WannaCry? You will after this so-named ransomware takes over your Windows computer, encrypts all your important files, and charges you $300 to decrypt them, if you’re lucky. This virus is sweeping the globe and making headlines because of its widespread impact. Before you read any further, make sure you have run the latest Windows update if you are using a version older than Windows 10.
Losing your family photos and personal files on a PC to ransomware is unfortunate. Losing the critical infrastructure that runs your business because you’re still using local servers is catastrophic. That’s right, these viruses are indiscriminate and business servers are not exempt from these attacks. Local servers are especially risky because they represent a single point of failure if they aren’t backed up. And how confident are you in your backup systems? Do me a quick favor and go unplug your servers. Are you 100% sure they are going to start up where they left off? If you’re at all hesitant, then ransomware is only one of a host of concerns that you should have:
Disgruntled employees – Is there any way for you to prevent an unhappy employee from stealing your data or wreaking havoc on your company’s servers?
Natural disaster – Fire, flood or tornado. Enough said.
Disk failure – Computers degrade over time and will eventually break down.
Failed updates – If you didn’t update your servers with the latest Windows patch, you are susceptible to WannaCry. On the other hand, every update has the potential to introduce compatibility issues.
Other viruses – WannaCry is just the latest example in a growing trend of PC and local server hacks. And, while it’s possible to recover your files from a ransomware attack, other viruses are less forgiving and will destroy files outright or render your machines completely useless.
How do you avoid these risks? Dump the servers and adopt cloud-based applications like ServiceTrade. Why are they less risky? Without going into detail about the advanced technology they use for security and backup, the easiest way to understand how they work is to compare them to banks. Is your money safer under your bed, or in the bank? If your home is robbed or burns down, you lose your money. If the bank is robbed or burns down, your savings are insured (backed up) and your checks and debit cards still work. It’s that simple.
Don’t keep your business data under the bed. Dump the servers and move to the cloud.
In case you’re curious how WannaCry works, here’s a video of it in action:
All-in-One is Pre-Internet Ideology
One of our most quoted blog posts is this one – where Billy says that in all-in-one software, the ALL will be SMALL. You should reread it, but the summary is that all-in-one providers can’t offer the same innovation as a suite of connected applications from providers who focus on one part of your business.
When was the last time you saw a TV-DVD-VCR combo? It’s a throwback to when innovation moved at a snail’s pace. The VCR was introduced in 1964. The DVD player – the next widely-adopted element – came along THIRTY-FIVE years later in 1999. That’s hardly a blazing trail of innovation in home entertainment. The all-in-one unit was a good idea when you didn’t expect anything to change. Ever.
Now think about the ways that your home entertainment system has changed since 1999. There are dozens of components and streaming services you can incorporate into entertainment, gaming, and audio systems. Things started developing on Internet time.
The same is true in business operations applications. The idea of all-in-one software is from the pre-Internet era when innovation was slower to occur and slower to be adopted. Technologies evolve at different rates – an all-in-one eventually hobbles the entire system with the limitations of its weakest parts. You can’t just throw out the VCR, you have to let it sit there and draw power from the rest of the system.
All-in-one platforms keep you from adopting new applications that would help your service business do new things in better ways. Connecting a mobile solution for field service management to an all-in-one would be like trying to connect Netflix to your TV-DVD-VCR unit. You might be able to pull it off, but it will be a hassle to setup and to work with.
Billy said that “the ALL will be SMALL.” I’m saying that “pieces of the ALL will become OBSOLETE and keep you from ADVANCING.” Maybe mine doesn’t have the same ring to it.
What’s holding your service business back? Is it double data entry and other accounting inefficiencies in the back office? If you solve those problems, are you going to create more value for your customers, make your techs more productive, and differentiate yourself from the competition? Nope. Accounting doesn’t drive better customer outcomes. So, why do accounting issues get all of the attention? Well, it’s easy to fall into the trap of prioritizing those back-office problems because they are in your face every day. They are like a thorn in your foot; very obvious. However, they are just the tip of the iceberg. Under the water is something much more deadly.
