Get a Demo
Category: Business Management

From Data to Dollars: Growing Your Commercial service Business through Data Insights

In today’s competitive business environment, the integration of data-driven decision-making can significantly enhance operational efficiency and market responsiveness. Inspired by the innovative insights from Shawn Mims’ presentation at the 2024 Digital Wrap Conference, this article delves into the transformative power of embracing data, optimizing operations, and leveraging technological advancements to streamline business practices and decision-making processes.

Transforming Intuition into Data-Driven Strategies

Operational Efficiency Through Metrics

Integrating Technology to Leverage Data

In conclusion, the strategic application of data-driven decision-making, as advocated by Shawn Mims, offers a comprehensive approach to modernizing business operations. By embracing these principles, companies can achieve higher operational efficiency, adapt more rapidly to market changes, and ultimately, secure a competitive advantage in their industries. This shift towards a more analytical, informed business model is not just beneficial but essential in the data-rich landscape of today’s market.

Choosing Quality Over Quantity: Why the Right Customers Matter

For commercial service contractors, it’s essential to find ways to improve efficiency and profits during this time of economic uncertainty and labor shortages. Drawing from ServiceTrade CEO Billy Marshall’s presentation at the 2024 Digital Wrap Conference, this article explores one key strategy for reducing risk, maximizing efficiency, and growing your profits: selling to the best customers.

It starts with selling to better customers

“Better customers will invest in better systems and better maintenance routines that deliver better outcomes while using less labor and eliminating unplanned service calls.” – ServiceTrade CEO Billy Marshall, from his DWC presentation, “Terminate Risk: Your New Sales Mission in an AI World”

Who are “the best” customers?

It’s likely that at some point you’ve dealt with customers who cut corners, avoid your recommended maintenance programs, and ultimately pull you into emergency situations. This disrupts planned workflows and creates operational chaos. These types of customers usually require more resources and attention, reducing overall efficiency and increasing costs due to the unplanned nature of the work.

By contrast, better customers are those who:

The benefits of selling to better customers

Premium customers often lead to repeat business and referrals, which are key drivers of growth. They are also more likely to invest in higher-quality services and products, which can help maintain high standards in your offerings. Most importantly, working with the right customers will result in steadier revenue streams and less operational chaos, allowing you to minimize on-demand work and maximize planned work.

Benefits of this include:

More efficiency,

Selling and Retaining the Best Customers

This all sounds great. But how do you close these premium customers and, beyond that, how do you keep them?

Understanding what customers fundamentally desire and how to continuously engage them are crucial in selling and retaining the best customers. At the heart of a successful customer relationship is the delivery of seamless, disruption-free services. As highlighted by Billy in his DWC presentation, customers primarily want “nothing” in terms of disruptions — no breakdowns, no malfunctions, just smooth operations. This simple understanding forms the basis of what it means to sell to and retain valuable customers.

To effectively sell to the best customers, businesses must utilize Marketing Impressions Per Service (MIPS). This strategy involves using digital touchpoints such as appointment reminders, enroute notifications, work acknowledgements, and online quotes to build a compelling online narrative.

Billy explained, “Once your current customers experience your Digital Wrap through your MIPS and the story of how you are taking care of them, they can’t leave you. They can’t go back to just invoices and emails and PDFs.”

This approach not only enhances customer retention but also significantly elevates the perceived value of your services compared to competitors who may offer lower prices but less transparency and reliability.

Further refining the strategy to attract and keep premium customers involves categorizing service features into Attractive, Performance, and Required. By understanding which features elevate customer satisfaction and loyalty — from the must-haves to the delightful extras — businesses can tailor their offerings to meet and exceed the expectations of the best customers. Focusing on performance features that influence initial purchase decisions and attractive features that enhance customer loyalty, ensures that your service stands out in a competitive market.

In essence, selling to and retaining the best customers involves not just meeting their basic expectations but consistently exceeding them through strategic use of digital interactions and a deep understanding of their needs and preferences.

Here are some additional resources:

Focusing on better customers builds a more sustainable and profitable business. By aligning your service offerings with the needs of high-quality customers, you can transform your operational model to be more efficient and less chaotic. Set the stage for future growth and stability.

Want to learn how ServiceTrade can help?

5 Simple Growth Strategies for MEP Contractors in 2024

MEP technician on ladder

MEP contractors are grappling with various challenges in 2024, including persistent skilled labor shortages and widespread economic difficulties, such as inflation, climbing interest rates, and supply chain disruptions.

