ServiceTitan Data Powers Million-Dollar Transformation of Ohio HVAC Company
There’s a furnace on display in the warehouse of Bay Heating and Air Conditioning in Westlake, Ohio, and general manager Sean Nagle is very familiar with it. That furnace helped Nagle learn about managing a home services company.
Nagle, a former business banker who handled Bay’s accounts, grew up the son of a bricklayer, but he had never worked in the trades before he joined Bay, an HVAC company west of Cleveland. That furnace helped him familiarize himself with the business.
“I think I tore it apart 50 times, just so I can understand everything that went into it, and put it back together,” Nagle says.
That and some time spent doing basic sheet metal work with one of the company’s owners represented chances to learn.
“I've always been mechanically inclined,” Nagle says. “Understanding how a furnace works, understanding how air conditioning works and all the components—in respect to what I need to know to make sure that I can successfully manage the operations, that wasn't terribly difficult.”
Nagle says that hands-on experience was important. It helped him understand the technicians’ side of the business so he could better integrate them with the business side.
The other part of his job presented different challenges. Nagle joined Bay, which caters almost exclusively to residential customers, just as the company prepared to go from a pen and paper field operation backed by a rudimentary office program to ServiceTitan’s trade company management software.
Nagle joined the company in October 2017, and his next four months were spent working toward a smooth rollout of ServiceTitan ahead of a Feb. 1, 2018, rollout.
Nagle learned early how to grow a business in the trades
Before joining Bay Heating and Air Conditioning, Nagle had been the business banker for the company for years. So he knew the ownership team from handling their 401(k), their business accounts and more.
Rebuilding a business operation, unlike that furnace, was something Nagle hoped to do only once. And that was a skill he had.
“Even though I was thrown right down into it, it really didn't feel like I was overwhelmed or over my head because there were all these tasks that I already had the soft skills in place to deal with,” Nagle says. “Really the only difference was the environment.”
Moving from banking to managing operations at an HVAC company isn’t a traditional route, but Nagle had the leadership and financial skills Bay needed. Nagle’s father, who was a bricklayer when Nagle was young but later worked in timber and lumber, paved that path by teaching him about succeeding in business, he says.
“I spent a lot of time once he kind of got into the lumber industry around the financial side of things, how to run a business,” Nagle says. “The right way to run a business (and) the wrong way to run a business because heaven only knows there were a lot of times that we didn't do things right in the family business.”
That experience led him to major in finance in college, with the idea that he could help any kind of business grow.
“I was always presented with new challenges,” Nagle says. “My goal wasn't just to be a resource from the financial side. My goal was also to help business owners brainstorm and find ways to grow and expand and get more profitable.”
He brought that desire to Bay, a company that desperately needed an operations update from pen and paper.
“We were doing the paper invoices and there was also electronic invoicing being done in the office,” Nagle says. “We were creating a lot of extra work for ourselves.”
The leap to ServiceTitan’s integrated mobile platform was predictably bumpy, but also worth the effort, Nagle says. The move to ServiceTitan also set Bay Heating and Air Conditioning up for another of Nagle’s goals—making the people around him better.
“My main focus has always been, for as long as I can remember, how can I help other people?” Nagle says. “How can I make other people's lives better? Whether it's coworkers, whether it's customers, whether it's ownership …
“That's my goal is I gauge my progress by the progress of everyone around me.”
And Bay Heating and Air Conditioning progressed quickly.
Change to compensation structure, adding ServiceTitan supercharge sales
Nagle drew on his banking background immediately with Bay, revamping the company’s compensation schedule for his technicians based on best practices for financial advisors.
Bay has two dedicated estimators who do solely replacement leads. But Nagle also changed the selling technician program, installing a tiered bonus structure based on 12-month rolling sales figures instead of making his employees start over every December.
“I figured it would work here, and it has,” Nagle says. “It's been a big differentiator for us. Our estimators have all pretty much doubled their output very quickly because they were actually getting compensated fairly for what they were doing.”
ServiceTitan reporting made that possible. And it supercharged the salespeople.
“It was a real game changer for us because you don't really have to babysit these guys,” Nagle says. “We do weekly coaching, but a big part of what's driving them is the fact that there are opportunities to make more (money).”
