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Malcolm Lui:
Welcome to the High Value Sales Show of Eversprint.com. I'm Malcolm Lui, the Managing Member of Eversprint, and today we're speaking with Jay Eastland, the Co-Founder of Engineered Solutions of Georgia, a provider of commercial and residential foundation restoration and waterproofing. Welcome to the show Jay.

Jay Eastland:
Hey Malcolm thanks for having me.

Malcolm Lui:
Jay, you grew your company's revenue from $5 million in 2014 to $9.1 million in 2017, an 81% increase, and in 2018 you hit around $10 million. Before we talk about how you grew your company so fast, can you briefly share what your company does beyond my quick intro, and how your company differs from the competition?

Jay Eastland:
Yeah. So as you said we're a foundation restoration and below right waterproofing company. We serve both the commercial and residential market. One of the things that differentiates us from our competitors is that we are a true design build firm. We've got pieces on staff full design department so we can provide a design build service for new construction foundation or remediation in some occasions will also provide solely design services or work at the direction of another engineer. But having that capability allows us to be to be pretty nimble and and to value add on a lot of projects

Malcolm Lui:
So how would the other firms work if they don't have their own design team on onsite on staff

Jay Eastland:
So they would they would typically work if it's a resort if it's a remediation project. The owner would the property owner or building owner would engage a independent engineer to produce the the repair plan and then that would be implemented by a contractor similar to us.

Malcolm Lui:
Right. Got it. And what are the advantage of advantages to the customer of having a firm like yourself that has a design team in-house as opposed to just finding someone else to do the design side of things.

Jay Eastland:
Well there are several advantages but the biggest advantage is even if we're not the engineer of record or the sole engineer on the project the nature of our business is such that we're dealing with problems that are underground that that no one can see so they aren't always what they thought we what we thought they were. When excavation is done and we can actually see what the problem is. So when things differ from what we anticipated Having design services streamlines those changes we can work much more efficiently with the engineer of record. We can propose alternative solutions that have been through our engineering department so that it's much more it's much easier for the engineer of record to to understand and sort of digest those the scope changes and and we're able to design things that we can build efficiently. A lot of times when you're dealing with engineering only those guys may present us with designs that are more expensive to install than some of the some of the things that we have over the years of trial and error have had figured out. So that's another advantage that we can bring because we can value engineer some of these repairs.

Malcolm Lui:
Right now your company specializes in foundation restoration as opposed to new construction is that right.

Jay Eastland:
That's correct. The about 80 percent 85 percent of our business is existing structures. And then we have 15 to 20 percent of our business that's involved in the new construction.

Malcolm Lui:
Ok. And for those who aren't in the construction business such as myself can you give me a sense as to what sort of problems people have with their foundations and how your team can fix it.

Jay Eastland:
So the biggest thing that we deal with is differential settlement. So I always explain it like this. When you build a building. If the building settles uniformly you never know it. All the all the finishes continue to match. And you don't see cracking. It's when things settle differentially a portion of the building stays in places. Another portion of the building settles. That's where we get damage. We get cracked round doors and windows cracks in exterior rigid finishes brick stone stucco cracks at Interior as it finishes the trim joints back splashes on counters and kitchens and baths tile floors things like that

Malcolm Lui:
And is due to the foundation not being perfectly level to the foundation shifting over time

Jay Eastland:
So the we work our wheelhouse as is you know five to seven buildings and shorter. And so what happens when when we build bigger buildings we take those foundations all the way to bedrock and those foundations are resting on competent rock. When we build smaller structures. The soil is actually a component of the foundation. So we design these buildings based on a bearing factor of the soil that we're placed them on. And sometimes that bearing capacity of the soil changes due to changes deep in the soil. Whether there's organic material in the soil whether it's the composition the soil allows it to consolidate with changes in moisture content. There are several factors but the as I said the differences is when when we design buildings and I mean we as you know the general construction market designs buildings where a portion of the foundation load is carried by soil they're susceptible to some subsidence. If the if the soil characteristics are either change or not understood at the time of design

Malcolm Lui:
So typically them. The most common problems you see is it's simply the foundation no longer being level and it's not going to tilt a little bit or part of the foundation break and shift because of the underlying surface its resting

Jay Eastland:
Well both the foundations are are generally built with rigid material concrete and and so concrete will builds build then some but it won't mean a tremendous amount. So yeah. The. We see that the concrete actually fracture. And fortunately we don't deal with catastrophic collapse that's typically not the problem. The problem is typically loss of service of the building. The first thing that happens is very cosmetic. Yet it cracks around doors and windows on the inside and on the outside you get cracks and tile floors. And then if if that if the foundation movement isn't addressed and it continues then you start to get windows that open and closed properly doors open and closed properly. And then if it's allowed to continue we find that we get deficiencies in the building and if we get leaks around doors windows and in some cases leaks at changes and roof pitch. So as it has it continues to move it continues to do damage and it does more damage not only to the foundation but to the rest of the building envelope as if it's ignored

Malcolm Lui:
Right. And is there a typical solution to solve these problems.

