Tommy Mello Of A1 Garage Door Services On How To Take Your Company From Good To Great
Leaders are readers. It is super, super important to read all the time and listen to podcasts and really grow as a person. Network and go to the industry show. I’ll give you an example, I went to Pantheon. It is Service Titan’s big show, and I just met so many great people and learned so many things on training and delegating and doing the manuals right and doing ride-a-longs and having forms. And so that is huge is just being able to read, listen to podcasts, and network.
As part of my series about the “How To Take Your Company From Good To Great”, I had the pleasure of interviewing Tommy Mello.
Founded by Tommy in 2007, A1 Garage Door Service is a national leader in the garage door service and sales industry. Based in Phoenix, Arizona, A1 Garage Door Service employs more than 350 team members in more than 30 markets in 19 states from coast to coast. The company projects revenue exceeding $74 million in 2021. Tommy is the founder of The Home Service Expert, the leading learning resource for ambitious home service entrepreneurs, and author of the bestselling book Home Service Millionaire, the true story of how Tommy turned his local garage door service business from $50,000 in debt to a $30 million business in seven years.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
My name is Tommy Mello, and I am the owner of A1 Garage Door Service. Originally, I am from Michigan, and I moved out to Arizona in 1999. A little bit of backstory, I started the company in 2007. The company, as of last year, did $74 million, and our goal this year is $151 million. We are in 19 states, 30 markets, and really looking to expand here in the next couple of years. I got in the business from painting garage doors. One of my old roommates used to be a manager at another garage door company, and he asked me if I would like to paint doors for them. They paid a hundred dollars per door, so I decided I wanted to do it, and I got to the point where I could paint ten doors a day on the weekends.
And then another guy and I decided to get in the garage door business. He was a tech at another company, and I just really liked the opportunity. We started the business in ’07 and did everything ourselves. We rode in the truck, answered the phones, bought our own parts, you name it, we did it. And 2010, we went in separate directions. He had some things going on in his life and he moved to Montana. We are still best of friends.
So in 2010, I split off and took on some debt because we owed some money to Valpak and Yellow Pages. The rest is history. My mom and stepdad moved out to help from Michigan and in 2014, I hired my key person, he is my integrator, and I am the visionary. His name’s Adam Cronenberg, and he really helped me out a ton managing things in the back office. And then in 2017, we got onto a CRM called Service Titan, which was phenomenal.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
You know, I never really thought I would give up, but there were times that it felt overwhelming. When you are doing all the emergency calls, trying to do payroll, at times things get exceedingly difficult. There were times that I’d been offered to buy the company for a lot of money, and I didn’t even hesitate to say “no.” I am not really into it… I do not feel like we have even come close to our potential. Some times that were tough were getting back from vacation and finding a mess or walking into the office and seeing three people smoking outside and no one answering the phones. And I got to tell you, I do not do well with firing people, so luckily, I have a wonderful team around me.
In 2018, I met a guy named Al Levi. He wrote the book, The 7Power Contractor, and he started to consult us, helped us really prioritize our organizational chart, get manuals, and do things with a more systemized approach. And I really got into reading. I could tell you that I have read a lot of books. I love the E-Myth, The Ultimate Sales Machine, and The Richest Man at Babylon.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
In 2007, I got into Valpak, the little blue coupon thing in the mail, and they gave me a call tracking number to show me how I was doing. A couple of years went by, and I talked to the Valpak rep, and she said, “Listen, we’ve done a case study on your business because you’ve had the best success out of any home service company in all the history of Valpak nationally.” And I realized that I gave that call tracking number to Clipper. I gave that call tracking number out to Money Mailer. I used that on my website. So, all the calls that they thought they were getting through Valpak actually were for all my advertising. So that was a huge mistake because all the garage door sections countrywide sold out because they owned the data. And what I learned from this is, to own your own phone numbers when you are doing call tracking.
Lots of mistakes were made. We did not do drug tests. That was a mistake. We did not own our own vehicles. We let the guys ride their own vehicles, and that was nonprofessional. I had trucks breaking down all the time until I really learned about accounting and accelerated depreciation and how those work. Lots of mistakes with the way I was driving around with the vehicles that I did not own. So, that was a mistake as well.
