Owners Chad & Julie Waite & GM Daniel Frank Have Transformed Their Largely New Construction Business into a Booming Residential Service & Replacement Company, Thanks to Their Change in Mindset Followed by a Dedication to Training & Commitment to Providing Premium Value to Their Customers
by Bob Houchin
Most average Americans couldn’t point out Farmington, New Mexico, on a map, and understandably so. It’s a dusty, little jewel of a city with a population of less than 50,000 tucked away in the northwest corner of the state, roughly 180 miles from Albuquerque and Santa Fe. It lies on the fertile San Juan oil basin, surrounded by Native American reservations.
“I was going down the path everybody does around here [after high school]. They either leave or go to work in the oil field because that’s what drives the area. I actually got a job in the oil field and was getting ready to start.”
Those are the words of Daniel Frank, General Manager of M&R Plumbing Service. “I went to church one night, I was 17. Chad was a church leader. He asked me what I was looking to do. I told him about my job. He said, ‘Why not work for me?’ That was 13 or 14 years ago.”
Chad is Chad Waite, owner of M&R Plumbing Service. Over the last five years, these two men have driven the company to tremendous heights, growing it to seven trucks, 16 employees, and generating over $2 million—almost all of which comes residential service and replacement. It’s virtually unrecognizable from its beginnings.
M&R Plumbing Service started as Morgan & Morgan Plumbing in 1954. Chad’s grandfather Ray bought it in the 1960s. In the early 1970s Chad’s father, Mike, joined him. The two naturally changed its name to M&R Plumbing Service. Chad’s uncle, Albert, joined the company in 1977. Chad remembered running calls with his dad and uncle as early as 8th grade. It would be his home for summer and spring breaks. Eventually, he acquired sole proprietorship of the company in the mid-2000s.
For much of the time under Chad’s leadership, M&R Plumbing Service traversed peaks and valleys. Revenue one year would jump to $800,000 then dip to $500,000 the next. Sometimes it made money, sometimes not as much. The bank account never seemed to show much of a safety net, let alone a surplus. It’s fair to say Chad carved out a living, able to splurge on a nice, new truck from time to time. But the stress and uncertainty of what each year would bring wore heavy on Chad’s shoulders.
M&R Plumbing Service always ran residential-service calls, but new construction accounted for the bulk of its dollars. “We’d get really busy doing new construction for a few years, we had some good jobs. So, we didn’t have time to do service. We couldn’t take care of people; so, they’d call somebody else,” Chad said. “When new construction would get slow and no one was building, we’d get back into service. Then, boom, another busy time. It was a vicious cycle.”
Chad knew something needed to change. He found a Success Group International Profit Day seminar being hosted in Albuquerque and elected to make the three-hour drive to see if he could glean some information. More than that, he joined Plumbers’ Success International.
“I put my deposit down. My wife and I got plane tickets to Sarasota to go to Executive Perspective. Then, you might say I had second thoughts. I didn’t go, and I told them to hang onto my money for a little while,” Chad recalled.
The things Chad referenced was a local recession hitting Farmington. “We got hit hard economically at the same time, in 2012, where everybody else got hit in 2008,” he explained.
It could be argued the recession helped M&R Plumbing Service in some ways. Chad recounted it drove many competitors out of the market, leaving more work for them. Chad put into effect a few of the lessons he learned at Profit Day, wearing a uniform and wrapping a van. “I knew we couldn’t make it at the prices we were charging. I knew [SGI] had StraightForward Pricing®. We had to do something better. I looked into SGI again,” he said.
Chad did more than look into SGI. In February 2015, Chad and his wife Julie attended Executive Perspective [EP]. It proved to be the launching point for the couple’s 60-year-old business.
“I wanted to change for years, but I could never make it. Change is hard. People aren’t good at change, and neither am I. During EP, I remember the prices we were told to charge—to finally make a profit, mind you—and I thought it would never work here, in Farmington. Customers would never go for it. Never,” Chad insisted. “I had to change my business, but I had to change my whole outlook, my whole mindset. Once I was able to do that, everything started happening for us.”
Immersion Training Increases Knowledge & Confidence
Executive Perspective gave Chad his first taste into total-immersion training. No distractions, no business demanding his attention every minute, nothing but a classroom, a facilitator, fellow students, and a structured learning environment. He’s been a believer ever since.
