From Cleaning Copper Pipes to Tracking Billions in Contractor Revenue – Kevin LeSage

00:00Cleaning fittings for his dad and selling an auto agency

Kevin LeSage: From cleaning copper pipes with my dad to tracking billions in contractor revenue, I show you how data reveals where your business is really leaking money.

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. Today’s guest is Kevin Lesage, founder of Searchlight Digital. He grew up cleaning copper pipes in his dad’s plumbing business, then spent years analyzing billions in ad spend at Autotrader and Dealer.com. Eventually, he brought that data expertise back to home services to help contractors

Tyler Martin: see where their money is actually being made or lost. We break down where contractors leak revenue, why cost per lead is one of the most misleading marketing metrics, and how the best companies use data to grow profit without spending more on ads. Let’s talk with Kevin now.

Tyler Martin: Hey, Kevin, welcome to the Profit and Grit Show. How’s it going?

Kevin LeSage: Good, thanks. Appreciate your invite, Tyler. I’m excited to be here.

Tyler Martin: Yeah, I appreciate you saying yes. I’d love to start out with just learning a little bit about you. Tell me about what you do professionally and then maybe just a tidbit about you personally.

Kevin LeSage: Yeah, I’ve been in digital marketing and analytics now for like the last 15 years. Started my career in automotive, which I always say is one of the best industries if you’re looking to learn quickly. Because car dealers need leads and there’s no bullshit behind that, right?

Kevin LeSage: So if you can succeed in auto, I think you can succeed in about any industry. But the cool story is I was with an agency that became the largest agency in automotive. We built the largest analytics product. And it was a great experience to see that business get acquired for over a billion dollars.

Kevin LeSage: So you can imagine what that was like for the small town of Burlington, Vermont. But after that, my dad’s been a plumber my entire life. Freddie used to bring me to the job sites as a kid. So after that acquisition, I started asking questions about his business and helping him

Kevin LeSage: and his friends, which scaled to creating an agency and home services. And very quickly, our agency identified an opportunity when it comes to the problems around data fragmentation

02:31Why contractor data is fragmented across SEO, mail and CRM

Kevin LeSage: in the industry. So you have a home service contractor that’s paying for SEO, advertising direct mail, they’re getting reports from their CRM, and there’s no service available that’s taking all that data in and automating attribution to understand what investments are actually driving revenue returns and which are not. So we ended up transitioning the agency business to

Kevin LeSage: become like taking that experience to build a data platform to help other agencies run their business and to help contractors better understand their marketing ROI. So we launched that product just under three years ago now. We have over 1,500 active customers, all in home services

Kevin LeSage: that are using our dashboard and our platform today to better understand marketing returns. We do work with 30 plus private equity groups now, a lot of the 30 agencies reselling our software. But at the end of the day, we’re just trying to help contractors better understand

Kevin LeSage: where they’re getting the biggest bang for their buck and what strategy adjustments can be made to better improve bottom line, right? So as a fractional CFO, we love revenue to the bottom line and that’s really what Searchlight’s here to help with.

Tyler Martin: Very cool. So what about on the personal note? I’d love to learn something about you. Anything you could share?

Kevin LeSage: Yeah, yeah. I married my high school sweetheart. I always knew she was the one. I mean, we have two young kids together, avid snowboarder, outdoorsman, things like that up in Burlington, Vermont. We’ve got the lake, the mountains. But yeah, I mean, other than family and work, I mean, that’s pretty much it for me these

Kevin LeSage: days. Just really passionate about what we’re doing.

Tyler Martin: Yeah, that’s awesome. Okay, I want to go back to your dad being a plumber. I believe you worked with him for a period of time. Is that correct?

Kevin LeSage: Oh, yeah. Nothing on the book. This is like, you know, he dragged me out of bed on a Saturday, Sunday morning and say, hey, I need you to come clean these fittings and, you know, nail the nail plates around these new rough ins or whatever he was doing.

Kevin LeSage: But definitely where I learned the respect for the industry and work ethic. That’s for sure.

Tyler Martin: Anything you saw, like when you had that experience that you even hold to today, like just experience in terms of maybe what your dad went through as a business owner in that in that industry or just looking at the other technicians, anything?

Kevin LeSage: any takeaways from that? Yeah. I mean, I, my dad is very black and white, right? He’s an old school

04:51His dad: online is bullshit until you prove it makes money

Kevin LeSage: plumber. You got a picture, uh, ripped jeans. And as a kid, we’d show up in a minivan, the van’s not wrapped, but he was a great plumber. Right. And what really started searchlight and got me passionate about helping these blue collar, uh, contractors is that people were marketing agencies

Kevin LeSage: can easily rip off people like my dad at the end of the day. Right. And I’ve done this long enough. I can make data dance, green, red, up, down, left, right. And my dad was always saying, he said the comment that started Searchlight,

Kevin LeSage: which is, I honestly, I tried to buy his business before starting Searchlight. And even though he saw the success we had in automotive, he said, everything you do online is bullshit until you can prove to me it makes money. And I talked to him about impressions

Kevin LeSage: and click-through rate and cost per lead. And he was just dumbfounded at the fact that if you gave me 10 grand, how come you can’t tell me how much revenue that 10 grand brought my business? And honestly, I think out of our 1,500 plus customers today, everyone feels the exact same way.

