Your average ticket price can have a huge impact on the profitability of your business. What can you do to improve it? In this episode, Tersh Blissett & Josh Crouch interview Tammy Vasquez the senior head coach of Business Development Resources, Inc. as they talk about ticket prices and efficiency. Tammy analyzes the impact of your average ticket price on profit, and how improving efficiency and engagement improves ticket prices. Tune in for more great tips on improving your business, right here.
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Average Ticket Prices And What They Mean To Your Business With Tammy Vasquez
In this episode, we are going to be talking about numbers. What's your average ticket price on your service ticket and install ticket? Why do those numbers even matter? I'm super excited to have Ms. Tammy Vasquez from BDR. You've probably heard of BDR or Business Development Resources. They're a coaching organization based out of Seattle.
It’s right at SeaTac, Washington near the airport.
Fun fact. Those who have followed the show had known Bruce. I was honored to have him. It had probably been a couple of years since I had spoken with him. BDR was a major influence in how I was developed as a service technician, service manager and install manager. That is where I learned the nuts and bolts of how to create a profitable service department that could carry the overhead of the entire company. It's weird to say stuff like that, but that made such a huge and massive impact on my life as a service manager and business owner. I love thinking about all of that stuff. It's awesome. I'm super excited to have you on the show, Tammy.
Thank you. That means a lot to us. I love hearing those stories. It's so meaningful to us because that's what we do. We work so hard to change people's lives. To know that history and connection is such a great feeling.
Tell us a little bit about you. For those who don't know, what is BDR? What do you do? As a service company, is it clearly focused on HVAC or other trades?
We focus on the core trades, plumbing, electrical and HVAC. We have some other service-type industries that we've worked with over the years, but we primarily focus on coaching. We have a training division as well that teaches classes all over the country. Those are knowledge-based type transfer things where you're learning how to build your residential maintenance program and labor management.
They're specific courses, but on the coaching side, we have had service coaches and labor install sales. It's a wide variety. We coach clients from startups that do $500,000 to very well-established companies doing $20 million to $30 million. They might have some certain pain points, specifically maybe the service department. We need to come in and assist them with that or work through the future of preparing that business for sale. It's quite a variety of clients. That's what makes it so amazingly exciting and never a dull moment.
Fred Kennedy was the guy who trusted me to become a service manager and I had zero experience at all. He was like, "Here are the BDR folders. Read those and that's what you do." Ignorance is bliss. There were no bad habits to get rid of because I didn't know what to do. I flew out to Seattle a couple of times and they're like, "Why do you do it like that? How did you make a commitment to jump with both feet in there and do it?" I was like, "I didn't know any other way."
I took the BDR book and was reading it because I had no idea what else to do. Google wasn't a thing back then. It was an awesome experience and I loved that whole thing. Can you imagine that as a business owner, the profit from your service department, which is a lot of times a loss leader for your install department, is carrying the overhead of the entire business? All of your net profit from your install department goes straight to the bottom line. It's wild to think about.
I was the service manager for 2 or 3 years and I had an on-site. I was like, "I'm going to rock this thing. We're doing everything right. We're killing it." Angela, who is our service coach, walked in and said, "What is that?" She looked in the corner and I was like, "Don't worry about that. That's nothing." She was like, "No, what is that?" It was 40 or 50 compressors sitting there. She was like, "Is that training or are those warranty compressors?" I was like, "Those are warranty compressors. Don't worry about those." She was like, "That's where we're headed." I was like, "I was about the rock this thing."
[bctt tweet="We work so hard to change people's lives, and to know that history and connection is such a great feeling." via="no"]
She's come over here and piling all of my skeletons in the closet. It was an awesome thing. I think about the warranty claims. It was $50,000 or $60,000 worth of stuff in this corner that we needed to return under warranty. We're going to talk about numbers and average tickets. You see the same thing over and over again every day that it becomes something you'd ignore. Having somebody else come on site made a massive difference for us.
