Ripe Bananas, Seat Miles, and Service Labor Hours
What do these things have in common? They all represent “perishable inventory.” Ripe bananas have a short shelf life – sell them or throw them out. A flight that takes off without being full means seat miles were available and not sold. A service labor hour without a corresponding service invoice is likewise “perishable inventory” that is lost forever.
In the case of both food distribution and airlines, the large companies that sell these products have spent lots of money for systems that help optimize revenue relative to each dollar spent on “perishable inventory.” Most services businesses are local, owner operator businesses without the capital means to consider huge investments in systems. However, I have seen some interesting and creative strategies during my time at ServiceTrade:
Tech Commissions – In many cases, service businesses turn a significant portion of technician pay into commissions. This strategy lowers inventory expense, and in theory it creates incentives for optimizing revenue. It likely works as well as the profile for the technicians you hire. If they are highly motivated by money, it can work. Generally speaking, however, the population of technicians that are highly motivated by money AND well organized to manage a schedule is probably pretty low. Highly organized folks that are motivated by money probably don’t often self select into a technician job. The best technicians I have met are not as motivated by money as they are motivated to do meaningful work for the customer. I see this trait in software developers as well. Doing good is more important than doing well. They are also likely not the most organized people in the world, so non-billable expense (i.e. travel time, administration, etc.) is likely to be high.
Subcontract Everything – In my former business, DunnWell, this strategy was very successful. The inventory cost in this case is zero – we used others’ inventory to service the customer. The total opportunity in the market, however, is lower as the only sales opportunities available are customer prospects with sprawling service locations where the complexity and scale of delivery is not manageable by a local firm. DunnWell grew rapidly because there were no capital constraints on growth once the company made the commitment to invest in ServiceNET, the service delivery and management platform that forms the basis of ServiceTrade today. DunnWell was never able to sell to regional customers because our costThe model could not match a local provider.
Aggregator Fill-In – The other side of the DunnWell coin for the local provider is taking in work from national firms that subcontract for delivery. If you can align the third party work with the routes for your current business, the lower margin on this work can be a great way to support an extra truck or two of incremental capacity. The challenge is knowing how to “blend” the work into the existing routes in a manner that makes it profitable. If you have to go out of your way at all, you just lost money. And the extra burden of the administrative requirements for some of these opportunities can be ridiculous.
All of these strategies for optimizing revenue relative to “perishable inventory” have some merit, but they also have their drawbacks. In my opinion, the best “mix” of these strategies looks something like the following:
Organize the Work – A commission or a very nice bonus plan will work well for some techs, but you will benefit most as the owner if you help the technician organize the work. Provide enough office support on scheduling and customer service to maximize the revenue opportunity and minimize travel time and administrative burden. It’s great when a tech is willing to work 12 hours, but when 5 of those hours are travel time burning your fuel, wearing out your tires, or doing job planning/organizing, no one wins. Organize the work and give the tech tools for maximizing billable hours during a set period of time and you will both win. The optimum outcome is for the tech to make more money while the owner also gets more profit.
Maximize Revenue Per Call – A really good field management system will track opportunities for your customer locations. Anytime you have an opportunity to send a technician out for any reason, you should offer the customer as many services as possible. You should also have the technician catalog any new opportunities while onsite – ideally with photos and other data-rich evidence. Optimize every trip to the customer site.
Say “Yes” to the Customer – Subcontracting everything is not the solution for most businesses, but you should have the capability to extend your scope and reach for good customers by subcontracting work. If your administrative and customer support systems do not seamlessly enable you to say “yes” to the customer and get trusted business partners involved in delivering the work, it is time to change systems. This capability is a key part of our value proposition at ServiceTrade, and it is critical to our service company customers.
Rightsize your Core – If you do not have a healthy profit at the end of each month, you probably have too many technicians. Get rid of some and get your core utilization up. Use subcontractors to grow strategically until you can support more technicians with your customer base (see say “Yes” to the customer above).
Accept Aggregator Business Carefully – There is nothing wrong with taking down national account business through service aggregators so long as it is deliverable within your core service area. It if feels like a stretch instead of a yawn to deliver, you are better off giving it back. Or charge significantly more for “out of the way” locations. Chances are if you have a hard time getting to it, so does everyone else.
