E0109 - Rehash Programs

In this episode, the OneLeg team discuss rehash programs, why they are critical to a successful home improvement business and what are the key considerations a company needs to make when thinking about implementing a rehash program.

Transcript

Welcome to one leg up where we discuss how you can deliver the very best customer experience and how you can achieve zero marketing waste. I'm Ed Davis, chief operations ninja here at one leg. And today, as per usual, our chief mastermind Vic Sun is joining us.

Vic, what's the haps?

They have attacked its Hap's the right. What's going

on now? How has the wheat going? How's life treating you?

Life is treating me just like everybody else, it's going great, it's, you know, doing really we're doing really, really well. So, thank you for asking.

We are doing very well. And we're really proud to say that that our podcast is getting momentum and therefore. We're looking forward to the next series of episodes that we're creating, because a lot of them are based on what it is that we pick up in in the various business conversations and chat within the industry.

And as you know, the last few weeks, we found ourselves in a number of these new business conversations with clients about a variety of things. But one topic seems to be gaining more momentum as we get deeper into this financial year.

And that is rehash programs. So today I want to discuss rehashed programs in the home improvement sector. And and let's sort of detail what our clients are, prospective clients, the industry at large might want to think about in terms of including a rehash program as part of their sales and business development and marketing programs.

And what they need to be thinking about as they implement them or what best practices. And so so you're going to enlighten us on what that is. And so, first of all, let's start at the very beginning. What is a rehash, because this term is not something that I'm necessarily familiar with.

Right. You are familiar with this process. It's just it's just it's just a term rehash is is simply just remarketing and being able to recover the revenue or at least the expenses that you've paid for for your leads, for example, and basically following up.

Right. So it's follow up. Selling in this term. Rehash is used mostly in the home improvement remodeling construction space. I know insurance and a couple of other industries use it as well. But in the bigger scheme of things, you know, regardless of industry, whether you're in technology or SACEUR or B2B, it's really just following up on leads

or opportunities that have not sold. And what are those activities that you do afterwards in order to maximize your tendency for it to be a sale?

Got it. Yeah. Got it. OK, so what does that cycle, the lead cycle to sales rehash process look like

in terms of the home improvement space? It really is a fairly short cycle. Leads are generated and through different channels. The home improvement company or the remodeling company will now convert on it. And typically it's through an appointment and a sales rep or a salesperson will now provide a demo or a demonstration presentation.

This industry believes in the one call close, which means, you know, they're really holding sales accountable to being able to convert on that appointment into a sale on the very first visit. Now, the reality here is that on average, nationally, home improvement sales only closes about 18 to 21 percent on average net.

So that means there is an overwhelming amount of appointments or leads that do not convert on the first visit. To a sale.

And so if they don't convert on the first visit, and I think this is what we're seeing, for whatever reason, the companies just go, yep, don't care about that lead anymore. If we can't if we can't do the one call, the one closed sale.

It sort of becomes irrelevant, by the way, being that you and I both do business development for for one leg and that we have a history of doing business development. Could you imagine our lives as if all we did was the one closed sale model or you know what I mean, the one piece of contact sales model

that would be amazing if we could convert. And that's what it was based off of. So I just found I found that interesting just from my standpoint, as I'm continuing to learn the home improvement industry. So when it comes to like like what is the best practice when it comes to rehashing in terms of the offers, what

you say when you engage, what is the timing of that? What does that look like?

Well, first having one is going to be important, having a plan, having a system, a process. Unfortunately, many home improvement, remodeling, construction, manufacturing companies do not have that. They do not have a system. They do not have a plan.

So to answer the question first, that I had the desire to have one make be to that and then starting to build on that. And the first step is really going to the beginning. And in this will this is a problem with, you know, a lot of companies, because what they end up doing is they continue to

define their challenge or issue as we need more leads. We need more leads when they actually do have those haven't

really milked the leads that they have for everything it is that they're worth.

Yes, it's it's it's not having a plan past not being able to sell the overwhelming majority of leads that you have already paid for, as well as you know, you weren't successful in in getting a contract from the very first call or the first visit.

