Guest: Austin Watterson, Royal Roofing & Solar
Host: Jim Ahlin, Roofing Success Podcast
Links:
https://roofedbyroyal.com
https://www.instagram.com/royalroofingandsolar
https://www.facebook.com/RoyalRoofingSolar
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From Restaurants to Roofing: How Customer Service Became a Competitive Advantage
Austin Watterson did not enter roofing the traditional way. His background was in the restaurant industry, where systems run the entire operation. When your average ticket is seven dollars and you serve thousands of people a week, consistency is survival. That mindset became the backbone of Royal Roofing.
He quickly realized that most roofing companies weren’t operating with anything close to the same level of process discipline. Roofing felt like the Wild West. Too many owners were shooting from the hip, skipping steps, and hoping things would work out. Austin built Royal differently.
As he puts it, “Everything has to be repeatable. You expect the same bite of a hamburger every time. Roofing should be the same way.”
That commitment to predictable customer experience shaped everything that followed.
Why Most Roofing Companies Struggle With Customer Experience
Early in his journey, Austin’s own team challenged him: “Our service sucks.” It stung, but they were right. Timelines were unclear. Calls were missed. Homeowners were left wondering. That was the moment Royal doubled down on customer experience.
They built:
- A 24/7 answering system
- A detailed call playbook
- A trained office team to book appointments properly
- A process for recording and reviewing calls weekly
Why? Because most roofing companies don’t answer the phone. Austin says if you call ten contractors in any city, maybe three pick up. And that creates the perfect opening for companies that value responsiveness.
This aligns with a key principle roofing contractors often forget: if your customers are wondering, you’re losing.
Wondering where the crew is.
Wondering when shingles will arrive.
Wondering why the siding looks different.
Royal solves this with clear expectation-setting before, during, and after the job. They even use what Austin calls the “Surgeon General’s Warning” — a simple but effective practice of telling homeowners exactly what could go wrong before it becomes a conflict.
That transparency prevents frustration, protects relationships, and eliminates unnecessary discounts.
The Real Threat to Roofing Profit Margins: Your Own Sales Reps
After scaling Royal past eight figures, Austin discovered a harsh truth: sales reps were unintentionally destroying profit margins.
They would:
- Sell too cheaply just to win the deal
- Miss supplements
- Skip attic inspections
- Fail to document pre-existing issues
- Offer discounts without approval
- Assume they would “make it up on the next one”
The result? Red jobs, lost revenue, and angry customers.
Austin put it plainly: “Fifty percent of nothing is still nothing.”
This is the trap of traditional 10/50/50 roofing compensation. Reps discount to win. The company eats the loss. Nobody wins.
Introducing the Red Light, Yellow Light, Green Light Pricing System
To fix the problem, Royal adopted a simple but brilliant system inspired by the solar industry.
Every job is flagged:
- Green Light — Acceptable profit margin
- Yellow Light — Still profitable, but needs manager approval
- Red Light — Below minimum profit; cannot be sold without adjustments
One dedicated team member (not the salesperson) builds and reviews every job. Margins are calculated accurately and automatically. Owners receive a copy of every red or yellow flag.
This eliminates surprises, protects the company, and turns every job into a teachable moment for sales reps who miss items.
If a rep turns in too many yellow or red jobs, it becomes a coaching tool — or a clear signal they are not a fit.
Why Royal Dumped the 1099 Model and Moved Fully to W2
From the start, Royal chose to make all salespeople W2 employees. Austin learned the hard way that 1099 models invite massive risk:
- Fraudulent insurance certificates
- No workers comp coverage
- Liability for injuries
- No control over company behavior
- Difficulty enforcing standards
Protecting the brand mattered more than saving on payroll taxes.
This shift also reinforced professionalism and accountability inside the sales team.
The 60/40 Redline Compensation Model That Actually Works
Under Royal’s new system:
- Reps earn 60% of the margin on self-generated work
- Reps earn 40% of the margin on company-generated work
This rewards hustle, encourages door-knocking, and discourages discounting.
Royal even employs a full-time team member who pulls measurements for every appointment so reps can build accurate quotes on-site without waiting for EagleView or Hover. Fast and accurate beats slow and precise.