Service businesses have more in common with airlines and grocery store chains that most folks see on the surface. What they do not have is the extraordinary capital for systems that optimize revenue relative to “perishable inventory.” The good news is that Software as a Service (SaaS) and low cost mobile computing (Android, iPhone) can help with all of the strategies above without huge outlays of capital. If ServiceTrade can help you enable any of these, I would love to hear from you.
Never Miss a Service – Managing Recurring Services
There are two keys to profitable service operations – job service density and job route density. I discussed job route density in a previous post entitled “Field Service Scheduling – Kill the “Where-wolf” that’s eating your profits.” Using a mapping tool simultaneously with a job scheduling calendar helps minimize drive time relative to work time.
Job route density is critical, but equally critical is job service density. Job service density is how much billable work you can pack into a single job. To maximize service density during the job planning step, you have to have visibility to all the work that is due or available at a given location. ServiceTrade has just rolled out a new capability for managing recurring services to ensure that you never miss a service opportunity.
Assembling jobs from services that are due has historically been a painful, manual process involving old file folders or endless re-sorts of some Excel spreadsheet report. ServiceTrade eliminates this nonsense with a simple interface to visualize all services that are due or available at a given location. Even when the process is complicated by various equipment with different service frequencies or customer requests for delays – ServiceTrade still makes it easy. What’s more, every facility manager can appreciate a sales pitch that begins with “While I am onsite, do you want me to go ahead and . . . “ because they understand that they have already paid for the trip charge. Matching the jobs correctly to the equipment maintenance schedules while also maximizing the other onsite repair work is tricky business.
Instead of the crude and inaccurate approach of simply “copying the old job” to create the new job, ServiceTrade enables you to attach “services” to a location and specify a scope of work, an asset, and a service frequency. Then, the application lets you run an interactive report that visualizes all of the services due so that you can align services at a location to maximize service density when creating jobs.
In the next couple of weeks, we will release a feature that gives you a reminder of past deficiencies on the location for review when creating jobs. That way you can add repair services to a regularly scheduled maintenance job and give the customer a call to offer them a special rate because they can avoid the trip charge.
Making it easy to maximize job service density is another way that ServiceTrade helps you do more real work with fewer hassles. Sign up today for a free trial and see how ServiceTrade can help you never miss a service opportunity.
Track the Truck? Track the Tech!
Fleet tracking has become very popular due to low cost GPS and software as a service (SaaS) solutions. I believe the same trends that are driving fleet tracking adoption – low cost/low hassle SaaS and real time feedback – will drive a new wave of technician tracking via the smartphone. Fleet tracking is an important capability, but it’s the technician, not the truck, that truly drives value for field maintenance businesses.
Everyone works more effectively when they believe the boss is paying attention to what they are doing. Paying attention to the truck, however, is different than paying attention to the technician. The truck doesn’t do the work, so there is a limit to the productivity that can be gained by monitoring the truck. Trucks don’t make decisions, and they don’t deliver much in the way of customer service.
Armed with the right solution, a technician can provide both the administrative staff at the office as well as the customer on the job site with a rich set of work status information without ever being interrupted by pesky “status calls.”
A GPS job clock tells everyone the location and status (en route, arrived, planning, departed) of the technician. These records also provide assistance in billing and payroll calculations. Any calculation by fleet tracking apps on job hours for billing is just guessing because the technician did not affirm whether the job work had started or whether he was eating a cheeseburger in the truck. With ServiceTrade, we record what the technician tells us to record when he punches the buttons on the smartphone app (and nothing more or less).
Photo, audio, and video reports from the job site provide insight and color on the job situation. Everyone can make better decisions with better and richer information, and the technician doesn’t have to waste time with painful handwritten reports or more annoying “what did you mean” phone calls from the office or the customer. The technician will leave a better record – in record time.
An interactive record of the work schedule and service history along with a representation of the work on a map enables better job planning and route management. A smartphone in the hands of the technician provides a rich record of the work to be done. The technician can make decisions that enable him to pick up work more effectively when the inevitable schedule foul-ups occur.
