Category: Business Management

What is Great Customer Service Worth? About 20% and $41 Billion.

Unless you’ve been living under a rock recently, you know that Uber is a taxi service start-up that connects drivers with folks who need a ride. As a business, Uber connects riders and drivers (just as a taxi service does) and they collect a 20% fee on top of what is paid to the driver. As of December 2014, the company is worth $41 billion. Here is the Wall Street Journal article with the details on the financials. When examining Uber, I find some interesting lessons for service contractors. The key takeaway is:

How does a simple change in customer service practices lead to such a massive breakthrough in shareholder value?

Uber has effectively changed one thing in the customer experience associated with a taxi ride – they have dramatically improved customer service by providing rich information to the customer throughout the service cycle. Uber has done this by eliminating the aggravating service uncertainties and the unknowns that are inherent in hiring a taxi. There’s no need for the customer to jump up and down on the curb to hail a cab or berate a dispatcher who has no better information than the customer on the real whereabouts of the driver and a likely pickup time. The Uber customer simply touches the application on their smartphone, chooses the driver/car with the best value for their needs (arrival time, type of car, price), and then collaborates with the driver from pickup planning through to drop-off and billing. The ride is essentially the same, but everything about the customer service experience is different. Thus, in exchange for amazing customer service and 20% above what is paid to the driver, Uber has built a company worth $41 billion.

Think about the parallels with the service contracting space. Great service contractors will tell you that a premium price is achieved through great customer service. Any contractor trying to run the business simply as a markup on skilled technician labor is ultimately going to fail. Yet most service contractors have a customer service approach that resembles that of a taxi company. The customer is only engaged via phone calls and a paper receipt at the end of the “taxi ride.” How valuable is that customer experience? Not very. How much more valuable might a service contracting company be if it were to adopt an Uber style approach to customer service? Much more.

Here are the lessons from Uber on building a premium brand through great customer service:

1) Engage the customer online throughout the service process: Customers do not want to speak to your dispatcher about status. Also, it is inefficient and likely prone to errors. Show them what is happening online – the driver, the arrival, the problem, the fix, the fees.

2) Images are more powerful than text: Show the customer, don’t tell them. Uber shows the car en route to the customer. Give the customer photos and images of what is happening with the equipment being serviced. Humans learn from stories and images.

3) Make it easy for them to engage your company: Uber does this by being ever present as an application on the phone. You can also do it by being easy to find online, by being in their inbox with regular correspondence about your recent service delivery, by providing service history online, and by allowing them to initiate service online.

Service contracting is definitely different than a taxi service, but the customer service experience has certain parallels. New Internet services are coming on the market everyday attempting to “Uberize” the service contracting business. Because the dynamics of service contracting are more complex than a taxi ride, it is unclear if these emergent Internet brands will gain the momentum of Uber. What is certain, however, is that great brands stem from great customer service. There’s little doubt that service contractors can dramatically improve the value of their business by embracing many of the elements of customer service that make Uber worth $41 billion. What steps are you taking to create a premium service contracting brand by engaging your customers online and pulling them into the service process?

Amazon Plumbing? Google HVAC? Navigating the Digital Service Contracting Landscape.

What does it mean when two of the biggest names in Internet technology jump into the service contracting business? It means that service contracting is a huge and lucrative market that is due for a shake up (or a shake down, depending on your perspective). Amazon and Google are both taking on initiatives that will plug them into the world of home services (light commercial as well, and I am certain that some level of industrial capability will ultimately follow), and I believe there are lessons to be learned by observing how these new entrants operate. Learning and reacting thoughtfully could yield some nice opportunities for growth and profit. Poor planning and stubbornly insisting that nothing needs to change will yield abundant misery and sorrow.

So what exactly are Amazon and Google up to that will have an impact on the service contracting space? Amazon has quietly announced a local marketplace for service contractors. A Forbes magazine article describes their plans, and here is the money quote:

“Amazon Local Services is a new and simple way to buy professional services from pros such as plumbers, auto mechanics and yoga instructors,” said a promotional video on the site. “We’ve handpicked some of the best pros in your neighborhood and require them all to be licensed, insured and background-checked.”

Now, my focus in this post is not auto mechanics or yoga instructors, but instead the folks ServiceTrade calls customers. Some of these are plumbing, HVAC/R, kitchen equipment, and other specialty tradesmen that offer repair, upfit, and maintenance services for property and equipment at the customer’s home or business site. Amazon plans to step in between the customer and the contractor to moderate the transaction – and take their fair share of 10 – 15% for their trouble. Amazon is an expert at driving efficiency in logistics and offering customers very low prices for everything they sell. Now they are bringing this efficiency and low price strategy to local services. Low prices, minus 10 – 15% sounds like a painful bargain for the service contractor that does not have a plan to respond to this strategy.

