Trevor Flanagan and Scott Hansen from Professional Chats talk about the challenges of a tech startup that takes off in a big way. Their challenge is more about managing growth in both infrastructure and staffing. They have quickly become a company with a large number of employees which is in itself is a big challenge.
BB: Hello everybody, this is Brad Burrow with Real Media. I am here with Scott Hanson and Trevor Flanagan from Professional Chats. I’ve been kind of looking at your business a little bit. It’s really … it’s exploding. You guys have had some pretty incredible growth. Tell me a little bit about … I am interested in the story kind of behind it. That’s kind of what we would like talking about. How did that come about? You guys have a very unique business background: orthodontics and plumbing.
SH: Yeah. Well first of all thank you so much for having us. The business kind of came about organically. I was managing my family’s orthodontic practice here in the Kansas City area, and-
BB: You have great teeth, by the way.
SH: Well thank you. You know, we were just trying to figure out a way that we could continue growing the practice. The practice was growing very successfully and we were looking for a way that we could get to patients faster. We understood that the patient’s buyer journey, that they asked other moms on Facebook where to find an orthodontist, and then they jump on Google and they’d Google “Orthodontist [inaudible 00:01:33], orthodontist Overland Park,” and they’d start clicking through results.
SH: The way that we looked at this buyer journey was they were kind of walking into our practice, almost physically they would walk into our practice and they’d read the brochures and they’d read all about us and then they’d hit the back button, walk back out, and then go in the next office.
BB: So you weren’t converting then. They were just kind of shopping.
SH: Exactly. If we think about it more in a physical sense, like people are just walking into our brick and mortar location, it’s a lot easier to understand our business because since we were looking at our patient’s buyer journey as a physical location, we knew intuitively that it would make sense if we just added someone there to answer some questions and greet the visitor when they came to our digital office, we would convert a lot more of those patients.
SH: We added online chat for our website, and we started managing it ourselves-
BB: With a plugin or something like that?
SH: Yeah, there are a lot of free tools that you can use, a lot of tools that are $50.00 a month that you can plugin on your website and do it yourself. The challenge that we found was that … We had a small team of 15 or 16 people, and we had … I had it on my phone, on the computer, and as soon as the practice got busy, it was really difficult to manage the online chat and be really reliable with our responses and all the other stuff that was really important throughout the day.
SH: So, we missed a few conversations of new patients just in the first month and we realized the lost revenue of those patients that we missed could have paid for a chat service for years. We went to go look for a chat service for our website, kind of like hiring a call center to answer your phones, we wanted a chat service to answer our chats. We found that there are lots of services that are available and have been for years.
SH: The reason why businesses like ours weren’t using them is because … And I found this just over time vetting these different chat services, is because all of those services are designed for low value customers relative to orthodontics, for instance. Our customers are worth $5,000.00-$6,000.00 a piece, and that means that the conversations have to be really high quality.
BB: You gotta know your stuff.
SH: Yeah, exactly. Exactly. Just be empathetic and be a real human being on the other side. When you’re trying to sell Bluetooth speakers or a pair of jeans, you can’t afford someone who really knows their stuff to sit there, instead they’re searching through a database.
SH: Anyway, so we decided, since this service didn’t exist, all the other services outsourced their labor overseas, or they contracted people to work from home, we wanted to design a really high quality service that was specifically designed to speak with high value customers. That was really what launched it. We started serving just orthodontists, and we served five in the first month and that turned into 150 over the first year, and now we serve about 1,200 clients. It’s been a wild ride, but I think it’s just because we just answered a need in the market.
BB: Yeah, that’s awesome. That’s great. Trevor, so your background, plumbing-
BB: Commercial and residential plumbing. But really, you think about it, people are out there searching … I love the idea, I use chats all the time because I like to be able to just get on and talk with somebody right then, and it’s helpful being busy. Probably the same issues for the market that you came from as well.
TF: Yeah, absolutely. People coming in and coming out, and I tried to do it at the plumbing shop I was at trying to do live chat ourselves, and even with seven or eight customer service reps we still couldn’t be 24/7 responsive and we couldn’t be on the phone and take chats at the same time. So there is a lot of issues that came into play. Scott came to me and was like, “Hey, I’m doing this chat business,” and then I was like, “Oh, that sounds interesting,” and Bob Hamilton, a lot of people know locally, was heading to a sale. So I was like, you know what, this would probably be a good time for me to go and do something new. So I joined up, and I think it’s been pretty fun. We’ve been at this two and a half years, and now we already have over 100 employees.