I also believe the smartphone will become the dominant solution in the realm of technician accountability and productivity because it is a positive oversight solution instead of a negative oversight solution. Fleet tracking is a “big brother is watching” solution that does not offer much to the technician in the way of productivity gains and positive reinforcement. By contrast, the smartphone, coupled with an application like ServiceTrade, enables the technician to “show what you know.” It allows the business owner to tell the technician “I trust that you are good at your work, and I am giving you equipment that makes your job easier. Now show me just how good you are, and go make us both some money by knocking it out of the park for our customers.”
The smartphone is not the best way to understand which technicians are doing jackrabbit starts in the truck or exceeding the speed limit (although it is technically possible using the GPS and accelerometer in the phones, but iPhone doesn’t allow it). Fleet tracking is clearly the way to improve on these type of potentially destructive and costly behaviors.
Smartphones with ServiceTrade is the way to get the most from your technicians when it comes to driving decisions and behaviors that improve your business and your customer service capability.
Smartphones are Smart Business
If you have been looking for an excuse to arm your field techs with smartphones, I am going to give you several in this blog post.
The goal of any business expenditure is to make your business more competitive by lowering costs, improving customer service, or increasing revenue. I believe an investment in smartphones for your technicians can do all three.
Lowering Cost
The biggest cost to your business by far is the payroll expense for your technicians. The way to lower these costs with smartphones is to maximize billable hours relative to payroll hours. Simply put – deliver more jobs with less time spent planning, reporting, and traveling. The smartphone features (coupled with the ServiceTrade app) that help deliver more jobs are:
GPS Time Clock – when you know where your technicians are working and their status (en route, onsite, job prep), you don’t have to call them (and waste time) asking for updates. When they know you know, they will also act differently. Everyone performs better with management oversight.
Job Planning and Dispatch – when job details arrive in the palm of their hand, techs don’t have to waste time talking to the office, taking notes, or traveling to a place to print paperwork.
Map Based Planning – when techs can plan their route using a map displaying all of their work, they will travel less and bill more.
Faster Paperwork – when the paperwork is printed with all the customer details pre-filled, and the job report is delivered instantly back to the office using the phone as a mobile scanner, techs don’t waste cycles (or lose paperwork) delivering it back to the office.
Less Paperwork – when job notes can be entered onto the ServiceTrade job record using the camera and the audio recorder on the phone, the techs spend less time writing out notes and talking with the office to explain their cryptic, bad handwriting from a job two weeks ago. The report is fast, detailed, and “in living color” for both the office and the customer.
The smartphone lowers technician costs by improving accountability, streamlining reporting, and optimizing the job plan.
Improving Customer Service
Great customer service is all about better and faster information (assuming of course that work quality is a given). Smartphones coupled with ServiceTrade get you and your customers better and faster information through many of the same capabilities that lower cost:
GPS Time Clock – when you and your customers know where the technicians are, it saves effort associated with calling and verifying. Good status information makes everyone more comfortable with the plan.
Better Job Reports – online job records with job photos and audio memos from the smartphone give the impression of thoroughness, and it establishes trust.
Job Planning and Dispatch – when technicians have location service history in the palm of their hand along with job details in the form of customer preferences and logistics, problems are diagnosed faster with fewer foul ups.
Map Based Planning – when you know where every tech is located and their job status at a single glance (based upon the GPS job clock), you can make dispatch decisions while the customer is still on the phone instead of calling them back after you play tech update bingo by calling and interrupting every job.
The smartphone improves customer service capability by giving everyone – the customer, the dispatcher, the tech – faster and better information about the job from start to finish.
Increasing Revenue
Higher revenue comes from selling more jobs and delivering more jobs. We already reviewed how to deliver more jobs through tech productivity, so let’s talk about selling more jobs. If we again assume quality of work product is a given, then the selling edge goes to the company that builds more trust with the customer. Here’s how you build trust with the smartphone:
GPS Job Clock – sounds like a broken record, but showing the customer via GPS records when technicians arrive and depart builds trust in your billing.
Better Job Reports – the best sales lead in the world sounds like “I have some photos of broken equipment that were taken yesterday at your site. Take a look at them online, and let me know if the quote I provided to fix it is acceptable.” Quotes with photos (or video) get approved twice as often as those without.
Technician Professionalism – when customers see the technician as informed and armed with technology to provide a better job outcome and report, they trust that he is part of an organization that invests in their people and their customers.
