During the pandemic, employers experienced a surge of what we now call ‘the great resignation.’ This wasn’t the case for Tommy Mello and his team of loyal employees. Instead, they stepped up and offered to take paid deductions and gave their PTOs. So, how did he do it? In this episode, Tommy shares leadership practices that develop loyal employees and create a culture of ownership within a team. Tommy Mello is the author of Home Service Millionaire and host of the Home Service Expert Podcast. Listen to his conversation with host Penny Zenker and get valuable leadership insights to strengthen your organization and grow your business.
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Developing Loyal Employees With Tommy Mello
Welcome to the show. I’m always looking for people in different businesses in different areas to get some different perspectives on how you can take back your time. In this episode, I have Tommy Mello with me. Like many business owners out there, he says he didn’t grow up with a silver spoon, but he has worked his butt off to figure out what works. He has developed his business into greater than a $50 million business with over 360 employees. He shares on our show some great practices as a leader of what he does to help to create greater loyalty and ownership within his team.
He has a lot of accomplishments behind him. He’s created this home service brand and has also written a number of books. The Home Service Millionaire is one of them, as well the podcast that he runs, which is The Home Service Expert. Whether you’re in the service business or not, it doesn’t matter. There is a way to lead your people and grow your business, and Tommy shares some of those smart ways to do that so that you can take back time and grow faster and more sustainably. Without further ado, let’s get to Tommy.
Tommy, welcome to the show.
Thanks for being here. I’m excited.
You said that you’re obsessed with business. Let’s talk about that. Some people knit for fun, or they go and cycle or play tennis. Do you do business for fun?
I don’t feel like I go to work at all. In 2021, we did $74 million. My budget for 2022 is $151 million, which is over 100% growth. I love key performance indicators. I call it BYB, Better Your Best. I’m not competing against anybody. We’re the largest garage door company in North America that’s not franchised. I read all the time. I’m fascinated with goal setting and hitting these goals. One of the things we’ll talk about is culture, enjoying the journey, and bringing people with you.
You said you love KPIs and being able to meet those. Is there a system that you use or OKRs?
If I walked into your business, here’s what I would do. I have a whiteboard out and say, “How much revenue do you want? What’s your average ticket?” If it’s home service, I’ll also ask, “What’s your conversion rate? What’s your call booking rate? What does it cost you to acquire a customer?” Those are the main five KPIs, and when I look at them, I can double a company overnight by finding the holes. Once you’ve got those figured out and they’re good, then you dump gasoline in it and continue to feed the engine of leads.
What we’ve done pretty well in the last couple of years is I have 7 full-time trainers and 4 full-time recruiters. I walked upstairs, and I didn’t know the guys had arrived. We’ve got seventeen guys that are training. They’re here for a month. They just finished their apprenticeship program. The key to success is building something that people want to work for.
There’s a guy named Darren Hardy that wrote a book, The Compound Effect. In the book, he was younger, and he wrote down 100 things he wanted in his life partner or in a woman. He wrote down all these attributes. He looks at his list of 100 things, then goes, “I can’t get a woman like this,” so he had to write down 100 things that he would have to become in order to even be deserving of a person that he drew out.
I went through the same thing, but I said, “Who do I have to become as a company? How do I want people to break walls to come work here?” We hired a dream manager, someone that’s helping people accomplish dreams within the company and letting them win. My vision had to be so big that it’s got to be able to handle 400 other employees to let them live their dreams and visions.
I’m a big believer in big goals and dreams because, like the compound effect, there’s building on top of what you have in those compounds, but also, when you get that big goal, people can’t think the same way to grow incrementally. You’re talking about 10X, which means that you have to think and approach it differently, who you need to become, and how to think around that. It’s easier said than done with one person. You’re talking about doubling your business. That means that you’re also going to increase your sales force or your team considerably in order to make that happen.
It’s about infrastructure, systems, KPIs, and goal setting, but it’s becoming a powerful delegator. One of the things that’s very hard that I told you before we got on here is there are certain things I have to do, but for the most part, I don’t put up my own email. I trust a lot of people to do a lot of things. As good as I might sound, I’m horrible at so many things. I’ve identified my weaknesses and hired around them, and I think that’s key. I don’t have anybody that’s a visionary because if I did, we would probably be butting heads.