In order to remain competitive and grow revenue this year, you’ll have to be strategic and proactive in your approach. In this article, we’ll explore five simple and achievable growth strategies you can implement in 2024 to stay ahead of the curve and take your business to the next level. 

1. Shore Up Your Service Business (and Build Strong Relationships)

It’s not too late to direct more attention and resources to your services department. Here are some benefits of doing so this year: 

2. Show Your Work 

Providing your customers with a premium experience will continue to be essential for retention and growth this year. One way you can impress customers is by providing detailed and transparent records of the work you do—even (or perhaps especially) in the case of routine maintenance work. 

When equipment is running without issue, facility owners and managers under economic pressure might make a case for cutting the budget. Why are we paying these folks so much money when our equipment is working fine? 

You know—and we know—that the equipment is working fine because it’s being routinely serviced. But the value of maintenance work will likely remain a blind spot for your customers—until you bring it to light. 

How do you do that? By showing your work. Providing media-rich records, before and after photos, and really telling the story of how your recurring work is saving your customers money in the long run. 

Looking for a streamlined way to tell the full story of your good work? Check out ServiceTrade’s Service Link feature

3. Prioritize Pull-Through Performance

What is pull-through work? It’s a metric that measures the number of repairs, upgrades, replacements, and installations that come from delivering existing maintenance agreements with your customer. Anything you’ve proactively suggested or planned with your customer outside of routine maintenance and construction work. 

The related metric pull-through efficiency is the rate at which routine work results in a pull-through work order. Improving this rate, and your total volume of pull-through work, continues to be a compelling growth strategy. 

According to our latest data study, the top half of mechanical contractors in total pull-through performance grew year-over-year revenue 122% faster than their bottom half performing counterparts.

How do you improve pull-through performance? The short answer is to get your whole team behind the strategy and focus on these five steps: 

4. Be a Gold-Star Employer

There’s never been a better time to focus on your technicians. As the labor shortage continues, it’s important to offer competitive benefits and compensation, whether that be through higher wages or commission-based programs. It’s equally important to moderate workloads and make the job as easy and enjoyable for technicians as possible. 

Focus on employee retention and attract new talent by listing openings for skilled technicians on your website. Be specific about the skills that you value and the unique capabilities of your company, including any special technology capabilities that you deploy in service to your customers.

5. Lean on Technology

The right service software will help you accomplish the four strategies above with more ease and efficiency. 

For several years now, smart technology solutions have differentiated MEP contractors from their competitors. And in 2024, as the industry continues to embrace technology, having robust and reliable service software will become increasingly essential to keeping up with the competition and growing revenue. 

Want to learn how ServiceTrade can help you hit your growth goals this year? Chat with our team!

A Better Approach to the Skilled Labor Shortage

At ServiceTrade’s 2022 Digital Wrap Conference, CEO Billy Marshall presented an innovative solution to a core challenge that’s top of mind for everyone these days—the ongoing labor shortage. 

The statistics are concerning. For every two techs that retire each year, only one enters the field. But demand for your services continues to grow. So what’s the play? Billy offered this 3-step strategy: 

We’ll get to those in just a minute. First, an illustration…

The F1 Analogy

Watch this:

In case the analogy isn’t clear, your technicians are your race cars on the track. The growth and limitations of your business rely largely on the quality and efficiency of their work. But in a labor shortage, skilled technicians are a constrained resource. You can’t just go out and hire more techs. You can’t tag in another race car.

But you can innovate and build up your supporting team, your pit crew, your technology-empowered office staff and sales team. Employ as much administrative staff as you need to achieve one mission – keep the technician solely focused on doing the high-value, hands-on work that only they can do. 

3 Steps to Growing Revenue Without Hiring More Techs

Minimize Demand Work

You can’t plan for demand work. It causes chaos and throws off schedules. Prioritize maintaining and repairing equipment with routine service. If you have customers who refuse to properly maintain or repair equipment, consider cutting ties with them, raising their prices, or deprioritizing their service. 

Sell Better Customers 

If demand for your services is high, make room for only the best customers. Good customers would much rather sign up for your premium packages than risk their equipment failing. Good customers want predictable operating expenses, not the unexpected and unpredictable cost of demand work. 

Organize Around the Goal of Keeping Your Techs On Track

Take administrative burdens off of your technicians. Invest in your office staff. Make sure that everyone in the company understands the goal and is working toward optimizing technician efficiency. Software helps you do just that.

You can learn more about growing your business despite the skilled labor shortage by watching the full presentation.

