The Best CSR, Dispatcher And Tech In The Company Was The Problem | Jim Leslie & Al Levi

The Home Service Expert Podcast

The episode features a deep dive into the distinction between revenue and profit within the home services industry. Guests Al Levi and Jim L

Key takeaways

• Al Levi argues that the 'nobody wants to work' excuse is often a failure of leadership to provide proper tools, training, or competitive pay.
• Jim Leslie highlights that high cancellation rates can make even effective marketing look expensive and ineffective.

Main topics

• Profitability vs Revenue
• Staffing and Retention

Notable quotes

Revenue for vanity, profit for sanity.

Conclusion

The takeaway value lies in understanding that sustainable growth comes

Transcript preview

Speaker 3 (0:00) I speak in front of hundreds of contractors a year and almost invariably, you know, in a Q &A or something, right? Somebody says, oh, I can't, I can't find good people. Nobody wants to work. And I usually clap back with, no, they just don't want to work for you. You don't, you don't pay right. You got a rusty truck. You don't have, you just don't have an opportunity that the right people want to take advantage of. Speaker 2 (0:22) You know, that's a you problem. I had a guy just interviewed a technician that's winning and he goes, you know, your manager hated me when he met me. He said, I don't have what it takes. So I went to another company. They didn't buy my tools. They didn't have training. They had used trucks. He goes, I don't want to be part of that company. So I studied up on the company, came back. I knew I was going to have to raise my level. All right, guys, welcome back to the Home Service Expert. I am joined by two of my closest friends, Al Levy and Jim Leslie, two guests today who are both incredibly important to me. Al Levy is the seven power contractor. He's been my mentor for about nine years now, and his system has helped contractors across the U.S., Canada, and Australia build businesses that run without them. Jim Leslie is the president of Home Service Freedom, our mentorship community. He's a former CMO who helped build A1 into what it is today. And he's helping hundreds of contractors do the exact same thing we did here at A1. Both of them are speaking at Freedom 2026 this October at Mandalay Bay alongside of Robert Herjavec, Donald Trump Jr., Eric Trump, Martha McSally, Terry Crews, and a bunch of other badass panels that we're going to be having. Let's just jump right into it. Al, Jim, you've both been on the show before. I think what I'm seeing out there is there's a lot of revenue happening. There's a lot of things in the community that we talk about. I still do a ton of shop tours. I'm out talking to a lot of contractors, big and small. And the revenue doesn't seem to be a problem, but very little profit. It's going back to the old revenue for vanity, profit for sanity. Speaker 2 (2:03) Number one, let's talk about that. Let's talk a little bit about freedom this year. Jim, why don't you go first? Speaker 3 (2:09) Yeah, I mean, I've probably been in 50 shops or better this year. And I think everybody's kind of in the same place. You know, major disruptions in search and marketing, in customer acquisitions, cost to kind of go, you know, cost to go through the roof. Speaker 3 (2:28) And everybody's struggling right now. So I'd say marketing costs are like the number one thing I've been kind of working with people on how to bring that down. Speaker 3 (2:38) you know, how to find out where the customers have went, right? You Speaker 2 (2:42) know what's interesting about that, Jim, is a lot of people are talking about being more transparent with pricing, putting the pricing on the website. The LLMs have been driving that, right? Speaker 3 (2:53) Like they Speaker 2 (2:54) recommend Speaker 3 (2:54) when they can find information on pricing, they're more likely to recommend you, right? And back in the day, Google's algorithm kind of, you know, pushed you a little more if you had some basic pricing data. The LLMs now are just crazy in the depth of information they want in order to rank you. And I see companies with a ton of pricing data out there that you wouldn't have seen two, three years ago. Speaker 2 (3:22) Yeah, I agree with that. I agree that you should always have a starter pricing. You should have options instead of ultimatums and be able to say, this is what a spring might start at. This is what a normal mini split might start at. But I wouldn't go too deep because... Then you let people know too much, and then they're surprised by the price. Yeah, a lot of Speaker 3 (3:42) people are going through case studies, right? So they, you know, almost like a blog post, but they publish this customer, the zip code, this is the work that we did, this was their all-in pricing. That's the kind of stuff that the LLMs are picking up. Speaker 2 (3:57) Al, what do you think? You know, you've been through this rodeo now for decades, and you've heard. that people chase revenue more than profit. Speaker 1 (4:06) Well, one of the advantages of talking to an old person is I have seen this and this is not new to me. It may be new to you. It's the rhythm of what goes on in this things. And it's classic when there's a boom. When I was out selling, just like you did years ago, Tommy. When I knew there was a boom, I couldn't even get through my sales pitch. And they would go, sounds great. When can we start? And that is a really sweet time, my friends. And then there's the other ones about, well, I'm getting through other bids. I haven't really done my process yet and all the other kinds of things. But what my father, my greatest mentor, said to me, the really best will always stay busy. And it's always about constantly marketing. Speaker 2 (4:53) You know, Speaker 1 (4:53) the phone's going crazy. Everything's great. So the tendency is to back off. And you and I talked about this in marketing. One of the things that people miss, they may get the marketing budget, they may get the allocation spread. But the one that Ellen and I always talked about is a marketing calendar. The way that a marketing calendar first came up is I