Sales Is a Process, Not a Personality with Sean Samson

Why sales is a process you can learn

00:00Bill Gallagher: Have you ever had a week when you're completely slammed, but somehow nothing actually moved? Is this one of those weeks? That's not really a time problem. It's a busyness habit problem. My new book, Busy Is Broken: Do Less, Scale More, is all about growing by doing less, not more. Read or listen to a sample chapter over at busyisbroken.com. That's busyisbroken.com. It's also on Amazon and other booksellers.

00:41Bill Gallagher: The teaser is this: why don't people buy? How do we get great at selling? How do we get better at selling, learn to grow the business, all the things that go along with growing the business? Our guest today, Sean Samson, trained hundreds of contracting companies, done a ton of work in the whole world of electrical, mechanical kinds of contractors, boiled it down to a few root causes. If you've ever heard somebody tell you, "Let me think about it," this episode's going to help you figure that out and apply it. So whether or not you're a contractor—we deal with a lot of contractors, but whether or not you are—we're going to give you some ways to get selling better, scaling your company, and so on.

01:22Bill Gallagher: Hey, everybody. I'm Bill Gallagher, Scaling Coach and host of this super fine Scaling Up Business Podcast. We come to you every week with a show, a story, a guru, an author, something around scaling and growing your company. We've helped thousands of companies over the years. I coach many, many every year—only a handful, like, really deeply privately—but we work with so many companies. And you'll find more than 650 episodes at scalingcoach.com along with tools, downloads, all kinds of things like that. We do a workshop every month. Many of them online, a few of them in person. We've got all kinds of things to help you scale. Come see us, scalingcoach.com. Like, subscribe, notifications, all that stuff wherever you're seeing this right now, LinkedIn, Spotify, Apple Podcasts, et cetera. Turn it on. You'll get it every week.

02:13Bill Gallagher: Alright, listen. Our guest today is Sean Samson. He's the CEO and founder of his own training company. He's trained and built in more than 300 contracting organisations across many countries. He's the author of Five Reasons Why People Don't Buy and creator of the Five Reason Selling System. Everybody's got a system. He's got one. Seems to be working for a lot of people. Thirty years in trades. Began with an electrical contractor. He's also the inventor of something called the Grab-It Guitar Stand. We'll talk about that, I'm sure. He helps contractors shift from transactional, kind of up and down world to more predictable things, service maintenance contracts, just like getting on top of their business. Alright. Let's get into it. Welcome to the show, Sean.

03:00Sean Samson: Thanks for having me, Bill. I appreciate it. It's exciting.

03:06Bill Gallagher: Alright. So we're going to talk about all the hard business stuff, but before that, why guitar stands?

03:08Sean Samson: Oh, man. I knew you were going to ask me that. So I'm a drummer. And most people would say you're a drummer, not a musician. It's an inside joke, right?

03:20Bill Gallagher: Are you a player as well? Do you play anything?

03:20Sean Samson: I play the stereo.

03:20Bill Gallagher: Alright.

03:20Sean Samson: I'm a drummer that invented a guitar stand, and the reason why the idea came to me is because—this is probably 2008—I'm at band practice. My guitar player had just bought a brand new Les Paul that I'm sure he paid $5,000 for or more. It was a classic. Put it in his regular guitar stand, turned around, cord wraps around his foot, pulls his guitar right out of his guitar stand and cracks his neck. And I said, why doesn't anybody make a one-handed type of click-in, click-out type of guitar stand where all you've got to do is have it be easy peasy, no-brainer? And why don't they have that? Did some research. By 2010, we had Grab-It Guitar Stands out. We had licensed it out globally for, I would say, maybe about three or four years. And then the Rock & Roll Hall of Fame picked it up, and they used all Grab-It Guitar Stands in their displays.

04:13Bill Gallagher: Yeah. So, look. We have people who haven't really thought about that, right? If you're in your home space, if you're touring, especially if you're touring or in some other place, you're performing, there's a guitar stand over against the wall or next to the amp or somewhere, and you put it in, it just sort of holds there. But in your case, it's got a little mechanism that grabs the neck and holds it firmly.

04:37Sean Samson: That's exactly right. Yeah. So I wouldn't say it would be designed for touring because normally when bands are touring, they're using multiple guitars or basses for different tunings and keys and things like that. But for home and studio use, it's perfect.

04:55Bill Gallagher: Ah. The opposite of what I thought.

04:55Sean Samson: Yeah, yeah.