Jay Eastland:
They're pretty varied. But the the I guess to break it down in its simplest form what we do is we take the load that's placed on the soil and we either transfer that load deeper to some competent soil some soil that's able to carry the load or we have some processes where women amend the bearing capacity of the soil itself actually compacts the soil while the building sitting on

Malcolm Lui:
And is there a solution. Just keep the problem from getting worse. Or can you fix it such that doors and windows open and close properly

Jay Eastland:
We can always keep it from getting worse and we can often return it if not exactly where it was too close to where it was. The the thing to remember is every time there is a cosmetic repair done that cosmetic repair is going to make it more difficult to return the structure to its original level. So if you think about a crack in a crack in Brick so a crack and a brick joint develops and it's unsightly so you you you put more mortar in that crack so that you don't see the crack anymore. Well then when we got to lift the building back up that the the the mortar that is inside that. Crack is actually binding and fighting against against us and lifting the building up. So the fewer cosmetic repairs have been done the easier it is to to return the building as close as we can get it to its original position

Malcolm Lui:
Right. And when you solve the foundation issues you have to dig out underneath the foundation and prop up the building. Do whatever you need to do or there less manual ways of getting it done.

Jay Eastland:
So it depends on the on the access. There are less manual ways of doing it but sometimes we we don't have a choice but to do it the manual way due to access adjacent buildings cause access problems adjacent structures property lines things of that nature sometimes making it difficult to get large equipment onto a site

Malcolm Lui:
All right. Yeah. There were the work you do. Is not something that most people ever see unless you're in the business I reckon.

Jay Eastland:
Yes they. We we have to convince people to literally pour money into a hole in the ground.

Malcolm Lui:
Right now you agree a business pretty fast over the past few years from 5 million in 2014 and you pretty much doubled it four years later in 2018. What were the three drivers behind that growth

Jay Eastland:
People people and people

Malcolm Lui:
Okay.

Jay Eastland:
Yeah. The we lose quite as my business partner and I say the the last thing that we did by ourselves was write a business plan. Every success that we've had after that was due to a contribution on some level by someone else. So people are really there. They're the driver of the business and they're the most difficult resource to to recruit and retain

Malcolm Lui:
Now I imagine this the some people in some functions that move the needle a bit more. Can you share with those functions where

Jay Eastland:
Here. So we've got we've got a sales force and a production department that have grown and continued to rise to every challenge that that we've issued. So those are the are the two parts of our company that have been most integral in growing our business

Malcolm Lui:
You okay. And how about on the sales force side of things. What do they do that really nailed it was it was there were they able to get new customers that drove your growth rate to get more business from existing customers. Were they able to land the

Jay Eastland:
So that in our business is such that we don't have a lot of existing clients. So customers have an issue with their building. We come out and fix our building and as long as we do our job right we're probably never going to see them again. Now there is some reoccurring business through Property Management Associations general contractors folks that that see similar problems through other properties but as a general rule once we fix it it's fixed. So our guys are tasked with finding and identifying new clients

Malcolm Lui:
Ok so they did a good job. What did they do to find those new clients.

Jay Eastland:
So they shouldn't have slighted the marketing department who was also integral the the sales guys have done a really good job of designing meaningful repairs that that folks could afford. But our marketing department has also done a fabulous job of getting our name out and building brand recognition for us

Malcolm Lui:
Ok so you're your sales force really good about coming up with solutions that people can afford. And then on the marketing side they were really good at getting the brand out. People know about you guys.

Jay Eastland:
Right.

Malcolm Lui:
Can you share a little bit about how your sales force are able to design meaningful solutions that people can afford.

Jay Eastland:
Yeah. So we're we're in a we're in a sort of an unusual niche. It's the the it's construction but it's different every time. So when you when you frame a house you have a set of plans and you frame the house to the plans. But when we're doing foundation repair we have plans for the House that are the building that may or may not be correct but we don't have a set plan that we're implementing for repair because each repair problem presents a unique and different set of challenges. So we're fortunate to have guys who are. Quick learners and we were able to early on in Engineered Solutions life we were able to bring together a group of people who have worked together in the industry over the last twenty five years really. So I'll kind of switch gears a little bit and and tell you a little bit about how Luis and I are how engineering solutions came to be and that answer may make a little more sense. Luis and I worked together at three other companies over the course of about 13 years before we started engineered solutions and we started as your solutions. I guess like anybody that starts a company as we thought that that we could do it better.

Malcolm Lui:
Right.

Jay Eastland:
So the result of that time together in the industry is you know we have people in our office engineered solutions will have its 13th birthday on August 16th But we've got people in our office that we've worked together for twenty seven twenty five in some cases almost 30 years. So we were able to gather a group of industry talent that is is is unmatched

Malcolm Lui:
All right. Yeah definitely. And then your line of work and I'll have it magic comes from experience right. There's no real cookie cutter solution.

Jay Eastland:
There's not. That's right.

Malcolm Lui:
Now you mentioned that the third of the three groups of people you mentioned the production and marketing and you just mentioned marketing you recently about how they got the brand out there get people to know about them. You talk about that more about how they did that how they are doing that

Jay Eastland:
Yeah. So the the biggest thing with our advertising marketing marketing has been consistency from from the very beginning. We had a consultant for lack of a better term agency maybe sit down with us and explain to us that and know who actually said it I've heard it attributed to many people but they said listen I'm 50 percent of your advertising is gonna be a total waste of money but I can't tell you or nor can anyone else tell you what 50 percent it is.

Malcolm Lui:
Right.

