When the Phone Stops Ringing What Trade Businesses Can Do Right Now to Protect Their Pipeline | Part 1

In this episode of The Motii Playbook, Fred Schnell speaks with Noam Horenczyk, Principal of Technology Partnerships at Simpro, and Kate Hay, Senior Implementation Specialist at Motii, about what has changed across the trades market and why connected systems are becoming essential for businesses that want to stay profitable.

What We Cover

• Why the trades and field service market feels harder than it did during the boom years
• How labour shortages, competition and squeezed margins are changing business priorities
• Why small operational errors can quickly turn profitable jobs into loss-making work
• The role of “chaos variables” in field service, from missing parts to unavailable technicians
• How customer expectations have shifted in an on-demand economy
• Why connected systems matter more than simply adding more software
• How trade businesses can start with the workflow problem instead of chasing every new tool

Resources Mentioned

• Simpro
• Pipedrive

Want to turn insight into action?
Book a Momentum Call and we’ll map out exactly how to apply this to your business:
👉 Book your call

Explore the Playbook
Frameworks, systems, and real execution:
👉 https://motii.co/playbook

Trial the CRM we use to build scalable revenue systems:
 👉 FREE Pipedrive Trial  

🌐 Connect with Motii

•  LinkedIn → https://www.linkedin.com/company/motii
•  Instagram → https://www.instagram.com/motii.co
•  YouTube → https://www.youtube.com/@MotiiSales

Transcript

SPEAKER_00 0:00

Modi acknowledges the traditional owners of country throughout Australia. We pay our respects to elders past and present, and acknowledge Aboriginal and Torres Strait Islander peoples as the first peoples of this land. Welcome to the Modi Playbook. If you've ever felt like your systems are technically in place, but somehow still feel chaotic behind the scenes, you're in the right spot. This is where we share what we're seeing, what's working, what's not, and the lessons businesses learn the hard way. Think of it as practical strategy straight from the trenches. Let's dive in.

SPEAKER_03 0:37

Welcome to the Moti Playbook. One shift, one system, and one measurable improvement. I'm Fred Schnell, managing director here at Moti. And today's conversation is about something I believe most trade business owners are feeling right now. And I also believe that most of them are not really talking about it openly. The market's changing. For many years, there was plenty of work going around here in Australia. The phone was ringing, quotes went out, and businesses grew without too much effort. But right now, I think a lot of trade and field service businesses are feeling the shift or the pinch. Less leads coming through, margins getting squeezed, and ultimately leads to pressure on every single job. The businesses that are going to come out the other side are the ones that get smarter about both the front and the back end of their business. Today I'm joined by two people who see this every day from two different angles. Snoam Horenchik, he's principal of technology partnerships at Simpro. He works closely with trades and field services businesses across Australia and globally. And Kate Hay, the senior implementation specialist here at Moti, where she spent many years inside trade and construction businesses working alongside teams to improve the way they operate day to day. Kate, Noam, thank you so much for joining.

SPEAKER_01 2:00

Thanks for having me on the podcast, Fred. Awesome to be here.

SPEAKER_03 2:02

Absolute pleasure. Now, Noam, let's start with you. Do you mind giving listeners a quick intro to yourself and what you do at Simpro, and then Kate will come to you after that for a quick intro and your role here at Moj. Yeah, of course.

SPEAKER_02 2:15

So Noam Hohenchick, I joined Simpro uh two and a half years ago uh in San Francisco. So I actually just moved to Brisbane last year. The goal was to have a global role to lead tech partnerships for Simpro group. So it's not just Simpro software, we also have Aeroflow and Big Change and Clock Shark. So it's a it's a whole group. But the idea is that we wanted one central place where we manage any inbound partnership requests. So if someone wants to integrate with one of our products with our open API, so kind of manage that, understand what that company does, what value they add to customers, and then help them get onboarded and have their integration approved and put on their marketplace and be available to customers, uh, as well as what I call outbound partnerships of trying to understand, hey, where do we have gaps that customers are asking for functionality that we are not planning to build? And how can we partner with specific uh companies in those gaps to provide more value to our customers? Very good.

