Will Parrish, co-founder and Chief Customer Officer at Lula, joins Andrew to talk about where property managers are starting to feel financially squeezed. Whether it's labor costs, pricing of repairs, or flatlining rents, PMs are looking for ways to optimize their processes.
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Season 6 Episode 3 features Will Parrish, co-founder and Chief Customer Officer of L.
The Triple Win Property Management Podcast is produced and distributed by Second Nature.
Andrew Smallwood
Hello, professional property managers. Andrew Smallwood here with the Triple Win Podcast. We have a special guest today. We've got Will Parrish, who's cofounder and chief customer officer at Lula, which is a maintenance platform for property managers, and it helps them coordinate vendors, resolve work orders, solve maintenance issues faster.
I've seen Lula over the past few years really, growing and taking hold in the space. Some great momentum. Will, Bo, Nate, there's a great team over there, great people doing some really cool things. We wanted to invite them on because they really have a unique perspective to share here.
But before we get into the topics and what we're going to be covering, Will, thanks for joining us. And maybe you could just share a little bit more context about Lula, what you guys do for people who aren't familiar, and also your role as chief customer officer today.
Will Parrish
Yeah. Thanks for having us, Andrew. Appreciate it. So, yeah, I guess to start out in my new role, chief customer officer this year, as we've continued to grow, I think we felt more and more of a need to make sure the voice of the customer was pulled through and that we could operationalize, you know, feedback from them, tech updates, just to make sure they're really our customer base as we're, you know, two hundred and fifty plus customers in the SFR space now, had a voice and had an advocate internally.
So that's really been the focus this year. I think that's been the right move. And, also, it’s more fun for me. It allows me to be closer to the customers and have the customer interaction be a part of my day to day.
So anyway, yeah, thanks for the intro. Yeah. I'll do a quick overview of Lula. I think that's probably valuable.
We have some people in the space that just see us as a vendor. We have other people that just think we're a technology company. And the truth is we're really, you know, one of the only companies out there that marries the two together. So Lula is a maintenance platform, as you mentioned.
We can handle the full life cycle of a work order. So we use both technology and people all the way from intake to invoice. So it's really, like I said, full life cycle of a work order. And so we handle all the triage.
We handle all the scheduling, getting additional, you know, pictures and information from residents. So we do all the resident interaction. Where we differ for most of the companies in the space is once we're ready to deploy a work order or dispatch it. We use our own vetted vendor network. And our vendor network is a managed network, which is a really important distinction.
It's not a button you click to connect to a list of vendors or anything like that. They're Lula pros. We only approve about fifteen percent of them to be on the Lula platform. They agree upfront that they're going to use our technology out in the field, so they check-in.
They check out on ninety eight percent of the jobs we do so we get real time performance data, which we're pretty obsessive about. We love sharing that data with customers on speed of repair, resident satisfaction, average cost. You know, those are usually the three things that are most important.
And then once we've completed the work and have full visibility into that work for our customers, we push everything back into their system of record via integration. So we're directly integrated with, I would say, probably the seven or eight largest software platforms out in the SFR space. So it really is a full life cycle of the work order that we manage. And for most of our customers, we're more of like a managed service where they've effectively said like, hey, we think maintenance is a thing that's keeping us from scaling. You know, we want to go from, whether it's a regional account that wants to go from five hundred doors to two thousand or to an owner operator that's got five to ten thousand doors.
Usually, recognize maintenance as kind of that bottleneck that's keeping them from going where they want to go. And so they basically use us as a managed service to, like, provide a best in class maintenance experience.
Andrew Smallwood
So if I play this back, what I just heard, Will, is like, hey, if I'm a broker owner of a property management business or if I'm a COO and ensuring the the day to day, right, is all running, and I'm working with Lula, I'm not just getting a technology, right? I do get that, right, full information, etcetera. But I'm really getting a complete solution including the managed vendor network as opposed to continually having to go out and search for vendors, vet vendors, etcetera. I can really bring both software and, like, the managed service kind of together to own that full, you know, maintenance outcomes so that I can focus on other parts of my business. Is that right?
Will Parrish
Yeah. You nailed it. I mean, it's perfect. Usually the options in the space have been one or the other.
Like, hey. We'll help you with the dispatch piece. But if we can't find any pros, we're just going to kick it back to you. Or it's like, hey.
We're a maintenance company, but you handle all the front end piece. And so that was the design from the beginning. It was like full life cycle management. We will handle maintenance for you.
We'll give your residents a best in class experience from speed of repair, your owners from a cost perspective with our flat rate programs. And so, like, let us do it. We're the pros in maintenance. It's all we focus on is SFR maintenance.
You can focus on growing your business.
Andrew Smallwood
Love that. Okay. So great. That's helpful context. As we get into this, you know, it's May, right, that we're recording this, which means in the property management world, there's been like five conferences in the last twenty days. And so, you know, I know a part of your role is staying really close to the market, right, representing the voice of that market.