Kevin LeSage: No plumber or home service contractor took up that career because they were a marketing expert, or maybe very few did as of recently. So what I noticed is just I want to help people like my dad stick to what they’re best at and let the data identify what’s working and not working.

Kevin LeSage: Not some snake oil sales pitch from God knows who. that sounds good and the data might look good. But if you understand marketing, you can ask a couple of questions and quickly find out like, what the hell is going on here? And I think that’s what started Searchlight.

Kevin LeSage: I asked questions, I got on the phone and I was like, this is unacceptable. And people like my dad deserve better.

Tyler Martin: Was there ever a point where you’re like, hey, I’m going to create Searchlight and I’m going to help home service business owners. But that’s a pretty big bridge just by your own, just because it’s blue collar. I mean, and honestly, this is true with most industries.

06:43Swapping click-through rate for booking rate

Tyler Martin: Like usually the business owners aren’t really savvy. And so how did you like, what were you thinking? Like, how am I going to make this connection so they can understand it? Or was that your goal is to make it very understandable?

Kevin LeSage: Yeah. I mean, we had to strip out all the marketing lingo and focus on metrics that plumbers understand. Right. So we replaced click-through rate with booking rate. Right. We replaced cost per lead with customer acquisition costs. So at the end of the day, what’s cool is we work with some of the largest, most sophisticated home service contracting, private equity roll ups in the country.

Kevin LeSage: But it all started with showing a raw version of the dashboard to my dad and being like, what do you see here? He would say something like, well, why the hell aren’t we selling these estimates? What’s going on here? And it’s like, all right, we’re getting somewhere.

Kevin LeSage: He understands that. He sees the output, the takeaway. He’s asking the right questions. And he’s not just glossing over and eating lunch while he’s on a monthly performance review call with his agency, right? Because we all know how fun those calls can be.

Kevin LeSage: But yeah, I think, I mean, that’s really it at the end of the day. Yeah.

Tyler Martin: When it comes to like revenue leaks, what are the things that you see most often as they relate to? Because you guys, I think over $2 billion of revenue you see flowing through your data. What do you see as big as revenue leaks?

Tyler Martin: Is there something that’s common?

Kevin LeSage: Yeah, the biggest one right off the bat, every contractor needs to be aware of is their estimate follow-up, right? It’s marketing’s job. I say the farthest we take the opportunity is getting a truck in the driveway. But the marketing agency that’s delivering those leads isn’t going into the home to sell the job.

Kevin LeSage: A technician is, right? And when the technician leaves the home, it’s usually not the agency doing estimate follow-up. It’s now responsible for someone to say, hey, you know, we were in your home two days ago. oh, is there anything more we can do to help close that job or whatever it is?

Kevin LeSage: So right off the bat, when we were starting Searchlight, we identified and created a term that we call revenue potential. So it’s measuring all of the revenue marketing brought your business, regardless if you sell the estimate or not. And what’s really helpful there is as a marketer, I could say,

Kevin LeSage: hey, I just had this call with the client. I brought in $92 million, but out of that $92 million last month, you closed $36 million of it. So the marketing team isn’t even getting credit for the right amount of opportunity they’re bringing in the business

Kevin LeSage: if you’re only looking at what’s hitting the P&L, because you’re only seeing closed and completed revenue that you’ve billed for.

Tyler Martin: How do you put a value on that? Because you even said even before an estimate, how do you put a value on that? Is it an average amount? Because they haven’t even really entered the cycle yet. What are you doing to come up with that 92 million

Tyler Martin: as an example?

Kevin LeSage: Oh, so for that 92 million, And when we look at all of the revenue, whether they’ve sold it or not, all revenue for home service contractors lives in three stages of their business. You get the book job, then you get the estimate, right?

Kevin LeSage: And you have an estimate revenue total. Then the next stage down is, did we sell the estimate but haven’t completed the job yet? So in that case, the customer has committed to the work. They’ve signed the contract, but we told the customer we can’t get to the house until next

Kevin LeSage: week because we’re busy, right? So for that period of time where they’ve committed to the job, but we haven’t finished it, we call it sold revenue. It’s just not completed.

Tyler Martin: Got it.

Kevin LeSage: And then when you complete the job and you send the invoice to the customer, I see the invoice being sent out of the CRM.

10:12The $200,000 estimate nobody followed up on

Kevin LeSage: So now I know the job’s completed. So for that example of the $92 million, I’m looking at all of the estimate revenue, the sold revenue, and completed revenue. And then I can say, okay, the total amount of revenue you have in all three stages of your business today is $92 million.

Kevin LeSage: But if I look at just the revenue that you closed and completed, that number was only 36.

Tyler Martin: Got it.

Kevin LeSage: Right. So we really, as a marketer, it’s imperative that we’re able to show the true value of all the opportunity we bring in, not just what they see on the P&L. And that is attributed back to the estimate follow-up, which without a doubt, you’re spending too much on marketing.

Kevin LeSage: You’re spending too much just on the technician to the home, the hourly rates, the hours of doing the home audit. And then I’ll talk to someone and I’ll be like, oh, wow, you’ve got a $200,000 job from a couple of weeks ago. Like, what are you doing to close that?

Kevin LeSage: And I hear, oh, I emailed them. I never heard back. And I’ll say to them, I’m like, this is an opportunity to go make some nice warm cookies and show back up at the front doorstep and close that deal. Right. Because we’re spending too much money to get the opportunity to not follow up correctly.

