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How Commercial Service Contractors can Dominate with Mobile Tech

This post is the second in my discussion of how to use mobile technology to dominate your market.  If you haven’t read my first post, you can find it here. In that post, I discuss the basics in taking your customer service mobile – you’ll want to meet this milestone before jumping into milestones two and three: Marathon Training and Race Day.

Milestone 2: Marathon Training (Research and Development)

Once you achieve basic fitness, you are already in the top 10-20% in your market regarding ability to compete. Now it’s time to begin the specific marathon training in earnest. Again, this is not a quick tune-up; it’s a commitment to building up the muscle and stamina to be competitive in a marathon race. Don’t expect it to happen overnight, but instead develop a training plan that will get you there over a period of one to two years.

Marathon Training in Practice

When ServiceTrade was just starting out, we spent about five months and about $80,000 on our first mobile app design iteration. It never went to a single customer or prospect, because we threw it away and started over. We had picked the wrong combination of technologies, and the result really sucked. It worked (sort of), but it was not up to our expectations for our brand, so we literally threw it in the trash heap. We did, however, learn a lot about what we really wanted, and that was a valuable experience. We began the effort anew with a different set of partners who were true experts in the mobile space.

Even large companies need a long training period to get ready for a mobile marathon. About 18 months prior to Chick-fil-A having a mobile app, I noticed that many of the locations began sending cashiers into the drive-through line with iPads to take orders. I’m willing to bet that this was a deliberate marathon training activity to understand exactly how to achieve effective mobile order-taking. Chick-fil-A got more than a year of feedback from “friendly” users to help them get it right for the major launch of the Chick-fil-A One app to the masses.

What Marathon Training Means for You

For the best results, undertake similar training. A small subset of your best customers, or perhaps your salespeople and customer service staff acting on behalf of customers (like the Chick-fil-A cashiers in the drive-through line), are great partners for getting a truly scalable customer mobile experience to the market.

Start with a few simple things like having a basic customer service portal on your website where an existing customer can request service and browse a limited set of service history. Make yourself into a customer contact and see what your customers see by spending some significant time browsing with your mobile device and using the interface just as a customer would. Be critical. Remember, this is marathon training and not the middle of a race that you are already losing. There is no point in desperation or exasperation. Take deep breaths and carry on with the training. Expand your muscle and fitness and move ahead to make the adjustments that move toward a competitive marathon outcome.

Milestone 3: Race Day (Your Branded Mobile App)

To win the mobile marathon, you need a branded mobile app for your customers just like Starbucks and Chick-fil-A. In addition to the obvious capabilities that are simply carryovers from your website service portal (service history, equipment assets, contract details, quotes, etc.), here are additional capabilities you’ll want to include:

The most successful service brands have a mobile app as a defining feature of their premium program. If you want to win, a mobile app is your future. I was very deliberate with the marathon metaphor so that you would envision a long-term plan with multiple plateaus of achievement leading up to race day. If you don’t commit soon to the fitness plan, however, it is unlikely that you will be racing with the best competitors in your market a few years from now.

When race day comes in a few years, you do not want to be an out-of-shape, flatfooted bystander watching the racers while you hand out refreshments. Start getting in shape now. Work your way toward maximum fitness. Mobile marathon training will begin shortly, and race day is going to be a ton of fun.

Winning the Mobile Marathon as a Commercial Service Contractor

There are plenty of examples of companies that have built market success because of their use of mobile technology, including Domino’s, Chick-fil-A, and Starbucks. Starbucks launched their mobile app in early 2011, and it included a mobile pay feature similar to a gift card. Mobile innovation has paid off for Starbucks. They reported that in the third quarter of 2017 approximately 30 percent of sales were transacted using the mobile app. The real win, however, is that mobile app users are spending three times more than other customers! Starbucks delivered an innovation that helps assure the loyalty of their best customers.

Starbucks and other stories of leading markets through mobile make perfect sense if you look around anytime you’re out in public. Fifty percent of the folks you see have their noses in their phones, and the other 50 percent all have their phones within arm’s reach. The phone has bridged not only the last mile to the customer but literally the last three feet.

What Market Leaders Know

If you are committed to leading in your market – if you expect to be the premium brand that is known for outstanding customer service – you must be committed to leading in mobile customer service just like Chick-fil-A and Starbucks. Fortunately it doesn’t have to happen overnight, and there is still plenty of whitespace in the market. No one owns this space or has such a lead that you are forced to follow their example. You can define your mobile future.

The race to mobile customer service in service contracting is going to be a marathon and not a sprint. Just like a marathon, competitiveness begins with a commitment to a training routine. Using the marathon metaphor, let’s lay out a basic program to get you prepared to compete for mobile dominance in your market.