04:57Bill Gallagher: Alright. Well, so let's talk about the book for a minute. Why did you write the book? What led to this, right, the evolution of your career a little bit?

05:07Sean Samson: Yeah. My career started off with landing a job at a local union contractor here in Cleveland, Ohio, that was looking to build out the service and maintenance side of their business. And they had nobody to hustle and sell electrical preventative maintenance service agreements. I'm not a technical guy. I did a lot of homework and a lot of training on my own to understand electrical systems and components and parts and things like that. But I got hired in 2003, and we happened to be in this global network of contractors at that time. By 2005, we were Contractor of the Year. By 2006, I was one of the top 1% performers in the network. And by 2007, the network that we were in came to me and said, "We want to steal you from Harrington Electric"—which is a contractor here in town—"and we would love for you to teach other contractors around the world how to do the things that you do because these contractors just don't know how to sell service agreements." And that led into training leadership, management, understanding how to scale businesses to get to the KPIs they're looking for, quotas. All those things that go into selling and creating higher revenue and higher valuation along with that too.

06:47Bill Gallagher: So you go from being somebody who wins at something to then designing things out and writing a book about it. Where did that come from? Did you stumble through everything and learn it the hard way? Did you read? Did you go through other training programs? What went into your education?

Deals die from lack of information and wrong price

07:02Sean Samson: My education is—and I'm still this way—I'm a micro-learner. And I'm more of a micro-learner now because of lack of time.

07:12Bill Gallagher: My wife thinks I'm a micro-learner, but she says I hardly learn anything, so that's the micro.

07:17Sean Samson: Yeah, well, you have to make the time to, I guess, absorb what it is that you're interested in and what you want to learn about. But me personally, I knew that if I wanted to be a top performer and make the most for me and my family, I had to understand the game of sales. I had to understand why people weren't buying from me. Because if people don't buy from you, you can't just keep doing things the same exact way. It doesn't work like that. You have to figure out what's the most obvious thing I'm missing or what are the most obvious points that are missing, and you need to make adjustments in real time. And those are the things that I was really, really good at. You can push out 100 different quotes and maybe you'll get a percentage of those back, but you're just tripping over sales. You don't want to do that. You want to have consistency in sales, and you want to have a process in place that you can scale out not only for yourself—

08:15Sean Samson: But also learning that that's why businesses fail, because they don't have processes in place that they can scale out and have other people copy and paste and train the same exact way. So develop my own sales process, develop my own system, and it paid big, big dividends for me. I was listening to Napoleon Hill, Jim Cathcart, Hal Becker, Tony Robbins, just really trying to get an idea of relationship selling, question-based selling, how to understand. Because they all have, if you look at, if you think about all those guys, they all have different approaches. But they're all delivering the same message.

09:02Bill Gallagher: I wonder if you look back in your history, can you think of something that happened where it looked perfect and then it died, and you had to do the postmortem on it? I'm curious, like, how that went and what you figured out was the killer.

09:20Sean Samson: For something that I was personally selling? Yeah. That's a really good question, and there's a great answer to that. The reason why things die is because customers don't have enough information. That's why things die. The reason why jobs don't close is because of two reasons: lack of information and you didn't get the decision maker, which gives you the authority, which is one of the reasons why I developed the Five Reasons Selling System. So, you know, that's one of the things that contractors do really good, man. They push out small projects and agreements that they have no idea what those thresholds are. There's nothing worse for you to come to me and go, 'Hey, I'd like a lighting retrofit, or I'd love for you to do X, Y, and Z in my business.' I go, 'Yeah, no problem. Here's a $200,000 proposal.' But I never asked you what your budget was or got decision makers or authority. Here you are loving what I put together and be like, 'Man, I got $57 to work with.' Well, where do you think that, what do you think is gonna happen to that proposal? It's gonna sit on the shelf, which gives me a long sales cycle, which connects me to zero money. So the objective of the game, and I'll keep using the word game because it really is a game. The objective of the game is to uncover those five reasons, but the big daddy of those is delivering wrong price. That's the reason why things don't close, man. It's lack of information and wrong price are the two logjams. The information that's lacking is what you get about the client prospect need, right? The information you're lacking is their world. 100%, man. You don't run a sales call if it's all people what you believe. You run a sales call to figure out what they believe. That's the reason why you run a sales call.

