5 incredible ways driverless cars will change service contracting
Driverless cars are coming and we are all going to feel the impact. There will be winners and there will be losers. While the transportation industry undergoes a massive transformation and sheds its workforce, service contractors will harness the new technology and available labor. Service companies that are ready will grow. Those that aren’t will be left behind. Here’s what to expect.
Hire from a new labor pool
When semi-trucks, delivery vans, and taxis don’t need drivers and all of those jobs disappear, the unskilled labor pool is going to overflow. With no new demand for unskilled labor and a massive increase in supply, economics tells us that the cost will go down. Hiring low-skilled workers is going to get cheaper and easier. This won’t solve the skilled labor shortage, but you will have a huge selection of candidates to fill entry-level and apprenticeship positions. Prepare for this labor glut by building an effective and scalable training program for new employees.
Reduce fleet management costs
Do you consider your technicians good drivers? Do they speed, accelerate too fast, brake too hard, and get in the occasional fender bender? Of course they do. You don’t have to worry about that with driverless cars. Your driverless vehicles will be involved in fewer accidents, use less fuel, and put less wear and tear on your fleet thanks to their better-than-human driving record.
Simplify parts delivery
Moving parts from your warehouse(s) and parts houses straight to job sites will be much faster and cheaper. Uber already offers a low-cost delivery service in some cities and driverless cars are expected to further reduce prices of local delivery. As I wrote in another blog post, the cost of delivering parts directly to your techs is already a lot cheaper than the opportunity cost of your technicians driving around picking up parts. Driverless cars will only make this option more practical.
Gain technician admin productivity
What are your techs going to do with all that time in the car if they don’t have to drive? Put ‘em to work! They’ll have plenty of free time in the truck to prep for their next appointment or wrap up the administration for the previous job. Turn windshield time into productive time.
Sell the Program
When you show customers how you take advantage of technology to reduce costs and provide better customer service, you’ll stand out from the competition. We call this Selling the Program. Driverless cars are a perfect fit for the program. They’ll enable your company to reduce costs for you and the customer while also opening up productivity for improved customer service. Besides that, how cool do you think it will be to take your customers for a spin in one of your new driverless trucks?
Driverless vehicles will be as transformative as the internet and successful service companies will adapt quickly. Just like the companies today that still use fax and paper to communicate instead of internet-enabled technologies, there will be Luddites and slow adopters of driverless cars. They will get left in the dust. Companies that are prepared will dominate.
Service Hazard (Infographic)
What’s holding your service business back? Is it double data entry and other accounting inefficiencies in the back office? If you solve those problems, are you going to create more value for your customers, make your techs more productive, and differentiate yourself from the competition? Nope. Accounting doesn’t drive better customer outcomes. So, why do accounting issues get all of the attention? Well, it’s easy to fall into the trap of prioritizing those back-office problems because they are in your face every day. They are like a thorn in your foot; very obvious. However, they are just the tip of the iceberg. Under the water is something much more deadly.
Since a picture is worth a thousand words, I decided to show you what I’m talking about:
Hiding under the surface is what’s really holding you back. Scattered customer service data slows everyone down. The symptoms are pervasive, and the costs are enormous. Why do you think the front office is always behind, techs waste time on callbacks, and sales is struggling to win new customers or make upsells? Well, when service history, customer quotes, contact information, recurring service schedule, and asset details are all stored in different places, it’s no wonder there’s so much confusion and so many slowdowns. Instead of a central system that helps your team collaborate, you’re stuck with ad hoc calls, emails, conversations, txts, and paper.
On top of that, when your service information is disorganized, it’s impossible to give your customers any visibility to the value you provide. When you don’t even know exactly where your techs are, what they are doing, or what work they’ve completed, how are you supposed to share that information with your customers? Remember what it used to be like to schedule a taxi? It was miserable. Calling the taxi dispatch took forever, you’d have no visibility to where the taxi was, no idea what they were going to charge you, and they may not even show up. It’s no wonder Uber is dominating that entire industry. All it took was a change to the process that removed risk and aggravation for customers.
