Ep 151 - "Holding The Line, With Ed Cross"

0:00 What's up, dude? Hey. Well, we're back from a little road trip. A little road trip. Yeah, we're a little road tripping up north to Canada. Went up there, a boat up there. We went to Canada. No, actually we went to Mexico, didn't we? Yeah. But we were hanging with Canadians, which was super fun. That was interesting, bro. Yeah. I don't know how many palm trees and... Yeah, probably not many. You know, white sand beaches there are up there. I'm sure there's some. Actually, they're probably getting ready to do some ice fishing. Yeah. Or it's not that far. That was quite the brain fart right there. It was a little bit of a... Yeah. Yeah. I really appreciate how you... Rhymes with Cancun. I really appreciate how you hyper-indexed on it. That was super helpful too. So remind me... Mind me. So moving along. We've got... Mind me later. You've got my back. That's good to know.

0:40 Confidence. You know the three questions? Chris, have we ever talked about the three universal questions? I just feel like you answered no to all three of them simultaneously for me. Should we just restart this intro or should we let it ride? We're riding. Let's let it ride. Hey, man. That's how it works. Today, we had a really great chat with Mr. Ed Cross. Dude, I... Yeah. Every time. He just really... He's top tier, man. He's really top tier. I think one of the things that you and I've always appreciated about him, and we were just talking about this again, is just he is so professional. Yes. You know, he's so professional. He's so thoughtful about the way he conducts himself. And I think the other thing I really appreciate, this is going to be an episode, by the way, for all of you listening, that you'll likely want to share with your team.

1:24 I think so. Ed is so good at this. He's so good at role-playing certain word tracks and conversation themes. Yeah. And there's quite a bit of that this time. Big time. Just in terms of how we can do a better job stage setting with our client, establishing the right kind of relationship with our homeowner or property owner client. relative to the other parties that often get involved in a claim. His words are just so great. So it's going to be one of those episodes as you go through this where you'll probably hit that little backwards 10 seconds. You'll have to blast back and re-listen to some of these sections because the way that he conveys things is so good. It's a really, I think this episode is going to be a really great learning tool and teaching tool for teams listening to this.

2:07 Yeah, I think so as well. I mean, it's just a good overall review of how are we carrying ourselves? How are we taking extreme ownership, really, in the way that we behave and the way that we execute on the role as claim steward, right? As guide. Being the contractor, the one that is the professional that is responsible for establishing the scope of services and ensuring that our client gets taken care of. It's a good listen. Ed Cross crushes as usual. He brings years and years and years of experience, not only working alongside restoration contractors, but defending them when it really matters. And the guy is balanced, calm, consistent, and very professional.

2:47 Yeah, and as, you know, Ed's on, he's in the media all the time. Yeah. You know, he's in industry. Rightfully so. He writes and publishes articles and does all those things. And, you know, like we always try to do, I think we got some fresh takes. I think we got some, there's some new stuff. Even if you're a big follower of Ed and you appreciate his insights, there's kind of some fresh angles in here. And so we go in some territory that I haven't heard him go over a ton. So anyway, it's awesome. Buckle up. Buckle up. Check it out. Wow. How many of you have listened to the Head, Heart & Boots podcast? I can't tell you that reaction, how much that means to us. Welcome back to the Head, Heart & Boots podcast. I'm Chris. And I'm Brandon. Join us as we wrestle with what it takes to transform ourselves and the businesses we lead.

3:32 This new camera angle makes my arms look smaller than yours. I'm noticing that and I really appreciate it. I thought you did that on purpose. No, I don't. I didn't. And I am not happy with it. Hey, y'all. Thanks so much for listening to the show. Hey, if you're not already following, please do so. And ultimately, share. The coolest currency that we have in terms of supporting this is share it with a friend. Share it with somebody, a colleague, a peer, one of your downline team members. Let them be able to take advantage of the information you're already leveraging in your favor. And finally, guys, if you hear a show that really moves you, that really moves the needle, will you please leave us a review? Those five-star reviews help us a ton.

4:13 Right on. And listen, if you're trying to grow your business, you might consider checking out Floodlight's Business Opportunity Audit. It's free. We provide it at no charge. It's actually what we use to assess new clients as they come in. It's a 110-point assessment for your business. And we've now decided to give access to the general public for it. So go and take our business opportunity audit at floodlightgrp.com. It's going to help you identify the biggest gaps and opportunities in your business right now. And at the end, it'll assign you a health score to let you know exactly where your business stands right now. So go check it out, floodlightgrp.com forward slash audit and take the BOA. It's a great way to get a pulse on your business.

4:53 Well, my friend, Ed, thanks for joining us. It sounded like you were on a rock tour recently. We were chatting a little bit before we hit record here. You are one heck of a busy man right now. Yeah, it's been a lot of fun. I've been all over the country. I've been to a bunch of regional meetings and senior restorers and pressing the flesh out there, breaking bread with some of my brothers. And it's been a lot of fun. So glad to be here. Thank you very much for this invitation. Yeah, this is going to be super fun. So Chris and I, after we got done, we were just chatting. The last time we saw you was at The Experience. And both of us actually attended one of the sessions that you did there. And you brought the fire as usual, hitting hard at some of the behaviors, the tools that we can adopt as restorers.

5:38 And I think a few of us anyways, post-conversation, we're just chatting a little bit, but like, Why is it so hard for us to adopt some of these behaviors? And there was a lot of people in that room that was chatting along with us, Leighton and some of the other leaders and influencers in the industry right now. And I don't know that we could put our finger on the silver bullet, but there was this general consensus that restorers want the help. They want to change the outcome, but we're struggling to change some of our behaviors and, And so my hope today is that the three of us can have some dialogue around what some of those mental challenges are. And of course, we're going to want some good reminders from you just in terms of some of those tools and resources you've been traveling the world teaching.