How existing customers reveal what you're missing

11:09Bill Gallagher: I think I do it. We all do it from time to time unconsciously. We get on the phone, and we just start talking about ourselves and what we do and that kind of thing. And you should know better. You should learn. And yet,

11:21Sean Samson: Like, for some reason, you keep doing it. You know? I'm gonna, as we prepared for this call, one of the things that you asked me was to give you real life scenarios and real stories about things. Just this morning, got off the phone call. We had just put this company through training, and he gets on the call with me. He says, 'Hey, I was out visiting an existing customer today.' So right off the bat, that's a red flag for me. And the reason why that's a red flag is because when you come through any type of training and then you take and you apply that training to existing customers, you think that you already know those customers, and you don't have to apply those concepts or those thought processes because you already know that particular customer. Make sense? Yeah. So one of the very first things that I had asked them were things that I know I was gonna get no's on, and that is understanding what their budget is, who's the decision maker, critical area. It's things that we would normally talk about. He's like, 'You know, I don't know those things.' I was like, 'Yeah, but, dude, you told me that they were an existing customer.'

12:20Bill Gallagher: Right.

12:21Sean Samson: You said that you guys have been working with them for the past eight years. They do hundreds of thousands of dollars with you. So you can't, when, if you're gonna go to see existing customers, you can't lazy up the processes that you've been trained on because you need to apply those whether or not I know you or whether or not I don't know you because at some point, it's gonna catch up with you. And that literally just happened this morning, as a matter of fact.

12:50Bill Gallagher: And so you called it out. Were they embarrassed?

12:55Sean Samson: No. He was cool about it. He's like, as a matter of fact, he had stopped me mid-sentence when he goes, 'Look, man.' He goes, 'Know,' he goes, 'Man, that I dropped the ball on this. You're exactly right.' Which is really, really interesting because if you have a customer that you've been working with for either one year or ten years and that customer doesn't know what it is that you do, where else are they getting everything else from? So if they're only using you for X, Y, and Z because they only think you guys do X, Y, and Z, who, what are the contractors are they working with? What types of service companies are they working with? Because they're only using you for the things that they know that you do. Right. Means you're leaving money on the table, man. And those are the things that contractors need to be aware of because if, unless that customer looks at you as a preferred source, they're getting services elsewhere, man. You are not preferred source. You're a vendor, but you're not preferred source, certainly.

13:47Bill Gallagher: How often are you working with people who are in a subcontractor position versus a general contractor or direct to, you know, property owner?

13:58Sean Samson: We are not working with, our clients are electrical, mechanical, plumbing contractors that are approaching everything from an owner-direct perspective.

14:09Bill Gallagher: Uh-huh. Uh-huh.

14:11Sean Samson: This is not, yes, they deal with GCs, and they deal with companies like that. But our training is to have them create a higher valuation through selling multi-agreements where you're connecting with owner-direct opportunities, plant managers, facility managers, maintenance managers, people that are already dealing with budgets and have the authority on some level to give the go-ahead on small project work and/or service and maintenance agreements.

14:43Bill Gallagher: Got it. So it's pretty much direct to an end-using decision, not a sub through a GC kind of a thing.

14:52Sean Samson: 100%. 100%.

14:55Bill Gallagher: Yeah. And yet a ton of mechanical, electrical are doing that kind of work for people on new construction, tenant improvement, et cetera.

15:05Sean Samson: Yeah. For sure. Yeah.

15:08Bill Gallagher: Well, let's talk about a variety of things. You know, you may think of other stories. Fine to toss them in. But one of the things that gets in the way a lot of times, or is a problem or frustration, is just this sort of ever-declining margin. We get in a competitive situation. We discount. We discount. We discount. Right? And it never seems to end, and then we end up with a business that doesn't make any money. You remembered a company in Rhode Island you worked with. Take that one or somebody else. Talk to us about maybe an example of working with that.

Discounting happens when you skip discovery

15:41Sean Samson: Yeah. I think that, you know, in the contracting arena, everybody is so used to, both contractor and customer are very used to