Another change was powered by the ease of offering upgrade options to customers through ServiceTitan’s pricebook integration. Where the company in the past often sold middle-to-low options, now it sells middle-to-high end products, increasing the average ticket.
“They know that if they're closing those deals, it's going to be better for them,” Nagle says.
Another byproduct of switch to ServiceTitan: Increased efficiency, rapid growth
Nagle says the company has 11 total technicians, spread among service techs, full-time install crews and a backup. Bay’s switch to ServiceTitan allows him to use those technicians more efficiently to increase profits.
“If you can find ways to be more efficient, that should translate to additional opportunities,” Nagle says. “The invoicing got better. It was easier to track if we weren't billing for things, if things weren't being taken care of.
“What we were able to do is we found ways to be more efficient, and ServiceTitan was a big part of that. It was kind of an engine (for efficiency).”
Among the ways Nagle says ServiceTitan has improved efficiency:
Dispatch of technicians is quicker and easier.
Technicians’ time spent on each job was reduced.
Install became better organized.
Membership scheduling and management was streamlined.
Immediate reports produced by ServiceTitan provided an up-to-the-minute look at the entire business.
In short, Bay better utilizes its employees’ time now.
“We're not only running more calls, but we're bringing in more calls, and we're able to see where everything's coming from,” Nagle says. “Overall, the whole functionality of it has helped. And as we get more efficient, we find additional opportunities.
“We're growing at a better clip than we ever have.”
Better data from ServiceTitan leads to better results from employees
Managing employees has become easier since the switch to ServiceTitan too, Nagle says. Great data powered that change.
“It was a matter of having good information, having good reporting, which we didn't really have before,” he says. “We've got all the reporting and everything now for the coaching.”
Nagle has instituted regular meetings for everyone from estimators and salespeople to installers and service technicians, to go over issues.
That gives him an opportunity to set clear goals that his employees can track with the software. He can go over where each employee stands in one-on-one coaching, too.
“We go over their total revenue, their callback percentages, their average service ticket size, we look at their billable hours and their net billable efficiency,” Nagle says. “We look at accessory sales, we look at replacement leads and replacement sales, membership opportunities, and then invoicing and time card issues.
“And then we've got for every one of those items, we have either a dollar figure or percentage goal that we expect them to hit every month.”
Nagle says his employees appreciate the training—and the transparency.
“Our guys all want to perform,” he says. “So if they feel like they're not doing something well, they're going to make sure the following month that they're going to do it that much better.”
Goals for 2020 include building on success and rapid revenue growth
For 2020, Nagle says, aggressive growth goals are possible as Bay’s employees continue to get more comfortable in ServiceTitan.
“We are rolling out a more tech-friendly way of invoicing and estimating.” Nagle says. “One of the key components of ServiceTitan is making sure that customers are getting options, and our sales guys do a great job of it.”
But technicians, as they are most everywhere, have been slower to adapt. Nagle hopes to use the ease of providing options through ServiceTitan to change that.
“Anytime I'm asking somebody to do more, I've got to find ways to take obstacles out of their way to make sure that they continue to be as efficient while doing more,” Nagle says. “I'm actually taking the guys to a class to explain why we're doing what we're doing and getting their buy-in on everything.”
The change will include a diagnostic checklist his technicians can use to create good-better-best options on every heating or cooling call, to educate customers and increase the average ticket.
“They can start doing a much better job of using the estimates and building three estimates for every single customer that they're seeing,” Nagle says. “Because right now we're really kind of stuck in that rut.
“We're not finding additional opportunities. We're not presenting the club membership options that we have in a successful manner. So the goal now for this year is getting them on board, getting them doing that, seeing three estimates per invoice.”
That would build on the growth Nagle has already seen. Bay Heating and Air Conditioning reached $1 million in service and maintenance revenue for the first time in 2019, and he’s looking to surpass that in 2020.
“My belief is, just by making these adjustments we'll sell more accessories, we'll sell more club memberships,” Nagel says. “We'll sell higher ticket items in some additional recommendations. I'd really, really like to see 25 percent growth in the service department this year.
“I think if we executed properly, we could even say 30 to 40 percent growth. So really my stretch goal is, let's get to $1.35 million for the service department this year.”
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ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.