92% of His Leads Come From One Faucet

0:00Uh my name is Joe Stress uh with Squeaky Clean and Dry. We do cleaning and restoration. Um mainly residential at the moment, which is going to be part of my question. Um we currently do 1.9 million revenue across two locations. Um want to be at a $100 million exit. No timeline on that. As long as it takes to get there. Um our current constraint, I believe, is a lead gen and ideal avatar problem. So currently a majority of our leads come from Google LSA. Um about 92% that data is not accurate. We know we need to get a new CRM. um so far as data but um with that being said it comes down to if we need a second acquisition channel and who to market to. Currently LTGP to CAC is lower on the residential side than commercial. We don't have a ton of data on commercial but CAC is the same. LTV is obviously you know much higher um recurring revenue with property managers and just bigger restoration jobs with mold water and fire

0:52>> and they're all and those are coming through LSA as well the commercial jobs. >> Correct. Are you running a different advertising campaign for those or they're just coming through? >> We can't really control who comes through that funnel because we just rank at the top if whether a homeowner or a property manager searches us or our services on Google. >> Okay. So, what stops you from doing more ads? >> So, currently we are essentially anytime uh LSA gets close to max budget, we're just increasing it, which is increasing leads, but not at the rate that's actually going to move the needle the way we want it.

1:21>> Okay. For your local market. Now, what how how many customers can you take before location caps? >> It's a great question. Like per week, cuz we do. So, cleaning and restoration. So, I know what you're going to say. Focus. Um, we actually bought an existing totally normal business, right? Chocolate and yoga, right? They go together, right? >> So, about a third of our business comes from cleaning. We do um between two roots uh three to four appointments on each route per day. Um each day is about $1,200 per per route. Um restoration we can handle about a job or two a day. Um each of those jobs basically caps at $3,500.

2:00>> And this is just like flood flooding type stuff restoration. >> Yeah. Based water floods, fire damage. >> Oh, fire. >> Yep. Mold remediation. >> Got it. Okay. >> Yep. >> So that's two. Is there a third business missing here? No, >> just two. Okay. Thank god. Okay. Um [laughter] >> so so the two locations they both do this buy model or you just have two different services. >> Okay. Got it. All right. And so what's the capacity of the facilities or the locations?

2:27>> So I mean we see people in our market um you know the the bigger national chains. They usually are around 3.5 to 5 million before they have other locations. >> What's primary channel for them? >> Uh TPA. So we do a lot of insurance work on the water and the fire side. So they work with third party administrators through insurance. Claim goes through insurance company pass >> and that's on the restoration side not on the squeaky cleaning side. Correct.

2:51[laughter] >> Um what's LTB to CAC on both of those? >> So for residential again >> no no not residential like >> on the cleaning side versus the uh restoration side. >> So again data is not super accurate from what we're able to get from the data we do have. It's 6.1 to one on the cleaning 6.8 to one on the restoration. about the same. Um, easier to I would imagine it'd be way easier to get cleaning customers than restoration customers.

3:26>> 100%. >> Okay. What percentage of the business is restoration versus cleaning? >> One/3 revenue is cleaning, 2/3 is restoration. >> Okay. Did you start both at the same time? >> Yeah. When we bought the business, it was >> Oh, it was like that. >> It was like that. >> So, you're inheriting >> correct >> step siblings. Got it. Okay. Um Okay. Do you want to run both? >> Did you buy it? So you bought it? >> We did about four years ago.

3:51>> Are you paid? Are you is the debt service done and all that stuff? >> Done. >> Okay. So you own it outright. There's no issues there. >> Correct. >> Okay. And it's still 2/3 one third. >> Correct. >> So the another kind of caveat to that with commercial um for that matter. >> So messy. Keep going. Yeah. >> Well, it just cleaning gets our foot in the door. >> Yeah. So, we can offer our cleaning services for commercial spot treatment, um, cleaning their area rugs in a larger facility, and then if something happens, we're their go-to guy.

