Wes Schaeffer: Tommy Mello founder, A1 Garage Door Service. Author, “Home Service Millionaire.” Host of home service expert podcast. All the way from Scottsdale, welcome to the sales podcast, man. How the heck are you
Tommy Mello: I am doing really, really good and excited to be on today.
Wes Schaeffer: Man Can I kind of talk about one of your competitors, although you don't sell in LA? Do you
Tommy Mello: Know, no. I would love for you to talk about my competence.
Wes Schaeffer: Alright, so he's not a competitor.
Wes Schaeffer: Because we can't be. I'm in an HOA, man. We can't get fancy garage doors, right, we have to get permission, just to paint the damn thing that I always talk to people about marketing and this guy Mesa garage. He may
Tommy Mello: I know well
Wes Schaeffer: He's a great marketer.
Wes Schaeffer: And I got. Imagine you're great marketer to I hear his and I don't listen to talk radio anymore, but just driving around lived out here for 16 years, you know, Lisa garage free delivery free totally free weatherstripping like, Damn, dude. I mean, Marketing. Marketing still works done it.
Tommy Mello: You know, if you called him. That means it works. And, you know, I love talking about marketing, and I love talking about traditional marketing.
Tommy Mello: And see, I'm big on direct response but TV, radio billboards, the differences don't search Chrysler repair Scottsdale browser repair la search
Tommy Mello: A one browser service. So the click-through rate goes up, the average ticket goes up the conversion rate goes up and there's a smart guy in Texas. He's called The Wizard of ads Roy Williams.
Tommy Mello: It's kind of fun. I studied a lot of his stuff. I just, you know, I'm here because I absolutely love marketing. Yeah.
Wes Schaeffer: Yeah, I used to live in Austin. So I was I was hanging out with Roy when he was still in a strip mall back in 2002 in Buda
Wes Schaeffer: Wow. So yeah, I haven't dang, I got there and drink some whiskey and
Tommy Mello: Yeah, he likes to drink, I think. Yeah.
Wes Schaeffer: Look marketing.
Wes Schaeffer: Oh, I love it out there.
Wes Schaeffer: So let's go back into that, though. What are you talking about direct or traditional marketing versus what what what's untrained it untraditional?
Wes Schaeffer: Like so. Well, your marketing PPC I mean, because a lot of people. Yeah.
Wes Schaeffer: They don't, they're not doing direct response marketing, you know, it's all Facebook.
Tommy Mello: Right. Yeah. Well, direct marketing is so so online marketing for me is Google is God. There's four algorithms for home service.
Tommy Mello: The first one is pay per click. Everybody knows pay per click; you pay at the top you pay for the click. If you want the first, but it's more expensive.
Tommy Mello: Garage Door Repair Phoenix, for example, is $79 and click on average for the first spot, which sounds crazy, because it's garage doors, you would probably predict it would be
Tommy Mello: 10 bucks. So it's an expensive way of doing marketing. I like to be in the three top three, then you have
Tommy Mello: What's called Google guarantee. Those are LSA local service ads and those are a guaranteed from Google and they're much more affordable and you only pay when they book the call. Those are good.
Tommy Mello: And Google's really smart for coming out with that program that's the latest one that you have your Google My Business page, which is the three-pack at the top.
Tommy Mello: And those are where you get the revenues, the hours of operation, things of that nature. And then you've got the straight-up organic.
Tommy Mello: We do about $2.6 million a month just from Google organic straight up Google organic. So I'm a huge fan of Google because people go there when it's broken, and they go to their to check out your reputation. I like Yelp.
Tommy Mello: BBB next door, Facebook, those are all great places to get reviews but I you know I still do well back. I still do direct mail. I still do all kinds of the old fashioned stuff that people say doesn't work. But I try to differentiate myself.
Tommy Mello: I try to be different than every single company because they use a local number and every one of the 10,000 homes that I hit invalid pack have a local ad for that neighborhood and people like to do business with local neighborhood so
Tommy Mello: I get up 1,000% return on value pack.
Tommy Mello: Which is unlikely, usually it's a five to one out of 10 to one ratio.
Tommy Mello: Yeah, I just think that people recognize my name, just like you might have got a coupon. And you might have picked me says because you say, oh, I know may say, you know, they're a trustworthy that my neighbors have used them. You know what I mean.
Wes Schaeffer: Your neighbors better not have
Tommy Mello: No, no, the guy's name is Dwight. He's a very smart marketer.
Tommy Mello: And he does a ton on TV. What he does that. I don't necessarily agree with
Tommy Mello: His be the, I don't want to be the Walmart because I can't be the Walmart and and
Tommy Mello: YOU KNOW, THE QUALITY BRAND at the same time. So I'd rather be the target than the Walmart and they've known for on time. People want three things.
Tommy Mello: They wanted them fast. They wanted them right and they wanted to cheat pick two out of the three. And here's what you get, because you're never gonna get all three.
Wes Schaeffer: Yeah, good. Fast, Cheap, Pick two.
Wes Schaeffer: So, so how do you decide then
Wes Schaeffer: How do you decide you know where to set the price because let me talk with entrepreneurs all the time, especially in the beginning when they're starting out, they usually underprice
Wes Schaeffer: The their offer or they were brainwashed into thinking I've got to join some titanium platinum war room master guru peak ethic unethical.
Wes Schaeffer: You know immersion and they're like, you're worth a million dollars an hour. That's what you should charge. I'm like food.
Wes Schaeffer: How do you figure out pricing.
Tommy Mello: Well, what you do is you add up all of your costs. We've got an equation we use and it's not something. What you need to do is have a very, very good set of books and those are where most companies fail.
Wes Schaeffer: Instead of what
Tommy Mello: A good set of books. So, meaning a p&l you want to have a good balance sheet. A good income statement, and you really what you want to do is add up all your costs and there's direct costs. So there's fixed costs and there's obviously variable costs and then
Tommy Mello: You want to make sure you add in the profit, you want to make, but I think about a good quarter of
Tommy Mello: A quarter, you know, you know, like we're in the fourth quarter. That's what I'm talking about is October, November, December, you take the quarters, where the data.
