Customer Interfaces: Comparing Apples and Blackberrys
Just over ten years ago, Apple announced the iPhone. Blackberry was the smartphone king with a great keyboard and wheel/ball for email power users. Now Apple is the most valuable company in the world, and Blackberry is out of the smartphone market. More applications and a better user interface won the day by a landslide. How would your customers grade the applications you provide and your user interface? Apple? Or Blackberry?
Think about it. Maybe you used to trade in labor rates and parts. Today you trade in information and convenience. Pressure readings, amperage readings, inspection intervals, flow rates – the information you manage is your stock in trade. What type of user interface are you providing your customer for them to value your stock? Phone calls and ad hoc emails with files attached? Uh, can you say “worse than Blackberry.” What will happen when your competitor shows the customer an iPhone? Oh, right. We already know how that movie ends.
Maybe now would be a good time to figure out a strategy for giving your customer more applications and a better user interface. Maybe your website should be something other than a billboard on a screen. Maybe the customer should have access to the information that you collect regarding their equipment through applications that help them make decisions regarding the maintenance and repair of that equipment. Don’t wait for the competitor to introduce the customer to iPhone. In fewer than 10 years they will be the most valuable company in your market and you will be out of business.
One final pro tip – this is not an accounting problem, so don’t bother asking your accounting application provider to solve it with a “customer service module.” Instead, look for built-in customer engagement features like an online customer portal and service history reports from providers who are evolving like Apple did over the past ten years that will help keep you at the front of your market.
Want to be the winner in your market? Be the first to innovate.
These words of wisdom were imparted by Reese Bobby to his son Ricky Bobby in the movie Talladega Nights: The Ballad of Ricky Bobby (clip and clip). Winners get more than their fair share, and a loser is just a loser. No one cares about second place. In our fast-moving world, the winners often take all of the profit, and the losers are just losers.
Ten years ago last week, Blackberry was the world’s number one smartphone. It had a keyboard that was awesome. Apple introduced the iPhone with its innovative user interface, and ten years later Apple is the most valuable company in the world. Apple takes over 100% of the profits in the smartphone market, and Blackberry does not even make smartphones any longer. If you ain’t first, yer last! The winner takes it all, and a loser is just a loser.
Ten years ago, Blockbuster was number one in the video rental market. Today, Netflix is number one with a market value of over $57 billion. They introduced an innovative user interface for renting movies over the Internet, and Blockbuster went out of business. If you ain’t first, yer last! The winner takes it all, and a loser is just a loser.
Ten years ago, taxi companies were protected, regulated operators in the local markets they served. They proudly paid huge sums of money for their operating medallions. Today, Uber is an enterprise worth over $80 billion – more than all of the taxi companies in the world combined. They introduced an innovative user interface for hailing a car and paying for the ride, and the taxi companies have been decimated in their local, protected markets. If you ain’t first, yer last! The winner takes it all, and a loser is just a loser.
How good is your user interface to the customer? Is it still phone calls and triplicate forms? Is it ad-hoc emails with files attached? No organization or intelligence, just a dump of PDF files? What happens to your business if you are not the first in your market to introduce an innovative interface for customers to receive your services? Are you going to be first or last when the change comes to your market? Will you be the winner that takes a bigger share? Or a loser who is just a loser?
Maybe it is time to start thinking about technology as a way to please your customers instead of simply a way to seek operating cost leverage. The lesson of Apple, Netflix, and Uber is also the lesson of Blackberry, Blockbuster, and the taxi companies. It does not matter how long you have been around or how good your internal operations may be. An innovator in your market can turn your business into a loser. So, are you going to be first in your market to innovate with a better customer interface? Or will you just become one of the losers when someone else innovates first?
If you ask equipment manufacturers (metal benders), they will claim that your customers are technically their customers. What’s changing now is that they want to have their customers pay them for maintenance and repair services instead of you.
