What’s HOT in Roofing, Coffee Conversations LIVE from FRSA – Day 2 - PODCAST TRANSCRIPTION

Editor's note: The following is the transcript of an live interview from Coffee Conversations LIVE at FRSA 2021. You can read the interview below or listen to the podcast here.

Heidi Ellsworth: Hello, and welcome to coffee conversations. This is Heidi Ellsworth of RoofersCoffeeShop. And we are live from the Florida roofing show. Yes, you heard it. Our second day live. And it has been going amazing. We've had some great interviews. We had a great panel yesterday. So if you haven't watched it, be sure to go watch it. And this is our second live coffee conversations. I am sitting with two people today that I just was telling them, I don't think I've been this excited ever for an interview and for a panel. It's going to be a little bit different. It's our coffee conversation. So we're going to go over what's hot, just like everything that's happening here. We're also going to be sharing some pretty exciting industry news. So I've been really excited about this. Let's get going.

I want to introduce Kim Simone of Reliant Roofing, and Ken Kelly of Kelly Roofing. And I have to tell you, this is really kind of fun. Because I've known Ken for a very, very long time. He's been an RCS influencer, he's been active with RT3 with National Women in Roofing. A huge supporter of us at Roofers Coffee Shop. And I was at National Women in Roofing meeting this week, and Kim was sitting across from me and I saw her beautiful name tag and I was like Reliant. I'm like, I just saw a press release. I saw a press release that Kelly Roofing and Reliant Roofing are now partnered. And I was like, hi, Kim, how are things? So I'm going to let them tell all of you a little bit about themselves. And then we're going to talk about their partnership, because there's some really exciting stuff going. So Ken, why don't you start with an introduction. Tell us a little bit about yourself and your company.

Ken Kelly: Sure. Ken Kelly, Kelly Roofing down in Southwest Florida. I've been in the roofing business almost 28 years as president. Got in the business back in 1993 after I watched my father fall off a roof in front of me crushing both of his wrists. So right out of high school, took over the family business was only one employee and he quit. But you know what, I would have quit too. Because I'm not taking an order from a 17-year old boy. But basically built the business up from there and they've enjoyed every single minute cents. And I have to turn it over now to Kim to introduce herself.

Heidi Ellsworth: Yes. Okay. Kim, tell us about you and about your company.

Kim Simone: Hi, I'm Kim Simone. And I started with Reliant five years ago. Reliant is actually my baby brother's company. And he started it in 2016. I was a teacher at the time, I was an educator for 18 years. And about a year into the business, he was looking to grow and out of the position that I was well suited for, at least we both thought so. So I decided to resign from teaching and join him and his company. And it's just been five years of an amazing experience of learning an entire industry I knew nothing about. Two weeks into training with them. Hurricane Matthew hit Jacksonville. And so I barely knew what a shingle was or where we bought them from. And immediately, started assisting with the sales coordinating for the company. So it's just been a fantastic experience. And five years later, here I am, residential sales manager. It's just an exciting opportunity.

Heidi Ellsworth: I love it. I love it. I want to come back, through this hour, we're going to be talking about what's hot here. I want to talk about sales. And I want to talk about women in sales. Those are some of the things that we are changing as an industry and it is so powerful. And so being a salesperson myself, love those conversations. And I know Ken has sold like nobody's business. But I just want to reminder, this is Q and A. This is live folks, we are live on YouTube. We're live on GoTo. And so please ask questions, send in your questions. Megan's going to be getting in here. Megan Ellsworth and Colin Sheehan are our producers and they're in the background making it all happen. So now, Ken, what's going on?

Ken Kelly: Heidi. We have known each other a long time.

Heidi Ellsworth: Yes, we have.

Ken Kelly: And it's been a fun journey.

Heidi Ellsworth: Yes.

Ken Kelly: Well, here's what happened. COVID. COVID happened. And for the first time in my career, I had somebody, the government, tell me I couldn't go to work. And that's a little unnerving. Because it wasn't just me, right? It was 150 employees that are depending on me to go and do my job. And I wanted to make sure that I had some stability, in case something like this ever happened, whether it's planes flying in the building, a pandemic, big recession, we wanted a little more stability in the organization. So what we did is we ended up partnering with a group of private investors, who are looking to back companies that are wanting to grow and have some systems in place that do well, right? Or are okay for their industry. And that's what happened.

We ended up signing a deal with a company out of Indianapolis, Indiana, back in September, 25 of 2020. And the idea was that we would partner then with other companies who are like minded, who wanted to grow, who could share ideas and take it to the next level. And that's what we're doing. There's really no secret to it, except that it's a really cool experience. I'd love to share, because I'm sure there are people who want to know why now, and all the details beyond what it takes to make that happen. But we're very, very excited about our partnership with Reliant. They're our first partnership, we could not be happier. They're just amazing. So we're very happy.

Heidi Ellsworth: The part I love about that. Ken is so innovative. I mean, here you are, you're in the middle of COVID and people are just like, and what does Ken Kelly do? Oh, I'm going to go partner with some private equity and help other roofing companies do the same thing and grow and take it to the next level. Again, kudos to you. And kudos. I'm so happy. That is the thing. So probably you said, you can help other companies? How? Tell us a little bit more about that.

