The First KPI Every Home Service Owner Should Track (Not Revenue) |

The Home Service Expert Podcast

Derek Cornish shares the foundational sales KPI every home service business should track—close percentage—and reveals how his company scaled

Key takeaways

• Close percentage is the most critical KPI for home service businesses—tracking it reveals true sales effectiveness before revenue numbers mislead.
• Raising prices by 30% led to a record-breaking month because internal systems (SOPs) were solid, proving pricing confidence comes from operational excellence.

Main topics

• Close percentage as the first KPI
• Pricing strategy and its impact on revenue

Notable quotes

"You can't price yourself out of bad KPIs."

"Raise prices, man. And raise prices. I love it."

Conclusion

Derek Cornish emphasizes that scaling a home service business requires moving beyond the 'fun

Transcript preview

Speaker 1 (0:00) We raised our prices 30 % in one month. Most people would have been like, you're crazy. And we were a little crazy. And we ended up having the biggest month the next month that we ever had. It did nothing. And when I say 30%, it was legit 30%. We went 10 and then 20. And it wasn't the issue though. It was all the internal stuff of no SOPs. Yeah. It was none of Speaker 2 (0:21) that. Speaker 1 (0:21) Well, you Speaker 2 (0:21) can't price yourself Speaker 1 (0:22) out of bad KPIs. Speaker 2 (0:24) All right, guys, welcome back to the Home Service Expert. Today, I got Derek Cornish here. He built... The sales organization that topped home improvements from the ground up. He started knocking doors, became a closer, and then built the entire sales operation that now runs across three locations with a dedicated sales manager and a high-level call center. Today, he's going to break down how he went from zero KPIs to a full sales management system. The specific techniques that turn a not interested into a closed deal and what a sales organization needs to look like at every stage of growth. Derek, how the hell are you? Speaker 1 (0:59) Doing good, Tommy. Speaker 2 (1:00) Thanks for having Speaker 1 (1:00) me. Speaker 2 (1:01) Glad you made it out. So, you've built the entire sales organization at Top Home Improvements from the ground up. Before we get into the systems, take us back to the beginning. How did you get into home service and what were those early days like? Speaker 1 (1:13) So, actually I was working at a company, screen printing sport apparel. And they were kind of going down, lost my job, and went home, was bummed out, and just got online and saw this ad for... company vehicle and 100k plus and so I jumped on and up getting the job actually brought me in for an interview for canvassing and call center I was like well I really want to be in sales so they brought me in for our interview got that job and from there took off at first start off slow and then our sales manager he's like you need to grow a pair and and started asking for the order and assuming the sale So once I started doing that, I ended up being the top salesman there. And then my partner and I went golfing one day and we kept trying to do different businesses, business ideas. And we're like, why don't we just do what we know? He's like, I know how to knock a door and do events and you know how to sell. So that's what we did. And we went from zero to we're on track to do over $20 million this year. Speaker 2 (2:15) And you guys. You guys are so so he was a good setter and you'd walk in and close right? Yep So it's a set closed model on the canvas side and then you take the best canvassers and you throw them in events and that's kind of like they're they're like hey, this is almost like a Promotion to get to the event team correct, Speaker 1 (2:35) especially in Michigan when it's a cold outside. They're event schedule Yeah, Speaker 2 (2:40) I was telling you I grew up there and Speaker 2 (2:43) It's near and dear. I'm happy I'm from the Midwest. The best people in the world. I was raised with a lot of culture, a lot of seasons. But I'll never go back. I go back there all the time. I got a lot of family there. But I just enjoy the sunshine, even though it's hot out here in the summer. That's why I did the Idaho house. Speaker 1 (3:01) I've been here since Thursday. Speaker 2 (3:03) What do you think? Speaker 1 (3:04) And I love it. I told Kate back at home, I was like, we might have to move out to Arizona. Speaker 2 (3:08) You know what, man? It's hot, Speaker 1 (3:09) but it's nice. I Speaker 2 (3:10) could bring you. I can show you the whole, I can show you everything from like ASU Tempe to Scottsdale, Old Town, all the way. There's so much. You go to downtown Phoenix, it's like, it's just a different, like everywhere you go, you get whatever you want. There's so many great events. It's just, right now, it just became home of the most millionaires in the United States. Speaker 1 (3:31) Yeah, Speaker 2 (3:31) Scottsdale. And I live right there in Paradise Valley. And I'm telling you, like, I just love this place. It's all on a grid. Traffic's not bad, depending on what freeway you're on, but everything's easy to get to. And it's just, it's a great place. I just, this will always be home. Yeah. You started knocking doors yourself. What's the difference between being great at sales and being great at building a sales team? And when did this shift happen for you? Speaker 1 (3:55) So when we started, Lakota did most of the knocking. Right. So he would set that for me. But as far as going in there, one thing we teach our salespeople is how to be a leader as well. How to help. each other out, how to, you know, we're all in competition. We always want to be the top sales guy. But how can we help the other guys out so we have a winning team? So, for example, I use a story, our two top window guys, one of them is now running a location. One of them said in the meeting one day, he goes, I'm the best window guy. And the other guy goes, I'm no way I'm beating you this month. But they would be the first person to answer the phone call. And they were like a thousand dollars off one sale off from each other. And but they would be the first one to help each other out. Yeah. So it's to be a good salesperson, one, you have to not be scared. You got to be able to go in there. And I learned that from a sales manager I had at the other company we were at. Guy could go in and say anything and get away with it. But it was how he said it. You know, it depends who you're going to say it to and how you're going to say it. And he would go in and he would say things and he wasn't scared. You know, one thing I preach at our office is, look, when I'm sitting at a table with you and I'm pitching you, eventually you're going to become my friend because we're good at building rapport. I want to know about you and your family. I'm going to let you know about our company and our products. But you have to ask for the order at the end. And a lot of people would get timid at the table because I wouldn't spend $20,000. Now I'm about to ask my friend to spend $20,000 on windows. Or you flip the mindset and say, look, actually, it is your friends will help them out before someone doesn't do a good job for them. Speaker 2 (5:28) It's a good paradigm shift. Yeah. One of my good buddies, Joe Crisaro, wrote a book, What Should We Do? And at the end of the sale, he says, in order to get the sale, you got to ask the question. All right, we're here. I got all the options for you. What should we do? Speaker 1 (5:46) Yep. Speaker 2 (5:47) And then you shut up. Speaker 1 (5:48) Don't talk. Speaker 2 (5:49) And I always say, here's what we need to do. Here's what we should do. And if you were my mom, here's what I'd be telling my mom. I love my mom. She worked three jobs when I was a kid. Grew up on 17 and Ryan Road. And I love my mom. And here's what I'd be telling mom. Based on the fact you're selling the house in three years, here's what I'd be telling mom to do. So I try to bring in their situation. I mean, if you got a noisy garage and you're waking up little Tommy Jr. every time you go to work. Here's the option I would pick to keep little Tommy sleeping through when dad goes to work. Speaker 1 (6:19) And Speaker 2 (6:20) if you could do that and be sincere, make eye contact, and actually play with the dog and give a shit, that's half the battle. And you almost got to find, I'd rather find people that don't mind smiling, that are good talkers, that tell a great story, that are sincere, than try to teach somebody the trade. Like, I'd rather teach those guys the trade than teach a person how to sell. Because really, it's about being a good human. Yes, sir. Absolutely, sir. I really appreciate that. They want to give you a nice tea? Absolutely. I'd love one. Thank you. Speaker 1 (6:47) Yeah. Always got to take the tea. Speaker 2 (6:49) Always take the tea. Speaker 1 (6:50) It's funny because when we started this company, I saw on one of your things about your mom. Or no, it was at Top 500. Speaker 2 (6:56) Yeah, yeah, yeah. Speaker 1 (6:57) About your mom was on the phone. Speaker 2 (6:59) Yeah. Speaker 1 (6:59) You know, is there a coffee you want? And she drank coffee. And my why, I have two kids now, so my why hasn't shifted. I still, my why is for what I got is my mom as well. you know my parents divorced that uh when i was like one both great parents but my mom didn't have much but she'd make sure i had everything um if i needed cleats or whatever it was so my why when i sat in that garage coming up with top was was her you know and how would you treat your mom yeah Speaker 2 (7:27) what Speaker 1 (7:27) would you want for her how would you want someone to come in here and people forget how that we're all human and we all got to be taken care of and treat people like you would your