Jon Bryant: Hey guys, welcome back to Price Sell Paint. Michael and I today are talking about how to 10X your business. Is it a good idea? Can you do it in the painting industry? What would go into it if we had to 10X our business? And a bunch of strategies on how to grow your sales for next year to take your company to the next level. Michael, welcome once again. Good to see you, man.

Michael Murray: Thanks, John.

Jon Bryant: Just swell. Really great. We're coming. 10X. Yeah. What do you think? Sounds pretty good. I'd buy the book. Maybe even read it.

Michael Murray: 10X huh? Sounds sexy. It sounds sexy. Yeah. 10X is easier than 2X. One of the Dan Sullivan strategic coach ideas. Yeah. I mean, I think we see this all the time. If you're in this industry, you're on Instagram, Facebook, home improvement, painting. There's a lot of the bros out there that like to talk about 10X your business and live the dream and hustle harder and all the things. I think it all just really comes back to what are your true goals? Yeah, I don't know if that's for me.

Jon Bryant: Yeah, I mean, we've talked about this before where 10X sounds really sexy and it's like, hey, next year do 10X. But the reality I think, and I know this is kind of what we're going to get into is that for me, if I were to try to 10X, and I'm not saying it's not possible and it's a great thought process, but it's going to destroy my business as I know it. I'm going to have to make some incredibly big changes and those might be something that you want to do. Obviously I think there's a bit of scale of business here as well in this conversation where when I imagine scaling, the things I need to do to do 10X for me, being a bit of a bigger business in this area are just very different. If you're sitting at a hundred thousand in revenue looking to go to a million, I can draw out the roadmap of exactly how to do it. It's not that bad, but there's just not a lot of these 50, a hundred million dollar painting businesses that exist in the world and that worries me for that idea of 10X. So I'm happier to look at it a little bit differently. I think you do too, but does that kind of stuff scare you? Like when you think of 10X in painting, what is that conjuring in your mind outside of you working 75 hours a day?

Michael Murray: Well, that's yeah. I mean, again, I think life's all about trade-offs. At the end of the day, it's like, I think what's most important is that as business owners, we're setting goals that are serving our life and our family and things like that. And that we're not trying to accomplish something for the wrong reasons. I was talking to a business owner just this week, completely different industry, nothing to do with what we're talking about, but we were just having a good conversation about what's content look like and what's enough. And we both have younger kids and I know you're similar. And it's like, at this point, I'm not going to trade 70, 80 hour work weeks for the time that I can spend with my kids. My favorite thing to do is coach my kids in their sports and baseball and softball and basketball and whatever they're interested in. Because I know that I have a super short window where that's going to be possible and I can grow the business more or less at different times based on how much time I'm willing to put into it. But I also think that I can grow the business in a very healthy way, healthy meaning for my life balance and my goals. And yeah, somebody else might want to have a bigger business, which great, I think it's just doing it all for the right reasons.

Jon Bryant: Yeah, starting with kind of the purpose of the whole thing and your values makes total sense.

Michael Murray: Now, with that being said, I do think that there's a, I struggle that I think in our industry, especially on the residential painting side, because I do think on the commercial and industrial, we do see companies out there that are 20, 30, 50, a hundred plus million dollar annual revenue. I think on the residential side, the only examples that we generally have of a company that's doing north of say 20 million are franchise models, which is a completely different business. And if you understand franchising at all, if you have a painting company that's successful and you want to franchise it, that's fine, but you're no longer in the painting business, you're now in the franchising business. And you're competing with every other type of franchise for business owners, and you're no longer necessarily in home improvement. There's nothing wrong with that. It's just understanding kind of the game that you're playing is a little bit different. And I do think though that as we think about, there are other industries that are in home improvement where it is pretty normal or common or whatever the right word is, maybe not normal, but a little more common to have a hundred plus million dollar, maybe even 500 or a billion dollar annual revenue. As you look at some of the companies that are focused on windows or even roofing, gutter guards, here in the Cleveland area, we've got this company called Leaf Home, which is almost a $2 billion annual revenue business. And it's just kind of incredible when you start to look around at what some of these other somewhat adjacent industries are doing.