First Milestone: Achieving Basic Fitness

No one serious about marathon competition just wakes up one day and decides to run a race the following day or even the following week or month. A basic level of fitness is required to even begin a serious training program; otherwise injuries plus mental and physical fatigue will seriously hamper achieving your goals. Basic fitness in this case means your current interfaces with customers are mobile-friendly.  Let’s look at the three steps to achieving this first important milestone.

Start with a mobile friendly website

Use Google’s mobile friendly analysis tool to test whether or not your current website is recognized by search engines as being easy for customers to use with a mobile device. Clearly your site needs to pass this test. Beyond that you should also be critical of the presentation of your brand value online in the mobile interface.

If you are not comfortable about passing this basic fitness evaluation, and you are also not comfortable with your current digital vendor, find one or two that will give you a second and third opinion. They should happily do this for free for an opportunity to become your supplier.

Optimize your company’s information in search

Next, make certain someone searching for you online can easily find your company, regardless of the device they use. Be especially critical of how the search results are displayed on mobile. Search results on mobile and desktop should be identical, but there are unseen variations that need to be in place for the best mobile presentation. In any case, anyone searching directly for your name should get lots of options for connecting with you online via their mobile device. Test it. If you aren’t happy with the result, either hold your current vendor accountable or ask for a second and third opinion. Chapter 8 in my first book, The Digital Wrap, is a great place to start in understanding the basics for a service contractor website.

Ensure customer communications are mobile friendly

Finally, assess the mobile fitness of all of your other routine communications with your customers. This begins with a commitment to have both email and mobile contact information for all your important customer contacts. I have never once answered a call at my office landline. If someone leaves a message, it comes to my mobile phone and I decide whether or not I want to call them back by pushing a button. Any of my customers or important partners who really need me have my mobile number and my email.

You should be able to reach your customers the same way. Make collecting email addresses and mobile contact information a routine part of your customer intake process. If you are sending them any sort of email or text correspondence that requires them to download and print a document, find a way to change that pattern to a “just click here” routine that presents the information in a way that allows them to take action right away without the hassle of a download.

ServiceTrade’s Quote Link and Service Link features are great examples of engaging the customer in a manner that invites them to appreciate your work and take action to award you more work without leaving the mobile interface. Send yourself test samples of several of the important correspondences you regularly exchange with customers. Evaluate whether or not you get the value from these messages without putting down your phone. If you are not happy, rework and reformat until you are.

Beyond Basic Fitness

Once you achieve basic fitness, you are in the top 10 to 20 percent in your market regarding ability to compete. Now it’s time to begin the specific marathon training in earnest. In next week’s post, I’ll discuss ways to build beyond the basics to truly dominate your market and win the mobile marathon.

If you want to read more about the mobile marathon and how to compete in the future of commercial services contracting, check out my books Money for Nothing and The Digital Wrap.

Cyber Attacks in Fire and Life Safety

In 2019, there’s a fresh wave of ransomware hackers targeting US-based fire and life safety contractors that have legacy server systems. Several have been either forced to pay a bounty or face devastating disruptions when the cyber attack is unleashed.  If you believe you are safe because no one is going to notice or care about your business, you are wrong. And the weakest link on your network that hosts your legacy server systems is no match for the professional criminals that are extorting you.

 

Now is the time to move all of your critical customer operations data to a modern cloud architecture.  It is no longer a matter of being competitive in customer operations in your market. It is now about a choice to remain an ongoing business concern or be wiped out by a cyber criminal.  The idea that you want to connect all of your technicians and all of your customers to a server on your network for them to collaborate in delivering your service value opens up innumerable vulnerabilities.  It is just a crazy idea. If instead, they are all connecting to Amazon’s network (all ServiceTrade applications are protected by Amazon’s security) or Google’s network or Microsoft’s network, you are largely insulated from attack.  

No one keeps their financial assets in a safe on their property any longer – they trust a commercial financial institution to be a good steward and use computers to deliver interesting applications to protect those assets while growing their value.  It is time to take the same approach with what is arguably the most valuable asset of your business – your customer operations data. Who do you serve? What is the schedule? What equipment do they have? How do they pay you? What is your contract with them?  What new opportunities for revenue are at their locations? If this information is protected by Amazon or Google or Microsoft, your business can continue to deliver value everyday. If it is vulnerable because of a legacy server on your network, that value can slip away pretty quickly.  Don’t lose what you have worked so hard to build simply because you did not take the time to transition to a modern customer management platform.

 

Need help buying SaaS software?

You’ll always make good software-buying decisions when you follow the 6 pieces of advice in the Software Buying Guide for Commercial Service Contractors. Download and read it here.

The All-in-one Software Fairy Tale

 

There is no such thing as an “all in one” software application for anything.  Like a unicorn, it is a neat idea (who wouldn’t want a friendly horse with a horn) that is nothing more than a fairy tale. Yet it is probably the most popular unicorn that commercial service contractors (and others as well) search endlessly to discover.   And yet it just will not die in the minds of those that seek it.