Jay Eastland:
But we've spent a lot of time and effort trying to figure that out. So we look at advertising. In two ways we look at brand awareness and we look at lead generation and so on. On the lead generation side it is it is easy to track what's working and what isn't. And so we've tracked that diligently and we've reached three organized our budget dollars. As we have discovered things that work you know things that we did more things that didn't work. We did less of the brand awareness side of it. It is kind of a shadowy beast because you can't be sure what it is that that is actually working. So we have agreed to a percentage a percent of revenue spend. And we have been diligent about maintaining that. That percent revenue spend. If you came to my office today and and asked me to spend the dollar amount that we spent on advertising right now I would I would tell you that I couldn't afford it. I wouldn't do it if I could afford it and then I'd throw you out of my office

Malcolm Lui:
All right

Jay Eastland:
But when you look at it as a percent of revenue it becomes much more easy to digest. You know we spent that percent last year and the year before and so we can sure we can afford to spend that percent again. So that was some really good advice that we got is to look at advertising as a as a percent of revenue as opposed to a raw dollar amount

Malcolm Lui:
Yeah. I think another key aspect is viewing advertising and marketing as an as an investment as opposed to an expense

Jay Eastland:
Yes. That's right

Malcolm Lui:
I mean if you say as an expense and it's just a dollar number right. But if you could see the value that you're getting from it and it changes the equation. I mean you're getting you're investing a dollar in your advertising and you're getting back to dollars of business right here you're gonna just crank it up as much as you can

Jay Eastland:
Absolutely. Well it is as much as you can service right. Because

Malcolm Lui:
Right.

Jay Eastland:
You know I can I can double our incoming call volume with you know a million if I if I spent a million dollars in additional advertising next year I could increase significantly our incoming call volume but if I don't have a sales force to service it or production department to service it then I'm going to at best case scenario waste the money on on those on that activity that brought in a worst case scenario. I'm going to I'm going to anger those people because I'm not going to be able to service them at the standard that we've set. So that's the real challenge when I talk about people you know is the the the part outside of people is a relatively easy mathematical problem you know equation but it's the people that really makes it makes it complex

Malcolm Lui:
I hear you on that one and at the same time I mean you're some reputation effects too. I don't want to be known as the company that can't deliver. That's going to have long

Jay Eastland:
Exactly.

Malcolm Lui:
Term

Jay Eastland:
Well

Malcolm Lui:
Impact.

Jay Eastland:
You can't because the you know you'll stop winning bids

Malcolm Lui:
Yep. Now I did take a look at your digital footprint. I didn't see any paper slick advertising going on right now and traffic wise I'm seeing some the value of the traffic. According to my tools this is not bad. It looks like it's a few hundred bucks 500 bucks worth of traffic coming your way on certain keywords. What's your take on digital marketing and how how it would help your business.

Jay Eastland:
So we. We wish we have a significant part of our business of our budget that is pledged to Ezio as CEO is a very important piece of the puzzle. We've been in and out of the paperclip game and what we've proven to ourselves time and time again is that it is more expensive and less effective than our CEO stuff. We when we first started that's all we had was was paperclip. We couldn't afford to do anything else. So we poured the bulk of our budget in the paper click and we loved it. We thought it was great. We we're killing it. And then as we started to spend more and more on SCA we found that our SGA results were really overshadowing our paperclip results.

Malcolm Lui:
Mike

Jay Eastland:
And we used paperclip now as as we're building. We have some weather phenomenon that are very good to us in terms of business wise especially on the waterproofing side. So for instance in Atlanta where we are 18 was the wettest year in the second wettest here in recorded history which which energized our waterproofing business. And so that's been great. We've had a fantastic with a fantastic 18 and first quarter 19 was was unbelievable. But as the as we get out of this wet weather pattern there's going to be a little bit of a lull in Leeds. You know we're not that we're not going to maintain the inbound call flow that we get they're really wet time periods. So we'll use some SCC here and are SVM here and there to juice up that lead flow because we don't want to the mass that we put on during this very favorable weather pattern. We don't want to lose that mass. So we can. That's the way that we can that we can do paper paperclip.

Malcolm Lui:
Right. Yeah it makes sense. You take out so tragically when you need it.

Jay Eastland:
Right. Right.

Malcolm Lui:
So many qualified leads are you getting from SEO each month

Jay Eastland:
That's a that's a really difficult question because the the CEO the Internet to a certain extent is the phone book right. So years and years ago we'd take out a big ad in the in the in the phone book and regardless of how customers were familiar with us they would be flipping through the phone book and I'd see engineered solutions. And because we built that brand awareness through other medium radio TV billboard a number of different things we would seem familiar to them and they would call and we say How'd you hear about us. And they'd say got you out of the yellow pages. Well we know that it wasn't just a big yellow pages ad that generated that call volume right. It was those other things that allowed us to be top of mind when they got to the yellow pages.

Malcolm Lui:
Right

Jay Eastland:
And the Internet to a certain extent is the same thing. So we you know we look at our analytics and we see the traffic and we see traffic increasing so we know that that is part of it. But we believe that it's it's really pretty closely tied to brand awareness too. You know when when when they do a search and we come up with three or four of our other competitors above the fold and they pick us that they didn't just pick us because of where we showed up in the ad placement or the result placement they picked us because we seemed familiar.