Jon Bryant: Yeah. So, I mean, as we've talked before, 10X again, this goes to the conversation of size of business. And I think for those listening who are starting or in that scale up to a million dollars of revenue, there's a lot of opportunities to introduce systems that might allow you to 10X. Might be this year. And it might be three to five years out, but this has been done and there's a model to follow and it's not reinventing the wheel. But in our particular case, the 10X puts us into territories that it hasn't really shown a lot of previous data to support that it's the right move.

Michael Murray: Yeah, it's hard to find that blueprint of like, look, here's all the other companies that went to 50 plus million dollars in revenue and just kind of follow that blueprint. And there's a path there to follow. To your point, it doesn't exist.

Jon Bryant: It doesn't exist. So I think today, what's most helpful, at least for me, hopefully anyone listening will be helpful as well, is just to talk about what 2X means. And as soon as I say that, I feel bad. I'm like, 2X, it's not that much. Loser. But the reality is to put a 2X into a painting business of a certain size is going to require a lot of planning, a lot of pushing the team, a lot of differences and I'd like to talk about that if you're okay with it Michael, just to figure out what that means.

Michael Murray: Yeah, I'd love to. And yeah. And I think especially for the focus of our podcast, right? There's a lot of business focused podcasts and I think we try to find the water's edge there, but we really want to focus on the marketing and sales side. And to your point, like how can we sell two times? What might that look like from a business perspective? We're not going to really focus on hiring the team, training, subcontracting, the HR department and all the other accounting, right? All the other functions of a business that are going to have to grow and improve at the same time. I think we just really focus on 2X sales and marketing.

Jon Bryant: Okay, I like it. Let's talk about that. And why not three, why not four, why not five X? Well, I think two X is tangible. I think it's something we can actually do. And I like the thought process because it starts to put me in a mode of growth. And maybe we find that three X or four X is possible, but the same thought process needs to go in. And this seems very, I mean, it makes me uneasy even two X to be honest at this point, but we can talk about that. So I would argue the first place to start when you're looking at 2X is really understanding what that sales means or what actually doing the selling means. Would you agree? So like, do you get twice as much sales?

Michael Murray: From a sales rep capacity. Is that kind of what you're saying? Yeah. Okay. Yeah. We've got a, we are definitely going to have to do a lot more quotes, a lot more estimates. Maybe not 2X, but maybe close to that.

Jon Bryant: A lot more estimates. Yeah, could be right. So I think the first thing you got to do is you got to reverse engineer it a little bit. So you got to take that number. Say you're running a million dollar business and you're looking to do $2 million of work and who is going to sell that $2 million of work and what are going to be their goals monthly, weekly throughout the entire year so that we hit $2 million of revenue. And I think probably in a lot of spaces, that's going to be probably two sales reps, would you agree?

Michael Murray: Yeah, I would say so. I think it depends on where somebody is. I mean, we've talked about, we've had an episode before on sales reps that sell more than $2 million as an individual in our industry. It's certainly possible. But if we're thinking about like, I've got to bring in new team members, I think you and I both agree that generally speaking, averaging about a hundred thousand to a little bit more per month, call it 1.2 million to 1.5 million is a really good sweet spot of an individual rep. And it's certainly going to be company specific, right? If somebody doing that is coming into a company with somewhat of a sales culture, there's probably already some sales reps. They've got a training system, they're using software like Paint Scout. That's going to make this kind of more possible, I guess. And without some of those things in place, it's certainly reasonable to see somebody maybe closer to a million or less.

Jon Bryant: Absolutely. So we've talked about this before in previous podcasts as well. The process of setting these goals, the process of getting buy-in from the team, figuring out what team members are needed. This is really like a spreadsheet exercise in my mind. So we're taking that big goal that we have and we're breaking it down into manageable pieces so that we can understand what the business is going to need and how it's going to work.

Michael Murray: Yeah, you gotta put the business together on the spreadsheet first and then you go and just execute that plan. I agree.

Jon Bryant: Exactly. I think it was a big understanding for me after starting out in the business is just how much planning actually gets you to results. And so we would do all this work and then end up at the end of the year being like, great. We got more than last year, but we didn't really plan for it. And it caused a lot of strain in the business because it's just unclear role division for everybody. If you have a sales rep that comes in and sells $2 million when you're expecting to sell 1.2 or something, well, that does a lot to your production systems too. So understanding that is super important.