Ken Kelly: Sure. So from our own position. Let's talk about resilience. When COVID happened, there were some companies that simply almost disappeared. Think about the hospitality industry. So for those who aren't attending the Florida Roofing Association, you may not know that Ron DeSantis, our governor, was our keynote speaker last night. And he spoke to the fact that Florida was supposed to have the lowest unemployment, because we're so heavily dependent on tourism. And people simply weren't traveling, right? There were too much of a risk. Well, if you think about industries, like tourism, your hospitality, restaurants, they didn't do well in COVID.
So investors are looking for companies that do well in situations such as that. And since roofing is in need, it's very elastic. It almost doesn't matter what's going on in the world. People are going to fix the roof because they have to protect all of the other valuables that are under it. So it turns out that the roofing and construction industry as a whole turned out to be a little bit of a diamond in a rough. So the values are nice. They are slightly elevated than what they would be normally. On top of that, the stock market is at all time highs. So anyone who's been investing traditionally, has probably made some money. But since it's at an all time highs, you don't necessarily want to leave your money there. There might not be enough runway, that's the term they use to grow further. So let's take that out of the regular market and let's put it into the private market. And let's invest in people at a local level, who are resilient and will be able to weather such things such as a pandemic, or a recession or so forth.

Heidi Ellsworth: Wow, that is so cool. And when you're looking at this going back, been in the industry for a while, we've had other times where we've had, traditionally I don't know if this is the same thing, but they've been called roll ups, right? So this is different outright?

Ken Kelly: This is very different. So my mentor has been Gregg Wallick. For years. I used to read his article as a child hoping that the things that I learned from Gregg Wallick's articles, I could bring home to my father, and that would help him run the family business. Unfortunately, my dad didn't have the capacity for the business side of the business. But he absolutely was a great roofer. So when I took over, I had the opportunity to do a lot of the implementation of Gregg's ideas, that's where we started our growth. So when you think about the opportunity to share, and to give back and to help others, it's a natural fit. This is what I want to do with Reliant. And I know that they have this same leadership mindset, is we want to give back to each other, and then to others.

Think about this, this could be an opportunity. Now, how does this differ from a roll up? Well, the roll ups that are out there today are really two different kinds. One of them is all paper, that's the industry term for them, where you are basically trading your business for a piece of paper that could someday be worth something if they go public. And if the valuations pay off the investors first and there's anything left over. The other side of things are a real cash transaction, like we are purchasing the assets of your company. And then we want you to stay on and run your company just like you did before.

So you take some chips, you bring them off the table, you put them in the bank account, and you retain ownership, so that there's skin in the game to make sure that we do have enough runway to grow, and to continue our track to improve and to bring others into the fold. Because eventually, there will be that next turn. And that's where there's another bite at the apple. These are all cool little cliche terms that I use now on this venture capital side of things that I'm just learning.

Heidi Ellsworth: Wow. Wow. So Kim, I mean, this has to be pretty exciting for all of you and your brother Sean, right?

Kim Simone: Absolutely.

Heidi Ellsworth: So just share a little bit of this experience of having this.

Kim Simone: Yeah, it's been extremely exciting and for me personally, it was a bit of an emotional shock to find out that we were joining up in this way. When my brother started the company, it was a very exciting thing, and him and his business partner, Sean, they've just grown such a legacy company already. And it has the makings for such a long term, legacy company in this industry. And they've always been leading edge in the way that we serve our clients, in the way that we structure our systems and processes, and all of these things. So I thought we were doing an amazing job. And of course, when you hear that there's something like an acquisition or a partnership or anything like that taking place, you're thinking what's wrong?

And our situation, it's not that at all, nobody's looking to get out of the game or change anything, it's just that an opportunity presented itself for us to really solidify the legacy that we intend to build with Reliant. And so for all of us, once I got over the realization that it wasn't my brother giving up this company that we've been working so hard to build or anything like that. We're still Reliant, we will always be Reliant. And now we have such a wider range of impact on the people that we serve, our employees, our communities, our clients. So we're just all very, very excited about what this is going to mean for us in the future.

Heidi Ellsworth: I love that too, because I've been through a number of acquisitions with manufacturers and different folks, and there is a level of fear, right? There always is. But to be able to come out and say, no, this is pretty dang awesome. And we are like minded. One of the things I love, too, is the fact of where you're located, right? Southwest Florida and Northwest Florida. So you both have... You would think it'll be Florida, but it's... Someone was just telling us the other day, it's like little micro areas across the state. So Ken, how do you see that playing with the two companies?

Ken Kelly: Sure. So if you think about it, we're diagonal from each other. Northeast Florida, Southwest Florida, we almost couldn't be further from each other and still be in the same state. But not only is there regional differences, there's difference in clientele. But there's also differences in product lines. Right? So Reliant does new construction, where Kelly does not. Kelly is installing Tesla's solar roofs, Reliant's not yet. Right? Reliant is installing hurricane shutters, Kelly is not. So when you think about the opportunity to open up each other's businesses to additional markets, additional territories.

Now for me to go to, let's say, Jacksonville to install a Tesla solar roof. That's a very expensive endeavor. But now we'll just turn that over to Reliant and Reliant's crews will do it for us. Because that's their hometown. Right? We have the contract for all the stores around the state. But we've been turning down their new builds, because we don't do new construction. Well, guess what? Now Reliant will take that over for us. So it makes perfect, perfect sense.

Heidi Ellsworth: Yeah. And also, I mean, when I think about the fact that you two are both amazing salespeople, and then now you're also that cross training of your companies. I mean, I know this just happened. So I know it's still... But you were saying next week it's all starting to come together, right?