SELECTING SERVICE MANAGEMENT SOFTWARE (That Keeps Accounting Happy)

You know it’s time. The service work has backed up and it’s becoming difficult to manage your limited labor resources. You’re ready for a new software solution to help take your service department to the next level. 

At this point, many commercial service contractors turn to their accounting team for guidance. Why? Because their accounting tools are deeply embedded into company-wide processes. They ensure finances stay on track and customers get billed for services. It’s no wonder leaders are reluctant to disrupt the back office. 

But while you should certainly consider accounting when evaluating software, back-office needs shouldn’t drive this decision. The needs of your service department should. In the end, your objective should be to find a robust service platform that will streamline operations, prioritize customer experience, grow service revenue—and also keep accounting happy. 

Essentially, there are three options to consider:

  1. All-in-one service and accounting software
  2. An add-on service module to your accounting system
  3. Purpose-built service management software that integrates with your accounting system

Option 1: An all-in-one solution

In your search you’ll probably encounter a few software companies that claim to have it all—all the tools for service management and accounting on one platform. Beware of this “all-in-one” messaging. Because while the software you’re looking for should certainly offer many capabilities and tools, no software to date is purpose-built for both service management and accounting. 

Note: Some service software companies will use “all-in-one” messaging while relying on accounting software integrations—an option we’ll cover below.  

Option 2: An add-on service module

Most construction-focused accounting platforms have attempted to solve service management for their customers with an add-on module. These types of modules are offered by the creators of Sage 100 Contractor, Sage 300 CRE, and Deltek+ ComputerEase accounting programs.

But these modules have accounting principles at their core. They try to shoehorn the complex work of commercial service departments into something that looks like accounting. For growing service departments, these modules lack the tools you’ll need to streamline operations and put your customers first

Option 3: A purpose-built service management platform

The best option for streamlining and growing your service department is—no surprise—software built for service management. ServiceTrade resides in this category and has a team of product engineers entirely focused on building and maintaining the best service software for commercial contractors. Now that’s the specialized solution you need. 

As for accounting, service management platforms will often integrate with your current system. The complexity of the initial setup will depend on which accounting software your business uses. As a general rule of thumb, if your accounting software is server-based, setting up an integration will be more complicated and costly than cloud-based accounting applications like Sage Intacct. 

3 QUESTIONS FOR EVALUATING PURPOSE-BUILT SERVICE SOFTWARE 

If you decide to go with service management software, you’ll find yourself with several options. We recommend using software designed specifically for commercial contractors as residential-minded software does not have the best tools for the complexity of commercial service. 

We also recommend asking these three questions.

Question #1: Who is driving the decision?

Up until this point, your accounting department has likely led the way on technology decisions because they hold the keys to what has been the most important software system in your business. But prioritizing the needs of accounting above all others when selecting a service management application is a common trap for commercial service contractors.

The good news is you can adopt service management software that keeps your accounting department happy, while also prioritizing the needs of your customers – the group of people whose needs must be driving your decisionThis leads us to the next question…

Question # 2: Does this solution prioritize customer experience? 

Accounting needs relevant service data so they can deliver an accurate invoice to the customer. But is that all your customers need? Of course not.

Your customers need to know what your techs found on the service call – risks to their business, their severity, and how the customer should address those risks. Strong service management software will empower your techs with tools to collect this information and deliver it to customers quickly and conveniently, which builds trust and generates additional revenue for your business.

Question #3: How will the integration work, and who will set it up?

Depending on which software you’re integrating, you may be working with a third-party integration expert or the service software business’s integrations team.    

You can address the complexity of the integration and who will be in charge of setup during the sales process. Ask for referrals from customers who use your accounting software so you can hear directly from them how the application works with your current systems and their lessons learned for what matters most in integrating service management and accounting software.

Considering ServiceTrade? Learn more about our accounting integration capabilities

5 Liability Management Tips for Fire Protection Contractors

It’s the unwelcome event many fire and life safety contractors have experienced and many others dread. A letter arrives. You’ve been listed in a liability claim. 

In the past, most liability claims were associated with fire and life safety system installations. Today, however, the majority of claims come from inspection, service, and repair work. The average amount of these claims is a whopping $449K according to an analysis of over 30K claims by Risk Suppression Partners

So, what processes and procedures do you have in place for when claims—or events that could lead to claims—arise? What work are you doing to prevent claims? 

Recently, ServiceTrade hosted a panel discussion with five industry experts who shared their best advice for winning and/or preventing claims. Here are five key takeaways.