Tommy Mello: And you find out what your profit margin is and if you can't get to 15%, you're failing, in my opinion, unless you're doing only new homes, but in the retrofit game, you're entitled to 15% I like to live more around 20 I'm not quite there yet.
Tommy Mello: But I don't sell on price. I sell what I've done is I went to the spring distribution, the stream the spring torsion spring distributor and I said I want
Tommy Mello: Something that no one else has. And they said, well, the highest cycle that we sell to most of your competitors, the best me sell or 25,000 cycles.
Tommy Mello: I said, Okay, I want 80,000 cycles and I want a powder coated and I want to differentiate myself. So if you sell a set of springs at 10,000 cycle, the average
Tommy Mello: And I for $200 and I sell my 80,000 per 500 you're actually getting a three more than three times better value for my screen.
Tommy Mello: So I got good, better, best, and the other thing I do is never ever started out with good. You start out with the best you could always come down to better. And then you could fall into good
Tommy Mello: But when I taught my guys how to sell the best in the beginning, or do what you would do for your mother or your grandmother or the most important person in your life. What would, what kind of parts, would you use
Tommy Mello: It sales really started to spike, but my problem is not lead generation. My problem is I have way too many leads. So I started to use
Tommy Mello: More of my sales and marketing to get great employees and forget marketing. If you don't have guys that can close the deal and you don't have guys that can make customers really, really happy.
Tommy Mello: And feel good about what they did.
Tommy Mello: So part of my eighth step in my five-star customer service program is making sure after we've collected the money we blow out the garage door. We've gone over the warranty.
Tommy Mello: We explain everything in detail. We have you get down the Christmas tree is to go above and beyond and say, Is there anything else that we could do for you while we're here, I know that was a lot so
Wes Schaeffer: Well,
Wes Schaeffer: Yeah, I love it so
Wes Schaeffer: Yeah, the formula makes sense. And then, you know, having some having some stretch goal. Obviously, there's going to be industry norms and then you want to beat those industry norms.
Wes Schaeffer: And then, yeah, I mean, I love the good, better, best, I mean do you pay your people or incentivize them differently, like years ago I was in the mobile home business.
Wes Schaeffer: And you know, we had gross margin targets for single wide versus double wide and if we didn't hit those margins. We could discount to close the sale.
Wes Schaeffer: But our Commission took a big hit. Right. It wasn't a linear decrease. So, you know, and I don't remember the margin, but
Wes Schaeffer: Let's say I get a 20% commission if I'm at margin, but maybe I only get 50% commission if I if I don't hit that gross margin. So do you do anything like that or recommend anything like that.
Tommy Mello: Um, so my performance Bay is a little bit different than just straight commission, I think.
Tommy Mello: When we talk about straight Commission.
Tommy Mello: There can be some ethical things that come into play like the end of the monster guys trying to make their rent. I think also having a price book.
Tommy Mello: Is very, very important. You'd be surprised in the home service industry when you pull up to a house. How many people don't have a price book of it's a beemer versus maybe a lower-income neighborhood.
Tommy Mello: But yeah, we've got a lot of incentives. One of the cool things. This is what nobody understands; this is very interesting.
Tommy Mello: And I talked about this a lot. You've got to we always talk about the salespeople. But we never think about the other key performance indicators like your call booking rate, the cost to acquire a customer your conversion rate. So you got call center, a
Tommy Mello: Player, you got a call center be player, they're both in the same call center both have 20 opportunities. A DAY ONE OF THE 60%. One of them is at 90%
Tommy Mello: Now 90% is attainable. It's not easy, but it really depends on your marketing sources coming in. So 60 9020 calls a day average ticket. A $500 now they're working a lot to Oregon 300 days in a year.
Tommy Mello: But one of the 60% cost you almost a million dollars by not booking the phone call. So what I like to do with businesses.
Tommy Mello: That I consult with is the first thing I do is find out your average ticket and most of the time is too well.
Tommy Mello: Most of time, you're not able to even cover your costs. So you're going to have to short everywhere else pay your employees like crap driving vehicles, not have the latest technology.
Tommy Mello: So that's the biggest thing I see first and then I look at the conversion rate and a lot of time is too low.
Tommy Mello: And then I look at how much are you booking the call. I mean, let's talk about your call booking rate they look at their acquisition costs.
Tommy Mello: And typically, the problem that they don't have money for marketing and I believe at a bare minimum, you should be putting 10% I gotta below that. But when I go into a new market, it's higher it's more on 15 to 18% because you're trying to get known.
Tommy Mello: On non-conventional Mark are old school marketing, by the way, I'm starting to get into door-knocking a lot more as well right now. But yeah, I think that you should spend a lot of money when you go into a market.
Tommy Mello: But to get back to the thing I just went off on a tangent again because today's been a long day already but
Tommy Mello: We don't think about marketing and the fact of getting great employees that do high conversion rates that are
Tommy Mello: You can get to the same numbers you want by increasing your booking rates and conversion rate and not charging as much
Tommy Mello: And normally, that people that have those little things have to charge an arm and a leg and the word of mouth doesn't carry over.
Tommy Mello: And they get a bad reputation. So I think that's the main thing is I focus on conversion rate during the calls and face to face before I
Tommy Mello: Focus on average ticket. I'd rather have two tickets for 500 to one for 1001 for zero. They both average the same, but I want to take care as many customers as possible.
Wes Schaeffer: So you'd rather to have 501 at 1000
Tommy Mello: And wanted to zero. So, if I had to customers 1000 is zero or 505 hundred I rather add the two at 500
Tommy Mello: Because I know I'm putting a sticker that garage, word of mouth. How did I get that other one. Why did I get kicked out of the garage and probably that's going to end up as a one star on some type of review site.