In the conversations that I'm having with property managers over the past few weeks, the way we kind of articulate this at second nature is they're really up against it as it relates to what we call the triple squeeze, which is three parts of that. One is rent growth has been declining or flat. I was just seeing this morning in Peter Lohmann newsletter, Sam Edinger is in a market where his rent growth is flat over the last seventeen years in Connecticut. I was like, okay. That's not most markets.
Will Parrish
That's a tough market. Yeah.
Andrew Smallwood
But people are feeling their version of that kind of, like, recently. Right? In the last couple of years, even seeing rents declining. The other aspect of this is that costs have been going up.
I saw a stat recently that the cost to maintain a property is up forty percent over the cost in twenty twenty, you know, in twenty twenty five and twenty six. That's up materially. You look at property taxes going up four percent, property insurance going up.
It's a lot of pressure on the ownership and, you know, the PMC. And then finally is rising expectations because residents and property owners are all expecting communication, resolution, things faster than they ever had. They're expecting their needs to be anticipated more than they ever have, things to be personalized to them, and less generic. And so all of these things, like, coming together, it puts PropoMeters in a space where they've got they don't have revenue growth coming in, but expenses are coming up, and there's a pinch.
And then on top of that, people are asking them to do more than they've ever done before and do it faster than they've ever done it before. And so that's kind of the systemic pressure that a lot of property management companies are feeling. And I think you sit and your company sits at like a very important spot with this and a great perspective on this.
So I'm just curious, what part of that is you're having conversations with operators, with third party management you know, businesses, are you kind of seeing of how property managers are approaching that, right, from a strategy standpoint or how they're thinking about moving their business forward in a market kind of condition that we're in today?
Will Parrish
Yeah. Great question. We see that too. And I'd like to pretend like, you know, when we started the company nine years ago that we knew we'd be sitting here at this intersection today.
Probably the truth is we accidentally landed in a really good spot, which is to say, like, we're tackling two of those things on a daily basis for our customers. The first one is you're right. Like costs are going up and even if it's not a third party property manager, it's the owner operator space, right? Like they've got a specific subset of properties, but maybe they're not buying anymore.
Like those five thousand properties you have, that's it. You can't go out and bring on more doors to supplement that income. So they're seeing a lot of squeeze on NOI as well. So the challenges are pretty similar.
The main thing we've done is based on customer feedback, we used to have a different pricing model, which is to say we kind of let our pros set their own price, but then we'd use our algorithm to make sure the most affordable pros got the job first, which we do still do for hourly work. But what we realized two or three years ago based on customer feedback is that customers want predictable pricing. They want flat rate pricing. And so we put together our flat rate catalog, which we continue to grow.
I think we first did that three years ago. And so it's stuff like, you know, if you have a hot water heater replacement, we're all-in starting at twelve fifty. And I think when people see the price, that's an amazing price. But the truth is we have significant buying power on the parts and side, and we have significant negotiating power on the labor side.
And so we can push those prices down to really best in market prices. And I think when people see a company like Lula, if people are smart, the first thing they might think is, well, that's an aggregator. They just go get the same pros we can get and then they add on top of that. But what our partners realize is, no, that's not where we stop.
We push those prices down as far as we can so that they get best in market pricing. So the flat rate program has been really helpful. We do HVAC. We do roofing.
I guess this is probably as good a place as any to make a big announcement, which is we're launching handyman. We're in pilot on that now, which, that'll be six hundred different handyman services that are all flat rate across the board. Predictable pricing, customers will know exactly what a toilet swap's going to cost. They're going to know exactly, you know, what a garbage disposal swap's going to cost.
All the customers in our space have wanted that. The problem with it is, operationally they can put together a catalog that shows what things should cost, but then to, like, actually enforce that takes significant headcount, which is kind of counterintuitive to to what they're trying to accomplish, which is better pricing, you know, more profitability. So it really was holding it on somebody like us on the vendor side to put together a program that way they don't have to enforce it. So we're super excited about launching that.
Our average ticket price has actually stayed steady over the last three years. And you're right. Costs are increasing.
Our margins have stayed largely similar, which is a good thing for us. Hopefully, that continues to stay true. But we really accomplished it just, like I said, by kinda pushing that squeeze down on our pro network, which is an incredibly valuable part of our business, which is to say, like, hey. You don't need to find work elsewhere.
Lulu will be your sole provider of business and a good partner to you. But in response, we need to give our customers great pricing. So that's one thing. And the other thing you mentioned is customer expectations and where we sit, we see customers as both the resident–
So our actual customer, of course, would be the third party property manager or the asset manager. But we have three customers, which you guys refer to some of this as the triple win, right? Like their owner for those third party property managers is our end customer as well. Because if they're not happy with what they're seeing, the property manager is not happy. The resident's also our customer.