4:19>> Just like by chance if something gets destroyed while you happen to be clean. >> We usually try like for [laughter] um so for for the commercial side, usually we we try to put a contract together. Um, I see usually some property managers kick back on that. Um, but if we can, we put a contract in place that if anything happens, mold, water, fire, while we're not like in contract period, we're here to help.

4:45>> Yeah, this is so weird. Um, okay. [laughter] It's a weird business. Um, you're like, if by any chance someone has, you know, food poisoning or here, we also do like resuscitation or whatever. It's um, how are you getting your leads on restoration? >> Same way. LSA. >> Okay. And there's not really much recurring there.

5:11>> Hopefully not. >> Yeah. Right. Yeah. Um you can always mess something up on cleaning now. Um Okay. [sighs and gasps] So if we think about this, so this is a $100 million leads problem, right? Which is which of the lead generation methods are you going to pick? So, you're profitable, I'm assuming, uh, and you're just trying to do more and you are maxing out your, you know, local search stuff and you just need more. Right. Exactly. Now, this is relatively common, too, that um, local search is super profitable, but like there's only so many people searching, there's only so much inbound intent and then after that, you basically have to go to interruption based marketing. So, I kind of need you to choose your own adventure. And I think, tell me if I'm wrong here, it seems like you're at a point of relative stability in the business.

6:03>> Correct. Okay, so you're at a point where you kind of need to make a bet. Uh, and so let's just walk through the bet together of which of these is the lowest bet for you. All of these are the right bet for the right person. We just need to figure out the right ones for you. Okay, so bet one is that you go all in on content and have, you know, dancing men in beards, uh, cleaning squeaky squeaky clean floors and then slipping and then restoring it. Um, [laughter] oops, a mop bucket, you know, uh, flooding. So, so that's that's option one. Okay. Uh, option two is you run kind of interrupt metabased ads. Uh, because whenever you go from intent to interruption, the ocean opens up to you because no one only a very small percentage of people wake up and say, you know what, I need to go get a cleaner day. Just about everyone else just keeps living their life and then gets interrupted and says, oh, maybe I will consider a cleaner because of the ad. Right? So, option two is we can run interruption based ads. Probably meta would be the first place that I would look.

7:01The third option is we can do basically a channel partner strategy. So affiliates and so of and the thing is like you have two businesses to feed which I hate side note but um because it's like okay [ __ ] that's a totally it's going to be a different game for both of them. Um if you think that the foot in the door is easier with cleaning I would agree with you. Um, I would put all my front-end focus on the cleaning most likely, and then have a cross-ell motion between cleaning and restoration, which you kind of have. But my focus from a legion perspective would be cleaning because it's so much easier to get those customers.

7:34Whereas, I think restoration will definitely have far more inbound intent. People don't wake up and say, you know what, I do need to restore my my basement today because it's flooded. Like, that's that they know. No one just decides to because of an ad, right? And so, um, which of those three feels like more up your alley? >> So, I love the sales side. I love going out and meeting people, >> um, trying to acquire referral partners, whether that's plumbers, property managers that are actually going to use us. Um, which was kind of my question about switching more to a commercial ideal avatar.

8:09>> Um, and then also anytime I'm doing that, I'm always preaching restoration. I rarely even talk about cleaning. Um just because again it's you know higher margins. Yeah. Um so >> but like you're you're going in and say like let's say here we've got a bunch of properties, right? Yeah. >> And so you'd say hey >> if something happens hit me up. >> That's much harder to do than like why don't we just start cleaning and then that stuff comes later cuz I feel like you need to like draw blood. You know what I mean? Like you need to you need to get a dollar across the line,

8:39>> right? >> Um >> cuz obviously there's big door knockocking teams which you could do if you want to do residential. commercial be a little tougher from the door knockocking perspective because there's gatekeepers. Um, but I think if you are and if you have like more sales aptitude if you want to go after property managers in order to target commercial customers, I think that makes sense. >> Basically, what I what I would love to give you a line of permission on, right? You can store it if you want to. Um, is you're going to have to make some material change right now. And that might seem contrary to what I was saying about refreshing the bricks, but you've reached kind of a local maximum of you're spending as much as you possibly can on the search words that you're aware of. Um, it does feel low from a revenue perspective because if each location's at 900K and that split between restoration and cleaning, I find it hard to believe that $300,000 in a local market is the cap for cleaning search,