SPEAKER_03 3:13

Kate?

SPEAKER_01 3:14

So I'm Kate Hay. I'm a senior implementation specialist here at Moti. And as Fred mentioned before, you know, I've been working with trades and construction businesses over the last nearly eight years doing implementations and helping them to streamline their operations, you know, put software and technical platforms in place that allow them to manage their client experiences. And I help to make AI and automations work in their day-to-day operations and processes. So I build systems, practical systems that help teams to save time, you know, build customer relationships, nurture those client journeys, and just help teams to work really smart. So that's me. That's what I do here at Madey.

SPEAKER_03 3:50

Very good. Well, thank you both. Let's dive straight into it. No, I'm from what you're seeing across the SIMPR group customer base, what's actually changed in the trades market over the, say, the last 12 to 18 months? Good question. It's getting harder.

SPEAKER_02 4:05

When everyone's complaining that it's hard out there, they're not lying, they're not whinging. It really is hard globally for trades businesses. I think uh there's always a labor shortage, right? Everyone keeps talking about it, especially here in Queensland and Brisbane. We have the Olympics coming up in six years. Who's gonna build all that? Right. Uh so what's gonna happen is that all these tradespeople are gonna come from the rest of Australia, right? So other states are gonna be in even bigger shortages because all of the tradespeople will be here building the stuff for the Olympics. So it's always, you know, something people talk about, and you kind of wanna you know, you don't want to just bring all these people that are not good at their job and just like plug the hole that way, because that could be a disaster. So that whole idea of labor shortages is getting tricky. I think there's a lot of competition. A lot of people are getting into the trades, they see that you can make really good money as a trades person or even as a like uh leading it a company in the trades. So you you see a lot of competition and then you see people having to deal with stuff that that's that's not their forte. Like, how do you rank first on Google, right? How do you make sure that AI captures your uh that even someone is using ChatGPT, you show up there. So those are the challenges that you know, if you're a plumber by trade, that's not necessarily uh what you're you're focused on. And I think the whole AI conversation is is confusing people. I have a long take on that, which I will wait for later in this episode to talk about. But I think, yeah, it's it's not easy and the margins aren't there. That's so I'm gonna quote my so my my CEO, he always he calls the tradespeople um the second responders, right? So there's the first responders if something bad happens, police, fire, ambulances, right? And then you have the second responders coming in and having to fix it, you know, if uh a bridge collapsed, if there was a traffic accident, whatever that is, right? Second responders, I think we all appreciate them very much. If you have an exploded pipe in your house, you worship the plumber that comes and fixes it, right? If you get locked out of your house, you worship the, and I have worshipped twice in the last year, unfortunately, people coming and helping me open uh my house. So we need these people, yet their margins are horrendous. So what we've noticed is that an average trades business has anywhere between six to ten percent profit margin, which is a measly percent for people that do a really you know important job. Lawyers get 30%, software is even more, right? So the people that we care about that do really important work are not getting paid enough for their work. And what we're trying to see is like, hey, how can we help them uh improve their profit margins to somewhere where it's you know reasonable? So it makes sense, and you're not spending your evenings doing paperwork and your nights kind of like uh running all the admin for your job. That's where kind of we're trying to help these businesses out. Yeah, because it it really is not easy to do that.

SPEAKER_01 6:59

I would say too that um, you know, when I walk into a business, I often see tradespeople who are absolute experts at what they do. They can go out there and fix a bridge, they can go out there and fix a road and patch a hole or you know, build a cabinet or do do whatever it is that they've spent years training to do. But, you know, because the the margins are tight, the costs are high, you know, they're trying to run their businesses um optimally and quite lean, they're trying to use AI to patch these gaps, right? So they're trying to put processes in their business and and you know, help to shore up some of those back-end things that you talk about. So the invoicing, you know, the quoting, you know, follow-ups and things like that. And I think that a tradesperson who is an absolute expert at getting on the tools is not an expert necessarily at putting the right process in place. And, you know, what we're seeing is that the extra money is not there to invest in a whole lot of different platforms or to invest in a whole lot of different tools to do that. So people are trying to moonlight as, you know, software technicians as well as being on the tools technician. And there are gaps there, there are big breaks that are forming because you know, those people who are who are trying to do these things to keep their businesses afloat aren't experts at that and it it's falling apart a little bit.