mom Speaker 2 (7:38) Yeah, it's tough, man. I don't know how you guys do it. I'm always envious of the home improvement space, much bigger tickets. See, when I get a phone call, it's like, I need you to be here right away. My garage door is broken. Speaker 1 (7:53) You Speaker 2 (7:53) go and build demand when people aren't necessarily looking for it. So I wouldn't consider those the hottest leads. I mean, they're not even looking. You're knocking on their door. I don't even know how that looks. So walk me through. Speaker 2 (8:07) you know you got lakota out there knocking on a door Speaker 2 (8:13) How does that even work? Like no one's even looking for anything. And all of a sudden, we're talking about windows and kitchen remodeling. What are all the things that we sell? Speaker 1 (8:23) So I was talking to Phil about this too. Every lead is different that you go into. So the Canvas lead, we go there and a weak sales team is going to say, get to the door. They're like, you know, your guy just knocked on my door. I don't even know why you're here. Hey, no problem. I'll let the office know. That's interesting. But yeah, we shouldn't be here if you don't know why we're here. Or a good sales team is going to be like, hey, no problem. It sounds like you set an appointment today with Dan. What made you choose windows out of the things that we do? Well, my kitchen window was causing some problems. There's some fog between the panes. Okay. Well, I'm already here. Let me just come in and take a peek at it, see if it's something we can do, and I'll at least leave you with a quote so when you're planning your budget, you can have that. So you just got to angle everything different because, yeah, a lot of times we do show up and they're like, I don't know. your guy just showed up and I just set the appointment. Cause you do a giveaway. Speaker 2 (9:13) So that's how you guys do it. A giveaway. A giveaway. Yeah. So like a giveaway for a cruise? Speaker 1 (9:18) A $15,000 giveaway. So every year we'll do a project for somebody. Okay. So we do a $15,000 giveaway. And then we do about four bathrooms a year for veterans. Speaker 2 (9:30) And four bathrooms? Yeah. Speaker 1 (9:33) One day. So a shower. Speaker 2 (9:35) Bathroom showers. Yep. And let me ask you, so. Speaker 2 (9:42) These people sometimes are just trying to get into the giveaway. I'm guessing. Yeah, Speaker 1 (9:46) so and a lot of times that will sway a Reps mindset, right? They just wanted a $15,000 giveaway But I always say treat every customer and do what you're trained and the things that you learn 100 % of the time to get 30 % results. I'm not asking you to get 100%. So Speaker 2 (10:09) that's the goal is three out of 10 to get actually a purchase order. Speaker 1 (10:13) Three Speaker 2 (10:13) out of 10. Speaker 1 (10:13) That's what we like. And that includes all. That's no shows. That's one legs. That's every lead that you got that month. You should close three out of 10 Speaker 2 (10:20) for Speaker 1 (10:22) base, like average. Speaker 2 (10:24) What does good look like? Speaker 1 (10:26) We have guys doing over 40%, so selling a little over four out of 10. That is Speaker 2 (10:32) incredible. That's incredible for those types of sites. What's the average sale? Speaker 1 (10:37) 17.5. Speaker 2 (10:38) 17.5. Yep. And and so you guys you know when I talked to Lakota a couple weeks ago He said you guys are finally starting to look at other lead sources like getting very serious about Google and some of these other places whether it's lead eggs But if you can make that kind of money with events and door knocking sky's the limit Speaker 1 (10:57) Yeah, and we did for the first five and a half six years We did nothing else but 300 events a year or more and knocked doors One Speaker 2 (11:04) thing I'll tell you to be really really focused on is the bottom line make sure it cuz cuz younger owners younger in the business not younger age they tend to say we're putting it all back into grow When they don't got a good CFO, they don't got a good bookkeeper and you're spending more and not focused. We're going to talk about KPIs, but a healthy bottom line is much better than a healthy top line. And you start walking into rooms and the right rooms, no one's going to ask you about revenue. They're going to say, what's the even margin? What's the profitability of the company? That's what you get paid on. That's how you build a company. That's how everybody grows. That's how you change your family's life. Speaker 1 (11:41) So eventually the situation needs to switch from how much Speaker 2 (11:44) revenue. Revenue is great. Because theoretically, there should be a percentage of that revenue that you're taking home. Typically, a good company is doing 15%. But there are ways to get to 30%. Speaker 1 (11:54) Yeah. So we... Speaker 1 (11:57) We grew the barbaric way. So we thought more revenue means more