1. Document everything (and make sure your documentation is organized and accessible). 

Guardian Fire Protection CEO Scott Agge shared his process for maintaining and assembling documents in the case of an event. Here’s what he shared:

Scott Agge: “When we’re alerted of an event, we identify all the systems that were involved and then we go into our documentation gathering phase. We assemble the full story in a chronological PDF. This includes the initial inspection agreement, all of our full-detailed inspection reports and inspection pictures (we’re able to gather all of this easily out of ServiceTrade), and detailed notes from schedulers about when they attempted to schedule any inspections or repairs and whether the customer chose to schedule. 

Deficiencies are where it gets really important. If you have deficiencies on site, you need to provide the details surrounding those deficiencies and what you did when the deficiency was identified. We make sure that customers are notified immediately which is easy to do through ServiceTrade. And we follow up with a quote within two days. 

We make sure the customer saw the quote and if the quote is approved, we document repairs. If the quote is not approved, we assemble all the information that shows we attempted to sell. By pulling all of this from ServiceTrade, we’re able to show the chronological history of delivering quotes and reports electronically, including when the customer viewed them and from which IP address.” 

2. Care about your contracts. 

Liability management begins with your contracts. Co-founder of the fire industry insurance company, Risk Suppression Partners, Top Myers; ServiceTrade’s Shawn Mims; and Scott Agge shared some contract advice.  

Top Myers: “There’s an opportunity to reduce your liability right up front. That is by being specific about the scope of work in your contracts. In other words: am I doing an NFPA 25 inspection? Or am I going to do an NFPA 25 inspection of one wet system, one dry system, and a fire pump where I specifically limit the scope? 

To avoid risk, don’t include things in your report that are outside the scope. If you say you’re doing an NFPA 25 inspection, and you include deficiencies that are outside of 25, you broke your contract. Then those great terms and conditions you put in your contract might not hold up against lawyers.”

Shawn Mims: “Care about your contracts. It’s really easy to get focused on the work itself, but step out of line with what you say you’re going to do in your contract and the whole thing can fall apart.”

Scott Agge: “We specifically state in our contracts that it’s the customer’s requirement to contact us to schedule their inspections. To be sure it’s done on time, we naturally call our customers and try to get inspections scheduled on time. We’re in the business of doing that. But in the event that you try to schedule and the customer doesn’t cooperate, you can go back to the contract where it says it’s their obligation to schedule. That comes in handy in the event that you don’t get an inspection done on time.”

3. Document deficiencies that are not code-related on a separate observation report. 

Being limited by your contracts can be frustrating when there’s a revenue opportunity outside of scope. Top Myers shared his take on the proper way to document these deficiencies. 

Top Myers: “We came up with an observation report. It’s outside of the inspection, but it’s an attachment that basically says, ‘Hey, listen! While we were there we noticed some things we want to share with you.’ This is not part of the NFPA 25 or 72, and we’ve never had a legal problem by doing it this way. Owners will appreciate the fact that you’ve found and pointed out some things that really weren’t in the code.”

You can download sample contract and observation report language provided by Risk Suppression Partners below.

4. Keep up with code and share code knowledge with your entire organization.

Chris Ruzika, former operations leader at LifeSafety Management, Inc. and current director of technical account management at ServiceTrade, shared his experience with creating an organization-wide code knowledge and a culture where liability management is prioritized by everyone at the company. 

Chris Ruzika: “What we always had great luck with was a code champion that was a trainer for the organization. He or she spent time understanding the differences from revision to revision in the NFPA—and in our case, the Florida State Fire Code. Then we had continuous training programs for everyone in the organization. 

We felt that risk management and compliance wasn’t an operations issue. It wasn’t a service manager issue. It was an organization-wide issue, right? So we frequently went over the basics of: what is code? Why is it important? Why are we bound to it in many cases?

We also kept a knowledge base, or a Wiki, in place for any of the individual requirements or any of the individual specifics that say Florida was requiring, as opposed to the city of Fort Lauderdale. So this code knowledge was accessible for the entire organization and wasn’t locked away in one person’s head.”

5. Invest in the best tools for code compliance and efficient documentation.

Chris Ruzika: Make sure you have the tools in place that allow your team to easily document everything. Look into what ServiceTrade allows you to do as far as documenting your quotes and deficiencies. And look into how ServiceForms can enable you to quickly deploy new inspection reports for your techs. You have to have the right tools in your toolbox.

You can view the panel discussion here.