SPEAKER_03 8:06

I think you've got a really good point, or both of you have a really good point. And I mean, in my view, there's a lot of tech noise, I call it, because there's there's software's popping up left, right, and center, right? So, and and even if if you're not in the industry, you're not kind of accustomed day-to-day, you kind of say, oh, that seems to be fixing my problem. Okay, I'll just I'll just get that in, and that's gonna magically fix everything that are out all the problems that I've got, which is not the case, right? So there's a lot of kind of yeah, a lot of technologies out there that really don't really don't help but kind of create that tech noise, I call it. So, Noam, Kate, you mentioned kind of the skill shortage, you mentioned the squeeze of margin. So, do you think the issue is lack of work or is it just more more competition in the job? But what what is it exactly?

SPEAKER_02 8:55

All a lot. What you said and more. I think I think what what we see causing those margin issues, I think at Simple we call it like chaos variables. So if you're a software engineer, no disrespect to software engineers. If you're sick one day and you couldn't go to work, okay, you know, maybe uh a few pull requests get done the next day, fine. But if you're running a business where you have to have like five technicians on the road doing eight jobs a day, jumping from one place to the other, there's so much chaos that can happen, right? One uh technician could be sick, just not show up that day, and then you have to shuffle everything around. You can go somewhere and the door is locked and the person's not there. You can have traffic, you can have uh um weather, there's so many different things. That's what we call it chaos variables. That uh, you know, you get there and you don't have the right tools, you don't have the right parts. Who the hell knows, right? We can just uh list this on and on. So, with all of that, it's just very hard to run these businesses efficiently when all of that is can happen at any single point of time, right? So forget all the other stuff, right? You don't have enough people, you know, the competition is eating your lunch, even if you're doing really well and you have your good customer base, you're really well known in your region, and you're like the ranked top of and Google and AI and all that stuff, you still have to manage a business that's very unpredictable, and that's just a hard thing to do, and then add on top of that all the admin that you have to do that you haven't signed up for, and you're drowning, right? Like what I always say is that if someone started a plumbing business and now has a plumbing business that's a few plumbers, they're passionate about what they do. They're not passionate about reconciling the books between uh Zero and Simpro. Like, that's not what they wanted. That's not what they got into this for. But they have to do it because they have to do it at night, they have to do it on the weekends because during the day it's just like chaos. They just have to like, oh man, that like I have to now send this technician there. They have to, they didn't weren't able to fix it, they were gonna have to come again tomorrow. So I have to shift all my scheduling. So it's there's a lot of different elements making it a really hard business to run. And we're trying to identify uh where we can help. Because we did an analysis and we found out anywhere between 27 and 37 workflows have to be done by a trades business as they're doing this. So, like workflow would be like ordering materials, you know, dispatching technicians, invoicing customers, all that stuff around the 20 to 30, right? So if we can eliminate, if we can automate, if we can help with, you know, a few of them one at a time, kind of roll it out, we can help them focus more on what they want to do versus what they want to do. Yeah. Yeah.

