- The importance of managing cash flow
- Successfully scaling your business
- Successfully launching your business
- Personalizing business development
- Making real connections with customers and the impact
Send us your questions, comments, feedback, praise! We can’t wait to hear from you!
Transcription:
Amanda Joyce:
Hey guys. In today’s episode, we’ll be talking to Erika Smith of the Roofing Revolution about how she scaled her company to $2 million in less than three years through relational marketing.
Devon Hayes:
Stick around until the end of the episode for actionable takeaways about managing cash flow for scalable success.
Welcome to Trade Secrets where we demystify digital marketing to help contractors get the most bang for their marketing bucks.
Amanda Joyce:
This is for you if you’re a contractor looking for actionable marketing insights.
Devon Hayes:
Learn from home services, industry experts to elevate your business through simplified marketing strategies.
Amanda Joyce:
Let’s dive into today’s Trade Secret.
Awesome. Well, thank you so much for joining us today, Erika. We really appreciate it.
Erika Smith:
Yes, it’s an honor to be here.
Devon Hayes:
We’re happy to have you mostly because your story is so badass. How long have we known each other now? We’ve known each other…
Erika Smith:
I’m going to say almost 10 years.
Devon Hayes:
I think so. It’s been a long time, and as a friend, just watching you grow and transform has been so exciting, and so we thought your story would be a really fun one to share. Erika as the owner of Roofing Revolution, but you guys have been in business since 2019, but before that, let’s talk about just your history because I think the story of your success and what you’ve been able to do in such a short amount of time is kind of backed by a career in the industry, in the roofing industry, and I think that knowledge has probably helped you make some really smart business choices. So I’m going to stop talking. I want you to tell us your first job in the space and how you landed in it and just your progression to how you got to being a business owner.
Erika Smith:
Absolutely. Yeah, it’s kind of an interesting history path in roofing. It’s not like I grew up and said I want to go into roofing. I went to Colorado State and they had on campus interviewing, that’s how old I am. There was no applying online or anything. You had to send a resume in and see if you got selected for an interview, and I did get selected for an interview with Allied Building products at the time, their a supplier, and now Beacon absorbed Allied several years ago, so it’s now called Beacon. So I got a little taster of the supply world. I went through a training program where I learned purchasing, sales and operations. I’m forklift certified. I would go around and pull pallets of material and help people load them in their trucks. It was really fun. Unfortunately…
Devon Hayes:
That’s awesome.
Erika Smith:
Inside sales is not my thing. So from there I went and worked for another manufacturer, GAF. So I was a GAF rep and I had national accounts for a while, then went into being the actual territory manager and calling on the contractors to pull the sales through, make sure that the contractors ordered the GAF and then installed it and liked it and had the support that they needed from the manufacturing standpoint.
Devon Hayes:
So were you traveling… Sorry, I love people that travel for work. When you were traveling and calling in on all these other companies, did you get to go to job sites and look at installation or anything like that, or was it kind of just talking business and working on obviously the relationship? I know that’s a big part of being a manager.
Erika Smith:
Yeah, so with Allied, with the training program, we actually went on all sorts of different types of roofing systems for the clients back then, so I got to see a lot of different roofs installed, which was really cool to help understand how everything is put together from that standpoint. And then with the manufacturers, because I also worked for Owens Corning, it was more of going into the office and having a relationship and doing training and maintaining the loyalty aspect of selecting a product and running with it. But very rarely would we go on job sites. We’d occasionally have to get on a roof and check to see if there was a defect or anything wrong with the product, but not too much field work other than that.
Devon Hayes:
So they had you knee-deep looking at numbers, like meeting quotas, minimums, checking in.
Erika Smith:
Oh yeah.
Devon Hayes:
So you probably are really good with numbers and I guess that exposure because we’re business owners too and I love to cast the numbers away, but when it’s your job to literally be on top of who’s purchasing what or that kind of, I think that gives you a probably a strong foundation for understanding, even down to ordering for jobs now, I would imagine, but just kind of having a good grasp on, I don’t know, what all those numbers mean.
Erika Smith:
Absolutely. It was definitely corporate America, so I did have to meet the quotas, I had to do budgeting, forecasting, you name it. I actually really enjoyed that part. I actually really like doing it for my own business. I know, it’s weird. It’s not something that I would normally even say about myself, but it is the actual part that I really did enjoy and I enjoy it now, I’m just not as good at it now because my time is dispersed into so many different aspects of the business.
Amanda Joyce:
I was going to say, during that time when you were working at the manufacturers, did you feel like you ever saw some business owners make some mistakes that you were able to learn from, that you were able to avoid making now that you’re on the other side of things?
