SUMMARY
In this episode, Louis Massaro shares how to make your moving company recession-proof.
- “You’ve got to make a decision right now that says, you know what? I’m not going to cave to the fear, but I’m going to stand up and I’m going to take the action that I need to take that’s not only going to help me thrive in any economy, but is going to just build my business bigger, better, stronger than it was before.”
- “Build a strong sales process. If you have up till now been in a position where you just kind of take whatever jobs fall on your lap, you’re like, “Oh, we get some calls, we get some leads, we book whatever we can.” It’s time to focus on your sales process.”
- “Fuel your sales with profitable marketing. The sales get you the business, the marketing gets you the opportunities. And the key with all of your marketing is to know your marketing ROI.”
- “Get ahead of the curve. Allow yourself to understand that the moving business is as close to recession-proof already as it is, because people will always need to move, no matter what. If they’re downsizing, whatever the case may be, but if you don’t tighten up, it’s going to be a rocky road. Not everybody is going to make it through this. That’s just the reality of the circumstances that we’re in.”
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TRANSCRIPTION
Louis Massaro:
What’s up, everybody? Welcome to The Moving Mastery Podcast. I’m Louis Massaro and I’m here with my main man, Chris, today, and we are still on lockdown as of the time of this recording. What’s happening, Chris?
Chris:
Hey, hey, hey. What’s up?
Louis Massaro:
I’m ready to get back to the office. I’m thinking next time we … It might be about the time we get back.
Chris:
Yeah, I think we’ll still exercise our social distancing rules.
Louis Massaro:
Yeah. I’ll let everybody else stay home and you and I could just go there and at least do the podcast.
Chris:
I’m looking forward to it. Let’s get to it.
Louis Massaro:
So welcome everybody. This podcast is set up to help you as a moving company owner take your business to the next level. Make more money, reduce your stress, live a better quality of life, and we’re doing that every single episode. These newer episodes Chris is coming with the topic, question, and just kind of dropping it on me. I’m not prepared for what, where we’re going and what we’re doing, but he knows to bring the value and to make sure that it’s stuff that will help you get to that next level with your business. So what do you got today, Chris?
Chris:
That’s right. I like putting you on the spot and putting you to the test here.
Louis Massaro:
It’s fun. It’s fun, I like this.
Chris:
For this particular one, this one’s … Normally, usually we’ve been having questions come in on our social media that make good topics, but for this one I thought I would kind of maybe go off on my own on this one. I want you to talk about something that I think is relevant for the time that we’re living in right now. I thought it was appropriate because I know you had just finished filming a new course about this particular topic. So what I thought is you should discuss how a moving company owner should deal with this upcoming recession.
Louis Massaro:
Okay, yeah. Yeah, so I did. I just finished, it’s called the Recession Proof Moving Company Masterclass, how to thrive in any economy. I did it as part of our Moving CEO Business Program for our members there because I wanted to give them a strategic plan to navigate this recession, right? Recessions here, it’s common, we don’t know how bad it’s going to get. We don’t know how long it’s going to last, we don’t know the effects. Luckily what we know is that we as moving companies we’re able to stay open and stay running, with the whole COVID thing. So it wasn’t as bad as it was for a lot of other business that really are suffering and have closed permanently because of this. But having gone through the 2007, 2008, 2009 recession at a point where my business was already around that eight figure mark and then just getting slammed with that recession, I learned a lot of lessons in that time and what I needed to do to bounce back, and realized that at the time the way my business was set up, it wasn’t recession proof. I had to scramble to put things in place to get it there, and I want people to just get out ahead of this thing, right? Don’t wait until it gets bad.
I want to put together an exact plan of what to do to go out there to recession proof your business, and I’m actually going to … This is for our members, but anybody that wants this course, I’m giving it away for a dollar for a seven day trial. It’s a seven day course. Go in there, check it out, implement everything that I talk about in that course, because it will help you recession proof your business, all right?
So if you want the course, go to LouisMassaro.com/recessionproof. LouisMassaro.com/recessionproof. It’s a dollar for seven days, and then it would actually enroll you into our basic Moving CEO Business program on a monthly basis. But check it out, you can cancel before the seven days. You’re not obligated to stay, but I want you to get this training.
I actually filmed it here from home. No TV, no flip chart, just went through and gave you the core, raw, here’s what you need to be working on to recession proof your business so that you will thrive in any economy. So go get that for a dollar. It’s LouisMassaro.com/recessionproof to get the Recession Proof Moving Company Masterclass, how to thrive in any economy. But let’s talk about it now. Let’s talk about an overview of what someone needs to do, and the first thing is to realize that a recession is not a death sentence to your business, right?
We’ve seen something with this pandemic that none of us have seen before in our lifetime, and it’s devastated a lot of people, and there’s a lot of negativity. There’s a lot of news that’s just breeding fear, which is understandable, right? There’s a lot of bad stuff going on. There’s people getting sick, there’s people dying, there’s businesses going under, there’s people being laid off from work. We’ve got the highest unemployment rate. I mean, in April alone there was 20 million people lost their jobs just here in the US. Just thinking about that can make somebody … Could really get into your head, it can infect your mind, right? So I’m going to get into some steps that you could take to recession proof your business, but I want to first share what I saw happen in the great recession, right? With the housing market collapse, and everything that happened from 2007 to 2009.
At that time I already had, I had just launched my long-distance division. I had six locations. Just launched my long-distance division. For the first seven years of my business I didn’t do any long distance, right? I had six locations, only local, and then decided, you know what? I’m going to go buy a million two worth of trucks, about 12 trucks, it’s like a million two, finance them, and was going to start hauling all the long-distance, we did for several years, but it happened right there, as the recession started, right? At the same time people started to not use the Yellow Pages as much, they started to shop online because the iPhone came out and more and more people looking for services started to go online.
So at the time I was spending $250,000 a month just in Yellow Pages, right? So now that’s going on. The recession hits. I’ve got all these long-distance trucks now. It was kind of like the perfect storm and it made me realize up until that point I was making a ton of money, things were running good, and it made me realize that I wasn’t recession proof, right?