Michael Murray: When I think about sales capacity, we've talked about this before, right? It's going to come down to how many estimates are we doing, whatever the amount of time is, weekly, monthly, annually, what is the average job size, and what is the win percentage? And so if I do 10 estimates and I sell four, and it's a $5,000 average job size, I just sold $20,000, and if I need to sell $100,000, I need to think of that in times five, whether it's five weeks or five reps or whatever that is. And it's just, I think to your point, it's like understanding those core numbers. I think one of the things though that I start to really think about if I have to double is I want to figure out how do we do this more efficiently so that as we're growing, we're also improving. I don't want to just take, if one sales rep sells 1.2 million, then two sales rep sell 2.4. It's like, how can I take one sales rep at 1.2 and two is 2.8 by helping them to increase their win rate and maybe their average job size and maybe some time management so that they can do an extra estimate a week or something like that. So that it's not like a linear path to growth that really just depends on more head count, more hiring talent and things like that. Do you agree with that?

Jon Bryant: Yeah, for sure. This, I think it goes to another, I immediately have another question about that though. So we want to get better. Obviously we want the team to get better because we have a team and I think competition, healthy competition within that is going to be super beneficial. So having some type of a scorecard and showing where people stand on that is going to increase competition, get you more sales, but a big part of it is how we set those goals too, right? So, do you, in your experience, do you try to set bigger goals for the team? Like for an individual sales rep, is it helpful to set a big goal? Stretch goal. Yes, great terms, stretch goal. You're going to 2X your business. We're not adding any sales reps. Each sales rep is going to sell double next year. Good idea or bad idea?

Michael Murray: Stretch goal. I, again, it's probably a bad idea. Let me like, if you're going to give me those two choices, I'm going to lean towards bad idea. I think there's some nuance there. I do think it's a good thought exercise, right? If you have that conversation with your sales rep and say, if you had to sell 2X next year, what would you do differently? And it's like, man, 2X, like that's nuts. And once you get past that shock of like, okay, well, all right, if I had to, what would I do? I guess I'd probably like, maybe I could work every other Saturday, if maybe they're not working Saturdays. I could figure out a way to find some time to do some more estimates. I might need somebody else. I might need some kind of assistant to help me with followups. Like, okay. Like, but yeah, if you're going to sell twice as much, maybe you could afford that person. Okay. Like now we're getting somewhere. Maybe I need to go after some more commercial work or some bigger projects so that instead of having, if I'm going to sell 2X, I don't have to do 2X the estimates because I can get that average job size up higher. So I do think that it's good to think like this, but when it comes down to put the numbers on the paper and create the compensation plans, a lot of our compensation plans are around hitting goals, whether it's on our production side, revenue, sales side, sales goals, different things like that. I want goals that are, so I want some realistic, I want somebody to be improving. So if last year you sold 1.2 million, next year the goal is going to be more than 1.2 million. For a lot of reasons, one, prices might just go up. And so last year's 1.2 might be this year's 1.25. But also, because I want to see some improvement and I want to encourage that thought process of how can I do this better?

And so I like to think in both ways. I like to set somebody's compensation around a realistic goal, but also have a lot of conversations around stretch, like what could, how could I do this? Not could I do this? Like how could I make this happen? Does that resonate?

Jon Bryant: Totally. I think with this though, I mean, a big part of it is it's always easier when people sell more than less. And so I think we want to talk about reasonable goals, smart goals that are achievable. So we can plan, especially on the production side and make sure that we're hitting what we hope to hit. So we keep everyone employed. We meet our overhead needs. Everything like that is important.

Michael Murray: Predictability. Yeah.

Jon Bryant: Predictability. And so what I find hard in the discussion is oftentimes you'll hear a lot of sales coaches, especially if you look at social media, say like set your goal, huge, massive goal, set this huge goal. And it sounds really nice again, kind of that whole 10X idea where you're like, okay, if I just set my goal higher, I guess I'll try harder and I'll make more money and make more sales. But if we plan based on that stretch goal and it's not possible, how crazy is that going to affect our business?

Michael Murray: Yeah, right. We've got to go spend the marketing money before you're going to even possibly do that. So if you're going to 10X, you got to go spend a bunch of marketing money and maybe that all doesn't work because you don't have your marketing dialed in and now we're in trouble.