Since a picture is worth a thousand words, I decided to show you what I’m talking about:
Hiding under the surface is what’s really holding you back. Scattered customer service data slows everyone down. The symptoms are pervasive, and the costs are enormous. Why do you think the front office is always behind, techs waste time on callbacks, and sales is struggling to win new customers or make upsells? Well, when service history, customer quotes, contact information, recurring service schedule, and asset details are all stored in different places, it’s no wonder there’s so much confusion and so many slowdowns. Instead of a central system that helps your team collaborate, you’re stuck with ad hoc calls, emails, conversations, txts, and paper.
On top of that, when your service information is disorganized, it’s impossible to give your customers any visibility to the value you provide. When you don’t even know exactly where your techs are, what they are doing, or what work they’ve completed, how are you supposed to share that information with your customers? Remember what it used to be like to schedule a taxi? It was miserable. Calling the taxi dispatch took forever, you’d have no visibility to where the taxi was, no idea what they were going to charge you, and they may not even show up. It’s no wonder Uber is dominating that entire industry. All it took was a change to the process that removed risk and aggravation for customers.
Icebergs perfectly demonstrate what’s going on with most commercial service contracting businesses. It’s easy to get stuck thinking about back-office problems. They are the tip of the iceberg. But, hiding below the sea is a mess of customer service data that is slowing down the entire organization and limiting your ability to provide a better experience to your customers. When you organize that data and move it to the cloud, you can cut your costs and Uber your competition.
I bought the wrong software.
Last year, I made a huge mistake. I purchased a marketing automation platform (I won’t name names, but it rhymes with harpstring) for our company and wasted a lot of time, money, and effort in implementing something that, ultimately, failed. I know I’m not the first person who’s ever made a bad software decision, but I hope that anyone who reads this blog post can learn from my mistake.
Made just for you.
My first mistake was not assessing the market that the product was built for. In this case, the software was designed for a completely different set of users, but I was enticed by the cool feature set. Without getting into further detail about why this product was a bad fit for ServiceTrade, I learned that you MUST consider the following when buying business software with large feature sets:
Is this software developed for a market or industry that is specific enough to support my company, but broad enough to support innovation and growth?
For example, there are quite a few field service management applications out there, but some of them, like ServiceTrade, are built specifically for service contractors as opposed to internal field service divisions of large companies like Comcast. Furthermore, some are built for commercial contractors, (again) like ServiceTrade, while others are built for residential contractors, like ServiceTitan or Jobber. Because these platforms are designed for targeted markets, new feature development will benefit their customers that fit their market definition. These target markets are also large enough to support ongoing innovation and growth.
On the other hand, there are software companies that target markets that are too niche. For example, we’ve seen broad business applications that attempt to target smaller industries like fire protection or kitchen exhaust cleaning companies. Yes, some of the features they offer are very unique and fitting for the industries they serve, but these platforms will not innovate as much as a competitors targeting a larger market. These applications also represent a risk because there is a chance that they will not make it in such a small niche.
All in one? The all will be small.
We’ve preached this point over and over again, yet I still got caught by this trap. The product I purchased offered CRM functionality in addition to the marketing automation I was looking for. As it always does, the all in one was too good to be true. Because the feature set was so broad, none of the features performed at the levels of competitive products.
The idea behind an all-in-one software is interesting, but the features always fall short in practice. Take a look at your smartphone. How many apps do you have? Just one? Of course not. Why would you expect the same from your business applications?
We speak with commercial service contractors on a daily basis that are searching for the mythical unicorn that is the perfect all in one. It doesn’t exist. Any product that claims to be one will disappoint you. This includes bolt-on modules to your accounting system.
Modern applications are designed to coexist in an integrated ecosystem that allows them to communicate the necessary information with each other while excelling at their core competencies. In other words, best-in-breed applications that can integrate will outperform all-in-one software.
What’s the big idea?
When considering a software application that my company would be using for years to come, I failed to consider the long-term vision of the product. As it turns out, the vision for the product was completely misaligned with my expectations which led to disappointment when I realized new features didn’t benefit me.
Service contractors often reach out to us after having had a similar experience. They purchased an application because of the features it had and didn’t consider how the product may change, if at all, to help them tackle evolving challenges. Here are a few red flags to look out for:
Software products that are at the end of their development life. These products receive little to no ongoing R&D and the owners are simply trying to sell as much as they can before the market catches on. Even though these products may have many of the features you are looking for, they will fall short of the competition quickly. Server-based software ALWAYS falls into this category.