Kevin LeSage: So that’s the biggest. If there was one thing every business needs, it’s a minimum of a drip campaign for follow-up. So you can automate that with service or software if that’s a problem for your team. But if it were me and my business, I would be sending an automated text message the minute I left the house the following day.

Kevin LeSage: And it doesn’t have to be a pussy message, but it could be like, hey, I’m leaving the office today in a few minutes. I just wanted to reach out and see if there’s anything I can do to help before I head home for

Kevin LeSage: the day. That’s just creating the door for someone to push open and say, actually, I do have a question about the job, right? But you’re not saying, hey, sign the contract, sign the contract. You’re coming across as a supportive resource. But at the end of the day, you got to be doing

Tyler Martin: follow-up or you’re losing money, guaranteed. Yeah. I always like to think with myself when it comes to why I didn’t buy something. And there are so many times that it’s not super urgent of a buy. And if someone followed up with me and the few times they do, I probably end up buying just

Tyler Martin: because I get into the dialogue. And then I don’t want to say I don’t want to say I feel obligated, but I’ve now had the conversation. It’s like, okay, let’s just move forward. You seem like a good person. But there’s been so many times I haven’t bought because just someone didn’t follow

Tyler Martin: up with me and just kind of create the conversation and it wasn’t really urgent and life goes on and

Kevin LeSage: you move on to the next thing. It’s not even, it really comes down to the personal habits. It’s like, I am so busy with young kids and the business and everything that you’re right. Sometimes I just forgot. Right. And I’m guilty of it myself, even with our own business and follow up.

Kevin LeSage: I mean, even this week, I was like, oh, well, I haven’t talked to this person in three weeks to send a random email. Hey, like, is there anything more you need for me? And his response was, oh, I’m so glad you reached out.

Kevin LeSage: Yeah, let’s get started. Right. And it was like, oh, that’s all he needed was that that door to swing, like to provide that opportunity for him to walk through. And it’s not a home service industry problem. Sales follow up is a pandemic in any industry.

Kevin LeSage: right so if there’s one thing to do to your business right now if you can’t do it manually go hire so there’s tons of software out there chirps a great partner of ours but very easy to set up a drip campaign and you check that box once and you know you always are following up

Kevin LeSage: with every estimate until they say stop texting me or they sign the contract and move forward yeah yeah but you’ve earned the right to do that if with the amount of money you’re spending on

Tyler Martin: the marketing and going to the home and providing all of that service. Yeah. I had Ryan Fenn on my

Kevin LeSage: show a while back. Is Chirp your preferred? Yeah, he’s a great guy. He’s an incredible guy. Is that Chirp your preferred platform for doing this type of stuff? Or are you pretty much anything is fine?

Tyler Martin: We have tons of partnerships, but without a doubt, when it comes to Outbound, we’ve been working with Chirp for years. We’ve built their analytics platform, so it’s connected. And not only just the software, but the team behind Chirp are just, they’re just awesome

Kevin LeSage: people we love working with them. Yeah, they’re a great group of people. Okay, cool. So what my takeaway on the revenue leaks is really, it’s just all in the follow-up is that where you’re seeing the biggest drop in the ball, I guess I’ll say in opportunities is just follow-up. So that’s,

Kevin LeSage: that’s good. I would say one other thing in terms of automation, do you have any feeling like, is there a, you use an example of $200,000. Is there any threshold of where, like in your process, Should you say, hey, if you have an estimate over $50,000, your follow-up should be bring

Kevin LeSage: cookies or whatever and do a personal touch? Or how do you see it when people are doing this effectively?

Tyler Martin: If it were my business, I would treat the $200,000 estimate the same way I would treat the $45 filter exchange, right? Like what we’re really getting at here is customer experience, right? And that should be the guiding North Star for any decision your business is making.

Tyler Martin: And you might sit here and be like, oh, well, I’m not going to do an automated follow-up because that’ll ruin the customer experience. But if you do it right, it’s supporting the customer experience. Like imagine an email coming from the CEO of your local plumbing business

Tyler Martin: that said, before I leave the office today, I just want to make sure you have everything you need. I would see that and feel very warm inside and supported. And if I got estimates from other companies that didn’t reach out, Chirp was telling me another day,

Tyler Martin: like they do videos for their follow-ups on estimates. So it’s the CEO saying, hey, we really appreciate the fact that you let us in your home. And like that to me is what’s going to separate you from all of the other competition in your market.

15:32Why cost per lead lies when 80% of leads never buy

Tyler Martin: So, yeah, I mean, regardless of the size of the opportunity, put customer experience first and you’re going to do great with your business.

Kevin LeSage: Yeah, that’s a great point. Just kind of switching gears here. A lot of times we’ll use the term cost per lead. And I think in researching you, there’s somewhat of a lie and just leaning into cost per lead as your main metric. Could you talk about that a little bit?

Kevin LeSage: Why could that be a little misleading if you’re just looking at cost per lead?

Tyler Martin: I could go a lot of different directions here. The first thing is you got to define what’s a lead. And I hate to say this, but that’s where we’re at, right? In Google Analytics, the standard digital marketing analytics reporting tool, you can define what a lead or conversion is, right?