15:53Sean Samson: Having a conversation where they expect to have to dial down labour rates. They expect to have to, at some point, talk price. And the reason why that happens is because you don't have a process in place, which is what we just talked about, of that customer getting an understanding of what it is that you do as a full service contractor, especially particular problems that you want to solve on the service and maintenance side. So, you know, we have a partner in Rhode Island where they've grown their service and maintenance side of their business 800% over the last three years. And the differentiation for them and getting them out of that price conversation is getting them really good at taking meetings with existing and new business and dialing in a sales process that explains what it is, not only what it is that they do, but getting a better understanding of the problems that they can solve for the folks that they're going out to see, and then making that differentiation in training, in technology, in tools, in competency to work on or around equipment. There's lots of things that can be said in front of customers where I can make that differentiation and be able to take myself out of the bucket of what everybody else is doing, because contractors just don't take the time to do that, man. We all know how contracting works. Contracting works where I get an opportunity. I pull it off of an email. I pull it off of some type of website. I estimate it, and then I push it back and I email it back. And then I just kind of go like that and hope that I get the job. So there's no question-based selling going on. There's no discovery, no exploratory going on. And that's really the differentiation. And that's a good story because they made those changes. And unless they would have made those changes, they would not be in the position that they're in right now. As a matter of fact, honestly, Bill, they probably would have closed their doors last year because bid and spec was really scarce in the window that they were in. And had they not had the multi-year service agreements that they had sold not only last year, but the year before, the renewals, that carried them through, certainly through those lean months, without a doubt. And here they are 800% higher than they were three years ago, and they just hired their second sales professional to help them scale out even more than where they're at. So it's exciting. It really is. The passion to see people grow, and it's not just about making money, dude. That's not even the exciting part. The exciting part, because that will happen if you do things right, the exciting part is watching people finally get it and that light bulb going off, and then really onboard onto the processes and the procedures and really just trusting in what you're training them. That's really the exciting part. The money's going to come if they do it right anyways.

Decent leads with a horrible close ratio

19:15Bill Gallagher: So, you know, I often work with general contractors, specialty contractors, sometimes like sub or trades. And I was talking to one recently about their sales process, and they were debating more leads versus better selling. And the owner realised that they actually had a decent amount of lead flow, and he was considering buying more leads. But he looked at his close ratio and it was terrible. And the data was poor, so we looked at it together. And as I asked him, the thing that struck me is they didn't know why people came to them. Like, okay, we got a lead in, but like, where did it come from? Did you hear about us? Are you referred? Like, that kind of thing. They didn't know the reason for doing the job. Like, oh, we want to bid on this project. Why? Why now? Why particular? Any urgency? They didn't know the competitive process. Are you collecting five bids? Am I a favourite? Am I the last of five? The first of five? Am I the only? Like, how's it going to go? What do you need? Is there any special requirements? No notes like that. They have a CRM. Good thing, right? So there is a CRM. There is some information collected, but it's just about the particular. Like, here's the address of the job, and here's the notes on what the person said they need. But none of the why, where it came from, what's driving them, expectations of budget, any budget at all established. Like, none of that there. And any of the things we could see at first. So I said, okay, first of all, you want to establish that bit. Like, let's figure out some key things we want to collect every time. And then the next thing was they would go this long bidding process to make sure they got the price right into, like, you could probably just look at the address, look at the thing, and make up a ballpark right in the thing and say, hey, we're talking about this many whatever dollars. Is that in the ballpark or not? Because I'll get more specific. But if we're not even close, then we probably shouldn't continue. And so any, like, pre-qualification, like, none of that was the case. And I think that's true for a lot.

21:42Sean Samson: You're talking about contracting. Contractors will look at themselves. If you were talking to a true sales organisation, would you have got those same results?

21:54Bill Gallagher: Yeah. No. They would know. They're like a pre-trained design thing. Like, I built my sales team, and they've got a process and a playbook and a whole thing. Yeah.

22:06Sean Samson: Yeah. And that's the reason why that particular contractor has those results, is because you have leadership in place that doesn't look at their organisation as a sales organisation. They're looking as a contracting organisation. You see, you can't have leadership in place that doesn't understand sales. It doesn't work. Or management that's in place that doesn't understand sales, because you're going to get crap results 100% of the time. So what did you do with the Rhode Island company? How did it change things? What happened there? Yeah. Well, what we did first and foremost, which is what you're talking about, is we gave them a very specific sales process. We gave them very specific tools to use to open up conversation, how to approach customers, gave them an understanding of the power of question-based selling in the construction arena, which is, again, going back to what you said. There was really no data. How is a CRM going to help me if I don't have anything to put in it? What's the customer journey? Why are they buying? What did they spend with us last year? What did they do in repairs? What do they budget for failure? You know, there's all kinds of things that you need to ask in those types of, whether service and maintenance or small project work. And that's what we did. We put a very specific sales process in place for them, gave them the training on how to approach, understand TAC. If you're not familiar with TAC, TAC is one of the biggest ball droppers of all time when it comes to setting meetings. TAC is just Time, Agenda, Conclusion. So if I'm sitting down with you for the very first time and I'm a contractor and you're a customer, it would sound something like this. Bill, thanks so much for seeing me today. I really appreciate your time. I know on the phone that you said you didn't have a lot of time. So what I want to do with today is I want to find out more about you. I want you to know more about ABC Electric and what we do as a full service contractor.