Customer service software that doesn’t actually improve your customer’s experience. If a company tells you that their grand vision for their customer service platform is only to help you operate more efficiently, you need to reconsider. Efficiency is important, but software that fails to meet the evolving expectations of your customers will leave you at a competitive disadvantage.
What happens WHEN it breaks?
Ultimately, the straw that broke the camel’s back with the marketing automation software I purchased was the complete lack of support I received for some technical issues I encountered. For weeks, I was stuck without a system because they refused to answer my calls and emails. During the sales process, I had no reason to think that the support was going to be so bad, but then again, I never asked.
Like many business software buyers, I assumed that I wouldn’t need support. I figured that good software doesn’t need support, right? I’ve never called Uber or Google for help, why should this be any different? I was wrong.
Good business software will have lots of features that require in-depth understanding to fully utilize. You and your team shouldn’t expect to know every little detail. Support through online documentation, courses, and training are important, but responsive phone support is a must. Case in point, ServiceTrade. Despite being ranked as one of the most user-friendly field service management applications on Capterra and having an average “Ease of Use” rating of 4.5 stars across 136 reviews (as of the time of writing) on Capterra, our customers that receive training and take advantage of support far outperform those that don’t.
Expect good support. You’ll need it. If you’re considering a product, give the support line a call before you buy to see how responsive and helpful the support team is. If it’s not available, or you have any concerns about the quality, buyer beware!
Yes, a reference please?
Before I purchased this infamous marketing automation platform, I was smart enough to ask for references. However, I should have put my guard up when, after nagging them, it took several weeks for them to provide me with a couple contacts. After all that time, the references I spoke with weren’t able to answer some of my most important questions. I should have dug deeper and requested more references.
Learn from my experience. Good references and reviews are important. We love providing prospects with reference customers because we work hard to
ensure that customers will be a good fit for ServiceTrade before they ever buy and
make sure all of our customers are happy, as is reflected in our numerous positive reviews.
If you happen to make a bad software purchase, don’t become a victim of the sunk cost fallacy like me. Instead of realizing that I made a bad decision, I dug my heels in deeper and wasted months of time trying to make it work. Eventually, I “saw the light,” but after wasting more time than I’d like to admit.
Learn from my mistake! Buy great software.
Rise of the Machines in Service Industries
A few months back, I wrote a blog post about the Tesla lesson for service contractors. Tesla has a direct-to-customer model for sales and service, and they support this model with a high tech connection to the car that allows them to deliver certain over-the-air updates while also monitoring the vehicle for proper performance. Every manufacturer in the world today envies Tesla’s sky high stock value, and they are all seeking ways to mimic their success and business model. This means that they are trying to use data and Internet connections to become more valuable to customers.
Last week, I was visiting with a ServiceTrade customer in the fire protection service trade. They informed me that they had found a good solution for collecting alarm inspection data to create the annual compliance inspection report for the fire marshal. I asked them who provided the solution, and they responded that it was offered to them by a manufacturer of alarm equipment for which they are a distributor. I asked further if they had checked into the ownership of the inspection data they collect with that equipment because it has been my experience that manufacturers are trying to displace the distribution channel wherever possible to get closer to the customer.
Sure enough, when my customer dug into the terms and conditions of the license that he signed for the inspection technology, he discovered that the manufacturer licensed the data collected to the owner of the alarm equipment, not the service company collecting the data. The license terms further stated that the alarm manufacturer also had a license to the data to assist the equipment owner in migrating the inspection and service work to a different service contractor than the one that had licensed the system in the first place.
WOW! As a service contractor, you have to be very diligent in protecting your direct connection to your customer. Your relationship in the future is going to be defined by data, Internet connections, and technology enabled services. You need to find applications that allow you to collect and own data that you put to work for the benefit of the customer and your business. Beware the rise of the machines. It can be a blessing, or it can be judgement day.
The Ups and Downs of a Service Contractor’s Software Buying Journey
I’ve watched a decent amount of Oprah in my life, so I’m pretty well trained as an armchair psychologist.