Tyler Martin: So at a minimum, when we talk about leads, we got to make sure we’re talking about tangible phone calls, forms, chats, schedule engines, because Google Analytics can be a conversion or a lead could be someone that visits your directions page or was on your site for more

Tyler Martin: than two minutes. And it looks like a conversion, but it really wasn’t right. And cost per lead can be great. I have a lot of clients that are their goal is to decrease your cost per lead over time. And I just think that is the absolute worst way to be managing a digital marketing strategy,

Tyler Martin: because I don’t give a shit if my cost per lead is going up. If I know downstream, my average ticket’s 12 grand. Do I care that my cost per lead went from 125 to 140? If I’m making 12 grand downstream, like we’re tripping over pennies here

Tyler Martin: for the wrong reasons, right? Right. And the other thing too, that is like the most important data point I can give anyone listening today is 80% of your leads don’t buy your services. 60% of your leads don’t book. And that’s not qualifying the leads.

Tyler Martin: That’s saying the phone rang, you got a form, did that form or call book? yes or no. And once you realize, and this is across 1500 accounts, but once you realize that 80% of your leads don’t buy a service, then how the hell are you using cost per lead to define

Tyler Martin: success? 80% of the leads don’t buy. I need a better metric to define success, right? And that’s where customer acquisition costs and average ticket will give you a much better directional target to be going after when it comes to building a strong strategy, because your cost per lead

Tyler Martin: might be great. But if your customer acquisition cost is three grand and your average ticket’s two grand, cost per lead doesn’t matter. We’re wasting money, right? So as an industry, we’ve

Kevin LeSage: got to get past that metric and start measuring revenue. I do want to talk about something you said. You talked about someone being on your website for two seconds could, in theory, count as a conversion. How do we in our industry, because I feel like, and I don’t want to pick on

Kevin LeSage: agencies, but this is one thing I see within my own practice. A lot of times clients will come to me and I’ll be, Hey, could you share with me the marketing reports that you get the advertising

18:21Using AI to score which calls were even bookable

Kevin LeSage: reports? I want to see what your conversion looks like. And, and there’s such a wide definition. Sometimes clients will think, Oh yeah, I’m converting so wonderful. Um, but then when you dig in, it’s, it’s not really revenue conversion. It’s just a bunch of data that

Kevin LeSage: doesn’t really mean anything. What’s the solution there? Like, how do you, I mean, how do you kind of get over that so that people do understand that just those reports sometimes could look really sexy, but they don’t mean anything. Like, how do you handle that when you’re talking with a client?

Tyler Martin: Well, we made a big investment into using AI to listen to every call, form, chat, and schedule engine lead coming through and tell us, was this an actual bookable opportunity in the first place? Right? Because if 60% of my leads don’t book, the next logical question for me is, well, what

Tyler Martin: leads were bookable and unbookable? Right? because now I need to invest in the channels that are bringing in bookable opportunities because the phone rang doesn’t mean it was bookable. And the crazy thing is we have a new product in market now that’s doing this and we’re seeing it’s on average,

Tyler Martin: 50% of the leads are unbookable. They’re coming from outside your service area. They’re calls coming in for services that you don’t offer. It’s very obvious that changes need to be made. But on the flip side, we see a lot of bookable leads coming in

Tyler Martin: that don’t get booked. So that’s really great for a marketer. One of the biggest things we see all the time is quality, a bookable lead came in, but it didn’t book because the CSR said no immediate assistance was available. So think about the marketer in that situation. I drove you a quality lead and then your team said, sorry, we can’t help you. But like, what the hell do you want me to do as a marketer here? Right.

Tyler Martin: But having those examples to show our clients that these leads were bookable from these sources, and you should invest more in those versus these leads are unbookable and you need to make changes upstream so we don’t keep spending money on this. At the end of the day, that is where we’re taking our entire product right now is trying to improve booking rate across the industry.

Tyler Martin: Because, again, only 40% of the leads book. So we got to figure out how to improve that number.

Kevin LeSage: When you see that 40%, does that mean, is our messaging wrong? Are we using the wrong keywords? Are we on the wrong platform? Or is that just is what it is?

Tyler Martin: I mean, you got the lead in the first place. So if the messaging was wrong, I don’t think anyone would have fallen to begin with. Right. So once we get the phone to ring, now I need to know, did the phone ring and did they say, Hey, will you sponsor my little league season? Or did they say, I have no hot water and I need a tech, right? Because those two calls could both come through pay-per-click channels. Very common.

Tyler Martin: If you don’t know, the first thing you should do as a business owner is listen to your phone calls. You will listen to your advertising calls and realize a lot of these are not real opportunities. They’re people calling, asking you for something. But your agency says, hey, the phone rang and now your cost per lead’s going down and high five.

Tyler Martin: We’re getting you guys leads. And now as a business owner, we need to be able to say timeout. Yeah, you got me 100 leads, but only 40 of those were real opportunities, right? And now the marketing and the operations is an obvious two-way street of accountability.

Kevin LeSage: So I guess that’s, and I probably just didn’t ask the question very well. What is the answer there when it’s that 40-60? Is it, obviously we’re focusing on the 40% once we get them, but is there anything we should be doing to optimize to get that 40% even higher or anything that we should be

Kevin LeSage: doing to get less of the 60%?

Tyler Martin: Yeah, you just got to cut the investments that are pulling down the booking rate. So if I can log in and say, hey, I have six marketing channels and under my PPC channel, I have 20 different campaigns set up for plumbing, electrical, service, drains, whatever it is.

