How Eric Emms hires and manages his employees in one of the most competitive markets in the US (Portland, OR) and how he increases profits with dynamic pricing.
📹 Watch the whole interview here: https://www.youtube.com/watch?v=KUxv-syGZfo&t=14s
- His company:👉 https://wwww.shine-this.com
- His hiring page:👉 https://shine-this.com/employment-opportunities
Eric Emms:
Okay, good. How are you?
Juan Chaparro:
Good, man. I was getting back on track after a big week in Dallas last weekend.
Eric Emms:
Yeah, right?
Juan Chaparro:
How about you guys?
Eric Emms:
It's good, buddy. I took your recommendation. I took the boys to go see that movie Air.
Juan Chaparro:
What do you think?
Eric Emms:
Good stuff. It was good movie.
Juan Chaparro:
Pretty good, huh?
Eric Emms:
Yeah.
Juan Chaparro:
I liked everything except that I don't know why they tried to keep Michael, especially in that boardroom where he didn't want to show his face; I couldn't get why that, I don't know.
Eric Emms:
I don't know. It did seem weird, huh?
Juan Chaparro:
Yeah. But other than that, it's very inspiring.
Eric Emms:
Yeah, good movie.
Juan Chaparro:
We can learn tons from that. The sky's the limit; it's how far we want to go and how big our dreams are.
Eric Emms:
Yeah, absolutely. Absolutely.
Juan Chaparro:
Well, thank you for coming to the interview, Eric. It's always good to see you.
I enjoy connecting with you. You're one of the most incredible founders I've seen here in the cleaning business, we have had interactions over the last three years, and I learn a lot from what you're doing.
And in these interviews, I'm doing; I want to bring people like you who are very sharp in doing something in the business. So let's get started; I have a series of questions for you; the goal is to be 20, 25 minutes here and be very on the point.
So I want to get started by telling me about how you got started in the cleaning business and then moving into hiring employees.
How's that working for you? What are you doing?
Eric Emms:
Well, I got started in the cleaning business; my wife kind of roped me into it actually. We were just kind of blending two families of six kids, and so we had a lot of moving parts and we both had other careers where we were essentially working to feed somebody else's dreams and just putting in a lot of hours.
And we wanted something that would give us more flexibility to spend time with the kids. I don't know what we were thinking that entrepreneurship would give us more time freedom when we were first starting. It certainly does now, but that wasn't the case then.
So anyway, she had a background in cleaning. Her parents owned a pretty large commercial cleaning business, so she had put herself through college cleaning and she had experience in that. And so she kind of talked me into it. And when I did a market analysis of our area and the competitors and stuff like that, I was pretty excited and I felt like we could really make an impact in that space, so I was all in.
Juan Chaparro:
Cool. Well, definitely you guys are making an impact. And what was your previous background? What were your previous career?
Eric Emms:
Mainly had sales manager roles, and then for a brief period when I was younger in a whole nother life, I used to do personal fitness training, working with athletes and stuff like that. And then for a brief period in my 30s, you could call it a midlife crisis or whatever you want to call it, but I kind of went back to that for a little bit. But yeah, my main background is in managing sales teams.
Juan Chaparro:
Cool. Okay. Well that says a lot. Now in your cleaning business how are you targeting your workers? Because I get a lot of people asking me, "Hey, how do I find the right people?' And I say, "Well, it's a combination of many things." So what are you doing to really find the right applicants for your company?
Eric Emms:
So I would agree, it is a combination of many things. For us, essentially we create our job posting through Pipehire, and then we post that on Indeed and Google Jobs and ZipRecruiter. And when the applicant comes across our hiring ad and they're interested and they'll click on it, it redirects them to our website and our hiring page.
And then I think here's where the magic happens is when they fill out the application, Pipehire system grades them and it puts them into baskets of A players, B players, C players and so, based on the criteria that we came up with, the scoring parameters that we came up with. What'd we do last month? If we get 150-200 applications, we're only seeing the ones that we're interested in talking to, so we're only seeing those A and B players.
So if an A player fills out the application and it grades them as an A player, then they'll automatically get a link to book a phone screen with our hiring manager.
So it's kind of an automated process for the most part. I think everybody should be working on right now, and I know we are, is employee retention. And I really feel like one of the biggest pieces to employee retention is just bringing the right people in the first place.
Juan Chaparro:
That's so true.
Eric Emms:
I mean, we spend so much time and money wrapping our arms around our team and loving on our team and trying to make sure it's a great place to work for them to stay, but that's all wasted time and money if you brought the wrong person in the first place.
Juan Chaparro:
I agree.
Eric Emms:
So that's one of the things that I love about this funnel system is it really targets it down to make sure that we're only talking to those A and B players in the first place.