I am, of course, speaking about how manufacturers are increasingly embracing the service business as the next leg of profit to be mined in the market. The days of distribution channel loyalty are gone. Prepare to do battle with the well capitalized companies that you used to call “partners.” Where is the evidence that the drums of a channel war are beating? Consider these two recent news stories:
GE just spent almost a billion dollars to buy a software company that specializes in technology for service delivery. The price tag for that purchase was an estimated 15-times ServiceMax’s current revenue. GE REALLY WANTED THIS TECHNOLOGY to pay that kind of price. Note that ServiceMax is built on top of Salesforce’s CRM platform, NOT AN ACCOUNTING APPLICATION. GE’s aggressive activity in the market says that customer service and sales are the new battlegrounds for manufacturer competitiveness. They want to control the entire customer experience from initial consideration of their equipment through the maintenance and repair cycle and then finally the upgrade and replacement at end of life. ServiceMax helps them deliver on this promise with great efficiency and customer visibility.
GE was in the news again because Boeing has hired a GE exec from the GE Aircraft Engine business to run the Boeing Commercial Airplane Group (CAG). Kevin McAllister was selected as the new CEO of Boeing CAG because he specializes in monetizing “after the sale” services for maintenance and repair. At GE, they sold a program to the airlines that delivered jet engine maintenance and repair for a fixed fee based upon the number of hours on the engines. That program was just what the airline operators wanted – a no hassle, no risk, fixed cost plan sold by an expert in jet engine technology. Now, Kevin is heading to Boeing to concentrate on the same type of program for commercial aircraft.
So why are the manufacturers so interested in service these days? Because lifetime value of the customer is everything, and service is easier than ever to deliver because of technology. Historically, service was hard because it was unpredictable, and it was not possible to be everywhere the customer needed you to be at one time. Now, with advanced instrumentation and the Internet, the manufacturers can “see” what is happening in order to better manage a service delivery plan. Also, customers have come to understand that the company responsible for service needs to be the one with all of the data required to do the service right, and it really doesn’t matter who employs the technician that shows up to turn the wrenches so long as the owners of the data give him good instructions. Manufacturers can build an enduring ownership bond with the customer throughout the product lifecycle to earn a premium on their stock value. Check out chapter 5 in my book, The Digital Wrap, about how Tesla has become the envy of the manufacturing world because of this dynamic.
So what are you going to do when the metal benders come after your customers? Are you just going to hand over the relationship and the data so that you can become the labor bureau and the truck depot for their profit machine? Or are you going to seek more data and more technology so that you can become the trusted advisor to the customer? The advisor that informs them of the failure modes of each type of equipment and teaches them how to negotiate with the manufacturers at arm’s length to get the best equipment deal? The advisor that implements the best customer service technology and sells the best program for hassle-free and risk-free maintenance and repairs?
The great news about the metal benders is that they are still metal benders, and they would struggle to spell customer service if you gave it to them in an anagram. It will take some time for software applications and technology to overcome their metal bender cultural habits. The bad news is that they have LOTS of capital, and while they are “figuring it out,” it may still cost you lots of pain and profits if you don’t have a better program.
Here are my tips for preparing to win the battle for customer loyalty:
Focus on technology for customer service and sales, NOT OPTIMIZATION OF YOUR ACCOUNTING FUNCTION! Your perfect back office process is perfectly irrelevant to a customer looking to eliminate risk and hassles. Stop looking to the accounting application providers to solve your customer service and sales challenges.
Systematically collect customer connections. Every interaction with a customer should result in an email address and a mobile phone number. These can be used to connect the customer with the information you generate to demonstrate your value.
Innovate in programs for service management. These innovations can be data collection and mining for predictive service, warranties you sell to those that enter your premium maintenance tier, system monitoring services, fixed price payment plans, or whatever application of technology and business process to limit risk and hassle for both you and the equipment owner.
Diversify your expertise across as many manufacturers and brands as you can credibly support. You want to be in the position of the trusted advisor to the customer, and knowledge is power in this position. You also want to have credible data and experiences to back up your representations to the customer.
Stop concerning yourself with parts margin and instead focus on total margin per applied labor hour. Parts are not going to be in short supply, but skilled labor will be precious. Lower your inventory carrying costs by setting up fast response partnerships and technology connections to the best parts suppliers. Focus on speed and proactive service with the customer, not parts margin.