6:22 And we're going to solve all of those problems. Oh, good. That's right. Pay attention, everybody. That's right. We're going to solve it all in 45 minutes. Your entire business will change shape. Outstanding. It's a great plan. I love it. Good luck to you. I don't know. You know, I think, Ed, like the biggest thing for us, and we probably need to hear it a million times. What are, from your perspective, I think let's start here and see where it takes us. What are the, from your world, the top two or three tools or actions that we're not leveraging consistently that I know you've talked on a lot? What are those again? Let's just set the stage. Yeah. Well, for me, I think it's vitally important in this day and age of restoration for contractors to seriously consider developing their own prices independently, making prices that are customized for their businesses.

7:16 And recently, the RIA, in conjunction with KnowHow, put out the pivotal report, the cost of doing business report. And in there, the association has taken a very strong and specific position. And it says that restorers should advocate for independent pricing that reflects their true operating costs. And we do a lot of surveys of our clients and we find that the Xactimate prices are not right for their company because they're based on assumed labor wages that are not accurate. That needs to be changed. So the pricing paradigm is shifting.

7:57 That's a big one. Obviously, there's the documentation piece. Some people are probably wrong. sick of hearing about documentation on and on ad nauseum ad infinitum ad absurdum more documentation more documentation there's kind of a crazy swing that's going on now that some adjusters have gotten so hungry and aggressive for documentation they're starting to ask for photos in a real silly kind of way while you're you're billing for latex gloves but you didn't for the glove. It's a little bit out of control out there. The documentation that restorers submit should tell a story about who did what, where they did it, when they did it, why they did it, The file should speak for itself so a third party could look at it years later with no access to the eyewitnesses and be able to reconstruct the key events of that particular claim.

9:00 And then the third one I would list would probably be... working on skills when it comes to relating to and negotiating with adjusters. And restorers, again, are leaving a lot of money on the table because they don't know how to navigate these particular situations, and they haven't had enough guidance from people who've been on the other side within the insurance companies to understand the limitations that an adjuster is under, what an adjuster is allowed to do, how their performance is evaluated, and the ways that you can get to a reasonable result on a claim without giving up the farm. You know, it's interesting.

9:40 I feel like one of the words that you use there, and I'm assuming this is fairly intentional knowing you, is negotiating versus fighting. One of the things that I just really respect about you, Ed, versus maybe some of the other types of communications that come down the industry is you are also asking restorers to mature in their behavior and the way they represent themselves and their company in these negotiations. It's not simply just fight to fight. Do you mind just kind of walking through that a little bit? We've heard you talk on this before, but from your perspective, what are you really asking restorers to prepare for and do in relationship to this ability to get paid what we deserve versus what we accept?

10:24 Well, that's a really good question. And so first off, regarding the word negotiate, some people get kind of agitated over that and they're concerned that it means that they're stepping over the line into public adjusting. I'm not advocating for any restorer to be a public adjuster on the same claim where that person is also the restorer. That's problematic in a bunch of different ways. You're not negotiating on behalf of the policyholder, and because of that, it's not public adjusting. What you're doing is what the courts expect you to do, which is to discuss the extent of the damage, your scope of work, and...

11:08 and the price that you intend to charge for that particular work. And that's a discussion that restorers should seriously consider having with all of the parties who are involved in a claim. And there are some guys who will say, you know what, my... contract is with the policyholder. My contract isn't with this consultant who just showed up out of nowhere and starts asking all these questions. Can you say, you know what, I'm sorry, Mr. Consultant, my contract isn't with you and I'm not going to talk to you? Yeah, you can do that. And if you think that the consultant is being too aggressive or you've hit an impasse or it just seems like it's futile to communicate with them, you can say, you know what, I'm not going to have this conversation.

11:51 However, as a general rule, I think it behooves everybody to have some dialogue. And when consultants come on to jobs, that's an opportunity sometimes to learn something. And maybe there will be. a technique or an approach that you didn't really think about. So each company needs to come up with their own policy as to who they're going to communicate with, how they're going to communicate with them, and where they're going to draw the line. And it's tough right now because the two sides are so polarized and you have some restores who are kind of overreacting to all of these heavy price adjustments.

12:33 And unfortunately, a few of them are adding things into their invoices that shouldn't really be in their invoices. That kind of makes the problem worse. And then you've got this counter reaction from the insurance side where they're starting to presume that every restorer is on the take. and is putting a bunch of stuff into an invoice that shouldn't be there. And we need to be very careful, particularly if we're using estimating services from people who are remote and didn't actually visit the job site to very carefully review those things before you start sending them into an insurance company. Don't bill for something you didn't actually do because you're really going to get it. in a lot of trouble by doing that.

13:14 But I think that what a lot of people fail to do is to speak to the communication driver that's at play when they're having one of these discussions. And if you speak to the driver, which is the other party's priority, then then you can help to lower the level of tension and have a more productive discussion. And so the communication driver for a lot of adjusters, obviously, is to control the price. So if I'm gonna have a conversation with Brandon, the adjuster, in five minutes, I'm gonna jot down a few little bullet points of some things that I've done on this job to control the cost.

13:57 Hey, maybe I got a good deal from a guy on cabinets. And maybe we pulled out a few pieces of equipment today just to show that you are not an adversary. You're not an opponent of the adjuster. If you go in assuming that they're just trying to be difficult, you're going to be at odds with them. There's going to be unnecessary conflict and it's just not going to be productive. So we want to. treat the others in these communications as though they were partners with us in this solution. You may be outraged on the inside. Your blood may be boiling when you're hearing what they're saying, but you bring down the temperature a little bit and you stay calm and you stay polite.

14:40 And you understand that a lot of these adjusters, particularly desk adjusters, they don't have a heck of a lot of experience anymore. and treat them with respect and understand what their particular limitations are, because there's a good chance you're speaking to somebody on the other end of the line who's never done an inspection before, who's never been on a job site, who's never picked up a hammer before. You're talking to a liberal arts major who's sitting in a cubicle under artificial light three states away who's telling you how to run your job. You got to draw the line. Listen, that description was amazing. Ed, let's hang in that pocket a little bit because first of all, I love the angle from which you're approaching this.