So what do software vendors do?  They play to market bias and adopt the “all-in-one” promise into their marketing messaging.  They pique your attention with claims of the elusive all-in-one software. However, when you take a closer look, you find the unicorn is simply a horse with a horn taped to its head. And the vendor trying to sell it to you is a charlatan.  Their website sucks. Their technology is server-based. (Which nobody should be buying in 2019). And their LinkedIn page shows they have like 9 employees, with the trendline going down, not up.

We have debunked the idea of a magical “all in one” application over, and over, and over, and over again. So you can imagine my shock when I saw a company that I admire marketing their application as an “all-in-one”.

ServiceTitan: “All in One” for Home Service Companies

ServiceTitan is a very successful company that offers a high-quality, modern customer service application for home services companies.  I admire their growth. I admire their management team. I admire their technology architecture. And in their marketing, they use the “all-in-one” label to get your attention.  I get the idea. I suppose it just makes sense if everyone is looking for “all-in-one” you might as well have them look at your application and decide for themselves which “all-in-one” is best for them.

But it’s just not true.  

How do I know?

Straightaway, ServiceTitan tells potential customers they will need to buy an accounting application such as QuickBooks or Sage Intacct.  “Wait a minute!” you say, “I thought ServiceTitan was an all-in-one?” Nope. Not really. That was just marketing.

Second, they promote several other integrated partner applications to their customers so that they can get greater value from the platform.  These include GPS tracking, pricing, and online review applications. “Wait, what about the all-in-one?” you declare again. Nope. Sorry.

Finally, they publish extensive documentation for developers to extend the application and integrate it with other applications via their Application Programming Interfaces (APIs).  “Wait!” you say again, “A true all-in-one doesn’t have to integrate with other applications because it should already do everything.” Sorry. That’s just not the case.

Separating the ServiceTitans from the Charlatans

So how do I square all of my admiration for ServiceTitan with my historical disdain for companies that, like them, make the “all-in-one” promise? More on that in a minute.

First, let’s answer a more important question. How can you, the commercial service contractor, know how to quickly spot a charlatan promising a unicorn but secretly selling you the same, tired horse with a taped on horn?  

Do a little research and answer some basic questions to look for red flags:

  1. What does their website look like?  Is it modern and mobile friendly, or does it take you back to the 1990s?
  2. Is their software cloud or server based?  No one should be buying server-based software in 2019.  
  3. Check out the company LinkedIn page.  How many employees do they have? What are their backgrounds?  Has the employee count grown in the last few years? Growth is good.
  4. Can their software easily connect with other applications? Look for a list of integrations or search for API documentation.  It should be obvious how the software can connect with other interesting applications to further extended its capabilities.

(For a more in-depth resource to help you with vendor selection and software buying, download our free software buying guide here.)

Rethinking “All in One” – What ServiceTitan Taught Me

I’ll admit it.  ServiceTitan forced me to stop and table my typical disdain for “all-in-one” promises from software companies.  They are a sound company with a high-quality product. And while they may not be an “all-in-one” application, they are “all-in” for their customers’ success.  Plus they are very focused on who that customer is – home service companies – and it shows on their website.

My advice to you? Stop chasing that elusive unicorn – stop looking for an “all-in-one” system because –  just like the unicorn – it’s only a fairytale. And it’s not what you really need.

Instead, look for the vendor that is “all in” for your success.  A vendor like ServiceTitan. They know your business, they understand their strengths and limitations and can connect you with trusted partners who can meet your needs that are outside their scope.  They’ve blazed a new trail for companies just like you in your industry who want to be innovative, and they’ve guided hundreds down the path before you. Just like ServiceTitan is “all in” for home service providers, ServiceTrade is “all in” for commercial service contractors.  If you want to learn how ServiceTrade is “all in” for our customers, schedule a demo today.

 

5 Questions to Help Service Contractors Build More Valuable Businesses

Much of the popular culture in management consulting today is focused on the customer experience. Matt Dixon, the author of one of my favorite management books, The Challenger Sale, is spending many of his cycles promoting another of his books, The Effortless Experience.  Shep Hyken is a customer service guru with a new book called The Convenience Revolution.  And my latest book with Shawn Mims, Money For Nothing, focuses on the science behind making a customer feel good about their experience buying from commercial service contractors.  

Yet even with all of this focus on customer experience, I still find that most service contractors remain firmly entrenched in a war to optimize the effort expended in their back office instead of directing their management attention to enhancing customer service. I have come up with a couple of questions that might help challenge that back office focus if the goal is to build a more valuable business.

Question 1: How easy is it to hire a new back office administrator versus hiring a new skilled technician?  

This is an easy one, right? The answer is that hiring an administrator is very easy when compared to hiring a technician. Management’s focus should be on maximizing the productivity of each technician so that they deliver the maximum amount of revenue each day while simultaneously eliminating the risk a customer faces due to potential equipment failure.  Your goal should be to increase revenue per technician 20% per year every year. Never yield in the pursuit of greater productivity for the technicians. Hiring administrators is easier, so transfer as much work as possible off the technicians and onto back office staff.

