’s a loaded question and there’s a multitude of factors there,
Adam Rich: but is the membership important? Without question, it should be, to build up a real eight, 10, 15, $20 million business should be a real primary focus.
Tyler Martin: Good stuff. So I’m gonna have a question here, but I wanna give you a little bit of background information. So recently I was working with a client and I’m gonna use ServiceTite and I’m sure there’s other systems too, but for the sake of this conversation,
Tyler Martin: This will be sort of exciting. So I was peeking in there and I always run the, I think it’s called coming expired or
33:50Monthly plans renew better than the $400 annual invoice
Tyler Martin: soon to be expired members. And I always run that report just to look at it. In this particular client, I know they’re not really, to your point with attrition, they’re not always focused on that. And so, you know, it’ll list like, hey, you got 10 clients coming expired in the next month.
Tyler Martin: And, you know, in a perfect process, your team would be running that report a month in advance and be following up and blah, blah, blah. So how do you fit in? Like we’re using Service Titan as an example. Like what can we use in Service Titan
Tyler Martin: that might allow us to manage my membership program better? And then where do you fit in? Like you talked about conversion data. Is that in Service Titan? And then where do you fit in getting all that data?
Adam Rich: Some of that is in Service Titan. And I think it’s just building a process and a system and roles and responsibilities. Sometimes there’s things like Marketing Pro where you can nurture these people before, during, and after they’ve made said decision. For example, hiring members 90 days from now, man, I’d love to have an email that says,
Adam Rich: hey, Tyler, your membership’s coming up for renewal soon. Don’t forget. Or, hey, book now, and you can save a little something. Or better yet, I’ll give you a little bonus. Instead of saving and discounting, I want to incentivize through perceived value programs like gift cards
Adam Rich: or air filters or early access to stuff or whatever it is. But often it’s just building a process. Now you could have a CSR do this. You could have a marketing person do this. It could be AI driven, which is where a lot of that stuff would go.
Adam Rich: But what we can’t have, and ideally, honestly, I would like that to happen well before 30 days out. What most people do is, and I have clients that do this. I won’t tell you who, obviously, but they don’t say anything. They just send an invoice for renewal.
Adam Rich: So first off, you’d look at, is it an annual plan or is it a monthly plan? I always hear everyone here listening to this to go to a monthly plan. Data very clearly indicates monthly plans renew at a higher rate.
Tyler Martin: Really?
Adam Rich: Oh, yeah. Most definitely.
Tyler Martin: Because it’s a lower price point, basically?
Adam Rich: The price point may be the exact same in most cases.
Tyler Martin: Well, I mean, I’m sorry. There’s like a lower initial because they’re just paying it monthly as opposed to one annual.
Adam Rich: They’re paying it monthly. So the pain of paying that is much less. It just becomes like every other membership you have, Netflix and your gym and your whatever. We’re in a membership society, right? Everyone’s got a membership to something. And it’s $20, it’s $40, it’s $8, it’s no big deal, right?
Adam Rich: But the reason for that too, I think, is when I get an invoice from a home services provider, it’s time to renew, here’s $400. You go, whoa, whoa, $400. Did I even use this damn thing? And when you go on a monthly plan, it’s just $33 a month or whatever.
Adam Rich: And it just, and often cases can auto renew with the right prompt. Now, I still am a fan of reaching out to customers saying, how’s it going? Are you happy with the plan? Has anything changed? Right. But to me, that is a much more digestible number, 33 bucks a month versus a $400 invoice.
