George Paladichuk<\/strong> 00:02<\/em><\/p>\n Mike Feazel, who we have on the show today, didn't just build a roofing company in one of the best times to build a roofing company. He also created almost an entire new industry under the roofing niche. For 25 years, Mike and his brother Todd ran Feazel Roofing, one of the biggest roofing companies in Ohio. Then Mike started noticing that shingles were getting a little bit lighter and a little bit thinner, and roofs started failing at a faster rate than before. So he went out and found a product designed to rejuvenate asphalt roads, if you will. The original product was for asphalt roads. You tested it on shingles, sold the roofing company in 2013, and then went all in on something no one had really done before, which is roof rejuvenation.<\/p>\n Today you're the co-founder and CEO of Roof Maxx. You've got more than 300 dealers across the country and over 20,000 reviews at a 4.9-star average. And you built it all without charging a franchise fee, or creating what most people would consider a traditional dealer network, which I think is super cool.<\/p>\n When I talked with your team before the show, we got into what you like to call the AI apocalypse, which I'm really excited to get into later on in the show. Essentially, you had lead costs that almost 10x'd overnight, and I'm excited to dig into what you did to combat that and what you're doing today with all of the changes in AI and marketing. So, all that to say, we have an absolute powerhouse on the podcast today. Mike, thank you so much for coming on the show.<\/p>\n\n Mike Feazel<\/strong> 01:37<\/em><\/p>\n Yeah, George, great to be here.<\/p>\n\n George Paladichuk<\/strong> 01:40<\/em><\/p>\n Bring me back a little bit to the problem you ended up looking to solve with Roof Maxx. Everyone kind of knows the story: you started to realize that shingles were getting worse in quality, and you were starting to see them fail at a faster rate. Why was Roof Maxx the direction you wanted to go, instead of sticking with a traditional roofing company?<\/p>\n\n Mike Feazel<\/strong> 02:02<\/em><\/p>\n So we started Feazel Roofing back in the mid-80s and built it into one of the larger companies in the country. It's still one of the larger companies in the country today. Over those years, as you said, things had changed with the manufacturing, and the manufacturers were kind of forced into that position. The cost of asphalt tripled; asphalt shingles tripled in price in a very short period of time in the early 2000s. In '08, during the downturn, we saw that people couldn't afford new roofs. So we pivoted and did a lot of maintenance, just helping people get more life out of their roof and save some money.<\/p>\n When we had an opportunity to sell in 2013, we started a company called Roof Revivers, which, as the name implies, gets more life out of a roof. So we had gone down that path. We didn't want to retire; we were still pretty young. Then we came across the product. It was originally used on roads, but some people had tried it with roofs. They were not effective at marketing it. The patent had pretty much sat on the shelf for nearly two decades, and there were only about three and a half years left on it when we got the rights to the formulation.<\/p>\n Since then we have a generation 2 patent. We did work with the Ohio Soybean Council and Battelle Labs, which is the largest research and development lab in the world, based out of Columbus, Ohio, and a lot of work with Ohio State University and other labs. Then we brought the product to market. Roof rejuvenation was not a thing. Now there's a lot of competition, which we think is great. It shows that there's demand.<\/p>\n And we're now at a point where, in the last 12 months, there have been eight articles in Roofing Contractor magazine about rejuvenation: some on statements I've made, some just talking about the overall industry. They're neutral to positive, which is very exciting. There really has never been a way to get a lot more life out of a roof. You could always do maintenance and repairs, caulking, replacing a missing shingle, but there was no way to extend the life of the asphalt shingle itself. And that's all rejuvenation does. We're putting an oil back in, helping the shingle remain malleable, contract and expand.<\/p>\n Then there's restoring a roof, which is doing the repairs: replacing a missing shingle, fixing some exposed nails or nail pops, putting caulking around flashings wherever it's needed, tightening down the flashings, and then rejuvenating the shingle, or maybe even cleaning the shingle before you rejuvenate it. That falls under restoration. We're restoring that whole roof.<\/p>\n This has already played out in commercial roofing. Today the commercial roofing industry is inspections, maintenance and repairs, restoration when it makes sense, and then replacement. The largest property owners and managers in the world now all work with what are called asset managers: a company that comes in, helps manage that asset and gets as much life out of it as they possibly can. That's really all we've done. We came in under the rejuvenation channel, and now we're expanding more into the broader roofing industry: residential, steep slope, just asphalt shingles, which is roughly 85% of the steep-slope market. Today about 80% of our dealer partners offer replacement or work closely with a referral partner.<\/p>\n When we started in the business, roofing contractors didn't want to become Roof Maxx dealers. Most roofers replace roofs, or they might do repairs. There really wasn't this maintenance model in the middle. So we had to go after business opportunity seekers to build the network, to build the distribution channels, and to get all of the TV ads and radio ads and all the things we do to drive demand. But now we've matured to a level where we've got a very mature network of contractors who really understand roofing. We're the nation's largest network of independently owned contractors that are maintenance first, replacement only when necessary. That's a very different thing from rejuvenation, which was this thing we put in the middle of the roofing industry, and we were always seen as competition. So we're making that, I don't want to call it a pivot, but that refocus. A lot of that has happened because of the marketing challenges of the last few years.<\/p>\n\n George Paladichuk<\/strong> 06:56<\/em><\/p>\n I think it's fascinating. I come from the seamless gutter and roofing industry. I've got a lot of great friends and business friends who own roofing companies or were salespeople. Historically, companies would chase the big-ticket items, whether they did it retail or through insurance. The goal was always to replace the roof. When they were canvassing or getting their inbound leads, they wouldn't really chase those repairs too heavily unless it was clear there would be a strong upsell opportunity into a full replacement. That's the beauty of roofing: you have these big tickets, and you can make all this money off just a couple of roofs. That's lovely.