You would be even higher than before. You never know.
I have a lot of innovators. I’m sitting on the shoulders of giants. They’re my coworkers, my internal customers. They’re the most amazing people. I’ve got these great ideas, but I can’t do a lot of them, so they do it for me.
Something I want to talk about is your people. With the great resignation, you’re hiring a lot of people. I don’t know if you’re seeing people resign as well, but I want to talk about the idea of how you are instilling ownership in your people. I want to ask you some questions about that. How do you get people to stay, be motivated, and want to fulfill that big dream with you?
What I can do for you is celebrate homeownership, good credit scores, and when people quit smoking. We also celebrate good weight loss. We could talk all about conversion rates and our goal-setting internally as a company, but I’ve been fortunate, and God has blessed me very abundantly. It’s more about the journey, and I’m having more fun sharing stuff with people, letting them win and become good moms or dads. A lot of people break down sometimes, and they tell me, “I became a better father, and now I’m spending more time with my kids. I’m now a better husband or wife.”
A lot of times, we don’t talk about money in school, but the first thing I talk about is money. I give everybody a tithing envelope like what you do at church, and I say, “Donate as much money as you got in your pockets,” and then I say I’m just kidding. I would say, “If the priest and the preacher could talk about money for ten minutes of every sermon, I’m going to talk about money. We’re going to talk about depreciating things like your RV and your motorcycle. We’re also going to talk about compound interest and how appreciation works.” We subscribe to the Dave Ramsey program for every employee here. It’s amazing what happens when you take care of your people.Identify your weaknesses and hire around them. Click To Tweet
We do okay. I always say I can do a lot better, but overall, there’s one thing I can tell you. It’s I do care. I had a line outside of my door of employees when this nasty virus came about. They walked in one at a time and offered to give all their PTO and take paid deductions. We didn’t end up having to go that route, but it was amazing when you saw the loyalty and what these amazing folks around me are willing to do. I feel like I got to give back as much as possible and take them along for the journey. We’re having a lot of fun doing it.
As I said, I don’t feel like I go to work. Even on a Monday, I’m excited to get in. I get on the phone a lot. I’m in a lot of meetings and do a lot of podcasts, but it’s fun, and I enjoy my life. The thing is letting them win and showing appreciation. Of the five love languages, there are five levels of appreciation as well, and those are important in the workplace.
What are those five levels of appreciation? Is that something that you follow within the organization?
There are a million things, but I’ve got a test you could take, and it is the five languages of appreciation in the workplace. It’s the same language as words of affirmation, some people like gifts, and a lot of people like recognition. We’ve got employee of the month, and we celebrate our big wins. A few years ago, I used to draw on a happy and unhappy face, and we went over to KPIs.
This guy came into my office and went, “A couple of years ago, you said no one’s a loser, but this is the losing side. I put my head down, walked up, and put my numbers on the whiteboard. I remember telling myself that I’ll never be on that side of the board again.” We’re too big now to have every guy write their numbers up. It’s important to give appreciation in the workplace.
I’m a good cop. My manager and assistant, Adam, I said to him, “If you’re going to come on, you got to be the bad cop. You got to do all the firing and all the performance improvement plans.” I’ve shied away from having to ever do anything. If you lie, cheat, or steal, I’ll fire you. That’s not right, and that’s immoral, but if you’re a good person but are not successful, it’s hard for me because I care.
Part of me says 400 employees are each taking care of usually around 3 people, so that’s 1,600 people. You got to make the best decision for the whole organization to move on. You’re feeding a lot of other people, so some people have to pay the price of not working here. I tell people, “If you don’t hit your goals, I’ll give you the opportunity to work for one of my competitors.”
You’ve got a lot of people. You can’t please everyone. You make the best decisions that you can that are going to move the company forward. I want to hone in around this idea of creating ownership in your team because there are so many people who say, “My people are not accountable. The new generation is not motivated.”
We have to look at ourselves as leaders and think that if our people are not motivated or not developing themselves, part of it is a leadership question as well. Maybe, in the end, you need to part, because people don’t have the skills or it’s not the right fit. It’s too easy to point fingers at other people and say that it’s everyone else’s fault and everyone else’s problem. I’ve been there, but I learned that I got to take a look in the mirror first.
