They spent hours on it. Brad Boggs at B&W Mechanical and Shawn Mims of ServiceTrade met several times to discuss how to integrate B&W’s accounting system with ServiceTrade. They planned it strategically, they talked with an integrator about the details, they held several follow-up calls. But as they say, the struggle of connecting ServiceTrade’s open APIs to a closed accounting system, was real.
Brad decided that since accounting was happy with their process, an accounting integration shouldn’t stand in the way of getting a new customer service and service management system in place. B&W Mechanical got started with ServiceTrade so they could meet their goals of growing their service division.
We caught up with Brad a couple of years later to see how it’s going. In this video, Brad tells us that now, B&W measures its success by things that matter to its customers – that their systems are operational and their facility needs are being met. B&W Mechanical communicates clearly and accurately with customers so they know everything they need to about their systems so there aren’t any surprises.
Their customers really like that they get clear data and visuals with a quote or an invoice. B&W no longer has to justify what their quotes or invoices are for – the customers have a clear, rich record that tells them what they’re paying for.
As Brad says at the end of this video, at B&W Mechanical the right things get done quickly. He isn’t talking about accounting.
Amazon does not settle for “good” in the realm of customer service. It is not enough for the customer to simply get what they paid to receive. Amazon wants customers to enjoy the experience in the same manner as a guest might enjoy a good party. Great brands now want to copy Amazon because Jeff Bezos has become the wealthiest guy in the world due to the crazy success of Amazon stock. Smart business owners want the same value for their shareholders, so they are behaving like Amazon and aiming well beyond the idea of simply satisfying the customer. They truly want their customers to “feel good” about the experience of buying from them. This current obsession with the customer experience is certainly a good thing for customers. Because so many companies are now focusing on innovation in customer service, the bar for “feel good” status is climbing higher every day.
The most popular approach today for measuring customer satisfaction is the Net Promoter Score, or NPS. Wikipedia reports that more than two-thirds of the Fortune 1000 are currently using NPS. Here’s how it works.
Customers are asked a single, simple question:
How likely is it that you would recommend our company/product/service to a friend or colleague?
Respondents are then given an option to answer that question with a number rating on a scale between 0 and 10. 0 means that the customer would never recommend the company to a friend or colleague, and 10 means that they would absolutely recommend the company to a friend or colleague.
Next, respondents are categorized into the following groups: Promoters – those who score the business with a 9 or 10, likely to promote to others Passives- scored 7-8, not likely to benefit or harm your brand Detractors- scored 6 or less, a liability for your brand
The final NPS score is calculated by subtracting the percentage of Detractors from the percentage of Promoters, with the Passives not contributing at all to the score. As an example, if you were to survey 100 customers and 35 score as Detractors (0 to 6), 25 score as Passives (7 or 8), and 40 score as Promoters (9 or 10), your NPS score would be:
Promoters – Detractors = NPS 40 – 35 = 5
Your NPS for this survey sample is a 5. Anything above 0 is considered to be positive, and a score approaching 50 is terrific.
Now I think all of this is probably a little too simplistic, and you will find lots of scientific criticism for NPS from survey theory experts if you go looking for it online. My opinion and the opinion of all of the other critics is not what really matters in this case. What is important is that two-thirds of the Fortune 1000 are relying on this information in one form or another to help them improve customer satisfaction. A lot of big brands with big budgets are focusing lots of energy on measuring customer satisfaction. The other important thing to note is that this wildly popular tool skews heavily toward “feel good” as the goal for customer service. Only scores of 9 or 10 are credited positively, and anything less than a 7 is negative. I would say anyone that scores a company with a 9 or a 10 feels really good about their experience with the company. So two-thirds of the Fortune 1000 are scheming for ways to get more scores in the range of 9 to 10 because that is the only way to improve their NPS score. That’s a lot of companies with a lot of focus on making customers feel good about their brand.