<\/p>\n I'm also starting to notice the same pattern you are. A lot of companies that traditionally would have been focused on that have either, number one, tapped out that market in their local area and are looking for ways to expand revenue per customer, and repairs, rejuvenation and maintenance are one of those ways. Or they're realizing that for all these years the big dogs have left behind these \"smaller\" jobs, quote unquote. They can still be in the thousands of dollars. But the big dogs have left them behind, and there's no strong player in my market that handles repairs, rejuvenations and maintenance for the residential market.<\/p>\n So I see a lot of companies that either strictly focus on those, or use them almost like HVAC or electrical does. They might come in and do a simple repair on an AC unit, or maybe the thermostat's broken and they replace it, just to earn that customer's business and loyalty and get them in their system, so that in the future they're much more likely to go with them for the big-ticket items. I'm seeing the same thing happen in roofing. A lot of companies are starting to notice that this rejuvenation or maintenance-and-repair piece, the smaller-ticket items, are, number one, sometimes a lot more profitable than a full replacement might be, and number two, a great way to get a customer into your bubble of influence. So later down the road, if they want a larger project or have a friend they might refer, you already have that customer acquired, if you will.<\/p>\n One of my favorite examples of this is Al Roofing, run by Tim Brown from Hook Agency and his partner. They're very well known in their community for chasing these smaller jobs, because they just want the customer to experience their brand and their company, so that in the future they leave a good reputation and become known in the community.<\/p>\n\n Mike Feazel<\/strong> 09:59<\/em><\/p>\n I think they work with Ugly Roof.<\/p>\n\n George Paladichuk<\/strong> 10:01<\/em><\/p>\n Yes, exactly.<\/p>\n\n Mike Feazel<\/strong> 10:02<\/em><\/p>\n Which is a great product. Those guys were traditional roofers who created that model, which I love, and they've stayed in the roofing space. We chose to go outside the roofing space because you couldn't build hundreds of contractors in the roofing space. Although that wave is coming, as this industry gets more mature.<\/p>\n\n George Paladichuk<\/strong> 10:22<\/em><\/p>\n Correct. So that being said, why do you think that's happening? Why do you think there's a large push toward maintenance and rejuvenation, and away from focusing 100% on replacement?<\/p>\n\n Mike Feazel<\/strong> 10:41<\/em><\/p>\n We have a perfect storm happening in the roofing industry. Literally, the stars are aligned. A, you have leads that are harder to come by, so you need to cast a broader net. Insurance is being taken off the table. There are more ACV policies, which are basically a prorated policy, so people aren't getting free roofs anymore, or fewer are. And I think over the next few years very few people will, unless they're paying an astronomical premium, and people just aren't going to want to do that. You don't wait for the paint to peel on your house and call your insurance company. Why would you do the same with the roof? But the roofing industry went that direction. It used to be that 3% of roofs got replaced by insurance, and it got to 33%. Well, they're getting that genie back in the bottle, and it might end up at 8 or 10%, but that market is dying. So you've got all of those contractors coming into the space.<\/p>\n Then you have the zero-click crisis in this new world of AI and everything that's happening there. Add on top of that, private equity has come into the roofing space. You're probably familiar with all of that. PE, which is great. Your friends, the guys who started Ugly Roof, sold. PE is very sophisticated. I think about 30% of HVAC companies are owned by private equity. They have annual inspection and maintenance packages that then lead to a high-end furnace. So it's lifetime customer value.<\/p>\n With roofing, there can be the annual inspection and maintenance package, and at some point rejuvenation in the middle. So you've got a small annual inspection and maintenance package, then rejuvenation in the middle, which is a much larger package, and then at the end of the roof's life, because all roofs do need to be replaced, you get into a replacement package. Or even a roof-and-solar package, because solar has entered the roofing space: GAF Energy, and CertainTeed has an integrated solar system. So now you have all of these things coming together at once. PE is very sophisticated. They will figure out a way to build a better model, and the roofing industry is going to dramatically change in the next decade. Roof rejuvenation will be a piece of that.<\/p>\n We're at the front end of pushing the model, but people are starting to get on board. We wanted to change the roofing industry; that was my brother's and my goal coming into this. But we chose a very specific path, because we went out to roofers and roofers didn't want to talk to us. And I'm a 40-year veteran. I love my industry, but everybody was busy doing what they do, which is replacing roofs and insurance and all of that.<\/p>\n\n George Paladichuk<\/strong> 13:38<\/em><\/p>\n Exactly. Ten years ago, that was the bread and butter. A hailstorm would come in, insurance would go absolutely nuts, and you would essentially just get free work. It was not hard to get jobs in the door.<\/p>\n\n Mike Feazel<\/strong> 13:50<\/em><\/p>\n Even up to just a few years ago. There was a roofing company in Atlanta, I don't even remember the name, but I know they went from zero to 100 million in three years, with a bunch of door knockers. Solar is sold door-to-door a lot, and a lot of roofing was sold door-to-door. I still believe door-to-door is one of the best paths. We have a lot of dealers, not enough, but we do have dealers who go out and sell door-to-door and do a great job with their business that way, and not just for rejuvenation, for roofing. I started my roofing company knocking doors, cleaning out gutters and then replacing roofs. I had my dad's borrowed ladder on my car, and that's how I started it. There's not a better way to get business.<\/p>\n So there is a new model emerging. The commercial roofing industry did it. It used to look very much like residential in the 80s and 90s, and then it started to change, and I think that's what we're helping happen, along with Ugly Roof and GoNano and all the others. What we're helping to usher in is a new business model within the residential roofing industry, which is more profitable for the contractor. It's better for the consumer. It has to be: if the consumer doesn't win, no model can be built. So you always have to go to the end and ask, are we bringing value? And if we are, it's a more profitable model. It's a more sustainable model for roofing.