Jon Bryant: Yeah, we're in big trouble. And so I think the how, the how and what do you do part of this thought process is so important, especially as we go into every year. And this is why we're having this discussion, I think, end of 2024 to say, what thought process do we need to have in order to make sure that we really push our business to excellence? And whether it's 10X or 2X, I think 10X is going to be a different place to get to, but it's still that process of what leads do I got to get? How do I manage all of this? What's entailed? And how do we make manageable goals so that the business is taken care of? And if we sell more, well, we can always expand or try to hire.

Michael Murray: Yeah. Yeah. I mean, I think it's hard, and I want to take this towards the marketing side, but I think as I think about the sales capacity, one of the things that we've tried to do is train more people on how to do sales so that we have some sales flexibility. Because the reality is when we look at our metrics and we look at some of the data that we can, that we have on marketing and demand and things like that, I think in our industry, we know that there is some significant seasonal shifts. And I think you and I can both see it in our data that we love to track. And so it makes it hard because I need to have enough sales reps in whatever, April and May, when let's say demand is really high, but I also have to figure out a way to afford them in December and January when demand is very low. And how do I flex in that way? Some of that is just have them do more estimates in the spring, but there can also be some diminishing returns. If you're doing whatever 20 estimates in a week, you might not be taking the time. You might not be winning at a higher percentage and might actually end up with a worse result. And so one of the things that we started to do going into 2024 is like, let's train our field managers on how to do quotes. Let's train our interior designer on how to do quotes that to be honest, they might not always do that. Even for myself, I am, I no longer, I'm part of the sales goal for what we're going to accomplish as a company, but I can certainly go out and sell in the busy times if we need to. I don't want to have our sales reps booked out for two weeks because we just have a ton of demand. We just don't have enough reps. I also don't want to have to hire another rep when we might only need them for that four or six week really busy rush in the spring and then things kind of settle back in to normal. I'd rather have just a little bit of flexibility with, I'll go do a few, this other person can go do a few, and we can keep the pressure off of the entire team in that way. That's something kind of new for us, and I think it's been helpful.

Jon Bryant: Yeah, I mean, it makes so much sense. Sales drives the business, having everybody involved. That makes a ton of sense to me. And we talk about it a lot in terms of our teams also selling like our onsite teams. And I think when it gets busy, the last thing we can do is sell a job. It's like, hey guys, we can't not sell additional work on this job, because we're booked out so far and we lose track of that skill. Then every winter we try to reignite it. It's like, guys, we got to sell tomorrow. Who remembers how to sell? We talked about it six months ago. We need some jobs like tomorrow. Like who's ready? Let's go. And I think that continuous focus on a sales organization matters because you're right. You need to be able to scale up and scale down. And if it's completely based on sales reps, if they're not working or not hitting goals, you run the risk of putting the company in jeopardy. And so understanding where your sales come from, reverse engineering it, making it all work. I think is so critical when you're trying to hit goals. So let's talk about leads.

Michael Murray: Let's talk. Let's talk about marketing. I like it. We're going the same place here. Yeah, because I think this is where I think for a lot of businesses, this is the biggest factor. So how do you think about it? Where do you start when we think about the marketing side of this equation?

Jon Bryant: Here's my thought process. I take our revenue goal for the year. I take our lead conversion expectations with some, usually I lower it down a little bit. So I figure out how many estimates we need. So average job size fits in there too. So take our revenue goal divided by our average job size. I see number of jobs that we need. Then when we go and we look at our win rate. So say it's 50% for easy math. So we double that number of jobs that we need. And then we figure out how many estimates we need to do. And then we look at what we want to spend on marketing. So three to 5%. And we're dividing the number of leads we need by our marketing budget to see if it all works out. Did I mix anything up there?

Michael Murray: That's how many estimates we need to do. OK. And you mentioned before, I just want to highlight a point. You touched on it, but as we're working through that math, if we need to do whatever, 1,000 estimates so we can sell 500 jobs, we need to generate more than 1,000 leads because of the lead conversion that you started at. And so what does that look like? What are your thoughts? What is a good percentage of leads that don't turn into estimates? What might be a metric for our industry? I think honestly, what I have found in the industry is nobody really tracks this very well, but I'd love to hear your thoughts.