Want to learn more about how ServiceTrade can help you manage liability? Book a demo.

Panel Participants

Top Myers

Top is the co-founder of the fire industry insurance company, Risk Suppression Partners, and the former president of the inspection software company, Asurio. He is on both the NFPA 25 and NFPA 915 standards committees. Later this month, he will be inducted into the NFSA Hall of Fame.

Jack Coffelt

Jack has been in the fire and life safety industry for over 30 years. He serves on the NFPA 72 and 101/5000 standards committees and NICET Fire Protection Advisory Committee.

Scott Agge

Scott serves as President and CEO of the fast-growing family of fire protection companies: Guardian Fire Protection Services, Confires Fire Protection Services, Fire Pros, Liberty Fire Solutions, and Fire Systems of Michigan.

Chris Ruzika

Chris is a former operations leader at LifeSafety Management, Inc., a fast-growth fire and life safety business with a very successful exit. He is now the Director of Technical Account Management at ServiceTrade.

5 Steps to Growing Pull-Through Repair Revenue

In a tight labor market, many service contractors are at capacity, with no room to take on new customers. To continue growing at such a time, businesses must find ways to increase revenue from existing customers. In fact, ServiceTrade’s recent data analysis found that the fastest way for commercial service contractors to grow overall revenue was to increase revenue per customer—regardless of their capacity. 

One of the best ways to grow revenue per customer is to drive more repair revenue by improving pull-through efficiency. 

What is pull-through efficiency? 

At ServiceTrade, we use the term “pull-through efficiency” to better understand how well contractors are identifying equipment issues during routine work, how often they are quoting these found issues, and at what rate repair quotes are approved and the repair delivered.

The 5 Steps to Establishing an Effective Pull-Through Workflow

Pull-through revenue growth requires a strong and efficient workflow and buy-in from the whole team. Here’s a five-step overview of a strong pull-through workflow. 

Step 1: Locate and record all deficiencies. 

During service calls and inspections, technicians must look out for repair opportunities—called deficiencies in ServiceTrade—and record them. That last part—recording them—is key. If a tech simply mentions deficiencies to a customer or the office, without documenting them, the rest of the workflow falls apart. Chances that the repair opportunity gets converted into a quote are slim. 

Recording deficiencies enables account executives to follow up with quotes and reminders. 

Step 2: Evaluate all deficiencies and create the quote. 

Once technicians have documented deficiencies, account managers can review them and quote the repairs. 

Step 3: Send the quote to the customer. 

An engaged customer is more likely to respond to and accept the quote. Contractors should send quotes quickly, while repairs are still on the customer’s mind, and engage them with images and text explanations that clearly explain the deficiency and why it needs repairing. 

Step 4: Manage open quotes and follow up with customers. 

A ServiceTrade analysis of quote acceptance rates showed that the more quote reminders, the better. Contractors who sent at least six reminders had the best chances of approval. 

Step 5: Schedule the repair jobs and earn the revenue

The final step in the workflow is to schedule the repair. Office staff will ideally have a way to easily convert approved quotes into jobs.

How and Why to Improve Pull-Through: What the Data Says 

When analyzing invoicing and quoting data from ServiceTrade contractors, we found some interesting trends. The top pull-through performers were not necessarily getting a higher percentage of quotes approved. They were, however, identifying many more repair opportunities during service calls and doing a much better job at following through to convert those opportunities into quotes for their customers. Essentially, they were giving themselves more at-bats. 

Let’s take a look at the key findings. 

Top and bottom pull-through performers had similar quote acceptance rates.

As shown in the graph below, bottom and top-half performers had similar quote approval rates.

Top performers, however, identified and quoted significantly more equipment issues and/or repair opportunities. 

Unlike what we saw with quote approval rate, we found a stark difference in the percentage of work orders with identified equipment issues between top and bottom-half performers. Top performers identified potential repairs on about 25% of all work orders, while bottom-half performers identified issues on only about 10% of work orders. 

The data also showed that top performers were much more effective at converting identified issues into quotes. Top performers consistently converted between 50% and 60% of identified equipment issues into quotes for their customers. Bottom-half performers only quoted identified issues about 10% of the time.  

Top pull-through performers earned substantially more revenue per work order and revenue per customer. 