How about Google? Well, they bought a company called Nest that makes smart thermostats and smoke/CO detectors. Here is the money quote from a Forbes article on this acquisition:

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” said CEO and cofounder Tony Fadell in a blog post.

The key term here is the “conscious home.” A home that is “conscious” is one that is aware of what is happening and can help Google respond to help meet the owner or occupant’s needs. With the thermostat and other devices in every room collecting information about the home environment, Google will be well positioned to help the homeowner get more value from their home ownership experience.

Google and Amazon are both in the business of using massive amounts of computing power to organize information to help their customers make thoughtful buying decisions. Isn’t the goal of any service business to organize information and provide expertise so the customer gets good value for the money that they spend upgrading, maintaining, or repairing the important things in their life? If you are a service contractor, how are you going to get better at knowing your customers and organizing that knowledge to help them make good decisions on equipment and services that improve their lives? How are you going to monitor their equipment usage and behaviors to make thoughtful recommendations in the manner of Google and Amazon? Or is your plan to simply let Amazon and Google own the customer relationship and instead settle for a 10 – 15% discount on the lowest price in the market?

Here are some broad recommendations I believe will help you have a thoughtful response to these new entrants:

Upgrade your approach for managing and using customer information
If your information about your customers is still trapped inside an accounting application running on a PC server in your office (or worse, filing cabinets), you are not well positioned to respond to Amazon and Google. I assure you that the systems and structure that Amazon and Google use to understand customer needs looks nothing like an accounting application. Great customer service will be defined by a rich mobile and cloud experience that allows your employees and your suppliers and your customers to collaborate online to deliver memorable outcomes that build your brand value with the customer. A PC server based accounting application will not distinguish you in this online fight for customer attention.

Invest in “smart” technology expertise
You need to have your own story regarding how you are going to monitor the needs of the customer and be responsive. Remember Tony Fadell from Google talking about the “conscious home” above? Think about smart electric meters, smart water meters, smart thermostats, and other connected sensors that allow you to be informed, thoughtful, and responsive on behalf of the customer. Be creative in offering maintenance contracts enabled by smart devices that make your services sticky, responsive, and invaluable for the customer. These types of “monitoring” services have existed for many, many years in the realm of security and fire systems. Bringing them to other areas outside security and fire in order to be proactive in customer service makes perfect sense.

Embrace Google and Amazon and others as a source of leads
You should be connected to these new entrants (and perhaps some of the older Internet players in the service contracting space like Angie’s List, Home Advisor, etc), but you should use them ONLY to establish a connection with a customer that you subsequently OWN. Avoid any contract with these entities that prohibits you from serving the customer independently after first touch. Deliver a memorable service during first touch, and then stick to the customer like glue using your upgraded customer service capabilities from recommendation #1 above. If you are memorable and attentive with a perpetual service approach, you will not have to ultimately settle for a 10 – 15% discount off the lowest price in the market after the first call.

You do not have to own massive amounts of computing capacity to enable a thoughtful customer service approach that makes you memorable for your customers. However, you do need to embrace cloud, mobile, and smart technology as a means to remain competitive in a customer service world that is increasingly defined by information, knowledge, expertise and online connections instead of simply local presence. Customer service does not begin and end in the parking lot or the driveway of the customer any longer. It extends to the boundaries of the Internet. Create a memorable online AND local experience for your customers and you will stick to them like glue. Miss this opportunity and you will be managing labor and truck maintenance in order to serve someone else’s (Amazon, Google?) customer for a 10 – 15% discount off the lowest price in the market.

Remember When You had a Parts Business?

Remember the good old days? Before Google and the Internet destroyed your parts business? Remember when advertising was local? When your listing in the yellow pages and the phone number on the side of your trucks would yield calls for replacement parts?

The great margins on most of the parts disappeared when everyone could Google a part number and get back 10 sites with pricing and detailed video documentation on how to diagnose and replace the failing part.