Tyler Martin: I go in and I look for what campaigns have high booking rates above my average booking rate. Those channels are working well. Then I can also identify that here’s a channel that has a 10% booking rate, right? So I need to turn that off if it’s not driving revenue downstream and put that revenue or

Tyler Martin: that investment, the spend behind a campaign that is driving high ROAS. So the best way to improve your booking rate is to cancel investments with low booking rates and invest more in the channels

Kevin LeSage: that have high booking rates. Got it. Okay. That’s kind of where I was going. And then a lot of times we’re conditioned to think, get the leads as cheap as you can get. Wouldn’t you say that’s

Tyler Martin: to some degree not true? I’ll tell you a good story. Yeah, please.

Kevin LeSage: So we onboarded an agency about a year ago, four or 500 employees, great, successful business, been around for, let’s just say, over a decade. And they told me, and I’ve lived this life, but they told me, hey, we optimize our agency to the campaigns that have low cost per clicks.

Kevin LeSage: So the cost to get someone to your website is cheap, and we’re looking for high conversion rates. So we want clicks to the websites, and we want a lot of people to call or something like that, right? They sign up with Searchlight and they realize that those investments downstream don’t make

Kevin LeSage: money, right? Let’s just say the campaigns have a great cost per click. The lead volume looks high, but Searchlight is saying we’re not making money. Now, in the same view, here’s a channel that the cost per click is high and the lead costs

Kevin LeSage: are high. Normally, agencies run from that. But if Searchlight says it’s high, meaning it’s $300, $400, but the average ticket from these campaigns is $12,000, $15,000, that’s a perfect example of using the wrong metric that is misguiding you into the wrong direction, right? I work very closely with a lot of

Kevin LeSage: board members on private equity groups. They tell me it’s painful for them when the CMO walks into the meeting, the quarterly business review, and talks about lead cost going up and lead volume going down because they’re setting themselves up for failure in that conversation. If they went in

Kevin LeSage: and say, hey, lead costs are going up, but our average ticket and our revenue downstream is going up at a faster rate and we don’t have to worry about these lead costs, it changes the whole feeling in that review. So coming from large groups to small groups, we got to start measuring

Kevin LeSage: revenue and get past the cost per lead because it is really misguiding.

Tyler Martin: When you have these conversations, are you having this conversation with the business owner or is this usually an agent that works, an agency that works for the business owner?

Kevin LeSage: It’d be both. We have like 30% of our business coming through agencies today and about 70 coming direct from contractor relationships.

Tyler Martin: And when you have those direct relationships, what’s the feedback you usually get? Are they like, oh, this makes total sense? Or is there a period of time where you have to like, it has to sink in for them? What’s that conversation look like?

Kevin LeSage: Usually on the first call, the data goes live. we have a review. They’ll tell us many times over that this is the most they’ve learned about their marketing in the last, in this call, in the last three years, right? And there’s a lot

Kevin LeSage: of those aha moments of like, oh, I always knew that maybe, you know, I always knew I should have pulled the plug or invested more here or whatever it is. But yeah, I mean, it is, I mean, our, we don’t, it’s very rare for us to turn an account. It’s, you know, our turn rate is extremely low

Kevin LeSage: because people are getting what they’re looking for out of the report. It’s a low cost to enter. I mean, we solve a big expensive problem for a low cost of entry. But yeah, I mean, the feedback we get from clients is phenomenal.

Tyler Martin: Yeah. So it just takes them a little while to see the difference. And then it’s like, oh my, oh my, this is exactly what I was hoping to see. Because a lot of times what I’ll get is everything can’t be tracked. Now, it depends what system they’re on and CRMs and stuff.

Tyler Martin: But a lot of times there are certain things that just don’t get tracked. Or they say, oh, it can’t be tracked, the agency will say. or we’re not exactly sure where this came from. So we’re not sure where to give attribution, stuff like that.

Tyler Martin: How do you guys solve that problem? So it sounds like you really are tracking literally everything.

Kevin LeSage: We are. As long as the customer comes through a tracked lead source, all tracking form, click the call. I mean, it’s gotta be some lead. If they walk into your office and say, hey, can I schedule a plumbing appointment for next week? And there was no call,

Kevin LeSage: there was no form, lead. I don’t see that. Right. So short answer, man, is our business is tracking everything. And we do it accurately because there’s an event, there’s a, there’s a deterministic click path that we can measure and prove that this was the events the customer took before doing business

Kevin LeSage: with you. Got it. We have APIs built with direct mail companies. We’re working with connected TV, you know, SEO, advertising, yard signs, door hangers, you name the campaign, I can tell you

Tyler Martin: if it’s working or not. Okay. Are there any certain things people should be looking for where like their data could be inflated? I’ll give you an example of where I’m going with this. So I once had an agency say to me, this is how we compute ROAS. And the way they were computing is

Tyler Martin: they were taking like multiple years of the client’s revenue. And it was like, dude, that’s not the way I tend to look at it. I tend to look at it like every 90 days or something. I don’t remember what I said, but it was a lot shorter. And they’re all, well, that’s not industry standard.