Jon Bryant: Yeah. Some people call it a separate or something else, but I mean, it's a funny one. It's all over the map for us. Some months we are setting everything and some months we're not. It really, I'd say a fifth, 50%. Where are you at? Do you know?

Michael Murray: So I'll say this, that in 2023, we actually started to pay attention to this number. Before that it was COVID craziness and we were all just riding this super awesome wave of amazing demand and like, who cares? Just there'll be more tomorrow. Woo, let's go. And realized as we went to 2023 that like, man, this feels like a normal winter. I remember in the winter of like 2022 to 2023, I was like, this started to feel normal, like normal, meaning winter, not so good and times are changing. And it's time to get back to the blocking and tackling of running these businesses. And one of the things I looked at in 2023 was our lead conversion and it was really bad. I thought, so we were like 65% conversion rate, meaning 35% of the leads did not turn into estimates.

And as I started to talk to people in the industry, a lot of people are like, that's awful. And I was like, what's yours? And they're like, I know it's better than that. I'm like, okay. That's not helpful. So, or like, well, you know, we do like 90% or whatever. And I'm just like, okay. Well, what do you do with somebody who calls and they just want their front door painted? Well, that's not a lead. They didn't count. I'm like, okay. So we need to better define this. I think for us, our target is 25% of raw leads. So everything. If the phone rings and you're three hours away, that counts. We don't service three hours away. I think most people don't. But we're not going to be able to give them an estimate. But that's part of that goal of 75% of every time the phone rings that could possibly be considered a lead, we're going to count that.

And then we would hope for about 85% of what we would describe as marketing qualified, meaning they're in our service area. They're generally looking for something that we provide. And we possibly could quote something, we're looking for about 85%. That roughly seems to be a pretty good target from all the conversations I've had. But I found that this is a number that is pretty difficult to really find a lot of data around the industry.

Jon Bryant: Yeah. When you originally asked me the question, I don't think I fully understood how, because the metric in which, like, if you take all of our raw leads and stuff that's far away from us that we don't service or people who call us and they're like, hey, can you guys install my deck? It's like, actually, no, we're a painting company. That's where that number plummets. We get a ton of leads that we don't service. We also have a job size we require that we include in that as well. And a lot of our estimators, if they don't get to that job size, they consider that a lost lead. So yeah, I like that though. Going back to the math. I mean, I guess if you got, if you figure you need 500 jobs and you get a thousand leads and then only, you're probably need like what? 1200, 1300 leads at that point, 75%. Yeah.

Michael Murray: Yeah, I don't have a calculator, yeah, I mean that's somewhere in that neighborhood. So you mentioned before, you said before I kind of interrupted, I wanted to just hit that lead conversion number. You had mentioned like three to 5% marketing budget, as a percentage of revenue or sales, right? Let's, we're kind of using those two numbers interchangeably, but for the sake of argument, you and I both know that those aren't the same thing. We'll probably use those kind of interchangeably throughout this conversation. We don't need all the comments to tell us they're not exactly the same thing. But for the sake of this, I think we can kind of use those interchangeably. Where does that 3 to 5% number come from? And I'd like to just kind of hang out here for a minute.

Jon Bryant: Yeah, I mean, that's been a number that was presented to me as an average way back in the day. And I'm not saying it's right. I'm just saying that's worked. And so I think you could up that number and you could get more leads and you could sell at a higher rate and it could still all work out.

Michael Murray: Okay. What would happen if you spent 10% of your revenue on marketing?

Jon Bryant: So here's, yeah, it's an interesting thought process because what we found is diminishing returns at some point in a bunch of our channels. And so we've actually struggled to figure out how to spend 10%. But as a general thought process, if we were to spend 10%, we should get double the leads and double the business. Would you? Where do you guys sit?

Michael Murray: OK. I agree. I think this is some of the other business owners I've had conversations with. I'll say that I tend to be the, I'm almost always trying to spend more than 5%. I look at other industries in the home improvement space, some of the ones I just talked about, that might spend 10 or 15% of the revenue on marketing. And they grow in ways that we couldn't fathom in our industry. And there's different, again, there's different constraints. I'm not trying to compare exactly, it's not the same thing. I get it. We're not selling window replacements for example. And it gets into subcontracting. Can you, in that space, it's somewhat common to 10X.