Icebergs perfectly demonstrate what’s going on with most commercial service contracting businesses. It’s easy to get stuck thinking about back-office problems. They are the tip of the iceberg. But, hiding below the sea is a mess of customer service data that is slowing down the entire organization and limiting your ability to provide a better experience to your customers. When you organize that data and move it to the cloud, you can cut your costs and Uber your competition.
Break the Profit Vise
Service contractors, you’ve got 2 huge problems. First, skilled workers are expensive and hard to find. We call this the “Skilled Labor Squeeze.” Second, small-time competition is undercutting you on price. We call these fly-by-the-night operations “One Truck Chuck.” With expensive labor driving costs up and cheap competitors driving prices down, you’re stuck in a profit-squeezing vise. So, what are you going to do about it? It may seem crazy, but the answer is to organize your customer service data.
Not sure what I’m talking about? Take a look at this blog post from a couple weeks ago about the inefficiencies hiding in most service contracting businesses. Basically, customer service data, the information necessary to provide world-class service, is usually scattered or locked up in an accounting system and filing cabinets. Data like service history, scheduling information, equipment failure records, and customer contact information, to name a few, are stored in a hundred different places and in a hundred different formats.
Effective collaboration makes technicians more productive and helps customers understand why you are different and better. If your information is locked up and inaccessible by technicians and customers, you’re especially vulnerable to the Skilled Labor Squeeze and One Truck Chuck. Why? Let’s break it down:
Technicians Administration, callbacks, and downtime are extreme wastes of tech time that are all caused by messy customer service data. Taking calls to answer questions about the work they performed last week is a waste of time. Calling the office or other techs to understand service history at a location is a waste of time. Going back to a location to gather data that was lost in the office is a waste of time. Coming back to the office to drop off paperwork is a waste of time.
Real-time collaboration of centralized customer service data in the cloud eliminates all of that waste. When skilled labor is more difficult to hire than ever, it’s critical to keep field technicians as productive as possible. Customers If your only vehicle to inform customers about what you do for them and why you’re important is an invoice, Chuck is going to steal your customers. In their eyes, you and One Truck Chuck look the same. You need to show them how you are more valuable. Queue the customer service data!
Once your data is organized and accessible, you can differentiate yourself from Chuck by collaborating with customers and providing visibility to the quality of your work. You can show them how thoughtful your program is. You can show them the pictures and videos that demonstrate equipment failure. You can show them how you save them money by keeping your techs productive working on their equipment instead of wasting time on administration and callbacks. You can show them how you help them make better decisions because they will have better information.
You will stand out against One Truck Chuck when you collect and use service information in helpful ways for the customer. Organized customer service data enables collaboration. Collaboration makes techs productive. Collaboration creates value for customers. This doesn’t work when the data is locked up in an accounting system. This doesn’t work when data is scattered across spreadsheets, email inboxes, and paper. Organize the mess, free the data, and start collaborating.
Scattered Data Could Sink Your Ship
Every day, we talk to service contractors that think the biggest problem with their business is double-data entry into their accounting system. We tell them the same thing every time. That’s just the tip of the iceberg. Below the surface, it’s hard to see the hundreds of small, but cumulative inefficiencies caused by scattered customer service data. Organizing that data will lead to leaps in efficiency and bounds in customer service.
By “customer service data,” I don’t mean accounting information. I’m talking about the data necessary to provide top-notch customer service and efficiently deploy your most expensive resource, skilled technicians. Data like service history, scheduling information, equipment failure records, and customer contact information to name a few.
Where is your customer service data stored? Multiple spreadsheets and Word documents on a server? Paperwork, files, and whiteboards? Pictures and videos on phones and random computers? Even worse, an accounting system that isn’t designed for customer service that only a few back-office staff have access to? Furthermore, how is that information communicated throughout your team? Email and text? Phone calls? Fax and snail mail? Cup and string?