<\/p>\n\n George Paladichuk<\/strong> 15:13<\/em><\/p>\n And I think it helps. I was just about to say the same thing. It makes the consumer so much better off, because it gives them more, and less expensive, options for getting the same result, which is extending the longevity of the roof, or having a roof that is protecting the home. Ten years ago it was, patch up some shingles and call it good, or get a new roof. Now they have so many more options for what they can actually do to make sure their roof is sustainable long term, which obviously is a good thing.<\/p>\n\n Mike Feazel<\/strong> 15:46<\/em><\/p>\n I tell the dealers, and I tell any contractor this: our job is not to go out and tell a customer what they need. Our job is to go out, assess the roof, determine what is going on, and then find out what the customer needs. If you're telling me you're selling the home in a couple of years, you're going to put it up for sale next summer, rejuvenation might not even make sense. I might say, \"Let's just do a good tune-up here. Let's get the gutters tight. Let's get the roof cleaned. Maybe we want to treat those stains and get the black streaks off so the roof looks nicer. But you can sell this home with the roof you've got on it. Don't waste the money on a treatment.\"<\/p>\n I might tell other customers that where the roof stands right now is going to be an issue, and getting a treatment and a 5-year guarantee on that roof that you can sell to the buyer is going to be beneficial. And some people you have to tell, there's nothing we can do. You just have to replace the roof. Unfortunately, you're going to spend 20, $30,000. Nobody likes to hear that.<\/p>\n\n George Paladichuk<\/strong> 16:42<\/em><\/p>\n No. Especially with how insurance is going. So, you run this dealer model, which is fascinating to me, because when I was talking to your team beforehand, it very much mirrors a franchise model. A lot of your dealers take on the Roof Maxx branding and use it to their advantage, much like a franchise would. But you don't have a franchise fee. You just sell them the actual Roof Maxx product. Tell me why you decided to go that direction and why it made sense for you.<\/p>\n\n Mike Feazel<\/strong> 17:20<\/em><\/p>\n With a franchise model, I didn't want all of the detail and regulation involved. I spoke to a friend of mine who helped Renewal by Andersen build out their model, which is a dealer model. There are more dealer models out there. Renewal by Andersen runs under a brand, of course the Andersen brand; it's their own brand within a brand. But I wanted to build a nationwide brand. We have 24% name recognition nationwide, from surveys we've done, because of all of the TV advertising. We did just over $20 million in advertising last year nationwide. Those ads are driving leads and building the brand for the network, and that's why we want vehicles wrapped in a cohesive brand.<\/p>\n Most dealer models are: I have a product, I'm going to sell it to you, you have your own brand, say a gutter cover, and you go out and sell my product. But the gutter cover has no brand. With rejuvenation, because of the newness of it, the novelty, we felt it had to be sold under a brand. We also wanted to build the roofing brand. I've been telling the dealers for a long time that we would add in the third leg of the stool, which is the replacement side. Roof Maxx doesn't replace roofs. We sell a rejuvenation product. Our dealers do maintenance, maybe without selling our product, or they come in, do maintenance and apply our product, or they replace the roof if it needs it, and they do that under their own brand. So really, we're just a contractor network: a bunch of contractors, many of whom started in rejuvenation and have really broadened their scope into the residential roofing space.<\/p>\n Ultimately, I think there are opportunities, like I said, with solar. I think solar is one of the biggest opportunities in the future, as the cost of energy goes up with all of the power demand and grid demand we have. Battery technology, the storage technology, is getting a lot better, even sodium batteries instead of lithium batteries, and AI is going to speed all of this up.<\/p>\n So again, we wanted to have the household name in the residential roofing space, and we've achieved that in less than a decade. There is no national roofing company with a household brand. There are some national franchises, but if you do research, if you do surveys, they don't have a household name. Like I said, we're at 24% brand awareness within our avatar, which is the 50-plus homeowner. That's really who we've gone after. We'll start to expand that with our messaging, but right now I run ads on TV shows where there are old people like myself, because that's our avatar. Our customer is 50-plus. As we expand the roofing brand, that will go down into the 40s, the 30s, to all homeowners.<\/p>\n So we've just taken a different approach, and we like the dealer model. I also like the dealer model because I only sell you product, and I basically lease you my territory as long as you're here. If you get a territory and I take that territory off the market, you have to buy a certain amount of product flowing through that territory, because I've taken it off the market. That's a very simple agreement, and it makes sense. I just didn't want to sell territories and get into the franchise business. Not that it's a bad model. I just think this works better for what we do.<\/p>\n\n George Paladichuk<\/strong> 21:06<\/em><\/p>\n I love how you took the dealer model. It makes total sense, especially since your bread and butter is the product and the service it provides for the customer, not necessarily replacing roofs. You're not a roofing brand in the traditional sense. And it's interesting, because you essentially created this industry with the product. You were the first people to come out and do it. You have a very unique perspective on competitors, including the ones that are sometimes literally taking your stuff, whether it's marketing materials or products, slapping a different label on it and pushing it out as their own. How do you think about competition in your industry, and what's your philosophy around the industry you jump-started?<\/p>\n\n Mike Feazel<\/strong> 21:56<\/em><\/p>\n I've been in the roofing business for 40 years. There are 400 roofing companies in Columbus, Ohio. So I'm used to it, and I don't even want to say ripped off, because when I borrowed my dad's ladder and started a roofing company, the largest roofing company in the country, still to this day privately held, was Able Roofing, Mr. Roof, out of Columbus, Ohio. I followed everything they did. I tried a lot of things they did. Why wouldn't I? I think everybody does that in business. So I don't take it as a slap in the face. I understand they're just trying to build a business.<\/p>\n Where I can get a little frustrated, and it won't work over time, is where I see people coming in and making these huge claims with a product that has never been tested. They talk about testing and they don't have testing, and they make claims of a 12- or 15- or 20-year warranty. I don't think that helps the rejuvenation space. It can hurt it. But I don't believe most of those companies will be around for long, so they don't get a lot of exposure. If you're not advertising, if you're not all over the internet, if you're not on TV and the radio, if you're not spending millions of dollars, nobody knows you're there anyway.