I was reading about a company that went from, I don't remember the exact numbers, but it was like 2 million, 7 million, 35 million. I think it was like 80 million, 130 million over like five years. Maybe that's happened in the painting industry. I've not heard of it. I would love to have that person come on and talk with us. But it just seems like those stories are a little more common in adjacent industries. And one of the things that I see as a difference, and again, there are others, especially on the installation production side, is how they think about marketing. And more generally speaking, it's just a lot more aggressively. The part of that that I come back to is, I know for us, and I think what I found is it's somewhat common in the industry, is we don't do a very good job of tracking our marketing and having really good metrics around it to know where should we go spend that money? Somebody walked in and said, hey, John, I just really believe in what you guys are doing. I want to invest. Here's $500,000. Please put that into marketing so that we can grow this business and throw some gasoline on the fire. I think most of us, and myself included, that's like really, I'm like, my gosh, I don't know what to do. Like that's a lot of money. My gosh. Like, where do I put this? I could guess. I could spend it. I just don't have a whole lot of confidence that I'm spending it wisely in a way that I can put in a dollar into the machine and know what's going to come back out. And I think that comes back to the metrics.

Jon Bryant: So. Yeah, I couldn't agree more. That whole idea when you said 500,000, I was just like, I don't know. It was like, I'm someone who loves marketing. Like I love doing this. It's fun. It's something I've always felt like I understood, but in this space, it's just like, is it more Google AdWords? Probably not. Diminishing returns, like I said in that space. But there's probably all a bunch of other channels we're not considering. I don't know. So yeah, like 2Xing even the marketing budget is an exercise.

Michael Murray: If you went back though to the life cycle of your company, even let's just go back like three years, five years, right? Your company's grown a lot over that last three to five years. But if you went back like three to five years ago, I would bet today's marketing budget is 2X that marketing budget. Easily. And so it's like, if we would've had this conversation then, we might've said, hey, what if I walked in with $250,000? Right. And it's just a slightly different number. But that would have had the same impact of like, holy crap, that's a lot of money. That's way more than we currently spend, whatever that is. And I don't know what to do with that. Diminishing returns. That's not smart. I couldn't, whatever. And now it's just like, well, no, we spend that all the time and it's now, it's not diminishing returns and it's not, so it's like, why, if in like three to five years from now, you will spend twice as much money in marketing, like if you just kind of went along this path. Why is it that if we did that all in this year, it wouldn't be smart, but over the stair stepping into that in three years, it will be smart.

Jon Bryant: I mean, you make a really good point. I don't know what to say.

Michael Murray: I mean, I had one person tell me that it comes down to market saturation, which is, I hear that, if you're already taken up most of the painting market of your city, then keep spending more money. You're already painting all the houses that need to be painted. The problem I have with that is, I think we're a pretty successful company in our market. I don't think we are 2% of the market share of what happens on residential-focused repaints on an annual basis. I think we're maybe 2% if I'm being optimistic. And in my mind, the analogy I use is, I think Coca-Cola and Pepsi have a better brand saturation than 2%. More in the United States and Canada, North America here, I think more than 2% of population know what Pepsi and Coke are. Yet they spend a lot of money on marketing.

Jon Bryant: Yeah, I mean, so I think what's so great about that thought process and something that I even needed in this particular case was just the idea that we can be a lot bigger than we think. You need to expand your thought process a little bit on what's possible and how you would do it. And again, looking at that in terms of 2X, 3X, 4X, like what does that actually mean? How would you do it? Comes down to more of the plan and how, then really what the dollar value is. And I got some work to do. So thanks for that.