BB: Yeah, that’s amazing. Great growth. That’s pretty exciting, huh?
TF: It is.
BB: With growth like that comes challenges, right? Can you guys talk about some of those from a business standpoint? There’s two things I’d really like to know. You talk specifically about there’s a certain target market that you’re going after, and a certain target audience. I’d love to hear your thoughts on how you guys have strategically figured out this is a good niche for us to go through … obviously orthodontics, but is revenue a part of that, demographics, things like that?
TF: Yeah, I think every successful business niches out there, marketing to begin with. If you look at Facebook, they did just Ivy League schools, and Zenefits did Silicon Valley tech companies. I think that an approach that a lot of businesses use that’s just wrong is going after everybody and then it waters down their marketing messaging and then they can’t really have an impact on anybody.
TF: We were pretty conscientious about who we targeted, and Scott had some level of understanding of the orthodontics world, and I had an understanding of the home service industry. Those were the primary industries we went after right out of the gate. But what we recognized is that this is not just for orthodontics or just for home service, this is a small and medium-sized business expectation for customers, especially we started thinking that this is just B to C companies. We need B to C companies that have customers over a certain value.
TF: When we were looking at it, we were like you know what? B2B businesses need this, too. If you look at our company, for example, we didn’t even look internally and understand … I’d say 50% or more of our leads come through the chat on the website. Sure, we’re a chat company, but we started doing it for web developers, and we started doing it for training organizations and we would end up at different trade shows with them and they’re like, “I cannot believe how good this is working.” We’re like, “Really? That’s good.”
TF: It really opened our eyes. We still … don’t get me wrong, we still niche out our marketing and try and focus on specific subsets of industries because we can get more bang for our buck if we kind of tailor our messaging to pest control companies, or to restoration companies in a specific state. But as far as the referral business, it’s been huge for us because every plumber, or every HVAC company knows somebody that does something else, and they say, “Hey, you should probably talk to this company.” We’re very forward.
TF: We’re still in the early stages, so we’re very honest with our customers and clients and say, “Let’s understand your business. Let me know a little bit more about it. We’re willing to give this a shot if you are.” We don’t try and overpromise on anything. It’s really helped us out quite a bit because I think that’s another problem that people get into is they try and overpromise what they can deliver on, and then they have really frustrated people on the backend.
TF: If you come at it like, “Hey, let’s be on the same team and try and figure this out together, and if it doesn’t work, let’s still be friends,” and it ended up with us serving mortgage companies, and a couple of other verticals that we never thought we would be in, and it worked extraordinarily well. As far as where it works best, it’s honestly most small and medium-sized businesses because chat as a communication, peace is being an expectation for everybody in the world nowadays and as a business, it’s not up to you how your customers communicate.
TF: It’s up to your customers. Understanding and empathizing with the other end of the table, and then delivering on that is what makes really great companies continue to be successful.
BB: That’s great. These are some great points. One of the things I wanted to talk to you about, every business that you represent has a different story, and a different set of talking points. How do you guys actually go through and educate your chat representatives on how to tell that story? That’s got to be a tough challenge.
SH: Yeah, it’s been something that we’ve been focused on since the first day. I think that there’s two really important pieces. I think that the first important piece is cultural within our organization. If we have team members that are on fire for our clients, they’re going to do a really good job representing our client’s businesses. Two is, our commitment to training our team.
SH: Every other month we bring in an outside expert, whether that’s a really great industry consultant or trainer, to train our chat specialists from the outside from our specific niche markets. And we commit about a half million dollars a year just to training. Our training process is really robust and very structured, and the expectations that we have of our team members are extraordinarily high.
BB: Yeah. That’s great. So you guys, do you ever think about maybe taking your team out to a plumbing company or an orthodontics office and saying, “Here’s what you’re talking about.”
SH: Yeah, we’ve definitely thought about that, and what we did instead was bring them to us.
BB: Oh yeah.
TF: That’s exactly what Scott was referring to, the consultants and trainers that we bring in are some of the best and brightest people in the world. They consult for multimillion dollar companies for a living, and then bringing them in. We’re willing to pay the speaker’s fee and the travel, and the meals just so we can get them in. Honestly, it’s a quite a large expense for us because we have a lot of overtime, we are a 24/7 business, and we need to make sure that not only do our clients not have any downtime while we’re bringing in these big speakers, but we can also get everybody in the room. So, we have people who work overnight, so we have to have the trainer come and do night trainings-
BB: Oh yeah.