Begin experimenting with non-proprietary, independent monitoring and controls solutions that you can apply across equipment brands. Use these to build data that leads to credible recommendations and solutions for the customer.
This cultural shift to an information-based service approach with lots of online connections to your customers and their equipment will place you in a position to be the valuable brand that the customer trusts with their important equipment purchases and maintenance programs. The manufacturers are guaranteed to show up with proprietary solutions because of their metal bender culture. If you are prepared, you can laugh all the way to the bank as they throw money at a problem that you have already solved.
In The Digital Wrap Book, Chapter 14 was titled the Digital Wrap Formula for Maximizing the Value of Your Business. The chapter covered the technical, financial calculus that can be used to determine the amount a financial buyer might pay for a service contracting business (read the related blog post). It also offered a good deal of advice regarding how an owner might maximize that value by lowering sales costs for new customers, demonstrating consistent revenue growth, expanding margins, and retaining customers. While all of the math and advice in the chapter is accurate, I have come up with a simplified slogan for focusing company value building efforts. How Many, How Much, How Long.
How Many refers to the number of customers your company has. A customer is not a location where you do work, but instead it is an entity that pays an invoice. How many unique invoice payers does your business have? How easy is it to add new ones? If the answer to these questions is “a few” (whether big or small) or “difficult,” then the value of your business is marginal. Having only a few customers, even big ones, is risky. More is better. Having an undefined sales process is also risky. If you do not know how to add new customers systematically, growth is a crap shoot. If you have a lot of customers and you can demonstrate how you reliably add more every year, your business will command a premium from a potential buyer.
How Much refers to the amount you can reasonably expect to be paid every year by each of your customers. If you can do more for them and if they pay you a premium relative to the market because you provide a unique experience, better outcomes, or great customer service, your business will command a premium from a buyer. If there is a great deal of uncertainty regarding how much each customer pays annually, a buyer is going to demand a risk premium from you and the value of your business will be marginal.
How Long refers to the number of years the typical customer stays with your company. Churn in the customer base is a bad thing, and your business value will be marginal if you have a lot of churn. Do you know how long the typical customer stays with you? Do you measure churn every quarter to see how well your customer service activities are being received? Ideally, your business has less than ten-percent gross churn (the number of clients that you serviced last year during the current quarter compared to the number serviced this year) and zero or negative net churn (the amount of revenue achieved from customers that you serviced last year in the current quarter that also received service this year). If your net churn is zero or negative, it means that you are becoming more valuable to your customers as a whole each year even as you lose some of them. It means you are raising prices and expanding your portfolio of services consumed by your customers.
How is your business doing on the How Many, How Much, How Long scale? Are you tracking these metrics every quarter? Are you putting programs in place that make it easier to sell your services, allow you to charge a premium, and make it hard for the customer to let you go? If not, why not? These programs will make your business more valuable when the time comes to move it along to the next owner and spend more time on the boat.
We are counting down the days to the Digital Wrap Conference in Isle of Palms, SC, and I am happy to announce that the fishing tournament format is all set. As many of you know, we have quite a reputation to uphold based upon previous success with our tournaments on the Outer Banks of NC. Last year, the participants laid 1,600 pounds of bigeye and yellowfin tuna on the deck. The year before, three boats brought in a haul of 700 pounds of dolphin along with a 400-pound blue marlin release. Well, in Charleston in October, it is all about the redfish and the trout. Good news for those folks that don’t care for an hour plus ride on the ocean. These fish are inshore sport, and Charleston serves them up in record numbers.
Tournament Details:
Wednesday, October 19 ~ 6 hours beginning in the morning $200 per fisher 2-3 person teams
We will have nearshore bay boats and flats boats with 2 to 3 anglers per team competing for largest redfish, largest trout, and most meat at the dock. Pick your strategy. Lunkers at the jetty (but you have to release the big fish over 23”) or volume in the marshes, or maybe a little of both. In the meat category, the flounder counts at the dock as well as any other species that might be great table fare such as sheepshead. That evening, all of the tournament participants are welcome to a fish extravaganza at our beach house, Ocean Dream in Isle of Palms.