Michael Murray: Yeah, one of the things, you just to maybe put a pin in the marketing conversation is I think too, there is a concept of spending marketing money at the wrong time can just be like lighting the money on fire. I think we should be spending more money when there is demand. For in our industry, what we have seen is that's the spring and the fall, generally speaking. We're starting to get to the point where we can track it somewhat to the week and we're trying to correlate that to the weather because I do think they are correlated to some extent. I also think it's correlated to non-weather factors like when are our kids in school which correlates to people's vacations and some of the holidays and just is Easter right and different things like that. I think are all parts of the demand curve that we see in our industry. And so we're trying to essentially look out into the rest of 2025 and say, okay, we can kind of predict when we hope that we can predict kind of when the demand is going to really start to naturally pick up. And a lot of what the marketing that we do in our industry is actually demand capture. We just want to be there when somebody's thinking about it rather than we're going to create this thought that they've never had. Like they just woke up and they weren't thinking about painting. Now because they saw our ad, they're thinking about painting and they're going to spend five or $10,000. I think that can happen. But I think most of the work that we do is somebody has a problem. They walked around their house and said, this doesn't look good and we need to fix it. And let's call the professionals and they go to Google or do whatever they're going to do and find the companies that are there. And so as I think about how we spend money, it's like, okay, how do we make sure that we are where they are looking? And at the time they're looking, whether it's direct mail, whether it's Google, whether it's Facebook, whether it's all the different things, trying to time up the message with the medium, with the timing so that when right when they go to look, they're getting that piece of direct mail or seeing that TV commercial or whatever that might be.

Jon Bryant: So when you go to next year, are you guys 2Xing next year, Michael?

Michael Murray: Maybe. No, I mean, I think we have some pretty aggressive goals. I wouldn't, I would never set a goal of 2X again, going back to people's budgets or bonuses are based on that. But, so yeah, I like the thought.

Jon Bryant: So you're going to, I mean, say it is 2X, you're going to go and take those times of the year where you feel there's the most demand and you're going to move your budget to those times. You're going to up it a ton in those times to make sure you capture it.

Michael Murray: Yeah, I mean more so, right. And so then that's also going to go back to the capacity planning we just talked about with the sales team. I don't want to just over generate leads that we can't service. We can't do an estimate for somebody who's got to wait three weeks to get a quote. That becomes a waste of money. And then I also need to make sure we have to try to be strategic too. I want to spend marketing money to really fill the winter bucket. So for us, that's like summer, fall marketing as opposed to spring. But yeah, I think we're going to be a little bit more aggressive in the spring than we historically have been. I'm fairly optimistic that we'll see a little bit more favorable conditions in 2025. I'm hoping interest rates are a little bit better. We can see some movement in the housing market, which certainly affects our industry in a positive way. So yeah, that's kind of how we're thinking about it a little bit.

Jon Bryant: What else can we offer here for people trying to 2X? I mean, there's obviously understanding your sales. So backtracking that there's leads, getting more leads. There's also, I think connecting these two. So you had mentioned talking to the sales team about how many leads they need, make sure everybody understands that. And I think I would add once you connect those two, this really becomes about management. Like you need to watch this. Like you can't set the goal and then find out at month eight that you're way off course. So I don't know. I mean, do you agree with that? Like that's part of this process?

Michael Murray: Yeah, I think we have to have dashboards. One of the industries that I like to really pay attention to is the HVAC. And one of the things that, if you get into it, one of the things they talk about is capacity planning for their techs. So one of the big differences just really quickly is in home improvement versus home service. In home improvement, what we do, we send a sales rep, they go and quote it. The customer says, yes, we send the crew out to go paint it two to 10 weeks later or whatever that looks like, right? Within the HVAC or home service, it's the same person. That HVAC tech shows up at the house, I diagnose the problem, here it'll cost this to fix it. You want me to do it? Great, I'm going to fix it right now. And so it's a little bit different on we think of capacity, it's for the sales reps and for the crews. For them, it's kind of the same, at least in the service part of what they're doing.

But I've seen where it's like, they will literally, the most sophisticated businesses in that space are looking to the next day. They're affecting today's marketing spend in Google ads and otherwise based on how full is the board for tomorrow and the day after and the day after. And trying to make sure that their team is fully busy. And if they're not fully busy for one, two, three days out, they're increasing that marketing spend to get them fully busy, then maybe decrease that marketing spend, again, on a daily basis, which is pretty incredible. We're barely sophisticated enough to do that on a monthly basis, if I'm being honest. I would like to see us be able to get to something that resembles a weekly basis.