You can't have an upset resident. And so where I think we've really excelled there is about half of our employees are on our dev and engineering teams. So like our ability to turn around customer feedback into significant technology changes and provide a best in class experience is really pretty good. Like it's a strong capability of ours.
And so when we hear from a customer like, hey, we need more visibility into what's going on in the work order. We don't want to have to call and ask what's going on. That's why we have these two integrations with software platforms like AppFolio and PropertyMeld. Right?
But the other thing is like, hey, we hear you. How can we do that better? And our chief data and AI officer put together the ask Lula extension, which basically sits over the top of our Slack channels. You can just ask Lula what's going on with the job, and you'll get every detail of what's happening in that job in real time so that you can give your asset owner an answer while you're on the phone with them.
Right? And so I think this is a great question because these two pressures are like the main things we hear both from existing customers and new customers. And it's why we show up to work every day. Right?
It's like, this is what we're trying to tackle. So hopefully that wasn't too long of an answer, but it's something we're passionate about.
Andrew Smallwood
I think this is great context and a great way to start. I mean, I just think about the maintenance space, I think about what a challenging category it is from just a customer expectation standpoint because it's like you almost can't accomplish it fast enough, right, for a resident. And then you've got pressure on the cost side, right, from the property owner who wants that predictable and like better pricing than they could get on their own. And then, you know, I hear you providing great value to the property manager of like, here's great visibility and the kind of things that make it easier to be communicating across these different, you know, stakeholders and a more managed process that really frees them up, right, to get. I never hear a property manager say I'm twiddling my thumbs looking for more to do.
And aligning those kinds of things all up, you know, at the same time is important to really get, you know, the whole system kind of like embracing, here's this way of doing things. I guess, how do you guys handle some of those, I guess, tensions? What I hear you saying is, hey, like, as opposed to there's an extra cost into the system by adding an additional party in because of the scale, right, that you guys are bringing, across folks. You're been able to keep where costs have been going up, right, twenty to forty percent.
You guys have been able to keep those costs largely flat, right, which I'm sure is keeping the property manager and the property owner in a better position. How do you balance that against like, hey, but we also need to get vendors that are getting out there fast, and then it sounds like if the vendors are taking on some of the margin pressure on their end, like, yes, they're getting volume on the other side of that, but it seems like a tricky problem to kinda, like, optimize all of that, so to speak. How do you guys, like, work through that and approach that?
Will Parrish
Yeah. I mean, you said it well. It's a really tricky problem to get through because it's a two sided marketplace. Right?
You have to balance that. And we also have to recognize that the pros are also our customers, and we're like, we want the Lula Pro network to love Lula, know, to see us as a partner as well. So we don't want to push all of the pressure down to them, right? Like some of it has to fall on us, but yeah, maintenance is tricky because the very first thing that you're going to have to talk to a potential partner about is like, hey, let's just understand that even if we're the best in the business, we're still going to fail sometimes.
It's maintenance. It doesn't go perfectly. Right?
What we really propose to them is like, now you've got a partner, somebody who will work through this with you if and when it doesn't go well. And it will inherently like something's going to go wrong with maintenance from time to time.
From the pricing perspective, it is really tough to balance. We use technology a lot to ensure we get it done as fast as possible. The way we stack our algorithm is based on a number of factors, like a pro’s pricing, availability, proximity to the work, those types of things.
We are obsessive about KPIs and performance metrics. I think on average, our time to complete a work order is just four days right now. But somewhere around sixty percent of our work orders are done in a day or less, which is fast. Like, it is really fast. So we've got to really engage the pro network.
And we really, like I said, we kind of lean on technology and the algorithm to make sure we're getting it to the right pro so we can get it done. But you're right. A hundred percent of the customers we talk to when we say what's important, they're like, well, I want you to do it fast and I want my residents to be happy, but it also has to be super inexpensive. Like, okay, so everything basically is what you're saying.
And so it is hard, but we do, I mean, those are the three things. I mean, and that's sort of like, again, you talk about like the three layers of the triple win, like those are the three things every customer has in common that they want us to accomplish. And so those are the three areas that we try to drive a best in class experience for not just our customers, but again, also our pro network and the residents and the owners. So that's a really long way to say, yeah, you're correctly stating that it's a tricky proposition.
Andrew Smallwood
Yeah.
And so, you know, Will, maybe you can give an example, one of your customers.
But, like, I would think about before they were working with you versus, like, twelve months after working with you. Like, in their business, what are the KPIs or kind of outcomes, you know, that they would see, hey, here's what we're accomplishing now or here's what's been driven now. Like, how have you guys kind of thought about that impact and how that gets quantified?
Will Parrish
I'll go back to a long time customer, and they have no idea I'm about to give them a shout out. But, like, what you want to hear from customers is “I brought you on to make my life easier and you made it easier.” Right?
Like, that's why that's why Lula exists. It's even in our tagline. They would say make maintenance easier. Right?