What does this emphasis on outstanding customer service mean for you? Your business is going to be compared to all of the customer service innovations of Amazon and two-thirds of the Fortune 1000 because they are all “focused like a laser” on customer experience these days. NPS is hot because customer service innovations are hot because customer loyalty is hot because growth is hot because Amazon is hot. Customers are not going to compare you to your “always go low on price” competitor down the street any longer. They are going to ask “Why can’t you be more like Amazon and give me notifications when I am due for service or when the technician is en route to my location?” The customer service bar is going to be set by the sum of all of the best experiences the customer has ever encountered across all companies in both their personal and professional life.
The good news is that most customer service innovations can be observed and imitated if they fit your idea of great customer service for your company. The case of Amazon is particularly intriguing because up until a few years ago Amazon had absolutely no influence over the products customers were buying from them. They were simply a reseller of other companies’ products. Any innovation they delivered to make a customer feel good was not a product innovation but instead was focused solely on the buying experience. In my next post, I’ll discuss the “feel good” customer service themes direct from Amazon that should probably be among the guideposts you use in establishing your “feel good” customer service strategy.
Tellin’ ain’t Sellin’ – Every Customer is From Missouri, So Show Them Something!
When your salespeople call on customers, what are they pitching? What do they present when they get that rare opportunity to show a high-profile prospect the benefit of working with your company? While I have not been in the room often when a commercial service contractor is pitching a customer, I have seen hundreds of websites for these companies, and I have been to lots of trade shows where they are exhibiting. Generally, I am not impressed by what I have reviewed. Mostly I see some version of one or more of the following themes:
We Work Harder! It sucks to work harder than the other guy.
We Care More! Not certain what sucks more – working harder or caring more.
Better Technicians Means Better Service! This is the Papa John’s pizza pitch. You’ve seen examples here, here, and here of how that’s not working.
We’re a Family Business! The mafia is a family business too.
We’ve Been in Business a Long Time! Really? Why are you still such a small company?
Sadly, the website content for most commercial service contractors is typically a long and rambling word salad that doesn’t add up to much value for the customer. Generally, Google is not impressed either as most rank pretty low for relevance in organic search results. I imagine the salespeople are equally unimpressed with the company strategy, so their pitch quickly devolves to price:
How much are you paying now? We’ll get the work done, and it will be cheaper! Let’s negotiate labor rates and a markup on parts! We will be there 24/7 when things go wrong! Call us anytime and we will fix your broken equipment by working around the clock until everything is good again!
Competing on price and some vague promises to work harder and care more and fix broken equipment 24/7 and be more family-oriented sucks. Why should the customer believe anything the sales rep is saying? How can your sales representative make an impression that moves the conversation to valuable outcomes instead of a mark-up on the cost of the labor and parts?
Of course the most important thing the salesperson can do is ask questions and understand the goals of the buyer through some discovery conversation. The other thing that should be offered is a premium program, but do not expect the customer to buy on the promises and platitudes of a sales rep. Tellin’ ain’t sellin! Your sales people should be able to show the customer the value of your brand by demonstrating how the program works. I am fond of declaring that all customers come from Missouri, which is known as the “show me” state. If you can’t show them the value, you will not sell them the program.
So what does a premium program look like? And how can you demonstrate it to the customer in a way that is meaningful to them? Let’s have a look at some examples from other industries to gain insights into components you should consider.
Amazon Prime – Amazon offers a subscription program called Prime, and nearly 70% of US households are Prime members. Prime members pay $119 per year in exchange for free two-day shipping, access to a library of movies, television shows, and music, and a free Kindle book every month, among other things. The most important thing Prime does, however, is put Amazon at the top of the heap when a subscriber considers how to buy the next bag of dog food, or supplies for their kitchen pantry, or Christmas gifts for their friends:
I’ve already paid for Prime, I might as well benefit from the free, expedited shipping!
The program helps keep the Amazon brand top of mind for future purchases, and customers pay for this marketing trick through their subscription fees! It’s brilliant marketing by Amazon. Amazon allows prospective customers to try Prime free for a month to experience its value because Amazon knows that all customers are from Missouri. The free trial “shows” the customer why Prime is valuable instead of just “telling” the customer that it will be great if they buy.