15:24 There is a huge antagonistic dynamic between just generally speaking. And one of the things that we try to teach folks and we were at a conference here just in the last few days and we were talking to restorers and we were talking about the importance of really knowing and understanding their customer. Whether their customer, in terms of the way we think about it, is an adjuster or a chief engineer or anybody else, it's really important to kind of understand their world. You've had probably more experience working with adjusters and observing their behavior and communications and stuff than maybe anybody, any other single person in the industry. Help us understand, get inside the mind of the adjuster today. Like what, I mean, you gave some examples there of how we can start to get on their side of the table with them, but what are some other ways that how can we better understand sort of the life of an adjuster?

16:12 What have you seen that are some common pain points that adjusters deal with on their end that potentially, like you talked about, cost control, that's proactively conveying that, hey, we're not trying to screw you over. We're not trying to retire on this job. But what are some other things we can be aware of Yeah, so I'm glad that you brought that up. And for decades, I've been preaching that the policyholder or the building owner is your customer. And that's the person with whom you have a contract. And that's where your loyalties are. And that's where your obligations are. And the insurance company is not the customer. Mm-hmm. I heard something very interesting at a regional meeting the other day from Bud Summers, who's wonderful.

16:56 He's a great source of information. He's the executive vice president of Pure Clean Corporate. And what he says is we wanna have a mindset that we really kind of have three customers, not in the legal sense, you've just got one, that's the person who signed your contract. But in a business sense, You have three customers. One is the person that you sign the contract with who you're doing the work for. One is the person who is paying for the job. And the other one is the referral source. And there are customers in a sense that it really behooves you to keep these customers.

17:37 parties happy so they don't become adversaries of yours so what is the thing that most adjusters really want to accomplish well recently restorers assume that all the adjusters want to do is beat down the restorer and some adjusters do beat down some restorers But what the adjuster really needs at the end of the day is not a lower price on the job as much as the adjuster needs the problem to go away. The pain point of the adjuster is getting callbacks. This restored, it didn't show up.

18:17 They lost my mother's diamond ring. We've got an issue with this. All sorts of problems. All sorts. Adjusters, many of them at many companies are overworked and underpaid. They don't want the project they're working on with you to become a nuisance. If you can handle your projects in a way so that there aren't any callbacks, there aren't any hassles where the adjuster has to step in like a social worker and help resolve these situations for the policy holder that were created by the restoration contractor, then the adjuster is going to be a lot happier. And happy adjusters are much more likely to agree to invoices than those who are ticked off.

19:02 And they're much less likely to steer your business over to one of your competitors the next time a job comes along. So I would say focus on customer satisfaction. And if an adjuster you've worked with a bunch of times has a question about a charge on your invoice and you're able to turn to that adjuster and you say, you know what, how did it work out for you on the last 10 claims that we had? Yeah. Was it a good experience? Was it a hassle for you? Did the problem go away or did it turn into another hassle for you? And if you can remind them, hey, all of these jobs go really well.

19:43 I turn it over to Brandon and Chris and wow, I washed my hands of it and everything is good. I think you're going to find that your revenue is going to improve in the process. Yeah. It's an interesting parallel, I think, that you do kind of hold with the documentation. I mean, you started right out of the gate with what do we need to be doing? Well, we've got to be telling a better story of why we did what we did and what we did, blah, blah, blah. It's so profound. And then this idea that we're communicating proactively in such a way to try to remove... issues or these pain points in the process for the sake of not sounding like a jerk. It kind of feels like, duh, Ed. So help me.

20:25 Help me understand why I can hear you say that to me. And I go, that makes total sense. I would require that on my behalf if I'm engaged in something, right? Right. Right. But it's not how we start. It just seems like every relationship... And I'm just going to speak for myself. And my past executing in the field is, as soon as the question comes up, my hackles come up. I mentally just go into fight mode like, Oh, here we go. Here we go. What is driving that? With all the people that you work with and that you've had these exchanges with, From your perspective, what is putting us in this fight or flight posture versus coming in as a professional and saying, okay, I've got a job to lead the stakeholders in this process and that's going to require something of me.

21:11 Who are we struggling with that mentally as restorers? Yeah, it's really a real difficult problem that we're facing and we're seeing it all over the place. And it's really unfortunate and I hate to see it when it happens. So I think it's being caused by a variety of different factors. We've got economic challenges that people are under. We have... a bunch of insurance companies that are pulling out of certain markets and trying to do things to control their costs. And some of them have gotten particularly aggressive in the things that they're doing, and it causes this counterreaction from the restoration side.

21:54 But there's plenty of blame to go all the way around. We have some restorers who jump into this business too quickly. They haven't been trained. They don't know sometimes the difference between right and wrong. And I hate to see that. But it is the reality and they're putting things out there that are making the rest of the world look a sconce at what restoration contractors are doing. So recently I was shopping for homeowner's insurance for my house and I talked to a local broker and he says, well, I can get you a quote written from blank. I'm not going to tell you the name of the company.

22:35 And I said, you know what? I'm going to pass. I don't really want to do business with that particular company. And he says, why not? I said, well, I have an understanding that they do not handle claims very well. Now, for me, I've got this incredible benefit of being able to call restoration contractors whenever I want and get inside information. And when I'm shopping for homeowners insurance, I call my buddy, Scott Johnson, up the street at Paul Davis. And I say, OK, around here, which companies are handling claims the best? And he says, avoid insurance. XYZ company. They're terrible. They're underpaying. So I say that to this insurance broker.