But we've got a customer here in Kansas City, Premier Property Management, a smaller regional property manager around three hundred doors and great guys. And so we brought them in. We've done work with them for about a year or two. We just said, hey, would you come in and just give us some feedback, maybe even do a video testimonial?
And they're like, yeah. So we said, let's talk first. So we meet them in the conference room.
And even better than, hey, you guys made our lives easier. They told us, we basically inherited this business from our parents and we were going to shut it down. We didn't want to do it. We didn't like showing up to work.
And it was all because it was ugly. It was hairy. Like we didn't necessarily have the background to do it. And like it just, the juice wasn't worth the squeeze for us.
They're like, we found you and we said, let's give it a shot.
And they're still a customer all these years later. And of all the testimonials we've ever gotten, like these guys were being genuine. Like, yeah, we didn't want to do this anymore. It wasn't fun.
We were going go find other careers. And so to me, like that is like the perfect scenario of where Lula exists is like, do you really like property management? You want to do it. You want to do the– everybody wants to do the best they can.
Right? But there's this one piece over here that almost unanimously, nine times out of ten, if you're having an honest conversation with somebody, they'll say like, I don't love that. And I don't think we'd do it great. And it's not really helping us grow.
And that's why we exist. It's like tag us in. Right? We'll take that. We'll let you grow to three other markets if you want to, because we're in fifty one markets around the US.
Right? Like we'll be your strategic partner. So that is really one of the best feedback I think I've ever gotten from a customer.
As far as KPIs we do, you know, with every customer, we do regular check-ins and every one of those check-ins is focused on performance. So what are our performance metrics? We look at speed of repair. We look at one trip resolution.
We look at resident satisfaction, which is critical. For a lot of our customers we do review boosting, which is to say like, hey, when we get a five star review, which is more than ninety three percent of the time, we can push them to your website if you want to boost your reviews as well. Right? So like we're happy to share in the positive interactions and reputation that we're building for Lula with our customers.
But yeah, we really will allow our customers to kind of determine what KPIs they want to track because the fact that our pros are using our app in the field allows us to turn around pretty quickly just about any KPI that somebody has or or thinks is meaningful.
Andrew Smallwood
And so if I'm a I'm just thinking about this. Like, you're talking about some good things. So like one is, hey, you were talking about resident reviews and, right, resident satisfaction. And that's trackable over time.
And here's how that's improving. You were talking about speed of repair. Like, I'd love to talk just more specifically about what does excellent performance look like, you know, from your standpoint. What are some of the, like, standards and benchmarks?
Earlier, you talked about, I think it was sixty percent of work orders getting completed, you know, or or addressed within a day.
And the average time, I think, somewhere around four days. Can you walk through some of these standards of like, hey, here's kinda what we generally see, right, out in the market, and then here's what we think excellent really really looks like, but that's achievable, so to speak.
Will Parrish
Yeah. It's also tricky because there aren't industry standards. There are folks that are really smart trying to create those. I mean, I know you have Ray over at PropertyMeld on a lot.
His team are really smart folks. I know they're trying to present that. The AppFolio team, same. The trickier thing– and this is actually a little bit trickier for us in those platforms as well because we look at it as, like, there's a service request, and then there are work orders.
And a service request may include multiple work orders. Right? Like, the service request could be, hey. There's a leak inside my wall.
Well, within that is a plumber needs to stop the leak. But, unfortunately, the way the industry was created, plumbers don't do drywall. You know, you learn that the hard way. So now you’ve got to queue up a second.
So there's two work orders within that. And because we're really an all in one where we can do both the leak and the drywall, sometimes I think the speed of repair metric for us on these other platforms gets a little misrepresented because our speed of repair on that work order may be ten days. But the truth is we stopped the leak within twelve hours. Right?
And then we had to get a quote for the drywall, and then we came out and fixed the drywall. So aligning metrics is actually really tough, and that's why it's really important on the front end when we're bringing a new customer on, is how do you see this? And to make sure that they understand, here's the concept of a service request versus the concept of a work order. And I think largely once you walk through it, people are like, yeah.
I agree. It also makes it tricky for us on platforms, you know, like Meld or AppFolio, because, you know, we will be compared to both the drywall person and the plumber from speed of repair, and those were two separate work orders. Whereas we pulled it all the way through. Right?
We were a one stop shop, and now it looks like, hey. It took Lula seven days, but it took the plumber a day, and it took the drywall pro six days. Right? And so I think those are things that can be difficult for us to manage, and, you know, we try to educate as much as we can.
Our standards, or what we're looking to accomplish, is we want that speed of repair across the board to be at four days.
Even in the busy season, anybody in this industry knows, like, May through August is not built the same as the other months. It looks different. It's more stressful, but we really don't ever want to see that number swell up to five days or five days plus. We try to keep it needs to start with a four.