Erika Smith:
Absolutely. So we would go in and train a lot of contractors. I mean, I’ve probably trained 90% of the contractors here at one point or another over the tenure of my career, so I’ve heard them talk over all the years about what their pain points were, how they wish that they would do something different if they started over, you name it, we probably had that kind of conversation at one point or another. And the number one takeaway that I got was, don’t grow too quickly, have a controlled growth rate, and then number two, manage your cash flow like crazy. So those two takeaways I think have made me go in a more successful direction with the cash flow aspect specifically. This year we probably grew a little too quick or quickly than I would’ve liked, but that’s due to a hail storm.
Devon Hayes:
Yeah, got to love a storm season when we haven’t had one in Colorado for, I don’t know, since 2017, I think, was the last…
Erika Smith:
2017 was a huge one, but I think 2019 was the last recorded where we actually had a little bit of hail disperse. So it’s been three, four years since anything major.
Amanda Joyce:
It was time.
Devon Hayes:
I don’t know. We got just murdered this summer. Spring, and summer Colorado has just been… So I can only imagine your growth like this year Erika because I know what it’s done for my husband’s company, so… All right. So we were talking about your background, GAF, I totally interrupted. You went from GAF to Owens Corning after that for a long time, right?
Erika Smith:
I did a little spot in between. So when I had my babies, who are now almost 14 and 15, I did part-time work and I worked for my ex in-laws who own a large roofing company and I was their director of marketing. So I did that for five years until my youngest was finally in elementary school. So I did a little stint in contracting too, and I understood, I do fully respect that roofing company and kind of the way that they went to market, and I learned quite a few things that they did differently than most of the contractors that I was working with at GAF. So.
Devon Hayes:
Oh, interesting.
Erika Smith:
And when I was ready to go back to work full time, there was an opportunity at Owens Corning. So I was like, oh my gosh, I can go to Owens Corning and talk about… I already kind of know what I’m supposed to do and how to do this role effectively.
Amanda Joyce:
Okay, so it sounds like you were just a perfect fit for that OC job.
Erika Smith:
Thanks. I mean I felt like I really was since I already had the experience, it was just taking on a new product line. And the great thing with Owens Corning is that it’s made locally here in Denver. It’s a very easy to easy sale saying that you’re supporting the local economy and whatnot. And I really did enjoy the organization and over time, I just kind of grew into my own shoes and didn’t like to be told what to do anymore and was like, why am I not making these decisions for myself and telling myself who I should be working with and my goals and really going with my core values? So that’s why I made the shift to contracting finally, and that’s where I’ve been for the last several years.
Amanda Joyce:
Yes. So can you talk us through that timeline a little bit? When did you officially leave Owens Corning?
Erika Smith:
I left Owens Corning in, I believe it was 2018. I actually went into oil and gas for six months and decided that that was not for me and came right back into roofing. Once you leave you, you are always going to come back.
Amanda Joyce:
It’s one of those industries
Erika Smith:
It is. Yeah, yeah.
Devon Hayes:
And knowing it inside and out the way you do from the manufacturer and supplier end all the way through to now contracting and now you’re building roofs. I’ve seen pictures of you actually doing repairs too.
Erika Smith:
I do those occasionally. It’s not my favorite thing to do, but sometimes I will jump in, help out here and there. It’s fun.
Amanda Joyce:
But it is just so unique how you have this full 360 understanding of the entirety of the industry and what a benefit that must be to you as a business owner. I feel like your customers have to be benefiting from it as well. You’ve literally seen behind the curtain and every aspect of the industry. I think it’s so cool that you have that perspective.
Erika Smith:
Right. Thank you. I’m super fortunate to have experience in all three channels of distribution within the industry, but it’s crazy too. I still learn something new every single day and that’s kind of the part that I enjoy so much about the industry and my job is just… Every day I’m like, oh, I had no idea that you installed one roofing assembly component the way that I see it installed or that you could do it that way, or learning something about the financial aspect or how insurance carriers do things. So it’s been an interesting ride for sure.
Amanda Joyce:
Awesome.
Devon Hayes:
Yeah, the insurance world, that sounds like a whole other animal. In each carrier, I’m sure it’s all nuanced and different, so I can only imagine how much you learn in a storm year versus a year where you’re doing a lot of retail roofing.
Erika Smith:
The carriers, they keep shifting and changing, so I’m actually really interested in learning how their business model works and how they do things and how it relates to the property owners because I do what I do because I like helping people. So I want to try and help every single person that has a roofing issue, and with that comes some insurance pieces as well.