23:16 I said, I'm getting bad information about their claims handling. He says, where are you getting that information? I said, proudly, from a property damage restoration contractor. He says, you can't listen to what those guys say. They always triple overcharge. They're a shady bunch. And I'm like, okay. What a statement, right? I can see we're not going to get anywhere with this. So it kind of reminds me of what's going on with the political system in this country with the two sides beating each other up. And then they escalate it and then they ratchet it up some more. And the next thing you know, we've kind of lost the perspective. point of what we're originally talking about.

23:56 And now we're just focused on trying to annihilate each other. And so restores should not pad their bills any more than adjusters should avoid making random, arbitrary, unsupported reductions to the bills. And so what do we do? We want to leave some room to bargain, you know, low ball and I go high, you go low, that whole nonsense. We need to return honesty back into the system. We need to preach and teach honesty and integrity and veracity. And when we do that, I think the level of trust is going to go up. And that's at the core of all of this.

24:38 The two sides simply don't trust each other. solving the problem, but I've highlighted some pretty depressing facts for everybody. Thank you very much. Well, listen, there are a lot of newcomers to the industry, and we've all met them at the conferences, and we've seen the influx of folks in the Facebook groups and the LinkedIn groups and all that. I think a lot of people, they don't know what's customary. Sometimes you talk about padding the invoice. There's some weird things that I think many restorers think are customary because their buddy who's been in the business or who encouraged them to get into the business told them, well, this is just the way you do it in this business. It's a weird industry and this is how we do it. What are the most common strategies that you see restorers utilizing that they may think is just kind of customary.

25:26 This is the way our industry works and are actually helping contribute to this negative dynamic. Yeah, so some of it, I think, is the tendency to cave in. There are some companies where any time they get any sort of pushback from an adjuster on a charge, they just say, oh, well, this is hopeless. They're not going to pay anymore. So there is a failure to be persistent, like we talked about earlier. You have to have the time and the patience to wait and, And the companies who do the best are the ones with the liquidity to wait it out long enough until there's a reasonable offer that comes in.

26:08 And sometimes you may need to have eight rounds or 10 rounds of the email communications with somebody before you can finally get a solution that you're looking for. You may need to go to a supervisor. You may need to go to a regional manager. You may need to make a complaint with the Department of Insurance, for example. And so there's a lot of talk about what's customary. And I try to keep contractors out of this discussion of what is customary and isn't customary with respect to billing. You need to charge an amount that is going to help you achieve your target margins.

26:49 It's your business. and we need to ingrain free market principles back into the business. There's too much control that's being exerted by the insurance apparatus. Pricing platforms should not speak for restoration contractors, like Mark Springer said at the RIA convention. TPAs should not speak for restoration contractors. You decide what you're going to charge, and the free market is going to determine whether or not it's appropriate for you to charge for that. Insurance companies will come in and say, well, I'm not going to pay for this because it isn't customary. But really what's important is whether or not it's reasonable.

27:33 And it can be reasonable to charge for a certain thing based on a whole variety of different circumstances, the demand, your reputation, your reputation, In the industry, the perception of the quality of the work that you provide, cat losses, economic swings, all sorts of different things will impact that. The right price for a job is not necessarily one particular number. It would be like me asking my friends in Orlando yesterday, what is the value of an automobile in Orlando, Florida? I don't know. It depends, right, on the level of quality. Are we talking about a Hyundai? Are we talking about a Ferrari? So restorers need to sell their own work better and explain how their service and their response times work.

28:21 are superior, and therefore it's reasonable to charge for that item. And if it's reasonable, then the insurance companies have to pay for it. And it doesn't matter if you are the first person to ever charge for this particular thing. In my opinion, you can be a pioneer. You can do new things. So long as it fits within the constraints of reasonable, the insurance companies have to pay it. That's so interesting. So one of the things that I, I mean, we fought, I fought myself, and I know that I watch Restorers fight now, is the hold the line reference that you make. And I'm hoping that you can highlight some things operationally.

29:04 And obviously, we have a ton of perspective on this as well. But just operationally, what are some of the things that we as Restorers need to keep in mind so that we can toe that line. We can professionally hold out and support what we've done until we get paid the entire amount. I've got some ideas here, but I'd love to hear your perspective. Yeah. Yeah. Well, like my friend, Kevin Riley at West Hill Global says that insurance claims are not like fine wine. They don't get better with time. It's more like raw chicken sitting out in the sun. Liftify.com forward slash bloodlight.

29:45 You've heard Brandon and I talk a bunch of times about the importance of Google reviews. Maybe you even heard our episode with Zach Garrett, the CEO and founder. Recency, consistency, two of the most important things when it comes to maximizing the benefit from your Google reviews. Why not use an outside partner? Liftify is targeting 20 to 25% conversion, right? So if you do a thousand jobs a year, you ought to be adding right now, 200 to 250 reviews a year, every single year. If you're not doing that, you owe it to yourself to get a free demo from liftify.com. See their system, see how it works, see how affordable it is. I promise you, you'll thank us. Liftify.com forward slash bloodlight. Thank you.

30:25 You know, we spend a lot of money and a lot of attention trying to get that first call. And one of the things that we do once it happens is sometimes we leave it to chance, right? Who picks up the phone? How do they respond? How do they walk that client into a relationship with us? Well, one of the benefits of partnering with a team like AnswerForce.com is we can systemize that. We can make it more consistent. We can also have backup for when our teams need that help, right? Somebody goes on vacation, somebody's out sick. You know, we get a storm surge, we get cat event. All sorts of things can have an impact on how we receive that client. But the most important thing is they need to know that they've chosen the right team. And so AnswerForce.com can support you, be a bolt-on partner to help you consistently produce an awesome onboarding experience with that first call with your client.