Malcolm Lui:
Right

Jay Eastland:
And that that's the shadowy part. Right. What have we done in the in the twelve years has been a business to two to seem familiar to these customers.

Malcolm Lui:
Right. So what's your sales team doing a marketing team doing to do more outbound marketing and get clients as opposed to end down where people are finding you through whatever means and calling you up direct

Jay Eastland:
Yeah. So we have we have a business development arm that we really don't we don't really consider it a function of sales although it is and we don't really consider it a function of marketing although it is. But what we've done with them is we've we've identified other industries that can be referral sources to us. So we said all right. And this is primarily on the residential side. We said OK we're in basements and crawl spaces. That's where we do our work. That's where the foundations are. So who else is there. So you know we said the termite guy the guy that finishes basements the AVC guy. All those people are in the areas that we work. So let's look at some type of arrangement that we can have them so that if they see something that we can address they mentioned it or if they're approached if the if the homeowner sees something that needs to be addressed addressed and they're approached how can we have a trade understanding with these other vendors so that they'll say hey you know if you have this problem you should call engineering solutions so we're we're doing that on the business development side.

Malcolm Lui:
All right. And are you able to track the how that's working in terms of referrals that are being generated.

Jay Eastland:
We get we did we track it as activity we we haven't we've been this is relatively new we started in the fourth quarter of 18 and the first the first sector I guess or or trade partner we looked at was real savings because real estate agents are do you know that every house this bar sold goes through an inspection. So any problem is validated to a certain extent by that inspection. Those problems are almost always repaired before or as part of the time of sale. And in our business those leads or historically thought of as a third tier leads. So we said all right. Why is that. And how can we fix that. So we developed an outreach program that we've been really successful with that has allowed us to identify good agents like minded folks. And we have seen tremendous growth in that piece of our business.

Malcolm Lui:
Right. Is that the biggest source of new business that you foresee will be coming from the strategic partnerships

Jay Eastland:
It's

Malcolm Lui:
Or is it

Jay Eastland:
It's in our it's in the top three for sure.

Malcolm Lui:
Right. Okay. What are the other two

Jay Eastland:
Well are you talking about this business outreach or just in general

Malcolm Lui:
In general

Jay Eastland:
Yeah. So we the Internet still gets credit for quite a bit of leads. That's probably our largest lead source although we as I said before we understand that or believe that that's not solely a CEO and solely internet marketing that there's a brand awareness component that we have to be thought through. I think what is exciting things is we started a category that we just called branded lead in and the folks that go into that category are folks that call us in and we say How did you hear about us and they say you know I think I might have I don't know maybe I saw or maybe maybe my neighbors use you or. I could I might have heard John you know they're not sure where they heard us and those are are some of the leads that we get most excited about because they don't even know why they wanted to call us. They just know that they did. And as we see that category increasing month over month and year over year it gives us some level of confidence that we're that we're doing the right branding efforts.

Malcolm Lui:
Right. Got it. And now circling back a little bit you talked about the sales people and how they helped grow your business the marketing folks. How about the production department. Now is this that third category of the folks you talked about and what do you mean by Production Department

Jay Eastland:
So those are the folks that actually go out and install the repair.

Malcolm Lui:
Like

Jay Eastland:
Yeah. And so we've got some what we do is really really hard work. I mean it's hard physical work. And to find a combination of you know we need a strong back and a strong line and we've been successful identifying that combination which is not always easy to find. And the other thing that we've done is we have kind of flipped the model so to speak on on how these guys get paid. Traditionally you know installers in our industry or any other industry were just paid straight by the hour. And what that did was incentivize them to put a lot of hours in. And what we did in in two thousand eleven is we switch that model and we and we made it an incentive based model so that they were not getting paid for the hours they spent they were getting paid for the revenue they generated. So when when we switch to a shared revenue model production increased By 35 percent almost overnight

Malcolm Lui:
Nice.

Jay Eastland:
It

Malcolm Lui:
How do you ensure that the quality is maintained.

Jay Eastland:
So it's interesting that you bring that up because you're right that the first thing that happened was we got we got work done 35 percent faster. And the second thing that happened is we had a spike in in warranty issues. So we made the understanding that warranties were going to be fixed outside of time and so they were going to cost a few days. And as soon as everybody realized how expensive it was for all of us to repair these warranty issues that cost settled back down

Malcolm Lui:
Right

Jay Eastland:
And really real relatively quick within within two two and a half months we got through the spike in the warranty the adjustment to take care of it and it got back to being a tremendous decision. What we we say this we have a saying that we use across all our entire business and that saying is track measured just and so we say that any any process no matter what it is if you want to improve it result there's two ways to improve it. One is luck which is really undependable and the other is to track your performance measured against where you want it to be and where it's been historically and and adjust your efforts to get where you want where you're trying to get the process. And so we've kind of applied that to every single thing we do

Malcolm Lui:
Right now in terms of finding people you miss now it's a challenge as well. How are you going about finding people

Jay Eastland:
So what we're doing now is we started to look at people. We have a really stable group of people at the and everywhere except for the entry level field position and the entry level sales position. The entry level field position there's a lot of turnover because as I said before it's it's hard work and it takes a certain type of person to do this work. So we we started looking at those two Labor needs just like we would look at the at the sales needs. We said hey you know we've got to we've got to manage a pipeline so we we sat down and looked at what percentage of people we hire stick. What percent of the people that that we talked to interview and then how many folks do we need for our growth plan. So we sit down at the beginning the year when we're setting our budget just like any other budget. We set a Labor budget and we say we to hire X Me and X number of people per month and we need X number of interviews in order to hit that goal and we've worked with a outside recruiting service that we just kind of kept on retainer but we've recently moved that function in-house as part of our H.R..