Adam Rich: Right. And so it all depends, but there needs to be a conversation up front about is marketing doing this? In a lot of cases, the answer is yes. Right. It may not be the CMO doing it, but the CMO is saying, this person does this, it goes
Adam Rich: out at this time. here’s how we’re tracking it. This email goes out. And just like in sales, right? More often than not, it’s not just one touch point. We sent out an email, Mike, and then what? All right. How often does one email get it done for anything? Right. How many emails and phone calls do you get text
Adam Rich: messages and email direct mail pieces every day? Right. And so there needs to be a system, a process, multi-touch points, right? Incentives to act early. What happens if they expire? Then there needs to be another process. They go right back and, whoa, whoa, whoa, whoa, you left us. What
Adam Rich: happened? We want you back, right? We work hard and pay a lot of money to get those damn members on the plan. We need to be willing to work just as hard to keep them on the plan. And if we find that they’re leaving, we need to understand why that is, right? So I think you would look at,
Adam Rich: in Service Titan, so most of our clients are on Service Titan, not all of them, but a lot of them. There are plenty of tools within there to build automation sequences and nurture sequences. Some are most email, some SMS. You can now use outbounding systems.
Adam Rich: There’s no reason not to do that. It’s just lack of knowledge of the value and being scared that this is going to take so much time for my CSR who’s already doing 8 million other things.
38:14Shiny object syndrome and using the tools you already pay for
Adam Rich: So I would want marketing to support that for sure.
Tyler Martin: Yeah. Which goes into my last topic here I’d love to talk about is just tools in general, software tools in general. So, you know, we’ve got Marketing Pro, we got Service Titan, we’ve got Hatch, we’ve got Chirp, we’ve got Searchlight and a zillion others, you know, I could keep going on and on. What’s your thoughts around that?
Tyler Martin: I mean, and where I’m going with this is like most business owners have all these tools or many tools. So they’re jumping from tool to tool. What’s your thoughts? Like, is it about tools? Is it about getting full utilization? I mean, certain service tight and so many people don’t even like barely even have it set up correctly.
Tyler Martin: So what are your thoughts around that?
Adam Rich: So at the end of the day, it’s both. But I think the second point you made about full utilization is a really good one. that we have a, particularly with AI now, a shiny object syndrome sort of phenomenon. While I was on this AI program and it was no good,
Adam Rich: so I flipped over here and I flipped over there and there. Not everyone does this, but a lot of people do. And it’s just like with marketing campaigns, particularly old school, traditional marketing and branding initiatives, community, et cetera. Before you’ve even given them the chance to develop,
Adam Rich: you pull the plug on it and move on to something else. And so we’re constantly changing systems It doesn’t mean we should be scared to change. We should be embracing change. Today, we have to. If you go on to chat or Gemini or Claude or whatever else and ask for a list of AI services that can do anything, and 100 of them pop up instantly.
Adam Rich: But I think at the end of the day, it’s utilization. Before I jump from one platform to another, have I given this every opportunity to produce at the level that it should? And who’s, again, who’s accountable for those opportunities and for executing at that level?
Adam Rich: We talk about Chirp and Hatch and programs like that. They’re all, they all can play a key role in what you’re doing, right? And should. But, you know, I think with the advent of AI, you have to be careful with it to some extent
Adam Rich: and find that balance. But, man, there are dozens and dozens of tools that we use for all sorts of clients, again, situationally dependent, that are phenomenal. and others that we implement that work great for one client and not as well for the other.
Adam Rich: And you go, it’s the same tool at the same price. What’s the difference? And is it their positioning? Is it their customer basics? They’re older, so they don’t use SMS. And you’re like, they don’t? My dad’s in his 70s. He uses that shit all the time. Where did you get that information, right?
Adam Rich: So often it’s how it’s executed and how it’s improved over time. But I also tell business I was given a chance to develop before you, some guy in some forum you talk to one time out and, you know, and I got to go over there.
Adam Rich: Right. And that is a syndrome that we have. We see quite a bit to go to these conferences and get all excited. And that stuff’s awesome. Don’t get me wrong. But, you know, we need to make sure we’re fully utilizing the tools we have first.
Adam Rich: And that’s something that I would, we would certainly spearhead.
Tyler Martin: Yeah, that’s great stuff. Hey, man, this was an awesome conversation.