31:13 So AnswerForce.com forward slash answerForce.com. blood light. Sounds great. CNR Magazine, we're friends with all the folks at CNR. Michelle and her team, they do a great job of keeping their ear to the ground and reporting all the important information from our industry. Right? You want to stay up on all the M&A activity and what the latest best practices are for selling your company successfully. Right? She's got that. Great articles about all the four quadrants of our business. Right? CNR is constantly pushing out great material and leveraging great writers and subject matter experts in our industry. Right? It is the water cooler of our industry. So if you're not subscribed, go to cnrmagazine.com. Follow them on LinkedIn.

31:53 Follow Michelle on LinkedIn. Trust us. If you're trying to stay on top of everything happening in the industry, your best destination is cnrmagazine.com. You guys, many of you have already heard about actionable insights and the training and the technical expertise that they bring to the industry. But how many of you are already leveraging the actionable insights profile for Xactimate? That's the game changer. It's essentially an AI tool that's walking alongside of you as you write your estimate, bringing things to your attention that should be added, that could be considered. All of them items that increase our profitability, increase the effectiveness and the consistency of that scope. And it can do anything from helping a new team member assimilate some estimating best practices.

32:38 And it also helps the grizzled bets add back that few percent that we've just forgot over time. So actionable insights, get insights.org forward slash floodlight and take a look at what the actionable insights exactimate profile could be doing for you and your team. The insurance companies really need to get their claims closed. And one of the ways that the performance of a claims professional is evaluated is based on how long claims are being left open. A lot of insurance companies on the inside will say, you know what, the only good claim is a closed claim.

33:20 And you've got adjusters who are overworked and underpaid and anything that you can do to help facilitate quick closure and conclusion of those claims, the better off you are. So naturally, it starts with having the liquidity available to be able to wait. and to hang out there, to be as consistent as possible with your pricing and your billing methods. A lot of the companies that I know that are the most successful with this are the ones who are able to say, you know what, I always charge for this. And if you can walk in with a track record where you can say, hey, State Farm, Liberty Mutual, Allstate, and USAA have all paid me for this particular widget that I'm charging for now.

34:10 You keep records of that. And so many companies don't track their data in this way. So operationally, one of the things that I would do is implement a custom price list system and then keep track of the names of the insurance companies who have paid those custom prices. So if insurance company X is says we're not going to pay this because it's not reasonable or it's not customary. You can give the names of multiple other big name insurance companies who paid it and say, so is it your position that all of these companies are acting unreasonably?

34:51 So all sorts of different ways to justify a charge. And if you look at what ExactWare has said in some of its publications, it says that the correct price for a job is the price that's agreed upon between a buyer and a seller. It's our classic definition of fair market value. And the exact word papers also refer to points like the different market conditions, the contractors margin and any other factors that would warrant the use of a custom price. So you implement that, you get that in place, and then you have...

35:32 a consistent way of explaining what you've done. And I think a great way to do it is to have a set of scripts where everybody in the organization is explaining the charges in the same way every time. So we always do this. This is how we charge. And eventually what they're telling me is if you wait a few months, there's like a delay period for the money to start coming in. If you hang in there, a guy said, you know, it was weird. We got like no money in for six months. And one day he came in and there was this huge stack of checks because they finally relented and paid those bills. they started cutting check. You know, it's interesting.

36:13 One of the things that I kind of keep hearing you talk through is this idea of like proactive engagement, basically like setting the stage from the very beginning. What are these things that I'm going to likely run into and what can I do to begin to address them right out of the gate. One of the guys that we've been spending a lot of time chatting with recently has been Lane, the founder of Clean Claims. And one of the things that I just find really interesting about our conversations together is how aggressive carriers have been to be motivated to adopt their platform. And one of the things that they reference in that is this idea of the transparency in the documentation. It's this idea that basically the tools helping restorers do a better job of documenting their actions in the field to make the process that much more transparent.

37:00 I know this sounds like a seamless plug for late and clean claims. I guess that's a freebie. But my point is, is that tools that put us in a position... where we're able to better articulate why it is that we were doing the things that we were doing, should motivate us then to hold the line, right? If, say, via documentation, like, we did this and the data proves that it was the right decision, i.e., we were able to dry the structure, i.e., we were able to save these finishes, whatever the case may be, then it really does go a long ways in ensuring that us as the restorer can stay in the gap and remain confident that what we charge is viable and we should defend it.

37:42 Is there anything else beyond just the transparency and the documentation, anything that we can do at the beginning of the claim, any high points, low points that you've seen over the years that when restorers go in and aggressively try to create commonality on those things early, that's, that again, it exponentially increases the likelihood of them being paid and being paid in full. Yeah, well, there's lots of different things that can be done, but the most important one, which I hope is obvious, is for us to ingratiate ourselves with the policyholder. And people tend to lose focus of this fact, and they say, oh, the almighty insurance company is the boss.

38:22 The insurance company is not the boss, guys, especially when you're working on non-programmed jobs. The policyholder or the owner of the property is the boss. The insurance company is working for the owner. The contractor is working for the owner. The owner is the boss. Let the owner be the boss. And what a lot of restorers are, probably do is they get so laser focused on getting this building dry that they haven't taken the time at the beginning to understand the needs and concerns of the boss so that they can form a strong alliance with the boss. If you've got a strong alliance with the boss and then somebody comes in from the side, like an adjuster or a consultant, they can say, wait a second, So what is the boss concerned about and how do we develop a strong alliance with them early on?

39:22 Somebody has had a terrible loss. They're in a crisis right now and you are coming in to try to help. What are their questions? What's on their mind? Number one, can you help? Number two, are you going to steal from me? In other words, are you trustworthy? Yeah, yeah. Number three, are you going to protect me? Are you going to get this done in a reasonable manner? And are you going to be able to solve this problem for me? Yeah. And I think if we just take a few minutes at the beginning of these initial inspections or the sales presentation to take time and really form a human-to-human bond with this customer and to express some sorrow for what they've gone through, to actively listening to what their concerns are, to understand what their priorities are, And to get to know them as individuals, the way that we speak to a civil engineer who's had a flood in his house is very different from the way we're going to speak to an artist who's had a flood in her house.