What do you think makes your company stand out? Can you share a story?
I just feel like sometimes we are playing chess and everybody else is playing checkers. We’ve got a great training center, CRM, and we have an amazing team. And you know, relying on the team has gotten me through the tough times.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
Proper delegation and owning your calendar. Google calendar is my best friend. I also have an assistant who manages my time well and keeps me organized. One of the things I always tell people is do not get a $50,000 person in your accounting team. I would rather have a $400,000 person for five hours a week than have a $60,000 or $50,000 person that works 50 hours a week because that is the lifeblood of your company.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
When Al Levi walked into my office back in Tempe, there were calendars everywhere. He tripped over a cord. The manuals had dust on them. There was only one main manual. He walked in the back of the warehouse and said, “I could have stolen all of your inventory with your own forklift.” He has been a godsend, really helping me along. He still is always there for me.
There is another guy named Keegan that I got close with, and he came into the business and really looked at our balance sheets and said I was bleeding in a few markets, and we needed to close those down, and I did just that. But what I try to do is I visit bigger ships than us. I was recently at a $600 million shop in California, and I asked a lot of questions, and that is what really got me through is going and traveling to see bigger, better shops, and trying to emulate what they’re doing over there.
Ok, thank you for all that. Now let’s shift to the main focus of this interview. The title of this series is “How to take your company from good to great.” Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?
A good company is about a 10% margin. They are making a profit of 10%. They are organized, but they are just not pushing through the boundaries. There are a lot of good companies out there that are having a challenging time right now hiring because they’re not great.
What I consider a great company is when you do what is called a net promoter score internally, and you have a lot of promoters at your company. I look at this as their internal customers are my employees. And I will say that some of the things we are tracking now are homeownership. Did they get their dream car? Did they go on their dream vacation? Did they bring a child into this world? Is their credit score getting fixed? Did they quit smoking?
A great company has a great culture. They hit substantial numbers. When the tough times happen, like COVID, they don’t blink an eye. They get through it, and everybody pulls together. That is the definition of a great company and really a great leadership team, and it starts from the bottom up. I will say that if someone is afraid to clean a toilet here, and they are a manager, which is just not the way we do things here, so treat people like you want to be treated. We became a big family here.
A great company communicates well, has great meetings, lets people know how they are doing, and has a manual to let people know how to win and lose. They keep score, have key performance indicators, and they enjoy coming to work on Mondays. I would say that for the most part, a lot of the people here do not mind Mondays, and that is hard to come by, especially in the home service niche.
Based on your experience and success, what are the five most important things one should know in order to lead a company from Good to Great? Please share a story or an example for each.
- Leaders are readers. It is super, super important to read all the time and listen to podcasts and really grow as a person. Network and go to the industry show. I’ll give you an example, I went to Pantheon. It is Service Titan’s big show, and I just met so many great people and learned so many things on training and delegating and doing the manuals right and doing ride-a-longs and having forms. And so that is huge is just being able to read, listen to podcasts, and network.
- The organizational chart is especially important and lets people know those to whom they report. It tells you what duties are responsible. One of the things I learned is to not put people in a box. Build the box and find people to fill that role.
- Systems. We use systems like Monday for project management. We are starting to get into Power BI, which is a business intelligence software. We use different communication tools. Own your technology. It is so important to use technology in this day and age.
- Google Calendar. Live and die by your calendar. Use it all the time. There was a time that I did not necessarily have all the things on my calendar, and what happens is if you do not plan for your day, your day gets planned for you. One of the things that I have done in the past was take a daily calendar, the ones you write in, and see what goes on all day long. Especially for my managers, my market managers, some of my trainers, what we look at is, where is my time going? And what you find is there is a lot of time wasted. So, get control of your calendar.