used to pick up my phone sometimes and go, maybe it's not working. Maybe the phone is broken. I'm not kidding. And I bet you've done it too. So marketing calendar, my guru, Leo, told me all these years ago, he says, you can't just wake up one day and decide you're going to do direct mail postcard campaign or get billboards or do anything else and really do something. Well, you have to work backwards through the year in your marketing calendar to get the things. And the other biggest thing that I always come back to now that the easy money is gone. and easy profit is that customer testimonials just cannot say it often enough. And there are three flavors of customer testimonials. One is bragging on a service or product that you did that changed your life, saved 30 % on their energy bills, the door is quieter than it ever was, whatever that is. The other one is about how quick you got here on it. Sunday, six o'clock, I thought I would get an answering machine and there was actually a live person. It was somebody at my house to take care of. I got my air conditioning back in the middle of a Phoenix summer of 115. Those are the kinds of things. And then the home run testimonial is the third one. They brag about what great product and service you are and they brag about how great your people are and how you took them out of a bind. And the answer to your next question is, well, how many do I need? You need them all. All, all, all, never, ever, ever stopping it. It affects your sales and marketing. Speaker 3 (6:43) There's something you said in there, the lead time on the marketing, right? Everything has a lead time, right? So recruiting has a lead time. Implementing a new operational process has a lead time. And I talk about this all the time. It's the intersection of those three things that you have to get right and why these guys are always in a boom and bust cycle. hey, we do a bunch of marketing. Oh, we got too many leads. We need to hire people. They back off on the marketing, but now the hiring lead time, you know, then the leads go away. That's Speaker 1 (7:14) the Speaker 3 (7:14) problem. Capacity planning. Well, Speaker 1 (7:17) we had this discussion just yesterday in the live webinar, which was about when I talk about the seven powers that Tommy knows, planning, operations, staffing, sales, coaching, marketing, finance, I really got it down to two, which is make more calls and more texts. Not one or the other. Speaker 3 (7:32) Yeah. Speaker 1 (7:33) More calls and more texts. And there's more depth to that. But you're so spot on with that. It's about all of these require planning. And that's Ellen's great line that she told me, I mean, decades ago, which is plan or be planned for. Speaker 2 (7:48) Yeah. You know, if you reverse engineer it, the one thing I will say, a budget's amazing. But I don't let the budget completely be the North Star because I got markets that are overperforming. That if we make budget by the 22nd, let's. move that money over, they're killing it. Their conversion rate, the booking rate, the average tickets where it needs to be. But the biggest thing that stands out to me is cancellation rate that people aren't paying enough, especially if it's break fix. Oh, yeah. If it's break fix. I mean, it's different if you're looking at if you're Speaker 3 (8:15) in Speaker 2 (8:15) a landscaping company or a pool company, it might be a little bit different. But if it's busted and you need to get out there and fix it, I got markets right now that are nine days out. That's how long I have to push them out. Even the project Speaker 3 (8:24) base. companies have a cancellation rate on the setting of the appointment that most of them are measuring, right? They set up an appointment for a sales rep to come out two weeks later, but they're not measuring how many of those drop off. And Speaker 1 (8:39) we're flipping out the term cancellation rate, which a lot of people may know, but they may not really know what you're speaking to because the one I always talk about, marketing, remember filling the bathtub, right amount of calls, right customer, right time, and the big cold to the train is, of course, your quality, your CSRs convert. That's conversion of those calls. But you're speaking about we can't get out soon enough, so the customer is obligated. You can't say I'll be there two weeks from now for your air conditioner that's broken at 115 degrees. Speaker 2 (9:06) And that's probably where the biggest pickup is. I'm having a real problem now, I'll tell you guys, is it starts out with culture. That's how I built the business. Like, I knew every person that came here. I knew their wife. Like, we'd go out a lot more. I lived at the apartments. And then it turned. All in the KPIs where we knew every metric. We studied these metrics and we got metrics for metrics. Really the main one is what's the cost per lead? Is it a quality lead? What's the booking rate? What's the cancellation rate? What's the conversion rate? What's the average ticket? Did we get a review? But now I'm going back and understanding because I'm losing a lot of technicians because my classes are getting to sizes of 80 a month. And it's hard to pour that much love into 80 people every month and then still keep capacity right. So I'm going back to like the beginning days. where you got to pour love into people. Speaker 1 (9:52) Oh, yeah. Speaker 2 (9:53) I mean, now that it's a metric-based business, you can't KPI your way out into the culture. And so I'm having a fun time with it. And we're just, well, you know, we got these decks we put together that are 150 pages that we review each month, but we never had the HR data to say, what's our turnover rate? And is it forced or unforced? By what market? What leader? And so now I'm getting... It's a different size problem than most have, so it's hard to relate. But I just want people to understand no matter how big you go, you never solved it. It's always something. Speaker 1 (10:22) I so agree with all of that. And matter of fact, when we were a pretty good-sized company years ago, but we decided to build our training room capacity that only 15 people could sit in there. We could