The percentile piece where, like, the percentage of work orders that we're accomplishing in a day or less, it always needs to be greater than fifty percent. Like, to us, that's a thing that really doesn't exist in the market as a standard. What percentage of work orders can you complete in a day or less? But to us, that is like a Lula special sauce. Like, I don't know if other people can do that. Right? And so we always want to make sure that that number is in front of our customers.
The resident satisfaction, it's always gotta be 4.7 or above. NPS has to be above eighty. Like those are just things that we're obsessive about and constantly tweaking and iterating different processes to try to make sure we're getting positive interactions with residents. So for us, those are really the key things.
A lot of the pricing metrics that are important are really being taken care of by our flat rate catalog. Right? So now that we don't have variable pricing on all these things, we know that as long as customers are leveraging us, and we tell customers to, like, when we show you the flat rate pricing catalog, first of all, they almost certainly won't get better pricing very often. But even if they have a pro that they can get better pricing on, are you getting that on all of those work orders?
Because this is our price for each market. Every time you send us the work order, you know what it is. Right? And so that's really on the pricing perspective.
We don't manage as much the KPIs there because we have that flowery catalog. So we're basically ensuring it on the front end, if that makes sense. But, yeah, we I mean, I think the way you pose the question is right. Like, we are really pretty obsessive about those KPIs on a daily basis, and we have a number of people within this company whose job it is to just watch and monitor and think about, like, what process improvements can we make that will make that number better.
Andrew Smallwood
Okay. You shared a couple things here that I know there's people listening to this right now. They're like, wait. Wait.
Wait. Wait. Can I go back to that? Because, like, I want to understand more about that.
Eighty NPS. You almost just said that in passing.
And that strikes me as, like, shockingly high for what this is in the context that it is.
Because when I think eighty NPS, I'm thinking like that's on the level of Amazon, you know, Netflix, like some of the just dominant, like, amazing consumer brands and what they're doing. And in a category like maintenance to be delivering on an eighty, like, I think you got to share can I ask you to share a little bit of like, man, what has really gone into that? What have you guys learned, you know, really driving that number up that a professional property manager listening to this could say, wow, like actually maintenance could be accretive to my NPS. Really, really be driving it up as opposed to a drag.
Will Parrish
Yeah, there's a few things. And one thing I do always want to point out on that is the way that we're actually a little more punitive on ourselves the way we calculate it. However, we do it based on our resident reviews, not our customer reviews. Because really at the end of the day, the resident interaction is what drives the customer's interaction with Lula.
Right? If everything's five star, there's no reason for a customer to ever be upset with Lula. It's when a one star comes through. Those are the ones where we hear from our customers.
Right? We know how the industry works. It's the loud one out of five stars that creates friction and now the customer's reaching out to us.
And so what we try to do is even if that's less than one percent of the work we do, it's the visible part. It's the audible part that our customers are having to reach out to us on. And so we try to minimize that as much as possible. We also try to make sure our customers see like just from a sheer volume perspective, like how many of these are five star interactions.
But yeah, so communication is key, even if the communication isn't good. We learned that a long time ago. Even if it's bad news, people just want to know, right? They don't like not knowing what's going on.
And so we have a number of different processes and team members that are responsible for that communication. And that's kind of the way we empower them and coach them is like, you have to make sure everybody knows what's going on with the situation, even if it's news you don't want to deliver. We also empower them to be creative with solutions. I always think of this, even outside of our general services team.
I always think of this example that occurred a couple of years ago, and we had a fridge that went out in St. Louis. And I can't even remember why, but we could not get one same day. Like, we tried, we were going to get somebody out there same day to swap it.
Food's going to go bad. And it's just for whatever reason, I don't know if they weren't in stock or if there's a shortage at that time. We just couldn't deliver it. And I remember one of our senior managers just happened to see the work order and just popped in and said, yeah, no problem. He went to DoorDash or something from Target, I think Postmates, and sent over, like, four big coolers, a bunch of bags of ice. Like, just went out of his way, like, a gift card just to make sure they knew, like, hey. This is not how this usually goes for us.
Like, we can usually swap this out same day. It didn't work today. I'm sorry for the inconvenience. And I always think of that example as having an employee within Lula.
Nobody told him to do it. Just saw it and said, like, that probably doesn't feel good to the resident. I'm just going to take action here. They didn't ask for approval from anybody.
And I love that. Like, That is probably the main thing that our team is empowered to do is we want positive resident interactions. The other thing is anytime a review comes in, if it's not four or five stars, it queues like an all channel communication. And there are people whose job it is to reach out immediately to the resident and find out, hey, what went wrong?
Where did we miss here? And what can we do to make it right? The magic in that, like we talked about, like even when something goes badly, just being communicative is a lot of those, like let's say it was a one star review and we reach out to the resident right away, will turn into a later five star review. Because you don't have to be perfect.
You just have to hear the resident and take care of the problem. Right? And so it's really a mindset for our service team, which is just to make sure you do everything you can to drive five star reviews from the resident, that they're satisfied and happy with the interaction they had.