Kim Simone: Yes, yes, next week our teams are getting together and we're going to start getting our plan in place and looking at a 90-day vision of what do we want to do? Where do we want to come together? What changes do we want to make? Let's just jump right in and get this going. I think we're excited on both sides of the fancier or both sides of the state to learn from each other. Our team is already asking me when do we get to go and see them? When do we get to go teach them? When do we have to go learn from them? Everyone is really excited about all of the things that we will have to share with each other.

Ken Kelly: Heidi, if I can comment on that real quick. The chairman of our board. His nickname is [Flatter 00:14:33]. His real name is Jim [Flatter Connect 00:14:37]. But he just goes by Flatter. No first name, or last name, just Flatter. Flatter has been around forever and ever. He was in the automotive industry. He made automotive parts for the big three, Ford, Chrysler, General Motors, and he sold his company back in the early '90s for 1.3 billion. And he's been doing these types of transactions ever since. So he bought and sold hundreds of businesses, merged hundreds more. And when we were getting ready to enter this partnership with Reliant, he gave me a book. And the book's name is Four Frogs on a Log.
And the riddle goes like this. Four frogs are sitting on a log, three decide to jump off. How many frogs are on the log? Most people would think, oh, there's only one left. The truth is all four are still there. Because just because you decide to do something, doesn't mean that it actually happens. So you are talking about this thing, Kim and I just met moments before this set. [crosstalk 00:15:35] It's the first time. And next week, we are coming together for this grand meeting, to come up with the things that we're going to adopt from each other and put that into action. We're going to decide, and then we're going to jump.

Heidi Ellsworth: I love it. I love it. Okay, well, so let's talk a little bit about that jumping. Because we also... things we want to talk about, what's hot in the industry and what's happening. And as you know, Karen Edwards, who is our editor, chief of operations, does everything for RoofersCoffeeShop is also the executive director of Roofing Technology Think Tank. And Ken you've been so involved with that from the very beginning, we've all been working together. Microsoft Visionary Award in 2015, you have some amazing software and processes. How do you see that playing?

Ken Kelly: It's really funny. We have not even discussed that yet. Right? It's really, really new here. Okay.

Heidi Ellsworth: He really knows a lot about computers.

Kim Simone: What's that? Tell me more.

Ken Kelly: So, here's the way I see. We both, both organizations have a list of things that we feel we're pretty good at. And we're going to go to the other company, and we're going to say, here's what we do and how we do it. Is there any benefit to you? Right? If there's the yes, teach me how to do that, I want that. Bam, that's going to be on our 90 day fusion plan. If it's, you know what, we do it pretty well. I don't see that as something's going to move the needle, no sense disrupting our current processes. No, thanks. And we're just going to complement each other. There's only one thing that we are required to help manage. And that's the finances. And that's just for fiduciary responsibility to the Federal Trade Commission's rules and everything. That has to be all up and up and reported in one consolidated statement, everything else could stay the same doesn't matter.

Heidi Ellsworth: Yeah. You're going take the best of the best.

Ken Kelly: Yes.

Kim Simone: Yeah. And that's really exciting to us, too. Because obviously, we are a successful roofing company. I'll just brag about us for a second. We are doing well, and we do have a lot of great systems and processes in place that have worked for us. And we certainly would not want to hinder the growth and the progress that we have had by being forced to change things in some sort of arrangement. And so that's definitely not where we're going with this, both companies are very successful. And we do just want to learn from each other. One thing about Reliant is, my brother Cameron has always said, it's all about continuous improvement. So every day, we're asking ourselves, what can we do to improve?

Not just changing something and trying something new and just blindly throwing things at the dartboard, but just looking and evaluating and analyzing constantly where are we at? What can we do to improve? We take feedback seriously from our employees, from our clients, and so in that spirit of continuous improvement, I think this is going to be a great relationship, because there's certainly going to be things that they're doing that we look at and go, yeah, teach us that. And then I think vice versa, as well, they'll see a lot of wonderful things that we're doing that they'll want to [crosstalk 00:18:45].

Heidi Ellsworth: Well, it's funny is because long before I saw the announcement come out, the name Reliant is very well known. And I had been stalking you guys anyway, a little bit, because we always want to get everybody involved. And so that's why I was like, oh, yeah. But yeah, you guys have an amazing brand. And to put your two brands together. Wow. So let's talk about that marketing wise. I know we don't know yet how it's going to work. But that's just such an opportunity, too. Ken?

Ken Kelly: Well, okay, so we were talking about culture. And our third core value is kaizen, which is the Japanese lean word for constant commitment to lifetime learning and improvement. It is literally where continuous improvement started. Right? So you're starting to see the cultural fit here. And I would say, for anyone who's thinking about going into one of these type of partnerships, you really need to have the culture the same. Right? It can't be drastically different or else it's not going to work. Right? It's very much a relationship. So I do want those moments where we're yelling at each other because we both are passionate about fighting for what is best, right? But at the same time, we know it's all for, what is the greater good?

So from a marketing standpoint, not only are we going to be able to tell both of our respective [inaudible 00:20:05] that we service their other buildings and so forth. But we also are going to have a better response time. If there's a hurricane, we'll be able to share cruise. Right? Think about it also from the standpoint of financial stability. Just because we're combined now, we are both going to get better pricing from suppliers. We're both going to get better rebates from manufacturers, we're both going to be able to share discounts from insurance companies. We didn't do anything yet. And we immediately started making more money. Right? How great is that?
So from a marketing standpoint, pure marketing standpoint, it's all about how can we get the best leads for the best price? Okay, because ultimately, whatever money we don't spend in marketing, it just goes right to the bottom line. Okay, Kelly Roofing currently sits at about 1/10 of a percent of our revenue in total marketing costs. In an industry that typically averages 5 to 7%, we figured out how to maximize our existing past customers and referral base. Okay? But Reliant has come on the scene in six years and dominated Jacksonville, they've come up with a way to do community outreach and general branding and it is top notch. Kim, I'd love to hear how you guys do it.