have built it much bigger. I've been in these cathedrals that they build, you know. And I tried to explain to them is... If they're sitting in the chairs and they don't get to talk or they don't get to touch the stuff, the effectiveness of your training and development in the culture is really compromised. So we would run multiple sessions. And after I left, I mean, all of you guys have blown away what I could do. You in particular, but, you know, even Jim Crenady and Zoom Train, they just, but we created it from bottom up. which were apprentices, it became junior techs, it became senior techs, and really high-quality field supervisors who could run their own groups of training, but we'd all run it the same way. And that really helps with this development, this culture, and still keeping the quality metrics where you want. And really what we talk about in staffing, really, is the five things of staffing. Always recruiting, always hiring, always orienting, always training, always retaining. And if you do a good job with the first four, you have a good shot. But the retaining, the time he's talking about, it's expensive. $22,000, $22,000 per take. But Speaker 2 (11:36) it's more Speaker 1 (11:36) than the money. It's demoralizing. Yeah, I know. Because people go out the door and you go, well, maybe I should go too. I don't know why. Well, not only that. Speaker 2 (11:44) Well, it really screws with marketing. Speaker 1 (11:46) Yeah. Speaker 2 (11:47) Because you're trying to say, this is how many guys we've got coming in here, so many leads. And when turnover becomes a real problem. So we're looking at it. And what I've identified over the last six months is it's completely leadership. You can only take a company so far unless you're training the next one down to care. And it's hard to train somebody how to care. So you've got Speaker 1 (12:03) to Speaker 2 (12:03) be better at identifying people that actually give a shit. I would say Speaker 1 (12:07) training up. I know that sounds weird. Training up the next person. Training up the ladder because that's where the real. You know, like what I was talking about, you wouldn't build the house by designing the, you know, the master bedroom bathroom suite up at the top. You get the foundation right and the foundation will allow you to scale in a way that's still safe. Hey, Speaker 2 (12:28) guys, I want to tell you something that we just added to Freedom 2026 that is not going to be on the main stage. It's Monday night, October 26th at 6 p.m. Jim Leslie and Al Levy. are gonna be doing a private session. It's a small room, there's no slides or anything like that, just time for you to lob questions at them with anything that you're dealing with right now in your business. If you don't know Al, he ran his family's plumbing and HVAC business in Long Island for 25 years. He got it so systematized that he retired at the age of 48 and he wrote one of my favorite books, The 7 Power Contractor. The guy walked into A1 back in 2017 when I was running a ton of jobs and barely keeping any of the money. He's the one that got... Me, the real operating manuals and scorecards in every department, my technicians, my CSRs, my dispatch, all of it. A lot of what led us scale past where I was stuck is the stuff that Al built directly with us. It's a pure open forum. Bring your problem. They're going to help you walk through it right there in that room. Here's how you get in. Buy any Freedom 2026 ticket package and use the code ALFREEDOM at checkout. That's ALFREEDOM at checkout. That unlocks your seat in the room with Jim and Al. on top of whatever package you already bought, which already includes free tickets. Freedom 2026 is October 26th through the 28th at Mandalay Bay. Go to freedomevent.com, grab your package, and don't forget that code. It's ALFREEDOM. Or call us or text us at 602-581-7563. Now let's get back to this episode. Speaker 3 (13:55) I think a lot of companies have never even just, I mean, I've seen some pretty sizable ones that have never built a hiring plan, right? And you, you know. The companies that we work with in HSF, one of the first things that we do is have them work out, okay, here's your goal, reverse engineer, how do you want to get there, the whole process that you always talk about. But the bottom line on that is, like, how many people are you going to need to do that, right, based on their average ticket and your current training and all that? And you can't hire a fraction of a person. It looks nice on a spreadsheet, right? When you figure out your turnover rate and whatever, most companies, like, you have to be hiring somebody. all the time yeah and the owners do it just reactively reactive versus product yeah and i'm Speaker 1 (14:35) first hand up and that's how I used to, you know, we just waited till there was a truck out in the yard going, what should we do now? And so, but that's why I thought what you said before about planning time and lag time, whatever you want to call it. We just didn't do that. But after we finally woke up, we were always recruiting, always hiring. We knew we could create the calls, good times, bad times, we could do all of it. And our trust in that was big. Speaker 3 (14:59) There's a concept of lost potential revenue too, where That truck sitting out there has a cost, right? Yeah. Well, we could get leads if we had somebody to put in it. What is that worth? $40,000, $50,000, $60,000 a month? I know. Speaker 1 (15:15) My father, years ago, I came to him. This is a long time ago. I said, we really need another big-ticket salesperson. And he said, yeah, but we just don't have the revenue for it. So he looks at me and he starts to laugh. And I remember he started from nothing. So he said to me, he goes, so you're telling me we can't get more big ticket sales until we get salespeople. We don't have enough money for the salesperson, so we can't get the big ticket. He just did this for like two minutes. Speaker 2 (15:41) Yeah. And Speaker 1 (15:42) it just like after a while, he goes, sometimes you have to stand on the bridge and know that you can make the jump and survive the fall. Speaker 2 (15:49) Most people don't want