There were things that I needed to tighten up, and that recession came and rubbed them right in my face and showed them to me, in a way where I saw them clearly. It’s like okay, I could see now what I need to do that I’ve been knowing I need to do, or talking about doing, but it’s important to get this stuff in place now so that, at the time it felt like survival, right? It felt like it’s doomsday, and that’s what the media does, and it’s the reality too for a lot of businesses.
So that moment for me, when I decided to take charge and not just sit around and say, “You know what? This is going to pass.” I realized that, you know what? Let me get way ahead of this. Let me improve and let me shore up all these areas that I need to improve in my business so that I can make it through this, and the reality was it actually propelled me right out of the recession. Coming out of the recession I went from 10 million a year to 20 million a year, because everything that I had put into place in that time that felt like it was more of a survival strategy really became that long-term success strategy, right? But I also witnessed and watched companies that didn’t take that action or didn’t know what to do. I don’t know exactly what their scenario was, but I did see businesses, moving companies go out of business, but I also saw my company and I saw several other companies just really take off during that time.
So the main message here is that it’s time to get things tightened up. It’s time to recession proof your business, because this will come and this will go, and it’ll pass, but there’ll be another one at some point, right? It’s like we knew there would be another one when that 2008 period, the so-called 2008, we knew there’d be another one at some point. We didn’t know when, right? So now here we are, what is it? 12 years later, and we’re headed into this recession. So you’ve got to make a decision right now that says, you know what? I’m not going to cave to the fear, but I’m going to stand up and I’m going to take the action that I need to take that’s not only going to help me thrive in any economy, but is going to just build my business bigger, better, stronger than it was before.
Chris:
Yeah, okay. So how does somebody go about starting this process?
Louis Massaro:
First thing I would say is that before we get into the steps, I’m going to share the steps, but you’ve got to be very, very conscious of how the fear of the recession is affecting you.
Chris:
Yeah.
Louis Massaro:
Right? Because having talked to people that lost their business or that had a really, really hard time in that recession in 2008, the common theme that I saw was that they fed into … I ask the questions, I want to understand what really went on, and the fear was so overwhelming and the fear was directing their actions. Right now the news, people are losing their jobs, restaurants are closing, they’re never going to open again. All these stuff is in your face all day long, so it’s telling your subconscious mind, “What’s the use? Why do all these stuff? We’re not going to make it.” And that’s one of the things that really impacted the businesses that didn’t make it or had a really hard time back then, was that they did allow that fear to get into their minds. We don’t realize it, what we consume kind of subconsciously takes over and helps us, good or bad, go in a direction that we either intend or didn’t intend to go. That makes sense?
Chris:
Okay. So even if you’re not aware of it, there is a subconscious influence happening there through the media, and wherever else, that can be really detrimental. Now, how do you know? First of all, how do you know if that’s actually happening to you, and then what do you do about it?
Louis Massaro:
Well, first of all, let’s just say that you’ve got to have some kind of faith that it’s not happening to you, right? Because especially back then it was like I had … Everybody would say to me, “Lou,” They knew I was in the moving business, and there was the housing market collapse, right? So everybody’s like, “Oh, man, this must be killing your business.” Everybody you talk to, everywhere you go, right? So your mind will start believing that if you let it, right? So if you don’t know how to take control and what to believe instead, here’s what I’m going to tell you, take it from me and have some faith that don’t buy into that shit. Your business, the moving business, is as close to recession proof as it gets, and even if we don’t implement the stuff that I’m going to talk about, right? Because people will always need to move, okay? People will always need to move.
Was the recession tough? Yes, but for me the toughest part was navigating that all these additional trucks, all these additional advertising expense and everything else that was going on with it at the same time, and right now it’s just a matter of tightening up a few areas in your business to make sure that you’re going to thrive right through this thing and not buy into that fear and just try not to consume it. Try to keep that … That period during that recession, that’s when I started to block out and not listen to the news, and not watch the news. Because every day it was like I’m trying to hold on here. I’m trying to build this thing, and I’m trying to make sure it doesn’t go under, and I’ve got to listen to all day long, businesses are collapsing, this is happening, and that’s happening. It’s just not good.
Chris:
Okay. So is that what you recommend? Is everybody just turn off the TV, stop looking at the news? I mean …
Louis Massaro:
That’s part of it. Then let’s get into the strategy too for the business, right? That’s part of it. You got to protect yourself and just be aware of what’s affecting you, right? And take it from me that if you focus in right now on your business, and you do the things that maybe you know you need to do, or maybe there are some new things I’m going to share with you on this podcast, and you implement that stuff and you just stay focused on not only survival but thriving, you’re going to be good. You’re going to be good, but if you let the fear overcome, if you let your mind say, “What’s the use? Why put in all this work? I’m not going to make it anyway. Businesses are failing.” Then that’s the action that you’re going to end up taking.
Chris:
Okay, okay.
Louis Massaro:
So the first … There’s seven steps, okay? The first thing is build a strong sales process.
Chris:
Okay.
Louis Massaro:
All right? Build a strong sales process. If you have up till now been in a position where you just kind of take whatever jobs fall on your lap, you’re like, “Oh, we get some calls, we get some leads, we book whatever we can. We’re not really doing much follow up. We don’t really have a script. Sometimes we miss some calls, we don’t really call them back. If the customer, we give them a quote and they want to book with us, they’ll call us back. We’re not going to follow up with them.” Right? That’s first and foremost, built a strong sales process. I mean, for me that was … I mean, that’s what propelled my business to $20 million and that’s what got me from zero to the first million, second, third, fourth, fifth, was sales, right?
When I went into that first market and every other market after, we blew past everybody quickly because of the strong sales process, right?
Chris:
Now, is that just like buying leads, or you’re …
Louis Massaro:
Well, buying leads is marketing, right? Marketing doesn’t get you business, marketing just gives you opportunities to sell.
Chris:
I see.