Let’s dive a little deeper and take a look at how scattered data makes your team slow, inefficient, and prone to error.
Back Office
Bookkeepers shouldn’t be chasing wild geese. Hunting down coworkers to get the information they need to correct invoices, complete payroll, and record costs is a waste of time. And, it’s easy to blame sloppy front-office staff and technicians for the mistakes and oversights that they have to deal with. However, sloppiness is not the root cause of the problem. Instead, consider the inevitability of data getting mismanaged or lost by the front office and technicians when there are so many systems in place to store and communicate it. That means more time spent chasing the data, and less time spent billing the customer.
Front Office
The front-office team, typically responsible for scheduling, customer service, and quoting, is the biggest victim of scattered data. Accounting systems are either unable or are poorly equipped to help them manage customer service data. In that vacuum, they implement a patchwork of paperwork, software, and processes to accomplish their goals. The resulting hodgepodge slows everyone down and is prone to error. Here’s what I mean
Q.) What did we do last time we were at that location?
A.) Let me dig up the file. I can’t read the tech’s handwriting, so I’ll send him back out.
Q.) What was the problem with my equipment and when can I expect a quote to fix it?
A.) Someone else takes care of quotes. They are on vacation so I’ll have them call you back in a week.
Q.) When is a tech supposed to be on site?
A.) Check the calendar. Oh wait, that calendar is out of date. I don’t know.
Q.) Can you get that file for me?
A.) No, the server is down.
Technicians
Skilled labor is the most expensive and coveted resource for service contractors. Technician downtime and missed opportunities can be attributed to disorganization and miscommunication of customer service data most of the time. The ball gets dropped somewhere in the multitude of channels used to tell techs where they need to go, when they need to be there, and what they need to do. When the work is done, the information about what was discovered or completed is slow to travel back to the office, if at all and is often unintelligible. That means more communication with the tech to find out what happened and more wasted time.
All of our customers thought that double-data entry was their biggest problem when they first approached ServiceTrade. A couple months after implementation, they gained visibility to the underside of the gigantic iceberg that was slowing down their business. However, after 6 months of using ServiceTrade, that iceberg turned into an ice cube when they were finally able to streamline their customer service data.
5 mistakes most commercial service contractors make
Dear commercial service contractors,
Your cousins, residential service providers, have it figured out. What are you doing? Why are you still acting like a company from the 90s? Why aren’t you taking a page from their book and modernizing your customer service and marketing? I get it, they play by a different set of rules, but there are 5 statements that I hear from most commercial companies that drive me crazy:
1.) “I don’t need to update my website.” It’s 2017. If you don’t think that customers and prospects are judging you by the quality of your website, you’re dead wrong. Even if you initiate business through word of mouth and outside sales, prospective customers are going to visit your website and compare it to the competition. How can they trust the quality of your workmanship if your website looks like something from the 90s, it’s constantly “under construction,” or can’t be accessed on their smartphone?
Your current customers didn’t decide to buy from you because of your website, but your future customers will.
2.) “Online reviews are for residential companies.” About 90% of consumers consider reviews when making an online purchase. Your customers shop online in their personal lives and they are beginning to expect the same experience in their professional lives. It’s not hard to get reviews. All you have to do is make sure your Google My Business page is set up, then ask your happy customers to leave a review. To start, shoot for around 10 or more reviews. That’s it.
The next generation of decision makers will care about your online reputation.
3.) “My customers prefer paper and faxes.” Is that what your customers really think? Or, is that what you and your employees think? The fax machine is a dying technology and nobody really wants to deal with paper. Our customers that have gone paperless (and faxless) unanimously agree that the majority of their customers prefer it that way. It’s not difficult to give data to your customers electronically and in a format that they can consume on their smartphones
Don’t assume that because you prefer paper and faxes that your customers do too.