9:30>> right? >> That sounds unlikely. >> So, would it make more sense to focus on brand? So, when people see us, multiple touch points. So, >> who's doing your search ads? >> Uh, my partner. >> Okay. I think they're Where we at? I think there's I think you can probably bid on more keywords than you probably are right now. >> So he's he's referring we do LSA. >> Okay. >> So that's that's the majority. We spend right now our budget's about 10k a week. >> Okay. >> And that's

9:56>> that's a lot given wait that's across both locations for all >> we've had increased revenue since increasing that but 1.9 was last year. >> Okay. >> So right now we're at about a million this year. >> Okay. Okay. So, what stops you from like you just can't spend more than you are? >> Yeah. I mean, every time we hit the budget for the week, you know, we're coming into our busier season, maybe we get to 12 and then, you know, we just won't start won't reaching.

10:23>> Do you know where I'm coming from, though? Like it it it's like you're in How big's the market you're in? >> Big. >> Yeah. Like I just I I have a hard time believing that you're like $300,000 like we capped it, you know, um for this whole platform. >> Must be the case. What? >> I said I would love for that not to be the case. I just want to do more. >> Yeah. No, I don't I don't think it is. Um, >> so I think probably having a keyword strategy would be the next kind of big thing cuz that like you already have an inbound call set up I'm assuming.

10:53>> Yes. >> Yes. >> Okay. That would probably be the easiest dial to move cuz on keyword like search stuff, you can do 100 grand a month, no problem, and spend. Yeah. >> And that could probably take you to the levels that you're looking for. So, I was trying to exhaust like is there anything that's close to what you're currently doing? I wasn't getting it earlier. So, I was like, "Okay, we got to pick out something new, but um if you're not doing any like search keywords." >> Yeah.

11:18>> Like there's a lot there that would probably be my first thing to do quote semi more of technically it's new, but yeah. Go ahead. >> So, you think include PPC with LSA even though it's like several like >> Yeah. you like you need to there's there's no there's no way on earth that you have cap like you just said like the the people in your market are doing way more than you, right? And there's no way that you've even come close to the cap on that, right?

11:46>> And just there's no way and so we just need to spend more across more kind of flows of traffic. >> Okay. So stay on Google just more of Google. >> That would be my first like my my shest first bet. >> Yeah. Beyond that, you're going to have to try one of the co call it net new strategies, which would either be finding centers of influence, finding those, you know, the the property managers and then doing deals with them. And it's going to be a slower role, but obviously it's more recurring and there's higher higher value from a selling perspective. Commercial's recurring is what matters more than commercial versus residential. Yeah.

12:20>> Um, >> but yeah, I would I would hit that easy button before I would try the new thing. Is that track? >> Cool. >> Okay. Yeah. Sorry, we had to like >> No, you're good. >> Go through two two locations, two different businesses, two different LTV CS to get there, but that's that's what I would do. >> If you're a business owner and you are not growing as fast as you'd like, I'd like to give you a free gift. So, my team and I put together the $100 million scaling road map, which is basically 200 hours of us looking over all the portfolio companies we've had and what stages of growth they went through and more importantly, where they got stuck and how they got past it. And so we broke it into these 10 stages and we made this little kind of quiz thing where if you put in your business information, it'll tell you where you're at and the most important part for you, what to do for each of functions of the business across product, marketing, sales, customer success, recruiting, IT, human resources, and finance. And so no matter what you're struggling with, someone else has already struggled with it and solved it. And so I'd like to give you this thing absolutely free. You can go to acquisition.com/roadmap, plug in your business information. And if you want us to actually help you deconrain the business and you're trying to scale, we'd love to help you out on the thank you page. You can just book a call with my team and we will look at the business, see if we can help, and if we can, we'll invite you out to Vegas and we'll do this in person live.