In 2020-2021, among the mechanical, electric, and plumbing (MEP) industry segment, top pull-through efficiency performers earned an average of 8% more per work order than bottom-half pull-through efficiency performers. In the fire protection segment, top-half performers earned 38% more per work order than bottom-half performers. 

revenue per work order chart

Differences in revenue per customer were even starker. Top MEP pull-through efficiency performers earned an average of 27% more per customer than bottom-half pull-through efficiency performers. In the fire protection segment, top-half performers earned 99% more per customer than bottom-half performers—that’s double the revenue per customer.  

revenue per customer chart

Check out our full data report for more revenue trends. 

ServiceTrade was built with pull-through efficiency in mind, and top performing service contractors are leveraging the app’s streamlined workflow to grow repair revenue. With the right workflows, tools, and buy-in from the full team, improving pull-through efficiency is simple. 

Book a demo to find out how ServiceTrade can help your business.

Raising Prices During Inflationary Times and Beyond: Part II

In Part I of this series, I shared my thoughts on how a service contractor’s Digital Wrap enables them to routinely raise prices while retaining customers. We talked about (a) the importance of consistently presenting your brand as a premium product and (b) providing a superior customer service experience. Here in Part II, we’ll talk about the operational component.

The 3 Operational Must-Haves for Routinely Raising Prices

Now that your Digital Wrap has set the expectation that you’re going to charge a premium price and keep raising prices in the future, how are you literally going to do that?

Operationally speaking, there are three must-haves for routine pricing adjustments: (1) service contracts that set clear expectations, (2) a capable contracts system, and (3) a solid process for implementing and communicating pricing increases. Let’s look at each of these in more detail. 

1. Service Contracts That Set the Expectation for Pricing Adjustments

Do you have contracts with your customer that establish your ability to raise prices on a periodic basis? You should. Being transparent and talking about pricing from the very beginning is a good way to set proper expectations.

You certainly need to be able to pass along material price increases to the customer based upon fluctuations in commodity prices. Explain to the customer how you source parts and how they can expect you to be efficient, but if the price of copper is up 100%, they should expect pricing on copper parts to increase by 100%. 

Similarly, you need to be able to pass on rising overhead and labor costs. Your service contract should clearly set the expectation that pricing will increase as you increase the value of your services. This ensures that customers are not surprised by price adjustments that are not directly connected to materials. It will also reinforce your commitment to continually improving your services.

2. A System That Can Account for Individualized Contract Agreements

If you do have contracts that establish your ability to raise prices, do you have a system that scales the delivery of prices to customer invoices based upon those contract agreements? When a customer rightfully negotiates a special rate due to volume or some other relevant factor, are you going to get it right when you create their invoices?

Each contract with any given customer should ideally be just a short list of exceptions from your master pricing, with each exception being triggered at an item or location level.  When you alter your master agreement, your customer’s exceptions don’t change until their contract renews or is renegotiated.

Anyone in your organization should be able to generate an accurate invoice if the system has the capability it should have. If you cannot, schedule a call with a ServiceTrade representative to see what you should be getting from your contracts system.

3. An Automated Process for Implementing and Communicating Pricing Changes

Finally, updating prices to increase them (or decrease them in the case of falling commodity prices) should be simple and reasonably automated. Generally, the customer should get some sort of notification before an auto-renewal period, and perhaps there will be a discussion about the terms of the contract. 

With clear upfront expectations, a capable contracts system, and automated communication, you can successfully raise prices without a lot of fuss by your staff and without driving away customers.

And if your Digital Wrap has been active and customers can see all of the good stories about your services online, they cannot even consider terminating their relationship with you when the value of your brand is so transparent and obvious. A premium brand is worth the premium price.

 

Want to learn more about ServiceTrade? Schedule a demo.

Raising Prices During Inflationary Times And Beyond: Part I

Raising service prices banner

What Should I Do About Inflation? Give ‘Em a Big Ass Price Increase!

The most efficient way to grow revenue in your business is to increase the price you charge for the services that you provide. Sounds easy, right? Well, it can be if you understand the underlying psychology of buyers and you have the operational capability to adjust prices easily across your business. The keys to successful pricing adjustments are:

  1. An expectation on the part of the customer that your brand is worthy of a premium price.
  2. A customer service approach that demonstrates value beyond the price of the service.
  3. Operational capability to implement price adjustments seamlessly.

In this article, I’ll focus on commanding a premium price and demonstrating value through customer service. You can catch my thoughts on operational capabilities in Part II.

Inflation sets the stage for a price increase

Inflation rose 7% in 2021. Fuel prices rose a remarkable 58%. The price for trucks and cars is up between 10 and 30%, depending on the category. How easy has it been for you to raise prices for the services you sell to your customers? 