Wes Schaeffer: So how scripted. Are these people, is it 95% scripted. Do you, you give them
Wes Schaeffer: Theory, you know, kind of a commander's intent and then let them, you know, stay as long as they stay within the boundaries. That's fine. You know how structured. Are you with
Tommy Mello: Home Services hard to get super structured. They asked three questions. Hopefully, there's a beautiful home. Have you lived here? Where's. What's the graduate, do it. What's the problem and that was the last time that Roger was looked at. But see I have manuals for everything.
Tommy Mello: I got creamed from
Tommy Mello: A guy named al levy and in the manual. It says
Tommy Mello: The deal is. We got to ask questions, you know, have a doctor. We got to sell like doctors. First of all, take the blood pressure check their height checked our weight.
Tommy Mello: You can't just poke around with needles. That's called malpractice and you lose your license. So we learn to sell like doctors to do the right things to do a needs analysis.
Tommy Mello: For our clients. So first thing they have to do is like you and trust you. And that's really, really important for me and
Tommy Mello: I truly believe in every time I'm in a meeting, I say, if there's anything we can do better as far as parts and as far as what we take care of
Tommy Mello: Then I want you guys to tell me, and we're going to carry those parts. There's nobody that sells better quality than us and I think we could charge for that.
Tommy Mello: But, but within reason I like I said is I don't, I don't want to be known as the highest price. I want to be known for the best quality.
Tommy Mello: And I think intrinsically you end up making more money. And I'm going to be the largest graduate company in the world. I'm not. Don't take this the wrong way. But I'm not going into California, New York or Illinois anytime soon. Due to the fact that there's more litigators in Southern California.
Tommy Mello: For workers than anywhere in the whole world.
Tommy Mello: Right, the way that we're expanding is by having an expected result by having manual standard operating procedures, there's a checklist on every single garage with pictures.
Tommy Mello: And there's accountability. There's discipline, there's consistency and, you know, we've got our core values here that we
Tommy Mello: We do. We're in 14 states. I'm going to go into 16 more next year.
Tommy Mello: And the plan is to get to over a billion in revenue in the next four years and a billion. Sounds like a lot, but really all I need is a little over 2000 technicians and 1400 installers.
Tommy Mello: So if I recruit 70 people a month with a little bit of loss. I get there and under four years pretty easily.
Wes Schaeffer: Do you get this all wrong. We're in a pandemic, man. You got to be hunkering down, you got to be good. You know what crawl under your desk and finish this interview from under there. You gotta be scared man.
Tommy Mello: I know that's what they say they say
Tommy Mello: They say, Gosh, you know, right now, go run and hide, I decided to double my marketing during the pandemic.
Tommy Mello: And we don't know what to do. We've got so many jobs. We've got, but you know what, it's more important is
Tommy Mello: I believe you got to take the people with you.
Tommy Mello: You know we do nice things. I love the feeling of doing great things for my internal customers, which are my employees. They've got graded health insurance. They've got great paid time off, they get more training.
Tommy Mello: Than anybody else I've ever heard of in the home service industry train, train, train and retain, retain, retain and
Tommy Mello: I love it. I'm passionate about it. I gotta say I'm I feel bad about people that are struggling during the pandemic and, you know, I don't know how they said, some people are not essential, but
Tommy Mello: They got it.
Tommy Mello: I've talked to private equity companies probably five a week just to stay in tune and home service companies there multiple of EBITDA has gone through the roof. During this pandemic.
Wes Schaeffer: Well, there's no way that you can be a greedy capitalists and take care of your people, something's going on I'm smelling a fishing something's wrong, man. There's no way
Wes Schaeffer: Look, I know you have 12 Lamborghinis. And you people on welfare admitted admitted right now. Right on.
Tommy Mello: On 1012 nice and tight with 120 7000 miles with a salvage title. Now, every one of my guys almost has a new brand new vehicle and I promised the company and everybody here, I would not own a new vehicle until everybody else had a new one. Can I afford one
Tommy Mello: I can afford one I could afford a lot of things. I'll tell you this, I still live in one of my apartments. I just bought a house, but it's still under Elise, I've got houses. I've got a nice house and Scott, so just bought a house in Paradise Valley, but
Tommy Mello: My apartment's 900 square feet. And that was where my technicians stay. There's 19 units there.
Tommy Mello: And every time they come in. We all have a beer. We go out there. We barbecue. I get to know these guys, I wanted to know who I am.
Tommy Mello: And on the know they're working for a leader that's going to stand behind them with whatever they have to do and what you've probably heard of the book eaters leaders eat last
Tommy Mello: But I'm a truly want to live that and continue to be a role model for all these people because I'm trying to train leaders. That's what I'm doing here is I'm building leaders.
Tommy Mello: Well, every single day. And the way you do that is they present to me they give me their ideas they come up with positive feedback, these, these manuals are living, breathing documents.
Tommy Mello: I have a guy that's waiting outside right now that wants to talk to me about he's got a lot of ideas. He's 23 year old dude.
Tommy Mello: And he just started, he went through his apprenticeship. He went through six weeks here in Phoenix to train
Tommy Mello: And he's going out there and he's just so successful yesterday night he called me. He said, Tommy. You got a quick minute. I said, I'm on the other line with my sister, but I will go ahead and he said
Tommy Mello: You know, there's this very elderly couple at late 80s and both cars are dead in the garage and their daughters.
Tommy Mello: Car was dead. So I stayed there and it took me an hour and a half. But I jumped every vehicle got them all running
Tommy Mello: And just let you know the ladies, a huge designer was a two and a half million dollar house should ask for a stack of cards and they're going to get us a lot of work.
Tommy Mello: And I said, Dude, I love that you're getting the work, but that just says volumes about who you are, who we are as a company
Tommy Mello: That you went ahead and did things like that and gone the extra mile, because that's what I want to be known for is taking care of people and going the extra mile, like that.
Wes Schaeffer: Yeah, that's cool.