4.) “We’ve been successful for 20+ years, we don’t need to change.” Threats to and opportunities for your business are changing quickly with the evolving technology landscape. It’s easier than ever for all types of new competitors to steal your customers thanks to new customer service technologies. Take a look at what Uber did to the taxi industry, Netflix did to Blockbuster, Amazon is doing to Walmart, and Domino’s is doing to Papa Johns.
In this era of customer service innovation, if you ain’t first, you’ll be last.
5.) “Software is made for accounting, not customer service.” Insert double facepalm here. Yes, accounting software is critical to understanding the finances of your business. However, modern software can enable a level of customer service that will set you apart from the competition. Use a best-in-breed software philosophy instead of software communism. Buy the best customer service software and a great accounting system. Then, integrate them.
Remember, your perfect accounting process is perfectly irrelevant to your customers.
These statements aren’t uncommon, so don’t feel bad if you’ve ever said any of them. Just know that if I ever hear you utter these words, I’ll probably sag my shoulders, sigh, and emulate my parents by telling you “I’m not mad, I’m just disappointed.” Learn from your cousins, the residential service contractors, and modernize your company.
Sincerely, – Shawn
I bought the wrong software.
Last year, I made a huge mistake. I purchased a marketing automation platform (I won’t name names, but it rhymes with harpstring) for our company and wasted a lot of time, money, and effort in implementing something that, ultimately, failed. I know I’m not the first person who’s ever made a bad software decision, but I hope that anyone who reads this blog post can learn from my mistake.
Made just for you.
My first mistake was not assessing the market that the product was built for. In this case, the software was designed for a completely different set of users, but I was enticed by the cool feature set. Without getting into further detail about why this product was a bad fit for ServiceTrade, I learned that you MUST consider the following when buying business software with large feature sets:
Is this software developed for a market or industry that is specific enough to support my company, but broad enough to support innovation and growth?
For example, there are quite a few field service management applications out there, but some of them, like ServiceTrade, are built specifically for service contractors as opposed to internal field service divisions of large companies like Comcast. Furthermore, some are built for commercial contractors, (again) like ServiceTrade, while others are built for residential contractors, like ServiceTitan or Jobber. Because these platforms are designed for targeted markets, new feature development will benefit their customers that fit their market definition. These target markets are also large enough to support ongoing innovation and growth.
On the other hand, there are software companies that target markets that are too niche. For example, we’ve seen broad business applications that attempt to target smaller industries like fire protection or kitchen exhaust cleaning companies. Yes, some of the features they offer are very unique and fitting for the industries they serve, but these platforms will not innovate as much as a competitors targeting a larger market. These applications also represent a risk because there is a chance that they will not make it in such a small niche.
All in one? The all will be small.
We’ve preached this point over and over again, yet I still got caught by this trap. The product I purchased offered CRM functionality in addition to the marketing automation I was looking for. As it always does, the all in one was too good to be true. Because the feature set was so broad, none of the features performed at the levels of competitive products.
The idea behind an all-in-one software is interesting, but the features always fall short in practice. Take a look at your smartphone. How many apps do you have? Just one? Of course not. Why would you expect the same from your business applications?
We speak with commercial service contractors on a daily basis that are searching for the mythical unicorn that is the perfect all in one. It doesn’t exist. Any product that claims to be one will disappoint you. This includes bolt-on modules to your accounting system.
Modern applications are designed to coexist in an integrated ecosystem that allows them to communicate the necessary information with each other while excelling at their core competencies. In other words, best-in-breed applications that can integrate will outperform all-in-one software.
What’s the big idea?
When considering a software application that my company would be using for years to come, I failed to consider the long-term vision of the product. As it turns out, the vision for the product was completely misaligned with my expectations which led to disappointment when I realized new features didn’t benefit me.