I want to talk about some of those leadership principles that get people in a place to walk into your office to say, “I want to reduce my hours so that more people can stay.” What creates that level of loyalty? You have these levels of appreciation, and it sounds like you go out of your way to make people feel special and important. What else do you think helps people when you make a decision that everybody might not agree with? What helps them get behind you and do it anyway?
Number one is that I run a democracy. It’s not a dictatorship. We would come up with reasons, and I love people with opposing views. We do a SWOT analysis on a lot of our decisions and look at some of the weaknesses. I like it when people have a valid case and go through a healthy debate. We set our budget at $151 million.
I asked the president of the company not to be there. I said, “I need you to push, but I need them to come up with the ideas.” What I try to do is plant little seeds and water them. I don’t think people realize I’m doing this, but I help them come up with a solution that they’ll feel is their idea. Most of the time, it is their idea, but I sway them in a direction.
If I understand correctly, you set the frame and get them your leadership team or whoever it is that you have to work on a particular problem. You will get them in a workshop, and they’ll work it through together?
I’m letting them come up with some of the ideas. I had a guy teach me The 7-Power Contractor. His name is Al Levi. We’ve got manuals, an org chart, and a depth chart. We know who’s in control of certain departments. There’s leadership, delegation, and a manual. People say a manual is a manual, but here’s the thing. When I was in seventh grade, in gym class, the gym teacher would give us this one-pager. One of them was basketball. The next week it was soccer. It showed us how to play the game. They showed us what a free-point shot was versus a three-pointer. It showed us where the offsides are and how many minutes are in a quarter. The manual teaches us how to play. The KPIs are the scoreboard.
A lot of times, people start and don’t even know how to win or lose the game. It’s unfortunate because people want to know they’re doing good. People say, “No one does it as I do it. If I don’t do it, it won’t get done right.” They’re not the owners. I notice when the fan blades don’t go at the same speed. I notice when there’s one light bulb out. Sometimes, I get upset. I’ll say, “Who used the last toilet paper?”
Everybody wants people to be the owners, but they’ll be your competition. I love Henry Ford because he came up with an assembly line. He hired specialists at one thing. They were monitored at that one thing, and they got very good at it. They didn’t get a jack of all trades because a jack of all trades is a master of none, and that’s what I try to do with an org chart and get people to dial in on one thing. That’s part of the way we create leadership.
I’m a big fan of accountability, deadlines, and checkups. I have eight steps of delegation, 1) What needs to get done. 2) Why it needs to get done. There needs to be an explanation of why we’re doing things. 3) What do you have available to get it done or your resources. 4) The priority assigned to it. 5) When it needs to get done. 6) Your meeting schedules and checkups to check up on progress. 7) The consequences, or the gifting if there’s a prize or bonus involved. 8) An opportunity for feedback after we get done to see where you got better. As great as it all sounds, it’s different from using it all the time because when you use it correctly, it is done right.
You’ve mentioned feedback. Do you have structured feedback processes that happen consistently in the organizationIt’s important to give appreciation in the workplace. Click To Tweet
Are you familiar with what a Net Promoter Score is?
There’s an internal NPS, and the promoters are 9s and 10s. We’ve got this thing called SurveyMonkey. We send out internal surveys all the time that are anonymous. I like bad feedback. I like to know what we need to work on. People sometimes hate negativity. I strive to be better because I want to know what we can do better. The one thing that I’ll tell you is with as many employees as we’re at, I can’t be there every time. If I spent five minutes with every employee, my whole month would be gone.
I had a guy sit in here one time. His name is Julian Scadden. He’s the CEO of Nexstar. They have 900 HVAC, plumbing, and electrical companies that they consult. He said, “Tommy, you’ll do amazing things. The one thing that you need to discover is how to build your leadership because you’re amazing, but how do you build this into each and every person and get them to care as you do?” A lot of times, I’ll sit in meetings, and I’m like, “This is boring. Let’s have fun. Let’s get passionate. Let’s tell stories.” I try to get my guys fired up. I’m shaking hands and kissing babies now. That’s what I’ve become as a cheerleader in this company.