Devon Hayes:
Joy, such joy. Okay, so let’s… Present day, you are the sole owner of the Roofing Revolution. And I think we said this in the beginning, you’ve been in business since 2019, but, I mean you’ve scaled pretty tremendously in just these few short years. I kind of want to talk about that a little bit. I want to talk about, and this is a marketing podcast, so we would be remiss to not include maybe how marketing has played a role from zero to where you’re at now, and you can share your numbers, we’re not going to air your business, but for contractors that are kind of on this journey in this growth pattern… Obviously if you’re a $10 million company, your marketing efforts and budget are a lot different than someone who’s making it to that $1 million mark. So this is where I guess we’ll ask you about maybe your marketing journey a little bit.
And if you focus on it, I know from other conversations that you have a heavier emphasis maybe in business development, but I would love to hear about that side of it and then maybe future plans for where you’re at now to when maybe you hit the five, eight, 12 million, however you continue to grow. So loaded question.
Erika Smith:
I think I can handle that one. So growth wise, my first year we were just about half a million and it was just myself and I had a sales production person that would help me on the production side of things, and that is kind of where I wanted to be. We hit that goal next year. We were at three quarters of a million, and then this year we’re probably going to come in right around 1.7 to 1.9 million. So that’s where we took that huge growth jump in the full three years that we’ve been in business. Again, it’s managing the cashflow aspect that is so important. So cashflow is king, especially in a roofing business where you can get turned upside down very quickly. A lot of roofing contractors go out of business in the first two to three years. I did not want to just be another statistic. So I really had to sit down and I actually sat down with a female who used to be my competitor, and we were like, how would we do it if we could do things a little bit different from the business development side?
So we were competitors doing business development to insurance agents and property managers. And so we did this kind of unique marketing strategy, if you will, where most of the marketing budget went towards the business development aspect, and then we said we would do the business development and slowly we’ve kind of gone more into the branding side over time really trying to utilize our logo so that it’s more recognizable. Other than that, we don’t do a lot of marketing, but what I would like to do moving into the future and figuring out to take us from basically the 2 million point to a $5 million point would be implementing some more branding and then probably updating the keywords on our website and then trying to get up the ranks with the organic searches, possibly a little bit of pay-per-click or doing some sort of landing page in the future. But right now the marketing is heavily based on business development. It’s about 4% of our budget, so we have a large marketing budget for the size of company that we are.
Amanda Joyce:
Absolutely. So do you want to talk a little bit… I mean, I know you said obviously some of that business development is focused on insurance agents there locally. Are there any other kind of tips you would have for somebody that’s maybe looking at how they can expand their business development footprint and some things they might want to test?
Erika Smith:
Absolutely. Yeah. With business development, it is about relationships, but it’s also about performance. So I’ve always just had the mantra of be reliable, do what you say you’re going to do. And especially with agents, they really like communication from everyone who they’re working with. So it seems like a no brainer, it seems very easy to go in and just say, “Hey, we’re going to communicate with you.” And they’re like, “Great.” 99% of the people who are calling on the insurance agents aren’t communicating with them. So that’s been our niche is going into both agents and property managers and proving that we can communicate the way that we say that we’re going to.
And then we tend to have very reciprocal type of relationships where we provide leads if they provide leads to us. So we work with a very small group of agents who we have deep, deep relationships with, and it’s the same with a group or a handful of property management companies too. So we kind of go with that small business feel from the business development and marketing standpoint, and we even try and implement utilizing personalized emails rather than automated emails as much as possible so that our clients get that special, personalized touch. And I mean that’s with property owners who are getting a roof replacement or insurance agents or their administrative team, and that’s even with the property management groups too. So everyone, we just want it to feel real personal and it’s almost kind of going backwards in time away from the automation.
Amanda Joyce:
It’s so refreshing for people. We’re also tired of just feeling like a number or some bot spit out the email we’re opening and it’s so nice to feel like there’s someone on the other side of that. Do you feel like your approach to business development was some of that, when you came in and launched the company, do you feel like some of that was more stuff that you’d learned in the field previously working with people and learning from other companies and seeing that they were doing it right or thinking, wow, they’re all missing the mark here, or did it just come to be as the company was taken off?
Erika Smith:
It kind of came to be as the company was taking off. I mean, my coworker, Tamira, her and I had this vision of excellent, fantastic communication, under promise, over deliver, rather than going out and marketing to all sorts of agents and just getting as many people as possible to give as many leads as possible. We took the different approach and said we would rather work with 10 or so agents on a very close basis and have them refer us for everything rather than just one here or there. So her and I had this interesting concept that has kind of evolved over time and knock on wood, it seems to be working because we are developing those close relationships that are based off of loyalty. And that’s not even just the people that we do business development with, but it’s also with our material suppliers, the manufacturers products that we sell. The relationships and loyalty are absolutely key in this industry.