You look at all those aspects and see the companies that are maybe at 10% to 11% net, but once they get that service department turned around, those are the companies that are in our profit coach family that are doing 16% to 23% net overall. They become much more of a referral-based type of business and they're not subject to the ins of ebbs and flows of economy or weather. The service department makes a huge difference.
With my extremely long introduction, I'd love to hear about you and everything that you do within BDR.
Thank you. I've been at BDR for years. In my senior head coach role, I'm responsible for our coach team. I still have a few clients that I coach, but prior to that, I was focused on head coaching in my role. I'll probably age myself at this point because I entered the industry much like you with, "What is this all about?" I took a territory manager job with no HVAC experience. When I applied for the job, I had to ask my dad, "What's HVAC?" You get into the industry and it's so amazing. You meet all these people and one thing leads to another.
I had bought into a company and was a part-owner in an HVAC retail business primarily focusing on residential service and change-outs. Fast forward and I'm at BDR. It's been an amazing journey. Coaching is my calling. It's where I see many opportunities to assist and support clients of all sizes and ultimately change their life. That's what we do. That's our whole focus at BDR.
How long have you been in the trades in total?
Many years, starting out at the territory manager side of things, working over into the ownership side of a business and then here at BDR.
How did you get in to be a TM with zero experience? That's answering a help wanted ad and it's like, "You need to learn all this stuff too because you're going to be the go-to person for these people."
Daryl Turner had taken a chance and I got in on the refrigeration wholesaler side because I have a sales and marketing background. I had worked in the software industry when I was first out of college at the Silicon Valley in California near where I live. That sales and marketing experience and looking at dealer development was the focus of it.
I took the training courses to learn the high side and low side, to get to understand what the whole refrigeration cycle was so I could go talk the talk. I'm not afraid to climb on a roof and do what we needed to do. I learned on the commercial side and then moved into working for specifically heating and air-conditioning manufacturers. That dealer development is where I found my passion for working alongside those owners to take advantage of all the manufacturer programs and things like that.
Let's dive deep into average tickets. Why is it important for us to even care what our average ticket price is?
The average ticket tells a lot. It tells the story of as a team or ownership management about what we are doing with our labor. That's an indicator to say how efficient are we being with our time of the technicians? The average ticket is a great indicator of forecasting future revenues if we know what our average ticket is and find out how many calls are in our capacity, then building out goals for that. The average ticket plays a huge role in understanding what the technician is doing with their time.
How do we know if that's good or bad?
We have benchmarks when we're coaching clients. A lot of that's going to playback into understanding what our opportunity is. If we've got a flat rate hour of $250 and a diagnostic rate of $90, we should be striving for at least $340 or $350 on an average ticket when you get out to that call. When I say that, I'm talking about all tickets combined if you were to take all the revenue because there are times where they're going to be running maintenance calls or might be doing some callbacks.
That is a great start or an indicator because of the fact that when you start moving into the higher average tickets, we can jump in and look at, "Is it because we're providing options for clients on the repairs or accessories?" There are a lot of things that you can do to grow that, but most importantly, you're trying to look for a baseline to get to a starting point.
For people who are familiar with the term average ticket or maybe they haven't started doing the math, what should they be looking at? Even if they have to use an Excel spreadsheet or write it down until they get a better software, what should they be looking at? How can they do the basic math on that?
What they can do is each day, they can tally up their tickets that have been submitted. Let's say there are 3 texts and each run 4 calls. You've got twelve tickets. I call them tickets or invoices. You can tally up that revenue and then buy it by the number of calls that were run. That gives you that baseline average dollar per ticket. You can start to do more of that billing detective process where you're going back in and examining the tickets and looking at, "This technician showed up at Tammy's house and they were there for an hour."
Start backing in and understand what your revenue per hour could be. Certainly, there are a lot of great software programs out there that will start to calculate those things for you, but a baseline is to start it from the day-to-day. You can see how effective the technicians were in generating revenue at that point.