Juan Chaparro:
Definitely. I tell people a lot that hiring is just the tip of the iceberg. There's really a lot more that you don't see that you have to do to really manage employees, retain employees, and keep them in the long term with your company. And most people are thinking, "Oh, I just need to hire more people." And the reality is that, yeah, that's part of it, but there's a lot more to it that needs to happen really to sustain those employees, which then sustains the revenue. Because you might find clients, but if you don't sustain your employees, then those people will eventually quit and customers will start quitting because they don't like the turnover. So thank you for clarifying that.
Now, last month we had a call or two months ago or so where you told me, "Hey, it's costing me a lot to bring applicants through Indeed." It was very expensive. You made some changes, and I think you're seeing great results now. What are your biggest takeaways from this implementation, this change that you did on your landing page? Because I see a lot of people sometimes blaming like, "Hey, you don't bring me traffic." It's like, "Hey, there's a lot to it. It's not just paying traffic. There has to be a whole landing page with a whole lot of work into it to really bring the right people."
So Eric, why don't you tell us exactly the before and after in your case for your Indeed traffic?
Eric Emms:
Well, yeah, I agree 100%. I think before that call a couple months ago, our landing page was just kind of, "Hey, join our team. Here's the application." And there wasn't really much to it. And so we were getting a lot of clicks through Indeed, and so we're paying for the clicks but then they weren't following through on the applications.
And so we really put a lot of effort into changing our landing page, our join our team page, and we added some video and we really spent a lot of time just breaking down all facets of the job from the perspective of what's in it for the applicant.
And since we made those changes, and it hasn't been too long to have too much data to go on, but when we first spoke, our cost per hire was almost $1,500. And that's just recruiting cost. Now it's down to about $300. It's way more applications coming through as well. So it's made a noticeable difference.
Juan Chaparro:
Yeah, thank you. Because this is not like before you have a job and people will apply. Now you have to really sell the job, what's in it for them, explaining clearly all of the things that they will get by joining your company. So, I think this is what's making in your company and other companies that I see that are applying these best practices to really connect and bring the right people.
Now, you mentioned retention. What good practices or procedures or events, I don't know, what are you doing right now to build this team up and retain them for the long run? Because that's really where the hard work is, really. Hiring has become easier now is how do I keep these people in my company happy for a long time?
Eric Emms:
That really is where the magic happens. I mean, yeah, we were just talking in Dallas, my wife and I, that our average employee, if you keep them for a year, they generate $105,000 of revenue in our business.
So obviously we want to keep them forever, but at least one year is that magic mark for us. And like I said earlier, I think a lot of it has to do with just bringing the right person in in the first place. But from there, I mean, it's kind of like you were talking about with your landing page. There's so many things that go into it.
But for starters, we pay well above the industry average. We're in a very competitive area here in the Pacific Northwest, Portland, Oregon, and we pay well above industry average. Our top cleaners make $30 and sometimes more $30 an hour. Compared to our competitors we have a pretty good benefits package that we're continuously working on and trying to add to that.
But really I think that moves the needle the most is over time when you're bringing in nothing but A players and you're retaining A players, we have an amazing culture of fun, energetic, caring, hardworking folks, and they really just welcome on the new people and everyone just kind of jives.
We put a lot of effort into our application and bringing on the right people. We use disk profiles to try to target the right personalities that we want. And so I think that goes a long way.
Then we also have, everyone has a monthly one-on-one with our hiring manager to kind of discuss any issues or what's working for you, what's not working for you. And we take those results and those conversations and we genuinely care about them. So if they do have an issue, then we have a system in place to follow up and make sure that we can take care of those. And then we have monthly team meetings, all hands on deck team meetings, and we try to make those fun and engaging. And then we have quarterly parties where we bring everyone in, I think, twice a year they can bring their spouse or significant other. And the whole thing just kind of works.
Juan Chaparro:
Yeah, I agree. Not just a paycheck, that's way back in the past now, it's like, "What else are you doing besides paying me?" Paycheck and all these benefits and things and a lot of people are still just getting this message. I mean, it's really about delivering more than a paycheck. Cool. Thank you for that because that validates a lot of what we've been speaking about now.
Also, we've been talking about last week just about dynamic pricing, and this is a concept that you kind of opened my mind to it and I was like, wow, how did I miss this thing? Because cleaning services is really a commodity and prices go up and down. So you open up my eyes to that and I'm like now trying to incorporate it in my cleaning business. But I wanted to hear from you because you are the only person I've heard this concept. And why don't you tell me more about that, because I'm really curious how other people can learn from it.
Eric Emms:
Well, I got to be honest, I'm super excited about it. I think it really moves the needle and makes a huge difference in our company. And we've been doing it, I would say, for about nine months. And like, I just stumbled across it and was kind of kicking myself of why didn't I see this earlier?
But essentially what happened, we were understaffed and so we were turning people away and we were having to cancel or skip scheduled clients. And so obviously there was frustration there. And I started looking at our reports and how many people we were turning away or trying to schedule them out for three weeks or a month down the road, hoping we would have more staff by then.