Wes Schaeffer: How'd you get started.
Tommy Mello: I am so moved. Arizona from Michigan when I was 16 and going to school. I ended up getting a master's degree in business and I had a small landscaping company but
Tommy Mello: My buddy called me up and said hey dude I'm working at described your company and it's pretty cool. And you're the only guy I know that like knows anything about business and thinking about maybe starting my own so
Tommy Mello: Needless to say, we wrote on some calls. I really liked the business and one thing led to another, we started a business and oh seven.
Tommy Mello: And it's all here in the book, but we didn't know what the heck we were doing. Looking back, and we got ourselves in a dead and the 2010 he was great, great friend. I mean, he's my best friend. He lives in Montana. Now, but we can't I just decided
Tommy Mello: I wanted to go my separate way he wasn't loving the business. So I said, look, either you take on the debt and you keep the company or I'll take all the debt and I'll take the company and 2010 I took on the company debt and
Tommy Mello: Hired my first best hi. My mom and stepdad moved from Michigan to help me run it and the 2014 I hired my general manager, Adam, who is my right-hand man.
Tommy Mello: And then just slowly started to learn about CRM and about reading books, my CPA handed me these books, the ultimate sales machine. Then he handed me the "E-myth" and he had me. "The Richest Man in Babylon," and I got obsessed with reading.
Tommy Mello: And leaders are readers man and I read a lot. I've read a lot, a lot, a lot of books.
Wes Schaeffer: That's all right.
Wes Schaeffer: Now we're inside the about four years, though. Did you so this was this was you started oh seven. Obviously, you grind it through the downturn of a way to 2010 so
Wes Schaeffer: I get your kind of the would you say you were at the bottom and 2010 like hey, you and I, we gotta, we gotta go our separate ways.
Tommy Mello: Yeah, yeah, it was bad. I mean, like I said, is
Tommy Mello: I don't really learn how to make money, till a few years ago. I mean, we always I paid myself.
Tommy Mello: The difference. People don't understand this. I need to make a good salary a livable salary that a CEO should make and I make less than that of our size company. Now we're gonna paste almost 250 million, but
Tommy Mello: The fact is, you need to make that 15 to 20% after you're paid a lot of people think your business, what you pay yourself is the profit.
Tommy Mello: And that's not true. Unless you've got another person operating the company.
Tommy Mello: So some people say, I made 200 grand last year. I'm like, No, you pay yourself to. And again, the company made zero. Therefore, it's worth zero, you can't sell a business that doesn't make a margin. I started. We're, we're not a nonprofit and even nonprofits make money.
Wes Schaeffer: Yeah.
Wes Schaeffer: So,
Wes Schaeffer: So I'm just trying to stay in the timeline right so 2010 you I mean that that was basically the, the beginning of your two point O business that will you would say
Tommy Mello: That was so I was able to graduate specialists that changes to a garage or a service. And the book is
Tommy Mello: High went from $50,000 in debt to $30 million dollar plus business and seven years. I started writing the book in 2017 it came out in 2018. So this is a little bit. It's not outdated. It's just the stats are a couple years ago because that's when the book came out.
Wes Schaeffer: Right. How do you decide when and if to branch out right because you're in, you're in not only into another region, but
Wes Schaeffer: Will you ever become you know a lawn care business or add a maid service. I mean, because you're in somebody's home right you're they're finding things, you know, how do you know when it's like hey, just stay you know dance with who brung me versus expand into something else.
Tommy Mello: Well, there's two ways to expand, you could expand the graduate company and all these businesses or you could be like the HR tech companies do they do plumbing, electrical
Tommy Mello: And they start owning the customer, they want to own it vertically, all the way through the different processes. I don't horizontal growth because I like to be a master.
Tommy Mello: I am not a jack of all trades. I am dead focused. I'm a rifle shot I do residential Garage Door Repair and installation.
Tommy Mello: The majority of it by a long shot is retrofit. We don't do a lot of builder work because
Tommy Mello: They want to be net 280 days and they want to pay the cheapest and they want. If the plumber messes up, they're not paying the garage door guy. And they want to build houses on the backs of the labors and I'm just not a big fan of that and
Tommy Mello: You know, ultimately, if I just stay in garage doors, I showed you the path to get over a billion. And if I get to over a billion. And let's just say
Tommy Mello: For for shits and giggles I'm at 15% that's 150 million. I'll get over a 15 times. Multiple even if I want to take a bite out of the apple for just 60%
Tommy Mello: And buy back into 40 and there's nothing more fun though. This is so much fun. I'm going to
Tommy Mello: I'm traveling all the time I get to do whatever I wanted to read books I get a great podcast at home service expert.
Tommy Mello: I've got amazing people all around because I'm hired around all my weaknesses and you know when I go into a new market. I mean, we're like, like terrorists with marketing because
Tommy Mello: I hit certain KPIs and I add another layer. I mean, the stuff that we do. That's a bad word for what that is, but I mean people don't like us when we come in because
Tommy Mello: They're like, who the heck is this guy. And what's the he's disrupting the industry, but I want to make it a better industry. I'm probably speaking of the International door Association, and I want to explain to people.
Tommy Mello: To elevate the industry just like a track, did we need to charge the right prices to make profit. That way you can sell your company. My goal is to educate people on how to sell your business.
Tommy Mello: So that it could truly be a retirement income for them because most of them don't understand they're not worth any money without them, the business is worth nothing
Tommy Mello: And it's sad because these people think I've been around 30 years. What do you mean, I'm like, well, if I look at your past 12 months.
Tommy Mello: Shows here. You pay yourself 150 grand but the company hasn't made anything. So you've got a lot of old trucks. You've got a lot of inventory that's been on the shelf for a long time.