Heidi Ellsworth: Yeah. Yes.

Kim Simone: Yeah. Well, that's one of the things that Sean and Cameron, they'd strengthened starting the company was their connections they had in the community, and then finding the right companies to work with for these kinds of things. So we had a strong marketing game from the beginning, we have committed the dollars to it in order to get ourselves elevated to that point. Of course aligning ourselves with some of the top lead generation companies and giving them feedback to improve their services so that we can improve the leads that we're getting. And then like Ken says, we've also learned the art of leveraging client referrals and our relationships in the community. To continue that, one of our strengths as a company, which was the reason I came on was that we have what we now call client coordinators.
I was the very first one and I was called the sales coordinator. And my job was to bring all the leads and get the phone ringing and answer the phone, get them scheduled. Do the lead qualifying and all of that. So us dedicating two positions in our company for that purpose allows us the opportunity to maximize all there is out there through the platforms, through technology, through all the organic methods. And of course now, we have a powerhouse brand that is well recognized, so people calling in want to do business with us.

Heidi Ellsworth: Yes. I just have so many questions. So how do you see... I think there's a lot of interest in Tesla. Right? And the Tesla's solar roofs, and I love hurricane shutters, right? Is that what I heard before? So different things going together, but where do you see right now the overall... I'd love to pick both your brains on the overall where we're at in Florida, with the roofing industry. What do you see for the future of Tesla shingles? I mean, I'd love to... It is a conversation all the time.

Ken Kelly: Yes. Yes. So I was on a phone call yesterday with leadership, we have a weekly call together. And Tesla has closed the door to any new channel installers currently. And the reason why is because they have a pool, and they're taking care of the demand on the direct side, direct install purchase, that they didn't want to mess up new relationships until they had the ability to scale rapidly. Because there is so much interest in this product. Right? So we are helping them by testing new products, new installation methods, new logistics, marketing, everything. And I'll tell you, there has been very few organizations that I've ever had the opportunity to work with that listen to direct feedback and implement it so rapidly. They're fantastic. You almost feel like you're an extension of their employee base. It's really, really neat.

Heidi Ellsworth: It's the whole technology play, too. I mean, we know this is where it's going. We know this is what it needs and to be able to be on that forefront of it. And really, I think that's been one of the biggest problems that we've always heard about solar, like who owns a roof, right? Well, in this case, the roofing company owns the roof, which it should be, right?

Ken Kelly: Right. Yeah, you're absolutely right. It's not electricians that are bringing us in. Right? We are controlling the entire process. And Tesla has done very well with their plug and play. Go to market strategy. So they sell us packages, and they're so easy to put together. And they've got fun, cool names that make it interesting, right? We literally have a power blaster. I mean, it's like Star Wars all over again, right? So, they're really cool about that [crosstalk 00:24:59].

Heidi Ellsworth: I love it. Kim, what do you see? What are some of the hot things? I mean, I love the fact like we talked about you being in sales, what are homeowners looking for? And what are you seeing happen in northern part of Florida?

Kim Simone: Well, I mean, everybody still needs a roof no matter what. Right? So the roofing has not slowed down one bit. And everybody is ready to get it done. As soon as they think that they need the roof. They want to get it installed immediately. So there's no shortage of getting that pipeline loaded up. I think in the roofing, we are starting to have people call in and ask questions about alternative types of roofing materials. They're wanting to know about energy efficient things. And we've been doing so for years now, the traditional panels, and had just completed a portion of our Tesla licensed installer requirements before we joined up with Kelly Roofing.

So we'd already been able to offer that and now we're getting more and more people asking about what are those alternatives out there for roofing materials. So there's been no slowdown there. And then the storm shutter part of our business has been an interesting thing. Right? When we first started those storm shutters, there really wasn't anybody in Northeast Florida installing them. Obviously, we're not a part of the state that really gets hit with hurricanes that much. So it wasn't anything that anyone really thought they needed. And then, of course, in the recent years, we've had back to back to back storm that's come into Jacksonville.

So that market is really starting to get hot, that's starting to develop a lot of interest. Of course, we have people moving up from South Florida to North Florida. And so they're familiar with having storm shutters. And so that is a growing area of our company, and really excited to introduce Ken's team to that and start bridging the gap between and across the state. Because let's face it, we do live in Florida, and we're all going to get a hurricane at some point, we all really do need that product.

Heidi Ellsworth: Yeah. And I tell you what, the weather is so severe everywhere. And that's been one of the things, how do you feel your companies... And Kim I'm going to start with you. How are you guys positioned for this hurricane season with material shortages and some of the labor? What are you seeing there?

Kim Simone: Yeah, so that's always one of those big topics that we start planning for around April, every year. And this year going into it, I remember commenting to my brother and our CEO Sean that I felt like we were the best prepared than we had ever been. In terms of things as a company internally, in our processes, our sales team has grown and increased. So I felt like we were ready to serve more people that would be impacted. The material are just definitely challenged and we've really done our brains in terms of color options for our shingles, to our clients, and trying to get things lined up, but our company, because we've always had a large pipeline, our installation process is usually four to five weeks out anyway.