Louis Massaro:
Right? Opportunities to close, and a lot of people have a negative connotation with sales, but in reality in moving all sales is is really good customer service that takes that customer by the hand and leads them to do business with your company. You’re not selling something that people don’t need, right? You’re not cold calling people and trying to sell them a product, or a service. If you were calling people right now, I started off when I was in high school selling vacation packages in a call center. You can’t do that right now, right? You can’t call somebody up out of nowhere and try to sell them a vacation right now, but when people need to move and you get them on the phone, whether it came from a lead, or whether it came from a phone call, it doesn’t matter, your job is to give them really, really good information, guide them through the process, and then close. But part of that is number one, lead management, right? Making sure that you’re managing those leads and you’re managing those phone calls so that you’re getting them in the right hands of the right person at the right time.
Chris:
Mm-hmm.
Louis Massaro:
Right? Then you’ve got to have your follow-up as well. How many times do you call those leads? When do you call them? Should you be calling? Should you be emailing? Should you be texting? Should you be leaving voice mails? All of that stuff seems like it’s common sense, but not many people are making it common practice. So we just assume okay, we got some jobs, we book some moves. Everybody that’s listening I’m sure has done their first move, or does moves, or has been in business for however long. It’s not about do you book moves or do you not book moves, it’s how do you book more moves. How do you book more, right? In a case study that we’ve done just showing the difference between a 5% booking increase. Meaning if you had 100 leads come in, and let’s say you book 12 of those, your booking percentage would be 12%, let’s just say. Then if you go to 17%, you increase by 5%. So now you book 17 jobs instead of 12, right? So with a small company that does approximately $300,000 a year, that 5% increase in booking percentage is about $150,000 additional in revenue.
Chris:
Whoa.
Louis Massaro:
Just by a 5% booking increase. So I’m not talking about do you book moves or do you not book moves, I’m talking about how do we get you to instead of booking 12 out of every 100, book 17 out of every 100, right? Or instead of booking 20, book 25. It doesn’t matter what your closing ratio is, the point is can we get you to book 5% more, right? That’s just a small company. If you look at a midsize company, a company that let’s say they’re doing a million a year, if you’re able to get a 5% increase in booking percentage, right? You’re talking about 400,000 and change additional in revenue, not spending any more money on marketing, right?
First course I came out with was Moving Sales Academy, right? First seminars we did was Moving Sales Academy, and people were like, “Louis, what about operations?” I’m like, “We’ll get to that later, but let’s get your sales rocking.” Because it’s until you see it, until you’ve seen all the different processes and strategies that you could lay out to be able to increase your sales, it’s hard to fathom, but you don’t need to double, right? You just need to basically look at the leads that are coming in, how do we get a 5% increase? On a large company a two and a half million dollar business with a 5% increase, that’s a million dollars extra a year. A million dollars extra a year in revenue without spending any more money on marketing. So when I say build a strong sales process, your number one goal is to just increase your booking percentage, right? I’m not talking about the amount of people you speak to versus the amount of people you close. I’m talking about the amount of leads you get versus the amount of people that you close, all right.
Chris:
That’s based on going from 12% of those leads to 17.
Louis Massaro:
It could be 12 to 17, it could be 30 to 35. The illustration is a 5% increase.
Chris:
That’s what I was going to say. It seems like, I mean, 12 is a pretty conservative book.
Louis Massaro:
Yeah, but the 12 doesn’t matter. It’s just I’m using that as a placeholder.
Chris:
I see.
Louis Massaro:
Right? Don’t worry about the 12. If your current percentage is 30, if you go to 35 you still see that difference.
Chris:
Gotcha.
Louis Massaro:
Right? The big factor here is the 5% increase.
Chris:
And it’s based on the cost of the average move, is that it?
Louis Massaro:
No, it’s based on booking more of the opportunities that you have.
Chris:
Right, but that revenue is coming from, if your average move is whatever it is, 1,200 bucks or something.
Louis Massaro:
You don’t even have to increase the average move. The case study that we have, we’ll put it up somewhere for people to see it, is the same average move. Same average move, right? You’re just booking 5% higher conversions. So if you’re at 20, you go to 25. You’re at 30, you go to 35, right? That’s the only difference, and the average price of the move stays the same. If it’s 800, it’s still 800.
Chris:
Yeah, I see.
Louis Massaro:
That’s the difference, right?
Chris:
Wow.
Louis Massaro:
So yeah, it’s powerful. So how do you do that, right? How do you increase the booking percentage? I mean, I’ve got a whole six week online training with this, so we’ll just talk about a few things, but follow-up, right? Making sure that number one, you’re following up with the new leads that you get, to get them on the phone to close the deal, because everything you want to do with your sales, you got two things. Get them on the phone, and close the deal, or book the move, right?
Chris:
Yeah.
Louis Massaro:
Get them on the phone, book the move. So having that in place. Then your sales script. Everybody has to have a sales script, doesn’t matter. Whoever is booking the most moves in your company, whoever is doing the best job, take what they say, write it down, and start with that as your sales script, right? Unless you, a lot of people have my sale … Huh?
Chris:
For everybody, all the sales team?
Louis Massaro:
Well, especially if you have multiple people because if they’re all saying different things, you’re leading people down, you need consistency, right? Part of thriving in any economy, part of recession proofing your business is starting to lock down these processes. Create consistency that’s dependable. Not like, “Hey, we had a good month. Oh, we had a bad month. Hey, we had a good month. Hey, we had a bad month.” No, you’ve got to have consistency, and you do that through process. You do that by giving your people the right tools. When it comes to sales, I don’t believe that great sales people are born, right? There might be some people that are just naturally gifted at speaking, but all sales is, especially with moving, is just know what to say and when to say it, and you can train your team to do that. The biggest success I had in hiring sales people was great customer service people that just sounded really good. We gave them the script, we taught them how to do it, we gave them the tools that they need, and they were off and running, right?