How do you get those leaders to develop themselves and be better leaders?
We’re bringing out a lot of consultants. I’ve got a guy named Jonathan Whistman, and he wrote a book called The Sales Boss. I’ve hired a lot of consultants. We go to leadership training all the time. We went to over 500 million shops, not in garage doors but different industries. That’s the best thing you could do. Put yourself out there and ask a lot of good questions. I try not to say, “Go to a local shop.” I say, “Fly somewhere out of the state. Make it an experience. Get out of your comfort zone and ask a lot of questions. Meet with the CMO. Talk about marketing and how they train. What are their secrets to recruiting versus hiring?”
The hiring is going on a job board. A lot of people go, “I don’t get it.” I’m like, “How much do you spend on marketing?” They’re like, “10%,” so they do $100,000 a month and spend $10,000 on marketing. I’m like, “How much do you spend on hiring and recruiting? You just put an ad on Craigslist and expect everybody to come to you for $35? That’s not marketing. You got market for great people.”
Every time we have a beer and pizza on the weekend, I try to get those magic moments on video and share them on social media. I’ll tell everybody, “Take out your phone.” I give everybody $1,500 if they get an employee to come to us. I had a guy make $15,000. I’m obsessed with recruiting. I wrote down $1 billion on the top right corner of my whiteboard, and I drew a line to the bottom left.
I drew five-year increments. I said, “How to get to $1 billion? A good technician will do $500,000 a year, so we need 2,000 technicians.” I broke down a hockey stick for a growth curve and did the math. It was pretty simple. I said, “We’re going to need a big training center, LMS or Learning Management System, and KPIs that track other things than just booking rates. We need to track employees’ lives and their happiness.”
My managers all walked in, and I said, “We’re going to do $1 billion in five years.” They looked at me and didn’t know what to say. They said, “You’re a dreamer.” They looked at me like I was crazy. When I showed them and sat down for an hour, we all walked out of here going, “We’re going to do $1 billion.” I said, “Here’s the path, but what do we have to do now? What do we need to do next month?”
A lot of people have these crazy dreams, but they don’t have any way to get there. I think, “What does it need to happen now in my business and in my life to change?” Everybody’s got next week. They’re like, “Next week, I’ll quit smoking, quit drinking, start working out or go on a diet.” What do I need to do now to make these things happen? It’s taking action now, and it’s hard for a lot of people to do that.
What I heard from you is a couple of different things. You’re shaking hands and kissing babies. You’re sharing the passion. Your passion is contagious, and when you’re passionate about it, they’re going to be like, “Tell me more.” They’re interested in it. It’s important that the leader brings the passion of their vision. I heard you say that you break down the path.
It’s one thing to throw a big number out there. As you said, people would be like, “That’s big. That sounds far.” A lot of times, they don’t recognize where the gap is and how much easier it is when you break it down the way that you did, and then it’s like, “It’s a clear path. It’s doable.” You help to take that vision and simplify it for them in the clarity that they can own it.
It’s got to be digestible. Do you remember the old movie, What About Bob? He was like, “Baby steps.” I don’t know why I thought of that, but it’s a crawl before you walk, you walk before you run, and you run before you sprint. It’s understanding that getting started is half the battle. I tell my guys, “Someone will have an amazing day,” then I’ll get them to the front, and I’ll have them talk. I say, “What did you do?” It’s always the same answer. I’ll say, “Let me guess. All you got to do is ask. Do you want to go on a date? Ask. If you get no, get comfortable with rejection.” There’s a great book called Go for No!.
I bought one of my biggest competitors out. We went out to lunch. It was in a cheap Hispanic restaurant with burritos and tacos. I said, “I got one of your coupons.” I knew they had coupons. I didn’t have it on me. She goes, “How much was it?” I was like, “It was $4 off.” She was like, “Okay,” and she gave it to me. The guy looks at me and goes, “Do you always do that?” I’m like, “Pretty much.” A lot of times, the hardest thing is asking, and I’m comfortable with rejection. I went to every one of my dances in high school, and I didn’t always get a yes. Some girls said no. It’s their loss. It’s what I look at it.