Today’s episode is about the ups and downs of committing to a field service management solution. Friends, you are not alone in your rollercoaster of thoughts and feelings as you consider making a change. If you’ve talked to one of our sales reps, you’ve seen what the application can do, you’ve built excitement about customer engagement, streamlining operations and knowing exactly what is going on in the field. This is when the fear, uncertainty and doubt can start to creep in. It can feel a bit like you’re about to
The Ups
A good field service management software solution (and we think ServiceTrade, in particular) opens up possibilities for the business beyond solving the pains and problems that inspired you to start looking at field service software in the first place.
It becomes a strong differentiator for you among the competition because of the customer engagement it enables.
Those engaged customers are very happy customers that stick with you.
Of course, you will streamline operations through modern, mobile technologies.
And you will understand more of what’s going on in the field.
All of this awesome potential probably makes you feel like:
The Downs
After talking with our sales team, that darned Fear, Uncertainty, and Doubt starts to rear its ugly head. FUD can easily chip away at the couch jumping you felt just a couple of days ago. How on Earth can you possibly handle the changes that would be required to handle 2x the revenue from your best customers, or have a 3x quote approval rate? You start to hear either in your head or from your staff that:
Change is hard! Change while you continue to operate and serve your customers can be scary, but here’s the thing. Go back to those issues that have been driving you crazy and holding you back and compare the pain of continuing down that path for another year to the pain of initiating change for the next 1-2 months.
Don’t move my cheese! Technicians, dispatchers, accountants and even owners are used to things being in a certain place, being done a certain way. Go ahead and rock your boat, and turn it into a sleek, efficient yacht.
We’re not techy! That’s ok, we are techy enough for both of us. ServiceTrade’s service team has been unwinding data hairballs since the company started. You might not do this every day, but we do.
I don’t have the time! Boy, do we get this one. The fun irony is that the time you’re spending managing schedules and jobs and clowning around in the phone call rodeo will be minimized when you’re up and running.
The Plan
Even as I write this today, I hear a group of three new users sitting in our Durham, NC office going through a daylong training course. They’re in the ServiceTrade application looking at their company’s data, asking questions, and laughing with our Support Tech Aaron Shoemaker.
Each new implementation goes through a 30-day step-by-step plan that you’ll get from your sales rep (if you haven’t already, ask them for it). You and your services tech will work through it one step at a time. We know about how long each step should take from our side, but we can work at your pace if you need more time to complete anything.
If you’re on one of our paid plans, you’ll have access to our services team when you need help troubleshooting issues or advice on the best practices.
The Payoff
You get a field service management solution! You get a field service management solution! You get a field service management solution!
Just kidding. Our goal is for ServiceTrade to pay for itself. It does that when you’re able to:
Streamline your operations so you aren’t missing any recurring work, are scheduling techs more efficiently, and are no longer chasing paperwork so you can bill customers more quickly.
Send electronic quotes that have a 3x approval rate when they’re delivered quickly, include photos and have an easy approve button.
Engage your customers online before and after the service call and give them insight and information that they can’t get from another vendor who might try to lure them away by undercutting your price.
Earn more customers by turning your service delivery into highly visible and valuable online reviews that make you stand out to prospects who are searching for your services.
So maybe you’ve seen a bit of yourself in the journey that so many of our new customers have gone through? When you feel the FUD taking over, have a seat on the yellow Oprah couch with someone at ServiceTrade, and let’s talk.
Beware of “All in One” Software – The “All” will be “Small”
The demand for “all in one” software in the service contracting space must be high, because I see lots of vendors claiming to be such. These vendors proclaim to prospective customers that a single integrated system from a single vendor that performs every software function (customer service, accounting, time sheets, fleet management, e-commerce and so on) is the only successful software path possible.
Most are VERY SMALL, with fewer than 25 employees. Some are bigger with as many as 50 employees, but still TINY in the sense of what it takes to deliver a comprehensive software platform that provides “all in one” functionality. It is literally impossible in the modern, connected world of high frequency innovation for such a small vendor to effectively deliver even half of the software features that a service contractor should expect to run in their business.