So if you’ve got your script. You’ve got to have objections, rebuttals to objections, right? I’m going to give the real speedy version here of how to build your strong sales process, but everything that a customer would say of why they’re not ready to book with your company, your price is too high, I need to get some quotes, I need to speak with my husband, we don’t have a closing date yet, I saw some bad reviews, whatever it might be, you’ve got to have a scripted response for everybody on your team to be able to reply to them to overcome that objection and get them to book the move, okay? There’s no doubt that it’s competitive out there, and you don’t want to be competing on price. Too many people are competing on price, and when things slow down, they just drop the price, but the price is not the issue. You want to be able to sell at a price that is an hourly rate, or a flat rate, or by cube, or by weight, however you’re charging, that is profitable, right? That is based on job costing, that accounts for all your other costs on the move, right?
So in order to be able to sell at a higher price, you need better techniques for selling, right? We talk about this in the course, okay? So for a dollar go to LouisMassaro.com/recessionproof and jump into the Recession Proof Moving Company Masterclass, and I’m laying all these out for you.
So for the sake of time let’s move to number two.
Chris:
Okay, so we’ve got the scripts and the rebuttals. What’s next?
Louis Massaro:
Basically build a strong sales process is number one, right? There’s more that goes into that, but number two is fuel sales with profitable marketing. Fuel your sales with profitable marketing. The sales get you the business, the marketing gets you the opportunities. People often say, “Louis, what should I be doing for marketing? What’s the most impactful? What’s the most lucrative and profitable marketing?” And the answer is run your reports and find out what it is for you.
Chris:
Okay.
Louis Massaro:
Right? Determine your marketing ROI. The main number, and in the course I share four metrics in there, but let’s just for the sake of time let’s talk about one of the most important metrics, and that is the percentage. So in other words, how much are you spending versus how much you’re making, right? Your percentage spend. So if I spend $1,000 on a lead source and it brought in $10,000 in moves, I’m spending 10%.
Chris:
I see, yeah.
Louis Massaro:
Right? So the key with your marketing, and look, there’s new stuff coming out every day, right? There’s different strategies, there’s all kinds of different tools and all of that, and this is the stuff I train on and teach every month with our Moving CEO Business Program, but the key is to manage it, because again, it’s always shifting. They’ll always be this new thing, they’ll always be this question of does this marketing source work, should I use it, should I … Try everything, right? Try everything because what you want to do is you want to be able to be in a position where you could test, track and tweak.
The way that you do that is you first have to have your marketing ROI report set up, right? To be able to know okay, out of these leads that came in, how much money did we make off of them? Because there’s only a 100% of the pie. If you do a move for $1,000, okay, out of that 1,000 there are certain expenses that come right out, right? You got labor, you’ve got fuel, you’ve got your marketing costs. There are certain percentages that come right out, and if you let your marketing percentage get out of control, that’s eating into your profits right there, right?
So the key with all of your marketing is to know your marketing ROI, right? You guys know I’m co-founder in SmartMoving, you could run this directly in SmartMoving CRM to determine your ROI in all your lead sources. It’s in there, right? But if you don’t have that, just basically look at how much money you’re spending verus how much money you’re making to get your percentage, right? So when you’ve got a-
Chris:
Ideal percentage like a target that you should be shooting for?
Louis Massaro:
It really depends on the other cost factors you have in your business. Some companies can spend a little bit more because their other overhead is low, right? But I would say a good target is to be in that eight to 12% range.
Chris:
Okay.
Louis Massaro:
Okay. So now once you start to see, so let’s say that’s where somebody is at, right? Now they see a certain marketing source. When you’re going the marketing ROI you are running it for each individual lead source, right? So every lead source that you have. You’ve got this lead provider, that lead provider. You’ve got Yelp, you’ve got direct mail, you’ve got Equate Media, you’ve got Quote Runner, you’ve got all these different lead sources in there. So you’re able to track each one. Well, if one of them, let’s say all a sudden it’s costing you 26%, meaning if you’re getting a $1,000 move, you’re basically paying $260 just to get the job. That’s high, right?
Chris:
Okay.
Louis Massaro:
So that’s where you test, track, and tweak. So you test by trying everything out, you track it by running it through your marketing ROI to see if it works and if it’s profitable, and then you tweak it by saying, “Okay, well let me look at this report.” If I’ve got this one is at 26% and there’s other lead sources at 5%, okay, well maybe I’ll take that money and move it to this lead source and spend more with them, right? That’s the type of stuff where you make those adjustments and you see monumental changes. This report that I originally created back in that recession time period was when leads first started coming out, we were running nationwide. I wanted to buy more leads, my sales manager was like, “Hey, there’s more lead. There’s a new lead company, there’s this.” That’s when it all started popping up. I just didn’t feel confident to spend the money, so once I came up with this report I was like, “Okay.” And the whole test, track, and tweak. I’m like, “Okay. I’ve got a system now where I could try this stuff, and if it doesn’t work I could get rid of it or adjust it, and it doesn’t hurt me too badly.” That right there, that’s what helped me scale from 10 to 20 million, right?
A private client of ours came in and when he started with us he was doing three million a year in revenue. He was spending $50,000 a month in marketing, right?
Chris:
Yeah.
Louis Massaro:
So that’s 50,000, that’s 600,000 a year, it’s 20% of his overall business was going to marketing. I’m like, “Look, we need to get you down to 25,000 a month.” So we went through, we did his reports, we started making adjustments and allocating money to different places, cut off some sources, move some money from one place to the other, and within that year reduced his marketing from 50 to 25 a month, okay? And he doubled his business from three million to just under six million.
Chris:
Wow, wow.
Louis Massaro:
It’s powerful. There are so many little intricacies in all of this stuff. I mean, that’s why I put this course together, the Recession Proof Moving Company Masterclass. It’s like listen, let’s just cut through all the stuff, let’s just give you the core. All my other courses are six weeks, they’re long, this is seven days of look, let’s get you the core stuff that you need to tighten up and recession proof your business now, and thrive in any economy.
So from there, you’re free to try any and all marketing and make adjustments, and it’s not going to hurt you. I see so many people out there that when we finally get ahold and look at their stuff, and look at their marketing, and run the marketing ROI, they’re just getting buried by some of these different marketing sources that they have. It’s bringing in business but they’re not making any money on it because they’re spending too much to acquire the lead.
Chris:
Okay, wow. But you got to know the numbers.