<\/p>\n So I understand that maybe they believe their product is going to last that long. I can't pass judgment on somebody I don't know anything about. But I don't fault anybody for trying. You've got to be in the game. You've got to be on the field, and they are trying, some with more success, others with less. That's just the way business works. At the end of the day, the winners are the ones who grind the hardest, who really try to meet the promise and don't look for shortcuts. When I was younger, I tried shortcuts as well. You get older, you get enough skin off your knuckles, and you just quit taking shortcuts.<\/p>\n And at the end of the day, as we said earlier, bottom line, you just have to pay attention to the customer. If that is your north star, our reviews show that. We're not perfect. We make mistakes. There are customers we have to give their money back to, and dealers make mistakes. You just try to live up to it, own up to it and be transparent. When mistakes happen, just own it, fix it and move on.<\/p>\n\n George Paladichuk<\/strong> 24:21<\/em><\/p>\n I love the competition. It's always good for business. And you're right, as you said at the beginning, it proves there's demand. If there was no competition, that would mean there's no one out there who actually wants to buy what you have to sell, so it's probably not the right business to be in. That's a great philosophy.<\/p>\n\n Mike Feazel<\/strong> 24:40<\/em><\/p>\n We had one of our dealers quit, wait out his non-compete, and now he's running another company, a competitor. I talked to a group of dealers the other day, and they were kind of ripping on this individual. I said, \"Not at all, guys. I don't see it that way.\" I've got no ill will toward this individual at all. He was well known in our company and our brand. I don't like how he went about it. He didn't come directly to me, and he tried to make it something I don't think it was, probably as a way to get away, because of what his intent was. If he had just come to me and said, \"Hey, Mike, I'm going to sit this one out for 3 years and then go compete with you,\" I'd have said, \"Awesome, buddy.\" I think his was a three-year non-compete.<\/p>\n We ask for non-competes from our dealers because I'm going to protect the network. Otherwise everybody would just jump in and out of this and go buy the next thing. There was a product called Roof Milk. I don't know if they're still around, and great if they are. But building a brand is difficult. Trying to get 300 people rowing in the same direction is difficult. So you have to put things in place that protect those who stay with the brand.<\/p>\n Those who leave, I have no issue with. We just had a dealer who shut down his dealership and went with Lance Bachmann, if you know who Lance Bachmann is.<\/p>\n\n George Paladichuk<\/strong> 26:09<\/em><\/p>\n Yeah, we actually had Kelly Miseres, COO of LB Capital, on the podcast not too long ago.<\/p>\n\n Mike Feazel<\/strong> 26:14<\/em><\/p>\n Build it to sell it. Lance was the keynote speaker at our conference a few years ago. Tommy Mello is the speaker this year. I love what Lance is doing. This dealer kind of felt bad about it, and I told him, \"No, no, no.\" This guy's 60 years old. He's got an opportunity and he's super excited about it. Why would I ever want to hold somebody back from something they're excited about? He was no longer excited about Roof Maxx. Trust me, there are days I'm not excited about Roof Maxx. But by and large I am, and I battle through those days like we all do in business. Every day is not a great day in business. It's business.<\/p>\n You want everybody to win, as long as they're playing fair and they're not stabbing you in the back or telling half-truths. But you're going to deal with a lot of negativity. The bigger you get in business, the more exposure you have and the more people are going to talk negatively about you. That's to be expected. I don't spend too much time focusing on what other people think or say about me. I'm the one who has to lay my head on my pillow at night and know that we're treating our dealers fairly, and our partners, and more than anything the customer. So it's all simple.<\/p>\n\n George Paladichuk<\/strong> 27:21<\/em><\/p>\n Right on the money. And I think it's funny that the largest and most successful companies are always the ones that attract the highest-quality talent, and the highest-quality talent are always the ones most likely to leave and start their own thing. One of my favorite business minds of our generation is Alex Hormozi, who has Acquisition.com. I was just at their headquarters in Vegas talking to some of their staff. The guy I was talking to was about my age, so early 20s, and I asked, \"How long have you been here? What's your goal? Do you want to stay with them?\" He said, \"Within the next two to three years I'll probably go out and start my own wealth management firm.\" I said, \"That's fascinating. That's so cool.\"<\/p>\n Obviously Acquisition.com is a very entrepreneurial-minded business, and they promote that type of thinking in their organization. So I asked him, \"Is that pretty common in the company, people wanting to go on and start their own thing?\" And he said, \"I think 70 to 80% of the people at Acquisition.com are either planning on leaving within the next however many years to start their own thing, or already have.\"<\/p>\n\n Mike Feazel<\/strong> 28:45<\/em><\/p>\n And I bet Alex, I don't know him, but I bet he really supports that, because I think a great leader should. The first company I worked with out of high school, I lived with the owner's son, in his home. We were good friends of the family. When I started my roofing company, my roofing company was a phone number and my dad's borrowed ladder on top of my car. Mind you, his father made me move out of the house. I got thrown out of the house. It cost me a relationship for a number of years. We never rebuilt that relationship fully. And I just thought, this guy is established, he's got money, he's a mature adult. I'm a young kid wanting to do better, and you're going to try to hold me down? So that really set the stage for how I felt about those things.<\/p>\n I got an email last week, and I called this guy. I had not spoken with him for 35 years. He emailed me and said, \"I don't know if you remember me, but you and your brother pulled me into the office in the early 90s and said, 'We think you're wasting your time.'\" He was a talented young man: \"I'm not sure why you're climbing roofs. You can do so much more.\" He stayed there another year. I don't even remember the conversation. And he said, \"Today I am the sales manager of a $70 million company, which is part of a much larger brand. I just wanted to say thank you.\" I think he saw an ad on TV with me in it and it just popped into his mind. I loved it. I called him to see how he's doing. I remembered the young man.