If you guys don't have the software for this or even if you do, this would be a great morning meeting for the day prior or end of day meeting to go over this as a team so that way, you guys can understand and help each other out because someone might have had a great day and then maybe they could share something with the rest of the team or maybe someone had a couple of bad days in a row and needs some pick-me-up like, "What am I doing wrong? Why am I not converting?"That's why it's so important to know this stuff.
Is it good or bad to split those up into departments? Should we have a maintenance, service and install department and split those average ticket prices between them?
[bctt tweet="The average ticket tells a lot. What it does is it tells the story of as a team or ownership management, and about what we are doing with our labor." via="no"]
Yeah, if you can departmentalize your financials, even if you started with an install department. Service can encompass maintenance as well if somebody wants to open up an IAQ division. When you're looking at the benchmarks, all service-related work is going to fall into certain levels of department ranges for labor and materials. Install is going to be very different. As clients are coming on the program, if they have to have a blended consolidated financial to help them get started, then we can coach to that and coach through that, but you want to have it departmentalized.
What happens if we are killing it and we are doing good with our average ticket price? My average ticket price is $1,200 or $800. You mentioned $300 or$350. Is there a point where it's too much?
Yeah. That $350 is like a baseline when you look at all the tickets if they're running warranty, callback work or maintenance, but when you jump into those higher average tickets of $1,200, it's a high-quality problem. We got to dig. If I'm the service manager or owner, I want to review those tickets everyday because I want to see where that tech is spending their time. Does the information that they're sharing with the client align with our core values and processes? Does it make sense to repair a twelve-year-old system and have the client spend $2,500? Did we do right by them by not explaining the option for the replacement? That's where it draws back to the processes, leadership and managing all of that.
Let's say I'm managing technicians. I’m a service manager. A technician comes to me and says, "I'm not a sales guy. I fix it. I'm going to provide options to fix this. That's what I do. I don't sell stuff." Most of the time, you don't hear any other option. He's like, " I go there, find the problem and fix it." What do you have to say for that conversation?
I love that one, especially when you're on-site in person with them. I say, "You are not a sales person. I do not want you selling. It's truly not your job to sell. You are a craftsman and an expert." That goes back more into the training. That's where a lot of times, ownership may miss the mark that we think, "Hurry up. Here's a brochure. Go offer for this and do that."
It's going to have to boil back down to the company values and for ownership. When I say ownership/leadership, it could be a service manager. They need to be able to explain the why. We do this. We coach to those good, better, best and fantastic repair options but one of them should be the turnover from the technician back over to the sales department.
I'm talking concierge approach. It has to be the techs calling in, doing a proper handoff and making sure that the appointment gets scheduled out for the homeowners, so they don't have to wonder, "Is that guy or gal going to call me? Am I going to hear back from the company?" When he or she leaves, that appointment should be set but I got off on track a little bit. When you have those options and you can explain them to the client, you're there to assist them. If I'm a technician and I'm speaking to techs, you're there to guide them in that buying decision process. You're not there to sell them anything.
You are the concierge there. We need to have a very clear future of when the comfort specialist is going to arrive on-site. We're already setting that appointment up. It's not like they get in the van, they're doing their debrief and they're like, "They didn't want to do anything. I got a diagnostic only. Have Jim call them, get people to go out there and do the process."
If I think about processes in an organization and building that cohesiveness as a team, each person should tee it up for the next. If I'm the technician and I'm talking to Tersh saying, "I'm going to get this appointment book for you. Josh is going to come out and meet with you. You're going to love Josh. He's extremely thorough. He's going to walk the house with you." Set the mind of what to expect. They can put the CSR dispatcher on the phone and confirm like, "Josh will be out at X time," or something like that to finalize it. If it's for a future appointment in the next day or so, then doing the normal process with the text or email reminders comes full circle.
I love what you said about each person tees it up for the next person. Who would the service tech or service expert tee it up for if you were not doing it for a salesperson? I love that thought process. If it's not something they do on every single call, it's very difficult to keep it implemented when it's needed. Are they teeing up for the happy call?