TF: There’s a lot of things that we’ve had to work through but one thing that we believe in is making sure our people are top notch. One thing that’s been really contributory towards that, if that’s a word, is our software. Scott started developing out our software with the help of some developers here in Kansas City, gosh, a year and a half ago. We continue to pour money into that. We learn things about the different industries.
TF: It’s like, you know what? We really need this piece to be a part of the software. If we’re chatting for this vertical, our chat specialists has those value propositions and those questions at the touch of a fingertip which allows us to look and sound like every organization. I mean, if we did not have the software, we would not be able to serve 1,200 clients. It’s absolutely kind of the center point of our organization. The people are super valuable, but the software is really, really important.
BB: So you’re really having to go through and figure out objections before they happen so your people actually know how to answer an objection.
SH: Yeah, and I think that was a huge benefit that Trevor and I came from different niche markets, because we had unique perspectives on what was important. What’s different when you’re representing … What’s important when you’re representing an orthodontist is slightly different than what’s important representing a plumber.
SH: We have used that perspective as we launch into other niche markets to design our process to ask really good questions of our clients before we ever start providing service. So, yes we set clear expectations that this is a trial and we’re going to do our very best, but we also tried to design the process to increase the likelihood of success from the get-go. I think that was just the benefit of us coming from two different places, and setting up our process uniquely for each vertical.
BB: As a business owner, and a startup basically, when you started this thing, probably a lot of optimism, “Hey, this is a great idea,” but looking back would you do it again, or do things the same way? Obviously you guys have a great success, so that’s awesome. But knowing kind of what you know now, would you do things differently?
SH: I think there are certainly some things that we would do differently, but we talk frequently about this, like what have we learned so far? We’ve learned a lot of really great lessons. Luckily, the lessons that we’ve learned have not come at a significant cost to us, and we’ve just kind of lucked … we give credit to God for a lot of those lessons learned that didn’t derail our business. I think that by and large we would do it a similar way. We’ve grown this business without investment, without debt, and that-
BB: That’s incredible, by the way.
SH: Yeah, it’s been a real … It’s been a challenge, but it’s also been all of the team working together with that in mind. When we onboard new team members, we talk to them about the financial health of our organization and why that’s important to us, and what our cultural values are that make that happen.
BB: Yeah, you mentioned faith. We’re a faith organization, and I believe that this is one of the biggest growth tools that I could have is Real Media because God uses it to keep me balanced and keep me on my knees focused on him. Without him, I couldn’t have done all this. Talk about the faith aspect of this a little bit, if you want to-
BB: I’m really interested in that from a faith standpoint because I really believe it. You mentioned that there’s an aspect that’s helped you guys. Can you talk about it?
TF: There are so many examples. We could be here for hours talking about it. Almost every day we say to ourselves, “Wow, that was God at work in our business.” But just one very small example, the third hire in our organization for a chat specialist, I made three months in, her name is Stephanie, and she is an absolute rockstar. She has had a tremendous impact on our business. She started out as an entry-level position as a chat specialist, and worked her way through to be one of our top sales people now, earning really, really good money, has totally … she’s done all the work, but she’s totally transformed her financial life and it’s made a tremendous impact on our business.
TF: That honestly … you could call it luck, and if you want to call it that, it was pure luck that I just happened to have that hire at that time. But I really think that that was God at work. There have been story after story after story of decisions like … Where we’ve come to a split in the road and we have to decide one way or the other, and we were almost 50/50 and we decided to go one way and we realize looking back that if we had chosen the other path, our business would have been totally derailed. That’s happened to us over and over, and it’s just … It can’t be coincidence.
BB: It’s interesting that the business world doesn’t really buy stuff like that, the decision making process and all that, but I believe the same exact thing, I really do. I’ve seen it happen here, too.
TF: For sure. I think if anything, my faith has just gotten stronger over the last two and a half years because it’s like … there’s a lot of stress in running a business. You know, I think if you take all of that on your own shoulders, there’s no way for you to be successful.
TF: If you can just be like, you know what? This ultimately is up to God, and I’m going to pray about it, and I’m going to put the stress back on him. It just does magical things because whenever you commit to not being completely in control of your own destiny and just kind of submitting, it’s pretty awesome. Scott and I both go to the same church, and that’s one of the places we met. We also got our MBA together at UMKC. I think that God was probably trying to force us down each other’s throats and eventually it took. It’s been pretty magical so far.