So now you have the excuse and justification you needed to do something you wanted to do anyway – arm your technicians with smartphones. Just by themselves, smartphones would probably be a good investment. But coupled with the ServiceTrade mobile and cloud app, they are definitely a homerun for your business. Have a look at this quick video to see more, or jump right into a ServiceTrade free trial. We will help you get the most from your smartphone investment.
Field Service Scheduling – Kill the “Where-wolf” that’s eating your profit
Field service scheduling is hard because it involves both time AND space. You can’t decide “when” until you know “where.” And knowing “where” is not just one location. The scheduler needs to see ALL jobs on a calendar AND on a map simultaneously to make good decisions for the schedule. In most cases, “where” actually determines “when” and not the other way around. “Where” is the variable that makes or breaks job profit due to travel time and fuel expense.
The wisdom of “where” is obvious to anyone that has spent more than an hour planning a field service schedule, or many hours trying to understand why the business is not profitable when the job rates and margins look OK. The “where-wolf” is eating all the profits due to drive time and fuel. If the “where-wolf” is haunting your business, we have a solution.
ServiceTrade designed a highly interactive map into the heart of our application – it drives the scheduling decisions. It took every ounce of clever software engineering we could muster to show where, when, who, and what along with current assignment and schedule status on a single, interactive web page.
But the “where-wolf” doesn’t just prowl around the office eating up profit. It also rides around in the truck with your techs. That’s why the job map, the “sort by distance” job list, and the GPS job clock on the ServiceTrade mobile app are also critical components in killing the “where-wolf.”
When your techs see their work in relation to where they are, they can adjust their schedule on the fly to mitigate the impact of daily foul-ups (customer “turn aways,” traffic, job delays, or faster completions). They can pick up more work because they see everything – jobs, locations, priorities – in the context of the map. And when your office staff can see tech location and status because of the GPS job clock, they will no longer fear the “where-wolf” when emergency calls hit. The right assignment decision is obvious without calling every tech to ask “Hey, where are you and what are you doing?”
If you are ready to drive the “where-wolf” out of your business, sign up to try out our mobile and cloud app. It’s free to try it, and there are no hassles with installing software or managing computers. Give it a shot and let us know what you think.
Why Cloud Applications are Perfect for Small Service Companies
If the thought of new software for running your field service business brings on pain, remorse, indigestion, or any other unpleasant malady, this blog post is for you. Software that is well designed and delivered to you as an Internet application (or cloud based application) should not bring on any of these symptoms of distress. Using a software application to help run your business should not require any real information technology expertise. If you have PCs, Macs, laptops, tablets and/or smartphones connected to the Internet, you have everything you need. Let me explain how cloud applications provide an enormous benefit for small service businesses.
Cheap. First, a cloud application that is delivered to you over the Internet should be the least expensive solution you consider. These applications do not require you to buy equipment called servers that run the application. If you don’t buy the servers, that means that you don’t pay to maintain them either. A true cloud application also does not have “host it for you” charges. Buyer beware! All that means is that your servers running your instance of the application are on a lease plan, and you are still paying for them and paying the maintenance burden (along with a profit margin on top). A true cloud application is cheapest because you share the computing resources with all other users of the application. Just like LinkedIn, Facebook, eBay, Google, Amazon, etc. With this shared approach, your costs are the minimal costs, which is the way you want it.
Safe. Some folks read the above paragraph on costs and proclaim “I don’t want my data on a computer that is shared with anyone else because that is not safe.” Poppycock. I can’t recall ever logging into Gmail and seeing someone else’s mail. Can you? I don’t think I have ever shopped at Amazon and seen someone else’s merchandise in my shopping cart. How about you? I’ve never had ADP send me someone else’s deposit on payday. What about you? I don’t ever recall logging into Salesforce.com and seeing someone else’s sales leads. Do you? I didn’t think so. A modern and professionally managed implementation of an application that is shared among all of the users of the application is the safest way for small businesses to get software capability. The infrastructure and the professionals that manage it are going to be better at technology management than the ones you would hire to do the same. If someone really wants your data, it will be much easier for them to get it from computers you are managing than from the ones that my staff and the staff at Amazon Web Services (where we run our application) manage. I promise, it is safer.