If you have not registered for the tournament yet and you plan to fish, sign up today. If you have not registered for the conference yet, what are you waiting for? It doesn’t get any better than great strategies to grow your business plus world-class golf and fishing. Register for the conference at digitalwrapconference.com.
Beat the Technician Labor Crunch – Sell a Planned Maintenance Program
I saw statistics the other day that indicated the number of licensed electricians in NC over the age of 40 was 10X those that were younger than 40. Uh oh. If you thought the skilled labor shortage was already bad, it is going to get worse. So what can a service contractor do to avoid the pain from this scarcity? Migrate as much business as possible to a planned maintenance program.
Do you remember Captain Chaos?
When supply is tight, prices go up. When the prices go up, customers shop for alternatives and buy less of the expensive items. In economics, this is known as price elasticity of demand. In your business, it is known as a gross margin squeeze. For some trades, the alternative to the inevitable squeeze is to migrate as much work to planned maintenance cycles as possible to minimize expensive, reactive repair work. If you are going to pull off this trick over the next several years, you have to have a framework for selling customers on the plan and then executing the plan.
Get Your House in Order
The first order of business is actually being able to document and manage a plan in a scalable way. When you have systems that plan the scheduled work in a highly logical and visible way, you can maximize the utilization of your expensive technician workforce. You also need to be able to use those maintenance cycles to detect and demonstrate to the customer other potentially costly failures that should be handled in a planned way instead of waiting for an unplanned failure. Planned work is orderly and generally more satisfying for the technician and the customer than emergency repairs that generate chaos and uncertainty. It’s also funny how the chaos stacks up in one big pile that distracts the whole company. The random nature of reactive work makes it very difficult to deliver it without overtaxing resources.
Sell Examples Instead of Promises
The second order of business is having a sales cycle that promotes a premium, planned maintenance program to the customer. You should have in place demonstrations of the applications you use to deliver orderly and repeatable service. Share examples with the customer from their locations that you survey as part of your sales preparation. Show them how you will engage them online with accountable and visual record-keeping – online notifications, photos, video, and service links that demonstrate you are on top everything. For all the suggestions you find during planned service, show them how they can review and approve them online to maximize convenience and further lower costs and risk. When they see the examples in the sales cycle, it is easier to buy into that concrete example than an empty promise that “we’ll git er done, no excuses!”
Have a Dotted Line for them to Sign
Finally, have the order ready for them to sign. If you do not already have the following three items in your arsenal, you need to develop them:
Master Services Agreement – these are all of the legal terms and conditions of your partnership relating to term and termination, definitions, payment terms, warranty, indemnification, jurisdiction for disputes, etc. All the basics without the specifics.
Planned Maintenance Program – these are all of the services for each piece of equipment that they should expect during the term, complete with details of service intervals, parts delivered in service, expected durations, and related fees. If something later demonstrates it is far out of tolerance from these boundaries, both parties have a foundation for negotiating change.
Service Level Agreement – this will document the response to be expected for various types of non-planned repair scenarios, including response times, definitions of criticality, fee structures, and level of effort to be applied.
When you can quickly generate the unique Planned Maintenance Program from the systems you actually use to deliver the work and the Master Services Agreement and Service Level Agreement are standard boilerplate, you have earned the right to ask the customer to buy into your premium plan. Ask for them to pay upfront for the planned services to save both of you the time and hassle associated with all of the aggravation of invoicing. When they also begin feeling the pain of the skilled labor shortage due to vendors that are not performing, you might be surprised how much you mop up the market with your strategic and thoughtfully planned maintenance program.
Stop Selling Parts and Labor! Sell the Program!
In the first chapter of my book, The Digital Wrap, I quoted Marc Andreessen:
“Software is eating the world.”
It is not exactly a quote, but rather a reference to the editorial that Marc wrote for the Wall Street Journal back in 2011. Marc is like the godfather of the Internet as he was the founder and CTO of the first browser company, Netscape. The one sentence summary of his editorial is that cheap computing power, plus everywhere networking, and mobile devices means that every industry is at risk of being disrupted by an Internet application. Witness what Uber did to the taxi companies who thought they had a safe, local monopoly. If software is going to eat the world, then every company needs to learn how to sell the program to avoid being eaten.
