In this episode of The Huge Insider Podcast, host Sid Graef spotlights the importance of maximizing revenue from existing customers, featuring insights from Michael Kaplan, an entrepreneur who grew a carpet cleaning company to strong eight-figure annual revenue before exiting. Kaplan stresses the value of upselling or cross-selling on-site, gamifying the sales process for technicians, and offering generous incentives to motivate teams. He explains that once you have already incurred the costs of acquiring a customer and dispatching your crew, any additional services sold can dramatically increase overall profitability. From creating fun, competitive spiffs to giving technicians scripts and training for door-knocking, Kaplan reveals how to turn “one job” visits into bigger revenue opportunities. Sid closes by urging listeners to download the free action guide and call in with both success stories and lessons learned from failures.

SHOW NOTES

Guest: Michael Kaplan

Key Topics & Takeaways

Resources & Links

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TRANSCRIPT

Sid Graef (Host):

So here’s the deal. It’s not your typical podcast. It’s not an interview show. It’s not an expert-driven show where somebody just tells you all these smart things. This is the deal: we have gathered a bunch of business owners and gotten them to share their top insights. These are seven-figure annual revenue, eight-figure annual revenue, and even bigger businesses. These are people that are running companies from 2 million to 40 million dollars a year in the home service industries, and we’re bringing you their best insights. It’s all focused on one single topic each month.

February—it’s all about prepping your marketing strategy and launching your business this year to its maximum capacity, revenue, and profits. These are real operators. These are people that are quietly building empires behind the scenes. They’re not on social media looking for attention. They’re in the trenches, making things happen every single day. So this is about running a better business.

Okay, I already mentioned this: since it’s February, this month we’re diving into marketing strategies you can implement right now to set yourself up for a massive year. You heard from Michael Dahlke on expanding your capacity for the spring season. Last week, you heard from Jared Skinner going over networking strategies that you can use at low or no cost to build your business this year. And today, you’re going to hear from my friend Michael Kaplan.

Michael Kaplan doesn’t talk much about his background in this share—he just gives actionable insight. But he’s a very astute businessman. He owns or is invested in a couple dozen businesses. He cut his chops with a carpet cleaning company that started with less than a half-million in revenue, and they grew it over several years until he sold and exited that company as a strong eight-figure business. So he knows what he’s talking about. He’s been in the trenches. He’s successfully built a profitable large enterprise—one most of us would crave to have. And he exited. So now he’s happy to share insights on what he calls “taking the second bite of the apple.” He’s going to teach you about how to maximize revenue and profits for each customer. I want you to meet my friend, Michael Kaplan.

Michael Kaplan (Guest):

My background is carpet cleaning—or, affectionately known as rug-sucking—and we were accustomed to going into a home and building a ticket through upsells. A lot of people in the huge world are focused on pressure washing, window cleaning, that sort of thing. A lot of the models tend to focus on having a sales guy go out, then having a worker, a team, a field team guy, go out and take care of the work. My pitch to you is: do not miss that second opportunity—that interface when you’ve got the guys out there sweating, doing the work. Have them be sales guys. Everyone on your team should always be selling.

Sales can be a dirty word. A lot of people are hesitant to creep out a customer, or they’re shy about it, but that’s because people define sales as extracting something that’s not wanted from the situation—pushing something on a customer that they don’t need. That’s not what I’m talking about. I define sales as the transfer of benefits and enthusiasm, and there’s no better way to transfer benefits and enthusiasm than when you’re on site working. You can do show-and-tell. You can do a demo. You can give an explanation. You can get excited about something that you know will transfer massive value at a price below that value proposition. If value exceeds price, that’s our happy place.