Tommy Mello: You don't say this to people you first you want to admire the fact they were able to when you're when you're running these negotiations, but
Tommy Mello: And you should see the financials, I get well you got to understand we have to shift to Bush and a lot of cash and my daughter is colleges on here. I'm okay. We can look at some mad backs, but
Tommy Mello: It's not what you think it is how you want me to work for 20 years in the current company to pay back. Yes, I'm going to come in and fix a lot of stuff, but you can't sell the business on what I'm going to fix.
Tommy Mello: You know, I mean,
Tommy Mello: So we want to give me future value of what it's worth. I'm like, oh, that's not how it works.
Wes Schaeffer: So is that primarily how you expand to a region is by an existing business.
Tommy Mello: No, no, I bought several businesses and we're looking into acquire more. Let me tell you the coolest thing in the world. I grow organically, but
Tommy Mello: If I buy a business. Let's just say the business does $2 million and it's doing 10% so that's 200,000
Tommy Mello: Okay, I'm going to buy that business for about four times. Multiple okay so 800,000 and I probably going to do some type of an earn out that are not to put all the cash up front, but the day I buy it.
Tommy Mello: I'm a platform company I'm worth 12 minutes so I got I'm worth three times that 800 so I'm worth two and a half 2.4 million for what I just spent 100,000 on
Tommy Mello: And it's it's unfathomable people say, wait a minute, just because you bought that company said
Tommy Mello: Well, no, I'm putting in my checklist my standard operating procedures, my training program. My LM s learning management system we're putting in our CRM we're putting in our checks and balances inspecting what we expect. But it's making money out of thin air, and I'm obsessed with this.
Tommy Mello: Is just this. It's crazy.
Tommy Mello: It's just, it doesn't even seem legal
But it is
Wes Schaeffer: So when you were getting started.
Wes Schaeffer: Did you ever do any hands on or was always you and your buddy, we're managers owners. And did you have like a small team that you were managing from the beginning.
Tommy Mello: Me and him did all the work I did all the marketing. I ran all the calls I showed up to my master's program greasy.
Tommy Mello: I go and they all look at me and they smell me like Greece and I'd be like, look.
Tommy Mello: I'm the only guy here. I was building links building citation sites, making videos editing videos when I was in the program and
Tommy Mello: Ya know I I did everything and I did it for a long time. It's, it's not uncommon for me to get, get out there with the trainees and show them in our training center. We've got 22 training base.
Tommy Mello: So Rogers with different different things. Low headroom different open or stuff like that and I still like to get my hands dirty, it's just now. I try to work on the business, you know, work on instead of in it.
Wes Schaeffer: So,
Wes Schaeffer: You're, you said what your, your mom and stepdad came down
Tommy Mello: So they moved out here in 2010 and my mom had walked out on me in
Tommy Mello: 2011. She goes, I can't handle that she was answering the phones.
Tommy Mello: And I said, Mom,
Tommy Mello: You gotta go back in. We're missing costs and I was out there, run my step dad's out here helping with installs. He was doing payroll, we were doing inventory
Tommy Mello: And you know I had probably five or six employees. Then when Adam started, we were doing 6 million a year. I didn't get out of the film till
Tommy Mello: 2014 15. I mean, completely. I was doing it partially from 2013 to 15 but man, there was a time where I was the business, whether it was the phone calls the inventory, the marketing and it's so fun to hire amazing people my CFO.
Tommy Mello: He came from a 420 $5 million company that he worked with in North Dakota, North Dakota and he worked there from 22 million all the way up to
Tommy Mello: Over 420 million. So he had been where I want to go and when you hire people like that they come in and they know how to get there fast.
Tommy Mello: And he just gave me the reports he gave me the KPIs. And he said, hey, in this market sis happening. Hey, this rent is too much here. Have you ever thought about this. Let's get a better rate on our credit card fees. I mean,
Tommy Mello: smart dude. And he taught me a lot. And so this new notion of just hiring people that are
Tommy Mello: That have been to a billion will get me there are 10 times faster. I think that's what people, they say, Man, that must be expensive to hire those people
Tommy Mello: Most people are on performance pay and when you're on performance pay when they when I win, and vice versa. So I don't have to have this guy sit here on his yearly review and say I'm tenured in here for a raise.
Tommy Mello: It's not what I believe in. I'm all about performance and when, when you and I can win and we can celebrate together.
Wes Schaeffer: So how do you find those initial people to buy in to the dream. Right. Yeah. Got a lot of listeners that or maybe where you were in 2011 1213 grinding it out. Maybe some family help
Wes Schaeffer: Four or five people kind of getting it done, but like, how, how did you get, you know that that home run hitter to join.
Wes Schaeffer: A small company where everybody's walking out the door screaming can handle this.
Tommy Mello: Now you know what the dream needs to become a vision and the vision needs to become a plan.
Tommy Mello: So I've literally had to take it all back. It got organized enough for a guy like that to want to come in. But first of all,
Tommy Mello: You needed I needed a plan with an organizational chart and a depth chart and I needed to define what each role is going to be and build a manual because they needed to teach them how to play the game.
Tommy Mello: And the biggest thing you see is small business is they're not Oregon. So get organized that hired a personal assistant who is absolutely phenomenally amazing with time management organization.
Tommy Mello: 20 times what I'll ever be. And I hired around my weaknesses and I made a few key hires to let me do what I do best and then when the manuals. You see in
Tommy Mello: Sixth grade, seventh, eighth grade. I had a gym teacher, Mr dollar earner and every Friday. He used to teach us, we didn't, we didn't do anything. And we didn't play any
Tommy Mello: Any sports but he teaches on pieces of paper. He had a written out how to play basketball. What a field goal. What a three three point what a three pointer was we learned how to play football. We learned that
Tommy Mello: Are the tackle the guard in the center. We learned all these things we learned how to play the game and the KPIs the CRM is the scoreboard.
Tommy Mello: And if you learn how to play and teach people how to play and you got a good scoreboard that's accurate with data accuracy.
Tommy Mello: It's fun, and they like to come here. I mean, I don't know the majority, I get 1500 dollars to employees to recruit. I have a guy that made $15,000 this past quarter.