Have you noticed that almost all of General Electric’s advertising these days promotes the idea that GE is becoming a software company? Check out one of the many humorous commercials they are presenting to the world to both mock their stodgy history and promote their sexy future.
GE claims to be writing an “Industrial Internet operating system” called Predix (their words, not mine) that will collect tons of data from customer equipment to help GE provide better service and better outcomes for the customer. GE is moving its headquarters to Boston to further promote the transformation from stodgy manufacturing to sexy software. I give them a 50/50 shot at actually being successful with the strategy because it is very hard to change culture and strategy and behavior at such a large and established company. However, I give them an A++ for understanding that they need to transition from selling metal to “selling the program.” GE has a huge and profitable industrial business, and yet they feel the need to transition. Do you think the manufacturers you represent are going to be following GE? Instrumenting their equipment to own a longer and more profitable relationship with the customer? Selling maintenance and repair services based upon the data they collect? How about you?
Service contractors likewise need to transition from selling parts and labor to selling the program. Parts and labor are easy for the customer to price shop, and so every discussion with the customer is about price and not about better service and better outcomes. So what is the program that changes the discussion?
It is a set of technology and an approach that can be used to deliver better customer outcomes through data-driven customer service.
It is the price that will be charged for the customer to “buy into” the program because not everyone is a fit for this level of service.
It is the online representation to the customer every day and in every way that better outcomes and benefits are being delivered as promised.
OK, great. So how do you do this little trick?
Be Data-Driven
First, you need to be able to easily collect and share data with the customer. This does not mean lots of ad hoc and unstructured emails and it certainly does not mean more phone calls. Software is eating the world, not email and dial tones. Do you have an existing application that makes it easy for you to survey the customer’s equipment and note condition and pre-existing problems as part of your sales cycle? During your sales presentation, do you present an online and interactive review of the customer’s situation along with your service commitments and repair recommendations and quotes? Is it easy to share these location records with the customer online? Is it easy for the customer to browse history and recommendations online? With a single click to authorize you to execute the next upgrade or repair? Are you using the information and data you collect on equipment to offer advice to the customer on which manufacturer to buy? Are you offering a competitive warranty in lieu of the manufacturer’s warranty as part of buying into your program? Do you have a plan for regularly replacing inexpensive parts that can lead to major and expensive level system failures? Can you easily search for equipment that is exhibiting failure modes to recommend repairs or replacements before failure occurs?
Use the Program as a Sales Tool
A sales presentation with a customer goes so much better when the conversation is grounded in a live review of customer equipment, relevant data about the state of that equipment, and the programmatic options you offer to minimize hassle and maximize return on expensive equipment investments. Humans are visual. They learn from images and stories. When you show the customer their situation, and when they can feel comfortable that they will always be able to review your efforts online via interactive records with photos, audio, and video, they can “buy in” to your program. Otherwise, the sales conversation will quickly devolve into a negotiation on labor rates and parts markup. Which conversation do you want to have?
Use the Right Application for Customer Service
This does not mean that you need to hire Owen from the GE commercial. It does mean, however, that you need to find a way to be comfortable researching and buying applications for customer service that look nothing like the historical accounting applications that you may have purchased for your back office operations. The currency of great customer service is information and data, and this type customer service data looks nothing like your accounting data. Sales and customer service data related to your front office operations will not fit neatly into your back office systems. There is an entire chapter in The Digital Wrap dedicated to the application review and purchasing process so you don’t have to guess at how to get it right.
If you want to build a premium service brand in a connected world, you need to prepare yourself to sell the program. Otherwise, software will eat your world, and some other brand (manufacturer? third-party aggregator? Internet titan?) will own your customer and you will become the parts depot and the labor bureau that helps them earn a premium profit.
Chapter 9 of the Digital Wrap book is about the application review and purchasing process Billy mentioned. You can read chapter 9 for free at digitalwrapbook.com.