40:41 And she may be more interested in protecting the aesthetics of things, whereas the engineer may be very pragmatic and fact-based and what are the calculations and let's protect the structure. And so we need to have the people skills to... to be able to modify our approach based on the level of education and the sophistication of the customer who's going to be calling the shots. And if we keep in mind who the boss is, the boss can bring down the hammer on the insurance company. But if the adjuster gets in there first, and convinces the policyholder that the adjuster is the one who has the best interest of the policyholder at heart, then we're operating with a handicap from the beginning.

41:30 And it's breathtaking to me how often policyholders will take what the adjusters have said as if it were holy gospel. Well, you're charging too much. Why do you say I'm charging too much? Well, your price is too high. How do you know that? Because the adjuster said so. There's this weird kind of assumption that adjusters are going to be taking my best interests into heart. So as a restoration contractor, what I would want to do is explain very sincerely to that person in the first meeting, my priority is to ensure that this project is performed properly. There are industry standards of care.

42:12 I'm trained in them. There may be an adjuster or a third party who comes in to try to limit what we're doing. to protect myself from liability and provide good customer service for you, I'm going to stubbornly insist that this property be turned to its pre-loss condition and that we aren't cutting any corners to try to save a few bucks for the insurance company. And watch out because somebody may come in and say, well, let's limit this and restrict that and reduce that. No, no, I'm going to make sure that this job is done properly. And I hope that you and I can work on this shoulder to make sure that goal is achieved. Wow. That was so good. Yeah. I think a lot of restores are going to like, they're going to hit rewind like another two minutes to re-listen to how you just conveyed that.

42:58 It was awesome. Yeah. It's huge. You know, one of the things that I just kind of hear you saying, there's like this common theme and you know, it kind of came up actually, we're up North visiting with some operators and actually in Canada and, And they kind of opened their event by saying, we've got to shift mentally from this place that our clients often become a pain in our rear versus there's an opportunity for us to earn the reward of their relationship and their trust. And it's interesting because I think this is true probably in a lot of businesses. I know I've ran into it personally, mentally, myself, and with a lot of kind of more blue collar driven industries. Yeah. is it's easy for us to slip into that space.

43:39 We're doing good quality work. That's enough said. And really what I'm hearing you say is there is a responsibility on us as restorers and business owners and leaders to adapt our skill set in conversation, reading people, understanding needs. And then we have a responsibility to shift ourselves in accordance with what we're learning in the moment. And that is, it's easy to talk about, but that is a challenging request to put on restorers. Do you have like, I don't know, again, silver bullets, right? But from your perspective, what do you see as like the easiest thing that they can begin to shift into in some of this conversation? I think to a certain element, you've already outlined three, four really key things that require some fundamental behavior change.

44:25 What's the first step from your perspective to start down this path of really owning how we're getting paid and what we're getting paid? Well, I think, again, that the owner of the policyholder is going to have the most influence over that. And you used the magic word, Brandon. You said trust. Are we earning the person's trust? And so you've got an adjuster and a contractor. They're both vying for the affection of the policyholder. Yeah. Who's who's going to get that affection at the end of the day? Because sometimes, unfortunately, they have to pick one or the other. You know, if they're getting conflicting stories, it's like being on a jury.

45:06 Well, this explanation sounds good and this explanation sounds good, but they got to pick one and they got to go with it. And so it's the party who has the most trust. And how do we earn the trust of people? Yeah. Well, there's the obvious things like doing what you say you're going to do by under promising and over delivering and by admitting when you're wrong and not being defensive about being wrong. proactive and getting information, pushing information to the customer ahead of time. So the customer always has a clear understanding of what's going to happen.

45:49 Give a forecast. And if your guys can't show up today because somebody's out sick, let the customer know in advance. You may have somebody who's staying home from work already. waiting for the technicians to show up and they've never been notified somebody isn't coming in today. So if there's a mistake, own up to it. If something is going wrong, you go ahead and tell the customer, hey, problems on disaster recovery are normal. Nearly every job has some sort of problem. And I'm not going to promise you that. that I am going to make no mistakes on this. What I am going to promise you is if I do make a mistake, I'm going to take care of it.

46:31 One of my best mentors when it comes to client relations was my sister, who is a very successful realtor. And, And her motto is that the customer or the client should always have a clear understanding as to what the status is. And she says if her clients are calling her, asking her what's going on, it means that there's been a communication failure on her part. And if you can earn that trust early on and... convince the person that you are going to notify them of all significant developments. They come to rely on that and say, you know what? This guy, Chris, the restorer, he's got his act together.

47:14 I've turned this thing over to him. He's going to keep me posted and I'm going to back off and I'm not going to tend to micromanage the work and I'm not going to be so suspicious of the billing. When I've got an adjuster over here saying, oh, those charges are too high. So build the trust and everything else will fall in place better than it will if the opposite is true. That's huge. Oh, it's fun. It's fun to hear affirmation from somebody like yourself, you know, the quote floodlight standard that we reference with clients all the time is in particular for commercial 24 hour job updates. A simple email update to that chief engineer, that property manager, whatever, as to what happened today, what's happening next, and do we have any questions or concerns that need to be dealt with.

48:00 If a restore, if that's all they do, Monday through Friday, every single day that that job is active, there's almost zero opportunity for us to lose the trust or break the trust or create confusion or frustrate the client. So much so that we've had a number of clients that have adopted that same standard for residential jobs. Once their PMs get in the rhythm of it, what they find is it removes a ton of negative downstream effects by just doing that, right? I think another one too that we've kind of heard affirm and reflected as people deploy it is the more comprehensive we can be in setting the stage for what's to come. Right? Like asking that client, have you ever been through this before?