And it just kind of hit me of why are we still quoting it whatever, $55, 60 an hour when we don't even have the capacity to serve these people?
So I wanted to slow down, really, I kind of fell backwards into this, all I was trying to do was to just slow down the sales process. And so we raised our rates quite a bit. I think we raised them at the time, I think we were doing $60 an hour and I think we raised it to $70, and people kept saying yes. And so we raised it a little more and we had to get up to $80 an hour before it actually made an impact and started slowing it down.
And then it just hit me a light bulb. And so moving forward, we did a test run for a few months, and essentially what it means is you figure out your capacity, and you can do that based on how many houses they clean in a day. I like to do it based on revenue. And so we figure out what our average technician brings in a week and then you multiply that by how many technicians you have, and that revenue number is your capacity essentially, give or take, right?
Juan Chaparro:
Right.
Eric Emms:
And so when we're at a certain capacity level, meaning we're too full, then we'll raise our prices by $5 or 10. And then when we dip below a certain capacity number, meaning we have more openings, then we'll lower our prices by 5 or 10. So it's constantly fluctuating. And like I said, it, we're kind of a different breed here in the Pacific Northwest, it's very competitive, but at times, our pricing will go as high as $100 an hour, and it'll never go lower than 65 an hour. And even when we're up at $100 an hour, we're still booking jobs, it just slows down. And that's the point, right? We're trying to slow it down at that point. And then when we bring on new team members and hire more staff, then we'll lower it down and it opens it back up. It speeds up the process, and it's just been awesome.
Juan Chaparro:
That's beautiful, man.
Eric Emms:
Yeah, it really is.
Juan Chaparro:
Yeah, because we always been thought of just this is the maximum rate you charge and try to sell more of that. But when you put this into the mix, I mean, the amount of new revenue you can create it's out there. Sky's the limit. You can just change prices and increase revenue and allows you to hire more people. So I see this a growth hack strategy, really, to get more revenue, put it into the business and keep on growing. Because normally we are used to charging a max amount and paying X, Y, Z amount to employee and then a certain amount of fixed profit for the company. But now you're opening the possibility of having extra revenue that we're collecting when we're too full and now capturing more revenue. So I really love it.
How can people learn more about this, get a hold of you to really maybe learn about this dynamic pricing concept?
Eric Emms:
So the best way to get a hold of me is just on Facebook, on my Facebook page, you can look me up there. Or I'm also a coach with Debbie Sardone's Cleaning Business Fundamentals, so you can find me there.
Juan Chaparro:
Hey, congrats, by the way, I saw you up there.
Eric Emms:
Oh, thank you.
Juan Chaparro:
I think you'll be one of those very sought-after coaches because you really have a lot to share and to add. So I'm glad that you're in that position now.
Eric Emms:
You're amazing my friend, I appreciate you saying that.
Juan Chaparro:
Yeah. I mean, I learned from you a lot even though you were not a coach. So in our conversations throughout this last two, three years that I met you.
Eric Emms:
Well, likewise. I don't think our hiring system and our whole hiring flywheel and retention, I don't think it would be where it is right now without you and your guidance. So both my wife, Debbie and I, we appreciate you, man.
Juan Chaparro:
Yeah, me too. Eric, couple of last questions. Why don't you tell me some of your maybe favorite podcasts, blogs, or anything that you're reading in the kind of home service space that's really helping you with your growth?
Eric Emms:
Honestly, I'm not much of a podcast guy, although I really loved... God, what was that called? Josh Latimer used to have a podcast, oh, the Growth Vault. I really love that. I always like Josh Latimer's stuff, but I don't think he puts anything out on that format anymore. Lately I've been into Ken Carfagno's Smart Cleaning School, I've been kind of into that.
I really dig that because while he does talk about cleaning and that space, he really kind of digs more into the individual and kind of talks about the person. And I'm very interested in the commonalities that we all kind of have in this space. So I've been kind of into his stuff a little bit lately.
Juan Chaparro:
Plus he has an amazing voice, right?
Eric Emms:
Yeah. I mean, that guy was made for radio, right?
Juan Chaparro:
Yeah, radio voice. Yeah. He's cool. I really like him and I've spoken to him a couple of times. Amazing guy, same values we got. We share the same values and really enjoy his friendship.
Eric Emms:
Good guy.
Juan Chaparro:
All right, buddy. Anything else you want to share before we wrap up here?
Eric Emms:
No, I don't think so. I don't have anything else on my mind.
Juan Chaparro:
Okay. All right, Eric, thanks for your time. Let's keep chatting. Let's keep on the conversations and we'll catch up later, man.
Eric Emms:
Yeah, sounds good. I appreciate you, Juan. Have a good day.
Juan Chaparro:
All right. God bless you, Eric. Thank you. Say hi to your wife.
Eric Emms:
I will. Thank you.
Juan Chaparro:
Ciao. Bye-Bye.