<\/p>\n So I think if we all have that attitude, how can we all win together? Tommy Mello definitely has that attitude. I know Lance does. If a contractor wanted to interview or walk through Lance's facility, or do a tour with Tommy Mello... If you follow Tommy Mello, all of the HVAC guys did that for Tommy. He went out and did shop tours, and he started to rethink the way the garage door business looked. Guess what he did? He just sold the thing for $2 billion. Tommy's somebody who wants people to win. Lance is somebody who wants people to win. I don't think you can get to a certain size in business if you want to hold everybody back. Do I want our employees to stay? Absolutely. But if they're going to go do something else, I'm going to support that too, because I want them happy. Some people are meant to own businesses, and some people are meant to work for other people.<\/p>\n\n George Paladichuk<\/strong> 31:26<\/em><\/p>\n Very true. And I think at the end of the day, your employees are what make a business run. Obviously you have marketing and sales and finance, but all of those tasks that need to get done, marketing tasks, finance tasks, can only be done by people. If you're not actively trying to develop your people, empower them and support them with what they want out of their life and their career goals, those people will eventually leave you. So in order to attract and retain good talent, you have to make it very clear, not only in your own branding but also in the way you treat current and past employees, that you're actually here to support them and their dreams. A lot of times, not always, but a lot of times, for those A-player-level people, that means learning as much as they can and then going to try something for themselves. And you have to be okay with that if you're looking to get those A-level players.<\/p>\n\n Mike Feazel<\/strong> 32:30<\/em><\/p>\n Especially when you're bringing in young talent like yourself. How old are you?<\/p>\n\n George Paladichuk<\/strong> 32:35<\/em><\/p>\n 22.<\/p>\n\n Mike Feazel<\/strong> 32:36<\/em><\/p>\n You're wet behind the ears still, but you're out there doing it. You're making it happen. You're not afraid of it. You're a very talented young man. You would be great in our company, but you're not going to stay here, because I think you are an entrepreneur. You wouldn't be doing this podcast and the business you have otherwise. You didn't even make it that long: you were 22, or 20 or whatever, when you started your business. I was 21 when I started my roofing company.<\/p>\n So everybody's different, and there are going to be people in our company who stay for life, and that's great too. It's great with all companies. At our old roofing company, one of my brother's and my closest friends is still at Feazel Roofing. He's the longest-serving employee at Feazel Roofing; he was on the roof with my brother and me back in the '90s. He works in the commercial division, in sales. He's been there forever. I love it. It's great for him. He's happy. He loves the owner, loves the company. It's for you to decide, not for me, what you do with your life. There is no right and wrong path. There's just a path.<\/p>\n\n George Paladichuk<\/strong> 33:41<\/em><\/p>\n Exactly. Walk me through what happened on that fateful day, September 14th. I want to get into the nitty-gritty now. Your team and I talked about it a little bit before, but for people who are not familiar: there was a day around this time last year when Google kind of flipped the switch. Walk us through that.<\/p>\n\n Mike Feazel<\/strong> 34:00<\/em><\/p>\n Last year at this time, we were generating 2,500 leads a week that were going to the dealers, probably 3,200 or 3,300 leads a week in total, because we don't have 100% US penetration. We had seen things changing. On CPL we were getting upward pressure as the AI overviews on Google became more prevalent. Then, I'm trying to think of the name of the product that came out, Blaze, which was an AI search, OpenAI's browser, openly going after the $300 billion pay-per-click market. Google owns two-thirds of that market, a couple hundred billion dollars' worth of market share. And right at the release of Blaze and their announcement, Google went all in on AI overviews.<\/p>\n For people who don't understand zero-click, the zero-click crisis, just search it. If you're running a branded TV ad or radio ad, people then come and search for you on the internet. They used to click on a pay-per-click ad, or click on our organic website, and we would have them on our landing page and tell the story the way we crafted it, with a funnel and a flow. We spent a lot of time getting the conversion rates from 3% to 5% to 8%, A\/B split testing like crazy. You've done that. Everybody has. Now, all of a sudden, what shows up is this random, basically landing page thing called an AI overview that was not very accurate.<\/p>\n It said our reviews were polarized. Our reviews aren't polarized. If AI had read Google's own reviews, it would see that we're 4.9 stars on nearly 20,000 five-star reviews, over 20,000 reviews. Now it is much smarter, and it understands that homeowners love us and contractors question us. Well, of course contractors question us. They want to replace roofs, so they see us as indirect competition. So they put out pieces, and actually most of the pieces I've read or watched are pretty accurate. They don't knock Roof Maxx or even rejuvenation. They just say it's not a magic bullet. Well, guess what? They're right. Roof Maxx is not a magic bullet. If there's bad decking, Roof Maxx isn't going to do anything. You've got to rip off the shingles and replace the decking. If all the flashings are failing, Roof Maxx is going to do nothing. You need a structurally sound roof that is just drying out. Put the treatment on it, give it a little love, a tune-up, maybe clean it, and now you get more life. It's pretty simple.<\/p>\n So our lead cost went from an average in the 350 range to well over 600. It didn't 10x, but it doubled, and even tripled in some markets, to the point where we had to shut off our national marketing. We had not done that for three years. We shut it off and we didn't turn it on until spring. We had to rebuild a whole new national advertising program, a new platform that delivered the leads. We didn't get that 100% right, so we had to tweak it. We just launched that a month ago, and now we're back on the climb again with leads. We won't get back to 2,500 leads a week this year, but we will by spring, assuming the algorithm doesn't change again.<\/p>\n\n Mike Feazel<\/strong> 37:47<\/em><\/p>\n Because we are in the very early days of AI and massive disruption. People are saying that in the next 12 to 18 months websites may be a thing of the past. Probably by '27 there will be more agents online than there are humans. Muse just came out. Now my 82-year-old father will be able to use an agent to go book his flight, and he has a hard time turning on his phone. He's 82. We had to pull the flip phone out of his hand and get him an iPhone four years ago. Now he loves his iPhone. So you don't have to be technically sound to use the new versions. And that's what Muse is. I think it's got more downloads than ChatGPT did, and that was the fastest-growing app ever. Now Muse is the fastest. So you're seeing all of these disruptions. Marketing is getting massively disrupted.