Tommy Mello: 15 grand and I said, Guys, if you can recruit one guy, a quarter that's six grand. I also have tracking numbers I have 3900 call tracking numbers. Every one of my employees got their own tracking phone number.
Tommy Mello: And when they get a call that's booked through their number they get a marketing fee attached to that, so they can make a lot of money.
Tommy Mello: A teaching them how to be many marketers, how to do social media, how to go on next door, how to ask for reviews and make sure we deliver five out of five service and if you
Tommy Mello: Please share this with the way I get reviews as people are more than likely to get reviews for individuals, they don't want to leave reviews for companies.
Tommy Mello: So I teach my guys how to ask the right questions and I they teach me a lot. I'll say this for everything I've taught them. They taught me 10 times more back and I've always just asked the questions.
Tommy Mello: Yeah.
Wes Schaeffer: Does
Wes Schaeffer: The installers, you know, traditionally, you get a hands on person. They don't want anything to do with sales. Right. Oh, I'm not a salesperson. Oh, you know, it's dirt. I feel slimy. I'm pushy or manipulative Baba, blah. I mean, how do you get them.
Wes Schaeffer: Over that to, you know, embrace that whole selling methodology.
Tommy Mello: Well, you got to recruit for that. So my recruiting process. Everything's in the process. So to get the right people. I do a lot of things. So first they need to do an interview.
Tommy Mello: They need to do one right now are in Spark player. It's kind of like a zoom call and they do. It's a face to face, but I've got pre recorded questions and I say,
Tommy Mello: Do me a favor and tell me the last game you played and How competitive are you did. You mind if you win or loss and you get this feedback and they take the predictive index is the personality assessment.
Tommy Mello: Then they got to go through and take a cognitive tests, then they gotta go through a drug test background.
Tommy Mello: Check and a driving record check, then they got to do another ride along with the ride along form I make a go of my trainers and they do a ride along and each market.
Tommy Mello: As a whole form they fill out that they smoke cigarettes. They show up on time. Are they asking the questions were they on their phone where they have social media.
Tommy Mello: What what they smell like that. They look you know they have facial tattoos and then they going to do another interview with the market manager then I gotta sign off on that.
Tommy Mello: And that's only just they have three weeks to make it through their apprenticeship at the short apprenticeship.
Tommy Mello: But in that time. My goal is to weed them out. I want it like to be like hell week I want them. You know, I don't want it. I never wish for them not to succeed, but I don't. I'm gonna make it really really hard. So just this past week this past weekend. Today's Monday.
Tommy Mello: Saturday, Sunday, I had over 500 applicants go all the way through the spark higher now.
Tommy Mello: You got to have a huge pool and I'm telling you my marketing is all about getting the right people. Now I focus more on getting the right people.
Tommy Mello: If I'm at a restaurant. I had a car to a bus with he's smiling filling up my water if I'm getting a haircut I reach out to that person. I say, Listen, if you're sick of this job. I got a career for you.
Tommy Mello: And I teach all my people to do this because they can make good money doing it, but the people is everything. So what you asked was, you know,
Tommy Mello: How do you teach these people sales well
Tommy Mello: The average age now is 23 years old and my technicians. So they're millennials which everybody says all millennials. They don't like to work. I'm like, no, they just want to be cared for. They want to know that they're important. They want to have a say in the outcome and
Tommy Mello: I think I'm right there 1983 the borderline so I know how they think. And I'm not quite as you know on social media as much as them.
Tommy Mello: I've actually deleted. A lot of my social media. I'm still still on Facebook, but
Tommy Mello: You know, the main thing is find out what they want find out their personal needs and match those up to their work needs. And then you say,
Tommy Mello: You've heard a word from what's in it for me. But what's in it for them. If you can live your life and understand what's in it for them. Why would they want to do that. And when you learn to motivate people through that one thought
Tommy Mello: It up, it starts to take on its own, a life of its own. It's nuts. It's fun.
Tommy Mello: And that's what I say. I got all this passion because I just love what I do. I love working with these people. And the guys and gals that work here are just, they're just they're a second family and they're just amazing people.
Wes Schaeffer: Yes, but Tommy. I went to a fine.
Wes Schaeffer: School institution of higher learning. I can't get my hands dirty. So
Wes Schaeffer: How might I go about making good money without skipping down in the weeds with grease into my nails.
Wes Schaeffer: Tell me you have an answer.
Tommy Mello: Hey, listen, if you could bus tables if you did cut hair if you could work. A Discount Tire. You're the perfect fit for me. I don't need to make these people
Tommy Mello: First of all, it's not too dirty of a job. You know, we buy all the tools from my guys now we buy all of it is 20 $400 because I decided I need these guys to be efficient before they used to show up with a glue gun and a
Tommy Mello: Crescent wrench.
Tommy Mello: And I'm like, no, no.
Tommy Mello: We need
Tommy Mello: We need really good tools. So it's really important. They come in here to train and I'm just a huge fan of continuing to train, train, train and design systems and standard operating procedures.
Tommy Mello: Everything needs to be systematized and have a checks and balance system.
Tommy Mello: And I think about it. I have a whiteboard and every room in my kitchen. I have a whiteboard and I'm constantly whiteboarding and coming up with ways to make sure that we're doing the best job possible for our clients.
Tommy Mello: And therefore we're spreading like wildfire because they know they're taking care of and the one thing that's more important to me than anything.
Tommy Mello: Is we run our warranty calls. First we put those ahead of everything we need to be there for the customers that need us.
Tommy Mello: And they dependent on us. They chose us and we're going to be around for a long time. And we're going to have amazing employees. We're going to make every experience matter.
Tommy Mello: I mean, except for 1% of customers because no matter what their math. You can give them
Tommy Mello: You give them a full refund and and show up with flowers which I've done to a customer and they're just 1% I feel like of the population is just
Tommy Mello: They're just not normal. They're just they don't understand what it's like they have no comprehension of a business. They think the world revolves around them.