Easy. If you don’t have to set up and manage the computers that run your application, you are already far down the road toward Easy Street. You know that you have actually arrived on Easy Street when it is only a few minutes between the time you sign up for the application and when you are actually using it productively. If you have lots of users and lots of historical data, it can take a few hours to get up and going, but it should not be more than that. If it is, you have a poorly designed application. If your application provider does not live on Easy Street, you should get a different one with a new address.
Fast. All applications should run fast enough that the user is not annoyed by waiting, but in this case I am talking about fast as in newer, better features. True cloud applications deliver new features to you weekly, or monthly at least, without you having to do anything. No upgrades required, just better software delivered for your enjoyment. You may think that all of the reasons listed above are enough to insist on a cloud application, but I actually think this one is the most important. If you pick wisely now and choose the most thoughtful application provider in your space, you will benefit from that choice over and over again without the pain of slow (or no) progress in the future.
So what are you going to do now? The more you move your business to the cloud the more you will enjoy its benefits and eliminate the pain associated with information technology management. Unlike building muscle or character where the idiom “no pain, no gain” applies, building a portfolio of cloud applications for running your small service business should just be “no pain, no pain.”
Welcome Beta Testers
ServiceTrade’s beta program is now open. Join up to share experiences with colleagues and qualify for a special pricing promotion.
Two weeks ago, I introduced you to ServiceTrade. Today, we are opening our beta program to any fire protection services company that wants to get an early look at our technology while helping us finish off the final features for a March product launch.
In my last post, I set a goal of complete transparency regarding features, functions, and pricing because customers deserve to know what they are buying and how much it will cost. For our beta customers, understanding what they are buying is simple – try the application and share feedback with us and industry colleagues. We are also offering special pricing.
For all beta customers, the first technician user will be free, and each additional technician user will cost only $19/month/user. All administrative and management users are free. These pricing terms are available to any beta tester that joins the program between now and March 1, 2013 provided they purchase by March 15. The pricing will remain valid for a period of five years so long as the customer maintains an active account.
If you have been sitting on the fence wondering when and how to upgrade your systems to embrace smartphones and cloud computing, now is probably a good time. Join our beta program and add your voice to others in the industry that are guiding ServiceTrade to a terrific product release. We look forward to a great future together.
Introducing ServiceTrade
ServiceTrade is a new software company dedicated to helping facility maintenance and repair companies deliver better service, grow faster, and be more profitable. Our aim is to provide a terrific mobile and cloud based application that improves field technician productivity, enhances customer collaboration, and streamlines the administrative processes associated with running a service business. The application will be easy to use and easy to buy – no software or servers to manage, no upfront fees, no sales pressure. Try it first and buy it only if it works for you.
We believe that maintenance businesses are a terrific market to serve because they are so underserved by current software offerings. Intuit’s QuickBooks is the only widely deployed software product in this space, and service management software is generally only used by the very largest firms. According to analyst firm Gartner, the current annual spending on service management software is about $330M. For a business segment that represents approximately $900B in annual commerce according to the US Bureau of Labor Statistics, this amount of spending is a terrible indictment of the current slate of software targeted to this market. The current offerings are hard to try, hard to buy, and hard to use while hiding behind a sales person that insists it isn’t so.
ServiceTrade is different. We will post our pricing on the website. Free trials are not only free, they are available without getting a sales person’s permission. If you need help, we will help you get started so that you can experience our value. If the application helps you and your technicians, you can buy it and use it without any long term commitments. That is how great technology is adopted and consumed. We have enough confidence in our application that we don’t need to hide it behind a sales person. You can judge the quality of what we are doing all by yourself.
The application will not be perfect, however, and it will always be better next week when compared to this week. There is a never ending list of cool things that should be available to help technicians deliver more work, report on the job from the field, and engage the customer in meaningful collaboration. We have only scratched the surface with our initial product offering which is currently in beta testing. The initial release of the application in March will have capability geared toward fire protection companies, and functionality for more trades such as HVAC/mechanical, electrical, and plumbing will follow shortly.
We believe ServiceTrade can do something great by serving maintenance and repair businesses with a world class app that is easy to use and easy to buy. If you are interested, please follow us on Twitter, or LinkedIn to keep up with our progress.