48:43 And then leaning very aggressively into, well, I'm going to take the time to teach you the players. the roles that they have in the process, the role that I have, the role that our different individual team members will have in that relationship. And Ed, I don't know if you can affirm this or push back on it. What we've seen is there's an opportunity to educate the client in quotes without coming across as being anti or confrontational. And what I mean is, a lot of times you referenced this already. You referenced that the client will often just begin buying what the adjuster is saying because they don't know any better. And so if we can proactively in the beginning reflect on with the client, Hey, here's the role of the adjuster.

49:28 Here are some of their activities they're going to be keyed in on. Here's how they're going to carry themselves. And you're in quotes, educating the client on that and to build that expectation on Well, then when they start doing the things that we get frustrated by, the client kind of already has their spider senses tingling and saying, oh, you know that? You know what? Brandon bought that up. We talked about this. This makes sense. Okay, cool. So that they don't fall into that where the gray is leveraged against us, right? When there's a void of information, they lean into, well, what the adjuster says goes. And so I don't know if you can affirm that or if you've seen examples of that working in the benefit of the restorer and the client. Yeah, I can definitely affirm that and I agree with what you're saying.

50:11 And it goes back to kind of what I was talking about before about assuming the role of trainer. Really not just assuming the role of trainer with the adjuster, you're assuming the role of trainer with the customer as well. Most customers have no experience with restoration and no experience with property claims. And a lot of this stuff is foreign to them. And so there's this natural assumption that the restoration contractor is working for the insurance company. Oh, what do you mean? Why are you asking me to pay money on this? I thought you were working for the insurance company. And so that's something really important that the restorer needs to train the customer about right up front.

50:58 I want to make sure we're clear on this. I'm working for you. I haven't been hired by your insurance company. I'll send a copy of the invoice to the insurance company as a courtesy. I don't know what they're going to do with it. I don't know what your coverage is. I know we're going to provide high quality work to you. We're going to do it for a reasonable price. And we've got documentation that will support our charges. At the end of the day, it's going to be your responsibility to pick up any amount that's not covered by the insurance policy. And I want to be here to help you understand how the restoration process works. And if you can fight the fear with the facts, if you can resolve the uncertainty that these people have, they will trust you more and things will go a lot more smoothly.

51:50 And so it's particularly difficult because of the emotional strain that people are under when their property has been damaged. And for some of them, they've lost nearly everything that they've had in their lives. And I think there's an unfortunate tendency when you're in any profession, if you're working for somebody who is hurting, if you've seen it a thousand times to have this like been there, done that kind of attitude, if it feels cold to the customer anymore. it's not going to work out well for you. So assume the role of trainer, educate the customer about what you're doing and why you're doing it to the extent they seem interested in it.

52:33 Others will say, oh my gosh, this is so horrible. I don't even want to think about it. Just take care of it. I'm going to go to work. And so we customize the approach for each situation. You know, that to me was actually, that was a pretty rad wrap up. I don't know if you can remember what you just said, Ed, but I want to just hit it one more time. It was your comment around fight fear with facts. And what was the second part? Do you remember what you just said? It was- I had like 12 parts. fight the fear with the facts assume the role of trainer keep everybody educated and you know what guys when you come down to it this is the deal the restoration contractor is the professional who has been entrusted with the responsibility to take control of that situation they want you to take control of it they need you to take control of it The IISCRC standards say that the restoration contractor is the one who determines the scope of work.

53:35 It's not Joe Blow adjuster. It's not John Q. Public, the consultant or some third party who's coming in. It's your job. Take control of the situation. People will respect that and you'll have a better outcome. That was awesome. That was a good wrap up, but I actually have a couple more questions for you that I want to cover. I think what I love, Ed, and Brandon, I both appreciate this and enjoy this about you is that we hung in this territory for the first part of the podcast with how do we conduct ourselves? How do we create a positive professional relationship proactively, not just with the homeowner? or the property owner, but also the adjuster.

54:17 How do we kick off? How do we set ourselves up for success in the way that we interact with the adjuster, the homeowner, etc.? But inevitably, some things are still going to break down. And so I'd love for you to speak to, you know, when we were at the experience, there was this emerging topic for you of tortious interference. Did I say that correctly? Yes. Yes. Thank you. And so it's not tortuous. It's tortuous. Tortuous. Okay. It feels tortuous. Yeah. Yeah. So I'm curious to talk about that and some of these other backup measures, perhaps, if the positive relationship development does not solve the problem. Talk to us about tortuous interference. And then also, what is the role in your view today of appraisal?

55:00 And maybe talk about those two different tools. And if there's a third tool that comes to mind, speak to some of these backup measures, if necessary. Yeah. So like you mentioned, having a good positive relationship is key. I want to talk for a second about preventing these problems a little bit more. And I think this conversation would be incomplete if we didn't mention the power of active listening. Yeah. And I've gone around and I've talked to people. Do you understand what active listening is? And most people don't. Active listening is when you are working through the information that the other party is giving you and you are evaluating it objectively and you are not aware.

55:41 working on what your rebuttal is going to be or figuring out how you disagree with it, but you're looking for avenues of common ground. And so often when I see the communications breakdown between restorers and their customers or the adjusters, It's because they are spending time reacting to non-issues and not spotting the opportunities. If you're engaged in active listening, you are going to miss opportunities. And the adjuster may spend 10 minutes talking about how terrible your invoice is, but then will say, But if you send me photos of this and a copy of this document, then I'll reconsider.

56:23 Well, try not to get so pissed off about the tirade at the beginning. It's like, wait a minute, there's an opening here and let's go down that particular angle. When we're active listening, we're seeking to understand what the other party's position is, not to agree with it necessarily, but to really understand what the other person's shoes are like. And then we mirror, we repeat back what they said to us. So what I'm hearing you say is, and then you recite it back, that's going to help them feel more comfortable that you are working on their side. And so... These things, unfortunately, despite our best efforts, will tend to break down sometimes.