So it hasn't impacted us too extensively, except for maybe some specialty products in some areas, but definitely something that we're constantly navigating. Unfortunately, we have a good relationship with our supplier, so they keep us updated, good relationship with our manufacturer, so we know what's coming and we can really design everything so that the client is always being served and having the best experience. So we knew to take colors away, rather than get people upset that they weren't going to get that color in six or eight weeks.

Heidi Ellsworth: It's just to me, that is the second important part of really sales in roofing right now is being able to move with the products and be able to understand the materials that are there, that they are not and that you aren't sending false expectations with the homeowners. That's the worst. What are you seeing? And tell us a little bit about your sales team and how they're handling that?

Kim Simone: Yeah, yeah. So I mean, with Reliant our motto, our mission has been to revolutionize the customer experience, right? So that's what the company was started with that in mind. That's what every day our focus is, every decision we make is about the customer experience. So obviously, when the material shortage came and we've had to navigate that, the first and foremost thing that we needed to consider was how best to serve our clients. And that did involve some very sticky conversations from time to time. Well, I like this color better. And this manufacturer from this roofing contractor has this color. And [inaudible 00:29:25] they focus on the shape, they focus on the value that we're offering and overcome something that seems as minor as a color choice but to that homeowner, it's very important.

So just training our sales team to handle those kinds of conversations. And then of course, our preparedness. And another thing that I think both companies, I'm going to learn next week, but I know for Reliant that we are so well prepared, and our systems and processes are what have made us successful. So the fact that we do plan ahead and we take a proactive approach to everything, means that I do know what shingle colors are available in the next four to five weeks. And so I'm not going to offer anything but those to my clients so that my sales people don't have to have difficult conversations and we never want a negative review, right?

So we want to keep everything smooth for everyone. On the shutter side, it's a little more complex. Now you're dealing with metals. So now you're dealing with manufacturing timelines that are much longer, so again, just creating the urgency for clients to get ahead of it, and not wait till hurricane season to start making these decisions. But even then, it's just all being upfront and transparent with your client base. This is the state of the world. Luckily, most of them have been very understanding about the impact that COVID has had on all of us.

Heidi Ellsworth: It's interesting because as we've been visiting with people at the show, and talking to them, and they're talking about material shortages, there seems to be so many different reasons, right? Some folks are saying, well, it's because we don't have enough labor to keep the plants running as much as we need to, other people it's trucking, and other things. Ken, what are you seeing? And how are you handling it down in Southwest Florida?

Ken Kelly: Well, February was miserable for us, because we had really done a good job getting the company into a just in time inventory scenario, right, to cut costs. And that's how most industries were running. And so when our backlog finally ran pretty tight because of availability, February was a miserable miserable month when it came to profitability. But now it's gotten to the point where the amount of time it takes us to get to the job based on our backlog is equal to when we're receiving material. And you'd asked about what I think one of the biggest issues in the industry is, when it comes to material availability, ghost orders. Ghost orders are so disruptive to us right now. I can't even tell you. Here's an example.

So we do a lot of tile in our neck of the woods. And tile right now, depending on the profile is anywhere from eight to 16 weeks out. Right, every roof is custom. Okay. Right? And there are hundreds to choose from. Well, here's what's happening. There are roofers that are going to ABC, and they're saying here's my order for Mrs. Smith. And then they're going to SPEC and they're saying, here's my order for Mrs. Smith, and then they're going to Beacon, and they're putting the same order three times. Well, the same manufacturer is putting that order in three different times because it's coming with three different PLs. They don't see the connection.

There's no address tied to it. It's just a purchase order to a supplier. And what we're seeing now is we're conditioning the customer. It's going to be let's say 12 weeks, right? Okay, no problem. I've got vacations, we're going to do a wedding in the backyard, no problem at all. I'm doing a new pool, whatever. And then all of a sudden, we place the order. And in a week, we get a call, your order's ready. And by the way, if you don't pick it up, it's 12 weeks. And you really want to deliver a good experience to the customer. So we race, we get a truck up underneath that are sometimes multiple semi tractor trailers. We put it in our storage yard. We rapidly mess around with the schedule to get a crew there to get the old roof off, so that we can put this new one on for them. It is very, very disruptive. We cannot run the way we want to run right because of it. I'm sure you want to comment.

Heidi Ellsworth:
No, I'm just saying I've been hearing this. So yes, keep going.

Ken Kelly: So yes, there was the freeze in Texas that caused the chemical that creates the agents for our adhesives to go down. It's the transportation. One out of every 65 flatbeds that you see on the road, are for roofing materials. 5% of all landfill is roofing material. We are a huge part of this economy, you don't even realize it. And so when you have trouble finding drivers, it is a big problem. We need to get that material into our location so that we can start utilizing it. I know roofers that are buying semis just like will pick up their own material. And we thought about it. It's that big of a deal. But I am seeing a break in the dam. So here's my good news. I told you about tile, it seems to be coming a little bit faster. Shingles also seems to becoming a little bit faster.