Adam Rich: Yeah, man.
Tyler Martin: I want to share a few of your websites before we wrap up here. Your business website is myrichideas.com. Of course, I’ll put your LinkedIn, your Facebook, your company Instagram is rich.ideas. If people wanted to reach out to you, is there any platform that’s the best?
Adam Rich: However they want to get ahold of me, as it should be, it all goes to the same place, right? You would hope that I have the infrastructure set up. I’m out here preaching it. Our website, form fill, our phone call, my information’s sort of plastered all over that.
Adam Rich: I would be the one that would be interested in having that conversation if it’s someone that came from you and said, you know, I saw Tyler’s podcast, man, I want to talk to you. That’s great. And I’ll tell people this, Tyler, oftentimes I meet with someone who’s in that maturation,
Adam Rich: like starting to mature from one to three to five. And a lot of times I say, you’re not quite ready for this. Or let me give you some tips before you get serious about that. Here are four or five resources or other people to talk to. I want anyone who calls me or watches your podcast and
Adam Rich: watches this to go, oh, okay, I got some kind of interesting information there. Even if I didn’t move forward, I feel better about where I am today having had that conversation. So I always try to leave people in a better spot than I’ve found them. And oftentimes that doesn’t even mean that
Adam Rich: we’re going to work together, at least not yet. And so if it’s not a good fit for us or them, I am super transparent with that. We’ve worked very hard to figure out what we do well and who we mesh well, as you have. And so we’re about as honest and accountable as we can be there.
Tyler Martin: That’s cool. So I think what I’m hearing you say is, hey, got something interesting out of this call. You want to kind of chat with you. You’re not going to come up. You’re not going to try to close them on being a client. It’s all about hopefully leaving people with a little bit more information and understanding and then let the rest take care of itself organically.
Adam Rich: That’s correct. And one thing I’ll leave with is just for anyone listening, we are industry exclusive and we are market exclusive. So if I got a guy and they’re just making up Dallas, Texas, and you’re in Dallas, I can’t and won’t sign that partnership or authorize that agreement.
Adam Rich: But I will give you some suggestions and some pointers and some things to look at. Because I know my business, just like yours, Tyler, almost entirely referral driven. I’m a marketing agency that doesn’t do that much marketing. right and so and I’m and at the end of the day I’m I’m sort of proud of that and so it sounds
Adam Rich: weird I’m not always practicing what I’m preaching for my agency but we are for our clients but of
Tyler Martin: course I’d be I’d love to have those conversations that’s awesome okay Adam you’re an amazing guest I think you gave us a lot of good wisdom that we can apply in our business so I can’t wait to have
Adam Rich: you on next time love what you do man thanks for the invite and we’ll see where the conversation
Tyler Martin: takes us awesome thanks man Okay, another great one in the books. One of my big takeaways from this conversation, marketing is just not about spending more. It’s about having the right structure, accountability, and focus on the numbers that actually matter. A lot of contractors are tracking activity, but not outcomes.
Tyler Martin: They’re looking at clicks and impressions, but not tying it back to revenue. And without someone owning that process, it’s really easy to waste money without realizing it. When you start focusing on the right metrics and holding your marketing accountable, a lot of things change.
Tyler Martin: So hey, as a home service business owner looking to turn growth into real profit with better cashflow, cleaner financials, and KPIs you can trust, you can book a no pressure intro call at cfointrocall.com. Hey, as a home service owner looking to turn growth into profit
Tyler Martin: with better cashflow, cleaner financials, and KPIs you can trust, you can book a no-pressure intro call at cfointrocall.com. Go ahead and check it out, cfointrocall.com, or check out my website at cfomadeeasy.com. As usual, thank you for listening. Thanks for being here. Thanks for
Tyler Martin: taking your time to listen to my wonderful guests that are on here, and I’ll catch you on the next episode.
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Tyler Martin works with owners on the numbers behind these stories: HVAC business coaching.