Tommy Mello: And their victims. Yeah. And it's kind of pathetic, frankly, you know, reading this book about the millionaire mindset, something like that. And he said,
Tommy Mello: You know, there's a lot of people out there that are victimized and they do what I call my book creative justification.
Tommy Mello: And they justify why I'm around money and people think money is a bad thing to say. Money is not that important money you know money is not. And I'm like, Okay, then go pay your mortgage with love.
Tommy Mello: And, you know, go. Uh, it's just crazy.
Tommy Mello: You know why people say money doesn't matter because they don't have any
Tommy Mello: And you know, I want to do what I want with what I want with who I want. I mean, that's the ultimate goal. I always tell the stories and check presenter came
Tommy Mello: And I was in Hawaii. We set a record when I was out of town. This is about two years ago and I checked presenter came and I stuck my card in there and I hand it off to the bill came back and I sent a check. And I said,
Wes Schaeffer: What's a check presenter, we
Tommy Mello: You know, the bill comes in to check presented the
Wes Schaeffer: Blow, and I get dinner or something.
Tommy Mello: Yeah, at a dinner so
Tommy Mello: Yeah, I'm sorry, the bill came from dinner, and it was an expensive mill, but
Tommy Mello: There's something to be said about just not having to look, you know, this is me in the past when I when I was, you know, frankly didn't have a lot of money and I don't have a ton. I'm just saying, you know, you look at the menu and you're like huh
Tommy Mello: Chicken sounds nice.
Tommy Mello: Or the salad inside but market price that was like a foreign word for me. I never asked what the market price.
Wes Schaeffer: On a Coke is 299 I'm an order water you're older and water well
Tommy Mello: Yeah, no, I don't want to Voss I'll just take out the water
Wes Schaeffer: Oh man, you got me off track. I had a good question and then
Wes Schaeffer: Go nice to come on man.
Wes Schaeffer: Oh, I don't even know. It's all good. That's awesome, really.
Wes Schaeffer: I love the whole process. You know, you talk about tools. And I remember my dad always saying because he he worked commercial installation. His whole life and
Wes Schaeffer: He was formed a big projects and then he did insulation and they will do the scaffolding as well. You'd have 600 people on a job site, you know, big shutdowns or retrofits and, you know, chemical plants.
Wes Schaeffer: And guys would show he's always recruiting right guy to show up. They want like journeymen wages. He's like, go get your tools and like what, like, go get your to show me your tools like say they show up with like some rusted stuff wrapped up in a newspaper. He's like, yeah, you're an apprentice.
Wes Schaeffer: Yeah, and so it's it's awesome. You get them the right stuff because we see all the time, people struggle.
Wes Schaeffer: Massey at working with businesses, you know, we're working with digital tools right but they're struggling with just you talking about systems and processes and checklists and and and all that and checks and balances. It's
Wes Schaeffer: I know somebody. Listen to this. The, the creative justification that the victims or they're going to say, you know, yeah. You want me to have this beautiful breast stroke.
Wes Schaeffer: Form. It's I brother. I'm just, I'm here just happy to Doggy paddle and get my head above water so you know where, where do you get that extra breath right or where do you find that sandbar to stand on for a second, just to like, Oh, okay, yeah sure is only 100 yards over there, you know,
Tommy Mello: You know the biggest thing is this
Tommy Mello: I'll tell you what the biggest thing is for people is you don't needs versus wants you don't need to go out to eat. You don't need a beautiful new car, you don't need to live in a big house. You don't need what your neighbors have
Tommy Mello: What those are wants. And when you learn to save money. Einstein said at the best compound interest. The fact that I still drive an old truck. The fact that level one of my apartments.
Tommy Mello: It doesn't make me cool doesn't make I'm not this hot shot. The fact is I let them money work for me. I buy assets that appreciate not depreciate.
Tommy Mello: And the biggest thing is sacrifice as you're gonna have to sacrifice today, you're going to have to lose relations, you're gonna have to work some weekend. You can have to miss the football game.
Tommy Mello: That's the biggest difference is, I've worked a lot. But the problem with me as I enjoy working. I enjoy it more than watching football.
Tommy Mello: I'd rather but
Tommy Mello: It's not work. To me, it's because I do what I love. And that's the difference is I enjoy myself every single day. I enjoyed this. I enjoy podcasting. I enjoy sharing and
Tommy Mello: You know a lot of people they don't have what it takes. They don't have the discipline, they don't, they're not consistent. They're not accountable.
Tommy Mello: And those are the biggest factors is there's discipline. There's a good book called willpower and it kind of explains and
Tommy Mello: When these kids are really, really young. They gave him a marshmallow and they said if we wait about 10 minutes we'll come back and give you another marshmallow. Well, a lot of the kids ate the marshmallow. They didn't wait
Tommy Mello: Those same kids didn't go as far in life. They didn't have the same relationship. They had a lot more divorces
Tommy Mello: They died early they had bad habits. They because they didn't have the willpower and willpower is a strong thing. Yep.
Wes Schaeffer: Yeah. You know, it's funny, talking about, like, I've got a I got a group of friends and
Wes Schaeffer: You know, for watching sports right now send a message out and like I can't sit on a Saturday, even though I like football, I can't sit around all day watch football.
Wes Schaeffer: It's like if there's one like big game that I care about. I'll watch that one game.
Wes Schaeffer: You know, and I may have the TV on in the background, but I got my laptop. I'm working on something I like, I'm like you. I like tweaking things working on things I'll put it on mute. I'll read off. I love look a big player i rewind and watch. Okay, go back to what I'm doing. I
Wes Schaeffer: Don't want to sit and just drink all day long, all, all weekend long but that's like normal for a lot of people
Tommy Mello: It's like, yeah, you're right in people compare themselves. I'll tell you what. You take your five closest people in your life do you spend the most time with add up their
Tommy Mello: yearly salary, you're going to be within 10% of that most of the time, the way you get out of that habit. Change your friends, change your habits, read more, because the more books you read,
Tommy Mello: If you're spending time with Steve Jobs every book that he ever wrote. And every cloete every day, you'll see yourself. Accelerating to a new level. And I think the people they always compare themselves to their neighbors or their friends well find new friends.