Louis Massaro:
You’ve got to know the numbers. That’s the number one thing with your marketing.
Chris:
Okay.
Louis Massaro:
Right? That marketing ROI report, I would say that’s the second most important report in your business, period. All right. Which brings us to number three, which is know your numbers and act on them.
Chris:
Oh, perfect.
Louis Massaro:
Yeah, know your numbers and act on them. I had a feeling you were going to ask what the other reports were, so. You’ve got to know your numbers and act on them, and for me this was something that I didn’t learn until the recession came, until I was at that place where I’m like, “Man, I’m spending way too much in yellow pages. I just bought all these trucks with all these payments.” Then I had to learn, wow, you mean all those truck payments are not all getting deducted from the profit? So I’m showing profit but then there’s no cash. There was all of this came together to force me to learn my numbers. The things that you really want to be on top of, number one is your profit and loss and cash flow, right? Just how much money came in, how much money went out, and what’s left over. I mean, that’s the basics of it, right? I go a little deeper in the course, but your profit and loss statement. Run that right out of QuickBooks and which also integrates the at SmartMoving now. Your marketing ROI report, for sure, right? That’s another one that’s really important.
Then you have your certain sales metrics and operations metrics that you need to be able to see to identify what’s going on to help you manage the business on a day-to-day basis. You want reports that help you manage the business and not just keep score. I used to have reports early on, but all it was was I’d look at how much money we did last month. I’m like, “Ugh, great, cool.” Right? Look how much money is in the bank. I’m like, “Okay, great.” After we paid the bills there’s money left over, and that was my reports for the first seven years of being in business, and it wasn’t until the threat of the recession came that it really opened my eyes to what needed to be more of like stepping into that moving CEO mindset. What I need to be focused on daily and what’s going to help me manage my business? Because when you know your numbers, the overwhelm goes away, the stress goes away. You know where to start creating your action plan, right? Where the areas of opportunity are, where the areas of weakness are and concern, and what you could start chipping away at.
So I would say for sales definitely you need to be looking at your booking percentage per moving consultant, right? Booking percentage per moving consultant, meaning we talked about raising the booking percentage by 5% and we saw how that can from 150 to a million dollars a year extra in revenue.
Well, if you look at your sales team, let’s say you have several moving consultants, what we call them, or sales reps, and you look at okay, how many leads they receive versus how many jobs do they book, you’ll see that they’ll be people that are five, seven, 10%, 12% higher than other people, right? So it’s like okay, it’s possible. How do we get them to book at that rate, right? So there’s more that goes into that with managing your sales team, but you want to be looking at your booking percentage per sales rep. How many leads do they receive versus how many they booked.
Chris:
That’s how you get the true picture.
Louis Massaro:
That’s how you know how each of them are performing individually.
Chris:
Yeah.
Louis Massaro:
Right? Because again, you look at your marketing sources individually. How is this one performing? How is that one performing? How is this one performing? How is that one performing? And you make adjustments accordingly, you do the same thing with your sales team. How is this person performing? How is that person performing, right? And how do I improve that? You could go and work with them, and coach them, and do a process that I train on called enhancement training, where you basically take your current team and make them better, right? But if you’re looking at their numbers individually, you know where to focus. You know where maybe you’ve given somebody too much time and it’s time for them to go, they’re not making it anymore because they’re pulling your overall booking percentage down.
Chris:
Yeah, that would be some helpful information to know.
Louis Massaro:
Yeah. Then operations, something that you’ve got to look at every week is your mover payroll percentage. How much did you pay out in labor versus the amount of money you made? This is a huge profit killer for a lot of people. It shows that compared to the amount of money that they’re bringing in on a move, they’re paying out too much in labor to movers, and it’s not because they’re paying their movers too much, right? Sometimes that’s the case, but most times it’s because they’re not charging enough for the move.
Chris:
Are you looking at this per job or?
Louis Massaro:
What I would do is on a weekly basis, right? Because you could get real carried away with reports, and you could start drilling into all kinds of stuff, and that’s the beauty of reporting, is that if you started at a higher level and you need to see more data and more information, you could always drill down. But here’s how you run this report, is you basically take your pay period for the week, right? Let’s just say it’s Sunday to Saturday, whatever your pay period is. You take all the moves that were done in that pay period. What’s the revenue? Let’s say the revenue was $100,000, okay? In that week you did $100,000. How much was your payroll for that same period, right? So whatever you paid for those moves, that same period of time, how much did you pay out in payroll? Did you pay 25,000 out in payroll? Okay, if that’s the case … Payroll to your movers, not payroll to your office staff, not payroll to your sales people, just movers pay.
Chris:
Oh, okay.
Louis Massaro:
So now you’ve got instead of doing on each individual job, which you can drill that down if you want, you take the week. How much did we get and how much did we pay for movers? You’ll have your percentage and you want to use that as your benchmark, right? By monitoring that number, you’re going to be able to see right away if it jumps. I don’t know, let’s say your number is 30%, right? Let’s just pick a number. All of a sudden one week it jumps to 35%, and then maybe you start seeing it go up even more. Why is it going up? The only reason it’s going to go up is that your guys are getting paid more, which means your price is either going down, meaning you’re giving away too many discounts, or your labor cost is going up. Maybe you’re giving away too much overtime, you have too many guys doing overtime. Maybe it happens, it happened to me, I caught a dispatcher in one of my locations that had a little deal going with the movers where he was giving them extra hours and then getting a kickback from them, right?
So the point is there are certain things that you want to watch and be able to identify, and that’s one of the reports and operations, is many more metrics for that, but I would be watching that on a weekly basis as well. Then I’d say those are the core numbers to start with. Are there more? Sure, but if you’re not doing those, start with those.
Chris:
Okay, okay. So got your numbers down, you got your reporting in place. What’s next after that?
Louis Massaro:
Run a tight dispatch operation. This is something that I instinctually … I did it early on without even realizing it, of just everything had to be tight. Meaning from the minute the movers came in to the office, to the minute I … Dispatching them, getting them to the move, having them come back to the office, all of that in there, there’s so much room to be losing money. One of the quickest ways to plug the hole, like if you’re losing money. If you think about like all your money is coming into a bucket, and that bucket has holes in it, and those holes are all the inefficiencies within the business. You want to start plugging those holes so that you keep more of the money in the bucket, right?