Devon Hayes:
I love that. I really, really love that approach because, I mean, we are always students here, we have a podcast, but we’re in digital marketing, so we’re constantly learning and listening and it seems that there’s always a tool being sold. There’s always something being sold. There’s like, “Sign up for this for your review automation, sign up for this for SEO. Do Google ads, do Google local service ads. Oh, you need to sign up for this kind of direct mail because we’ll send 10 postcards to a targeted zip code.” I mean, you could spend so much money, but the value of actually putting in the time to build relationships versus trying to throw money and have leads created that way, it’s a different approach. And I think when you’re starting out, you’re not starting out anymore, you’ve been doing it, but I think that’s some really, really good advice for people that are starting out.
But even I would say in any market, the best referrals or the best clients come from referrals typically, and when you have those strong relationships, if something goes wrong, because in construction it often does, you’ve already got that trust established, and so you’re not going to lose them, versus if you get a one-off lead from an agent because, I don’t know, they got an email blast and something goes wrong, you don’t have that history with them. They don’t know that that’s not par for the course with you. So I think that… What do they call it? There’s a business term for it. The lifetime value of that referral partner is just massive when you kind of set the foundation that you have and really build it on loyalty, trust, personalization, customization, quality and transparency. I mean, that’s huge. So I think that speaks very much… The formula works.
You look at your success and you’ve only had one storm year since you’ve been in business and you’ve had to push away leads and not do your job site marketing because everyone needs a roof, but even if you try to set that timeline expectation of, “Sure, we can get to you in 12 weeks,” That’s not what a homeowner wants to hear. So yeah, it’s just a really refreshing approach. Instead of trying to throw money at a problem, you really have just invested the time to build these relationships that will continue to be a lifetime lead source for you.
Erika Smith:
Yeah, and that was the whole goal coming in, and I’m sure we’re going to have to pivot and shift at some points during our growth scale, but right now, it seems to be working, but it’s a lot. I value the people who work with me, so the marketing business development aspect is a huge piece of that. So I pay more than most people do on that avenue, and it seems to be working so far. So check back with me in a year and see if that shifts.
Amanda Joyce:
And we can’t wait for the follow up a year from now to hear what incredible number you’re hitting. Yeah.
Erika Smith:
Oh, thank you.
Amanda Joyce:
I was going to say, before we close out, I feel like you’ve made some references a couple of times to controlling cash flow. If you had a tip or two you could give to somebody who’s just starting out, maybe that they’re where you were in 2019 and you were getting ready to pull the string, and obviously you knew way more going in than a lot of people that might be launching a business, do you have hot tip or two about staying on top of that cashflow that might help somebody that’s trying to control growth and is looking up to somebody like you as a business owner?
Erika Smith:
Yeah, of course. So what I did when I started knowing that this is kind of the standard problem, I got a loan, I borrowed money from myself, and then once I built up a big enough credit score, I went and got a line of credit. And I did receive that piece of advice from a fellow colleague and he was like, “The number one thing you need to do after you spend your money setting your business up is go get a line of credit and make sure that you pay that money off as quickly as you possibly can every single month.” And especially cash flow in this industry, the cycle on average is between 60 and 90 days with these storms to get your money back that you’ve already invested. So hopefully that helps anybody coming into the industry.
Devon Hayes:
Yes. And if people want to get in touch with you, ask you, I don’t know, more questions, maybe they’re on their contract journey or maybe they want a roof, how would they get in touch with you? What’s the best way?
Erika Smith:
The best way with me is email or text. My email is erika@theroofingrevolution.com, E R I K A, and my mobile phone number is (720) 427-9555, and I text all day every day.
Devon Hayes:
Perfect.
Amanda Joyce:
If you want a personalized response, you know who to hit up. It’s Erika.
Devon Hayes:
I know. That’s bold. That’s bold right there. I like it. Thank you for sharing your story with us and spending a bit of your morning. We know you are buried right now, so we really appreciate it.
Erika Smith:
Anytime. It’s so good to see you two performing so well and happy to be on this podcast.
Devon Hayes:
Aww, thanks.
Amanda Joyce:
We can’t wait to have you back. Thanks, Erika.
Devon Hayes:
All right, take care.
Amanda Joyce:
That was today’s Trade Secret. Thanks for listening.
Devon Hayes:
Did you find this helpful? We’re just getting started.
Amanda Joyce:
Subscribe and don’t miss our next reveal.
Devon Hayes:
Until next time.