After customizing and ordering their StraightForward Pricing® guide following EP, Chad and Daniel traveled to St. Louis, Missouri, to attend Learning Alliance’s Service Essentials. Not long after, the two attended a water-heater class. “You could finally see how to build the value and follow the process,” Chad said.
Almost every M&R Plumbing Service technician has attended Service Essentials now. “It’s going to make you more successful and more money, and it will make you a better person,” Chad continued. “It’s good for those guys to see other techs doing it, too. It gives them confidence. We had one guy struggling to sell clubs before he went, he came back and sold one immediately.”
Chad believes one of his best and earliest decisions as a new member of SGI was to take Daniel to Expos immediately. “Then he could really see and understand what we wanted to become. You get to talk to so many people, too. We got to meet people like [fellow members] James Wisler [of Wisler Plumbing in Rocky Mount, Virginia] and Steve Egner [of Steve’s Plumbing in Lynnwood, Washington],” he said.
“Now, when we go to Expos, one practice we’ve put into place is writing down the things we’ve determined need to be done, and we set dates to when we’re going to accomplish them,” Daniel shared. “That way, when we come back, we can keep each other accountable to get them done.”
Inspection, Options & Performance Pay Create Happier Customers & Techs
Repeated trips to the same training can bare additional value, as Chad and Daniel have found. What doesn’t sink into your mind initially can sometimes grab your attention later. That was the case when Daniel took a crew of techs to Service Essentials again, which was hosted at Baker Brothers Plumbing in Dallas, Texas.
Daniel had a discussion with another member in attendance about providing options for every repair proposed on every call. “It finally sunk in how important it was. We added space on our invoices to be able to do that and started pushing it with the guys,” he said. “We never push an option, only present them. More often than not, people pick the most expensive option, not the cheapest.”
It further underscored to Daniel the importance of conducting inspections on every call. Inspections lead to options. Options lead to sales. He admitted that he must stress the necessity of inspections on every call more than he’d like. “They all know it’s part of what we do,” he added. “The guys who are religious about doing them always have the higher tickets.”
Consistency with inspections and options both improved once M&R Plumbing Services switched to a performance-based compensation structure. It also penalizes for call-backs to ensure quality control remains high. This was yet another idea instituted after talking with fellow member Steve Egner.
The techs tentatively agreed to keep an open mind to performance pay following Chad and Daniel’s assurances they wouldn’t allow them to go hungry. That’s hardly been an issue. On the contrary, everyone is making more money. “About a month after we started it, I asked where one of our guys was going. It was 5 o’clock. He said he was going to put a water heater in. He knew he could get it in that week’s pay period,” Chad shared. “They definitely keep track of it. They know when they have a good day.”
“Our customers love getting a straightforward price knowing that’s what it’s going to cost them. Our guys love not having homeowners looking over their shoulders while eyeing their watch, and they’re making a lot more money. It’s been good for us because we don’t pay for non-productive hours,” Chad continued. “Everyone is happier.”
Tracking Leads to Accountability
Ask Chad or Daniel what the company’s average ticket might have been prior to joining SGI, and their best guess was $200. That number is exponentially higher today, by the way, and the reason they know is Travis Hill. He was hired in September of 2017 to serve as office manager and a jack-of-all-trades.
“Travis worked for us before and got his plumbing license, but he didn’t like being a plumber. He became a service writer for three years and got really good on the phone. He’s also a great IT guy. He was the right person for the right position,” Daniel said.
Travis also has mastered the company’s customer-relationship management software, ServiceLine. He provides Chad and Daniel with a Daily Management Essentials report every day. All three men review it, and once a week, they dissect it, looking for areas of improvement. “Chad always monitored QuickBooks, but we didn’t break it down like we do now,” Daniel said.
By monitoring the team’s daily performance, Daniel is also able to quickly correct a technician before a slip-up or an honest accident evolves into a bad trend. Success in service is founded on consistency. Having the right tracking devices in place allow for such consistency.
Culture Founded on Training
Growth at M&R Plumbing Service has been consistent since February of 2015. Chad no longer finds himself in the field, and Daniel not as much. Replacing them hasn’t been easy. It’s a struggle to find quality techs in Farmington as much as anywhere else. The two took SGI’s advice to heart and have begun growing their own. It’s yet another reason why tracking has become a critical function for the company.
M&R Plumbing Service has three homegrown techs running service now, and two more are in training, doing ride-alongs each day, serving as apprentices. “None of those guys had any training [when they were hired]. We felt they were good people and needed to be a part of this organization,” Chad said.