One of the biggest areas is a lot of companies will dispatch their crews and send them out for the day and give them the contract, and give them the price, and let them calculate the move themselves. Like, “Okay, you guys are all set. I’ll talk to you later when you’re all done.” And the movers go out, and the movers check in with the customer, and the movers will calculate the price. The problem with that is there’s so much room for error. There’s so much room to be losing money, right?
Let’s just say for example you send a crew out and maybe you charge $150 an hour, I’m going to just write this down so I’m keeping track. Charge $150 an hour. The crew goes out, they get to the job at eight o’clock, but they don’t clock in with the customer for whatever reason until 8:15, right? The reason could be they’re just not paying attention, it’s not that big of a deal, like, “Oh, the clock says, yeah, 8:15 by the time.” They’re just not paying attention, number one. Number two, they’re telling the customer, “You know what? It’s 8:00, I’ll start the clock at 8:15, don’t worry. Take care of us, we’ll take care of you.” Right? Basically looking for an additional tip. Or working off the clock, right? Which basically is stealing from the company, okay?
Chris:
Yeah, yeah.
Louis Massaro:
But it happens, consistently. If you’re like, “Wait, that doesn’t happen to us.” Check the times that people are clocking in and clocking out on their job and compare that to your GPS to see when they actually got there and when they actually leave, and there’s going to be discrepancy, okay? So if you look at, let’s say you charge $150 an hour. You lose 15 minutes right there on the front end, because they clocked in a little bit late. Now they go to clock out at two o’clock but they don’t leave till let’s just say 2:15 again. I’m being conservative, right? These numbers are much higher usually when we look at them. But let’s say you’ve got 15 minutes on the front end, 15 minutes on the back end that you’re losing.
Chris:
Half an hour.
Louis Massaro:
Half an hour, so that’s what? 75 bucks.
Chris:
Yeah.
Louis Massaro:
Okay. So let me get a calculator here, I don’t want to be on the podcast doing my math wrong. So let’s say you do 200 moves a month, right? Times, and whatever your moves are, calculate it by that, and whatever your hourly rate it, calculate it by that. But 700 moves a month times 75 bucks, it’s $15,000 a month, which is $180,000 a year.
Chris:
Yeah.
Louis Massaro:
15 minutes on the front, 15 minutes on the back, 180 grand a year if you’re doing that many moves, right? If that’s where you’re at. So a lot of people, “But Lou, it’s a lot of work. We have to clock the crew.” When I say clock the crews in, here’s how we did it. We sent the crews out, you need to be there at whatever time the job is. When they get there they call in and they say, “I need to start time.” We look at the clock in the office and we give them a start time based on that clock. They call back in, “Hey, we’re going to be done within a half hour.” Okay, great. We’ll look at the clock, we tell them the finish time, we put it in the CRM, we calculate it, and we give them a price, right? Make sure that they’re clocking in and clocking out at that time, and make sure that that truck is there and leaving by that time. You clock out by two o’clock, the truck should be gone, not in the truck folding pads, all of that. Truck should be gone. You’re getting paid by the hour, it should be gone.
Now, that’s only like misting hourly rate, right? People say, “Yeah, but the guys get paid by the hour. Why would they let that happen?” Again, three, they’re just not thinking about it, right? They just don’t realize that it’s taking money away from them, or they know that hey, 15 minutes on their, if they’re making 15, 20 bucks an hour. Maybe they’re making 20 bucks an hour, 15 minutes is what, five bucks an hour? If they can make, get a good thing going with the customer, where they get a $100 tip, you think they care about the five bucks, right?
Chris:
Yeah.
Louis Massaro:
So there’s money there, a lot of money there. Then you look at the other questions, that when you clock the crew in and out yourself it’s like, “Okay, was there any additional packing? Did the customer need any pads?” All these extra stuff that the movers may or may not add, that they forgot, was there shrink wrap, stuff that maybe you charge for, maybe you don’t, you start adding that stuff up, right? Let’s say you’ve got another $50 in packing on every move, right? 250 moves, 50, that’s another 10 grand. So another $120,000 a year.
Chris:
That adds up.
Louis Massaro:
There is so much money to be made in dispatch, the dollars are in dispatch. Yes, you’ve got to book the moves, right? Yeah, I’m saying all this stuff is important because it is. If you want to run this business so that it’s highly profitable, all these areas need to be tightened up. If you want to run this business so that it’s recession proof and can thrive in any economy, all these areas need to be tightened up, all right?
So there’s other things you could do to run a tight dispatch operation, but let’s just start with clock your crews in and out from the office, and start by just looking, comparing their clock in and clock out times with the GPS to see where they’re at.
Chris:
That’s huge, wow. Yeah, okay. Really I was thinking, in a recession especially, that money is a big difference in your bottom line there.
Louis Massaro:
Any time, any time. I really feel like a lot of companies are going to, like this is going to be a huge benefit to them, this recession. It’s going to light that fire onto them. A little bit of the fear is okay to be like, “All right, let me get it together now.” Let me do these stuff that before I was like, “It’s no big deal.” Let me get it on point. They’re going to be so much better off when this is all over.
Chris:
Yeah, those vulnerabilities.
Louis Massaro:
Yeah.
Chris:
That’s good, okay.
Louis Massaro:
So the next one is, number five is, hire quickly and fire quickly.
Chris:
Okay.
Louis Massaro:
All right. So you’ve got to be able to, there’s two positions that you’ve got to have a system and a process to be able to hire quickly for, and that’s your sales reps and that’s your movers, okay? Both of these positions are either hurting you or they’re helping you, right? If you’ve got sales people that just are burning through your leads and you’ve coached them, and you’ve worked with them, and they’re not working out, you’ve got to be able to fire them quickly, but the reason people don’t fire quickly is because they dread the hiring process.
Chris:
Oh, okay.