Tommy Mello: And you want to be a millionaire hang out with millionaires. If you want to have a great relationship hang out with people that are still married and
Tommy Mello: It's just crazy how people's minds and it's all about this justification and victim victimization and I'm just
Tommy Mello: It, it's always they always point the finger. The first thing is saying it's me. I'm accountable for everything that happens in this business if someone goes and gets a car accident right now.
Tommy Mello: Guess what. It's on me. I own that I'm the one that's on the one that signs the checks. I'm the one that the aim number
Tommy Mello: There with the government. And you know what, here's the thing.
Tommy Mello: I most businesses fail right most businesses fail. There's no reason why. If you succeed, you can't do greatest the American dream. It's capitalism at its best.
Tommy Mello: And I'm sorry but you know these taxes that certain people want to give is if you don't incentivize me to continue to grow. I probably going to leave.
Tommy Mello: And this is what's going on all around this country with doctors and everything else and they say, well, we've got
Tommy Mello: The thing that people don't understand, though, is the rich number, you know, there's this law that got passed in the 70s. It's called the Augusta law. You ever heard of the master's program and the desktop.
Wes Schaeffer: Yeah I leveraged the Augusta law.
Tommy Mello: I can rent out my house to myself.
Wes Schaeffer: Yep.
Tommy Mello: For two weeks at the same rate as a little paper resort near there. So these are just things that you learn. I just did a cost segregation study of for my buildings.
Tommy Mello: Look, look, I'm sorry that the President and pay a lot of taxes, but he used every law out there and it was so I'm just
Wes Schaeffer: I know that's controversial Biden's, the one that passed the last trump just follow them.
Tommy Mello: Right 47 years
Wes Schaeffer: Alright, last question. I'm what I was going to ask you, tell me, like the 1% are always going to be mad. What do you do with the trolls and the upset ones. You know, I've seen those funny pictures like a restaurant, you know, it's like
Wes Schaeffer: Hey, come in and and have you know what Tommy from Scottsdale said was the worst apple pies ever had, you know, they'll kind of mock that that review and play it up.
Wes Schaeffer: You know, do you do you try to defend yourself or is it, like, just a quick hey we tried. Sorry. Couldn't help you and just let them go. I mean,
Wes Schaeffer: What do you do with those with the trolls.
Tommy Mello: I got a whole team dedicated near that and we call them.
Tommy Mello: You know, everybody would say anybody leaves a bad reviews and troll. Most business owners, but I understand we do make a lot of mistakes, there are problems that happen.
Tommy Mello: And, you know, some people think we're going to charge the same as they can buy from Amazon from the Chinese freakin factory.
Tommy Mello: But usually what we do is we listened to them. We let them vent for quite a while.
Tommy Mello: And then we offer a solution. Now the solution could be. They don't want to pay the $20 fee. I've had to pay for people's carpets to get clean because there's lube that
Tommy Mello: Apparently, got on the ground. They walked in on their carpet, but you know I've done everything, you name it, but I just try to offer some type of solution.
Tommy Mello: And there's some type of a moral high ground that a lot of these people. My employees take and say we can't do this. And I say, listen.
Tommy Mello: A one star on Yelp, but once they're on Google cost us a lot of money. And it's my money that we're giving back. So I tried to come up with a fair offer a fair solution for them. I have a price beat guaranteed from any competitor of it's apples to apples, but I like to sell oranges.
Tommy Mello: So that's what I try to do I try to get in front of it. Bite it right away. I try to find out.
Tommy Mello: And I've got a quality assurance team now that jumps on most phone calls at the end of it to make sure that the customer is happy to try to get in front of it before it gets
Tommy Mello: Out there all over the internet. The internet's a crazy thing and you know they used to say they tell the unhappy customer will tell it to other people.
Tommy Mello: To some type of means, but now I think it's in the hundreds because of social media and just a review site consumers have a lot of power.
Tommy Mello: Before it just used to be the double truck or the Yellow Book and that was it, and consumers had no power, and now it's like the it's the opposite. Consumers have more power than ever. Yeah.
Wes Schaeffer: So you've got a URL for our listeners, right, you've got
Wes Schaeffer: To get the free copy of your home service millionaire book right
Tommy Mello: Yeah, they pay the shipping and handling, you know, have that is it's it's basically barely covers the cost of a book. Right.
Tommy Mello: It doesn't. It doesn't even cover the shipping, plus the cost, but it's a home service millionaire.com forward slash special
Wes Schaeffer: Okay.
Wes Schaeffer: So go to that. And so I'm linking to that I'm linking to your podcast.
Wes Schaeffer: As well. I mean, and you know, everybody. Listen, even if you're not in the home service business. I'm not in the home services business and I freakin set here to probably three pages of notes already. Plus, I'm gonna get it transcribed so
Wes Schaeffer: You know, there's a lot in here, the podcasts. I've got your link to Twitter from here as well. So, you know, subscribe to the home service expert podcast. Get the book and
Wes Schaeffer: Learn from this guy, man. It's been cool, thanks for
Wes Schaeffer: Thanks for, you know, coming out of your shell, a little bit. I could tell, it's kind of hard for you to do, but I appreciate you making that
Tommy Mello: Hey, it wasn't easy.
Tommy Mello: You just a good host. So maybe
Wes Schaeffer: Are you saying I bring the best out in you.
Tommy Mello: Really
Wes Schaeffer: Cool, man. ALL RIGHT, TOMMY, I live in Scottsdale, man. Thanks for coming on the show. Hey,
Tommy Mello: Let's get together, appreciate you.
Wes Schaeffer: Thank you, ma'am, great day.