Guess what? Your services business might be the next to fall to the Internet Titans. Angie’s List, Home Advisor, FM Facility Maintenance and all of the manufacturers you have historically represented want your customers’ service business. They are investing millions and millions in capability to deliver customer service via the Internet and relegate you to being the labor bureau and the truck depot that they harness to make premium service margins. They are going to connect the equipment to the Internet so they can see exactly how service should be delivered to maximize the customer’s return on those assets. They are going to use data and statistics to deliver predictive customer service via amazingly rich websites. They are going to enable the customer to do a level of self-service and basic maintenance through gentle email reminders and cool “how to” videos that demonstrate simple consumable part replacements. Every search the customer does on the Internet or in their email inbox is going to yield a hundred hits in favor of Internet customer service. And, you will be maintaining trucks and managing labor issues awaiting their dispatch call to service their customer.

If you do not like the sound of the new business model that you are facing, maybe it is time to actually do something different. Get ahead of the trend. Invest in Internet customer service instead of continuing to insist that a clunky accounting application plus a static website is all you need to run your business. Your customer service capability needs to extend to the boundaries of the Internet. Your customer impressions cannot be limited to the period when your truck is parked in the customer’s driveway or parking lot. You need to figure out how to deliver valuable information on the web and in their email inbox to help them make good decisions on equipment stewardship based on YOUR expertise. The only way you will make premium margins in the future is to get paid for what you know instead of simply getting paid for where you go. Figure out how to be the brand instead of simply being resigned to being the labor bureau and the truck depot for someone else. If you want a roadmap, call us. Providing a bright future for your service business is our commitment to you.

Jesse James’ Advice for Service Contractors

Jesse James, Train Robber

I have been to multiple events in the past several months where service contractors from many trades (food equipment repair, fire safety, specialty cleaning) lament the insertion of one or more parties between themselves and their customers. It seems that when they do not directly influence the terms of service with the customer, including the amount of payment to be received, they do not make much, if any, profit. It seems to me, then, that the best way to fix this situation is to have a direct relationship with the customer in order to set terms that are profitable.

Jesse James was reported to have said that he robbed banks because “that is where the money is.” I don’t know if he really said this as the photo here indicates Jesse was also fond of trains, but I do know that in the service contractor world it is the customers that have all the money, and every other party in a transaction only gets what the customer gives. If you rely on an equipment manufacturer or anyone else to sell the services that you provide, then you should expect that manufacturer to take most, if not all, of the profit associated with that work. Ditto for any other third party (brokers, aggregators, whatever you want to call them). If you are not at the table presenting your value when the deal gets struck (whether for new equipment installation and service, or maintenance, or repairs), expect to get the scraps that are left over. So how do you get invited to the party where all the money is sloshing around and decisions are being made about who gets it? The customer needs to perceive your company and your services as critical to any decision they make regarding new equipment sourcing and the subsequent maintenance and repair of that equipment. You need to demonstrate to the customer that YOUR COMPANY IS THE EXPERT and no decision should be made without your involvement.

So, how do you become the expert and how do you demonstrate that expertise to the customer? Some of it is just good old fashioned sales execution – be familiar with the customer’s interests and be active in fulfilling them. Increasingly, however, folks have less and less time to invest in your sales process. They expect to interact with your product on their time and on their terms. Your presentation of value has to be digital, relevant, and readily available when they want it. The work that you do for them has to generate content that you constantly feed to them online so that you establish a reputation that encourages them to reach out to you when they need advice in your area of expertise. When your interactions with them serve to both gain their trust and teach them how to make better decisions, you get their attention . . . and their money.

Here are some practical tips on how to get called to the table as the expert when decisions that influence how much money you will make are getting made:

Be in their inbox all the time. These days, everyone operates out of their email inbox. Search has become so powerful and prevalent, that folks answer the question “who can help me with X, Y, or Z?” by searching their inbox. If you are not sending them email “notices” regarding scheduling, delivery, quotes, service history, invoices electronically with interesting content attached, you will lose your relevance to someone who is. Don’t send junk mail, but information about what you do for them is generally not junk.
Show them “why.” It is not enough to tell a customer what you did, show them why it was necessary and what to expect in the future. Show them what happened with photos and audio and video. Engage their curiosity and their motivation to be better. Generally you cannot afford “show and tell” in person during the busy day when the technician needs to move along to the next call and the customer just wants you out of their way so they can also get back to work. When it is electronic, they can access it when they want it – after the shift when everything slows down and they can reflect on it.
Predict the future and offer a better outcome. Never leave a service call without doing a “sweep” of the area for troublesome signs. Document them with photos and audio, and then play it back for the customer along with a plan for a fix. If they don’t respond, and it breaks, you nonetheless warned them and they will see you as someone that can predict the future. If they do respond, you can fix it during a slow period and they will pay less.
Summarize their relationship with you with data, and offer ways to lower their costs before you are asked. If you can get efficient in customer service administration, you will have more time for customer service recommendations. Feed your customer rich reports that show them ways to lessen what they pay you (and others) by changing work practices or equipment vendors. When you have the data and the means for them to profit from it, they will ask you for it, and you will be at the table when important decisions are made.