Service contractors often reach out to us after having had a similar experience. They purchased an application because of the features it had and didn’t consider how the product may change, if at all, to help them tackle evolving challenges. Here are a few red flags to look out for:
Software products that are at the end of their development life. These products receive little to no ongoing R&D and the owners are simply trying to sell as much as they can before the market catches on. Even though these products may have many of the features you are looking for, they will fall short of the competition quickly. Server-based software ALWAYS falls into this category.
Customer service software that doesn’t actually improve your customer’s experience. If a company tells you that their grand vision for their customer service platform is only to help you operate more efficiently, you need to reconsider. Efficiency is important, but software that fails to meet the evolving expectations of your customers will leave you at a competitive disadvantage.
What happens WHEN it breaks?
Ultimately, the straw that broke the camel’s back with the marketing automation software I purchased was the complete lack of support I received for some technical issues I encountered. For weeks, I was stuck without a system because they refused to answer my calls and emails. During the sales process, I had no reason to think that the support was going to be so bad, but then again, I never asked.
Like many business software buyers, I assumed that I wouldn’t need support. I figured that good software doesn’t need support, right? I’ve never called Uber or Google for help, why should this be any different? I was wrong.
Good business software will have lots of features that require in-depth understanding to fully utilize. You and your team shouldn’t expect to know every little detail. Support through online documentation, courses, and training are important, but responsive phone support is a must. Case in point, ServiceTrade. Despite being ranked as one of the most user-friendly field service management applications on Capterra and having an average “Ease of Use” rating of 4.5 stars across 136 reviews (as of the time of writing) on Capterra, our customers that receive training and take advantage of support far outperform those that don’t.
Expect good support. You’ll need it. If you’re considering a product, give the support line a call before you buy to see how responsive and helpful the support team is. If it’s not available, or you have any concerns about the quality, buyer beware!
Yes, a reference please?
Before I purchased this infamous marketing automation platform, I was smart enough to ask for references. However, I should have put my guard up when, after nagging them, it took several weeks for them to provide me with a couple contacts. After all that time, the references I spoke with weren’t able to answer some of my most important questions. I should have dug deeper and requested more references.
Learn from my experience. Good references and reviews are important. We love providing prospects with reference customers because we work hard to
ensure that customers will be a good fit for ServiceTrade before they ever buy and
make sure all of our customers are happy, as is reflected in our numerous positive reviews.
If you happen to make a bad software purchase, don’t become a victim of the sunk cost fallacy like me. Instead of realizing that I made a bad decision, I dug my heels in deeper and wasted months of time trying to make it work. Eventually, I “saw the light,” but after wasting more time than I’d like to admit.
Learn from my mistake! Buy great software.
Uber is better than your techs…for parts delivery.
Since the writing of this blog post, UberRush shut down. However, a local courier will make a great alternative.
Do you charge customers for time spent driving to and from the parts house or warehouse? You shouldn’t. Before you get defensive, hear me out. If your parts house could quickly deliver parts directly to your technicians in the field at a reasonable price, you could charge the customer less and make more profit. Cheap delivery is available now thanks to Uber’s new(ish) on-demand local delivery service, UberRush. How does this result in lower prices and more profit? Let’s run the numbers.
Let’s look at how you currently charge the customer for a small repair that requires a trip to the warehouse or parts house. Let’s assume that you use a $500 part and 4 hours of labor plus an additional hour of driving the 15 miles to and from the parts house. If you mark up the part at 80%, your invoice might look something like this:
Parts
$900
Labor (5hrs @ $115)
$575
Total
$1475
Assuming that you have a low margin on labor (around $10), which is common for parts-heavy service contractors like mechanical companies, and have an average cost of $.50 per mile for travel, you are looking at a margin of $435 or 29.4%
On the other hand, if your parts house or warehouse used UberRush, parts would be delivered directly to your technician in the field. In this case, that would save an hour of drive time. Additionally, It’s easy to justify passing on and even marking up the delivery fee if you show the customer that you are saving them money:
Parts
$900
Delivery Fee
$73
Labor (4hrs @ $115)
$460
Total
$1433
The cost of the delivery fee is $40.50 for a 15 mile trip in New York City based on the current UberRush pricing. Marking that fee up the by the same 80% as our parts yields the $73 price above. All told, the new margin is $470.50 or 32.8%.