With that many fresh faces, Daniel knows his job as trainer is critical. Tuesday is communication training, and Thursday is technical. Every Tuesday session flows roughly the same way. The team will vote on an “Attitude Award” for the week, and the winner spins a prize wheel. Everyone will discuss their previous week’s goals and their goals for that week. Then, Daniel will play a video from SGI’s HUB website or YouTube. The hour concludes with group role-playing certain situations.
The company also huddles when there isn’t formal training. On Monday, they have “Motivation Monday,” where the techs take turns delivering an uplifting message. Wednesday is used to talk about any unusual situations experienced in the field, and on Friday, in the words of Daniel, “We take some time to enjoy one another. That’s the one thing about our culture. We have a team. Everybody cares about each other’s success. If someone is out at 7 o’clock at night, we’re checking on him and helping out, not ditching our stuff and going home. I feel like a part of that is due to our meetings.”
“A bigger part of that is Chad, too,” Daniel made a point to add. “He brings breakfast burritos in on Tuesday morning. But more than that, he’s really good at making everybody feel like he cares, making people feel like family. His door is always open. The guys will go sit in his office and talk with him.”
Word has spread about the environment at M&R Plumbing Service. Frequently, they have walk-ins looking for a job. “This isn’t just any job now,” Daniel stressed. “This is a place where people want to work.”
M&R Finds Huge Opportunity in Pipe Bursting
Prior to SGI, M&R Plumbing Service primarily was a new construction company that would dabble in service when convenient. Even as of last year, half of their sales came from it, a far cry from where it is today. Only $50,000 of their over $2 million could be tied to construction in 2018.
Growth has mostly been organic. Certainly, they invested in marketing and creating a presence that’s easily found online. “We’ve gotten really good word-of-mouth advertising from our customers and calls from networking in BNI. But last year, we really concentrated on growing our replacement business. We’re selling more boilers and tankless systems,” Chad explained. “We’ve really focused on sewer work.”
M&R Plumbing Service puts a camera down every clean-out it does, and they camera-inspect every club member’s home during their annual inspection. “The camera adds value. Where we charged $150 for a clean-out, we now charge $285, plus the service fee,” Daniel said. “It’s allowed us to really boost our BioOne sales—when it hasn’t led to a bursting opportunity.”
Early in 2018, Chad made the decision to invest in pipe-bursting equipment, and it’s proven to be a wise investment. M&R Plumbing Service’s technicians locate the broken line. They flip the opportunity to Chad or Daniel to sell. “Some of these people, we’ve unclogged their line 8 to 10 times. We give them options, but when we explain that bursting doesn’t tear up their yard and is a permanent option—they won’t be paying for us to come out all the time—it sells itself,” Daniel explained. “We always offer it with financing, too.”
M&R Plumbing Service went from maybe one sewer-line replacement job every couple of months to one to two pipe-bursting jobs a week. A service call they routinely charged $150 has turned into a replacement job averaging between $4,000 and $7,000. “Needless to say, it’s a part of the business we’re pretty excited about in the long-run,” Chad said and laughed.
People Value Service & Will Pay for It
Chad and Daniel have aggressive-growth goals for M&R Plumbing Service. “We have a lot of opportunity in Farmington,” Chad said. “I’m also eyeing Durango, Colorado, about 45 minutes from here. We think there’s a lot of opportunity there, as well. That won’t be until we really finish up here.”
“If we had the right people here, we could add them now. We have enough calls to support them, but we know how important it is not to hire just anybody,” Daniel added. “We have a few guys in training now that are going to be excellent, so we’re excited for that.”
Not long ago, the idea of charging what M&R Plumbing Service requires today frightened Chad. It’s largely why he joined SGI at Profit Day but hesitated for years before finally going to Executive Perspective. But he accepted his discomfort and is now prospering because of it.
“One of those initial hard things for me when we first joined was charging a dispatch fee. But I went ahead and started one at $49. I was shocked how much money is made by doing that. However, at the time, there were people—who had been customers for years—who said they refused to pay it. They would call someone else. Now, I know it’s okay to lose those customers, but at the time, I hated it,” Chad explained.
“What’s most interesting is every single old customer who said they were leaving us, they almost all came back. ” Chad continued. “They said, ‘I can’t find another good plumber here!’ It was the proof I needed that, even in little Farmington, people value service and are willing to pay for it. It’s why we’re so busy. We have a great reputation because we take care of people, because we have great people.”