Setting time, agenda, and conclusion at the start

23:56Sean Samson: I know that you guys use contractors. You have a 100,000 square foot facility. Obviously, you guys are using somebody. What I'd like to do is find out more about you. And if we see some commonality at the end here in conclusion, let's figure out a way that we can work together and how we can solve some of the problems, some of the issues maybe that you guys are having. Does that make sense, Bill? And Bill's gonna go, well, yeah, that makes perfect sense because now you set the tone. You set the approach for what we wanna do. So now that if I'm gonna ask you all these questions, you're prepared for those because I can't just launch into questions.

24:25Bill Gallagher: That would be ridiculous. I mean, I might come back to you and say, listen, I only have twenty minutes here. So fine. But, like—

24:32Sean Samson: Or say, fine, I have that time, but I'm not gonna tell you about who I used to use, that secret. But now you're getting into the intuitiveness of selling and how to get around those things and how to get the key points and get the key questions in the event somebody says, I got five minutes, what do you got? Yep. Certainly.

24:49Bill Gallagher: The other situation, contractors in particular, and we see this, people think of that, oh, that's a special thing. But building software for other companies is very much like being a general contractor. It's a project, and I'm gonna build it. And that kind of work, and there's others like government contracts and things like that, it's feast or famine. Like, we get big projects, we do them, and then there's nothing even about it. I worked with a large equipment company as an adviser many years ago. And they eventually got to hundreds of millions a year, but they didn't have maintenance, training, certifications, all the other kinds of things that they could have had. But when they introduced that, then they got a recurring revenue stream, and it had a surprising secondary effect. It meant they were already embedded when the new project came out. So they always got either the only bid or the first notice on the replacement bid when equipment, either they need new equipment or the equipment needed to be replaced, they knew first. Right? Because they were in there every month.

26:01Sean Samson: So you're talking about, and this is the key, and this is where we talk about scaling and we talk about how numbers and things matter. I cannot scale a service and maintenance business on service agreements alone. It's never gonna happen. I have to scale it on the pull-through work, which is what you're talking about, that comes from the hustle or the sale of the service agreement. So the number that you're looking for as a contractor is you're looking for a three to one. For every maintenance dollar that I sell, if I sell you a $10,000 maintenance agreement, I wanna get a $3 return for that $10,000. So my job is to have a process in place and a back end process in place of going, if I'm gonna sell you $10,000, I want a $30,000 return on that service agreement. So the return comes in two ways. The return comes in either the repairs or the replacement of what my technical team found from performing the service and maintenance. That makes sense? And it's also gonna come in a pull-through in the pull-through realm of I get calls now because they have panel replacements and machines that are getting moved. I would have never got that call had I not sold a service agreement. They want a lighting retrofit. They want infrared windows. They want these two motors replaced because of x, y, and z. So that's where that three to one comes into play. It's the pull-through work that comes from the hustle or the sale of the original service agreements being sold. If you can't scale that and if you don't have a process in place to get that three to one, you're gonna fail miserably, and you're gonna go, service is too hard, it's not for me, we can't manage it, and let's just go back to what's easier because contracting is easier than service.

Recurring revenue creates three to one pull-through

28:03Bill Gallagher: Mhmm.

28:05Sean Samson: That's that game a 100%.

28:09Bill Gallagher: So can you think of a company that struggled to adopt that? And I don't know. Tell us any stories about doing that. I think there's 70,000 contractors in the United States.

28:20Sean Samson: You know, 69,999 of them struggle to adopt that. I wouldn't have a job if people understood the power of recurring revenue and process and procedure. So everybody struggles with that. We're a small boutique training company that does what we do. We're not looking to build out this thing to a 100 clients. So the people that we have are the folks that want to change and may not be comfortable with change, but they understand that what got them here is not gonna get them to where they wanna go. So I would say that the majority, 90% of all the contractors out there, struggle with the understanding of sales process, procedure, and even of paying for salespeople. I mean, talk to a contractor and say, hey, look, what are your thoughts on a salesperson, and what's your thoughts on paying for a salesperson, and see what kind of result you get. Crazy.

