Chris Hoffmann likes to speak in baseball metaphors — which is no surprise, given that his family’s HVAC, plumbing and electrical shop has its own branded section at St. Louis Cardinals baseball games: The Hoffmann Brothers Rooftop.
Hoffmann, the CEO, is proud and vocal about his St. Louis, Nashville and Denver-area businesses being family-owned. And in a competitive consolidation and private equity (PE) space, he and his brother Joe (COO), and father, Robert (founder), often touch base with other shops that are looking for alternatives to PE.
In 2023, those discussions led to what appeared to be a consolidation straight out of left field: Hoffmann Bros. added a brand new vertical to its services — Ferguson Roofing & Exteriors.
Why was it a potential curveball? Unlike the HVAC consolidation game, which Hoffmann said is very far along, the residential roofing ballgame has just started.
“Right now, roofing is maybe in the third inning of the consolidation wave,” Hoffmann said. “And I love that.”
He loves it because, even with stark industry differences like insurance and contracted labor, Hoffmann believes that roofing shares a large commonality with the other trades they provide.
“Really, it's sales and marketing,” Hoffmann said. “And candidly, (the roofing industry is) marked by a low level of sophistication from competitors today, so it's easier to acquire leads. On average, the service that customers receive in that space is really poor. So it's easy to differentiate yourself by elevating the customer experience, doing what you say you're going to do, showing up when you say you're going to show up, and answering the damn phone.
“The bar is lower.”
And he has the stats to prove it.
Software, you’re on deck
Ferguson had been a multi-generational mainstay in the St. Louis area since 1939. But before Hoffmann Bros. acquired it, the shop struggled with top-of-funnel strategies like marketing and call center operations.
“They weren't spending any money on marketing. They were getting a bunch of phone calls just by word of mouth and reputation,” Hoffmann said. That was impressive — but what followed was too many bottlenecks and workflow issues.
“The call center was run poorly,” Hoffmann said. “50% of the calls were not even being answered.”
Selling jobs lacked visibility. So did ordering materials, setting up jobs, and sharing all of that information with crews. Much of this had to do with Ferguson’s previous software system and reliance on Excel spreadsheets. They couldn’t offer reporting metrics like close rates and average tickets. Neither could they show how the sales team was performing.
“No one zoomed out and said, ‘Why do we do it this way? How does this impact the customer?’” Hoffmann said.
That’s why the first hack after acquiring Ferguson was to create processes with more visibility. That included putting the shop on the same software system that Hoffmann Bros. used: ServiceTitan.
Right off the bat, the software mapped out workflows — from a job sales checklist, to how to get a job on the schedule.
“Ferguson went from a 50% abandoned call rate down to sub 5%,” Hoffmann said. “And we're using ServiceTitan to see sold jobs, scheduled jobs, all the visibility that we didn't have before that was in Excel and in people's minds.”
ServiceTitan also allowed Ferguson to offer third-party financing, which made converting sales a lot easier.
By the end of 2024 — one year after acquiring Ferguson — revenue jumped from $12 million to $18 million.
Covering the bases, for every trade
Insurance is one big differentiator when comparing the residential roofing industry to HVAC. But Hoffmann foresees a shift in that landscape.
“If I took out my crystal ball and fast-forwarded 10 years, I think we're going to see a much more retail-centric model as insurance companies begin to increase their deductibles,” Hoffmann said. “Because candidly, insurance companies are sick of this game of, ‘Everyone wait for a storm and then get a free roof.’ Therefore, (I think) you're going to see deductibles, particularly on your roofing line, become a percentage of home value. That'll effectively push reroofing into the retail channel.
“(I think) it'll look a lot more like HVAC, where you need third-party financing, people are buying, they're responsible for paying for it. Therefore you're going to see better margins, too. The retail side is just more attractive.”
That is all the more reason to focus on sales, marketing and the customer experience, Hoffmann explained — which is why he’s relieved that Ferguson is using ServiceTitan.
“Whether you're selling HVAC or whether you're selling roofs, ServiceTitan has the ability to support workflows in both of those environments.”
He touted ServiceTitan’s recent integration with EagleView — an aerial imagery tool that has a 98.77% accuracy rate — as well as the collaboration with Xactimate, for enhancing Ferguson’s sales process by allowing for faster and more accurate estimating.
“Don't fall into the trap of thinking, ‘Well, ServiceTitan's new to roofing, and therefore it's unproven.’ I would say, ‘Listen, ServiceTitan's clearly established itself as the technology of choice for in-home sales in one of the largest in-home sales categories: HVAC, plumbing, electrical.
“There's no reason to think that they can't do that in the roofing world.’”
Keep your eye on the customer
As the roofing consolidation game moves into the middle innings, Hoffmann Bros. is proving that efficient workflows, smart tech and a relentless focus on customer experience have been the keys to their success.
“When we show up to the house, we have a well-defined sales process and batting order,” Hoffmann said.
“We have an inside sales function where we're following up on sold estimates. There's a higher degree of accountability around sales team performance. We significantly increased our ability to process jobs for our crews. And we've added a ton of crews to our team so that we can actually do way more roofs per day than we were doing two years ago.”
Two years after Hoffmann Bros. purchased Ferguson, its revenue has more than doubled to $26 million and counting.
In a baseball metaphor? They’re crushing it.