Tyler Martin: And I’m like, well, I never heard there’s an industry standard. Like I just, I want a more realistic thing on what my return is. Cause I think it’s misleading to use a different number like that. What, what are your thoughts around that? Like that’s sort of the, that’s where the

Kevin LeSage: beauty of being a marketing company first that built a data platform. I don’t write code. I understand marketing. So if I had an agency say something to me like that, I would probably get on my toes and be like, lean into them a little bit on what kind of stupid idea or

Kevin LeSage: logic did you kind of bring to the table or define what you think industry standard is. And I think we’re searchlights almost creating that right now, right? Like we are the standardized measuring tool or stick across all of marketing. Are we, I’m not going to say we’re perfect. No

Kevin LeSage: one is, but we we’ve gone deeper than anyone else. We’re our own worst critics. And when you’ve brought on 1500 accounts, any variable or question or concern, you know, we’ve seen a hundred times. So there’s a lot of confidence in that too, right? We’ve had to go toe to toe with every agency

Kevin LeSage: that a contractor signs up and then they’re like, Oh, I use agency X. Well, what do you think agency X says is unless they, if they’ve never heard a searchlight before, they’re like, Oh, searchlights bullshit. Let me get on the phone with them. And I’ll show you that it’s all wrong. And what happens

Kevin LeSage: is they get on the phone and we go toe to toe. And then the agency signs up with us directly on top of the relationship through their contractor. Because I mean, really like there’s nothing they haven’t, they’re thinking of that we haven’t thought of

Kevin LeSage: and put software behind. Because I’ve lived that life for 15 years. I know what they’re dealing with. Sure. And the cool thing is when the data is read and the business is struggling, I don’t just say good luck. I’m like, here’s what you need to do to fix this, right?

Kevin LeSage: I know marketing well enough where we’ve taken businesses that are about to close down their doors and then read to having record month over month over month. and now they’re celebrating million dollar months and their businesses are flourishing. But that starts with cutting waste,

Kevin LeSage: figuring out what’s booking, what’s not, where are we getting revenue, calling out the unbookable leads, right? There’s no magic bullet. The best clients we have are brilliant at the basics. And that’s just, I will die on that hill because for 15 years, I’ve tried creating the magic bullet.

Kevin LeSage: I’ve bought what I thought was the magic bullet and it never turns out to be that.

Tyler Martin: Yeah. Do you, and you kind of answered the question in that last statement you made, but for a company that’s $5 million, when you see them go from like five to 10 million, what are they doing right? Or do you have some data that says,

Tyler Martin: hey, getting from five million to 10 million, this is what those companies are doing to scale up to that, particularly in revenue generation?

30:071% a month, unbooked LSA messages and finger pointing

Kevin LeSage: 1% improvement. That’s the answer. It’s 1% improvement every month, right? It’s not, we’re going to buy the new tool and it’s going to fix everything. It’s okay. If booking rate today is 35%, percent. Next month, our goal is to get that to 40 percent. And here’s how we’re going to do that.

Kevin LeSage: And if we do that month over month and we keep cutting waste and we keep finding tweaks and efficiencies, you’re going to look back in 18 months and have an untouchable marketing strategy. And that’s what we’ve helped PEs do for two years. And then we see them exit for over a billion

Kevin LeSage: dollars. And they’re using Searchlight to prove the value of their business to the buyer. They’re using Searchlight to increase the profitability, the EBITDA, to cut the waste. And then I’ve even heard from private equity groups that businesses are worth more when they can prove that the

Kevin LeSage: marketing has a strong ROI. It’s not just a black hole. And Searchlight makes that very easy in

Tyler Martin: black and white. Yeah. You said something really important a few sentences ago. You said they do the basics really well. I think that’s one thing that a lot of times that I see in my own client base when clients come to me is they really oftentimes don’t have those basics down.

Tyler Martin: And then they’re trying to put, it’s like kind of a weak foundation. They’re trying to build on a weak foundation and that makes it really hard. What, when a new client comes to you and where you have a direct relationship, how involved do you guys get in terms of like, Hey, you know,

Tyler Martin: this is what you should be doing in terms of getting the basics really right. Do you get involved at that level? And how often do you see when the basics aren’t being done right?

Kevin LeSage: Yeah, we do. We offer an add-on service to our data subscription that allocates a data analyst to the account now, which basically says, we are now part of your team and we’re going to take control and we’re going to get on the phone with your vendors. And we are going to, with your

Kevin LeSage: approval, make strong recommendations of what we want to see change. And even our biggest accounts, I mean, I have examples where like some of the most successful groups in the country will onboard and they’re like, we’ll connect to LSA, right? And LSA can drive phone calls or messages.

Kevin LeSage: And I’ll be like, how come you got hundreds of messages and none of them booked? And they’re like, well, what’s an LSA message? And that what they’re telling me is they don’t even know that the messages are coming in. Or when I see booking rates low on forms

Kevin LeSage: and I’m like, what’s going on here? And they’re like, oh, Susie or whoever it is is on maternity leave and we haven’t gotten to those. And I’m like, how are we in, this is blowing my mind because these are successful businesses. So yeah, I mean, this isn’t rocket science, right?