So having that, I think once you've identified your user journey and that should be a fairly good exercise on its on its own. Now, you want to identify how do I remarket, how do I follow up to these clients and having the objective that majority of the time you're not going to get a contract on the first

call, on the first visit, which is a huge mistake in terms of the intention of most companies, because when you create a follow up program and you still bank on the fact that you are a wonderful close, which means that you're looking at the minority of the time, right.

You have you start to lose the ability to look at and improve on a rehash, a follow up program. You need to look at the program as this is a blue ocean of opportunity. Most of the time, this is where I'm going to be able to maximize my revenue and my profits.

And then at that point, you can instill touch points, strategies and then tactics in being able to communicate, follow up and provide a better choice architecture to those who have already seen you already know about you. But this time, it's through the process of time that passes after the first appointment or the first time you've engaged.

Right. So what I'm also curious about is if you've got 100 leads and we've established and the industry has established that 18 to 21 percent of those are going to get to that close if you implement a rehash program.

What does that add? Is it five percent? Is it 10 percent? What what what would you think is a legitimate percentage of add as part of a rehash program?

I think that a an OK two good rehash remarketing program should net you after the first appointment or the first call, anywhere between 25 to 33 percent. So about one out of three to one out of four pass the remainder of those, 80 of the remainder of those 80.

Now, if you aggregate that and include that to the overall net close ratio, you are increasing your 18 to 21 percent average just by doing so.

Right. And then just so then help me out. You know, I would imagine that this is you know, if we drew this on a piece of paper, typically our clients are their marketing to their their customer. Farmers and that's a linear that's sort of a linear thing, right?

But what you're saying is when we get over here toward towards the end, if we don't close, we want to actually have like a loop in there. Is there is there an idea is it, you know, one go round or are we putting these people in through the mill like two or three different times?

Like what? You know what I mean? Is it multiple points of contact over the course of a year? What does that look like?

So going back to the beginning, as I, as I have mentioned, is going from the very point of your lead conversion. If you have a lot of leads, but they have low buying intent, that really simply means that you don't have a lot of personalization.

You've not identified your target audience really well and your identity. You're generalizing everybody under one bucket. So first tip, I would say, is to go back from the beginning, look at your users, their journey, and then identify and separate the leads with low buying content from the leads that have high buying content.

And then from there, segment them even further by product, byte by market, by zip code. You know, anything that's relevant or as an element that affects your ability to go and get a sale. And you look at this from the user's perspective.

Once you have done that, I think at that point you'll start to see the loops towards the end game, because once you've identified these are the target audience, this is usually the journey they take. You might find that, you know, low buying leads with low buying intent may end up having to have three more touch points over

the next 90 days versus leads that have high buying intent in which that sales cycle for follow up could be simply about a week to a maybe just 30 days. Because the urgency is there to make a purchase.

So that would be a different flow. Those would be different tactics that you'd employ. And of course, that the touch points would change. And again, that starts from the beginning.

Got it. So then, other than the obvious of not having a rehash program, what what some of the the bigger mistakes or the mistakes that you see home improvement companies make with the rehashed programs, if they actually have one.

It's again, treating it exactly the same way that they would on a one called close and just continuing on that same user journey and saying, well, those did not close on the first visit. And so I just need to go and continue on with that particular cycle and see if I called the exact

same things that I was saying, the exact same offers, blah, blah, blah, blah, blah.

Right. And the reality is they end up really bastardizing the program, you know, making it suck even more. And so that even lowers the potential for the sale or the tendency for the sale. And the biggest problem here for those who, you know, the big companies that are starting to grow, you have to think about compliance, because

once you provide a price to a homeowner, you know, whether you're in construction, remodeling, improvement, you cannot just drop your price and just renegotiate on the same project because that can be seen as price gouging. Why didn't you give me the homeowner that very best price in the very beginning?

You're essentially coming back to me and saying, OK, we're following up on you. We didn't get a contract two days ago. What if we gave you another five hundred dollars off in the same project? And again, that is, you know, a very poor way of handling a rehashed program or at least having those elements in there.

But that is one of the bigger issues when people do have a rebate program is treating exactly the same way, not being compliant, whether it's legally or through, you know, these privacy or, you know, through the process of touching either touch points with the client and their contracts.

But I think, you know, that really is where you have to go from the very beginning and understand your client and not put them in one big bucket.