My mom taught me that as well from a young age. If you don’t ask, you don’t get it. There’s no harm in asking. They can say no.
It’s the way that we ask too. I had an event, and I paid a lot of money to go to this thing. The guy walks out there and goes, “Who here wants to be a volunteer to come out on stage?” I was new to this group at the time, and I didn’t want to be that guy. He said, “Let me ask you this. Who here wants to be the best husband or wife? Become a better natural leader? Have the best sex life ever?” He starts going off, and after five minutes, he goes, “When you get off this stage, your life will be changed forever. There will be a glimmer in your eye,” and then everybody was begging to go on stage after that.
I don’t have any kids. I want kids here in the next ten years. I’m getting old. I don’t have a bubble here. When I have a kid, a boy, in particular, if you ask a girl out, the first thing you do is smile. I tell my guys all the time, “It’s hard to do, but stare in the mirror and smile. Even when you’re talking, you can see when someone’s smiling. Also, eye contact and body language.” I talk about these things all the time. One of my guys calls me and tells me how much he’s letting me down. This is in Michigan. He goes, “I’m dropping the bomb. I’m letting you down.” I said, “Stop right now. Are you near a mirror? The first thing you need to do is tell yourself you love yourself. The second thing is to smile. Pull your shoulders back and own it. When you walk in, slow down, smile, and enjoy your life.”
He never did over $3,000. For the next job, he got $7,000. I said, “They’re buying you, and if you believe it, you’re the doctor.” The doctor asks questions, smiles, and enjoys it. He sits down on his desk after he checks out your ears, makes you cough, and does all that stuff. He then asks you good questions and gives you a diagnosis, and he might write up a prescription. When he gives you a prescription, do you ever go, “How much is that going to cost?” You never ask your doctor how much the prescription costs. You say, “This is what I need to get better,” and I say, “That’s what we are. We’re the doctors when we enter the garage.”We want to be valued. We want to grow. We want to be listened to. We want to be involved in the decisions. Click To Tweet
By sharing these stories and nuggets of wisdom, it helps people reframe where they are to see their better selves and reach for them.
Have you ever heard of Simon Sinek? There’s this story. There’s this lady, and she lives in this tribe. They’re at the bottom of the base of this mountain. There’s this other tribe at the top of the mountain, and they’re bad people. One day, the baby that she had goes missing. They had a couple of trackers in this tribe to go track where the baby was up at this bad tribe’s base in the mountains.
They got halfway up, and they were stumped. They didn’t know how to get up there. They were getting ready to turn back around, and all of a sudden, in the distance at the top, they saw the lady running down this big hill of a mountain. She’s got the baby. They said, “How did you figure out how to get up there?” She goes, “It wasn’t your baby.” The point is she figured out a bigger why.
If people know the direction of why you’re doing this and what you’re going for, it changes the whole perception of what we’re trying to do. We raised 25,000 bottles of water for the homeless in the summer here in Arizona. One of my technicians walked outside of Walmart. He was homeless for a year. He lived out of his car before he started working here. He gives the lady $20.
She was an amputee and missing one leg. She goes, “I don’t want your money. All I need is a bottle of water.” He goes into Walmart, gets one of those styrofoam coolers, and fills it up with Gatorade and water. He gave the lady water and stayed with her for half an hour. She got rehydrated, and he bought her a bus ticket and helped her get on the bus.
He comes in and says, “We have to do something for these people. They’re dehydrated.” It was a bigger cause, and all of us got into this thing. We did jackets in Michigan for the homeless people. We painted the YMCA. We feed the needy. They do this thing called Shop with a Cop. I had this little girl, and they don’t get anything. They don’t have Christmas. I’m sitting there tying her shoe, and I felt so bad because they only have a budget of $100. The first two things she grabbed were over $100, so we got her more stuff. We have a bigger reason, why, and a cause to all this.
We planted trees. We try to do something every month. We donate to wounded warriors. We do a lot of garage doors. I try to let them come up with ideas. We donated a lot to breast cancer. We had one of the guy’s moms that beat breast cancer, and we did a marathon for that, understanding your why is so important. It’s easier to say now because I don’t have as many bills as I once had. I’ve been very fortunate. Now, it’s more for a legacy. What can you give? How many lives can you change? More people are starting to see that, and it changes the dynamic and the culture. There’s a different reason for showing up.