BB: Yeah, that’s awesome. Talk to me a little bit about your future. Where is this thing going to go? You’ve got explosive growth. That’s amazing growth.
TF: Yeah, it’s so fun. As we continue to grow we have to be more and more strategic, because when you’re growing at 10% a month with 100 employees, it’s different than growing at 10% a month with 10 employees.
BB: Cash flow, there’s a lot of requirements that come along with that.
TF: Yeah, the space is probably the biggest thing because cash flow, that’s easy. We have a good process, it’s super scalable, so that’s never really been a concern from the get-go. The problem really is the space aspect because we’re running a semi-call center type environment which requires a lot of space, and we want to be very conscientious about keeping all of our team in one place.
TF: Recently we’ve had to split up some of that because of space concerns, so we just leased out an additional 10,000 square feet. It’s luckily only three minutes away. The duties kind of naturally fell. We have sales and marketing and project managers at one space, and then we have all operations at the other space. We’re very much looking six to 12 months out because we know that we’re probably going to need a 30,000-50,000 square foot building to continue building this place for the next five to 10 years.
TF: We’re like, “Okay, we can’t make a one month decision and get into a space that big.” We have to be planning now for what does that look like, are we going to have to do a build-out, do we stay in the same kind of ZIP code as we’re in right now? The decisions are more fun, but it’s also a lot weightier for Scott and myself because it’s like, “Wow, that’s a big decision.” We still need to make it somewhat quickly, so we look at it and we’re like, “Does it make sense to be here? What are our options?”
TF: We’ve very much been relying on really good counsel throughout the city, whether it’s our accountants, our lawyers, or business friends, to help us make some of these decisions because largely for both of us, it’s our first time growing an organization this fast. Bob Hamilton grew fast, but it didn’t grow to 100 employees in a year and a half.
BB: No doubt, yeah.
TF: Relying on people that have done it before, and being very open to advice has been very valuable to us.
BB: Speaking of faith, that’s a biblical thing, is the safety in the multitude of counselors. I agree. You can get people … Do you guys have an advisory board or anything like that? Have you thought about doing something like that? I think that’s a smart thing to do, especially kind of in the tech space that you’re in and kind of your forging new territory a little bit. You’re probably dealing with problems that you’ve never dealt with before just from scaling that big … even HR, man. I mean, I can imagine HR has got to be a challenge.
SH: You know, I think if people are looking for growth hacks as they listen to the podcast, I think this is one of the most important growth hacks that Trevor and I have realized over the last few years. That is, you want to listen to advice from people who have been successful at the thing that they are giving you advice about. I think that a lot of people really have a difficult-
BB: Not just some Joe on the side of the street, “Hey, can you give me …”
SH: Yeah, and what we found is there are extraordinarily successful people doing one thing, and oftentimes they try to give advice about doing things that didn’t make them successful. We just have to be really conscientious of what kind of advice we’re getting, and what their history has been because there are lots of smart people who have done very, very amazing things.
SH: What we try to do is soak up their wisdom in what made them successful, and be really careful about taking those same people’s advice about things that didn’t make them successful. I think that’s a trap that a lot of people fall into. They think that if someone is successful that all of their advice is gold. We’ve just been really careful about that, and obviously we’re respectful, too, but we want to make sure that we’re taking good advice from really great sources.
BB: Do you guys have a Board or anything like that at this point?
TF: No, we don’t.
BB: Have you thought about doing anything like that? I’m just curious. I mean, it’s-
TF: We really like stay away from red tape and we don’t want to turn into an organization filled with meetings. We really like getting stuff done. Not that Boards prevent you from getting stuff done, and I’m sure that as this business grows to 20, 30, 50 million dollars, we’ll probably have to change our process. But right now we just like getting work done and getting after it.
BB: Yeah, that’s great. Well, I think we’re about ready to wrap up here. Guys, if somebody hearing the podcast wanted to get ahold of you and find out how they could engage you, what would you have them do?
TF: The easiest way is just to go to our website, ProfessionalChats.com and just chat in and talk to one of our great people. They can help you get in contact with us better than anybody else, because we don’t really know where we’re going to be from hour to hour. I would say chat in and plus you get to experience how great chat is.
BB: All right guys, thanks a lot. I appreciate your time today. It’s very interesting, and man, what an incredible story. It’s only going to get better, right?
SH: Thank you so much. Yes, we’re really looking forward to the future.