Yeah. So so building off of that. Right. I think one of the things that we've seen, one of the things that we've heard is there's this who do when does the company take the the lead back from the sales person and who should be the one responsible for for reaching out and trying to rehash or remarket to

those customers? Would you say that? Best practice is going to be there should be like a rehash team, like somebody who is absolutely dedicated to to remarketing, like would that be best practice?

Again, it's depending on each company. Some companies have depending, again, on verticals as well, have their sales team follow up and they work that funnel or that pipeline. If you are able to go in, have your own marketing team that's specific to their retargeting, remarketing recovery, that will free up the sales team on being able to focus

on their current opportunities or the ones that they're about to provide demonstration's presentations for or contracts. I got to point out here, Ed, that, you know, one of the issues is really because a lot of companies trying to tend to generalize.

And so just think about what I said, where most companies have this idea of a wonderful close. So automatically their philosophy is in opposition with good strategy. So they say, well, this salesperson clearly on the first visit did not close.

And we know that the overwhelming majority do not. So let's send somebody else, a manager, somebody. What they are discounting is the fact that if this salesperson did, in fact, build a great rapport with that lead or that opportunity, that client.

Right. That prospect, they're discounting that simply because of this notion or this formula that once you run the appointment, you're done, you're one and done. And so now what you end up doing is you get to eliminate all those positive things that that that person has created with this lead.

And now you're starting over by giving it to somebody else. So I think that it's important to go in and again, go back from the beginning and say, well, look, the majority of my life do not close in the first visit.

What I should do is take a look at some elements. I should measure this. How was the client's perception of that person? Did they build enough? Reported the client. Want a follow up? Right. Because simply having a blanket rule, which most companies have, which is once you're done, I'm giving it to somebody else or you're not going

to be able to do that because I want you to focus on one call. Close is wrong. It's just wrong because the majority of the time you are not getting a contract on the first visit.

Sure. As we know.

Yes, that's true.

Right. So then so let's shift to the things that are going to enable you to have a rehash program, and a big piece of that is technology. So what are the core technology considerations? A home improvement company should make if they're thinking about implementing a rehash program, I would assume that this is simply, you know, most of

these companies already have the crimes, the the dialers, all of those things already in place. It's just a matter is it just a matter of rethinking, as you were talking about before, sort of a different workflow and a different way of handling them and not treating them the same as a hot new lead?

Yes. And so if you want to talk about the tech stack pieces that you could add or you could put in consideration is being able to have a piece of technology that scores and and also provides you with better insight other than, you know, what you already know, to be able to determine these users.

So there are many platforms out there that allow you to provide surveys, you know, asking your consumer and your sales team. This is quite simple. A lot of companies don't do them. And that provides automatically with far deeper insight into who your users are.

Well, into your point, it doesn't have to be complicated. You know, it's and it's it is best practice. And I think what what I would say is, if you are trying to get better and you were trying to become more efficient from a marketing and a sales standpoint as a business.

You're you're initially going to say it's counterintuitive to to put a point of interaction where you stop and you take a survey in the middle of it. Right. But actually, that's a really valuable data point to your point, which is, you know, even though you're not all the way through companies, clients are clients, you know, at almost

every stage in this process. They do need to be checking in with their customers. Right, because you want to make sure, OK, did we provide you the right information that we provided in a timely fashion? Did we meet your expectations?

What else can we do differently? Those are three very quick questions that somebody can answer very easily. And you would get a wealth of information that would help you tailor your customer experience. So you're constantly making that better and making it more impactful.

Correct.

Correct. And in with regards to knowing the data, there are many platforms out there that you can use power by if you're perfection, which is one of the more popular platforms out there. There's a litany of reports that you can customize if you're in Salesforce.

There's the analytics part of it, which is a tableau based platform, Einstein Analytics. And really, this sounds a little scary to some people say, oh, my God, do I need a data scientist? No, you don't. What you really need is the intention first to truly understand what is simple, which is your most companies will study.

These are the ones that sell, which is 20, let's say 18 to 20 percent. There's more leads or opportunities that do not sell at 70 to 80 percent. So you should study that. You should look at if you have a CPQ and you're picking up these data and you're saying, well, look, in this market, the price points

from that first visit that do not sell are between this range in this range of these products. And it happens to be from these zip codes and it happens to be from these lead sources. They never sell in the first visit, you know, should we go and follow up with them in a different way?