The margin increase and savings for the customer are great, but there are two bigger wins this process offers. First, your tech now has an extra hour in his day to perform work for another customer. In the provided scenario, that extra hour could allow for another job to be completed that day. On a broader scale, this could mean an extra job or two per week per tech. The implications for your company’s revenue and bottom line are substantial.
At a high level, adopting technology like UberRush is further ammunition to explain to your prospects and customers why you are different. As I explained in my recent blog post, Beat your low price competitor, Chuck, whenever you can show the customer how you use technology to work smarter in order to avoid using scarce labor resources for their and your benefit, you will have a differentiating sales advantage.
Unfortunately, UberRush is only available in New York, San Francisco, and Chicago, but I suspect it will arrive in new cities quickly as they expand their other local on-demand delivery service, UberEats. If you want an email alert when it’s available in your city, you can use this Google Alert. Be sure to change “Raleigh” to your city’s name.
Trouble selling? Be memorable.
Why is it so difficult to remember even a short speech, but so easy to remember an entire song? For example, what do these 7 digits do for you? 867-5309. Humming yet? Now that I’ve probably lost your attention to Tommy Tutone, I’ll try to make my point. We are creatures of rhyme, story, and imagery. Great salespeople use this trait to leave memorable impressions with the customer.
Let me give you another quick example by telling a story about overcoming the challenging trends service contractors face today:
You know One Truck Chuck? He’s the low-price competitor that steals your customer by undercutting your invoices.
Competing on price was fair game when technicians were easy to hire. That game has changed with the skilled labor squeeze which is predicted to worsen over the coming decade.
Feels like you’re stuck in the tightening jaws of a vice; right between increasing price pressure from One Truck Chuck and rising costs from the skilled labor squeeze. Fortunately, these challenges are not insurmountable.
But, before I present a solution, I want to point out the tools I’ve used so far to make this narrative memorable. When you step away from this blog post, you won’t remember this particular sentence but you will definitely remember the phrases “One Truck Chuck” and the “skilled labor squeeze” because of the imagery, rhyme, and alliteration I used. That’s powerful. You need to leave the same lasting impression with your customers and prospects.
Now, back to our story. You can’t afford to beat Chuck on price. You have to differentiate yourself and show the customer how you offer more value. A good portion of this blog post is dedicated to just that, but I think this image helps sum it up:
Your pitch can go something like this:
Prospective customer, this is what happens when you go with my cheap competitor, One Truck Chuck. It will take him twice as long, causes twice the aggravation, and results in twice the expense due to shoddy workmanship. He is undercapitalized, under-equipped, and under-experienced to provide the expertise you need. You will spend more time and more money dealing with him.
Obviously, this shouldn’t be the entirety of your sales pitch, but this is a great piece of ammunition to support the case that you are a high-value provider. Feel free to use any of the images or rhymes in this post during your next sales call and please let us know what you use to get your point across to the customer. Check out our webinar “Don’t sell on price. Sell a premium program.“ to learn more about using these tools and others to outsell your competition.
Beat your low price competitor, Chuck.
You know “one-truck Chuck,” or “white-van Stan” as I’ve heard him called before. He’s the one undercutting you and stealing your customers. It’s because he’s well rounded, and by that I mean he’s cut all the corners clean off. He has no overhead and he only wants to make a little more than his old hourly wage as an employed technician. But Chuck isn’t alone, is he? There’s Stan, Bill, Charlie, and the other new low-price competitors setting up shop every day.