Question 2: How easy is it for your customer to review and approve a new quote? 

If the answer is that they have to download an Excel file or PDF, print it, sign it, scan it, upload it, and email it back to you, that answer sucks.  That is difficult. Not easy. Compare that level of effort with an online quote with pictures and video of the issue and a single button to push to “Approve” (or request changes) and provide a purchase order for billing purposes.  Oh, and it never hurts that when the customer has viewed the quote online, the salesperson knows it has been viewed and can follow up to answer any questions. Don’t make it difficult for the customer to give you more money and remove risk from their environment by upgrading or repairing equipment (which is also good for you).

Question 3: Which is more valuable: eliminating all administrative overhead or showing an ability to sustain 20% revenue growth every year?

Again, it is an easy answer. Eliminating all of the administrative effort is worth perhaps 5 – 8% of revenue. Growth is MUCH more valuable if you can demonstrate you have a systematic way to sustain it due to your customer sales and service approach.  If you ever intend to sell your business or bring on a new shareholder, focusing management effort and technology purchases on enhancing sales productivity is where you should spend your thought cycles and investment capital.

Question 4: How easy is it for you to show the customer the value of your work online?  

Or do you just send them an invoice with a bunch of text and cryptic accounting codes to represent the value you deliver?  If a customer has to wade through a detailed invoice, guess what is going to draw their eye?  You got it, the numbers on the far right and in the bottom right corner. Guess what they are going to want to talk to you about? The value you delivered? Nope. “Why does it cost so much?” is the most popular question generated by an invoice.

Make it easy for them to see that value without digesting a cryptic invoice.  It should be easy for them to see your work online in the form of service history for their equipment with photos, videos, risk assessments, quotes, etc. so that they see you are thoughtful and thorough in your approach to managing their important assets.

Question 5: How easy is it for your salespeople to show a new customer prospect how you are different?

Do you demonstrate the value of your unique approach to customer service?  Pitching a value proposition of “we try harder” or “we care more” or “we are cheaper” sucks. It is much better to show the customer an online experience where they can conveniently review and engage with your company on ways to reduce risk and eliminate disruptions through a rich set of service history and equipment risk analysis.  

If you cannot show prospective customers examples of this capability, what are you selling? Invoices? How do you expect to command a premium in the market compared to the low price competitor? Simple answer – don’t expect a premium and be prepared to compete on price.

I find all of these questions to be obvious indicators of where management should spend their effort – front office innovations that make customer service and revenue generation easier because the customer gets an effortless, or, better still, a feel good experience.  So where are you spending your management effort? Front office and feel good? Or back office? Think about it.

 

How much information is too much?

Check out this image from an Amazon notification that I received during the holiday season.  It included imagery of the product (some black pajamas), a map of my neighborhood that indicates the location of my house, the current location of the delivery driver (the Santa sleigh), and a caption telling me Santa (aka Amazon) was just seven stops away and would deliver my package before 2:15pm.  It is interesting to see how much information Amazon provides as part of their customer experience, especially when compared to the data we observe in ServiceTrade. Amazon knows that it is almost impossible to give the customer too much information, and yet most commercial service contractors completely ignore this lesson.

Currently, fewer than 2% of ServiceTrade work orders include a notification to the customer that the technician is en route.  The feature is an easy one for technicians to access, but they just don’t do it. It’s a shame, because Amazon is not a fool. They know that customer loyalty stems from winning the information arms race.  Customers LOVE to know what is happening, especially if it involves zero effort on their part to dig the information out of the supplier. If it is simply offered as part of the service experience, it creates positive feelings about the service brand.  The notification creates a dopamine response from the anticipation that something good is about to happen. That little jolt of feel good neurotransmitter goes a long way in justifying higher prices during the next contract negotiation.

How easy is it for you to measure the number of digital records you transmit to your customers as part of your service experience (marketing impressions per service or MIPS)?  Do you hold technicians accountable for generating en route notifications, before and after videos and pictures, deficiency records documenting equipment failure risks, review requests to boost search engine optimization?  If not, why not? ServiceTrade measures all of these MIPS so that it is easy for you to monitor your success in sharing rich service records that keep the customer engaged and delighted in your work. Amazon knows there is no such thing as too much information.  Isn’t it time that your service business took that lesson to heart?

Service Contractors: Grow like a software startup

Every Sunday evening I receive an email from the software investment banking team at Key Bank Capital Markets. The subject line of the email is “Software Valuations,” and the email contains a link to a weekly report that details the valuation metrics of about 100 different software companies. All of these companies are public corporations, so their stock information is readily available for the folks at Key Bank to analyze. Most of the companies they follow are software as a service (SaaS) companies, and because ServiceTrade is a SaaS company, this report is very interesting to me as the CEO and a shareholder of ServiceTrade. It is my job to maximize the value of our stock for the benefit of all of our shareholders, and the Key Bank team helps me do this through their analysis of SaaS company valuations.

