In an era of consolidation, customer loyalty is your competitive edge

RCS Influencer Tracey Donels shares the importance of building repeat business and proactively strengthening customer relationships to maintain a steady revenue stream and stand out in a crowded market.

Editor's note: The following is the transcript of a live interview with Tracey Donels of Service First Solutions. You can read the interview below, listen to the podcast or watch the recording.

Emma: Hey everyone, I'm Emma Richardson here with RoofersCoffeeshop.com, and I'm chatting with Tracey Donels of Service First Solutions. And today we're talking about our August Influencer topic, which is private equity and industry consolidation. Tracey, you have anything you want to share with us?

Tracey: Yeah. As a person who is always talking about service departments and how well a service department can help you grow your business and supplementing the low bid process and having to be that low cost provider and really getting into business of people that you can work with, the private equity companies are looking for service departments. They are looking for that repeatable revenue, that dependable revenue that will keep a business going.

I have had the pleasure, I don't know if it's pleasure or pain, of losing four or five clients specifically because they were bought by private equity because of their service department. They want to see this service revenue. They know what that leads to. They know about getting the revenue in every month, but also in what that means in the project world and the production world, which is where so many of our roofers make our money, right? It's the big jobs. Stuff like that, and it's those jobs that can really sustain us. And if we have those service relationships, it's going to make those jobs come in at better margins, the jobs are going to come in faster, they're going to be easier, and it's going to be a lot easier to grow that business because you have that service department that is keeping touch with that customer base, keeping them happy, keeping them dry, keeping them informed, helping them save money, helping them budget for their future expenses. If you are a roofer that is waiting for your customers to come to you, you're missing the ball. And honestly, you're missing what a lot of the private equity firms are looking for when they're going after contractors.

When I hear of someone that gets purchased by a firm or something like that, it's never anyone who has no service department. It's never anyone who is a low price provider and they're a storm chaser and they go all over the place and stuff like that. It's always people that have systems, have processes, have real people managing their companies. And when we have systems and processes and real people managing our companies, it's very easy to put one of those people in the service seat and have us grow from there.

I know from my personal experience being a contractor, we were eventually able to get to where fifty percent of our production revenue was coming from the clients that loved us, those service clients. So we didn't have to go out there and be the low price provider. We might not have gotten every job, right? And we didn't get jobs handed to us all the time, but we got a more than just being a nobody, somebody you just met, and sometimes we did get those jobs handed to us.

So many people think of the project as the cupcakes and the service as the sprinkles. You have to flip that around. With a great service department, the cupcake is the service, the stuff we're doing day in and day out. We're making great money, we're keeping people happy, they're referring us, they're calling us, we're staying in front of them. And then all of a sudden we walk in and they say, 'Hey, by the way, I just bought a building that needs a new roof. You by chance re-roof 800,000 square foot warehouses.' And you say, 'Yes, Mr. Great Customer, I do happen to re-roof 800,000 square foot warehouses and let me get you a price.'

So when I think of private equity, I think of service and maintenance. What are they doing to keep the revenue coming in each and every day? So many people, how many roofers have you heard? Well, service and maintenance keeps the lights on. Service and maintenance pays the overhead. And if you can get to where they can pay the overhead, that means you have a professional department. If you have a professional department, that means you can grow it. And that's what private equity is looking for. 

Emma: Awesome. I think you made a really wonderful point about repeatable revenue because the revenue doesn't really matter if you can't keep it flowing.

Tracey: The revenue doesn't really matter if you can't keep it flowing. So That is correct. And what do they say the easiest customer to sell is the last customer you sold. So stop waiting for them to think, I need somebody. Start going out and telling why you need them or what they're going to miss out on if they don't choose you.

Emma: Awesome. Well, Tracy, great chatting with you. Thank you so much for your response, and I will catch you again next time.

Tracey: Thank you guys so much and I'll see the team at the Western Roofing Expo.

Emma: We'll be there. Thank you.