SPEAKER_01 11:31

So I think too, as you were talking about then Noam, you know, you've got what, 27 processes, you know, that that uh need to be put in place for a workflow for a job to get through from start to finish. If there's a break in any one of those processes, and when we're looking at 27, that's quite a lot. If there's a break in any one of those processes, that means that job needs to be revisited, either by, you know, the person who's doing the job, somebody in the back office, if they've got a back office, you know, and that's a luxury for some of those bigger businesses who have more technicians on staff, who have more, you know, revenue coming through. If you look at the smaller businesses that might be traditionally, we're looking at like a husband and wife team or, you know, maybe two partners or a tradesperson and apprentice, they don't have that person who's able to go and do that for them. So every minute that they have to go and revisit that work and fix that process that didn't happen, didn't fire, you know, or didn't go through properly, that's time off the tools. That's adding to their labor margins, that's adding to their cost, you know. And if there's if there's more than one process that breaks down, you could be spending almost the same amount of time doing rework and investigation and trying to fix a process as you are on the tools doing the job. So your margins are at huge risk because, you know, of all this time you have to invest.

SPEAKER_02 12:41

Yeah, if you're already operating in a very low margin, any error can just put you in the red, right? So you do one error you have to revisit, then you actually paid more for then than the money that you got for that job. Yeah. So easily.

SPEAKER_01 12:55

And then you think about those, you know, small businesses who don't invest a lot up front, you know, that means that if they have, you know, more than a couple of jobs a month where this happens, they're at risk of going under because they cannot support or continue to float themselves in that space.

SPEAKER_03 13:08

Looking at it from a bit of a different angle now, Noah, do you think customer expectations have shifted in the market as well from like compared to the boom years? Yes.

SPEAKER_02 13:17

So I'm a millennial, right? I I'm aware I'm kind of like in the middle of the millennial area. But yeah, it's like it's an on-demand economy now, right? Like it used to be that you we had we we just had more patience. Uh, I think the generations that uh before me had more patience, I think I had more patience. The generation after does not have that much patience. So, and especially you don't have patience if it's a trades thing that has to happen now, right? If you're locked out of your house, I don't want someone babbling on for ages. I want the locksmith on the way in 30 minutes, or I'm screwed. So I think like the expectations, first of all, is like everything on demand, everything quickly, everything with a smile on your face, which I know not everyone always has that smile on their face. But yes, that's our rating, right? Yeah. You kind of expect people, you know, the same way that we got used to like the Amazon of the world. Like everything is on demand, everything is quick. You expect it. So I think people expect something, they expect to get an estimate when you come in, right? They want to know how much it will cost. They don't want to be like, oh yeah, we'll look at it and we'll send you an estimate in a week. Like that doesn't fly anymore. Uh, you expect it to be solved in one go and you'll be disappointed if if it if they have to come again, right? There's all these different expectations that just like because of the whole everything else in our life, we kind of expect that from our tradespeople as well.

SPEAKER_03 14:34

Okay, yeah, very good point. I I totally agree. So let's dive a bit deeper. And so if you if you think a business is getting under pressure, what do you think that looks like? Or what does that actually look like operationally in your view? And where do you think you start like seeing things break down first?

SPEAKER_02 14:52

I feel like what breakdown is the boring stuff is the admin stuff, right? Like at the end of the day, if someone knows what they're doing, they're a plumber, like they'll they'll know how to fix it, but they won't make it in time, you know, they they schedule too many jobs for one technician, or they haven't, you know, they have to chase invoices and all that stuff. So I think what usually breaks is like the back office where the expertise is just not there. And we're we're trying to solve that with a lot of AI. So if you if you follow Simpro, you're gonna see that like AI is a big uh function of that because we really think that that could be something that that solves those uh admin issues uh because it's the easier things, right? Building a robot with AI that will come and diagnose a plumbing issue and fix I don't know how many years, you know, then so who knows, maybe two months with the way Anthropic is doing things these days, but I don't know, but not yet, right? We're not there yet. But having AI, you know, kind of look at all your invoices, match it to jobs, uh, or like email customers, say like, hey, you need to follow up, like, here's how you pay, like that's something that is pretty easy for AI to do, and it can save so much time for those tradespeople. So we we're trying to we're seeing slower, slow adoption of AI across this. I I have my reasons. I'm saving it for the last question because I know you have my the last question about the mind shift, so I'll save it for that. But we are seeing that kind of AI starting to flow into those trades businesses that realize, like, hey, you know, we you we used to not trust this, right? I used to like a few years ago, if I call and I realize that it's like a bot talking to me, I would be just like, representative, just like leave me alone. Like I know that you're not going to be able to solve my problem. But I think now that we're all using Chat GPT and Claude and all that stuff, we realize that it can actually solve our problem. So if now I call something, call somewhere and I get like uh an AI receptionist, I'm less skeptical. And I think trades businesses are less skeptical as well for themselves and for their customers. So we're starting to see that slowly get into their uh with their flow.