People rally around a bigger cause and see that you’re sincerely interested as an individual and as a company to make a difference. I believe people rally around that, and that’s the difference with the younger generation. They want companies that are more purpose-driven. It’s forcing a good change.
Everybody says Millennials, and I’m right on the borderline of a Millennial. We want to be valued, grow, be listened to, and be involved in the decisions. I want to see a ladder that I could potentially move up in the company. The benefits are almost a given now. In this day and age, flaws come out all the time because there are so many choices. People say, “I can’t find anybody.
I said, “Look where you’re at. It keeps saying must and only.” Most of my stuff says everything about who we are as a family. By the way, we do drug tests at the end of it, but it’s not full of must-be or background. That stuff comes eventually. We do drug tests and background checks, but it looks like they’re trying to get parole in these things they put on Craigslist and Indeed.
That’s another thing too. If you look at my Indeed or my Glassdoor, I actively went on and told my employees, “Would you do me a favor? Let me know how I’m doing. Personally, I want to know.” They went on and got 4.7. You always get the unhappy guy or girl that gets fired that goes on and blasts you. I asked them to do that for me, and they did.
There are 150 responses. A lot of people look at your company, and they would say, “I got a good Yelp. I got a good Google.” I’m like, “Employees go to Indeed and Glassdoor to look at this stuff.” We don’t think about that stuff, but try to put yourself in the place of somebody looking for a job and what you would be attracted to.
It has been a great conversation. We’ve touched upon a lot of different things. I know that different people are reading this that they have each taken away something very different. How do people get ahold of you, and where should they go?
I’m on Facebook and LinkedIn quite a bit. I wrote a book called the Home Service Millionaire. It’s how I went from $50,000 in debt to, I think at the time, a $35 million company. I got a podcast called The Home Service Expert. I had Michael Gerber and had Gino Wickman on the show. I’ve had some cool people on there that offered a lot of insights on a lot of things. You can also hit me up at TMello@A1Garage.com. That’s my email.
Thank you so much for being here.
Thank you, Penny. It was a blast. I always have fun doing this kind of stuff.
Also, thank you all for reading, because, without you, there would be no show. Make sure that you write down a couple of takeaways from this episode and what you are going to put into action. We also heard from Tommy that what are you going to do now that’s going to make you better than you were? What are you going to do now that’s going to help you to get to whatever that goal is? Make that commitment, make it now, and then do it. I’ll see you in the next episode.
- Home Service Millionaire
- The Home Service Expert
- Tommy Mello
- The Compound Effect
- The 7-Power Contractor
- The Sales Boss
- Go for No!
- Facebook – Facebook
- LinkedIn – Tommy Mello
About Tommy Mello
Like many other business owners out there, I didn’t grow up with a silver spoon. I know what it means to work your ass off to get what you want.
I ventured into different jobs when I was a kid from bussing tables and being a lifeguard, to trying to flip cars, until I finally started a landscaping business (check the poster on the left. It’s not that horrible. I guess. But I could work on my smile.)
The truth is that growing up hearing my parents talking through bill issues is what motivated me to remove money out of the equation, so I could spend quality time with friends and family without having to worry about it.
It took hard work to build a $50M business with over 360 employees. But what matters at that end is that we all have to start somewhere.
Being through all that gave me the motivation to help other business owners succeed just like I did.
And that’s the main reason why I’ve created the Home Service Expert brand, and put out there so many learning resources like the Home Service Expert podcast, the Home Service Millionaire book, and the Home Service Millionaire Club.
Tommy’s Key Accomplishments:
Runs a home service business that’s about to cross the $50M mark in revenue with over 360 employees.
Published on top publications like Forbes, The Huffington Post, Entrepreneur, and Inc. Magazine.
Host of the acclaimed Home Service Expert podcast, where world-class experts like Michael Gerber, Ken Goodrich, and Jay Abraham were featured in.
Author of the book Home Service Millionaire, #1 Best-Seller on Amazon in 7 different categories.
Named top entrepreneur in Arizona under the age of 35.
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