29:24Bill Gallagher: I think that many people, I think many like it conceptually. But when they get them in and then they get people in it. And if they have to pay it, like, and everybody's kinda fine with a 100% commission except that they wanna control what people say and they want them to come to the office and they can, so, like, okay. You wanna pay a little base, you have some control. But then you immediately have, okay, how quickly is this gonna turn out? And you do have a lot of people who aren't particularly good at sales, who hang around sales careers forever, and they're like order catchers. They find themselves to companies where the orders are just kinda coming in. They're not actually any good at selling.

30:09Sean Samson: Well, ask a contractor what the difference is between business development and sales. Because those are two different people, and they're two different positions. Business development is account management. It's not sales. Sales is me prospecting and soliciting someone who has never done business with us before, is already working with two or three contractors, and it's my job to make them feel comfortable to have them erase those relationships that they already have and jump on board with me and trust me. That's sales. That is 100% what we train and what it is that we do. But you're also talking about opportunity ADHD, though, Bill, because that's what contractors have. When contractors see something real shiny and new, this contractor is having success with this sales professional and this system. They're like, you know what? Let's do that. And then they give it three months. And that's what I mean by that opportunity ADHD. If they don't see results within three months, ninety days, within six months, we're like, you know what? Let's go back to what we were doing, man, because contracting is much easier in their opinion. You're never gonna see results with any kind of system if you put something in place for six months. I mean, you're just getting used to systems in six months. Yeah. It can be difficult.

Business development is not the same as sales

31:36Bill Gallagher: And actually, generationally, you have people now who wanna jump between jobs in less than a year, and they haven't learned much of anything.

31:46Bill Gallagher: Or what they barely learn, they carry to the next job, and they barely learn something, and they bounce from place to place. Collectively, they probably learned some things, but there isn't a chance to recover that. I think as an employer, you also need to think about, like, how do we get people to stick around a little bit longer?

32:00Sean Samson: I think that's also getting an understanding of your employees getting an understanding of what the mission is for the business. You know, it's too bad for this conversation, it sounds like I'm throwing all these contractors under the bus. There's a lot of great contractors out there. But, you know, the way to have a higher retention rate is to put people in the right seats on the bus that are good at those positions. It's very, very rare that you have a contractor that really cares about where people are at or really what they're good at. They're looking to fill voids and to fill holes.

32:46Sean Samson: One of the things that I love about service and maintenance is because there is a higher retention rate because of the additional training, the technology that has to be implemented, but also giving a 15 or 20 year electrician new life into just being a wire and pipe guy. He's always been a great customer guy, always handled people well. And now he went from wire and pipe, and now he's leading the service and maintenance side that he never even thought was possible. And then, you know, you have these agreements that are coming, and you have this recurring revenue and renewals. And, you know, it's just there is a higher retention rate as long as you're willing to build it out and stick with it. You don't have that opportunity ADHD that we're talking about. You know?

33:33Bill Gallagher: You talked as we were getting ready for the show about a company in Massachusetts that encountered this with scale and then moved through that. Tell us about what was that company like when you first encountered them. What kind of work, like, how is that now? Take us through that.

33:50Sean Samson: Well, they've done a, you know, I think every contractor, majority of contractors, have the idea or the notion that they could probably create higher valuation and get to some exciting things if they build out the service and maintenance side of their business more. This particular contractor has done a pretty, I mean, honestly, a halfway decent job with getting an understanding. They're a plumbing company, and getting an understanding of the codes and the standards that the plumbing arena has to abide by. And leveraging service agreements has everything to do, whether you're mechanical, electrical, or plumbing, has everything to do with the codes and standards that you use every single day. You have to sell these service agreements, and these service agreements have to be written on those particular codes and standards. Otherwise, customers aren't gonna care. Unless it is governed by, as an example, 70, right, the NEC code, or NFPA 70B, or NFPA 70E on the electrical side, unless it's governed by those things, I can't just walk into the facility and go, Bill, you know, shit's gonna fail, man. And you go, yeah, but I've been here for 30 years, and only a couple of things have really gone crazy. Well, it's very tough to manage. I can manage that through code compliancy rather than just managing your want to or not want to, if that makes sense.

35:21Sean Samson: So this Boston company, same exact thing, is getting them understanding of how do I build service agreements that are based off of code compliance from the plumbing code, from what the state of Massachusetts says that I have to do, touch points, things that have to be scheduled quarterly, yearly, those types of things, and getting those into a framework where customers understand what's coming next. The budgets have already been built for them, and then there's a follow-up process for renewal. And that's really where it started with them. You know, they have a decent amount of service that they're already doing, but they're doing the servicing and fixing problems, and then there's no follow-up. Right? If you're gonna fix something for somebody, shouldn't there be a process in place for you, the technician, to go, hey, man, we just fixed X, Y, and Z for you. Is it okay if Sean Samson follows up tomorrow? He wants to introduce himself, and he'd love to talk with you more about what it is that we do and how he probably could have mitigated this from the get-go. Are you cool with Sean calling you? Who's gonna say no to that? Everybody's gonna say yes to that. Whether or not I get there and we move forward or anything is all different story, but nobody's gonna say no. No, I don't want Sean calling me. I would have much rather have paid $10,000 for that rather than getting into a service agreement where I was only gonna pay $2,500 or $1,500. Right?