You lose deals to Chuck and Stan every day. Prospects tell you “I’ve got a guy” and customers tell you that someone offered them a price they can’t refuse. So, what are you going to do? I suggest you take advice from a Chinese guy that died over two thousand years ago:
“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” – Sun Tzu, The Art of War
OK, I know it’s passe to whip out quotes from The Art of War when you’re talking about business strategy, but bear with me on this one.
Know your Enemy
Chuck and Stan are really easy to understand. Like any of your competitors, they have strengths and weaknesses that you can exploit. Obviously, their biggest competitive advantage is price for the reasons mentioned above, but they also have personal relationships on their side. Their customers have their cell number and can give Stan a call anytime they want.
If you’re trying to grow a high-margin, premium brand, you’ll never compete with these fellas on low labor rate or personal relationships, and you don’t want to. Neither are scalable. And, if you want to beat Chuck, you should tell your customer that your goal is to expend as little skilled labor and customer-facing admin as possible. Tell them that skilled labor is costly for you and difficult to hire. Tell them that modern customer service doesn’t happen over the phone.
Instead, offer customers a technology-enabled plan for predictable outcomes at a predictable price. The goal is to reduce their risk and aggravation by implementing a proactive plan that uses data about their facility and equipment to intelligently target low-cost preventative work that curbs expensive repairs. By planning work as opposed to reacting to it, overall expenses will go down because less on-demand skilled labor is used and fewer parts are required. Throughout the service cycle, information will be pushed to your customers online to reinforce the value you provide and to build trust through visibility and transparency.
Chuck can’t offer that. Chuck shows up when the phone rings if he’s not too busy with another customer. Chuck fixes broken equipment that could have been repaired for much less if the issue was caught earlier. Meanwhile, the customer is aggravated because they have downtime, lost revenue, and unhappy employees or customers of their own. Chuck costs more when you calculate for these risks.
You can explain these risks until you’re blue in the face, but a large portion of prospects and customers will still choose Chuck and Stan over you. That’s OK. Those aren’t the customers that you want so don’t waste your time. Simply leave them with an accurate prediction of their future. Explain the many ways that Chuck will let them down, and when he does, they’ll remember you.
Know yourself (and what makes you better)
Let’s do a quick test. Which of the following are part of your company’s value proposition?
We work hard
We care
We have integrity
We are honest
We are dedicated
If any of these are in your brand’s value proposition, you have a problem. There’s a lot wrong with this list, but most of all, they aren’t competitive or differentiating. It only took 10 minutes of Googling service contractor websites to find the same values listed on multiple websites. Honestly, all of these values are table stakes for the industry and should be implicitly expected. So what makes you different? Do any of these values sound familiar?
We’re more experienced
We’re bigger
We do more
Each of these actually provides tangible value to the customer. More experience means that you are likely to solve problems faster and at a lower cost than your competitors. More coverage area and diversity of service offerings mean that your customers won’t have to manage as many vendors. These are a step in the right direction. How about these values?
We’re transparent
We’re accountable
We’re data-driven
We’re modern
These are rarely seen value propositions in our industry because they are difficult to offer without technology that enables mobility and modern online customer engagement. The vast majority of service contractors are still running on paper, server-based software, or accounting systems that don’t offer functionality for technicians or customers. That means that customer data is limited, inaccessible, and unusable. In other words, the opposite of transparent, accountable, data-driven, and modern. The companies that can offer these values will win the most desirable, high-margin customers.
Beating Chuck and Stan really isn’t that hard. It comes down to a couple easy steps. First, differentiate the value that you offer and understand, without a doubt, that your higher rates are warranted because you will reduce the customer’s risk and aggravation by providing predictable outcomes at a predictable price. Second, if the customer still isn’t convinced, let them go. Predict their future and they’ll come back.
Want to learn more? Watch the recording of our December 7th webinar, “Don’t Sell on Price, Offer a Premium Program” presented by ServiceTrade’s CEO and author of The Digital Wrap, Billy Marshall. Click here to watch the recording.