Some of the issues that we've had super fast escalation and pricing that seems to have stabilized. We know about plywood going all over the place. Now, it's starting to come back down. And it's almost coming back down as fast as it went up, which is great. And here's another thing that caused I think a lot of this, as soon as people realize they couldn't get material. They went and they hoarded. You saw what happened to the toilet paper over there. Roofers did the same thing with roofing materials. So we may have a couple pallets of nails and adhesives and markings. And I've told him start using it. And that's just going to help relieve that pressure across the industry. I think we're largely coming out of that.
The last thing is labor. And I don't want to make this a political topic. I'm just going to tell you the reality of what's happening in our southern border. People are coming into the country. They have papers. They're given a court date. They're authorized to work. They're authorized to get a driver's license. They're hard working individuals who have fantastic family values, and we're utilizing them. The last two months, we've hired 57 field employees. They're all very hard workers. Now, there's some issues with that. A lot of them are from Guatemala and Honduras. They don't speak Spanish, they don't speak English. It's a local Aztec dialect. And there's like 100 of them.

So you can't read your employee manuals, they can't sit through your boot camps, training is a little bit of an issue. So right now, we're starting on the tear off and cleanup crews. But a couple months, they'll catch on to how our society runs. And they'll understand how the roofing system works. And with our internal training and a little bit of shadowing, and side by side, what we call it the pigeon effect, you take them under your wing, and it's absolutely going to pay off. So we're utilizing that new workforce that's coming in for sure.

Heidi Ellsworth: So, okay, tell us a little bit more about that new workforce that's coming in, because I know you're very active with NRCA. And NCRA has been working very hard in Washington, DC, on immigration, and to open it and to help the industry. 57, that's a big number.

Ken Kelly: It is. I'm not saying it's the be all end all to our problem in labor because we need skilled labor. Right? I mean, these will be skilled laborers in a year or so. But it is going to take time. On the Roofing Day committee that I sit on, we're very focused on labor being the one and only issue. So for those of you who have participated in Roofing Day, you know that we typically go with three topics. You go and you sit down with your congressman, your senator in Washington in their office, you get one on one with their staff liaisons, and you talk about the issues. And typically, it's been three issues, we're actually thinking, maybe we just talk labor, because it seems to be the one big issue that our entire industry has.

So you make a good point, I don't think we have the answer yet. I know that we are going to need to train our own workforce. So working on training, working on certifications is the right direction for our industry. And I know that it's going to help us long term. So whatever you as a contractor can do to bring people in, to teach them not only roofing, but unfortunately, in a lot of cases, you have to teach them life skills, soft skills, how to work a smartphone, how to read a paycheck, how to file their taxes, these are things... And if you do that, you get a lot of loyalty. And they stay with you.

Heidi Ellsworth: Yeah. And you learn a new language.

Ken Kelly: True.

Kim Simone: Yes.

Ken Kelly: I think so, Kim, what are you seeing on labor?

Kim Simone: Yeah. We've definitely had our share of challenges with labor as well. And we're fortunate that we seem to be able to find what we need when we need it. We have all of that in house labor available to us. The COVID situation definitely made things a little trickier when someone has to be out, and then you're constantly navigating, how do we do this now? Not every position can work from home, obviously, when we're talking about labor, it's not possible at all. So that has definitely made things a little bit challenging for us.
Also, we did in our history, in our infancy, have training programs for in house labor ourselves to address because it's just always been an issue, right? For construction and for roofing. So we'll continue to focus on that, as needed in the future. But I think I would just say, we've been fortunate that we've been able to navigate it, been able to find it and have things in place to keep serving our clients.

Heidi Ellsworth: Yeah. And along that same line, I know we talked about this when we met at the meeting on Tuesday with National Roofing and all the different councils. But that whole drive for diversity in our industry, I think is so important. There's 50% of the population that has traditionally not been even like five or 10%, of roofing, and there's so much and being a woman in sales, Kim, I just that I think... How have you coming into the roofing industry from teaching, which my whole family was teachers, except for me, where I'm at. But coming from teaching into roofing and then working in sales. How has that been? Tell us a little bit about that?

Kim Simone: Yeah. It's been quite the experience. I mean, obviously, I don't think I would have ever come into roofing had it not been to help my little brother. It's definitely not something that I grew up saying I wanted to sell shingles for a living. So that was interesting coming in from teaching which is a predominantly female oriented career, to now being very much in a man's world. And we were a very small company, of course, when I started to, so there were a few women. And then we've grown more and more over the years since I've been there. But I'm very fortunate that a lot of the stereotypes that women have to navigate in the industry with it being so heavily populated by men, has not really been an issue at our company because I'm fortunate to work with a lot of very quality men and women at our company.

And we've always said that it's never really been about gender for us when we're looking to grow our team. It's always about finding the right person for that position. And sometimes that is a woman, and sometimes that is a man. But we're always just looking for that right fit, the team. But I have been excited though, to be able to grow. I think it's amazing that women are out there on the roofs, that they're actually building the roofs. I mean, I would love to learn that skill. I actually got to learn to weld TPO recently, when we did one of our community projects, and I'm not a hands on person, so I'm very intrigued by all of that. I've tried to grow my knowledge as quickly as possible.

I know some of the guys get annoyed sometimes, because I'll be the one asking all the questions just because I want to know how it's done, even though I'm not responsible for getting it done. So I admire all the women out there that are doing that. And from the sales perspective, I mean, I had had a sales experience alongside teaching. So I've been in sales for a long time. So the sales aspect of it, of course, was very easy for me, but having to learn new products, learn a new industry and all of that, of course, was a little bit more of a challenge. So I bring in as many women as I can to join the team. I have women that we hire for other positions in the company, that then are coming to me wanting...
I just had a couple of them actually out today for roof safety training, because they want to learn to get on the roof, they want to be able to go out and observe these processes and learn these things. So whether they're going to be in a sales position or not, they want to come in and add value to their own personal role in the company. So that really excites me to see that. In fact, we were just joking, though a couple of us the other day about how there's really no good women's line of clothing in roofing and even the cougar paws, they were trying to match them up for the size. And so we might have another little side business idea there for the future for some of us to team up on and get some clothing designed for women in this industry.