Let’s start with this inflation excuse as a case study for customer reaction when they expect price increases. When all of the news outlets in America are braying about the highest inflation since 1982 and every Tom, Dick, and Harry is paying $15 for a burger and fries at 5 Guys, most folks will expect their vendor bills to be more pricey. When higher prices are all around you, it is difficult to single out a particular vendor for a protest over a price increase. The inflationary environment and all of the market symbols that go with it has set the stage for the price increase.

But how do you increase prices without help from these inflationary symbols?

How do you create symbols that confer an expectation on the customer that prices will be on the premium side of a fair trade? 

Well, you do it by placing your own brand symbols in front of the customer everyday to reinforce the idea that you deserve to be paid more because of the way you do business. If the customer sees images of your brand everyday that are consistent with premium service, they are unlikely to protest when your invoice arrives sporting a higher price than they paid last year and one that is higher than the competitor down the street would likely charge. And then, they pay it.

Ideally, you are doing things differently to elevate your brand above the minimum commodity status where price is the only determinant of value. If you do not want to compete on price, you need to develop a premium brand, even if customer expectations for the products and services you deliver are generally low. How do you overcome commodity expectations? Let’s look at an example from a commodity market.

The Big Ass fan example

My first experience with a Big Ass fan was in an open air concourse at the airport in Punta Cana, Dominican Republic. This thing was huge! And it worked well also as I was there in August when it is hot and humid, and the fan in the open airport made a big difference.

Big Ass is a good case study for price expectations because generally speaking there is nothing more commodity than a fan. The market for fans generally should be one where price is the ultimate determinant of value. Yet when I recently went looking for a fan for an outdoor kitchen project, I totally expected the Big Ass version to cost significantly more than the competition. My expectations were met and exceeded.

Big Ass Fan in airport

A Big Ass fan at the Punta Cana airport

An 84 inch HVLS (high volume low speed) fan in oil rubbed bronze can be found online for less than $1,000. The comparable Big Ass versions will run between $2,000 and $3,000 depending on options. Really? For a fan? Why not? And people with the money will pay for it because they trust they are getting a better product and better customer service with the Big Ass brand.

I expected the Big Ass brand to command a premium (I was a little shocked at the 100% plus premium to be honest, LOL), but how did I come to have that expectation? What did they do to prime me to pay so much more for their product?

First, the brand caught my eye years ago in Punta Cana. Of course the name created a conversation among the people that were traveling with me (creating a conversation is good branding, btw). What did we do? Picked up our phones and began searching around for Big Ass information. 

What did we discover? An interesting story, of course. The company began cooling cows, who apparently will eat more and produce more milk if cooler. Soon the company branched out into other industrial settings like warehouse distribution centers and open air applications like the Punta Cana airport and amusement parks. 

The name came about from customer calls asking if they were the manufacturers of “those big ass fans.” The mascot, Fanny the ass, is ever present as both a part of the logo as well as numerous statutes on the Lexington Kentucky campus. 

The company pays premium wages to employees, invests heavily in research and development, and has about 10,000 applicants for every 200 job openings. And the website sports customer reviews and makes it super easy to buy really expensive fans direct from the company. All of this information was readily available online from multiple sources.

Takeaways for commercial service contractors

So how are we going to use this review of Big Ass to teach your customers to expect big ass price increases from your company?

Lesson 1: Do something uniquely well. Do not try to serve everyone with the same old thing. Big Ass started with cows and industrial settings. These were unique markets that were likely underserved, but with a terrific value proposition for the customer: low cost cooling relative to the alternative of conditioned air. Who cares if the fan is super expensive when the alternative technology is prohibitive. Focus on a unique capability for a unique market.

Lesson 2: Tell an interesting story online. We talk about this all the time, but your Digital Wrap is really important. Your technicians gather lots of “stories” everyday with the work that they do. Get that story into the hands of your customers and prospects via your online marketing impressions (MIPS). If you don’t know what I am talking about, you really need to spend some time with ServiceTrade.

Lesson 3: Be transparent and available online. Big Ass publishes reviews on their website, including the poor ones. Several of the reviews indicated the way that the company recovered when the product failed to meet expectations – the customer service response was terrific. Also, it was easy for me to engage directly to configure and buy a fan online. It should be easy for your prospective customers to qualify themselves for a purchase or sales call from you using your website. Have you tried it lately disguising yourself as a customer?