<\/p>\n There's a national flooring company. I'm not going to say their name. One of my partners went to law school with a guy who's with the investment bank that bought it; it was part of a rollup. This company's been around for years. They had done $90 million in profit, in EBITDA, in 2024. Last year they did seven.<\/p>\n There's a national ad agency we had worked with, a great agency. I'm not going to mention their name either. They're losing huge accounts from household brands, which are going to other agencies because they think it's the agency not understanding. I think people are starting to become aware that it's not the agencies. You're a marketing guy. How many of your SEO buddies are having a hard time? How many of your marketing buddies are having a hard time? How many people in marketing are having a hard time, online, offline, direct mail, doesn't matter? Everybody.<\/p>\n The biggest change in 40 years for me in home services is the last 12 months. I believe we've got another 2, 3, 4 years of this turmoil. I think anybody who is really paying attention needs to get on the doors. I'm not saying not to do marketing. You've got to do marketing. But I'm always preaching to the dealers to build out a door-to-door program. There's no way you can do a job and not go talk to the neighbors and introduce yourself. Not to try and sell them something. Just let them know what you're doing, hand them a business card: \"You're going to see me in the neighborhood.\" There has to be a better way. And right now, the only thing I know that's not going to get disrupted is doors.<\/p>\n\n George Paladichuk<\/strong> 40:40<\/em><\/p>\n You're on the money. To break it down for people who might not understand the marketing world as much: the reason you're seeing a lot of marketing channels that used to work really well not work as well anymore, and the reason you're hearing a lot of talk and examples like Mike's of lead costs going crazy, is that the platforms are fundamentally changing how they deliver information to their users. The two biggest examples are Google and Meta. Google had the AI overview, which is an insane thing, because now there's what's called zero-click search. That's been a thing, but zero-click search has skyrocketed over the past 10 to 12 months, because AI overviews got really good, and now people can find any piece of information they want.<\/p>\n\n Mike Feazel<\/strong> 41:38<\/em><\/p>\n That is the new landing page. That is an AI overview. That is not my landing page that I could A\/B split test. And that's the challenge.<\/p>\n\n George Paladichuk<\/strong> 41:47<\/em><\/p>\n People are using the information they get from things like AI overviews instead of going the traditional route, like Mike said: clicking on an ad, clicking on a website, looking at the Google Business Profile. They're getting their information elsewhere, because the platforms are changing how they serve that information.<\/p>\n Number two is Meta. I think it was around this time last year that they released Andromeda, which was their biggest update on how they deliver content to their users. You've heard a lot of conversations about how, with Andromeda, you don't really see your followers' or friends' posts as much. You hear everyone talking about it: \"What happened? I don't see any of my friends or the people I follow anymore. What happened to all the stuff my grandma was posting? Now I just get all these BS pages on my feed that I don't even follow.\" Well, why is that? It's because social media is no longer a thing. It doesn't exist. It is now interest media. Interest media serves you content based on what you interact with and what the algorithm, the big scary algorithm, recognizes that you like. That might be something you pause on and read, or something you actually like or share. The way they calculate it is unknown, but it's based on what you're actually interested in, or what the algorithm thinks you're interested in, not on who you follow.<\/p>\n\n Mike Feazel<\/strong> 43:14<\/em><\/p>\n And that's the biggest opportunity in marketing, George, now. But if you don't put out value... It doesn't matter whether you have a thousand followers or 100,000 followers or a million followers. Now you can put out a great piece of content that's of value, because that's what a great piece of content is: it's valuable to people who are searching. Now all of a sudden the algorithm favors you, where you used to win because you had a million followers.<\/p>\n\n George Paladichuk<\/strong> 43:46<\/em><\/p>\n Exactly. Now, as long as you're putting out pieces of content that people find relevant to them, you will find a pocket of people it's relevant to, and that content will perform well based on the interests those people have. What people are finding now, especially with Facebook ads, is that you used to be able to have a lookalike audience or a custom audience you could run to. You would have this audience, throw a bunch of ads at them and figure out which one worked. Now it's throwing a bunch of ads at the algorithm, which then finds the audience for you, because its targeting is way better than your own targeting could be, with Andromeda. Those ads then go to different pockets of audiences based on what they're interested in, what Andromeda recognizes as their sphere of things. People are having trouble because they don't understand how to work with Andromeda, which in my opinion is one of the best things that's ever happened to marketing.<\/p>\n The second piece is the AI overview and the SEO challenge. AEO and GEO and all of these fancy terms for how to get AI search, whether it's AI overviews or ChatGPT or whatever platform you want to use, how to get those agents to recognize your brand the same way Google used to with traditional SEO, is kind of a big black box. Some people have all these opinions on how you do AEO, that it's all in Yelp and reviews and all this. Other people say it's fake and you really have no control over it. That's the big reason all these massive marketing agencies are losing accounts. It's not because they're bad marketing agencies. Everything changed at the drop of a hat, and no one really knows how to go forward. It's all just trial and error.<\/p>\n\n Mike Feazel<\/strong> 45:30<\/em><\/p>\n I think that with you explaining that, and then you uploading this, and then the LLMs crawling and reading this information, they may find me and they may find you. And I'm guessing that's one of the reasons you do this podcast. It's certainly one of the reasons I'm on this podcast: to give valuable content to contractors or franchisors or franchises, I don't care. But also so I can train the LLMs to understand what Roof Maxx is, what our business model is, what we're really trying to do. So it's putting out quality content at scale to become relevant.