Strongpoint Services CEO on the power of outbound efforts

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I can go into the market, spend dollars, and acquire strangers as customers, or I can re-tap and re-activate these customers I’ve already dealt with.

Rich Jordan, CEO of Strongpoint Services, a multi-trade home service company with over 50 trucks, talked to Homepros about contractors’ mistakes, call conversions, and the newest, oldest trick in the book.

The big picture: Jordan isn’t sold on all of the industry’s best practices.

• “Home service companies put a lot of effort into leave-behinds and QR codes as it relates to generating reviews. I don’t think a lot of that works; it’s a lot of effort for a little gain,” he said.

• “Folks, especially from outside the industry, think you can win on Google PPC… and that’s just not true. It’s the other guerilla customer retention strategies that are more cost-effective.”

What’s happening: There’s been a shift in conversation lately from acquiring new customers to leveraging existing customers for growth.

• “I definitely feel that [outbounding] has been a topic of discussion more and more over the last year. And that may be because it’s gotten harder to do anything productive with LSAs, PPC, and stuff like that… [Contractors] are trying to get off of Google dependency. They’re looking to other avenues,” Jordan noted.

Details: Strongpoint has grown revenue significantly over the past year by simply making outbound efforts to existing customers. 

• “For someone who’s been around for a while, your customer list can be fairly large. Our customer list across the portfolio has almost 60,000 contacts.” 

• “So, I can go into the market, spend dollars, and acquire strangers as customers, or I can re-tap and re-activate these 60,000 customers I’ve already dealt with.”

• The strategy has also opened up acquisition opportunities: “One of the [customer] lists we bought last year, we called backward and forward I think six times. We got multiples of the purchase price back in revenue due to the outbound effort,” he added.

Of note: Jordan’s team openly borrows and tweaks ideas from other contractors — and re-shares them. Recently, they took a nugget from a Houston contractor to increase customer awareness of other trade offerings.

• “This is a head-slapper. We call it the ‘Oh, by the way.’ If you tell your call center you’ll give them $20 for every cross-trade booking, they’re like, ‘Okay, great, but I don’t see a natural way to bring that up in conversation.’” 

• “But this idea is, after going through the booking flow, saying, ‘Oh, by the way, we also offer electrical and we’re running this promotion right now for a panel inspection. Would that be something you’re interested in?’ Or something along those lines.” 

The numbers: For a promotion started in May, Strongpoint’s seeing a 30% pick-up rate on phone calls and around a 30% booking rate — converting 9% of raw phone calls. 

• “That’s one of the higher-performing promos, but that’s generally what we see. 20-30% of people will actually answer the phone, and then depending on the promo, we’ll see a 50% booking rate, or a 30% or less. I’d say, often, it’s less — 20%.”

What else is bubbling: Jordan commented on the HVAC replacement environment getting more challenging due to higher financing costs and economic pressure — whether real or perceived.

• To address this, Jordan noted, “We’re trying to increase customer contacts and visits into the home, assuming that, probabilistically, will increase replacement sales.” 

• “We’re not dumping money into ad words; we’re just trying to get into your home more often and offer low-barrier-to-acceptance promos like system checks or tune-ups. Then ultimately, it comes down to technician performance, presentation, and option building to get those replacements up.”