Here is an annotated version of a table they publish for about 70 different SaaS companies. I limited the table to 10 of the entries to make a point about the importance of growth to shareholder value.

 I sorted these from high to low based on the value-to-revenue multiple. The value-to-revenue multiple indicates how much the total of each company’s outstanding stock is worth as a multiple of their anticipated 2018 revenue. The number-one performer is Shopify, with a value-to-revenue multiple of 17.2X. The total value of all outstanding Shopify stock is equal to 17.2 times the revenue expectation for Shopify in 2018. You are reading that correctly. Investors are willing to buy Shopify stock at an extraordinary premium because they believe Shopify is going to grow, grow, grow. And Shopify is delivering on that promise. Note that Shopify expects to grow revenue by 51.1 percent in 2018 compared to their revenue in 2017. That’s a terrific growth rate. Also note that Shopify has a value of NM (Not Measured because they are not making a profit) in the category of price-to-earnings. That’s because Shopify is going to lose money in 2018. They will probably also lose money in 2019 and 2020 because they are investing like crazy to continue to grow. Despite this lack of profit, their stock is still extremely valuable.

Contrast Shopify with ChannelAdvisor. Their stock trades for just 2.9 times the revenue expectation for 2018. It’s interesting that Shopify and ChannelAdvisor offer a similar value proposition with their software applications – they both help small merchants sell their products online. The biggest difference is that Shopify is expected to grow 51.1 percent in 2018 and ChannelAdvisor is expected to grow only 6.8 percent. The expectation of growth explains why Shopify is almost six times more valuable than ChannelAdvisor.

Why is any of this relevant to your business? It is very relevant because their business model is similar to yours in that they sell a subscription program to their customers. If you are following my advice and developing a subscription program for maintenance, monitoring, and inspections for which you sell an annual or longer contract, your business is similar to these companies, and investors will ultimately value your business in the same way they value these businesses. The point I am trying to make is that growing is better than grinding when it comes to creating value for shareholders.

Grinding means pushing everyone in the organization to squeeze more profit from the current revenue stream. I have nothing against profit, and I think you should aim to be profitable. But grinding does not significantly increase the value of your business if there is the possibility to grow the business instead.

Growing is much more fun for everyone than grinding, for all of the obvious reasons. Growing means that new stuff is happening all the time. New products are being introduced to the market. New customers are being served. New employees are joining the company to help take care of the new customers. New promotions are being handed out because there is more responsibility to be shared. New offices are being opened. New equipment is being purchased. New tools are being deployed. New training is underway on how to use new tools. New, new, new means fun, fun, fun.

Grinding sucks because old tools are breaking and not being replaced. Old employees are leaving and not being replaced or taking on more responsibility for no increase in pay. Old customers are complaining because they are not getting good service. Old trucks are breaking down and disrupting the workday. Old, old, old means suck, suck, suck.

What is your plan for growth? How are you going to orient your company in a direction that gets to the fun of growing? It begins with a commitment to growth. If there is no expectation in the company that growth is an important metric, then no growth will occur. Set growth targets as part of your planning process, and don’t be shy about asking people to stretch to achieve something ambitious. For organic growth, plan to grow by 10 percent per year, and think about pushing for 20 to 30 percent (depending on the size of your company). All the best employees in your business will rally around the growth goal because none of them signed on for a career in which not much was achieved. Your employees will get much more career development from an aggressive growth strategy.

Maximizing the value of your business is the most tangible outcome associated with a successful growth strategy. The difference in valuation of the companies tracked by Key Bank in the SaaS market based on their respective growth rates is extravagant, and it should be a lesson for anyone who wants to build value with a subscription business model. The intangible value of having a growth strategy is that you will attract, develop, and retain a better class of employees who value your company because they expect to experience greater career development. They will be exposed to ever-increasing levels of responsibility, which leads to higher job satisfaction and better retention. Growing is fun and grinding sucks, so aim for growth and get more pay and have more fun along the way.

Good is Not Good Enough – How Amazon Raised Expectations to Feel Good for Commercial Service Contractors

happy amazon customer receives amazon box delivery

Several dozen books (at least) have been written about the Amazon phenomenon, and I could probably go on and on myself about the lessons that can be drawn from its success. The lesson for the service contractor is that making your customers feel good about your service will likely lead to greater riches for you and your company. Jeff Bezos is the richest guy in the world, and he has been pretty clear that his success comes from innovations that make the customer feel good about doing business with Amazon. Many of these innovations are directly applicable to a commercial service contracting business, and you should take inspiration from them to deliver your own version of “feel good” customer service features.