<\/p>\n I think that's just always been business, but there is definitely a new way it has to be done. As you said, it's interest media, and that intent is getting smarter, and it's going to be a better world for everybody, because I don't want to see a bunch of crap on my phone. I want to see stuff that's relevant to me, not relevant to you. But if it's relevant to me and somebody's putting out content, and you happen to be the person who put it out, I might connect with you, if I think you're authentic and you're not full of it and you've got a good offering. It's very simple. There's no magic to any of this. It's making the world more transparent.<\/p>\n\n George Paladichuk<\/strong> 46:43<\/em><\/p>\n I think it's giving people more of what they want, which is stuff that's relevant to them. And it's incentivizing advertisers and creators to put out pieces that are actually of quality and actually relevant to an audience. You will get severely punished, by just not showing up anywhere and not getting your content to spread, if you're putting out BS stuff.<\/p>\n\n Mike Feazel<\/strong> 47:09<\/em><\/p>\n Or AI slop. They talk about AI slop. AI can be used to help put out content at scale, edit things quicker, come up with more headlines, split test and all that stuff. But at the end of the day, it still takes a human and their experience. That is not going away, at least not anytime soon.<\/p>\n\n George Paladichuk<\/strong> 47:30<\/em><\/p>\n Exactly. With our own marketing, we're starting a newsletter as of today. Part of the benefit of it is that it's 100% handwritten by me. I spent money and my time on a copywriting course to make my writing better, and I am now handwriting long-form articles, which used to be the norm for decades.<\/p>\n\n Mike Feazel<\/strong> 47:58<\/em><\/p>\n Are you talking about holding a pen on a piece of paper?<\/p>\n\n George Paladichuk<\/strong> 48:01<\/em><\/p>\n I'll draft it out on a piece of paper, but I do type it out. It's all me. It's all written based on my experience and how I would like to craft the message, and there's no AI at all. Which, yeah, takes a lot of time. I spend 5 to 6 hours per day creating and ideating on content, but that's what makes you stand out.<\/p>\n\n Mike Feazel<\/strong> 48:19<\/em><\/p>\n Exactly. And I tell you, there are a lot of deep learnings that come from that as well. The ideas flow in a different way than just telling AI to give me something creative. I sit and spend probably two or three hours a day conversing with AI and having it run reports and studies on different ideas I have. That used to take me a week of research, and now I can do it in a 20-minute conversation. Twenty minutes later, I've got an eight-page document that gives me deep insight into something.<\/p>\n\n George Paladichuk<\/strong> 48:49<\/em><\/p>\n So there's definitely a place to use it and a place not to use it, which I think you're doing a really good job at. We're closing in on time here, so I want to do a couple more questions before we head out. To wrap up the whole conversation about marketing and AI: what are you doing now to bring those lead costs back down and change the way you're marketing? What is your initiative going forward?<\/p>\n\n Mike Feazel<\/strong> 49:14<\/em><\/p>\n We're using a lot of AI. A lot of marketing is in the rearview mirror: what happened last week, last month, and you're trying to adjust. Now we're using AI so we can look through the windshield into the future. You take a lot of the data that's coming in, and now you're looking at that data to forecast messaging: what's getting people's attention, what's not, A\/B split testing, messaging on landing pages, pay-per-click, everything. So we're doing a lot there, which has helped us bring it back down.<\/p>\n And putting out content so AI can understand us in a new way. AI right now sees us as a product, and I don't want to be seen as a product. We had to be a product to get into the market, to create the industry, to create the niche. But we're becoming more of a network of contractors, and that's really what we are. Because our dealers are doing roofing, they need to be able to monetize the entire customer lifetime value. That's what matters. They need to be able to make money when they go out and a roof's not old, so they can be the person who goes out every year, cleans out the gutters, gets the debris off the roof, and makes sure the rubber gasket didn't dry-rot or the caulking didn't pull away from the chimney. Just general maintenance. Make money every year and build that relationship, so they're getting referrals from friends, family and neighbors, and repeat customers. Treat when they can, replace when it needs it. Whether or not they decide to get into solar doesn't matter. Whatever they want to do. We've got dealers who are now doing pressure washing. Our dealers have gotten creative because they've had to.<\/p>\n We're down on revenue. When you're down on leads, you're down on revenue. When you're down on revenue across the network, your dealers are struggling. This is no different from when I've struggled during recessions: the '08 downturn, the Great Recession, or right after 9\/11, when the market was pretty weird. So I've seen this a number of times over the years, but it's magnified when it's across all of our dealers. They're really struggling, and they don't understand the things we've discussed about the marketing. I've talked to them about it a lot, and they can go out and research it and see that I'm not blowing smoke, but it still hurts when you don't have as many leads as you were getting. It still hurts when you're not turning the revenue you were turning.<\/p>\n But we're getting through this period. We're building it back up. I'm prepared for the next shock, because I think there's going to be another one, and another one. Will it be marketing? I don't know. Is it going to be $10 diesel? It's $6.57 now, and that's going to push through and create inflation. So we live in weird times. Anybody who's a business owner just needs to be prepared for more things to happen. As I think anybody can attest, more crazy things have happened in the last 10 years than in my previous 30. There is this acceleration. Some call it the singularity, if you're familiar with that term. Whatever. But there are a lot of things happening, and it's great change. Change creates turmoil. People don't like change. They like certainty. But we live in uncertain times.<\/p>\n\n George Paladichuk<\/strong> 52:58<\/em><\/p>\n Entrepreneurship as a whole is uncertain. If you look up the definition of entrepreneurship in the dictionary, I'm pretty sure it says \"uncertainty\" right next to it.<\/p>\n\n Mike Feazel<\/strong> 53:06<\/em><\/p>\n I read a report from Tony Robbins. The failure rate for small businesses used to be that they typically failed within three years. I think after 5 years you've got 20% left, and after a decade you have 5 or 8% left. Since COVID, the failure point is down to one year: people are failing within a year. And I think in the last couple of years those numbers are really magnified, because if you started a business and didn't understand everything we talked about with marketing, you entered your new journey trying to find business in the most difficult time in history to find business.