Latest / Scaling Up with Fexingo: How Small Businesses Become Mid-Market Companies / How This Plumbing Company Hit 30 Million With a Sales Team
Transcript
- Lucas: There's this idea in the trades that sales is a dirty word. That if you're a plumber or an electrician, you just show up, fix the problem, and send a bill. Anything more feels like you're upselling or being pushy. Luna: And a lot of business owners in those trades will say they'd rather grow slowly than hire a salesperson. They're afraid it'll ruin their reputation. Lucas: Exactly. But today we're looking at a plumbing company in Phoenix that rejected that assumption and grew from $4 million to $30 million in five years — by building a dedicated sales team. The founder is Dave Merrill. He started out as an HVAC technician, then launched his own plumbing company in 2014. Luna: So he wasn't a natural sales guy either. He came from the technical side. Lucas: Right. And for the first few years, he grew the old-fashioned way — word of mouth, a few Google ads, just doing good work. By 2019 he was at about $4 million. But he hit a ceiling. He was working 60-hour weeks, and any growth meant he personally had to sell more. Luna: That's the classic bottleneck. The owner is the only one who can close a big job. Lucas: So he decided to hire salespeople. But not the stereotypical used car lot type. He created a role called 'comfort advisor.' The job was to go into a customer's home, diagnose the problem, and present options — from the basic fix to a premium upgrade — but always with the customer's needs first. Luna: Comfort advisor. That's a deliberate naming choice. It frames it as a consultative role, not a transactional one. Lucas: Exactly. And the compensation model was key. Dave didn't want his advisors to push unnecessary work, so he paid them a base salary of $45,000 — enough to take the pressure off — plus a small commission on gross profit, not on the total ticket price. Luna: I want to pause on that. Commission on gross profit versus revenue. Why does that matter? Lucas: Because if you pay commission on revenue, the salesperson has an incentive to sell the most expensive option, even if the margin is thin. But if you pay on gross profit, they care about what the company actually makes. It aligns their interest with the business's. Luna: Makes sense. And the base salary means they're not desperate to close every single lead, which keeps the pressure off the customer. Lucas: Right. Dave also made a point to hire people with no prior sales experience. He looked for former teachers, nurses, even a retired firefighter. People who are good at listening and explaining, not at fast-talking. Luna: That's interesting. Most companies would want someone with a proven sales track record. But he wanted people who could build trust. Lucas: And it worked. Within a year, his close rate on service calls went from about 40 percent to over 70 percent. And the average job value doubled because customers were choosing more comprehensive solutions. Luna: So the customers were actually buying more, but they were happier because they felt educated rather than sold to. Lucas: Exactly. And customer satisfaction scores stayed above 94 percent. That was Dave's benchmark. If a salesperson's satisfaction score dropped below 90, he'd have a conversation about their approach. Luna: So he measured it. That's crucial. If you're going to put salespeople in people's homes, you need a feedback loop on how they're perceived. Lucas: And that feedback loop also helped refine the training. Every month, the team would review recorded calls and ride-alongs. They'd look for moments where an advisor could have offered a better option or where they might have been too pushy. Luna: So it's not just a hiring model, it's a coaching model. The salespeople are constantly improving. Lucas: Right. And as they grew, they added a second layer: a sales manager who didn't carry their own quota. Their only job was to train and develop the advisors. That let Dave step back from the day-to-day. Luna: I think a lot of business owners hear 'sales team' and imagine a big overhead cost. But what was the actual investment here? Lucas: Each advisor cost about $70,000 in year one — salary plus commission and training. But each one was generating over $400,000 in gross profit. So the return was massive. And because they weren't paying for ads, the customer acquisition cost was basically just the advisor's salary. Luna: If today's episode gave you a useful perspective on how to think about sales in a service business, you might want to know that the show stays free and ad-free entirely because of listener support. You can contribute at buy me a coffee dot com slash fexingo. It's a simple way to keep conversations like this going. Lucas: Yeah, and we really appreciate that. It keeps us independent, which means we can dig into stories like Dave's without any sponsor pressure. Luna: Alright, back to the plumbing company. So they scaled to 30 million, but what were the biggest mistakes they made along the way? Lucas: One was trying to pay commission on revenue in the early days. Dave experimented with it for a few months and saw that advisors were pushing high-end water heaters even when a basic fix would have been fine. Customer complaints went up. He switched back to gross profit quickly. Luna: So the model is fragile if you get the incentives wrong. That's a good cautionary note. Lucas: Another mistake was hiring someone with a strong sales background from a different industry. That person had a very different style — more aggressive — and it didn't fit the culture. They left within three months. Luna: Which reinforces the idea that cultural fit matters more than experience in this context. Lucas: Exactly. Dave also learned that you can't just drop a salesperson into a territory without support. The first few months, they need to ride along with a senior technician to understand the products and common issues. Otherwise, they can't speak knowledgeably. Luna: So there's a ramp-up period. How long did it take a new advisor to become productive? Lucas: About 90 days. The first month is shadowing and training. The second month they start taking leads with a mentor. By month three, they're on their own. And after six months, they're usually hitting full productivity. Luna: That's a significant investment of time. But if the return is there, it's worth it. Lucas: And they retained most of their advisors for over three years. That's partly because the base salary gives stability, and partly because the role is genuinely rewarding — customers are grateful for the advice. Luna: So what's the takeaway for a small business owner listening who's thinking about adding a sales role? Lucas: First, don't hire someone who's done sales the old way. Look for empathetic communicators. Second, pay a base salary so they don't have to close every deal. Third, commission on gross profit, not revenue. And fourth, measure customer satisfaction religiously. Luna: And maybe rethink the title. 'Comfort advisor' sounds a lot better than 'sales rep' to both the employee and the customer. Lucas: Absolutely. Dave Merrill's company is proof that you can scale a trade business without ads, without a big marketing budget, just by investing in people who know how to listen and solve problems. Luna: It's a model that could work for electricians, HVAC, even home services like pest control. The principles are transferable. Lucas: Right. And the key is that you're not selling — you're advising. When you frame it that way, it changes everything.