57:05 And we want to try to avoid unnecessary legal expenses. The restoration industry wastes money on legal services when they don't need to. And they fail to avail themselves of legal services when they've got an opportunity to accomplish something good with it. So there needs to be an adjustment with all of that. But a great way to minimize the legal expenses that restorers incur is... is through appraisal, which is an informal process where representatives of the policyholder and the insurance company will get together to discuss and set the amount of the loss.

57:48 And in the event of an impasse, they can submit their differences to an umpire who will make the decision on that. It's a really inexpensive, streamlined way to go about achieving a result. And in my opinion, In most states, the policyholder would have the right to assign to the restoration contractor the right to pursue appraisal. Now, I know there's a lot of insurance companies out there who disagree with that, and we can litigate that another day. But I think restorers should seriously explore the possibility of appraisal. If you get the right appraiser and the right umpire, you can get a really, really good result.

58:31 So when it comes to tortious interference, this is where a third party is interfering with somebody's contract or their business relationship. And in many states, you have to prove that the person interfered using some means that were wrongful, correct? committing some sort of bad act such as defamation or fraud or misrepresentation that actually led to a loss where the restoration contractors invoice didn't get paid. I am really excited about the possibility of trafficking. tortious interference, changing the dynamic in these conversations.

59:15 And we're litigating a number of cases on this right now. And it's the perfect time for it because we do have some insurance adjusters who are being too heavy handed and they are discouraging policyholders from paying the restoration contractors, and they're doing it based on an incorrect method. They may be committing insurance bad faith as part of the process. They may be spreading falsehoods about the restoration contractor. They may be getting in there and gumming up the works under circumstances where it's reasonably likely that what they're doing is going to disrupt the contractor's business relationship with that particular customer.

59:58 And so there's going to be some news coming out in 2025 about some of these cases that I've been working on. And I believe the tortious interference is going to be an important first step towards shifting the balance of power between the insurance industry and the restoration industry. Wow. I'm curious, as you're starting to work these particular cases, relative to the cost of litigation and engaging an attorney to help you with this tortious interference issue, like what does an invoice need to be for it to make sense to engage an attorney to engage in this tortious interference argument? Yeah, so in my opinion, the wrong way to look at it is just by looking at the dollar amount of the invoice.

1:00:44 A lot of my clients who are pursuing these cases are doing it to try to set a precedent. And this is what's referred to as impact litigation. One of the most important things that we have in our justice system is the ability to change the way people operate and to change that by providing. prosecuting our rights to compensation when things have been handled improperly. And a great example of that is product safety. And there are some companies out there who would not be making products that were safe, but for the fact that they are subject to getting sued if they do something wrong.

1:01:26 And so it can be a great equalizing factor. So I think that what we're looking for is repetitive situations. If you've got an insurance company that is repeatedly and wrongfully refusing to pay a certain item over and over and over again, and you want to turn the tide on that, An opportunity to do that would be with tortious interference, where we're not just saying, well, the attorney's fees are going to be X and the invoice is Y for it to be a straight economic analysis. On a typical collection matter, most of my clients are saying, all right, are we going to recover much more on this than we're going to spend?

1:02:08 It's just straight math. If it doesn't look like there's going to be a direct and immediate financial ROI, And they say, I don't want to pursue it. And I totally respect that. But the case that I had against Allstate, where we recovered $335,000 on a dispute over a $33,000 invoice, was pursued by my client because he was having an ongoing problem with overhead and profit with Allstate. And he said, you know what, if I can get this problem fixed, fixed downstream it's going to have a tremendous ROI for me. And a year after that case, I called him up and I said, hey, how's it going with Allstate now?

1:02:49 He says, it's going great. He says, they're not giving us hassles anymore on these types of issues. And every so often, if an adjuster starts to step out of line, we give them a friendly little reminder about the case that we had before and the outcome of that, and it gets them to behave better. So are you looking at something that is a big picture problem that you're facing over and over and over again? If so, it may be worthwhile to make an investment in that to try to solve the problem. I'm looking at the bigger picture. I don't want to just look so much at one claim. Okay, next claim, next claim.

1:03:31 Yeah, get to the root cause. Yeah. Yeah. All right. Well, Ed, every time we've... This is the second go-around, I think, that we've had the opportunity to hang out with you. It causes me, just in full transparency, it causes me to pay very close attention to what you're saying because you operate... at a pretty high level in regard to the wisdom that you bring to the industry and some of the challenges that we have in front of us. And it's always high impact. So again, thank you so much for taking time out of your day to hang out with us and share this information that all of us are able to leverage in our own businesses. What's next on the horizon for you before everybody tries to get a holiday in before the year closes? You got anything fun coming up?

1:04:12 Well, my daughter, stepdaughter, is going to be getting her California bar results in four hours. And so we're very excited to hear about that. And... We are working on trying to reschedule the RIA regional meeting that was set for Orlando, but had to be postponed due to the storms. Definitely looking forward to that. And 2025 is going to be an exciting year. And a lot of new and different things are happening. This is a very fluid industry that we're in. And what is going to happen with AI?

1:04:53 What is it going to do? What's the harm going to be? What are the positive benefits going to be? And who's going to get left behind because they're not harnessing the technology? That's what I'm watching for in 2025. I love it. We'll be following along with that as well. Well, thank you again, my friend. If we don't talk to you again beforehand, have a really great holiday season, you and your team. You too. Happy holidays to you. The feelings are mutual. I have great respect for you guys and everything that Floodlight is doing. Keep up the good work. Go Floodlight. Thanks, brother. We appreciate you. All right. Thank you. All right, everybody. Hey, thanks for joining us for another episode of Head, Heart & Boots. And if you're enjoying the show, but you love this episode, please hit follow, formerly known as subscribe, write us a review, or share this episode with a friend.

1:05:42 Share it on LinkedIn, share it via text, whatever. It all helps. Thanks for listening.