If all of this sounds difficult and out of reach, then you better figure out how to be the low cost and most efficient provider of contract labor to third parties. Commanding a profitable premium means that you have a direct relationship with the customer that pays for your expertise instead of simply being the labor that is dispatched to serve another company’s customers. What are you going to do to be at the table when each important customer decision is made?

Give Yourself a Raise – 5 Ways Service Contracting Software Puts More Money in Your Pocket

One of the consistent themes we hear from our service contractor customers is how expensive, slow, and cumbersome basic administrative tasks become when they attempt to scale their business with their on-premise PC server-based applications. Scheduling, inventory management, billing, payroll, customer service requests – all of these activities seem to get choked up with an administrative staff that always needs more capacity and ultimately holds the business hostage to the arcane knowledge that is trapped in their head regarding “how things work around here.” Progress and growth in the business grinds to a halt because the administrative burden becomes so complex. The mantra of the business becomes “don’t change anything because we can’t profitably manage what we have going already.” or “Grow? Grow! Are you kidding? Everytime we grow we lose money!”

The primary reason for this calcification of process and the resulting steady escalation of administration expense is the application structure – all communication and information MUST run through the office to be processed. Traffic cannot “flow” without being directed by a “traffic cop” sitting inside the office. Every car has to get attention when it hits the traffic circle, and all other cars must wait until the cars ahead are pushed through. Plus, batches of traffic show up at rush hour (in the morning and in the evening) and further clog up the highway, preventing progress until it is processed out. The key to breaking this miserable traffic jam in the office is to create a continuous flow of work that is not constantly interrupted by the need for “immediate” communication. Getting continuous flow means eliminating the daily phone rodeo and migrating from physical paper to digital data.

Stop the “Phone Call Rodeo”

The only calls you want burning up the phone lines in your office are either customers with an urgent need or happy customers calling to gush about the service they just received. All the other calls simply interrupt the workflow and prevent forward progress. If instead, all the information from the techs arrives in a queue where it is visible, actionable, and subject to prioritization, it will get handled with much higher efficiency. In the same manner that processing through an email queue is easier than taking an equivalent number of calls, processing through real time update information in ServiceTrade is easier than taking all those update calls. A phone ringing provides no information until you interrupt your work, accept the call, hear the situation, then triage your response. A dispatch board with visual cues on status (enroute and distance, arrived, photo memo, audio memo, problem found, etc) allows the work to flow without the interruptions and real time triage. Instead of one dispatch person for every 6 – 8 techs, you move toward best in class where one dispatcher can handle 15 – 18 techs.

Migrate to Digital Data

The biggest problem with paper is not the bad handwriting and lack of professionalism displayed to the customer (although these are issues which create other problems). The problem with paper is that it is slow and clogs up the office with administrative tasks that are cumbersome and batch oriented. When digital data arrives continuously through the day and it is organized in a manner that makes it actionable, you can close out more jobs faster and get the invoice to the customer faster (in the field if you like). Which means you get paid faster. When you stop being the payroll bank because you have effectively aligned your billing and collections with your service expenses, you can give yourself a raise from the enhanced cash flow.

The other “side” benefits of this streamlining and continuous flow include:

Burning Less Fuel – when you can complete the job and invoice without dropping the paper at the office, you burn less fuel.

Performing More Jobs – when your techs don’t have to call the office for updates and instructions, they deliver more jobs per month. When they know their activities and performance can be monitored in the office via digital data, they deliver more jobs per month.

Spending Less on Paper and Postage – triplicate paper and stamps for invoices are expensive. When your job data is digital along with your invoices, you save money on these items.

All of these are simple changes that enable you to give yourself a raise. Isn’t it about time?!

From Vision to Execution: 8 Critical Business Questions for Service Contractors

“Vision without Execution is Hallucination.”

I wish I could take credit for the great quote above, but I cannot. Walt Brown, a friend of mine who helps companies implement Gino Wickman’s Entrepreneurial Operating System (EOS), used that phrase to describe companies who attempt strategic change before they have their daily operations under control. Affecting strategic change (i.e. implementing the vision) is not possible if you cannot even make tactical improvements. No point in planning a trip to the moon if you can’t even get to the corner grocery store.