Andrew Smallwood
Well, I love what you're sharing there because it'd be easy to understand, hey, there's a culture around just completing the task and completing the process or the workflow exactly as it is versus it's clear that you guys really work to instill this culture of, hey, we want to own this outcome of a satisfied resident. And so when the process isn't working or going as expected as opposed to just that's the way that it is and going with it. Yeah. What can we do to still deliver on this need and maybe even in an unexpected way?
It's funny how sometimes those scenarios, when you handle them that way, it's like it leads to a five star review because they didn't expect you to handle it that way. Right?
The expectation for service was that it's maintenance. It's just going to be okay and whatever. Deal with it. Right? So just the mere fact of showing you care or having, you know, gratitude or hospitality as concepts, right?
Like sometimes even if the experience was bad, the way you handled it can make it a five star experience.
Andrew Smallwood
Yeah, that's really great. So another thing that came up earlier that I want to make sure I didn't miss. This flat rate pricing, which you've covered a couple times, can you just clarify, is this like flat rate price? Like, is there just like a price book, right, of here's what it is for a water heater, right, Here's what it is for this item, that item, this type of job, etcetera. And so, hey, like, here's a price book that you kinda are able to deliver to the customer and set expectations around that. And, I mean, I gotta I know you said you've kept things pretty flat and consistent over time.
Are you guys managing that through, like, hey. You've got contractual agreements for a certain time period with folks, and it gets updated once a year. Like, how does that get managed over time?
Will Parrish
Yes. We have to have the ability to update it as needed just because of some of these changes that have occurred, but we do everything we can to not update it. And a good example would be the HVAC switch.
I think it was last summer when they changed some of the system requirements and coolants that you had to use, and we did not pass along any cost there. We just said, like, from a customer perspective, flat rate has to it's like a trust thing. Right? We want our customers to know that the price they see is the price they get.
Like, could something happen in the marketplace that requires us to occasionally change the price? Yes. Like, we still have to run a business, but we have worked really, really hard not to change that. The other thing that we want to make sure our customers know is like, this isn't like, hey, we're going to show you a price and there's all kinds of change orders.
Like even on an HVAC swap and you see a price starting at whatever it is, like four thousand two hundred for a full system swap. Like we're not going to go in there and hit any change orders for our customers unless the work is five hundred dollars or more. If we get on-site and there's four hundred dollars worth of work that needs to be done that we didn't quote, we don't care. We just eat it because we want the customer that sent us that work to know that when I think I'm getting a flat rate price, I'm getting a flat rate price.
It gives them confidence that they know what the price is going to be. And I think more than anything, particularly in the property management space for third party property managers, it empowers them to better communicate with their owners.
I say especially retail owners, maybe it's the same in the enterprise space, but they never like the price they see. Right? I think it's just like a reflex that they push back on it. Like, hey, is that a good price?
Even if it's a great price. And having that flat rate catalog allows our customers, like the PMs and maintenance coordinators to say with confidence, like, hey, this is a great price. Like, I can get you a second quote, but it's not going to get better. And also the company we're using can get this done today.
Right? So the catalog is really important to us. How we present it's really important to us. It is a price book.
When we onboard a new customer, whether they're on contract with us as a managed service where we're going to do a hundred percent of the maintenance or we're just doing overflow for what they would normally send to a third party. Yes. We provide them that book.
We ask them to provide it to everybody within their organization because we feel like the more people see it, the more work they're going to send us because the pricing is amazing.
Andrew Smallwood
Okay. So I want to ask just one or two more questions to kinda kinda bring this to a close. And, you know, as we're talking about the expenses and where we start with this kind of rise, like, you guys have a unique seat. You're tracking this.
You're looking at cross markets. I mean, all kinds of different categories, everything else. And I'm curious what your perspective is on what have been the drivers of the rising expenses. Like, I hear things all the time, there's a labor shortage in certain categories, you know, and that's really, like, driving the labor cost up. And Yeah. And, like, what do you forecast a little bit of, hey. In the years ahead, these are going to be the things that you kind of are expecting to see based on what you're seeing the drivers today and kind of the drivers tomorrow?
Will Parrish
Yeah. Well, first, let's address the labor shortage piece. Hate to even say this out loud, and I'll knock on wood every time I say it.
It makes sense that a labor shortage is going to occur.
Skilled tradesmen specifically are aging out faster than they're coming into the industry. So just from a numbers perspective, any smart person looking at the industry can say there either is already, you're feeling it, or there will be a labor shortage.
We haven't felt that yet. Yep. But we're smart enough sitting where we sit to know that there's a potential that that's coming. I think what we feel is like, because of the experience we provide for our pro network, we're probably like the place of last resort where they're really sticky. Right? And so maybe there's a reason we're not feeling that yet, but we know that that could exist. That has not really been an issue for us from a pricing perspective as far as costs go.