Consider NetSuite. A publicly traded company with over $600M in annual revenue and more than 1,000 software engineers on the payroll. They claim to be an “all in one,” and you would like to believe that maybe, given their large size, they can pull it off. Now, take a look at the NetSuite partner page of applications that provide functionality that NetSuite cannot. Over 320 applications listed across 32 pages of partner apps. Huh? Wonder why such a large and successful company that markets itself as “all in one” (hence the “suite” name) needs 320 partner applications?
The answer is simple. No software company can stand alone to provide all your needs. Not even one as big and powerful as NetSuite. Not even Apple, the most valuable company on the planet. Here is a screenshot of my phone. Only three of the apps on that screen are provided by Apple. They all work nicely with the Apple technology, but Apple does not deliver an “all in one” solution.
Why is there not one simple button on my phone that says “All in One” for the weather, traffic, mapping directions, playing music, watching videos, transferring bank balances, trading stocks, monitoring my exercise routine? Of course, the answer is obvious. These are all very different apps that require a different approach to data and the user interface. In the same way that accounting is a VERY DIFFERENT application than customer service, with a different data set, different users of the data, and different user interface requirements.
What is the lesson in these observations about NetSuite and Apple? Both market themselves as being the “superior integrated system” that all consumers seem to desperately want. Yet both of them develop massive partner ecosystems to deliver the applications that they cannot.
Service contractors should seek software vendors that are the best in class for their particular solution: Customer service applications from field service management companies, accounting platforms, contracts management, fleet management, customer resource management (CRM), email marketing, and human resources to name a few. The initial setup of those integrated systems will make changing individual systems much easier in the future than a forklift of an “all in one” that seemed like a good idea at the time.
The lesson is that “all in one” is simply a marketing term to grab your attention because that is what you seem to be seeking, but it is misleading because it is not possible to have “all” from “one.” The lesson is that you should ignore the marketing, and instead observe the reality.
If a small company offers “all in one,” remember it is just a marketing pitch to get your attention. If NetSuite and Apple cannot do it, the small firm courting your business certainly cannot. Not even close. But it is OK provided that they behave in a manner similar to Apple and NetSuite and embrace partner applications that work seamlessly alongside their application.
I cannot fault a company for good marketing, but you can certainly fault them for locking you into a trap where many of your needs are not met because the “all” is very “small” and no partner applications are available because they actually believe their marketing hype. Ask about partners and application programming interfaces. If you get a blank stare, caveat emptor! The “all’ will be “small.”
There is a saying on Wall Street regarding investment decisions – cut your losses, dump your losers, double down on a winner. The basic philosophy comes from the concept of discounted cash flow analysis. It does not matter how much money you invested (spent) historically, all that matters is what you will invest (spend) in the future and how much cash will flow to you from that investing (spending). If a stock has declined since you bought it, and you are pretty certain nothing fundamental has changed to improve its future outlook, you would be crazy to buy more.
Yet this is exactly what many folks dealing with failed software implementations continue to do. If every experience has been negative, what has changed to make you believe future return on investment will be positive? Is the company behind the application a leader that simply has not yet broken out? Why is another dollar flushed down the drain going to improve the outcome? Think about how much money you would lose in the stock market with the following investment approach:
“I don’t care how much the stock price has declined. I am going to buy more because I have already bought so much.”
Buying more does not change the outlook – it simply accelerates losses. If you are convinced that your experience is an aberration, that the market is wrong, that the company behind the stock is really a high quality opportunity, that a rebound is inevitable, then there is nothing wrong with doubling down on a heretofore loser – you’re getting a bargain at the lower price. If you are not convinced of the foregoing, cut your losses and dump your losers. You are simply paying more money for more pain without the joy of future income associated with the investment.
Lots of companies get “stuck” (or gigged) with bad software because they do not know how to measure the quality of the vendor during the sales cycle. One of the best ways to measure a software company prior to buying the application (aside from the advice in the The Practical Guide to Buying Software for Service Contractors that talks about avoiding dead-end PC apps, non-SaaS products, etc.) is by measuring the software vendor’s GIG – Growth, Innovation, and Gross margin.