- We built a machine, and we have four full-time recruiters and seven full-time trainers. And the machine is made to grow. We recruit, and recruiting is not hiring. Recruiting is going out and finding amazing people, and today, that is hard to say what many companies are doing. And being able to train them. We have an apprentice program. We are not looking for people with experience. We want to teach them. We hire for attitude. And I would say it is a machine. We can manage 30 to 40 technicians a month, which is crazy. So, building that machine has really led to a lot of success.
Extensive research suggests that “purpose-driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose-driven business, or consider having a social impact angle?
We want to be the largest and most trusted garage door company in North America. We have set goals, and we actually have KPIs that drive those goals. One of the things we founded was A1 Cares. We shop with a cop, we feed the hungry children, raised 25,000 bottles of water in Arizona, repainted the YMCA. We have a coating program in Michigan going on. We sponsor all kinds of things. It is important to be involved in the community and it is important for our employees to be involved, and they really, really enjoy it.
Know what your goals are and articulate them, there is nobody that does not know what our goal is. 151 million, that is our budget for this year. And they know exactly how we plan to get there. We have budgets, we have goals, we have KPIs, but more importantly, I would say, you got to enjoy the journey. I really am enjoying this every day when I come in and what we are building, and it is incredibly special, and I know that a lot of the people really feel the same way.
What would you advise to a business leader who initially went through years of successive growth but has now reached a standstill? From your experience do you have any general advice about how to boost growth and “restart their engines”?
You must visit a business that is more successful. And I try to get out of the state, and I go there with a bunch of plans, ask a lot of questions, meet with their CMO, their marketing officer, their CFO, their COO. It is important to watch success and try to emulate it.
What else I would say is, sometimes you got to bring on a consultant. I go through some major KPIs, and I can tell you exactly what is wrong with the company. I look at what you want to do in revenue, and then I look at your conversion rate. When you are face-to-face with a customer, how much are you converting? Then I look at your call booking rate. And then I look at your cost to acquire a customer. And typically, with one of those areas of the business, those impact areas, I could identify weaknesses, because once you identify those KPIs and you have them running really, really well, you feed the tank. You pour gasoline on it. You just spend more money on marketing because you know your cost per acquisition. You know you are booking the call. You know you are converting on it, and you know you are getting an average ticket. I would say really start to use technology to understand the gaps and where you should be focusing your time.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
There is this book called Double Your Profit: In Six Months or Less, by Bob Fifer, and it is important to understand that a lot of people are good at creating money and businesses, but they do not have any control over where it goes out. There is a thing called Parkinson’s Law, and it says, “Whatever’s in your bank account, you’ll use.”
There is a guy named Michael Michalowicz and he said, “Keep separate accounts and put your profit away first.” It is a great concept. It is like when you run out of toothpaste is the Parkinson’s Law. You find yourself using less and less and you make it last, and that is what happens in your bank account. That is what happens to a lot of things. Keeping some more of the money that you bring in, having a good controller, understanding how leverage works, and compound interest work.
It is always good to get a loan when you do not need one. We are in the midst of trying to acquire a lot of businesses, and we are going to use leverage and debt until we find, in the next few years, a private equity company. But really, my goal would be to get to $50 million bottom line EBITDA. And you know, at that point, companies are getting twenty times EBITDA, which would be a billion-dollar company. And you know, it is not that far. We are really starting to acquire companies. But no matter what I do, I am going to buy back in and work with the private equity companies in a few years, if that’s the way that I go.
In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?
Checks and balances. Every Friday, we do a financial quick check. I know what is in the bank, what bills we have, and exactly what each market’s doing. That is essential, and most business owners should take the time to learn how to read their balance sheet, their income statement, and their P&L.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?
There are a lot of things I would say to do conversion rates. Number one is you must really look at the customer journey. What do they see when you do marketing? What do your ads read? And then, can you book from the ad? We have a web portal to book it easily. What does our ad say about us? What does our vehicle wrap say about us? What does our billboard say about us? Our TV, our radio? And one of the things that I have seen repeatedly is, the customer journey, they let the phone ring too many times. And then the guy shows up late or does not smell great or does not call them on the way or hit the time area right.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?