Malcolm Lui:
Like do you find that a lot of the qualities you're looking for. You know every screen for upfront because you said before you looking for someone has a strong strong body and a strong mind. Right. Some of those things are our quantitative. Can be quantitatively measured but quite a large part of it is qualitative. You may not know until down the line

Jay Eastland:
Yesterday

Malcolm Lui:
If they have

Jay Eastland:
That

Malcolm Lui:
The right

Jay Eastland:
Day.

Malcolm Lui:
Stuff

Jay Eastland:
Yes you're exactly right. We we think the entire interview process is actually about 60 to 90 days long

Malcolm Lui:
As many people typically say this isn't the right thing for me.

Jay Eastland:
Yep yep

Malcolm Lui:
All right switching gears in a bit. Looking at 2019. What D.C. is the biggest opportunity for 2019.

Jay Eastland:
Giving continued growth. I think that we have we've we've been diligent and dedicated with our messaging for the last 12 years. And so I think that we are we're starting to pick up steam there. I think we're taking market share and I think that we can expect more of that this year.

Malcolm Lui:
Like is any particular segment niche that they use is a great opportunity where you can jump in and get the market share.

Jay Eastland:
So we've kind of we've kind of looked at that and we have some some competitors in our market who have you know gone to gutters and roofs and you know they've taken on other product lines. What we feel is right for us right now we don't think that we've taken all the market share out of our core business yet and and we think that we just if we just continue to get better in our core business we've got a Three to five year plan before we think we feel like we even need to consider branching out into into other trades.

Malcolm Lui:
Ok so for your core business what's the plan. I'm finding more foundation work. Typically they're one off your 80 percent you said or so was on remediate errors. I know you talk about finances partners to help with furloughs and you have your your branding it's bringing people in from difficult to say from what source. Are there other ways of getting more business for you. They see especially attractive that you can take more advantage of

Jay Eastland:
Well there there is. There are the things that we can't control such as whether you know in a great weather year last year. We don't anticipate. We typically don't have favorable weather years multiple. So we know that that we're gonna have to fill that void. And we've talked a little earlier about some paper paperclip as as a managed to lead that inbound call void but you know the other thing we're very fortunate in that we're in a very forgiving client climate. We don't have we don't have wind events that they have on the coast. We don't have deep freeze events so that that that would affect buildings in a more harsh climates. The industry is forced to build a better product to withstand those harsh climates. Well in Georgia we don't have those harsh climates. We have a very forgiving building clients which will which allows which allows folks to build a lesser quality product in terms of buildings. So being in that repair business you know there are folks that are that are building jobs for us five to seven years down the road right now as we speak.

Malcolm Lui:
Right. So in terms of challenges. What's the biggest challenge you see to to hitting your growth target. Not fact. We didn't I didn't ask you about this before for 2019 What is your growth target numbers wise

Jay Eastland:
We think that we can. We look at we look at a couple of things we look at revenue goal and sales goal. We think that we're gonna be right at twelve five on the sales goal and then we think that we can install about 11 7 and so that's a little bit different than I think maybe the way some people look at it. So. So we want to look at Hey what did we sell and then hey what were we able to install.

Malcolm Lui:
Right.

Jay Eastland:
And we always want that sales number to be a little bigger because we want to have a somewhat of a backlog of work but we don't want to be the one. We don't want a huge difference between the two numbers because we don't want you know there's a sweet spot in terms of backlog of work which is around three weeks for us.

Malcolm Lui:
Okay

Jay Eastland:
So that's where we expect to be this year

Malcolm Lui:
Okay. So that the 10 million and we talked about before the hit in 2018 that was your installation revenue

Jay Eastland:
That's correct.

Malcolm Lui:
Right.

Jay Eastland:
That's

Malcolm Lui:
It gets you looking at about 17 20 percent growth

Jay Eastland:
Yep

Malcolm Lui:
Of your revenue. Nice. And what's the biggest challenge. What's the biggest obstacle you see that's in your way that your team needs to overcome kind of climb over the marsh to achieve that goal.

Jay Eastland:
So people and competition because we had such a favorable weather climate last year. There are companies that have we say that like weeds you know when we get a bunch of rain waterproofing company sprout up like weeds and then when it dries out they shrivel up and die. So

Malcolm Lui:
All right

Jay Eastland:
Some competition that's that's introduced into the market this year and

Malcolm Lui:
Uk

Jay Eastland:
Some of it some of it is is is not going to be good but some of it is going to be really good. I mean you know we came into the market 12 years ago and and we've turned out to be fierce competition for for some other folks and it's naive of us not to assume that there's some other guys that are probably smarter than we are there that are about to start doing it and are going to be competition for us.

Malcolm Lui:
Yep.

Jay Eastland:
And it's not just competition for the it's not competition for the business it's also competition for the for all of the resources competition for the people.