Pictures and video. Amazon understands the psychology of human decision making. Images impress us.  They help humans understand their environment and make decisions. We are more easily impressed by images and stories than we are by bullet points and descriptive prose. I challenge you to find anything for sale on Amazon that does not include at least one picture. Generally there are several, and Amazon gives you tools to zoom and pan to get a better view of the details that might interest you. It is easier to feel good about a purchase when we can see the images that reinforce our buying decision. Increasingly video is also becoming a part of the purchase review because it combines imagery with a story about the product.

Reviews. Reviews are the stories other customers choose to share about their experience with the product. Like images, stories are a powerful learning mechanism for humans. By reading stories, we get comfortable with the experience we can expect from the product. We also understand any trouble we may face through these review stories. Reviews further empower the customer as well because a poor customer service experience and a bad review is often the catalyst for a company to correct the problem. The ability to hold the company accountable to a good experience through a review process gives the customer more comfort at the time of purchase.

Convenience.  One of Amazon’s first innovations was one-click purchasing.  They applied for and were awarded a method patent on this invention back in 1999. Amazon famously sued Barnes and Noble when they copied the innovation. Amazon had streamlined the purchase process by eliminating the hassle of checkout, and the company was not going to stand by quietly when their fiercest competitor attempted to copy this convenience innovation. Now the company offers a mobile app (of course) so customers can easily browse and buy from their phone.  Additionally Amazon provides multiple delivery and gift options, smart speakers that let you buy with Alexa commands, push button buying using a little connected clicker called a Dash button for common items like laundry detergent, and many more buying innovations. The company is even experimenting with flying drone delivery. Eliminating all of the barriers between your customer’s money and your bank account just makes sense.

No Hassle Returns. Amazon never argues with a customer regarding a request to return an item so long as there is some reason for the rejection (fit, color, quality, whatever). They make returns easy with a self-service process from their website. Customers feel better about placing an order when they know they can return the product if something is not right.

Mobile experience. Amazon enhances convenience with their mobile app because shopping is always available. Most customers are never more than three feet from their phone, and therefore I believe mobile is worthy of its own feel good category. Because my smartphone has a camera and a microphone, I can take photos (or scan barcodes) to search for products as well as giving verbal commands. I can also manage every aspect of my relationship with Amazon through my mobile device, which means I can manage it anywhere and anytime.

Feel good by doing good. The Amazon Smile program allows me to select a charity to receive a donation from Amazon equal to .5% of my qualifying purchases when I begin my shopping at smile.amazon.com. Do you imagine that a customer feels good when they begin their shopping experience by typing “smile” and then direct a contribution to a favorite charity when they buy something? It is easy to feel good when your vendor helps you do good.

Notifications and visibility. Amazon gives customers a number of ways to track their orders and their order history with the company. Any shopping activity, whether resulting in a purchase or not, generally results in some level of follow up from Amazon. If I place an order, Amazon continuously informs me of the status from a “thank you” order confirmation. They send a shipment notice plus an arrival notice. If I shop and do not order, Amazon often follows up with deals on items that I viewed hoping to push me over the edge to actually buy the product. After I receive a purchase, I am generally offered an opportunity to review the purchase, and I will typically be offered several complementary items. Beyond these notifications, Amazon tracks my purchases so that I can reference that information to make decisions regarding future purchases. All of this attention and account visibility certainly helps the customer feel good about their relationship with Amazon.

Subscription membership. Amazon offers customers a subscription program called Prime. Prime bundles all manner of Amazon services and benefits into a subscription program for which customers pay an annual membership fee. The subscription offers access to a library of books and music along with lower costs (usually free) for shipping and guaranteed two-day delivery for any purchases. Statista, the online statistics portal, estimates that Amazon had 95 million US Prime members as of June 2018.  That amounts to nearly seventy-percent of US households participating in Prime. It feels good to be a member of a club with a wide range of benefits and a subscription business model with its predictable and guaranteed cash flow is a powerful foundation from which to build a dominant brand.

Commercial service contractors should take a lesson from Amazon: making customers feel good about your services will likely lead to greater riches for your company. The best part is, many of the innovations that make customers feel good about doing business with Amazon can work for you.

Good is Not Good Enough

Amazon does not settle for “good” in the realm of customer service. It is not enough for the customer to simply get what they paid to receive. Amazon wants customers to enjoy the experience in the same manner as a guest might enjoy a good party. Great brands now want to copy Amazon because Jeff Bezos has become the wealthiest guy in the world due to the crazy success of Amazon stock. Smart business owners want the same value for their shareholders, so they are behaving like Amazon and aiming well beyond the idea of simply satisfying the customer. They truly want their customers to “feel good” about the experience of buying from them. This current obsession with the customer experience is certainly a good thing for customers. Because so many companies are now focusing on innovation in customer service, the bar for “feel good” status is climbing higher every day.

The most popular approach today for measuring customer satisfaction is the Net Promoter Score, or NPS. Wikipedia reports that more than two-thirds of the Fortune 1000 are currently using NPS. Here’s how it works.