The result?
- Higher margins
- Better compliance
- Faster sales cycles
- More predictable customer experience
For most reps, this model pays significantly more than 10/50/50 — but only if they sell profitably.
Why Some Roofing Companies Will Survive Private Equity and Others Won’t
Austin and his partner John (Abernathy Roofing) eventually merged their companies after years of collaboration. They realized that independence requires scale, systems, and shared leadership.
Private equity is pushing into roofing fast, but Austin believes small businesses can thrive if they stay focused on relationships, systems, and predictable service — just like plumbing, HVAC, dental, and veterinary industries did.
His biggest advice for new roofing owners: “Don’t do it alone. Find alignment. Build a team.”
Final Takeaway: Protect the Brand, Protect the Margin, Protect the Customer
Austin’s story is a blueprint for every roofing contractor who wants to scale without chaos.
The formula is simple:
- Make customer experience predictable
- Build repeatable processes
- Train daily
- Price accurately
- Pay reps on margin, not guesswork
- Remove the 1099 chaos
- Use systems that prevent mistakes
- And never let your sales team decide your profit margin
Do that, and you can grow — and stay profitable — even in a world of private equity giants.
FAQs: Roofing Business Takeaways from This Episode
Q: How can roofing companies stop sales reps from discounting too heavily?
A: A margin-based compensation system solves this. By flagging every job as red, yellow, or green, reps can no longer hide low-profit jobs. They learn to build profitable estimates, and discounts become rare because they affect their own commission. This motivates reps to price correctly while protecting company margins.
Q: What processes help create consistent customer experience in roofing?
A: Start with a scripted call playbook, clear scheduling, mandatory attic inspections, documented pre-job walkarounds, and automated expectation-setting calls before installation. These eliminate surprises, reduce complaints, and ensure homeowners know exactly what will happen next.
Q: How do you prevent homeowners from blaming you for pre-existing damage?
A: Use a “Surgeon General’s Warning.” Walk the homeowner around the property before work starts and point out aging siding, damaged fascia, or other issues. By setting expectations early, you avoid surprise complaints and unnecessary discounts.
Q: Why is 10/50/50 a risky compensation model for roofing companies?
A: It incentivizes reps to sell cheap jobs just to win deals. This leads to thin margins, collections problems, and lost revenue. A margin-based model aligns sales behavior with healthy financial outcomes.
Q: Why should roofing companies avoid 1099 salespeople?
A: Misclassified sales reps expose you to major liability. If someone is injured or causes an accident, the company and homeowner may be held responsible. W2 employees with workers comp coverage protect the business and the customer.
Q: How can two roofing companies successfully merge?
A: Alignment is everything. Leadership must share values, goals, and operational philosophy. Without alignment at the top, no amount of paperwork can save a merger.
Q: Does answering the phone quickly impact lead conversion?
A: Yes. Austin notes that most roofing companies don’t answer at all. If you pick up, book the appointment, and set expectations, you often eliminate the homeowner’s need to call anyone else.
Q: How do you ensure reps build accurate estimates on-site?
A: Use quick-bid systems. Have a dedicated team member pull measurements for every appointment. Train reps to calculate squares, waste, accessories, and steep/two-story charges. Fast, accurate pricing wins more jobs.
Q: How often should roofing companies train their sales teams?
A: Daily. Weekly meetings are not enough. Daily touchpoints reinforce expectations, correct mistakes quickly, and strengthen culture.
Q: Should roofing companies rely on tools like EagleView or Hover?
A: They are great tools, but they’re expensive. Some companies hire an in-house measurement specialist to pull measurements manually. This reduces costs and speeds up the sales cycle.
Q: How do you integrate solar sales with roofing?
A: Solar industries use redline pricing models. Roofing companies can adapt the same system to create predictable margins and empower reps to sell profitably without micromanagement.
Q: How do you fix sales reps who keep turning in low-margin jobs?
A: Use red/yellow/green metrics as coaching tools. Review every flagged job with the rep, identify the issue, retrain, and monitor. If improvements don’t happen, it becomes a clear personnel decision.
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