Malcolm Lui:
Yep.

Jay Eastland:
So the I think competition is something that we're always mindful of. And then you know recruiting and retaining the right people is something that is always difficult. But I would I would say those are the two biggest challenges.

Malcolm Lui:
So we talk about the recruiting side that's really at the entry level right that you're referring to.

Jay Eastland:
That's right.

Malcolm Lui:
Ok. And tell me about retaining you. What's the challenge in the retaining inside my retaining the young guys who are going into entry level or a timeout retaining the more seasoned folks.

Jay Eastland:
Well both you know both the the we think that there are a couple of pretty simple means to two retention but not they're not simple to in fact but you know conceptually they're pretty simple. We feel like we need to make a have a very positive place to work where people or feel like they can thrive and grow and that sounds cliche and it sounds easy but it's really not. So you've got to hire with that in mind as well as with just core skills in mind. The other thing that that we feel really strongly about is that we've got to create a model that allows people in our industry to make more money here than they could make anywhere else. So that's it that's a challenge. I always say if you if you pay somebody then you always have a risk of resentment. You know a campaign has got too much pain it's got so much but if you create a model that allows him to earn then all of a sudden that resentment disappears because you're not you don't look at it as paying this guy you look at what he earns so it's all of those if you can tie all of your compensation back to growth or whatever behavior you're trying to do that you're trying to drive. Then you can create a place that that is at the upper end of industry pay scales

Malcolm Lui:
Yet

Jay Eastland:
And that's what that's what we want to do and that's much easier said than executing

Malcolm Lui:
Yep it is. You just mentioned that reminds me of another conversation I had with another show guest where we had a discussion off line about how some business owners don't view marketing as an investment. We view it as an expense and the CEO of the company goes no saint. You will probably view their people as an as an expense as well as opposed to an investment.

Jay Eastland:
Right.

Malcolm Lui:
That's kind of an interesting angle right. Because your people are an investment because they're the ones that are generating the returns for you

Jay Eastland:
Absolutely. I mean if you view until the end until somebody figures out how to make robots that can do this. That will be you know back to what I said earlier the last thing Luis and I did by ourselves was write a business plan

Malcolm Lui:
All right. So you are and you were not in the thick of things from day one. Is that what you're saying you hired people to do for you

Jay Eastland:
Yeah well me week we started with you know a week or when we started it was myself. Well that's my business partner and two other guys. So Lewis and the two guys installed everything and I sold everything.

Malcolm Lui:
Right.

Jay Eastland:
We were very much in the trenches. But without without our first two employees Lewis and I couldn't generate the revenue that we needed to feed ourselves right. So from the beginning we we had to have good people

Malcolm Lui:
Yeah totally got it. So in regards to the competition or your new competition coming in. What do you get. What do you put their team going to do to combat them to keep them from gaining market share from you. Are you going to outsell them out market them.

Jay Eastland:
What was going to continue to. And this again sounds like a cliche answer but we're going to continue to get better at what we do. And we're gonna continue to attract and retain the best people. And if we can do that then we can do battle with anyone that comes to town. We feel like we've got a good footprint as you know kind of the local guys we grew up in the area and we feel like the the that we've got a good story. We have good community involvement and and we feel like the best way to deal with with competition is for us to continue to get better and better at what we do.

Malcolm Lui:
Right now in terms of finding more new business than Sonic is a big challenge for you guys. There are a pressing challenge

Jay Eastland:
It's not. I mean we've got we we have. And I'm not saying we're the smartest guys in the world because we're not. But we have a formula that has proven to work for 12 consecutive years. So every every year that it continues to work I continue to have more faith in in that model. So in and we're in we're in a big city where we're in. And we have a lot of people with a lot of construction going on. So you know our market is very favorable for additional business.

Malcolm Lui:
Right now. How would you describe the formula that you talked about. I know we touch on different aspects of it during our conversation with you at the marketing side the branding side. You. You're introducing a referral element a mother what other bits of the formula are there

Jay Eastland:
I'm sorry say you

Malcolm Lui:
Talk about the formula to generate new business for you. How would you summarise that formula

Jay Eastland:
The the marketing piece you know dedication 2 percent of revenue. And the. We consider every person that we come in contact with an interview the nature of our business is such that this is kind of an example more than an answer of a mindset that nature our business is such that about 10 percent of the folks that we see residential or commercial they don't actually need us. It's something very simple or it's not a structural crack or they're there. You know they saw something on TV about sinkholes and they got scared and they called us. So we have a choice more or more in those properties with those 10 percent of people that we don't that we can't service. They don't have a problem. So the way some of our competitors dress it is there. Yeah listen you don't really have a problem. Thanks so much for calling. See you later. What we say is we provide all of our customers with an experience and there's an experience to us telling you you don't have a problem and that experience takes a little bit of time. We need to we need to do some diagnostics we need even even if we recognize immediately that they don't have an issue we need to take them through how we know that they don't have an issue so that they don't feel like we just rushed through it. We give them experience and we call that a commercial because there are a couple of things are going to happen. Maybe we were wrong and that was the beginning of a foundation problem. They're going to call us back because they had a positive experience with us.

Malcolm Lui:
Yet

Jay Eastland:
Maybe their next door neighbor is going to have a problem and their next door neighbor is going to say who should I call. And they're going to say we have engineered solutions. They came out told me I have a problem but they took me through it. So. So we every person we kind of come in contact with. We consider that a little mini job interview.