Jon Bryant: And just lining that up with demand. I mean, you've always said it. And I think it's true that I would love to have a paint crew always available tomorrow. That's really hard in our space just because of, I think marketing plays a large role. I think some of our discussions about this business in particular, about why it can be so difficult. And I kind of feel like you're at the mercy of all these factors. It really comes down to the fact that I got to look internally and be like, well, we didn't market well enough and we weren't really dialed in and we let outside factors make us feel comfortable. And then we didn't act. I think when you're looking to grow, looking to scale the business, that's just so important is to understand what that schedule looks like, how it's going to be spent, how it all ties together, manage and track it so that you're dialed in and that's really the place you want to get to at the end of the day.

Michael Murray: And I think the other one, maybe one last thing that just kind of comes to mind for me is, we've talked a lot about spend more money, generate more leads, sales side, sales capacity, maybe improve those metrics. But I also think that there is something to be said for the repeat and referral business. And I think the businesses that are best in class are not neglecting that. And they're actually very intentional and they're spending money on their marketing budget to generate repeat and referral business. And I feel like as an industry, that's a piece that's maybe too often neglected. What do you think about that?

Jon Bryant: Yeah, it's huge. If you're looking to scale your business, best people to help you do it are the people you've already helped in the past. And we've always believed that as a major source of our leads, it comes from referral and we know that we're doing a good job when people are referring us. We also will reward people for doing that. We don't really offer too much upfront to say we're going to do it, but we send someone something to them after as a thank you. We really believe in thank yous and that's really helped us scale our business. The one concern I always have with referrals is that it's not predictable. And those are the highest value leads that referrals and repeat customers are such a necessity. But if I were to think about 2X in the business, it's a hard lead source to predict in a way, because I don't know how to incentivize that further other than looking after them super well. Maybe you have some other ideas there.

Michael Murray: I mean, yeah, well, I do think that the first thing I think we can do is we talked about the marketing budget is just to say, are we spending any money? Are we spending any effort there? If we're not, if we're not putting energy, effort, focus on something, then we certainly can't expect it to grow and improve. So for us, that's one of the things that I'm kind of challenging our team on is instead of always thinking of the marketing budget as like, how do we go spend more money on the Google machine and the Facebook machine, what about the customer list? What can we do with these people? I think it's, I don't know. I went, I think it was at PCA or something. I heard, I want to say it was Brandon Lewis talk about, I want to give credit where it's due, where he mentioned like something about how most people can't remember the name of the nurse or the doctor that was there when you and your spouse gave birth to your first child. But we think that our customers are going to remember the painting. Our customers are going to remember the name of the painting company. And that's insane. You and I think we both run pretty good businesses and try to treat people really well. And we have a lot of really happy customers. And if we're being real, two months later, they don't even remember who the hell we are. Certainly, a year or two later, they do not remember who we are.

We have to spend some money and some effort staying top of mind. I think it can look simple. It can be a quarterly email. It could be a handwritten note. It can be some kind of a thank you, a holiday card or things like that. I don't think it has to be anything that's crazy, nobody ever thought of before. I think it really just comes back to some of the basics of the how to win friends and influence people kind of stuff. Like be kind, treat them like you would a friend, stay in touch a little bit. The more personalized the better.

Jon Bryant: Yeah, absolutely. Yeah, I totally agree. I think all of those things play a vital factor in allowing you to scale so that you're not having to go back every year and find perfectly new customers all the time. It's a very difficult thing to do. So yeah, I love all this. Figure out what you want to do next year for your growth and lining that up. I think it's fantastic and I think all this stuff plays a major factor.

Michael Murray: Yeah, I think we, I think I'll conclude just by saying that a lot of these conversations, whether it's 10X or 2X are very good conversations. And we need to be having these, not just with ourselves as the business owner, but with our leadership teams, with the sales reps, with the people that really are driving the business. And put these things down on paper, put them down in the spreadsheets, and break them down into bite-sized pieces and then just go and execute and really just try to pay attention. Are we on track this week, this month? And you might surprise yourself with what you're capable of.

Yeah, good stuff. Well, I appreciate it. If you've stuck around this long and you've gotten some value out of today's episode, we would love it if you could like or subscribe, tell your friends. We are trying to grow the audience a little bit here. We're trying to spread the news here that the painting industry is a great one to be a part of. We want to be a part of helping you to grow your business, grow your sales in 2025. And you're glad that you're along for the journey. So John, looking forward to a great year.

Jon Bryant: Michael, me too. See you soon.

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