These are critical measures of a quality software company, and if your vendor does not meet certain criteria, you will be in a bad situation over the relationship. The reason that they are critical is because performing well on these measures provides a software company with access to capital. Capital is critical in order to drive research and development activities that lead to competitive innovations that help you drive your business forward. Without capital (either in the form of high gross profit or investments based upon high gross profit), the software vendor will inevitably “gig” you over and over again for services charges associated with getting it right for your situation – not a sustainable business model for the vendor or for you. So what should these metrics look like?
Growth – A software company that is not growing at least 20 – 30% a year is dying. They might not die quickly (depending upon the gross margin), but they are certainly not moving forward. Faster growing competitors will ruthlessly devour their customers and slow growth will become no growth and will eventually become death. Ask your prospective vendor how many customers they are adding per week/month/year and the average annual subscription value of those customers. Ask them for how much customer churn they are experiencing – i.e. how many customers quit the platform. Validate this information the best you can, although it might be difficult. Ask for the names of the new customers and the names of the customers that quit. Check them out and make your own assessment.
Innovation – A software company that is not delivering new features every month is dying. Modern SaaS companies deliver new capability monthly (unless they are very large, and then it is often quarterly – certainly not “every couple of years”). Ask the prospective vendor for a list of new features delivered in the last six months and validate that list with customer references. Ask the references how fast the vendor moves, and their level of satisfaction with the rate and quality of new innovations. New innovations drive growth, which, when coupled with gross margin, drives access to capital, which drives growth and so on.
Gross Margin – A software company that is not delivering gross margin of at least 60% is not a software company. It is a service company, and it is dying (unless of course their goal is to be a service company, but that means the application is dying). Service companies are very different than software companies. They don’t innovate. They charge you for services. And you pay a $1 for every $1 of improvement or change in the application. With a great software company, you pay less than a penny for every $100 in innovations delivered because your subscription payments get pooled with thousands of other customer subscription payments to drive research and development which drives innovation which drives growth. Subscription margin typically runs 80 – 98% gross margin. It is the fuel for a software company. Services are simply the smallest required investment on the part of the customer to get onto the application (training, setup, etc). The blended gross margin across subscription and services needs to be above 60%, otherwise the company is dying. And you are throwing your money away when you make them your vendor.
If you have ever been “gigged” by a software vendor, you know it is not pleasant. Avoid it in the future by measuring the Growth, Innovation, and Gross margin before you buy. A big GIG is the best way to avoid getting gigged.
Cloud Computing & Service Contractors – A Perfect Match
Service contractors need the cloud, but over and over again we see companies that are confused or unsure about how moving to the cloud will affect the operations of their business. Change is scary. As human beings, we are wired to avoid change, especially when it concerns a switch from what we are use to.
Cloud Computing
At a recent HVAC convention, our VP of sales witnessed two different speakers advocating the benefits of cloud computing for service contractors. Obviously, we are always pleased to have others singing the same tune. Here are a few excerpts of what was said:
The Cloud is Secure – One attendee described how all company data on their PC server was held hostage with Ransomware that cost more than $10,000 to remove. Huge organizations like Amazon, Google, and the US Government store billions of documents in the cloud. Virus protection and security are an integral part of data management and these large organizations would never store data in a location that wasn’t secure. Do you trust technology experts to build strong security or do you trust one of your administrative staffers to know about the latest virus, bug, or software flaw?
The Cloud is Cheap – There’s truly no reason to maintain a mail server anymore (or any other type of server, for that matter). Dozens of cloud applications can not only provide a hassle-free email solution, but a more feature rich solution as well. No one wants to pay an outside IT professional to be their problem solver. The cloud has lowered the price of software solutions by allowing software companies to put more power and more features into the hands of users. Cloud storage is essentially free. There’s truly no need to buy more file cabinet or PC hard drives.
The Cloud Empowers Your Customer Service – Items stored in the cloud can be accessed from any device – PCs, tablets, or smartphones. Your technicians can answer questions faster and with greater accuracy, even when they are in the field. Customers expect speed and accuracy. (Don’t we all use Google for fast answers?) Showing clients before and after photos, online work acknowledgements, past work history, or old invoices make you and your team shine.
The key point is simply this: Cloud computing is a perfect match for service contractors and their business operations. Embrace the cloud and prosper.