Customer Service is Dead: 5 Companies That Killed It
Thanks to new technology, customer service innovations are not just an option, they are a must for most businesses, especially commercial service contractors. To be clear, by “customer service,” I don’t mean more smiling employees on phones reacting to disgruntled customers as this Google image search for “customer service” suggests. Truly modern customer service doesn’t burden companies because technology and processes provide customers with the information they need and enable them to fulfill their goals without assistance.
This is NOT good customer service.
Every company listed below had strong, well-established competitors that provide great customer service in the classical sense. Innovations to the customer service model is all it took for these companies to overcome their competition and build billion dollar brands. In fairly commoditized industries, these companies found ways to enable customer self-service to differentiate themselves from the competition, enhance their customer service experience, and avoid hiring expensive customer service staff.
As you read about the companies below, think about the customer service experience you’ve had with any them. Have you ever had a phone call or exchanged emails with any of their employees? Would you consider yourself happy with their customer service?
Many would argue that they preferred the great customer service experience they received at a Blockbuster years ago; Employees taking them by the hand and making personal recommendations from a large selection of new releases. However, I think most folks would agree that they are willing to spend more time sifting through Netflix’s older digital selection as long as they don’t have to leave their couch. In fact, so many people prefer Netflix that its annual revenue has surpassed Blockbuster’s highest annual revenue by about $1.5B without selling a single pack of overpriced candy.
For those of you who are half blind like me, you may be more familiar with Warby Parker, a company selling designer frames and glasses for under $100. Aside from the great price point, Warby Parker has two major customer service innovations that have skyrocketed the company’s sales and valuation. First, customers can upload their picture and digitally “try” different frames on. Second, customers can have five frames sent to their home for free to try on before making a purchase. This has the added benefit of enabling the customer to solicit feedback from their friends and family about their selection. This simple tweak to a business model that traditionally required customers to drive to a physical store during business hours and receive advice from a total stranger has been upended by a self-service process that customers love because it is more valuable and convenient.
Company: Dollar Shave Club Age: 5yrs Value: Acquired for $1B Revenue Multiple: 5x
Admittedly, Dollar Shave Club found success through both customer service innovations and great marketing. If you are unfamiliar with their brand, I implore you to watch their first viral marketing video:
Marketing aside, the subscription model that they use was transformative and effective. By simply removing the hassle of remembering to buy new razor blades, Dollar Shave Club solved a simple problem that inevitably happens to everyone. If you do not plan ahead, you will run out of razors which can lead to awkward, stubbly days at the office.
Practically everyone is familiar with what Uber has done to transform the taxi experience and dominate the industry. In fact, we wrote an entire blog post explaining exactly what Uber did to the customer service experience in the taxi industry that has enabled such incredible growth and value. Suffice to say, Uber cut out the hassle of dealing with taxi dispatchers, crooked drivers, and broken credit card readers and replaced it with smart technology that empowers the customer.
Before Amazon, all we had was Walmart, the mall, and catalogs. Personally, I dread all three of those options so I am glad to have an alternative. By simplifying the online retail experience such that customers could easily find and buy whatever they needed, Amazon has taken over. They’ve eliminated so much hassle by removing the need to drive to a physical store during business hours or speaking with a catalog company’s customer service agent on the phone. Traditionally, stores and catalogs offered great customer service with sales teams that guided customers to make informed purchases. However, I will sacrifice the sales guidance every day of the week if it means I can shop from the comfort of my own home.
These companies followed a simple formula for success: Innovate to eliminate hassle for the customer, often with self-service technology or processes. Though self-service often adds additional steps or work for the customer, it is more valuable (when executed effectively) because they can accomplish goals in their own time at their own convenience.
To follow in the footsteps of these successful companies, simply review your current processes and look for customer-facing operations that require high labor and yield low or no revenue. Then, ask yourself if technology or processes can be put in place that eliminate hassle for your customers and enable them to conveniently serve their own needs.