Louis Massaro:
I hated hiring. I did not like the hiring process. When I first, when I opened the call center I hired a bunch of moving consultants. I’m like, “All right. I’m good, we’re done.” And some of them didn’t work out. We had to go back to the drawing board to hire again. It was like, “All right, I need to create a system and I need to create a process so I could teach this to my sales managers so that when we need sales people we could hire them quickly. When they’re not working out, we could fire them quickly.” When I say not working out, we give them an opportunity, we coach them, we work with them, do enhancement training. It’s not like we send them out there to swim or sink, but there comes a time where they’re no longer profitable for the business based on what you’re paying them and versus what they’re booking, they’ve got to go.
Chris:
Yeah.
Louis Massaro:
Same thing with the movers, right? In both of these positions you need them to be able to scale, right? You can’t grow without more sales people, you can’t grow without movers, and I see companies that will hold themselves back from growing because they don’t have enough movers. Yes, I totally understand it’s hard to hire movers. I understand that this modern day people could go drive for Uber, the younger generation doesn’t want to do the physical work. I get all that, those are all excuses, but if you have a process for hiring movers and you just implement that, and the minute you need movers you just start following step, step, step, step, step, that you could teach to your operations manager, teach to your dispatcher, and you’re able to get them in and get them in the rotation and on the trucks quick.
That’s going to give you a huge competitive advantage to be able to grow your business. It’s the same thing, you’ve got to be able to fire quick too. If they’re going out there and they’re pissing your customers off, they’re causing damage, they’re not showing up on the days where you need them to show up, you don’t have time for that. You’ve got to move on. It’s hurting your business, but again, people will stick with employees that they know are not a good fit for the business because they dread the hiring process, and they only dread the hiring process because they don’t have it documented. They don’t have it laid out in a way to where they could do it quickly.
By the way, I know I’m going through this quick. I laid this out in the course, you can get the course for a dollar. Just go to LouisMassaro.com/recessionproof. LouisMassaro.com/recessionproof. Jump in this course for a dollar and this is, I’m going to lay all this stuff out for you.
Chris:
For reference, just this process that you teach of hiring movers quickly, what’s the timeframe from when you get an application till they’re on the truck? How quick is it?
Louis Massaro:
It depends, right? But within a two week period you should be able to start your process and have them on the truck, within that two week period.
Chris:
Okay.
Louis Massaro:
Right? It’s not about ugh, we need movers, what do we do? It’s about we need movers, okay, whoever is responsible for that, start the process.
Chris:
Yeah.
Louis Massaro:
So it’s like step, right? Okay, place the ad. Get the résumés or the applications for movers. Get the phone interview, get the in person interview, do the skill assessment, and get them going. If you just have the steps to follow, it makes it so much easier. Where if you don’t have the steps, you procrastinate, right? Because it’s like, where do I start? It seems like this big unmanageable thing, when all it is is a series of steps.
Chris:
As the owner you can breathe easier knowing that it’s getting done and it’s getting done the way you want it to be.
Louis Massaro:
I mean, we’ve watched, you’ve seen it. So many of our clients that this was a problem for them, hiring movers. Now they’ve implemented our process and it’s like it’s not even an issue. It’s like they get to a place and either them, depending on who it is, them, their ops manager or their dispatcher, just like, “Hey, hire some movers.” Okay. How many do we need? And they know the process, they know what to do. They know exactly the steps to take. I mean, what a weight off your shoulders.
Chris:
Yeah.
Louis Massaro:
It’s such a barrier to growth and an excuse why people don’t grow, that once you get that in place, you’re off to the races. You’ve got to be able to hire and fire quickly, sales reps and movers, to be able to thrive in any economy and reach that next level, and recession proof your business.
Chris:
Awesome. So is that it or is there more?
Louis Massaro:
Two more, two more.
Chris:
Okay.
Louis Massaro:
So number six is cultivate repeat customers, referral customers, and reviews. The three Rs, okay?
Chris:
Okay.
Louis Massaro:
All right. You can’t assume that you’re going to get repeat customers. Somebody that you move that’s going to move with you again, sure. You get them naturally, they fall on your lap. Referrals, they fall on your lap, reviews, they fall on your lap, but you’ve got to be able to cultivate more of those, okay? So you’ve got to be able to get your customers that moved with you once to move with you again, right? I teach all the steps on how to do that in that course. The referrals, right? You want to build yourself a referral program. For me, when I first started, what I did was I went out and I pounded the pavement. I would dispatch the trucks, I didn’t have an office, I worked out of the truck rental yard, and I went apartment complex to apartment complex, to apartment complex. That’s pounding the pavement, right?
Chris:
Oh, yeah.
Louis Massaro:
And rounded up business, but the minute I got busy and I stopped nurturing those relationships, all those referrals stopped coming in, right? Years later, really right before the recession time period, around that timeframe, I was like, “Look, we maxed out all our other marketing, and let’s get this referral program going again but let’s set it up properly.” Right? Let’s have it formatted, let’s give it a name, let’s give it a … And we came up with what’s called The Moving Points referral program where there was cash prizes, there was also prizes that we gave away. Everything from an iPod to a vacation, and everything in between. The point is that you’ve got to establish your referral program before you try to go out and get referral partners, right? What I did the first go-round is I went out to get, I didn’t call them referral partners at the time, I just was trying to draw my business, but what I was actually doing was I was going to get referral partners without a referral program, right? This person I’d bring them donuts, this person I’d send flowers to the office, this place I’d bring cash. It was all over the place, and when I stopped nurturing it, it fell apart.
So in order to get the referrals, first build the program and decide how you’re going to compensate people, right? I go over The Moving Points referral program in the course, which by the way, it’s a dollar. Go in there, you get it for seven days for a dollar. If you want to continue with us in the Moving CEO Business Program, great, if not, go in there and take this course. It will help you recession proof your business.
