He Turns Down More Business Than He Accepts

0:00Uh, my name's Todd Weir. I have an intermodal trucking company. Doesn't really sell X to Y. An intermodal trucking company, 18 locations around the country. Um, we do bad year 36, good year 50 million in revenue. We'd like to double that. Be it uh that's 70 to to 100. Um, what's stopping me is our inability to get leads for new independent contractors. We have a owner operator based model. We don't own anything. >> Okay.

0:24>> Um, we seem to be trading freight. So, when we get instead of to take more business, we just uh because we don't have the capacity to do it with our own with like because we can't get new owner operators, more owner operators >> right? >> Trucks. Get drivers with trucks. >> Yeah. >> Independent contractors. >> Okay. >> They they lease exclusively to us. We take care of their insurance. They can't use our truck for anything else. >> And then you sell their their their loads.

0:49>> Yeah, basically. And we just fill their lanes, right? Um, just can't seem to our pipeline of candidates replace our turnover >> Uh-huh. >> and not much more. >> Got it. >> So, there's plenty of business out there. We don't have a problem with that. Um, our customers don't leave. We can either take more from them or take less or >> constrained, not demand constrained. >> Yes, exactly. Um, and we just can't seem to Although, we do no marketing whatsoever. >> Yeah.

1:13>> Um, and that's learned a lot in these round in the in the round tables. Um, that's what stopping us. >> Cool. So, this is a really cool one. Um, we were talking yesterday, right? So, uh there are some businesses that are demand constrained. Other businesses are supply constrained. And so, trying to sell marketing services to a supply constrained business, they're like, I don't have an issue getting customers. So, it's like if if I go to you and say, "Hey man, I can get you people who want to who want to move stuff." You're like, "I I'm good. I'm I'm fine. I It's not my problem."

1:43>> Plenty of freight. We We say We say no more than we say yes. >> Right. So, she said. Anyways, so, >> [laughter] >> uh So, uh uh so so on the supply side, right? So, I I think about it as like uh I made a podcast or something a a ago about like what business you're really in, right? And so like a good a friend of mine had a cleaning business like Molly Maid style business and he came from the fitness world and so he was like, "Dude, it's so easy to get customers. Like getting people to just you know clean you know people want other people to clean their houses." I was like, "Yeah, I could believe that. That's not hard to sell." The problem is getting people to show up on time to speak English who are willing to work really hard and like come like all of that, right? And so what we basically shifted with with him was you're actually not in the cleaning business, you're in the recruiting cleaners business. And so I think it's the same thing with you that you're you and you probably to some degree already know that, right? Like you're in the recruiting independent contractors business. And so the current way that you're attracting independent contractors that is your pipeline that you were referenced is via what?

2:45>> Amazingly enough most independent contractors are still using Craigslist. >> Okay. >> That's the number one area indeed >> Uh-huh. >> they're posted on and that's in in referrals. Referrals are probably our second highest >> Okay. >> application rate. >> What do you make on What do you make on a on a truck per annum in terms of gross profit? >> It's 100 it it's about 185 to about 185,000 gross gross revenue.

3:12>> Okay. >> We make >> [clears throat] >> we make about gross we make 70,000. >> Okay, so you make 70,000 for a driver, right? So what are you willing to pay to get a driver? >> That's something we haven't really even looked at. >> So how much would you pay >> I I would pay as as much as I had to pay obviously under that number. >> Yeah, and this is yeah and this is why this is why I go there. So then you get into payback period. So there's cost to acquire customers CAC, there's also cost to acquire talent just CAT.

3:39Get CAT like that. And so the idea is uh there was a friend of mine who had an insurance company who was probably actually about the same size as you right now and he was stuck there for a while and he was like, I just I need more brokers. I need guys and more agents, right, who are going to come in and sell insurance. And so, what he realized after a few years of kind of like slowish growth is that every agent that was productive made him $250,000 a year in gross profit.

4:06And so, he was giving referral bonuses to his agents for $2,000 to get people to to come. And sometimes they'd refer people, whatever. But when he realized that he was making $250,000, he started paying $25,000 checks to the agents for bringing someone on and getting them productive within 90 days. And so, that was the thing that completely changed his business. And so, if you make $70,000 a year on a trucker, I would wonder if you could give a referral bonus that's like a $35,000 referral bonus. And then you can pay it back.

4:34>> Yeah, we do five. We've We've never um it's It'd be obviously that 35 numbers and it it makes sense, but >> But you do it after they've after they're productive. >> Yeah. Oh, yeah. >> So, it's like I'll give you 35. You can give five today, 30 when they're productive. >> Mhm. >> And just give the the the back the back half on on the 6-month. Which then gives you an internal champion for them because they're going to want to make sure that they they stick 6 months cuz they're going to get their spiff. >> 100%. We get the kickback of uh well, if they're on here, then the freight we're not going to have as much freight, you know, by growing.

5:03>> I would Yeah. >> We explain we had we just had to educate them that. >> Yeah. >> That's not a problem. >> Yeah. >> Yeah, it's >> I mean, you could also just say and if you refer, you get first dibs. >> Yeah. You know it's not an issue, but in terms of like >> quelling the the concern, >> Right. >> just say like, so anybody who refers gets cash and you get best best routes or best, you know, the >> The ones we're better than me. >> Yeah, yeah, yeah. So, that would probably be my like that would be like my first thing that I could do shooting from the hip with like no more context. Um but from an acquisition channel perspective, um I do think this is something that paid ads would work for.

5:32Uh and basically building a funnel for this. So, we had a different business in the portfolio um that we exited. Um but we basically had to attract independent contractors, same thing. Kind of like semi-operator models, but it's for brick and mortar. And uh the big constraint of the business was that we like like we had all the cash, we had all the demand, we just needed people to actually do the thing, right?

5:55And so, we uh we basically built a cold cold traffic funnel to attract uh operators, and it worked famously. And so, we just had them jump through a bunch of hoops, and we just had to figure out how much friction to put in there, and then we were able to basically on demand be like, "Okay, well, we want to open up X locations." And then we just fill it up. And we just knew how we'd get 10% of them to to stick. >> And we talked about that in the uh in the round table because because we're doing nothing. >> Yeah. >> Um so, something's going to help, right?

6:20So, being being able to do Facebook with a targeted cuz the luxury that we have is that they're either going to a port or to a rail. So, we know where they are every day at some point. >> Yeah. >> So, being able to do that. So, we're going to start that immediately when >> Yeah, I would just spiff up the hell out of the referral thing as like that you could do that tomorrow. >> Mhm. >> And then the uh and the priority plus the referrals would be paired to to quell their concern. And then yeah, I would just I would start running ads to this very simple application funnel with a like a mini VSL like 3 to 5 minute of like, "Hey, here's the opportunity. This is what we do. This is what other people can't help you with. This is what we can. We'll cover your insurance. Blah blah blah. We have more demand than we can handle."

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