Heidi Ellsworth: I think, well, National Women in Roofing Day, NWIR, they're going to be showing some safety gear for women. And so there is this push. So you're very smart. That's exactly what needs to do. And I also love the fact that you, in the midst of everything you have going you're also starting a council in your area in Jacksonville.

Kim Simone: Yes, the Northeast Florida chapter we've been trying to get it off the ground. COVID slowed us down a little bit. But yes, very excited. I joke that just at Reliant, we have our own little mini council so [crosstalk 00:42:48] I think we're up to 11 now at Reliant. And so we're very excited to continue to grow. It's been a great opportunity down here to network with so many professional women in the industry because you do get busy and get stuck in your own company and in your own lane and you don't realize that there's so many other people out there enjoying success. And I've just met a lot of wonderful women that have so much to offer and so much education to provide.

And I'm excited to bring that to my team, we have a lot of young people in the company, I'm one of the eldest at Reliant. And so I like the idea of keeping men and women both all these young people that work for us excited about a career in roofing. And just all the different directions that it could go, especially with this partnership that we have now, the sky is really the limit on what we can offer our employees throughout the state of Florida. So I'm excited about the council getting started.

Heidi Ellsworth: That is cool. And I have to tell you, it is amazing when I get to go to these different places, and we get to meet and it's like we've become friends. And it's through National Women in Roofing, there's just such a camaraderie and for the industry and the gentlemen who support it, and it's made a difference, it really has made a difference. So I want to go... As we come up to, this hour is going so fast. I can't believe it. But Ken, I just want to pick your brain on one thing. So we're going to change topic just a little bit. But I would love to talk about the next 18 months or even longer. And what do you see as some of the new or innovations that are going to need to happen in the roofing industry to help with labor, to help just that whole next step? What are you seeing?

Ken Kelly: Well, here in Florida, our governor recently signed a new law limiting how insurance work is done. Now, there may be a slight setback currently because there was a challenge to it. And we'll see how this turns out. But it's probably going to be rewritten. And a lot of our industry is insurance based. So we know there's going to be disruption there. And I'm very curious to see how the industry changes to work with that. In Florida, we started with the deductible wind/hail value as a percentage of the home's worth. And that's very interesting when you think about a $300,000 home with a 5% deductible. That's 15 grand. I mean, that almost pays for the roof. Right? There's no help from insurance and your roof is laying on your neighbor's yard. That's a big issue. It's not 500 bucks, or, hey, I'll waive your deductible the crazy stuff that goes on.
That's going away. So how does the industry respond to it? 18, 24 months, we're going to have to figure that out. We can't go door to door anymore, we can't we'll do the work if we also create the scope. We can't do public adjusting, all of these things are going away. So as an industry, do we change that because insurance companies are realizing we're getting good at insurance work. We're getting really good. And their losses are racking up. And the insurance industry is being regulated by state laws. So they can't raise the rates fast enough to cover it. They're losing money, they're pulling out of these states, and we need them. So there's going to have to be a balance. Right?

So we'll see probably more consolidation, more authorizations from insurance carriers that pick companies to say, we know they do it right, they don't mess around with the pricing, they don't create damage, and pretend that it was the storm. And this unfortunately happens in our industry. But as that occurs, I think you're going to see a lot of change around it. The other thing we're going to see is a huge change in technology and how its utilized. Back in the day, we remember the day?

Heidi Ellsworth: Yes.

Kim Simone: Yes. Where is my pencil sharpener?

Ken Kelly: To understand technology, you really needed to go try to learn technology, you needed to go to a programming course or even to use it, it was so complicated. Today, the user experience has been brought to us. So it's very simple to adopt new software, people are thinking more about UX instead of just UI. So now they understand that the fewer the clicks, the better AI is taking on, doing a lot of the back end for us. That is going to really help revolutionize how we utilize technology because it's become an extension of ourselves. So what I mean is, today, the buzzword is APIs. Let's get all of these different silos of software platforms to talk to each other. 24 months from now, it's going to be one software. Now, it may be parts and pieces, but they're going to be so seamlessly integrated that they're not going to be parts and pieces. So it's something that's coming up.

Heidi Ellsworth: Yeah. And I know, Mr. Microsoft, that you're have the inside scoop there, I would be listening. If at all you-

Kim Simone: We're going be listening.

Heidi Ellsworth: Yeah, we're going to be listening. I'm always listening. So what do you see in the next 18 to 24 months? What's going to really impact Florida market?

Kim Simone: Yeah, most definitely the SB 76 legislation that Ken was speaking of with the insurance, that's definitely going to have the largest impact on us on the residential side of things in terms of how we generate those sales and how we serve those clients to the best of our ability to make sure that they get that quality roof replacement, and that their insurance does right by them. Definitely, along with Ken, I'm interested to see how that's going to play out. Injunction gave us a tiny bit of reprieve and in some areas of the legislation last week, but still there's a lot of new information there that we're going to constantly navigate. Yeah, I would say that that's going to be the largest thing we keep our eye on in the next year.