There's a lot to it when you're looking at the whole closeout process of a service call to begin with. In a lot of programs where they've got a nice dispatching software, you can create those steps in there and it becomes part of the checklist. That way, if our technicians are used to looking at a wiring diagram step 1, 2, 3, then you utilize the same concept with a checklist that makes it easy. Check a box and then that cues it up for them to remember to do those things.
What can we do? What's the solution? I'm like an ostrich. If I don't pay attention, then I don't know what the problem is, but I feel it's going to be $85 or $89 average ticket price.
It is a multi-pronged approach. The question you're asking me is if we've got a low average ticket, how do we continue to grow that? It goes back to the time of me being an owner and understanding my why. What is the purpose of my company? It's going back to your core values, but from there, it takes a multi-pronged approach to training and it might be multiple things.
The sooner you get the technicians involved in any aspect of something you're trying to roll out, whether it's an accessory or maintenance program and having them be a part of that building out phase, that's one part of it. If you've got your programs already built out, you bring on new techs and let's say that one technician is struggling, we recommend the weekly team meeting because they can learn and hear from each other and share best practices amongst the team. Nobody loves role-playing, let's face it.
You do. I shouldn't say that because that comes as an extreme but getting into the depths of training is to try to change up the words a little because sometimes that can be very intimidating, but as someone in leadership, it should be laying out a training outline multiple weeks in advance or at least a month out so they'll know very specifically. You can't make it long and drawn out. Do not have a meeting for two hours. I'm talking 30 to 45 minutes. It's like a shot in the arm. Talk about a topic and let the other techs share their wahoos.
One of the best trainings I ever did on skills training and sitting with a client is I said, "Tell me a little about this electronic air cleaner." I took something like a yellow pad. I wrote feature and benefit, something as basic like this tee thing. I said, "Tell me what you like about this product. How did it help people?" Once they started talking, the dispatcher said, "I get it. I love how he said that." Maybe the other guy is very analytical and doesn't convey the message in that way. You start small, get into the group and create that safe environment where people can talk.
I remember the owner saying, "When are we going to get into role-playing?" I was like, "We've already been doing it. The two of us talked more in this hour than any other time." That's the importance of creating that safe place where they can all talk and share. You can elevate other team members who are doing something well. They explain how they greet the client or bring out the accessory brochure.
Training grows from that level weekly. The best training that you can do is the one-on-ones. I highly recommend that a service manager, meet with technicians at least once per week to help them establish some personal goals and then back in and show how by increasing the average ticket, there could be additional spiffs or bonuses involved depending on how their compensation structure is set up.
Do you coach your service managers or even an owner, if he doesn't have a service manager, to do ride-alongs? If so, how often do you recommend that?
I love the ride-alongs. It plays out based upon performance but you still shouldn't neglect the top performer either because team members like to be with the leaders. You don't want to do that. Plus, sometimes when you look at the amount of time that's spent with somebody who's a top performer, a little extra attention can compound the effect of continuing that success. Working with the lower performer should be a couple of times a month.
[bctt tweet="You start small, you get into the group, and you create that safe environment where people can talk." via="no"]
You've got your one-on-one meeting and then you're hopping in the truck. That windshield time creates a lot of opportunity to have a very open discussion that is not threatening, but if you can plant the seeds for things, then you can also debrief specifically on the calls. We have a ride-along checklist that managers can use. They use that to guide the conversation and the things that they should be looking for too.
It's always good to see how amazingly clean they keep the vans, the dashboards, the back and how well-organized it is.
That's a pet peeve for me, too, like Angela. If you see that van or someone else's vehicle, we should take good care of that. It's a good sign of how efficient they are with the ability to find their materials.
I have a follow-up with that because I have my experience, even when I was running my own branch. I knew ride-alongs were important. However, I found many other things to take precedence over those and kick the can until it got bad enough where it was someone that was pissing me off. I was like, "What is going on? I got to ride with you."
They know. They've heard it, seen it and have been told. How do you recommend they start doing that? There are some difficulties because it's very awkward at first because that's not the normal day. Your team members are going to feel like, "Big Brother's watching over my shoulder." What do you recommend for people to start doing that one-on-one coaching during the day on their calls?