So what I’m talking about is: you’re on site cleaning windows, and you have a pressure washer in the truck, but no pressure washing is scheduled. Think about the math if you add pressure washing, say, a fence or a driveway or the front face of the house—whatever it looks like. You’re going to provide that service, and what are your costs? You don’t have to acquire the customer—you’re already there. You don’t have to drive to the house—you’re already there. You’re going to use a minimal amount of product, and you’ve got to pay for your labor. So it’s a stripped-down version of COGS, and if your COGS is normally 40, whatever the number is, you’ll see that what’s left in expense is pretty nominal. The rest goes straight toward paying your bills or to the bottom line. So you’ve got a massive opportunity to be really, really profitable, which is fun thing number one.

Fun thing number two: you’ve got an opportunity to play games with incentives and probably pay more than you think is reasonable or logical to your tech—but get them excited about selling, and get them excited about their job because they’re going to make more money. Your opportunity cost—what’s your next best option? If you don’t crazy-incentivize them to sell, you get nothing because they didn’t sell that pressure washing. So think about this: you come up with a sales strategy to double the commission. Let’s get crazy. You pay your guys 25%. Let’s make it 50%. Let’s say your COGS was fully loaded—which it won’t be because you’re not going to have all of the associated expenses—but let’s say it was fully loaded at 45% before adding 25%. You add that 25%, and you end up well in the profit. You’ve got great money coming in, and your tech’s getting twice the wage. How is that not a win? Because the alternative, again, is you get zero.

So you can play with commission. Imagine if you said, “Hey, I’m going to give you a commission to door-knock—not just door-hang—and do five rounds, but door-knock to try to add a job because our schedule sucks. We’ve got wide-open lanes, and you’ll be home by one o’clock, which isn’t good for the truck. We don’t want it sleeping. We don’t want you coming home early. Go door-knock, and why are you going to do it? Because I’m going to pay you 50% of whatever you bring in, or 60%. You’re already there. You don’t have to pay for radio, or postcards, or the phone operator to schedule that appointment. What if you overpay? The tech’s going to like it. You’ve got to give them scripts and coaching and training, but if they become effective, they’re going to like doing work for twice the rate, and you’re going to like that the truck’s not coming home to sleep—it’s making 30, maybe 40 percent of something. It’s taking a second bite of that apple, that opportunity where you’re already out there, you’ve got your guys out there, and you’ve already incurred most of the expense. So why not take advantage of it?

Alright, so if you’re convinced that you are missing an opportunity by not selling when you’re on site—either upselling or door-knocking or doing something while your guy is at a location—or if you’re already convinced of that, the second key piece of this pie is to make the magic happen with contesting, gamifying, and creating competition for your guys to excel. Some of your team members will naturally take to scripting; they’ll be great sales guys. They’ll transfer benefits and enthusiasm and come back with an extra 500 or 1,000 dollars per day. That’s well and good, but what about the 90% of your team that doesn’t take to it naturally? You’ve got to create a context and circumstances where they can excel, and I think that’s through gamification and contesting.

What I’ve had great success with—and what I encourage you to work on—is figuring out how you can make a public spectacle out of whatever your goals are for upselling and create games, create spiffs, and make them really public. Spiffs don’t work nearly as well if they’re secret, if they’re hidden, if they’re private goals. I think you create accountability by sharing those goals and getting everybody enthusiastic about it. You are the Chief Repeating Officer. Your job is to have the megaphone and the wacky waving inflatable arm tube man out there, getting excited about what you’re asking the guys to do. Give them incentive for doing whatever it is you’re asking. If you hit X, you get a prize. If you’re the top sales guy, you get to throw a dart—and you get 10 times whatever dollar number you land on—or shoot a free throw and get a hundred bucks. Create spectacle. Get them excited. Chief Repeating Officer, very public. Track the snot out of it—get whiteboards all over and highlight who’s winning, who’s not thriving—and be very public about it.

