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Category: Shareholder Value

Make your Business more Valuable by Being more Valuable to your Customers

Billy Marshall often speaks to industry association groups on topics that help service companies be more valuable, successful, productive and more important to their customers. This past May, he spoke in Indianapolis to fire protection companies about The Digital Wrap.

Billy is an animated speaker

What is Billy talking about? Watch the video to see!

This 15-minute recording is crash course on what a digital wrap is, and how it helps commercial service contracting companies become more important to their customers – and in turn – increase the value of their business.

Billy uses funny and interesting stories to relate how service companies should:

If you like what you see here, read a free chapter or get the book at and consider joining us for the Digital Wrap Conference in October.


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 ps. Don’t have 15 minutes? You can watch short segments from this presentation at

Key Principles to Maximize the Value of Your Service Contracting Business

At some point, every business person or entrepreneur wants to be paid the full value for the investment of time, energy, love, and money they have made in their business.  Whether that payday is an arms length financial transaction with an unrelated third party or a passing of the business to the next generation, everyone wants the satisfaction of believing the next owner is receiving something of great value.  The principles behind maximizing the value of a service contracting business are pretty simple, but it is amazing how often they are ignored in the day to day decision making process regarding what issues get management’s attention.  Keeping the formula and the principles for maximizing value in focus on a daily basis will increase your payday when you cash out, whether that cash is a financial transaction or simply a passing of the torch to the next generation.


The formula for value is simple – NC * (LVC – CAC) = VALUE

NC is the number of customers.  Ideally you have many of them because having few is risky for the future owner.  If they lose one or a couple, much of the value of the business is quickly erased.  Also, business you receive from third parties (manufacturers, management companies, etc) generally does not count as value either.  Without a direct, persistent, and meaningful connection with the end customer, your revenue and profit margin are tenuous and therefore not very valuable to the next owner.

LVC is the lifetime value of a customer.  Ideally you get lots of predictable repeat business from each customer.  If each customer is “one and done” with your services, your business is not worth much because you must sustain market advertising or other similar expenses promoting the brand to attract new revenue.  As with having only a few customers, the future is risky when the new owner cannot depend on your current customer base for future income streams.

CAC is the cost to acquire a new customer.  A strong and valuable brand will attract new customers at a lower cost because the marketing and sales expense is low when references, customer service, and brand reputation are strong.  Fighting a trove of negativity in the market associated with poor customer service and negative reviews is expensive (high CAC).  A new owner does not want to spend heavily on advertising because you have created a wall of negativity that must be climbed for each new sale.

If this is the basic formula for value, what are the principles for maximizing value?

Provide AMAZING customer service.  Maximizing LVC means the customer would never think of using any other company for any service that you can provide for them.  It means you get a greater share of wallet over a longer period of time.  Price is important for each service because no one wants to discover they have been gouged when they share their experience with a neighbor.  However, the experience and the ability to recall, review, and share that experience is critical, which means it must have an online digital component (a coffee and tobacco stained yellow paper invoice with cryptic accounting codes finds the trash quickly and will never be recalled, reviewed, or shared).  If you have not figured out how to connect with them online using digital service artifacts that make it easy for them to review and recall your value, you need to figure it out and join the 21st century.

Amazing customer service also dramatically lowers your CAC.  Advertising is an expensive approach to gaining new customers.  The lowest CAC comes from referrals and online reviews that put your brand in the top position among prospects considering the services you offer.  Make it easy for the current customers to rave about you and forward your digital service artifacts onto others or post them online.  If you don’t understand that last sentence, hire someone who does and tell them you want to join the 21st century party that is happening online.

Manage and mine customer data vigorously for new service call opportunities to increase LVC.  Your opportunity to sell more to an existing customer is directly proportional to how much you know about that customer and how easy it is to turn that knowledge into new service calls.  A history of invoices in your accounting system does not count for any incremental LVC.  How much data do you have about their property, equipment, and service history that you can act upon with computing resources to send them a tailored offer online for improvement?  If this last question means nothing to you, hire someone that gets it and tell them to upgrade your filing cabinets to create digital treasure troves.

Finally, create a sales culture that leads to predictable year over year increases in NC.  New customer additions should be an almost daily occurrence with a predictable formula and routine.  When you can predict and bank on the addition of new customers and you can likewise predict that each customer will provide many years of income due to amazing customer service and the ability to mine data for new services, you have built a very valuable business.

The new owners will reflect the value you have built either in the purchase price or in a next generation debt of gratitude.  Either way, your satisfaction will be substantial and genuine knowing you created something of great value by following these principles.

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?

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

Paperwork Image

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:

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

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

Service Contracting Software - DispatchingWhen 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.

Service Contracting Software - SchedulingWhen 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.”

Service Contracting Software - Quoting

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.