It's almost all been about the economy and, you know, the price of goods sold, like, you know, procurement of the HVAC parts, procurement of appliances. Like, those things are continually becoming more expensive for a variety of reasons, some like macroeconomic, some industry specific. And that's where we really have to make decisions about, you know, we have to balance Lula as a business. Like, you know, we've been lucky to be able to stack, you know, like, seventy percent growth year over year over year over year even as we get older and more mature.
We've also been lucky to be in a position where, like, we've got a healthy enough business that we probably don't ever have to fundraise again. Right? But those things don't mean that we don't have to run a healthy business. And so that's really the balance is like, as we see these costs coming in, like, what can we absorb personally so that our customers continue to have a great experience versus where do we just have to acknowledge our customer base?
Like, we're feeling the squeeze here too. But it's almost all about that procurement of parts piece, really. The labor's been consistent And anything else internally from a cost perspective, we have a number of different things that we believe culturally, but one of them is always tackle it with technology first. Don't just hire somebody for it.
And so internally, as far as our cost to really perform, like, we've we've maintained, like, pretty consistent there as well. So it's just that piece that we continue to monitor around procurement.
Yeah. So it sounds like, hey. Really, any labor effect to whatever degree that has happened, pretty mitigated.
Obviously, still keeping an eye to the future and that could present itself as a change going forward. It's really the materials, right, that's been driving up a lot of the expense over the last few years is what you're seeing there.
Andrew Smallwood
I want to ask this last question, Will, and then I'll open it up in case I miss something and just give you an opportunity to share a final thought. But let's say for a second that Lula didn't exist for a second, and you're sitting in the operator chair, the COO chair. Like, if you were leaving, like, turning off this podcast and saying, I'm going to go do three things right now to really improve, right, the outcomes and the health of my business by focusing on this in the maintenance space. What would be the actions that you would be taking right now in 2026? I know that can be contextual to business, but you can speak in generalities.
Will Parrish
Yeah. No. And I think it's a great question. I mean, I think the first thing that I see some people trying to do, it's more difficult to do than I think people think.
But, like, you have to have some sort of scoring metric for your vendor base. Otherwise, you don't know. You're operating off of things and feels, and that's tough. You know, anytime we get feedback from a customer that's anything that's not positive, hey, show us examples. Give us some examples and we'll take action on that. But without, like, hard data, it's it's hard to manage a business. And so I think, you know, if Lula didn't exist or if there's somebody out there that doesn't use Lula or maybe, you know, did that doesn't anymore.
I think you have to find a way to score your vendors based on those three things that are most important, which are almost always the same things, right? The speed of repair, resident satisfaction, and the cost. And even there, I mentioned earlier, there's some real nuances as to how you do that. It's not as simple as when did I send the work order and when did it get completed.
We chop it down into six different areas throughout the speed of repair, which is how long did it take for a pro to pick it up from the time we send it out? We call that job velocity. That's an engagement.
In our days to complete, how much of that was resident? So, like, if I reached out to a resident today and they said, yeah. I'm available next Wednesday. Well, there's four days that accrued that, like, it matters.
It's a part of the speed of repair, but also we can't really impact it. Right? How long does a job set in quote approval or or quote to be approved status? So maybe we send it to a customer and it sits with them for four or five days, right?
So there are all these nuances within this speed of repair that make it difficult to do. But I think that's the first critical part.
The other part I think is work order intake. It's overlooked and often ignored, and it's the absolute most critical part of having a successful work order, which is anybody who has ever seen what a work order looks like when it comes from a resident originally.
There's not a lot of actionable stuff in there sometimes. It's hard to discern exactly what the issue is. And so when you go through that sort of triage and interaction with the resident, that's really a critical part to find out really specifically what the issue is that you're needing to fix. That way you know what the outcome is.
That way the pro knows. But also just to arrange it in a consistent way so that you've got data around Right? So that's another piece that I think the owner operators and third party PMs really, really struggle with is like they don't have the bandwidth to sit there and do that on every work order when it comes in. So it comes in and they just sort of assigned it, but it's like junk in, junk out sometimes, right?
Like you don't get a good outcome because the work order wasn't very clean. And so I think those are the two areas where even customers don't usually look at focus and really start to get and drive better outcomes themselves. The pricing stuff is hard. It takes a lot of work.
It takes a lot of volume, too. Just candidly, a part of the reason we have the ability to do that is just the sheer volume we have. There's not that many folks in the space that have volume similar to that. Right? You're looking at the top end of the space, you know, Progress, Invitation, Tricon, First Key, those folks.
But, you know, as you get into to maybe more of, the Narbonne crowd, which we work with a ton, like, you know, if you have three hundred doors, it's hard to push back on a vendor on price because you need to get the work done and you've got an owner kind of yelling at you like, hey. When is this going to be done? Right? And so I feel like that subsegment has to kind of accept one of the three more often, but I think our take on it is actually you don't.