The first necessary ingredient for implementing any change is visibility to the behavior and/or results that you desire to improve. Try catching a fly with your eyes closed, or try catching a fly by being told where it was just 2 minutes ago. Without visibility to the relevant data there is no accountability, and without accountability, there is no change. Also, when change yields improvements that are also invisible, you cannot apply the positive reinforcement to make certain they are sustained. Visions of the blind are simply hallucinations.

We got into this discussion because Walt is in the business of helping the same customers that ServiceTrade helps – privately held service contractors. However, he never begins with the strategic changes but instead with the tactical improvements and accountability metrics that build momentum toward strategic change. He references this approach as “Traction,” which also happens to be the name of the book upon which the method is based. ServiceTrade is all about traction because we give our customers visibility to both the data and the behaviors that drive outcomes – whether minute by minute or week by week or month by month.

The Service Contractor “Vision Test”

Can you see the answers to these questions every day in the metrics you review? Do these answers simply appear in a daily report, or does someone have to grind away for weeks to give you information that is irrelevant by the time you receive it?

How much revenue did each technician deliver yesterday? last week? last month?
How much repair work did you quote yesterday? last week? last month?
How much in repair quotes does each dollar of maintenance work provide?
How long do your technicians drive on average for a dollar of revenue?
Which customers need to be notified right now because the tech is going to be late due to a prior appointment experiencing complications?
What percentage of your quotes get approved versus the total of quotes delivered to the customer?
How much revenue do you deliver per dispatcher/scheduler payroll dollar?
How much revenue did you deliver relative to the total value of revenue available last month?

If answering these questions is difficult, expensive, or impossible, or if seeing the behavior that drives these metrics is difficult, expensive, or impossible, you are blind, and a vision of a better business is just a hallucination. To get traction, you need visibility. When you have visibility and traction, you can drive to better outcomes. When you get better outcomes, you get freedom.

The Tesla Lesson: 4 Takeaways for Service Contractors

I am a big believer in market signals. I think Tesla is one of those signals. As a breakthrough company with a skyrocketing stock value, Tesla is clearly doing many, many things correctly and making very few mistakes. I believe there are some lessons in the Tesla experience that service contractors should be learning.

As context for everyone that lives under a rock, Tesla is a manufacturer, distributor, and customer service company for electric vehicles. Specifically, these are are not your Aunt Minnie’s electric hybrid Prius, or Civic. These are high performing vehicles that have a style about them that does not signal “compromise.”

For those that do not watch the stock market, Tesla is a high flyer. For every $1 in car sales, Tesla (NASDAQ: TSLA) gets almost $10 in shareholder value in return. Contrast that with Ford (NYSE: F), a fine company with very good management, which gets approximately $.40 (yes, forty cents) in shareholder value for every $1 in car sales. The market believes Tesla is onto something special and that it will dramatically outpace all others in this segment – otherwise the share price would make no sense.

Here are the lessons that I believe service contractors can take from Tesla:

The market values products that dramatically lower fuel consumption.

The market is signaling that fuel prices are going to continue to spiral upward. If fuel was going to be $2/gallon or even $3/gallon in the future, Tesla would not even exist. As a service contractor, you better have a strategy to use less fuel per revenue dollar in the future or you will find yourself in a dramatic squeeze. What are you doing to pack more revenue into every mile driven by your techs? Raising fuel surcharges is not the answer. Something along the lines of “plan a better route and offer more value at each stop” is the right strategy. Increase your service revenue density per mile is a lesson from Tesla.

The market values products that require minimal maintenance.

Tesla’s vehicles require far less maintenance than conventional cars. Some of the maintenance is delivered over the air in the form of new firmware for the drive system. All customers want to buy a product that is maintenance free. How will you drive revenue growth for products that require ever decreasing levels of maintenance? Expand your service area? See above on revenue per mile – difficult to do with ever rising fuel prices? Expand your expertise offered to your existing customer base? Yes. Expanding your service density per customer location is another lesson from Tesla.

The market values predictive maintenance with a single point of accountability.

Tesla monitors the health of the cars and initiates service with the customer based upon the exact situation of their vehicle – not some vague timeline. Tesla shows up with a loaner and takes the customer vehicle to the shop based upon setting an appointment with the customer interactively using the Tesla interface in the car. Equipment will be increasingly connected to the Internet (see Internet of Things) and monitored for service requirements by the manufacturer. How will you be the source of knowledge and data for the customer when the customer is connected directly to the manufacturer via the Internet? Collect an extraordinary record of the customer’s service needs via mobile devices, aggregate data to discover opportunities for better outcomes, and use the Internet to connect to your customer is another lesson from Tesla.