A couple of things, if you do the one-on-one meetings, you should have an agenda with very specific items. It's like after a service meeting. One technician stays back, but you have your agenda. You're talking about their wins and actual performance. You're also establishing some type of personal understanding, so you understand what motivates them. Money doesn't always motivate a technician. It could be a trip, accolades or so many things. If I'm the manager or the owner and I hesitate to do the ride-alongs, it’s having that checklist. What do you want to get accomplished on that?
You have to not bare your soul. You have to be very transparent with them and say, "I'm here to support you. This is not Big Brother. Even when I've done ride-alongs during on-sites, I tell the technicians because they're always like, "I don't want her to ride with me," or even on the sales sides. They see that I had those same battle scars and troubles that you've had so I'm here to support you. You have to have those open conversations. I have to tell you, though, it's still going to come back down to leadership. You got to have some type of discipline. If I'm an owner and my manager's not doing it, it still goes back to some discipline to stay focused on that.
I did a ride-along and it wasn't that we had an issue at all with this service expert. It was a situation to where he went out on this call. It was a technical thing that I noticed during his debrief forms and service call checklist that he flat out missed it. It's not a normal situation. I was like, "Let's go back out here." I had the dispatcher reschedule a service call with no charge and then go back through the whole process with him.
Being on-site and watching him go through the service call checklist, he was like, "This is a piece of cake, but I always struggle right here." I'm like, "Good to know because I didn't know that that's where you struggle. I brush right over to that because I've been doing this since 2005." I noticed that he didn't carry the proper tools when he went into the attic. I carried my tool bag.
I keep a tool bag that constantly gets depleted by technicians, but I try and keep it in stock. I carry my tool bag up there and he didn't carry the tools that he needed, so then I was like, "Tammy tells me you have to go downstairs and rant." I'm like, "I have it all sitting right here. Let's bust this job out." We have all the information and data, take lots of photos and then we're sharing stuff. We wrapped up the call. We had so much more data and information for the homeowner, along with tons of photos and videos.
This homeowner's in the military and overseas. We're able to send these videos to this homeowner with their invoice. I was like, "This is what I expect you to do on every single person. We typically want you to do an hour and a half-long diagnosis. This has taken us 45 minutes. You can build rapport the rest of the time if that's what you do." It's one of those things where as long as you're efficient with certain things, then you can spend more time doing other things.
I feel like it's similar with your average ticket price because if we're scheduling calls, we have a truck stock that's not stocked properly and we're constantly going back and reschedule calls, our average ticket prices will be lower. We made three visits here because we didn't have a fan motor or a capacitor and we had to reschedule the call, so our average ticket prices went down. It's those little things that you don't think about until you inspect it. You can't expect if you don't inspect. You can't measure it if you don't inspect it.
Sometimes it might be that little nugget that helps them become more efficient at the technical aspect and they love that. They're like, "I can do that." They can make their day that much better, but I'm 100% in agreement with you when you go back. That's why we have to look at ourselves in our dispatching or service management roles. Are we booking those calls to the best of our abilities to make them efficient? There are things that the technicians don't have control over. You got a high drive time. How many more tickets could they get in that day? Getting back to those efficiencies like what you're referencing becomes so critical.
This is a super deep topic because the average ticket focuses on the technician, but if you look at it, you step back and say, "Did the dispatcher schedule efficiently? Did we book calls and move things around the board the right way? How well-trained is our team, so they're not forgetting their fan motors? Are they making sure their tools are with them?"
I have one more question for you and it's a pretty simple one. Sometimes the people that can get into average tickets look at it almost too much like it’s a day-by-day type of thing. It drives them crazy like, "My average ticket's super low." Do you have a happy medium of how often they should be looking at this so they're not over-analyzing these numbers?
Are you thinking from the manager's perspective or the technician becoming obsessed about their average ticket?
It could be both.
From a technician perspective, if you have clear goals, explain to them the targeted number of calls that we're looking to have them run or a revenue per truck goal but backing into very specifics like accessory sales or units. You don't always have to go to dollars because sometimes, if somebody is selling an easy trap and they're including those on every single call, that's a win.