Code compliance sells service agreements

36:49Bill Gallagher: It's funny you start rattling off codes and things like that, and I thought I was gonna turn into a Steve Martin skit about a sprinkler maintenance supervisor.

36:57Sean Samson: Well, that is key, though. It's absolutely key. It's the reason why you're able to leverage these service agreements, especially with people that just don't care. Right?

37:10Bill Gallagher: Gotta talk their language. You gotta think about the world that they're grappling with and then create that continuity of managed proactive kind of a business, and that is the key for your recurring revenue. Right?

37:23Sean Samson: A 100%, man. If you can manage that based on what the standard's saying, what code says, you're doing something right.

37:28Bill Gallagher: The systems, the teams, the things like that that follow on, that build that, that create that consistency, and then that leads to the scale. Right? We've got the regular work, then we've got the pull-through work, and we start to have like, we start to be a legit company.

37:44Sean Samson: You know, you being in the industry too, Bill, you know that there's a large gap, a separation between the, I would say, the 5 to $50 million contractors and then the $50 million contractors and up. And what I mean by gap is the 5 to 50, they pretty much have their shit together. Their leadership teams are very small. They have a very good idea as to what their margins are, what they're really good at, what their niche is, things like that. The $50 million and up, you have a lot of decision makers. You have a lot of red tape. You have siloed individuals. You have siloed divisions. Everybody's working as an independent contractor of sorts. And those $50 million and up are very difficult to change and change the paradigm and make that shift and put additional processes in place because they're just so used to doing it. And very rarely do they get everybody to say yes that they wanna move in a particular direction. They got 12 decision makers, four are saying yes, and the balance of those are saying, let's just keep doing what we're doing.

39:04Bill Gallagher: Well, interesting. When I, I mean, I don't just work with trades and construction and contractors, and I do a broad, I do quite a bit of technology and that kind of thing, healthcare, and on and on and on. So I do broad range things. You do see common elements with things, and I think about, like, there are different stages at each that and things that people struggle with. Sometimes it's tied to revenue. Very often, it's more tied to the number of people and depending on what would go on. So when we have a team of 10 people,

39:40Bill Gallagher: 30, 50, 100, 200, 500, 4,000. All those have different dynamics, different leadership styles required. And I think about the ones, there are definitely inflection points where they're more open to change and points where it's harder. When we have thousands of people, I have a company now that's gone from start-up to 2,500 people in a couple of years. But we, all the way through, have been thoughtfully building process and culture and that kind of thing. So it's not broken. We are fine-tuning it as we grow to a 4,000 or 5,000 person business. Like, it's getting refined, but it wasn't broken. Right? And then sometimes you encounter a company where things are really broken. They're already 75 people, and they've got a lot of bad habits. There's kind of a lot of rework to do and more soul searching for the founders, owners to think about in that.

40:47Sean Samson: Well, then you're dealing with a company where their leadership has things dialed in. I mean, that's what it sounds like to me. You look and, you know, the old saying that the larger the organisation, the quicker clarity decays. And that is absolutely the case with larger organisations. And it's unfortunate. It really is because, you know, we work with a lot of our great relationships are with M&A companies. And I can tell you some stories about contractors that want to unload their businesses. And the first thing that the M&A company comes in and says is, what do you have from a recurring revenue perspective? Yeah. What do you mean, your 15 times EBITDA?

41:38Bill Gallagher: Yeah, yeah, yeah. So let's talk about a change of leadership. Somebody buys a company, somebody sells a company, somebody grooms somebody to take over a company. Talk about, you mentioned a Colorado company, but start maybe start with that one where there was some succession. What happened? How'd they go? What are the issues there?