money. Yep. That's farthest from the truth. Yeah. We thought more sales was great. Whatever it might have been, as we've grown and put ourselves in the right rooms, Lakota read Brian Gottlieb's book. Yeah, Speaker 2 (12:21) The Hammer. Speaker 1 (12:22) And messaged him on Facebook, got connected with him. And that's when our entire company changed. Last year, we probably changed a thousand and ten things. Yeah. Selling process, KPIs, how we track leads, you know, and for a while, some of our vet reps, you know, that were selling roofs and those are higher tickets. The average ticket on those is probably thirty five thousand. He's like, why are we going based off close percentage? I'm doing 200 grand. Okay. You've sold three roughs, big metal roughs out of 40 leads. Yeah. So now I've, you've ran all those other leads that cost money that now that's taken off the bottom line of the three that you sold. Right. So if you're going to run 40 leads, you have to close, you know, 12, 10 to 15, 15 leads. Yeah. Speaker 2 (13:16) That's another thing too, is, is I do have a problem with, with. Young entrepreneurs and by the way, I was one of them I've been in this 20 years and before that at a landscaping company But saying yes to too much revenue because how do you get good buy structures? You know, I'm Servicing 25,000 homes a month. So who's Speaker 1 (13:37) buying better than me? I'm spending a hundred million dollars with my manufacturers Speaker 2 (13:41) How do you make great technicians? How do you make great salespeople? How do you get the custom truck set up for that particular trade? I think what happens is when you say yes to too many things, you're a jack of all trades, a master of none. And if you're going to grow and scale, you can't say yes to everything. In the beginning, you have to because you need the money. And then you figure things out as you go. But eventually, you're like, I'm going to focus on these two things or this one thing. And this is where masters of closing this. This has got the highest. EBITDA contribution. This is where we can negotiate best with our vendors. This is where we can buy the best leads. This is I try to find something that's an open book, like big tickets, big conversion rates, unlimited leads and just unsus sophistication. I think roofing is great. I think those guys are a little bit I've met guys doing $30 million that don't know what a KPI is. They don't know what a mission vision core value is. They don't know what an SOP is. And I'm like, you guys got the $30 million. And they're taking a fair amount home. They're taking home $3, $5, $6 million. Yeah. And I'm like, man, if you put some sophistication around that, it's $100 million taking 20 % home. Speaker 1 (14:46) Yeah. And Speaker 2 (14:47) that business of $20 million of EBITDA is probably worth, you know, if I had to guess, $200, $300 million. Speaker 1 (14:55) Yeah. Speaker 2 (14:55) And that's how it is. It's a multiple of EBITDA. Speaker 1 (14:58) Yeah. I mean, that was us to start off. Speaker 1 (15:03) The thing that saved us was a company we worked for before is they were already the highest priced company in our area minus, you know, like RBA, Windows, and some of those other ones. But outside of that, we were the highest. So when we did ours, we didn't go as high as them, but we didn't go down low because we knew how to sell the higher tickets. Right. So that, I believe, saved us in the early years because we weren't scared of price. But a lot of companies are scared to raise prices. I mean, you go to some of these events and they're talking about just raise the price. Because I'd rather do, our thing is, if I go sell an asphalt roof at a price where a lot of these people are doing, and make 10 % or 5%, or and do 100 more jobs a month, or I can go do 50 less jobs. Speaker 1 (15:55) make the same, if not more, by having a higher price. And I have to do less services if there was any less. That's exactly Speaker 2 (16:02) right. I was just with Ken Goodrich, Gettle, you know, and I said, what's the number one thing? He goes, dude, I buy companies and I just get them priced right. He goes, if you could get the companies to price right, where every company is different when you got to look at your infrastructure, but to have a great infrastructure and be able to grow, you need to charge the right prices. And most people get that wrong. But you still, I want to talk a little bit about KPS because you went from having none at all to texting updates back and forth to build a full tracking system across three locations. I mean, pricing, Alan Rohr says, wherever you're at, double your prices. That's what she says. And every price increase I've ever done has never affected conversion rate. It just, it doesn't. I mean. If you're good, you're good. So, I mean, there's a way to price yourself completely out of the market to be ridiculous, but that's when you got to think