Innovation is not an Option for Service Contractors
My kids have a Chick-fil-A habit, and I don’t mind because I also enjoy the comfort food they offer (particularly an Arnold Palmer with half lemonade and half unsweet iced tea). On my latest Chick-fil-A run, I was bombarded in the restaurant with banners and promotions for Chick-fil-A One – the new Chick-fil-A mobile application the company is promoting. The application makes it easier for me to choose Chick-fil-A as a restaurant option because it streamlines the buying experience by eliminating lines, communicating my preferences for buying, and leading me to a familiar brand when I am traveling. If Chick-fil-A is innovating in the area of customer buying experience, when do you believe your customers will demand similar innovations from you?
I ask prospective ServiceTrade customers all the time if they believe their customers are buying from Amazon, Uber, eBay, and other innovators in the area of online and mobile buying experience. Of course they respond that all of their customers are experiencing the conveniences of these leading mobile experience brands. Now we can add Chick-fil-A to the list of companies that is placing their brand into the palm of their customer’s hand in order to differentiate their product. This current innovation from Chick-fil-A is not a juicier chicken nor a crispier fry nor a tarter lemonade, but instead it is an information and communication innovation that endears them to the valuable customers carrying smartphones in their pocket. If customers come to expect this type of buying experience from all the companies they patronize, what innovation will you deliver to satisfy that desire?
Innovate or Wait?
Will you deliver innovations before your competitor in order to create a sales advantage? Or will you wait to see if a competitor really takes business from you simply because they are easier for the customer to engage online?
Instead of innovating, maybe you will become the labor bureau to an Internet pioneer that corrals the customer online and sends you to deliver the work using their mobile app – reporting back to them with photos and video in order to claim your meager labor wage.
Or perhaps a manufacturer you currently represent will instrument the equipment with sensors for proactive service – selling a three year maintenance agreement to the customer at the time of the original, online equipment purchase? How do you fit into that arrangement?
Innovation is not optional if you intend to maintain a premium price with your customers, and it is also not limited to the classic tools of the trade. Chick-fil-A did not fry a juicier chicken, but instead delivered a mobile app. Innovations in customer experience are the next competitive land grab in most industries, and service contracting will not be exempt.
Innovation’s Rewards
Innovation is a key ingredient for new sales, customer retention, and employee recruiting and retention as well. In the service contracting space, the worldwide skilled labor shortage is going to be a boon for the innovative brands that can attract customers and workers, and it will be a death knell for those that remain trapped in old ways of doing business. The former will drive new sales, raise prices, and attract scarce workers that are looking for career growth. The latter will lose customers to innovators, sell on price, and squeeze employee wages to maintain margin – fully embracing the downward death spiral that follows a lack of innovation.
If Chick-fil-A is promoting a mobile app as the number one priority in their business, when are you going to do similar or likewise? What are the customer experience innovations you are embracing in a world where everyone uses Amazon and Uber? How can you be the first in your market so that you can set the rules instead of being the follower that sells on price and embraces the death spiral?
Pick up a copy of The Digital Wrap and get your head around the idea that these changes are not just about big brands with tons of capital. Customers are being conditioned to expect these experiences, and your brand can be the one they embrace online if you believe as I do that innovation is not optional.
Growing is Better Than Grinding
I recently received a “thank you” email from a customer who had just read my book, The Digital Wrap. Here is the money quote:
I just purchased your book last week and I have to tell you my blood is pumping . . . The last year and a half I have been so focused on internal systems that I completely forgot about the customer . . . The customer became a pain in my ass . .. Thank you for publishing the book and getting me refocused on customer service and growth.
Growing is better than grinding. It is so obvious, but after reaching a certain size, so many companies stop focusing on growing and turn their attention to grinding away at internal operations to squeeze the next little bit of profit from the business. Efficiency is important, but grinding is no fun. There must be a balance in the business, and there is a role for technology to play in having the customer and your prospective customers reflect their gratitude back to you with higher revenue per service and new sales.