So we got repeat customers, referral customers, and reviews, right? In this modern day you’ve got to be cultivating reviews. Reviews are everything. Your customers, if they … However you get them on the phone, however you get the lead, just know that they’re also googling your company, and they’re going to check you out, right? And you’ve got to make sure that you’re cultivating those five star reviews, you’re getting more of them. You have a system for doing it. You don’t just wait for people to leave you the review. You proactively go out there and get them. Again, in the course I teach the safety net review fetcher. It’s a seven day course. I mean, we’re running through it all here. We could’ve broke these up into probably seven different episodes, but.
Chris:
It’s a lot of stuff. I mean, over seven days even that’s … I mean, you’re diving through it all in seven days. I mean, I’d probably take some time to implement, right?
Louis Massaro:
Yeah, yeah, yeah. It’s not like seven days, in seven days you’re recession proof, that’s not the …
Chris:
Oh, okay.
Louis Massaro:
Yeah, yeah. It’ll take you time to implement it, for sure. I don’t want to mislead anybody. So repeat customers, referral customers, and reviews, right? The seventh and final step to recession proof your business is fine tune your fundamentals before you expand. We’re talking about the recession as if it’s … Getting through it as if it’s like survival, but the reality is that you could still expand during a recession.
Chris:
Yeah.
Louis Massaro:
You’ve got all this stuff in place, you could still grow if you’ve got all this stuff in place. So fine-tuning your fundamentals says let’s take a look at the five fundamentals of a moving business and fine-tune those, and those five fundamentals are lead generation, booking moves, servicing moves, customer service, making sure your customers are happy, and accounting and reporting, right? Everything you do in your business falls under those five categories, everything. One of the things that I see a lot of people fail with, and for me it was a certain sense of failure when I first started to expand and open additional offices, is doing it before they’re ready to do it, right? Going out and opening a second location before you’ve fine-tuned the fundamentals at your first location. When you open more offices, when you go into another division, you’ve got to make sure that your business currently can run without you, and you really want to build yourself a model business, right? Meaning this is exactly what I want, because imagine you could just copy and paste. On the computer you could go and copy something and paste it.
Imagine if you were writing a letter and you need to copy and paste it to however many places. You’d want to get that letter written exactly right first before you copy and paste it.
Chris:
Yeah.
Louis Massaro:
You don’t want to copy and paste it and then go make a bunch of adjustments all over the place in the different letters that you’re sending out, right? It’s the same.
Chris:
If you have a second location, you want it to run exactly like the first.
Louis Massaro:
If the first one is run right. So in other words, if there’s a lot of stuff that’s not tightened up and a lot of problem areas, you don’t want to duplicate that, because now you’re just going to have a second headache with more problems. You’ve got to fine-tune the fundamentals. You’ve got to get your business so it’s consistently profitable that you can predictably count on that money, you’re able to see this is how the business runs based on process with the people running it, knowing hey, I could hire quickly, I could fire quickly. Everything is on point, my sales is on point, I’m able to track my marketing, I’m running a tight dispatch operation, right? My customers are happy, I know my numbers, I know my reporting. Then take that and duplicate that.
Chris:
Okay.
Louis Massaro:
Right? Don’t bring a problem to a new location. A lot of people be like, “Man, I need to make more money. I’m not really making money. Let me go open another office.” No. What you’re doing is you’re just digging a bunch of little shallow holes when you need to dig one deep hole where you’re at, get the money there, establish that model business there, then duplicate, then expand.
Chris:
I know you had to learn that lesson the hard way, right? Because I remember you telling stories about flying all over the country to different locations trying to put out fires.
Louis Massaro:
Yeah, I thought I had stuff in place because my first office ran so well. But what I didn’t see and what I didn’t take into consideration at the time was the fact that it ran well because I was there and I could see it, right? So what wasn’t written down in processes, we didn’t feel it because I was there to give the guidance and give the direction, but when we opened other locations that I wasn’t there to see, and I wasn’t there to be there, and hear it, and feel what’s going on, that’s when I discovered that things weren’t running the same, right? What I copied and pasted I thought was the same, but the missing piece was me, and you can’t copy and paste yourself, right? That’s why I say your business has to be able to run without you before you duplicate it, because you’re that missing link. If you duplicate, you’re like, “No, it runs great.” And you put it somewhere else, you’re not there, right? So if you’re the missing piece, you’ve got to make sure that your current business can run without you. That’s the true test. Once that’s in order, duplicate, open as … I mean, go worldwide, do whatever you want to do, but get that first model business down.
Chris:
Awesome.
Louis Massaro:
So those are the seven. Build a strong sales process, fuel your sales with profitable marketing, know your numbers and act on them, run a tight dispatch operation, hire quickly and fire quickly, cultivate repeat customers, referral customers, and reviews, and then fine-tune your fundamentals before you expand.
Guys, go and get this Recession Proof Moving Company Masterclass. You could try it out for a week for just a dollar. Go to LouisMassaro.com/recessionproof. I’ll put the link down below for you. You’ve got to get in there and put this stuff on your list and start implementing it right away, all right? Don’t be behind the curve on this. Get ahead of the curve. Allow yourself to understand that the moving business is as close to recession proof already as it is, because people will always need to move, no matter what. If they’re downsizing, whatever the case may be, but if you don’t tighten up, it’s going to be a rocky road. Not everybody is going to make it through this. That’s just the reality of the circumstances that we’re in, right? But if you’re here, you’re listening to this, I’m sure you’re committed to mastery. You’ve listened to this whole episode, you’re here with us, so you’re someone that’s committed and dedicated to building your business so that it will strive and succeed over the long-term. Go get that course, LouisMassaro.com/recessionproof for the Recession Proof Moving Company Masterclass. I literally shot it from my house because I wanted to get it for our members, right? It’s something that I did just kind of as a gift for our Moving CEO Business program members that they weren’t even expecting, but I wanted to give them a strategic plan to navigate through these times.
Chris:
Awesome.
Louis Massaro:
Anything else, Chris?
Chris:
No, that’s it. Get out there and kick some butt.
Louis Massaro:
All right, guys, until I see you next time. Go out there every single day, profit in your business, thrive in your life. I will see you in the Recession Proof Moving Company Masterclass and I’ll see you on the next episode of The Moving Mastery Podcast.