Kevin LeSage: Like if we button up those first five, 10 things, that is going to put you in the top 1% of businesses around the country because most aren’t doing the basics correctly. It’s powerful. I’ll even say the agencies too, man, it’s scary. Like if you set up an account, there’s some basic setups that you have to do for it to

Kevin LeSage: perform. And when we allocate a data analyst to a plumber’s account, and then we look at the ad strategy, I mean, we’ll pull our hair out because we’re like, we always joke, but we’re like, there should be some sort of test that you need to pass to create an agency business because there’s no

Kevin LeSage: credibility. You could start an agency today and just start selling it. You know what I mean? And there’s no one to really keep people in check. And I really think that’s important.

Tyler Martin: Yeah. There’s that abuse. I don’t know if that’s the right word. It might be too strong, but there’s such a disconnect because it’s such an easy entry and everybody wants more leads, more business. So I think, you know, once they sign up with someone, they don’t really understand

Tyler Martin: all the technical lingo, like you said, and it’s a pretty high ratio, I would say, of companies that actually provide quality service, honest, ethical quality marketing service versus the

Kevin LeSage: ones that don’t, just from what I’ve seen. I mean, it’s even like the SEO one always kills me. Like they’ll charge like $3,000 a month for SEO. And it’s like, to them, that means like maybe optimizing your website once or something. And it’s like, that’s not SEO like that. I’m sorry.

Kevin LeSage: I know things have changed and maybe that’s a little different now.

Tyler Martin: Yeah. It’s a head scratcher to me. There’s a lot of abuse in that area.

Kevin LeSage: Yeah. Again, to go back to the point we were talking about before, my dad doesn’t know how to call that stuff out. Right. But you put me on a phone with anyone. And if I hear some dumb comment. I’m just going to ask a good question. And very quickly, they’re not going to have

Kevin LeSage: answers. And it’s going to be obvious to the clients on the phone that this isn’t the right partner. Right. But if I ask the right questions and I get good responses back and quality, you know, challenging questions and response, I’m like, oh, okay, let’s roll up our sleeves and

Kevin LeSage: let’s get into this is a real player we got here. And let’s like, let’s do this. I love those conversations. And what happens is those clients sign up with us and they love searchlight because they get that we’ve been down that road and we’re here to support their business.

Kevin LeSage: Because again, we started this company because we had to prove the value of our own efforts, right?

Tyler Martin: Yeah, that’s good. That’s good feedback. Hey, last topic I want to cover around is, and this is kind of a tough topic. A lot of times we want to grow our business. We want to hire an external agency or marketing company or software to help us.

Tyler Martin: And oftentimes the problem is within the company itself, their operations and stuff. How often do you, or the marketing team or whatever, how often do you see that in what does that conversation look like when it’s not necessarily the external things are happening, but just the internal problems?

Kevin LeSage: Yeah, I mean, that’s where the data needs to drive that discussion. And it can’t be an emotional attack on a business or a person, right? But if I can show you that you got 400 qualified leads and 200 of those went unbooked because your team had mismanaged them, very quickly, marketing isn’t the first person to get the blame.

Kevin LeSage: And creating accountability between marketing and operations is foundational to Searchlight. because we’ll get on the phone with a CMO and they’re pointing fingers at operations for not booking the leads and not doing follow-up and operations is saying, we’re not getting enough leads from marketing

Kevin LeSage: and marketing is the problem with the business. So it’s very common for us to get a CMO and a GM together on a call from a large group and hash that conversation out together and get them singing from the same song sheet and the same data.

Kevin LeSage: And those are our best, you know, those are our multi-year partners that are using our platform all throughout the day, right? But without that, you’re left with finger pointing and you’re left with passing reports back and forth that aren’t even accurate. And that’s just creating more distrust between the teams.

Kevin LeSage: So at the end of the day, I think, you know, it really does come down to accountability and letting data drive that discussion, not some gut feeling where people get emotional.

Tyler Martin: Yeah. How often do you think that happens where those discussions need to happen?

Kevin LeSage: I mean, they should be happening a minimum of once a month. But I mean, honestly, if it were me and my business, this is our daily, weekly conversations. Okay. Right. We got it. I’d be looking. I’d come in in the morning as a contractor.

Kevin LeSage: I’d open up my Searchlight platform and I’d identify all of the bookable leads that we didn’t book from yesterday. I’d be doing follow-up. I’d be getting on the phone with marketing agencies based on previous day’s performance and where I’m seeing things drop off

Kevin LeSage: or increase. And where is the plateau if I spend more with Searchlight? It can be more of a mathematical equation to success and not this ambiguous art project of try this and try that and constantly tweaking. I know what it costs me to get a paying customer.

Kevin LeSage: I know I need to make $200,000 this month. So now how many leads do I need to get to get to the paying customers if my booking rate is X? You can really reverse engineer this. But I think going back to my dad, black and white, that’s what he needs.

Kevin LeSage: not some marketing guru that’s going to come in and paint this picture of euphoria and it’s all BS in three months. So I think keeping it real with the data is what keeps agencies and contractors

Tyler Martin: and marketing and operations grounded. Yeah, that’s good stuff. How about on the sales side? Do you ever see within the data where maybe the sales team isn’t as efficient in terms of closing deals or follow-up? And how would you handle a conversation? Would it be exact same conversation?

Tyler Martin: But let’s say it’s a little bit smaller where there might not be a GM, there’s a business owner and there’s a sales team. What would that conversation look like?

Kevin LeSage: Yeah, it’s going to be the follow-up conversation. And I would say if you need somebody or something to be doing estimate follow-up until that customer signs the contract or says, stop emailing and texting me, I’ve moved on. Right. And I don’t care the size of your business.