The market values a direct connection with the manufacturer.

Tesla sells direct, with the customer doing most of their education and interaction via the Internet. Manufacturers will increasingly connect with customers via highly interactive, multi-media and multi-modal experiences regarding their product and its advantages. What will you do to be a part of that conversation and express to the customer all the things the manufacturer does not know and cannot know because you are the one with the experience on the ground? The answer is not “well I guess the technician will show ‘em some stuff while he is there, before he leaves behind a handwritten, tobacco- and coffee-stained invoice with a bunch of cryptic codes from my accounting system” Wrong answer. You better be thinking about how you express your expertise to your customers online, interactively, with “rich media” and “big data,” because I can promise you that the manufacturers that you currently represent are going to do it. Embrace technology that connects you directly to your customer with rich media and a data-driven approach to service management is another lesson from Tesla.

Fortunately, none of these lessons have to be scary lessons. Yes, manufacturers have big capital to do big things, but they move slowly and spelling “customer service” would be a challenge even if they read this blog post. And big capital is not a requirement for fantastic systems in a world with ubiquitous mobile platforms (smartphones and tablets) and cloud computing.

With just a little bit of cash flow, you can make investments in capability that will cement your relationship with your customer in a world where they value everything I described above that Tesla is delivering. You can increase service density per mile, increase service density per location, collect an extraordinary record to drive expert service, and connect to each customer in a manner that educates them regarding the value you provide. Or you can wait for the manufacturers and other third parties to insert themselves between you and the customer so that every time the phone rings it is a dispatch to “their” customer. You decide.

4 Ways Service Contractors Can Grow Sales Without Selling

Services businesses are “the gift that keeps on giving” in the revenue department…if managed effectively. Unfortunately, many are not very well managed and somehow lose their connection and relevance with customers. The success of Angie’s List and other similar customer advocate intermediaries is a direct result of service vendors inability to remain relevant and build long term value through their customer base. For the vendor that is paying attention and wants to avoid the fate of having every job delivered by a customer service web engine that siphons off valuable margin, here are some tips for growing that do not require massive investments in sales and marketing.

Never Miss a Service Call

When a customer calls, whether a new prospect or an existing customer, how effective is your company at responding? An effective response is directly proportional to the immediate visibility the customer service rep has to supply and demand.

Supply visibility is knowing the current status of all of the field technicians that might be able to respond. I crack up when I see PC-based dispatch boards that represent “what was supposed to happen” at the beginning of the day but immediately become irrelevant when the day begins. If your dispatch board is not updated by every action the technician takes in the field (or does not take), it is irrelevant by 8:05 AM for making customer service decisions. Putting the customer on hold, or heaven forbid, calling them back when you know what is possible, is the kiss of death. Review the board and make the decision NOW about which tech will make it happen and when. If the decision has to wait until you finish a game of “phone call rodeo”, the customer will not be amused, and you will lose the call.

Demand visibility is quickly reviewing the customer history and having an educated opinion on what might be causing the problem. Providing some instant advice based upon your location record as to how they might reduce the severity until your technician arrives will gain you hours of cushion to get to the location. For example, knowing that the water cutoff is in the broom closet 12 steps from the front door. If you have to traipse back to a filing room, or if your technician reports are limited to scans of terse, hard to read, hand-written reports relating the history, you have little opportunity to establish credibility with the customer and move toward a solution in the first 2 minutes of the interaction. If it is a long run for the nearest technician, you are losing valuable points with the customer that may result in a lost customer when the next service opportunity arrives.

Maximize Maintenance Revenue

If the month of May has 285 maintenance services due, how many do you deliver? If your answer is less than 95%, your organization is not best in class, and you are missing revenue. Maximizing maintenance revenue requires 2 key capabilities: visibility to the undelivered work and customer scheduling efficiency.

When you have visibility to what is committed but undelivered, you can drive your technicians to respond. When you do not know what is happening hour to hour and day to day, and you are waiting on a folder to come back to the office to understand the productivity of a week of work, you have no hope of maximizing maintenance revenue; you do not know who is productive and who is goofing off. You need to know the productivity of every technician every hour of every day. The money is out there just waiting to land in your pocket, but you need constant visibility to take it all.

Committing the customer to the work is also a requirement to maximize maintenance revenue. Ideally, committing the customer to the work does not involve 5 phone calls to each customer. Having visibility to the customer preferences for service (never Tuesday, always early, etc.) as well as a notification system that allows you to easily connect with the customer lowers the expense and aggravation of committing the customer to the schedule. This customer engagement model for scheduling is a challenging technical problem, and I expect some very interesting innovations to emerge in this area.