Malcolm Lui:
Yet.

Jay Eastland:
And then the other philosophy that we have is we have a sign coming out of our meeting room that says remember who your bosses and that we say you know we've all had bosses that were difficult to work for. And you know you don't feel like you do anything right. And then we've all had bosses that really motivate us and made us feel good. We got good news bad news scenario because you have both of those kinds of bosses because your boss is the person that's on the phone the next time it rings. Right. And so that person is going to be reasonable and nice and motivating and sometimes he's going to be really difficult to get along with. So that we we force ourselves as well as all of our people to understand who the who the real bosses who really have power to make us or break us. And that's the customers

Malcolm Lui:
Right. Speaking of signs the signs that you just mentioned if you were to have a billboard somewhere in Georgia what would your billboard message be. And keep in mind people typically only have about six seconds before they drive by Billboard said Germany has to be pretty to the point and in pretty short

Jay Eastland:
Yet so are our billboards say crack foundation question more wet basement question mark. Engineers on staff and then they have the phone number and engineered solutions. So we want it to be you know why do you call. Why should you call us. Well you should call us of your basement leaks or if you have a crack in your foundation you know that's the need. And then what's what's the quickest thing that we can say that differentiate differentiates us from our customer. We have an engineer on staff so that's that that very succinct message that that we use on billboards and can go back to that brand awareness thing. You know when I when I look at the auto I on the billboards that I have if if it was just about auto I'd stop doing it tomorrow. They don't pay for themselves. Right. I can't look at that at my double invoice and the amount of business that it brings me and justify continuing to have a billboard up. But I do know that over the last 12 years of spending that consistent percentage on marketing and having that that percentage spent on a blend of mediums that my raw lead count has gone up every single year.

Malcolm Lui:
Yep

Jay Eastland:
You know I cannot

Malcolm Lui:
Yep

Jay Eastland:
Tell you that I'm getting the RL I specifically dollar for dollar on billboards. No but do I believe for a fact that they are part of the equation that gives us this brand of wares that allows people to pick up the phone and call us. I really do

Malcolm Lui:
Yep. You talked about sharing what your percentage of revenue you spend on marketing.

Jay Eastland:
Yeah. Percent

Malcolm Lui:
How did you and your consultant come with that number.

Jay Eastland:
Well that day you know he wanted to spend 15 and we want to spend five.

Malcolm Lui:
Okay

Jay Eastland:
We looked at some industry standard stuff and we looked at you know what that consistent spin has done in terms of generating the leads that we need. And we'll play around with it a little bit. Usually what we say is we're not going to go over 8 of our our season we're not gonna go over 10 of our last year's number and we'll budget eight of our increase. And it's you know it's a it's a little bit of a shadowy number there been years where we've spent more and have been years where we spent less

Malcolm Lui:
Right.

Jay Eastland:
Being on you know because there've been years we've had years where we grew 38 percent and we wanted to pump the brakes just a little bit because we felt like we were grown too fast to maintain our our Our quality

Malcolm Lui:
Right. Now when you say a percent of your revenue on marketing what do you lump into marketing. Is that just strictly advertising and in your digital marketing or does that also include salaries and what you pay your sales

Jay Eastland:
No

Malcolm Lui:
People in marketing people

Jay Eastland:
In really. It's to be more accurate. It's really an advertising expense as opposed to a marketing expense because we don't have we don't have our our business development salary in there and we don't have any of our business well-meant efforts and there

Malcolm Lui:
Right.

Jay Eastland:
Are the. But but our primary driving force is advertising

Malcolm Lui:
Right. And I know you talked about a number of different channels you're using key sheriff but that's what the channels you're using. I know you're using billboards. I know you're doing CEO. I know you didn't paper. Now and then

Jay Eastland:
That

Malcolm Lui:
What else are you doing to get

Jay Eastland:
We do.

Malcolm Lui:
It

Jay Eastland:
We

Malcolm Lui:
Out

Jay Eastland:
Do

Malcolm Lui:
There.

Jay Eastland:
Radio. We do cable television. We do we do some some kind of a little bit different. We do some retargeting which I know you're probably familiar with that term and it means a lot of different things to a lot of people but we market based on keywords. We do that they have these home improvement books in our market their direct mail. We do the. We have some consumer advocate type folks that we that we work with and then you know we do we try to do a lot of our stuff like we're on a lot of high school scoreboards and we're on a lot of high school baseball fences some of that sort of you know kind of grassroots guerilla type marketing we still do things like that pretty successful.

Malcolm Lui:
Okay great. You covered it covered quite a few bases here. I mean I can't think of anything here other than us. What are you not doing. You do. You're doing direct mail. You're doing cable TV I guess in cable TV meaning those smaller channels.

Jay Eastland:
Yeah. Yeah because we can surgically we can surgically strike television advertising by zip code because we can do it through the tube through cable Alice. So we have stayed away from network television because it's very very expensive. You've got to have a really high production value commercial. And and we you know I'm no expert but but we think that network television advertising is is going to end up kind of going the way of the Yellow Pages at least for local businesses. You know I think I think Coca-Cola is always going to have a voice on on network television but I'm not sure that engineered solutions of Georgia is is going to have a voice on a network television.