41:58Sean Samson: Oh, they're still going through it. And they were purchased by a very large conglomerate that has nothing but great intentions in building out what is it that they purchased. And they already do 50 to $60 million in service and maintenance. But, you know, I think that if anybody's looking for a buyer, I'm a contractor looking for a buyer, one of the very first things that I want to look at, am I just looking for dollars and cents? Or if am I really looking to partner with the right business that's going to take everything that I've done and now take it to the next levels, but complement what I've done on every single level. And I think that this company that is purchasing one of our clients, I think that they are absolutely complementing the company that we're contracted with. But I'm going to go back to the saying, there are extremely large, large contractor taking over a smaller contractor, and there's lots of moving parts and there's lots of decision makers. And you're never going to get everybody on the same page. It's just not going to happen. It's just not going to happen. You're going to have people that are just too busy, people that don't want to get involved, which is unfortunate. And then you're going to have players that are always going to want to be involved and want to change the landscape of the business. So, yeah, I think taking over businesses or larger companies taking over businesses, I think we're always going to have those types of things happen because that's a natural progression of business. But as a business owner or somebody who's managing business, there's not much you can do. Somebody buys you, you're not an owner anymore. You're an employee, man.

43:48Bill Gallagher: You know? When I think about companies, I think about, I mean, the thing that I love about is we're building things or maintaining things. Like, the physical structure of the world we live in, we're managing. We're keeping it. We're creating a new building. We're repurposing a building. We're building a home. Whatever it is, we're building and maintaining things that allow us to live and be happy and prosper in our lives. And I love that about it. But a lot of times, I think there can be like this pervasive kind of thing in that world of, ah, I just need to get the foundation done, or I just need to like get the drywall up, or whatever it is, the piece of it that they do. They focus only on the thing, and they don't think about consistent process, a great team, really reliable people, like saying no to bad jobs, like that whole, like, world of business excellence, not always thought of. The focus on the process and brand advantage and great selling and that kind of thing is often missing.

45:05Sean Samson: Well, what contractors, look, I'll just kind of piggyback off what you said. What contractors do really, really well, Bill, is they get in, get out as fast as they possibly can, and they never want to see the building again. That's their process. Right? They want to make hours. They want to get in. They want to get out. And the fact of the matter is that the smart contractors want to get in. They want to stay in. That's the reason why, you know, one of the things that we do before we onboard anybody is get an understanding of what do they do percentage of design-build, what do they do percentage of service, and what do they do percentage of construction. Because I want to know those things so I could figure out where those gaps are or what my advantages are to help them build this thing out and scale this thing. If you're doing a ton of design-build as a contractor, guess what? Design-build in service agreements. If you're doing a ton of jobs with general contractors, then have a process in place for job closeout and having the introduction from the general contractor to the building owner or building manager so that you can say, hey, look, not only did we build this thing for you, but I'm going to completely maintain it for you from now until the sun burns out. Nobody does that, or I should say very few people do that. Right, right. Yeah, but that's the mantra. But and see, HVAC, completely different. HVAC, they want to build it and stay in. Electrical contractors, they want to build it and split.

46:34Bill Gallagher: Mm-hmm.

46:35Sean Samson: They each have their vibe. They really do, man. There's an apples and oranges situation going on with in the MEP arena, for sure.

46:48Bill Gallagher: For sure. But there, we've talked for a bit, and we always try to do a show about this long. Sean Samson. SeanSamsonTraining.com. Let's put up his, yeah, there you go. On the screen, Sean Samson Training. It'll be in the show notes as well. Not hard to remember. SeanSamsonTraining.com is a great place to go. You want to know more about Sean's work? Maybe it's a fit for you. Maybe it'll help you get your sales process or tune up your business. Sounds complementary to some of the work that we do, which is more about the growth and the eventual exit of the business. I really appreciate you coming on and talking with us today, sharing some of your stories and examples and your thoughts about the world of it. For our listeners, viewers, thanks for watching. Thanks to my friend and mentor, Verne Harnish, created the whole Scaling Up framework, and to Wanda and Anna who produce our show every week and get it out the door and that kind of thing. If you want more information, you want to know about our workshops, that kind of thing, our coaching program, ScalingCoach.com.

47:51Bill Gallagher: On the screen also, scalingcoach.com.

47:53Sean Samson: Happy, I appreciate it. I had fun, it was great.

47:56Bill Gallagher: Not hard to remember. Thanks again everyone for watching, for listening. We'll talk to you again next time. Bye bye, keep scaling.

48:08Bill Gallagher: Thanks for listening today. One last thing: if anything in this episode hit home, my book digs into it further. Busy Is Broken: Do Less, Scale More. It's all about how to stop drowning in work and build a business and a team that scales without you. Available right now with content samples at busyisbroken.com. Go grab it, be less busy.