<\/p>\n\n George Paladichuk<\/strong> 53:48<\/em><\/p>\n Tell me about it. I did, and I have been, and it's interesting. But to your point, the saying is \"hard times create hard men.\" Yes, it's hard now, but if people can figure out how to grow and win in business during times of turmoil, imagine how much farther ahead they're going to get during times of peace and relaxation.<\/p>\n\n Mike Feazel<\/strong> 54:17<\/em><\/p>\n My nephew is a little bit older than you. I had lunch with him before we jumped on the call. He's here visiting my sister. He just graduated college, and what's he going to do? I said, \"Whatever you do, have it be fun. Go deliver pizza to make money on the side. Go drive Uber, DoorDash, Uber Eats, whatever the hell you're going to do, but then go find this passion project and don't worry about the money.\" He loves marketing, so he's got some ideas, and I'm like, just go test and fail and fail and fail, and love it, and learn to embrace it. Because it is the failures that will strengthen you. It is not the successes. Successes will spoil you and set you up for massive failure, because your ego gets out of control. It is learning to embrace failure and struggle, and staying positive while you're going through all of that.<\/p>\n And trust me, I have my days. I'm 60, so I have my days. I'm like, \"What in the hell am I doing? Why am I still doing this? Just retire and hang it all up.\" But I know I'd go crazy. My wife would probably leave me. And I do enjoy this at my core. I really do. But business is tough. You're right. I think you learning to grow your business through these times will make you more resilient.<\/p>\n\n George Paladichuk<\/strong> 55:41<\/em><\/p>\n Tough times build strong people. We're coming into a tough...<\/p>\n\n Mike Feazel<\/strong> 55:44<\/em><\/p>\n Well, they say great times create weak people. Weak people create bad times. Bad times create strong people. Strong people create great times.<\/p>\n\n George Paladichuk<\/strong> 55:58<\/em><\/p>\n It's just this loop.<\/p>\n\n Mike Feazel<\/strong> 55:59<\/em><\/p>\n Virtuous loop.<\/p>\n\n George Paladichuk<\/strong> 56:01<\/em><\/p>\n It's a virtuous loop. Two things left and we'll close it out here. Number one, I can't believe you're 60. You look like you're 45. So congratulations on that. That's insane. That was the biggest surprise of this whole episode. And number two, where can people find you? What are you working on? What's something you want to leave the audience with? And where can people find you if they want to learn more about Roof Maxx, potentially becoming a dealer, or just following along on your journey?<\/p>\n\n Mike Feazel<\/strong> 56:28<\/em><\/p>\n Roofmaxx.com. There's a \"become a dealer\" button there that will take them to another page where they can learn about that. If anybody is having a challenge, I'm always happy to give free time to talk to a contractor who's struggling. I do it quite a bit. I've got a lot of friends, or people I've been referred to, not just our Roof Maxx dealers, outside of it too. I really enjoy the business and coaching people. I'm happy to jump on a quick call and at least give you my two cents.<\/p>\n Things are tough. The roofing industry is having a tougher go than the rest of the home service world, because the insurance element is shrinking as well. So now you have way too many contractors, an oversaturation of contractors in a shrinking pie, because a big piece of that pie is being taken away by the carriers, rightfully so. There's still a need for insurance. There's still a need for restoration. There always will be. But just because a shingle blows off, I don't think somebody deserves a new roof, because it makes my premium go up and your premium go up. So things are switching to ACV policies quicker than at any other time in the insurance industry. There's just this restructuring of our industry.<\/p>\n I'm talking to some very successful contractors who are really, really struggling. I know a lot of the private equity firms are struggling. Ken Kelly is a friend of mine. He was a member of an organization I had called Roofer Success International back in '04, and he had a $60 million roofing company that he sold to private equity. He just bought it back in the last month or so. I sent a note over congratulating him. He's going back in to save that company, because all the employees were losing their jobs. Ken's a great guy, and he's doing the right thing.<\/p>\n And it's not because private equity is wrong. Some PE firms are not great, just like in any business, but there are a lot of really smart guys out there in PE, and they're not going anywhere. They're going to help bring this industry into a new phase. Rejuvenation is going to do that. The market will mold it in that direction. Contractors will start to learn to become a full-service contractor: I don't care if it's Roof Maxx or not, but pick your poison, some rejuvenation product within that full package, and become the roof asset manager, the lifetime contractor for that property owner and their friends and family. There's not a better place to be than the roofing industry in the midst of the turmoil we're having. So for those roofers out there, you have a huge opportunity. Take advantage of it, but you have to see things a little bit differently.<\/p>\n\n George Paladichuk<\/strong> 59:15<\/em><\/p>\n 100%. Well, we appreciate you coming on the show. Lots of wisdom dropped on us today. I love getting industry vets like you on, because, number one, clearly you have the expertise and the track record to back it up. But number two, especially for someone like yourself who's been around the industry for so long and is still pushing just as hard, you can tell you have a true love not only for the industry itself, but for the people in it. So thank you for coming on and showing that love.<\/p>\n\n Mike Feazel<\/strong> 59:44<\/em><\/p>\n Proud roofer.<\/p>\n\n George Paladichuk<\/strong> 59:46<\/em><\/p>\n Well, thank you for being one, and thank you for coming on to share your knowledge with the rest of the industry.<\/p>\n\n Mike Feazel<\/strong> 59:51<\/em><\/p>\n Awesome, buddy. Great to meet you, George. I appreciate you having me on.<\/p>\n\n George Paladichuk<\/strong> 59:54<\/em><\/p>\n Awesome. Have a good one.<\/p>\n\n Mike Feazel<\/strong> 59:56<\/em><\/p>\n You, too.<\/p>","guest_name":"Mike Feazel","guest_role":"Co-Founder and CEO of Roof Maxx","guest_market":"","guest_bio_line":""},"yoast_head":"\nWhy roof rejuvenation instead of roofing<\/h3>\n
The small jobs the big roofers leave behind<\/h3>\n
The perfect storm in roofing<\/h3>\n
Why a dealer model instead of a franchise<\/h3>\n
Copycats, competitors and dealers who leave<\/h3>\n
Thrown out for starting a roofing company, and an email 35 years later<\/h3>\n
The day Google flipped the switch<\/h3>\n
AI agents, a flooring company's $90M-to-$7M year, and the biggest change in 40 years<\/h3>\n
AI Overviews and Meta's Andromeda update<\/h3>\n
Teaching the AI who you are<\/h3>\n
Bringing lead costs back down<\/h3>\n
Small businesses are failing faster, so learn to embrace failure<\/h3>\n
Where to find Mike, and roofing's restructuring<\/h3>\n