Customers are asked a single, simple question:

How likely is it that you would recommend our company/product/service to a friend or colleague?

Respondents are then given an option to answer that question with a number rating on a scale between 0 and 10. 0 means that the customer would never recommend the company to a friend or colleague, and 10 means that they would absolutely recommend the company to a friend or colleague.

Next, respondents are categorized into the following groups:
Promoters – those who score the business with a 9 or 10, likely to promote to others
Passives- scored 7-8, not likely to benefit or harm your brand
Detractors- scored 6 or less, a liability for your brand

The final NPS score is calculated by subtracting the percentage of Detractors from the percentage of Promoters, with the Passives not contributing at all to the score. As an example, if you were to survey 100 customers and 35 score as Detractors (0 to 6), 25 score as Passives (7 or 8), and 40 score as Promoters (9 or 10), your NPS score would be:

Promoters – Detractors = NPS 40 – 35 = 5

Your NPS for this survey sample is a 5. Anything above 0 is considered to be positive, and a score approaching 50 is terrific.

Now I think all of this is probably a little too simplistic, and you will find lots of scientific criticism for NPS from survey theory experts if you go looking for it online. My opinion and the opinion of all of the other critics is not what really matters in this case. What is important is that two-thirds of the Fortune 1000 are relying on this information in one form or another to help them improve customer satisfaction. A lot of big brands with big budgets are focusing lots of energy on measuring customer satisfaction. The other important thing to note is that this wildly popular tool skews heavily toward “feel good” as the goal for customer service. Only scores of 9 or 10 are credited positively, and anything less than a 7 is negative. I would say anyone that scores a company with a 9 or a 10 feels really good about their experience with the company. So two-thirds of the Fortune 1000 are scheming for ways to get more scores in the range of 9 to 10 because that is the only way to improve their NPS score. That’s a lot of companies with a lot of focus on making customers feel good about their brand.

What does this emphasis on outstanding customer service mean for you? Your business is going to be compared to all of the customer service innovations of Amazon and two-thirds of the Fortune 1000 because they are all “focused like a laser” on customer experience these days. NPS is hot because customer service innovations are hot because customer loyalty is hot because growth is hot because Amazon is hot. Customers are not going to compare you to your “always go low on price” competitor down the street any longer. They are going to ask “Why can’t you be more like Amazon and give me notifications when I am due for service or when the technician is en route to my location?” The customer service bar is going to be set by the sum of all of the best experiences the customer has ever encountered across all companies in both their personal and professional life.

The good news is that most customer service innovations can be observed and imitated if they fit your idea of great customer service for your company. The case of Amazon is particularly intriguing because up until a few years ago Amazon had absolutely no influence over the products customers were buying from them. They were simply a reseller of other companies’ products. Any innovation they delivered to make a customer feel good was not a product innovation but instead was focused solely on the buying experience. In my next post, I’ll discuss the “feel good” customer service themes direct from Amazon that should probably be among the guideposts you use in establishing your “feel good” customer service strategy.

Tellin’ ain’t Sellin’ – Every Customer is From Missouri, So Show Them Something!

welcome to Missouri the show-me state highway welcome sign

When your salespeople call on customers, what are they pitching? What do they present when they get that rare opportunity to show a high-profile prospect the benefit of working with your company?  While I have not been in the room often when a commercial service contractor is pitching a customer, I have seen hundreds of websites for these companies, and I have been to lots of trade shows where they are exhibiting.  Generally, I am not impressed by what I have reviewed. Mostly I see some version of one or more of the following themes:

We Work Harder!  It sucks to work harder than the other guy.

We Care More!  Not certain what sucks more – working harder or caring more.

Better Technicians Means Better Service!  This is the Papa John’s pizza pitch.  You’ve seen examples here, here, and here of how that’s not working.

We’re a Family Business!  The mafia is a family business too.

We’ve Been in Business a Long Time!  Really?  Why are you still such a small company?

Sadly, the website content for most commercial service contractors is typically a long and rambling word salad that doesn’t add up to much value for the customer.  Generally, Google is not impressed either as most rank pretty low for relevance in organic search results. I imagine the salespeople are equally unimpressed with the company strategy, so their pitch quickly devolves to price:

How much are you paying now?  We’ll get the work done, and it will be cheaper!  Let’s negotiate labor rates and a markup on parts!  We will be there 24/7 when things go wrong! Call us anytime and we will fix your broken equipment by working around the clock until everything is good again!

Competing on price and some vague promises to work harder and care more and fix broken equipment 24/7 and be more family-oriented sucks.  Why should the customer believe anything the sales rep is saying? How can your sales representative make an impression that moves the conversation to valuable outcomes instead of a mark-up on the cost of the labor and parts?  