I can assure you that raising prices for existing happy customers and signing new customers is a faster and more rewarding path to a twenty percent increase in profit than pounding on your internal staff to get more done with less. But you can’t accomplish this increase in revenue if you do not have a superior customer service capability. Superior does not mean that you call more often or that you take more time on the site either. Superior means that customers can see and appreciate what you do for them through your “digital wrap.” They trust your company because of the online experience they receive through the service cycle. Amazon doesn’t call more often. Uber doesn’t have friendlier dispatch personnel. Both give superior customer service via technology, and they reap the rewards through high brand recognition and repeat business.
If you have been grinding away on internal operations and applying technology to squeeze a little extra blood from your staff, maybe you should think again about a more balanced approach to technology and growth. Ask yourself and your company the question, “How can we use technology to be more important to our customers and prospects so that we can raise prices and close more sales?” If you have never asked this question, why not? If you have never considered technology for anything other than internal operations, why not? If you think growing would be more fun than grinding, why are you still grinding?
Get your copy of the book The Digital Wrap: Get out of the truck and go online to own your customers. Visit digitalwrapbook.com.
Be as Sexy and Savvy as Tesla to Grow and to Change Your Cash Flow Model
How great would it be if you could have customers pay you now for services you plan to deliver in the future because you gave them an online presentation promising great outcomes? Show them photos and specs for the equipment you will be maintaining and indicate how your services will keep assets in top working order, and then ask them to fork over the dough. Share data and references to support claims of longer equipment life, lower utility costs, and limited downtime or outages, then cash their check. Then go spend that money to make certain you live up to their expectations.
Elon Musk at Tesla just had a group of prospective customers do exactly that. He raised nearly $400 million in an interest-free loan from about 400,000 customers placing a downpayment on a car they hope to receive in the next 18 – 36 months. He showed them some digital pics of how he is going to make it happen, and he laid out the specifications with credible evidence encouraging them to believe in this amazing future.
Do you suppose he could have pulled off this feat by giving them a handwritten invoice on yellow triplicate paper with some cryptic accounting codes on it displaying how he planned to fix something that was broken? And then asking them to write a check and mail it back? Doubtful. Tesla has built a direct connection to a base of buyers by presenting them with a rich online record of what they can expect from the new Tesla Model 3. These buyers then plunked down $1,000 to get in line for the privilege to spend another $34,000 to $60,000 in the future to take delivery of their Model 3. Neat trick, huh? When you are going to start adopting these practices in your service business?
I know several ServiceTrade customers that already sell to their customers in a similar manner. They begin the engagement with the customer by doing a detailed inventory of all of the equipment they will maintain (or inspect in the case of compliance-oriented businesses). This information is documented and organized in ServiceTrade. These customers likewise document the recommended maintenance intervals and parts along with any repairs necessary to bring the equipment into a maintainable state or configuration. They demonstrate their processes and their tech savviness by giving the customer an interactive presentation using the ServiceTrade interface of what the customer will experience throughout the service cycle. They then ask the customer to pay them upfront to enter into the maintenance program. And then the customer pays.
My point with this post is that you can ask the customer to trust you and demand a payment IF you can demonstrate to them that you are modern, technically savvy, and organized about your business WAY beyond the capability of your competition. Customers want to buy from the sexiest and savviest suppliers because they want to be part of the thoughtful crowd. And they hate the hassle and aggravation of dealing with the morons that still run their business like it is 1955. The customers that buy into this technology-enabled, data-driven, outcome-based service program are the high-value customers that will pay you a premium. They are the ones that are going to grow and help you grow your business. By contrast, any customer that does not have email or request electronic records is probably a customer you should be looking to replace anyway. I bet they are the ones that drag their feet on payment. Am I right?
If you do not already have a packaged maintenance or compliance program for your customers to purchase with upfront payments, why not? If you are tired of managing ballooning AR balances and acting as the bank for many customers, maybe it is time to turn the tables. Go after the sexy customers with the sexy services and ask for payment up front to guarantee outcomes in the future. Elon Musk is no idiot. Take his proven performance and make it work for your business. Become the tech-savvy competitor that all the other players envy and all the best customers want to embrace.
The Digital Wrap book is here! Download the Kindle edition or buy the printed book at Amazon.com.
Read ideas about how to be first in Billy’s book 
The Digital Wrap book is here! Download the Kindle edition or buy the printed book at