We’ve been talking about the connections between customer service and its impact on the growth of service contracting businesses.
We’re not the only ones who see this critical connection. Read this excellent blog post titled “Customer Service is a Marketing Strategy” by Ben Landers, the President of Blue Corona. In the conclusion, Ben says:
“The goal of marketing is to position your company as the right solution for your target audience. Marketing is supposed to engage your target audience and pique their interest so that your sales team can convert those who are qualified into customers. Nothing can compete with remarkable service to achieve these goals, nothing.” Read the blog post.
We’ve all had experiences like Ben’s when our expectations weren’t met, or we were frustrated by poor communication. Ben’s post uses Nordstrom as an example of a company that consistently gets it right and has a very happy customer base.
For a service contractor, each interaction is a marketing opportunity. Whether it’s office staff taking a new service call or a tech speaking with a customer, each interaction strengthens – or weakens – the relationship your customers have with your brand. Perpetual Service results in perpetual marketing.
Today we will leave you with this question: Do your customers sing your praises as strongly as Nordstrom’s?
Even if you’re providing a maintenance or mandatory service that won’t get your customers as excited as a fantastic pair of shoes, (service contractors love great shoes, right?) there’s no reason for the customer experience you provide to be anything but excellent. Find tips for using technology to improve your customer service in the book The Digital Wrap: Get out of the truck and go online to own your customers.
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?
Customer Service is NOT an Accounting Function!!
The history of software applications for service contractors is dominated by accounting applications. Controlling the business was the first priority for computer deployment. I believe the next wave will be about collaborating with the customer via the Internet to deliver amazing customer service. The accounting application – the control point for your business – is the wrong starting point for customer collaboration. Someone on the Internet wants your customers. Your ability to do better inventory management, job costing, or payroll calculations will not matter one bit when that Internet enabled competitor steals your customer away with a better customer service experience.
Is your customer service department up-to-date??
Customer collaboration is about a free flowing exchange of stories and ideas between your business and your customer. The Internet is going to be the conduit, and the content will be pictures, videos, audio and free form notes inside an attractive user interface that conveys the value of the services you provide.
Examples of KEY communications between your clients and your business –
1. When it was broken, it looked like this. Now it is fixed! Here’s a picture!
2. Can I show you an improvement that will lower your power bill?
3. Our technician will be arriving at your location in 25 minutes!!
4. Please review your quote online and click -Approve- if it looks good to you.
5. Your “after service” report is online – contact us again if you need anything.
This is not accounting data. It does not fit nicely into a ledger. It is not revenue, nor COGS, nor inventory, nor AP, nor AR. Why would you expect your accounting application to be the core application by which you collaborate with customers via the Internet?
Let me ask these questions in a different way. Do you host your website on the server that runs your accounting application? Is your accounting firm the professional group that dictates the design and content of your website? If you expect your accounting application to lead the charge in customer service, shouldn’t this same function be driving your website presence? Of course not. Use this same logic when you are figuring out how you are going to expand your customer service capability from the customer’s driveway or parking lot, to the boundaries of the Internet. In your search for a software service partner to maximize your customer service experience, look for partners that think about what your customers want, NOT how to control the financial operation of your company.
Accounting is about control: limit the interfaces and the access so the data can be pristine, structured, and managed without any possibility of error or fraud. It is a VITAL aspect of your business. Customer service is an equally vital part of your business but customer service is about collaboration, not control. It is a free flowing exchange of unstructured data between a group of loosely coupled participants. Think about these differences when you begin to build your software foundation for delivering amazing customer service via the Internet.
And be sure that you pick a software partner that understands EXACTLY how to help you deliver this experience.
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?
Talk is Cheap, and a Picture is Worth 1600 Words
I get lots of comments from prospective customers about “going paperless” using tablets and smartphones. In many cases, however, they are talking about simply making the technicians in the field type character information into digital forms that otherwise would have been paper. Maybe if you are going to go “paperless” you should reconsider how you form your data as well.
Much of the data that technicians “report” from the field is unstructured – it is not a serial number, or a weight, or a model, or a date, or a length, or a dollar amount. A computer system is not going to operate on it in the future – a human is going to review and react to it. It is often a detailed description of a situation that affects the customer – or will affect them if left unattended. Or it is a description of a difficulty they encountered that threw a wrench into the schedule for that day.
Rather than have them enter that information on a “form,” consider how much cheaper (and richer, ironically) it would be to have them shoot photos and record audio describing the situation. Anyone who needs to act on that information can now respond to the photo and audio (and maybe video), instead of reading off a report.
Why is this important? Because talk is cheap. Literally. How fast can you type on a tablet or a smartphone? If you are really good, that number is probably 25 words per minute (wpm). On a good keyboard, I can type at 80 wpm, but I slow to about 25 on a smartphone and about 35 on a tablet. But we can all comfortably speak at 120 – 150 wpm. And the old saying that a picture is worth a thousand words should be considered in this context as well. So, why would you want your technicians to be typing stuff when they could be speaking and snapping to give you more and better information faster?
I did some calculations as well on photos, and an 8 megapixel photo is worth about 1600 words just from a comparative data perspective. And while processing audio is equal to exactly the speed of the speaker (i.e. how quickly or slowly they speak), processing photos is fast and enriching. People enjoy the color that photos add to the customer service experience. Photos do not lie, and the customer appreciates the veracity that a photo of their equipment and your good work conveys.
If you are “going paperless,” consider what that means for productivity, and also consider how you might change your expectations for the data you use to run your business. Asking people to “type” things that they could say or show is going to add administrative expense that could be used for new revenue opportunities when your technicians are struggling to enter information instead of hustling to the next customer call.