Kevin LeSage: That’s something, if you don’t have the resources to do that at the human level, you need to invest in software and you need to set up that drip campaign. What are you paying a technician to go to the home for? How many, you know, for a couple hours to do the audit?

Kevin LeSage: What are you paying for marketing? You might be five, six, seven, $800 in the hole here. And then you’re not even going to protect that investment with a follow-up. And in addition to that, we’re all busy. We need a little push or a reminder.

Kevin LeSage: So stop thinking you’re going to create a bad experience for the customer. Put a spin on it and make that follow-up resourceful. Make it educational. Make it supportive. And you’re going to turn what you think is a negative into a positive. And you’re going to sell more deals.

Kevin LeSage: And your marketing return is going to increase because you’re doing follow-up. And you’re going to be providing better customer experience. And at the end of the day, I mean, that’s what we’re all chasing here.

Tyler Martin: For sure. Hey, as we wrap up here, is there anything you’re seeing trends-wise that we could give to the audience? Trends, whether it be customer acquisition costs or standards or anything that comes to mind that we could kind of share as we wrap up?

Kevin LeSage: Yeah, the guiding North Star for everyone. You got to have your booking rates accurately figured out here. But if you’re getting any booking rate per campaign over 40%, 50%, that’s a phenomenal channel and you should invest more in it. I’ll go back to that point earlier.

Kevin LeSage: 60% of your leads don’t book a job and 80% don’t buy, right? So the magic bullet is using data to figure out where you’re getting high booking rates and high paying customer rates. And just, I always use this term, invest where you see success, right?

Kevin LeSage: People will onboard with me and they’ll be like overwhelmed with all this data. And they’re like, what do you do? You’re a data guy. I’m like, I’m not a data guy. I’m a marketer. I don’t even know how to use Excel. But for me, it’s like, let’s simplify this.

Kevin LeSage: Again, I’ve been programmed by my dad, who’s a plumber. I just want to know what am I paying to acquire a customer? And is my average ticket more than that? It doesn’t get any easier. If it’s more than that, we’re making money and I want to find the

Kevin LeSage: channels with the largest gaps. So the lowest customer acquisition and the highest average ticket. If you identify that channel, go spend every dollar you have until you find that plateau. That is a great source of marketing investment. While everyone else is running around using clicks

Kevin LeSage: and leads and throwing money into the wrong areas, this is your opportunity to really set yourself apart from making those same mistakes.

Tyler Martin: Yeah, cool stuff. Hey, one last thing. Do you have like a mantra or some type of guiding principle that you live by, if you will, that keeps you grounded or focused?

Kevin LeSage: Yeah, I mean, the one I tell my team all the time, I always say in business, perception is reality. You can build the best product, but if people think it sucks, it sucks. And it’s our job to educate them and show them it’s not.

Kevin LeSage: But the other one I live by too is like, you know, build fast, fail fast. Don’t let perfect get in the way of great. When you’re building software or any business, it’s easy to get hung up in the planning and the processing and all of the concerns that can go into the next step.

Kevin LeSage: But for me, I just start running in a direction. And I usually have to start over and go back to the beginning, but I figure it out and I figure it out quick. And for people that are trying to build something and you’re never going to get it perfect on

Kevin LeSage: the first time, right? If you get an MVP out or iterations, you look back down the road and you’ve come a long way and no one’s touching you because they’re still looking for perfect.

Tyler Martin: Yeah, that’s good stuff. Hey, so your website, searchlightdigital.io. searchlightdigital.io. And then I’ll, of course, put your LinkedIn and then your Facebook links in the show notes. In terms of what’s your ideal client size that’s right for you? Or is it pretty

Kevin LeSage: much anyone in home services? Who’s your ideal client? Anyone in home services that has the CRM, right? Because then I can pull the data and I can automate it. So that’s kind of like the base criteria is you’ve got some sort of call tracking set up, you’ve got a CRM,

Kevin LeSage: and now I can pull the data I need automated.

Tyler Martin: Okay, very cool. Hey, thanks, man. I really appreciate, Kevin, you coming on, sharing a lot of valuable advice around marketing, what data is important, things along those lines. I think really a lot of resources for people to be able to really think about their data

Tyler Martin: in a different way.

Kevin LeSage: That’s why we’re here. Thanks, man. Thanks for the invite, man.

Tyler Martin: Yeah, take care.

Kevin LeSage: I appreciate it.

Tyler Martin: You too.

Kevin LeSage: Kevin’s story proves that the smartest contractors don’t just chase more leads. They fix the leaks and track what really drives profit. If you’re tired of guessing where your money’s going and you wanna turn your data into a growth plan that actually works, that’s what I help business owners do.

Kevin LeSage: Let’s talk about where your numbers stand and what’s possible next. Book a quick intro call at cfointrocall.com or visit cfomadeeasy.com. As always, thanks for listening to Profit and Grit. See you on the next episode.

Related Episodes

• How to Fix Your Messy Data Before It Kills Your Margins – Bernie Ollila
• The Hidden Revenue in Your Pipeline You’re Not Capturing – Ryan Fenn
• Why You’re Losing Jobs After the Call Is Booked – Brigham Dickinson
• The Revenue Levers Most Owners Ignore – Justin Judd

Tyler Martin works with owners on the numbers behind these stories: HVAC business coach.