I don't want to penalize somebody because they aren't offering the electronic air cleaner because a lot of that has to do with confidence. If I'm a manager, I need to watch my numbers daily. Can I watch them by the hour? Sure, depending on your software. You have to know exactly where you're at each day and then be able to understand that in the next day, do we win or lose? Where are our opportunities?
To me, if you got too obsessed with the average ticket, you're going to miss a whole boatload of things like what Tersh said about that ride-along where he was able to uncover where the tech missed that step. When you're delivering everything that you promise and if you focus on that, the average ticket is going to come up. It goes back down to your culture, processes, ongoing training and staying consistent. That's where leadership misses the boat because they don't stay consistent enough on these things to follow up and follow through.
[bctt tweet="If you got too obsessed with the average ticket, you're going to miss a whole boatload of things." via="no"]
Staying consistent is the key to life. If you broke it down to one thing, just be consistent. Whether it gets consistently good or bad, you'll be able to make adjustments based off of that.
It's a lot to be a service manager. There are a lot of balls that you're juggling and things to watch, but if someone's becoming so obsessed, then I'd want to know why. Why are you so obsessed with this aspect? Are you missing the boat? When you're not investing back into those technicians, they know that they're just a number to you. I'm just as revenue-driven as the next person. I love to chase and pursue that, but if I do that at the expense of being so obsessed, I have to coach and manage to it. Your team is not going to follow you because they're going to know that you're not as invested in them and you don't care.
Every time I have a conversation with someone, I get to a point where I'm looking at numbers and everybody knows that I'm looking at numbers. I'm not a micromanager, but it was very much a situation to where it was like, "This is not going to make sense to Tersh." As soon as I heard that the first time, I was like, "I got to be careful with this." I have to make sure they understand that I want them to know these numbers to help them.
You went into the why and you cleaned it. That's where managing the numbers becomes so critical. You have to do that. At some point, as a manager or a leader, you should have some type of composure on how you demonstrate your actions in front of your team. Use it to guide it because numbers aren't lying. It's a science. They tell us something, but what do they really tell us? They're telling us about the opportunities to improve in our skillsets, offering accessories or whatever the item is. They tell a story and it's wonderful to utilize them for that reason.
If somebody is reading the show and they want to learn more about you and the BDR in general, what's the best way for them to reach out and learn more?
Our website is very encompassing. That's the first step if they want to get familiar with a lot of the different products and services that we have but they once they call in, we have great support team that will connect them with one of our advisors to talk in more depth about the coaching programs because there are so many and then also be able to share the training classes as well so they understand. A lot of times, clients come to classes first and utilize some of that training, then they join coaching or vice versa or they do both at the same time.
Josh, you want to add anything to that?
It's like anything where you guys have to take the first step. The first step is talking to someone at BDR, especially if you've tried other coaching programs and it didn't work out for you or you're looking to start getting some coaching because you don't know your business's direction. BDR has been around a long time. They have a very good reputation. If you see in these Facebook groups, they get recommended quite a bit. It would be worth reaching out to BDR and see what they can offer for your business.
Thank you. I appreciate that boat of confidence. Our team and advisors do a great job in being able to break down the steps to help the client understand where their opportunities are and then from there, the coach takes it and develops the coaching plan once they join.
Thank you so much for coming on the show.
Thank you for having me. It was a lot of fun. I enjoyed myself.
If anybody has any questions, don't hesitate to reach out to Tammy and her whole team over there at BDRCO.com. If you have any questions, don't hesitate to reach out to any of us. With that being said, thank you for reading this episode. This show focuses on service, business owners, managers, and technicians who are considering becoming business owners themselves. Our goal with this show is to help answer some unasked questions and I hope that we did that in this episode. There are a lot of unasked questions that pertain to average ticket prices and knowing your numbers. I hope you have a wonderful and safe day. We'll talk again next time.
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About Tammy Vasquez
Senior Head Coach at Business Development Resources, Inc.