Malcolm Lui:
Yeah well maybe some selective show. So not everything that's for sure

Jay Eastland:
Yeah. And so the next thing that we're working on is we're putting together some 15 second spots that we're going to use. On Internet advertising. So

Malcolm Lui:
Right

Jay Eastland:
We

Malcolm Lui:
Now.

Jay Eastland:
Think that that's that's where are our television quote unquote. But budget is going to is going to go towards

Malcolm Lui:
Yep. And on radio you're doing am radio F.M. radio both.

Jay Eastland:
Yet both both

Malcolm Lui:
Yeah.

Jay Eastland:
At

Malcolm Lui:
One yet another

Jay Eastland:
Items

Malcolm Lui:
Guest

Jay Eastland:
Like

Malcolm Lui:
Another guest I recently had actually. So there are advertising on the likes of Pandora which

Jay Eastland:
Well

Malcolm Lui:
Might be sleeping at the checkout.

Jay Eastland:
Yes we're looking at Pandora right now. It's when it started it was really really expensive. I think I don't think that they totally understood. I don't think anybody totally understood. So we in fact had a meeting last week about it and the prices have come down. The thing that I'm struggling with is how many people are you know how how effective is that message going to be

Malcolm Lui:
Yet

Jay Eastland:
As you can you can opt out of that. You don't have to listen to those commercials. So. It's really about the price point. You know if the if if the price point gets to a certain spot then we'll get in. You know what. Well we'll try it. But.

Malcolm Lui:
I think the biggest value that the other show gets found from Pandora is that they have the data that allows you to track exactly how many people listen to it because they know

Jay Eastland:
And yeah that's another thing that's interesting with a lot of these digital advertising guys because we have a lot of digital stuff where they can they they say we brought you X number of traffic we brought you action on road clicks and what we have to tell them is listen we don't know what traffic doesn't buy stuff from us and clicks on our stuff from us

Malcolm Lui:
Yet

Jay Eastland:
What we need is is phone calls and appointments.

Malcolm Lui:
Yet.

Jay Eastland:
So it's like like the some of the. There are some digital opportunities out there that are there just driving clicks and there's some vendors that you know we were only able to reach 45 percent of the phone submissions that they sent us now so. So their whole model was drilling this funnel down to all forms of submission you know half these people they sent us a form submission we never call them back and they would never call us back. And we we had we emailed three times recall every three times and then and then they drop out of our system. But

Malcolm Lui:
Yet

Jay Eastland:
Five percent of them or we're never even getting in touch with and said that they wanted the vendors said We have a look at all these people we've got all these form submissions. We brought you might you it those but you know 55 percent of them were nothing.

Malcolm Lui:
Yet

Jay Eastland:
We're looking for quality.

Malcolm Lui:
Yeah definitely. Yes they need to tweak their final a little bit there.

Jay Eastland:
Yeah. Yeah. But that goes back to our conversation earlier. You know what. What. What are they incentivized by. Or they insist that they get paid for form submission so they're incentivized to to generate form submissions. We

Malcolm Lui:
Yeah

Jay Eastland:
Have a year we have with vendors where we're in a reverent revenue share agreement with them. So they're they're incentivized by us closing business and those leads tend to be much more productive than than the folks who are incentivized by you know get somebody to fill out a form

Malcolm Lui:
Yeah definitely. So I think for them I'm guessing not known any details about what you describe. Sounds like they're just targeting the wrong people to begin with

Jay Eastland:
Right.

Malcolm Lui:
So that two final questions for you. Who are your ideal customers and what's the best way for them to reach your team.

Jay Eastland:
So our ideal customers are anyone with a crack or leak below the first floor in any residential building or commercial building under seven stories. And then the they can they can reach us through our website which is ESG repair. Dot com. They can also reach us at our office which is 6 7 8 2 9 0 1 3 2 5

Malcolm Lui:
And is there a geography that you only work in a region arrange

Jay Eastland:
So residential metro Atlanta and commercial. The south east

Malcolm Lui:
How big of a southeast region are we talking about here.

Jay Eastland:
So we're just we're in Atlanta Georgia and we're just finishing up about a three month project in Natchez Mississippi which is just on the other side of the Mississippi from New Orleans. We had some folks in Rock Hill South Carolina this year. We've got a couple of things in Chattanooga Tennessee. So North Carolina South Carolina. Georgia Alabama Tennessee and Florida primarily.

Malcolm Lui:
And these are in your your team just packs it up and heads out there for a few months or you find

Jay Eastland:
That's

Malcolm Lui:
People

Jay Eastland:
Right.

Malcolm Lui:
To help

Jay Eastland:
That's right. Yep. We service it all from here are were license stuffing in 16 states engineering wise and we're licensed in three states as general contractors although we don't function as general contractors that general contractors license makes it easier for us when we have to pull permits and then something we win some business because we can act as a general contractor

Malcolm Lui:
Right. Got it. It's been great having you on my show today. Really enjoyed hearing how you grew your company so fast

Jay Eastland:
Well yeah I enjoy talking with you Malcolm.

Malcolm Lui:
We've been speaking with Jay Eastland, the Co-Founder of Engineered Solutions of Georgia, about his company's rapid growth. For interviews with other fast growing, high value sales companies, or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.

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