Of course the most important thing the salesperson can do is ask questions and understand the goals of the buyer through some discovery conversation.  The other thing that should be offered is a premium program, but do not expect the customer to buy on the promises and platitudes of a sales rep. Tellin’ ain’t sellin!  Your sales people should be able to show the customer the value of your brand by demonstrating how the program works. I am fond of declaring that all customers come from Missouri, which is known as the “show me” state.  If you can’t show them the value, you will not sell them the program.

So what does a premium program look like? And how can you demonstrate it to the customer in a way that is meaningful to them?  Let’s have a look at some examples from other industries to gain insights into components you should consider.

Amazon Prime – Amazon offers a subscription program called Prime, and nearly 70% of US households are Prime members.  Prime members pay $119  per year in exchange for free two-day shipping, access to a library of movies, television shows, and music, and a free Kindle book every month, among other things.  The most important thing Prime does, however, is put Amazon at the top of the heap when a subscriber considers how to buy the next bag of dog food, or supplies for their kitchen pantry, or Christmas gifts for their friends:

I’ve already paid for Prime, I might as well benefit from the free, expedited shipping!

The program helps keep the Amazon brand top of mind for future purchases, and customers pay for this marketing trick through their subscription fees!  It’s brilliant marketing by Amazon. Amazon allows prospective customers to try Prime free for a month to experience its value because Amazon knows that all customers are from Missouri.  The free trial “shows” the customer why Prime is valuable instead of just “telling” the customer that it will be great if they buy.

BMW Ultimate Care – BMW is a premium automotive brand that delivers what they claim is the “Ultimate Driving Machine,” and Ultimate Care is their premium maintenance program.  You pay in advance, typically at time of purchase when financing is also a part of the conversation. Ultimate Care provides unlimited service consistent with the manufacturer’s recommended service plan.  All parts and service required for recommended maintenance are included at a thirty-percent discount. The program is only available at BMW dealership locations, so you will be bringing the car to the dealership and wandering about reviewing all of the latest offerings of BMW as your maintenance plan is delivered.  

Once again, brilliant marketing.  You pay in advance so that you will certainly use the service that requires you to come to the dealership on a regular basis.  No doubt you will get a loaner for the latest model at the upper end of your price range for any extended service requirements.  The dealership is having the customer pay fees in advance of service to help them deliver a hassle-free experience and market their latest offerings to the customer on a regular basis.

Brandt STORM – Brandt Engineering is one of the largest mechanical contractors in Texas, and STORM is their premium program.  STORM stands for Service, Technology, Optimization, Retro-commissioning, and Monitoring. When the customer buys into the STORM program, Brandt does a top-to-bottom review of the equipment while installing monitoring technology to track key performance data on the critical elements where failure results in expensive disruptions.  Once they and the customer agree the equipment condition is worthy of a performance promise, STORM is initiated. The customer receives regular communication and attention from Brandt engineers and technicians while simultaneously benefiting from lower rates on service requirements and ideally lower utility costs.

The customer is paying Brandt the money they are saving on utility bills and breakdowns as subscription fees in order for Brandt to continuously remind them of the value of the Brandt brand! That trade-off is certainly worth the risk to Brandt of a failure where Brandt must pay the premium (expedited parts, overtime labor, etc.) for recovery instead of the customer paying it.  These risks are minimized through information, and the customer is conditioned that any retro-commissioning recommendations (quotes for new equipment) based upon the data are in their best interest to avoid performance disruptions that fall outside the STORM promise. It is brilliant.

So what are the lessons you should take from these examples?  

1 – Brand the Program. What is your version of Amazon Prime? Ideally the name helps the sales rep to tell the story, to get the conversation going with the customer, and then the customer remembers your brand.  A good name demonstrates your company’s thoughtfulness in how you communicate your value.

2 – Show, Don’t Tell.  Your sales people need to be prepared to give a demonstration of the program.  Amazon gives prospective Prime members a month of free Prime membership to try out all of the benefits.  Do your sales people have a way to easily give the customer your branded program experience?

3 – Promote the Features. Can you enumerate the features of the program?  In a list? Spend some time thinking about the names of the features.

4 – Get Paid for Nothing.  If the only time you send a customer an invoice is when you have a labor or parts line item to bill, guess what?  They are going to assume your value is in the labor and parts instead of the program. The fewer invoices you send to the customer, the better.  Ideally, have them pay annually in advance. It’s better for you and cheaper for them.

5 – Offer a Good Contract. Put in place a master service agreement, a rate schedule, and a service level agreement.  Good fences make good neighbors and good contracts make good customers.

None of these elements of a premium program are rocket science, but it is surprising to me how rarely they are implemented by service contractors.  Do not let shoddy practices in your industry nor weak competitors that always sell on price dictate your business model. The executive management of your company should spend at least fifty percent of their time working on program and marketing innovations that set the brand apart from competitors.  Innovation rarely happens by accident, and it is the key to having a differentiated value proposition.