Like, let us help you with that. Yeah.
Andrew Smallwood
Yeah. Bringing that scale brings a different, a different kind of leverage. Right?
Will Parrish
It does. Yeah.
Andrew Smallwood
Okay.
I would be remiss if I did not ask this question. I'm sure some people listening to this appreciate that we didn't talk about AI within the first five seconds of this. I think I would be remiss if I didn't at least bring it up of your perspective and point of view. You guys are obviously a tech forward bunch of, one, how you see the opportunity for transformation and maintenance and really AI strategy of where is it overhyped, underhyped? What's your kind of take on what kind of impact that can have on the maintenance space?
Will Parrish
Yeah. I mean, it's real. It's tangible. I think the people that are engaging with different solutions right now are seeing the benefits and gains of it.
I also appreciate that you didn't bring it up on the front end because whether it's this industry or another one, there's also, like, a slew of solutions that are, you know, quote, unquote, AI that are really, like, offshore call centers behind behind the scenes and just not not, like, true AI solutions. But, you know, one of our first c level hires, anybody who looks at our business would probably say we did everything backwards, but it turned out to be accidentally correct in my opinion. So one of our first hires was our chief data and AI officer, Lax Degala. The great guy at this point, I've known him for a number of years.
He wasn't the AI officer then because it wasn't a thing. He was just our chief data officer, but he is now. And so even with, like I mentioned, our approach to problems is like solving a technology first. And so that's been a huge part of our component because we essentially operate the same way that the maintenance arm of a property management company were.
Right? Like, we've got a team that's here in office that's responsible for managing the life cycle of the work order. And so some of the places where we deploy it today are just ensuring good communication. Right?
And so we have the ask Google feature. We're going to be launching that sits over Slack today. We'll be launching the browser extension here in a week or so. And it's really powerful for one of our customers to be able to ask, like, what's going on with this job and to see the full work order history.
The cool part about it is, and even I fall victim to this sometimes, I'll use it and I forget that I can ask follow-up questions like, okay, well, how long is the drain line or what color of flooring was used? And to see really detailed responses.
It's not that our team can't do it, but it's just that that response because it's AI is always in real time. And we have so much data that it's actually a pretty robust response.
And so we've seen that the questions that come into our team like, hey, what's going on with this work order have actually decreased by over fifty percent because they're using the Ask Lula feature. And they're getting an answer they like. We ask customers during check-ins and they're like, yeah, if I'm being candid, sometimes that answer is better than the one I got from the person on your team prior. The other place we use it is Intake.
We've had Lumi out in the market for a while. We've got a number of customers using that for intake. That's our AI intake piece. It's also got a voice AI component that's really like my favorite thing about the voice AI piece is that it also has hospitality built in.
It just sort of unprops us some cool things like congratulations on your new house or I'm sorry you're having this experience. Like things that you would want a customer service person to say.
So it does the de-escalation and triage on the front end. We used to do that manually with our team here and they did a great job, but they're also a bottleneck. Right? You only have so many team members. You want to make sure you've got a consistent approach to how you do it.
So that's been super helpful. And then we've started to deploy it in a number of other ways internally as well. I don't see it. And maybe I'm just old school in this way.
Like, I don't like to think of deploying AI as a way to replace people that are here. I don't think that's the best use for it. I don't think that, you know, the people that make up Lula also make up the culture, and it's super important to us. That's where you get those five star experiences and that NPS.
But, like, can we improve the customer experience in a way with it? Can we take human decision making out of the loop in some places so that we're more consistent and make sure that we, you know, have a better outcome? And the answer is yes. And I think the customers that we work with that we see engaging with AI, whether they're building out tools and agents themselves or working with other third party customers, that's how most of them are approaching it.
It's like, how can I grow more without adding additional people, but also maximize the people that I have? And that's really been our focus so far.
Andrew Smallwood
Awesome.
Well, I think that's a great, great note to wrap this up on. Will, if people were looking to connect or get in touch with you or what's the best way for them to do that?
Will Parrish
Yeah. Give me an email directly. It's wparrish@lula.life.
They can also connect with us atwww.lula.life and connect directly with our sales and account management team.
Our information's pretty out there. Everybody in the industry seems to know Nate as well, so obviously, we're pretty visible on LinkedIn and at conferences and shows.
Please come up and say hi. We just kind of put a cap on it. You know, we work with customers from two hundred doors up to, you know, eighty thousand. So I think we're one of the only companies out there that can really work with people of all sizes and kind of, you know, breadth markets. We're in fifty one markets across the US. So, yes, if anybody's got questions or, you know, like to learn more about Lula, please reach out.
Andrew Smallwood
Awesome. Hey, thanks for the time today. I'm sure we'll see you around at the next I'm in event or wherever we're headed to next. And listen, if you're listening to this, keep stacking your triple wins, and we'll catch you on the next episode.
Will Parrish
Take care. Thanks, Andrew. See you next week.
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