Set yourself up for success, wearing clean clothes, uniform, calling on the way. Typically, what I do is I will always buy the customer a coffee on the way, and I tell my guys, “Listen, stop off and get them a Gatorade, water, coffee, whatever they like.” And what we talk about here is tonality, asking the right questions. When people say, “To sell me a watch,” the answer is, “What kind of watch are you looking for? How much are you looking to spend?” Asking the right questions, eye contact, tonality, body language, and just doing the right thing by the customer. I always say, “Do what I would do for my mom.” And I tell my guys, “Treat everybody like they’re your mom or somebody that you love.” The key is not necessarily going after-sales. It is going after what’s right for the customer.
Great customer service and great customer experience are essential to building a beloved brand and essential to being successful in general. In your experience what are a few of the most important things a business leader should know in order to create a Wow! Customer Experience?
There is a great book called Raving Fans. What I try to do is I have eight steps of the customer experience, and the eighth one that I do is to wow the customer is we literally clean up the whole garage after we collect the check. We do it with a blower. We clean it, we add light bulbs, we go over the warranty. We spend a lot of time with the customer afterward. And there is a lot of other things we do, the way that we pull our trucks up, the way that we park. As I said, the call is on the way. Our software text messages the customer on the way, but what I try to do is just really make them laugh and enjoy the experience. And when we call and we can pick something up on the way, they never had that done before.
But what is crazy now is that a lot of companies don’t even answer their phones correctly. I heard somebody say a while ago that if you answer your phones, you are 90% above the rest. I mean, just down to the basics, being nice on the phone, letting them have a wonderful experience, giving them options. And what I always say is, “Do what you would do.” If you are selling a house, let us just make this work. Let us make it past inspection. If you are going to raise your family here for 20 years, we have some different options.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
The first thing is they try to do everything, right? They work in the business and not on the business. That is a huge problem. Number two, they are not organized. They do not have a business plan. They do not have banking relationships. They do not network efficiently. And they try to do it all. Delegating, finding an amazing operator to help, knowing what your time is best used for.
And really, here is the biggest thing I could tell you is, focus. There is a great book by Gary Keller, The ONE Thing. There is another book, Essentialism. Typically, we have ADD when we are a founder, or a visionary and we say “Yes” to things. We start flipping houses and doing stuff that is not business-related or at least the core business. And I would say, if you get really, really good at your business, continue to let it pay you dividends. You know, this business brought you success, and a lot of times what we say is, “We deserve this second house and this RV and all these other things.” But I would say if you put it back into the business, it multiplies faster. So, those are some common mistakes I see.
Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
I am in the home service industry, and we are going to make thousands of people in the company highly successful homeowners. I want them to own multiple homes. I want them to be great parents, spend time with their families. I want them to succeed in their dreams. I have what I call a “dream manager,” and the goal of this dream manager is to help every single employee accomplish their dreams, and really have that work/life balance to where their goals at work equal their goals in their main life, and their children, and their significant others.
I really respect Elon Musk. I respect the fact that he is clean energy, going to Mars. I love the Tesla brand. What he is doing is providing satellite internet for everybody. He is changing the way things are done. I just love what he is doing with SpaceX. I love what he is doing with Tesla. I love what he is doing with solar and battery power. That is a movement that I would love to get involved with.
And the plan is, A1 Garage Door Service, we are going to try to buy a hundred companies. There is this amazing word out there when you could buy companies and multiply it. It is crazy how it works. It is called Arbitrage, and I could buy a company five times, and the day I buy it, I am worth twenty times, which is twenty times profit. So, we are going to do this as a chapter of my life where we are going to start doing acquisitions and probably some mergers, and then I will probably do it again in a couple of home service companies. And then I will move on to the next chapter, which is like I said, something hopefully like Elon Musk, but those are big shoes to fill. But yes, that is the plan. I appreciate you taking the time to listen to this, and if you need any more insights on any of this stuff, just let me know.
How can our readers further follow you online?
https://homeserviceexpert.com/
This was very inspiring. Thank you so much for the time you spent with this!