SPEAKER_01 16:52

I've seen that in a couple of places.

SPEAKER_03 16:54

Just wanted to ask if that aligns with what you see.

SPEAKER_01 16:57

I would say yes. And I and I'm thinking to a recent implementation project that I've worked on where the business has an AI chatbot which is attached to their phone system. And what that allows them to do is to qualify some of those incoming phone calls as leads, you know, based on the conversation that's had, the keywords that are spoken, they can work out very quickly, you know, what kind of work stream this belongs to, whether it's a reactive job, a maintenance job or something else, and then qualify that lead into their sales team to go ahead and push that through to convert that to a job. So I think where I'm seeing the breaks here is that, you know, when we don't have those right processes in place, or we're not using the technology in the right way, leads aren't converting, you know, leads are getting dropped because they're not being followed up, or, you know, the conversion rates are quite low because people may not have the time to go back and chase those up because they're too busy fixing the jobs that are in place that have gone wrong as well. So I think that there's definitely a direct impact there on using these tools in the right way, you know, putting AI in the right spot to do the right job for you. You know, it might not be able to make you a cup of coffee, but it can certainly help you to qualify your incoming pipeline, perhaps, or follow up a quote that might have been outstanding for seven days and you've forgotten about it, um or you don't have time to follow it up. But if there's, you know, if AI can do that for you and send out that reminder or send out that gentle nudge, that's another converted lead potentially that's coming into your into your work. And that's what you want.

SPEAKER_03 18:18

Totally agree. Let's dive a bit deeper into that space, kind of looking at a business that is that is doing well in in today's environment.

SPEAKER_02 18:25

What are they doing differently? Yeah, I think what they're doing differently is they're planning ahead, right? They're seeing where the market is going, like, oh, you know, I will, you know, I see the summer's coming, I'm an HMAC technician. Like, you know, the cycles are coming, so I need to make sure that I'm staffed, uh, which I think a lot of businesses do. Like if you're an experienced business, they do. So I think do you just do it better or worse? But I think a lot of them just make sure that their systems talk to each other. Again, the more boring part of their job that they did not sign up for, but if you make sure that your job management software is talking with your accounting software, as talking with your estimating tool, then you're saving, first of all, you know, that data entry, which is like the most boring term in history, double data entry. But it is a thing, it is a problem, right? Because if you do it, it's not just that you spend time doing it. There's also mistakes, right? Now someone typed in the site address slightly wrong, and then the materials get sent to the wrong address, even though you have the right customer address in your CRM, like these little things, right? Or like a purchase order that then gets sent to the yeah, yeah. And then you start building the the road in the wrong place. But um then, and then you also have like with the supplier with like a purchase order, yeah. You know, you you mistyped some part number and you get the wrong part, and then everything gets delayed. So like just having your systems talk to each other and integrate, which is kind of my world. So I'm very biased. Like if you ask me what computer uh customers are doing that is good, I'm like, yeah, they're doing what I think is important very well, which is having their technology work for them and talk to each other versus be a burden. Okay.