Obviously, you’re going to coach up the guys who aren’t doing great; you’re going to roleplay in the morning and give everyone an opportunity to practice. If they can do it in the office, they can do it in the field. But you’ve got to create this environment where you can lift everyone up, create a shared expectation and competition, and maybe a Voxer channel—whatever it is to keep people bantering, talking, and competing. You will find that when you create a game and a contest, people will do the work for you. They’ll have more fun competing at work than they do doing most things in their life. They’re going to want to win, and you’re going to see that rising tide raises all ships. Even your guys who are timid or hated selling—when you reprogram them and teach them that selling is just getting other people excited about the benefits, then you give them the tools to communicate and the incentive and peer pressure, you’re going to see magic.

This is my rant about in-home or on-site upsells. Take it or leave it, but I’ve had great success, and I’ve seen countless companies implement similar programs. They turn a fixed job with very clear costs and a low ceiling into something with a much higher ceiling once those costs are already fixed—except for labor. Who doesn’t want to pay their guys more, and who doesn’t want to bring in some extra cash? That’s my pitch for you.

Sid Graef (Host):

Alright, here’s something I learned: million-dollar ideas are worthless, but million-dollar execution—well, I guess you could say it’s worth a million dollars. The point of this entire podcast is to give you wisdom, insights, tactics, and strategies you can actually use. But the only benefit you get is by taking action and doing the thing.

That’s why every week—like this week—we have either a one- to five-page action guide based on the episode that you can download. The link is in the show notes, or you can just go to www.thehugeinsider.com. Download your action guide and go on and do the thing. This is what I really love to see most about the show. We have these experts and experienced business builders share some of their best insights on the topic. You, as a listener, take that information, apply it to your business, and then tell us how it worked out.

We’ve set up a special phone number for you to call in and let us know your successes. That number is 804-600-HUGE—that’s 804-600-4843. You can call and leave us a message. Here are the things we’d love to hear from you:

Here’s the thing: I’m going to be real authentic—I lost my place in my notes, so I’m finding my spot. Yes: The Huge Convention and The Huge Insider Podcast. These are two ways we meet our mission. Our mission is simple: to help our blue-collar brothers and sisters build a better business—a business that brings you money freedom and time freedom. That’s it. We are fueled by freedom, because isn’t that the goal? Isn’t that the reason you started a business? You wanted to be free. You didn’t want to have a boss. You didn’t want someone telling you what to do. You didn’t want to be limited by someone else’s opinion of your worth. You wanted to build your own thing so you could have time freedom, money freedom. That’s our mission: to help you achieve that.

There are three specific ways we do that. One is through our free newsletter and podcast—the one you’re listening to now. Two is through The Huge Convention itself—our annual event, always in August. This year, it’s August 20th through 22nd in Nashville, Tennessee. It’s the place where breakthroughs happen. It’s the place for world-class business education for home services. For the best networking with other business owners at different levels, so you can learn from them and help each other, and we also have the biggest trade show in the home service industry. It’s pretty darn cool. I hope we see you there. Tickets are insanely inexpensive, and it’s always a ton of fun and learning. You’ll come away with strategies, tactics, and actionable ways to improve your business—that’s the point.

The third way we help achieve that mission is the Huge Mastermind. This is for more mature, bigger businesses. We have a mastermind that meets quarterly, currently in Nashville, Tennessee. It’s for business owners whose revenue has surpassed the million-dollar mark. If you want to get to ten, if you want to 10x your business but do it without adding more chaos, it’s all about leadership, operating systems, and bigger-picture thinking. If you’re rapidly approaching a million dollars, if you’re already there and looking to grow and streamline—and you want to stop playing whack-a-mole and actually have a business that works for you rather than you working for your business—the Huge Mastermind is something you definitely need to check out. You can find all of this—tickets, the Huge Mastermind, everything—at thehugeconvention.com. Just scroll down; you will find it.

I really appreciate you taking the time to listen. Call us and leave a message, give us your feedback, and I’m looking forward to meeting you in person at The Huge Convention. That’s it for this week. But here’s the deal: don’t just listen—take action. I’m Sid Graef, and this is the Huge Insider Podcast. I’ll see you next week.