Deliver More with Less

Growing without selling also means having capacity to deliver without expensive and slow ramp up of new resources (techs, trucks, admins). When you can squeeze more out of the current resources and just say “yes” to the calls that are already arriving, that is the ideal situation. Additionally, the ability to seamlessly “source” work to trusted partners when you have absolutely exhausted your ability to fulfill it with your crew is critical.

Squeezing more out of the current resources means that you have the visibility to where a well-applied squeeze will be effective. Squeezing your most productive tech as hard as you squeeze the loafer because you cannot see the results is a recipe for some pretty low outcomes – the best guy leaves and the loafer stays. It also means that your office crew is not covered up with mindless additional administrative work when new opportunities arise. How effective is your process in the office at scaling to meet new demand? Is it a miserable paper chase with stacks of folders representing different status migrating from desk to desk? Or is it a well oiled machine with instantaneous status alerts online that hardly notices an additional 15% uptick in orders?

Delivering more with less also means that you can have the ability to subcontract work to trusted providers with a click of the mouse. If your subcontracting process is not a simple redirect of work in your management application, with your subcontractors using the same technology platform and processes that you use to hold your techs accountable, then you have the wrong application and it is time to call ServiceTrade.

Fix Everything

The best sales lead in the world goes something like this:

“Yesterday while I was at your location, my technician noticed a problem with Equipment A. He documented it with photos that I have attached to the quote that you can review online. We can fix it this week, and all you need to do is click ‘Approve’ in the upper right corner of the online quote.”

As long as you are incurring the expense to go to a customer’s location, whether for a maintenance call or a service call, or even a sales call, you might as well maximize your opportunity by noting everything that you could do for the customer. When I say “note,” I do not mean some chicken scratch on a piece of coffee- and tobacco-stained paper that rides around in the truck for another week. What I mean is an organized record of digital artifacts, including photos, audio memos, and perhaps even video, that is easy to redirect back to the customer online to demonstrate your organization’s thoughtful stewardship of their equipment. Online quotes with photos are more than three times as likely to be approved by the customer than flat paper quotes delivered via mail or email attachments.

If you are ready to grow, but you are not ready to suffer the ramp-up of expensive sales resources, consider how these tips might generate the growth you want. Connecting with customers in the digital age is an amazing new opportunity for service companies. The ones that figure it out will grow with an absolute minimum of marketing and sales expense.

It Pays to Know: How Service Contractors Get Paid For Expertise, Not Just Labor

The best service contracting business model is based upon customers paying a premium for expertise instead of simply paying a markup on parts and labor. When true expertise is offered, the customer perceives that in the long term they will have better outcomes for less money – no callbacks, fewer breakdowns, less energy consumption, higher equipment output. With expertise in play, the customer trusts the advice of the provider, the provider takes care of the equipment, and both parties are happy with the long term value from the relationship.

Without expertise, the payment is simply a markup on parts and labor plus the lingering suspicion that perhaps something was not done right. Without expertise, it is always a forced march to the lowest rate on labor or the first truck in the driveway. The customer becomes like the general contractor – a supposed expert, often with dubious management practices, and a sharp focus on the fees. Without expertise, you are simply getting paid to show up and execute the tasks according to the will of the task master.

But how can a service contractor transition from the labor markup model to the premium pricing model? What is required to get paid for what you know instead of payment for where you go? There are 2 steps in this transition – 1) know what you know, and 2) show what you know.

Know What You Know

You cannot get paid a premium for expertise until you know what you know. Most service contractors do a lousy job sharing expertise throughout their organization. Part of the problem is due to antiquated systems – PC based applications with short text fields, no photo reporting, no audio memos, and with access restricted to those sitting in the office. Most of the knowledge is with the techs in the field and is based upon the unique situation that exists at the customer premises. However, the only means techs have to report what they know is a paper form upon which they scribble notes for the office to decode and enter into a system that no one in the field can access. If it sounds ridiculous it is because it is ridiculous.

Knowing what you know means that it must be easy to collect what you know and also to distribute what you know. Humans learn visually (pictures and video) and from stories. Whenever I want to learn a new song on the guitar or if I want to fix or upgrade something on my boat or my F250, I turn to YouTube. First, no one would bother to write most of that stuff down because it is too tedious. Second, it is hard to learn without the visual cues of video and the context that is often delivered with story vignettes by the “teachers.”