differently and say, what can we package together that nobody else is that doesn't cost as much? So people are getting far more for their dollar. Talk us through kind of the evolution of KPIs and how you look at it more of a system now. Speaker 1 (17:06) Well, I always say that too, because you go to a lot of these events and people say price doesn't matter, price doesn't matter. And I do agree with that. However, to your point, at some point price does matter. Speaker 2 (17:17) Yeah. Speaker 1 (17:17) Right? But... You just can't be scared of it. And you got to be able to deliver it to the sales team the correct way. That's the biggest thing. One month, we thought it was our price and it was all internal. And our first mentor that we had, Bob Quillen out of Ohio, owned a smaller $8 million window company. But when he sold, he was at 27 % bottom line. So he was making more than some people at $20, $30 million. Speaker 1 (17:48) But the so we didn't track anything and and then we went into Brian Gottlieb. Yeah got the KPIs We didn't we weren't in EOS and then we but we were doing small things. I will do leadership meeting every Monday Yeah, we're doing our own things there And then he goes, well, you got to track everything. Speaker 2 (18:10) You know, Speaker 1 (18:11) I couldn't even tell you our close rate. We would only go off demos. Speaker 2 (18:14) Yeah. Well, Speaker 1 (18:14) the other leads still cost money. Speaker 2 (18:16) Yeah. Speaker 1 (18:16) So in a one leg, how am I supposed to know my sales rep didn't go into that lead and say, oh, the wife wasn't there. Speaker 2 (18:23) Right. Or Speaker 1 (18:23) the husband wasn't there and just make it up because they didn't feel like pitching that day. Speaker 2 (18:26) Right. Speaker 1 (18:27) Well, now I'm going to count it against them. Speaker 2 (18:29) Yeah. And Speaker 1 (18:30) they're going to do whatever they take. And if they don't, they're not going to hit numbers. Right. So now we track. literally everything. So we started off where we would just text, what was your close that day? How many leads did you run? And what was the revenue? We implemented that and now we have Excel spreadsheet that has everything. So we do how many leads we were supposed to have that day, how many that we issued, how many we demoed, how many we closed, and the revenue. The Speaker 2 (18:56) average. And Speaker 1 (18:56) the average ticket. And so it became a math equation. Like our new sales manager over in Detroit right now, his thing was, I need more reps, I need more reps. I'm like, you don't need more reps. You need the reps that you have closing jobs. Right. And today I talked to him and he's like, you know, I have less reps now and we're closing and we're actually doing more revenue this month than we have just started the last two months with less reps. Yeah. So it takes that mindset change of like, no, you don't need more. You just need to convert the ones that you have. Speaker 2 (19:34) Yeah, that's usually the answer for every single person on the grid of the org chart is I need more people. I need more people. I need more people. And it's like, then you go through this time exercise of saying, what do you do in a day? And how do we make you more productive? Especially there's like, there's income generators and then there's income assistance of revenue assistance. Like your recruiter is definitely not putting dollars on the board. But they need to bring you guys great people and get more door knockers and get more leads. So there's this guy. He's like the private equity master. His name is Sandy Aug, I believe. And when you look at an org chart, there's pieces of the equation. Like your recruiter your marketing person the person doing the pricing like all these things make a big difference even the way you handle fulfillment How can you save money? Well the guy out there negotiating to get leads cheaper the guy out there negotiating get trucks cheaper the guy out there negotiating Speaker 1 (20:32) to Potentially get better deals with your Speaker 2 (20:36) there's so much opportunity throughout the organization to actually unlock Profit and it's it's up to you guys to figure out where those are I'm writing a book. It's done. It's going to be released this year, but it's all about how to use what's called an equity incentive program. And it's how to build a company where you have multiple. There's a way to earn and invest ownership. And the right people, if they're A-plus employees, it's the best thing you could ever do. And by the way, it's vested over time, so it's not like, and there's no tax ramifications of it. So it's called, it's an EIP program. And it's genius when you reach a certain size. It's when you start making serious profit is when you want to put it in place. Speaker 1 (21:16) I saw one of your videos. The guy said, I can have two A players that I pay 200 grand apiece, 400,000. Or I