Lesson 4: A premium price pays dividends in employee loyalty. You cannot build a premium organization if you do not charge a premium price. There is not enough money to go around. The customers have the money you need (as opposed to cutting corners in your business). Find a way to take it from them and pass it around your organization. You will find that your organization becomes better at taking more when you take care of them. Did you see the statistic on applications for jobs at Big Ass relative to openings? How would you like to have that problem?

 –

High inflation is not the only excuse for a price increase. A premium brand is the other excuse that works every time all the time. So get your Digital Wrap going and give the customer a Big Ass price increase as often as your contracts allow.

Read More: Raising Prices During Inflationary Times And Beyond: Part II

Don’t Use Residential Software for a Commercial Service Business

Commercial and residential service contractors work completely differently. So why would a commercial contractor adopt service management software designed for residential contractors?

 

 

While they work in similar fields — HVAC, plumbing, electrical — commercial and residential service contractors work in altogether different ways.

Three key differences highlight the complex work demands that face commercial contractors — and reveal ways in which the right service management software can drive success.

Commercial contractors generally work:

  1. In long-term relationships wherein both maintenance and repair work is structured contractually.
  2. On complex systems of capital equipment that require years — sometimes decades — of precise, detailed, and documented maintenance.
  3. With facility owners and managers who require a clear understanding of the condition of the equipment in their facility so they can make good decisions that reduce the risk of costly downtime.

Let’s examine each of these three differentiators more closely.

Long-term relationships with customers wherein both maintenance and repair work is structured contractually.

The work of residential contractors tends to be transactional in nature — a home’s air conditioner isn’t cooling properly, so the homeowner calls for help. That homeowner may not experience a similar problem or interact with the same contractor again.

So, the residential technician must capture the homeowner’s consent and credit card information immediately, while still at the property, lest the company not get paid for its work.

This contrasts significantly with commercial service contractors who sign long-term contracts with customers detailing exactly what maintenance and service repair work is involved before a technician steps foot on the property.

The commercial service contractor performs their work under contract to make workload and cash flow more even and predictable throughout the year. In return, the customer realizes better outcomes with higher equipment uptime, fewer emergencies, and predictable pricing.

Commercial service contractors require software that manages the delivery of complicated recurring services on specific pieces of equipment within each contract. They also want to communicate information to the customer in a way that validates the value of the contractual relationship.

Complex systems of capital equipment that require years — sometimes decades — of precise, detailed, and documented maintenance management.

Commercial service contractors work with complicated, integrated, and expensive systems — the failure of which puts customers at serious legal, financial, and reputational risk.

The right service management platform helps the commercial service contractor intervene early by delivering on an established preventative maintenance schedule, staying ahead of potential problems, and mitigating that risk of failure.

Say, for example, a commercial technician performs routine maintenance on three compressors for which there are six blowers, and identifies that one blower needs repair. Consulting the equipment’s service history, the technician sees that the same blower has been repaired two times already for the same issue. At that point, the technician might escalate the repair to recommend replacement.

Likewise, commercial service technicians need to see incremental movement on potential problems — a pressure gauge registering 8% now, whereas it registered 4% the month before. More than seeing the potential problem, a commercial service contractor needs to share that information with the customer in pictures, videos, and notes to help the customer fully understand the problem, and appreciate that a repair may be necessary now or in the future.

Appropriate intervention on expensive and long-lasting capital equipment can extend lifespan — and help safeguard the customer against short-term and long-term risk.

With facility owners and managers who require a clear understanding of the condition of the equipment in their facility so they can make good decisions that reduce the risk of costly downtime.

A homeowner can tell right away that the residential contractor did the work they were paid to do because the problem went away.

The facility owner pays for annual preventative maintenance services that may not result in detectable changes. So how does the customer know that the contractor did the work they were paid to do? Moreover, if the contractor delivers their work well, the customer will see no disruptions, no downtime, and experience no drama.

To validate that customer’s trust, commercial service contractors must share reports with the customer that detail what equipment was maintained, when it was serviced, and if any problems were discovered. This is a challenge; commercial customers are busy with non-facility matters, so vendor interactions must be fast, easy, and readily available.

Modern commercial service management software should deliver reports online and offer other conveniences, such as the ability to request service and or view a detailed service history in a portal — showing work in ways that help keep the customer a long-term customer.

Putting relationships over transactions.

ServiceTrade enhances a commercial service contractor’s ability to demonstrate long-term value to commercial service contractors by fostering communication and transparency, and mitigating customer risk.

To learn how ServiceTrade can help your commercial service business build stronger and more transparent relationships with customers, request a demo with an application expert.