Turn the techs into teachers – for the office and for the customer and for other techs – by turning them loose with photo and audio (and video once the data plans support it). You will be amazed at how much more effective everyone becomes at matching the customers needs with the right resources when you have better tools for knowing what you know. ServiceTrade builds photos and audio into the mobile applications so that the techs become the teachers. We enable them to share with others in a manner that is easy to use so that everyone benefits.

Show What You Know

The next step in getting paid for what you know is to be able to show what you know. How do you share your knowledge with the customer? Is it limited to when you show up on a service call? When they are stressed out because their equipment is broken? Or do they have a 24×7 digital love affair with your work? Oftentimes the techs on-site visit schedule is a darned inconvenient time for the customer. They have work to do also, and sitting around jawboning with the tech about how this breakdown could have been prevented or about the unique approach he took to fix it is not high on their list at the moment. However, after dinner or over the weekend when they are paying bills, they might indeed take the time to review in detail the situation that led to an equipment breakdown.

If those details are scribbled on a triplicate form with coffee and tobacco juice stains on it, chances are they are not going to dwell on the matter. Nor will they have a high opinion of the service contractor no matter how capable the technician might have been. However, give them a webpage to browse with useful links to insightful details of their situation, and you might discover an interested customer that appreciates learning. The best gift we can give another human being is to teach them something that they want to learn. How effective is your customer service approach at teaching customers about their equipment and how you take care of it?

With the low cost of smartphones, tablets, data plans, and software as a service applications like ServiceTrade, there is no excuse for not moving toward a better service contracting business model. “Getting paid for what you know instead of where you go” will be more profitable and more enjoyable for everyone.

The Labor Market is Speaking – Are You Listening?

In early 2001, I had just been appointed to be the Vice President of North America sales for Red Hat. Many of my early meetings with prospective customers were geared toward understanding what was going to drive buying behavior for large scale adoption of Linux technology. One meeting in particular sticks in my mind today as I ponder potential buying behavior for my prospective customers at ServiceTrade.

That meeting more than twelve years ago was with a technology executive at Merrill Lynch. When I asked him why the investment bank was considering Linux technology, and by proxy a relationship with Red Hat, he replied “The firm has determined that we will not be able to hire the best technology workers in the future if we are not using the technology that they want to use. We believe the best technology employees will want to use Linux.”

Today, as I travel about and meet with various service contractors that support over $500 billion in annual maintenance and repair commerce in the US, I hear many complaints about how hard it is to recruit and retain skilled workers. I also see lots of really archaic business infrastructure. Interestingly, I do not hear as many complaints about hiring from companies with more progressive infrastructure. Maybe there is a correlation. Maybe the problem is not a skilled labor shortage. Maybe the skilled labor has no tolerance for poor working conditions.

In the case of Merrill Lynch back in 2001, they made an investment in a new type of infrastructure in order to be able to recruit the best technology managers and developers. For service contractors, investments in infrastructure might lead to the same attractiveness for service technicians. It is easy to see how a comfortable new truck might be attractive, just like a nice office location for a Merrill Lynch technology developer. But the new truck does not necessarily make the technician productive just as a new building with new furniture does not make a technology developer more productive. Productivity, and corresponding job satisfaction, comes from delivering the most value to the customer with the least amount of company dysfunction.

Manual reporting, missing parts, poorly planned routes and jobs, lost paperwork, broken down vehicles, broken tools, call backs, disorganized dispatch, and “where you at” calls during the job all represent dysfunctional BS. Some amount of it will be tolerated as inevitable. Too much of it will send employees searching for a better opportunity – an opportunity where the ratio of dysfunction to productive work is lower.

It is self serving, but I believe the technology infrastructure service techs use in the future is going to be equally, if not more, important than the hand tools, trucks, and other equipment. The technology that connects the service tech to the office and the customer in a way that eliminates dysfunction and maximizes productive labor hours (and the corresponding paycheck) will be a key element of recruiting and retention. Technology that makes the service tech look knowledgeable, modern, and effective in the eyes of the customer will reinforce job satisfaction as well. Technology that looks and feels like the basic elements of their everyday life – iPhone, Android, Internet, iPad – will be expected as a tool of the trade at work.

Whether ServiceTrade or something else efficient, effective, and modern, an investment in technology as a means to recruit and retain skilled labor talent will probably yield a pretty good return. The alternative is to be satisfied with the business results and customer service that can be achieved with service techs that tolerate productivity sapping dysfunction. Listen to the market for labor. It is telling you what to do.