Should we even offer those products? Should we go and adjust our offering? Those are two things. There's a there's a treasure trove of data that will guide you now in being able to plan not only your lead generation activities and conversion, but also what happens past the first visit once you get that information.

You know, it's interesting and this is a bit off script, obviously, because, you know, before we record this podcast, we do have a conversation. We do do our research. But as you were just sitting there talking about, you know, understanding the data, and it occurs to me you're 100 percent right that if you really stop to think

about it, if you have a mentality of a one call close, that means that the vast majority of your opportunities you're giving up, you're relinquishing you are making a conscious decision to say, well, if it didn't happen in the first two days, I don't care.

And to your point, if it's 80 percent, you know that that's 80 out of 100, obviously. But but I wonder, would people pay more attention to that? And this is, again, this is literally off script. We constantly get into conversations with clients about the cost of the the analytical cost of their leads.

Right. And we've seen things as high as a thousand dollars for for a lead that came through Facebook. But in reality, if you if you honestly start stop to think about that. That thousand dollars. In a way, you have to think about it in the sense that really two hundred dollars went to winning this lead.

And I'm just accounting for 800 dollars for all the ones that I missed. Right. That's probably not the exact right way. But I say all of that to say and maybe this is a note for for you and I and the rest of the team to consider.

I wonder if we should do. A cost of missed opportunity. Right, and so have you sat there and understood? Yeah, you spent all this money, but really that money wasn't spent for you to win these 20 opportunities. You spent that money and you said, I'm OK with losing these 80.

Like that just doesn't compute. Maybe that'll change the the conversation.

That's actually a very good point and a great way of framing that. And I like that a lot. You know, and I'm glad you went off script, because that's a that's an excellent framing of this problem or this challenge.

And I'll be I'll be the first to say that this problem truly exists within this space and many other spaces because of their philosophy or this formula instead of timeless principles that we know that most people, especially when you're spending more than a couple of bucks.

Do you have to think about a purchase home improvement products, remodeling, construction? You know, when you're getting into the thousands of dollars, it's quite difficult to go and say that everyone, you know, within a span of a six year, 90 minute presentation can make that decision.

Everybody nowadays is more careful. You got more information. So people want to curate, you know, the information that they have. Think about that and then get back to you to the ones where they feel that's what they want to explore.

But the main obstacle here really is, number one, as you said, a lot of business owners do not look at the missed opportunities and what's that costing them. And at the other side of it is there's so married to this formula, to this philosophy of a one called close.

And I can tell you that that that stems from a groupthink, because the consultants in this industry, I won't name them, but a lot of you know, a lot of them are have been around for 30, 40 years.

When they get into these companies, when at the start of their growth, maybe their mom and pop, they start growing even in the growth stages. They will employ these tactics where they say you must live and die by the one called close.

Otherwise, your sales team will be wasting your leads. Now, to some degree, there is some truth to that. But the reality is, when you look at the data and you know that 80 percent do not come out with a contract on that first call, you know, you have to wonder, are they looking at the data, which or

not? Or they simply married to a philosophy because of tradition. Sure.

Sure. Well, it's fascinating. I'm happy to report that, you know, we are changing that paradigm with the clients that we're working with. And I and I, I'd like to think that we're showing them the light, so to speak.

And our our clients have been very receptive to this idea of a rehash program. And from our standpoint, you know, if you think about our zero weight marketing waste mentality, it it just adds to the efficiency. So I'm excited about implementing these programs.

I think our clients are excited about it. It's not really costing them any more money. And we can get into a whole other episode about, you know, your call center staff and your sales staff. How efficient are they?

How much time are they actually spending on the phone and then meetings. And that's for another day in terms of best practice. So it like I said, it's a very interesting subject. Absolutely appreciate the fact that, you know, I feel like we've got one of the smartest guys in the industry when it comes to talking about rehashed

programs and implementing them. And, of course, I'm going to say that because we work together.

So thank you.

I appreciate that. I appreciate you shining the light on this area and on this topic. And so you know that that's perfect. And that's it for us today. And we hope you've enjoyed our chat and learned a couple of things.

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Thanks. Talk to you next time.