SPEAKER_01 20:01

Kate's yeah, I agree with that wholeheartedly. And from the flip side of that, you know, I spend a lot of time getting teams to talk to each other or teams to communicate with each other using these software platforms. So, you know, for me, it's about setting up a software platform and these businesses who understand the value of putting in the time to configure their environment, to configure their platform, their software, their tech stack, to make sure that they are, again, they are all talking to each other so that teams can efficiently do the work that they do best and then hand it over to someone else to do their work that they do best, you know, and whether that's understanding a lead that's come in, capturing what they're after, capturing, you know, what they need from you, and then being able to hand that to operations with no gaps, you know, so where the information just flows from one to the other so that operations can then do the things that they do really well. And like you said, Noan, that might be raising a purchase order that's linked directly to your supplier account so that the purchase order gets injected into the supplier account, there's no mismatch on product codes, there's no mismatch on delivery address and things like that, and everything, you know, then flows on from there. So I think those businesses who who do take that time to understand, you know, what does my customer lifecycle look like? What are my needs? You know, what do my people do? And how do I best automate that for them or make sure that they've got the right tools to do that job in the best way, you know? And I think I I wouldn't make a cake using a, you know, a drill to mix the batter, you know, and then stick it in the oven and expect it's gonna be really good. It's gonna be clumpy and there's gonna be stuff everywhere. So, you know, using a spreadsheet to try and manage an entire job life cycle from, you know, incoming lead right through to invoice at the other end is not gonna work well. You know, it's the same thing.

SPEAKER_03 21:43

I think it's got a it's a bit of a double-edged sword, I reckon, because I mean, you both alluded on the fact that, you know, you you you're chasing every job and the margins are so squeezed and you're dealing with crises, like you're a crisis manager pretty much on the day-to-day basis, right? So for a business owner of a business like that, when do you take time to get out of that daily grind, head down, bum up, to really think about your customer journey. You think about your workflows and where things fall through the cracks and where the admin burdens are, and how like how could I fix that, right? And probably also coming back to that kind of the technoist, right? So you see this pop up on your screen. Oh, it's gonna solve all your issues. Okay, I'm just gonna sign up. But I think you know that that yeah, you you need to have the right technology in place, you need to take the time to really work on your business to to think it through and to make sure that it actually works and that you're not that you're not just having a technology that does something but doesn't really do it well, and you're still copy-pasting from one system into the other, right?

SPEAKER_02 22:52

Yeah, and and I think yeah, and and I think so nobody has any time for that. That that's answer your question, nobody has the time to think strategically. And honestly, us software companies are not making it easy because every software company is trying to like sell the dream, right? So a lot of the software you're using has a bajillion functions, but you don't need those bajillion functions, you just need this specific workflow. But it gets really hard when you're already overwhelmed to understand, like, okay, this part of the platform is not for me right now. Maybe I grow into it. Maybe you know, in a year I have this part of the business that I actually need it. These are the workflows that I'm using the software. So, like, that's why I always say like websites are horrible. Like, if you're trying to evaluate software based on websites, they're just meant for SEO and for like being taught. But like you don't understand what the comp what the software actually does. You need to make sure, you know, it always has to start from the problem. I know it's like something everyone says, but like, what is my problem? What is the workflow I'm trying to solve? Can I solve it with this software? It might have all these other bells and whistles. Great, maybe I'll get there, maybe I won't. But I just need to make sure it solves this one thing that I'm trying to do and and make it and focus on that when you're talking to the representative for that company and when you're implementing it. No, 100%.

SPEAKER_03 24:05

Well, unfortunately, that is all we have time for today. A huge thank you to Noam and Kate for joining me for part one. The good news is we are only halfway through this conversation. Stay tuned for part two, where we will dive a little bit deeper into the specific tools and strategies you can put at work right now. In the meantime, if you would like to find out how a connected SIMPRO and pipe drive setup could work in your business, use the link on our website moti.co slash playbook to book a demo with the Moti team. Thank you so much for listening and we'll see you in the next one.

SPEAKER_00 24:42

That's it for another episode of the Modi Playbook. One shift, one system, one measurable improvement. All information shared in this podcast is general in nature. For tailored advice specific to your business, visit Modi.co/slash playbook and book a momentum call with our team. See you next time.