Heidi Ellsworth: It really goes to show how important it is for roofing companies to be adaptable. I mean, and let's talk just a little bit about post COVID I mean, when we were selling one way before COVID and installing totally different way during COVID. Now we're coming out of post COVID, it seems like it's going to be a hybrid of some way. Because personally I like being able to go on the computer and find my stuff and not do a house call. Sorry. But people are changing, and the next generation is changing on how they want to get their information. And Ken you were one of the very first people I mean, I will always remember. And you still probably have it, your quiz on what kind of roof are you? I love that on the website. How is that changing everything?

Ken Kelly: Here's what's really happening, there is a fundamental shift in the way we communicate. Back in the day, if my parents wanted to get in touch with me, they pick up the phone and call me. Right? And that was relatively new. Today, I don't call my son, I text him. Right? And I know whether he's seen it or not. Okay? And I actually know where he is because we choose to share each other's location in case of emergency. Right? That's really interesting. That's a fundamental shift. Think about the way we buy things. I'm addicted to Amazon. Yes. My name is Ken and I'm addicted to Amazon. I mean, seriously, I need a support group for this. Because every single day there's a package showing up in the home. I got to go downstairs and get it.

Customers are going to expect us to communicate omni channel. Doesn't matter if they contacted us on social media, and then followed up with a phone call, and then texted later after the relationship was built. They're going to expect us to know all of those communications and wrap them into one. Okay? And respond in kind. So we need to be in social, we need to be okay with texting and so forth. And they're going to want to buy in a process that may not include someone coming to the home and doing the dog and pony at the kitchen table. It's still absolutely the preferable way. And even if you ask customers, they're going to tell you later. I'm glad that I let them come here, right?. But what COVID did is accelerated what I think was going to happen anyways. So those who figure out how to sell online, or at least educate and prepare a customer for a sale online, are probably going to do better.

Heidi Ellsworth: Yes.

Kim Simone: I think so, too. Yeah, we were really well positioned, fortunately, for that shift as a company, because with young owners, and young entrepreneurs that started the company, we are already very tech savvy. And then we also serve a wide range of clients, including those who own property in Florida, but live elsewhere. So we were already prepared and doing virtual type presentations. We already had our materials that we would present in person digitized, so that we could send it through an email. And do screen sharing and all of that. So we were very fortunate in that way that we didn't have to do any scrambling around when it came to rescheduling or changing our scheduling process. But since things have opened back up, we're getting a mix of people, I think, I mean, there's still people who just always did prefer to do it over the phone, or virtually.

But I do think that we all went so long with being stuck in our houses, and just bringing back the old school because that's who I am. I think people do still want to connect. And I think that there will always be value in the kitchen table. I think that the younger generation for sure, we're seeing more digitized type proposals, companies and sales people going in with tablets versus printed material like we do. But I still think that we have a large clientele that wants to be served in those traditional ways and wants that eyeball to eyeball energetic connection that we can give them by showing up in person.

Heidi Ellsworth: What I really love is I love that you say you were fortunate, but to me that you were prepared.

Kim Simone: We were prepared.

Heidi Ellsworth: You were prepared. And fortune comes from being prepared. Right?

Kim Simone: Yes.

Heidi Ellsworth: So I love that. We do have a question here. And we are getting close. But I want to get this question. And it's from Oregon, so my peeps out in Oregon, I love it. And I loved being able to join FRSA from Oregon, what are the ways your companies are drawing in the younger generations and keeping them invested in your company? Great question from AJ. Thank you.

Kim Simone: That is a great question. And I guess I'll start since I had already mentioned that we are such a young company, and so full of the younger generation, I mean, I think our youngest person, right now is probably 22 in our company, 23 right around there. And so I think it goes back for us, what keeps them invested in us is the culture. And so we work really hard to have an inclusive culture, and always a place that you want to get up in the morning and come to work at. We have great communication in our company from the leadership all through the employees, and then casting the vision, right? You got to have great leadership, and a company and good leaders to always cast the vision. And of course dollars help. So always reminding them of the potential in this industry, that if you stay and you develop a career, there's so many different places to go with it. So I think we just stick to that, the tried and trued, right? Cast the vision, keep them happy, give them incentive and create a great culture.

Heidi Ellsworth: And bring him in. And bring him in.

Kim Simone: Yeah.

Ken Kelly: I think Unfortunately, there are people in our industry who simply say, I'm not hiring a millennial. And I think it's a real shame because what the millennials have, and we can classify because there's generalizations that tend to be true about people, right? I'm Italian, so I love to eat. There's some truth behind it, right? They tend to be very passionate. And if you can channel that passion and aligns with your vision, oh my gosh, they're all stars. Right? So don't let them off. I know in our case, we tend to hire salespeople that are right out of college. They've never done roofing, we prefer that as a matter of fact. So understand that you are going to have to do a little more teaching outside of just simply roofing. But if you're okay with that investment, my gosh, they're amazing to work with. They become part of the family. They're so committed.

Kim Simone: Yes. Absolutely.

Heidi Ellsworth: Wow, that is great. I love it. Well, our youngest is 19. And who's working for us, too, and we take insurance, we love it. But I do think we are at a point where we need to call it the hour. Thank you. Thank you so much. I can tell you it's been... I'm kind of fangirling. I want to thank all of you for joining us today at this live coffee conversation from FRSA. We are so happy and proud to be here. We have special thanks to our sponsor FRSA and the team and everything they've done. You are on YouTube right now. So please subscribe, like, and I guess ring the bell so that we could get our notifications. I was trained to say that. So just so you know. That's the next generation right there. So thank you. Join us and we'll see you on the next live coffee conversation at IRE. See you next time.