BMW Ultimate Care – BMW is a premium automotive brand that delivers what they claim is the “Ultimate Driving Machine,” and Ultimate Care is their premium maintenance program. You pay in advance, typically at time of purchase when financing is also a part of the conversation. Ultimate Care provides unlimited service consistent with the manufacturer’s recommended service plan. All parts and service required for recommended maintenance are included at a thirty-percent discount. The program is only available at BMW dealership locations, so you will be bringing the car to the dealership and wandering about reviewing all of the latest offerings of BMW as your maintenance plan is delivered.
Once again, brilliant marketing. You payin advance so that you will certainly use the service that requires you to come to the dealership on a regular basis. No doubt you will get a loaner for the latest model at the upper end of your price range for any extended service requirements. The dealership is having the customer pay fees in advance of service to help them deliver a hassle-free experience and market their latest offerings to the customer on a regular basis.
Brandt STORM – Brandt Engineering is one of the largest mechanical contractors in Texas, and STORM is their premium program. STORM stands for Service, Technology, Optimization, Retro-commissioning, and Monitoring. When the customer buys into the STORM program, Brandt does a top-to-bottom review of the equipment while installing monitoring technology to track key performance data on the critical elements where failure results in expensive disruptions. Once they and the customer agree the equipment condition is worthy of a performance promise, STORM is initiated. The customer receives regular communication and attention from Brandt engineers and technicians while simultaneously benefiting from lower rates on service requirements and ideally lower utility costs.
The customer is paying Brandt the money they are saving on utility bills and breakdowns as subscription fees in order for Brandt to continuously remind them of the value of the Brandt brand! That trade-off is certainly worth the risk to Brandt of a failure where Brandt must pay the premium (expedited parts, overtime labor, etc.) for recovery instead of the customer paying it. These risks are minimized through information, and the customer is conditioned that any retro-commissioning recommendations (quotes for new equipment) based upon the data are in their best interest to avoid performance disruptions that fall outside the STORM promise. It is brilliant.
So what are the lessons you should take from these examples?
1 – Brand the Program. What is your version of Amazon Prime? Ideally the name helps the sales rep to tell the story, to get the conversation going with the customer, and then the customer remembers your brand. A good name demonstrates your company’s thoughtfulness in how you communicate your value.
2 – Show, Don’t Tell. Your sales people need to be prepared to give a demonstration of the program. Amazon gives prospective Prime members a month of free Prime membership to try out all of the benefits. Do your sales people have a way to easily give the customer your branded program experience?
3 – Promote the Features. Can you enumerate the features of the program? In a list? Spend some time thinking about the names of the features.
4 – Get Paid for Nothing. If the only time you send a customer an invoice is when you have a labor or parts line item to bill, guess what? They are going to assume your value is in the labor and parts instead of the program. The fewer invoices you send to the customer, the better. Ideally, have them pay annually in advance. It’s better for you and cheaper for them.
5 – Offer a Good Contract. Put in place a master service agreement, a rate schedule, and a service level agreement. Good fences make good neighbors and good contracts make good customers.
None of these elements of a premium program are rocket science, but it is surprising to me how rarely they are implemented by service contractors. Do not let shoddy practices in your industry nor weak competitors that always sell on price dictate your business model. The executive management of your company should spend at least fifty percent of their time working on program and marketing innovations that set the brand apart from competitors. Innovation rarely happens by accident, and it is the key to having a differentiated value proposition.
Fix the cracks in your customer experience before they become a chasm
You know those signs on the back of dump trucks that say something like “Stay back 200 feet?” Those things are no joke. I found out the hard way when I was driving home from work on the interstate and heard a loud CRACK in my windshield. I definitely let loose a few four-letter words. There’s almost nothing worse than dealing with cracked glass on a vehicle. Cost aside, you’ve got to play phone-call rodeo with some auto-glass repair shop to get on their schedule, drop off your car, go without a car for a day (or more if they mess up the appointment), and then you’ve got to hitch a ride to pick up your car. What a waste of time. Personally, that inconvenience is just enough to push me to procrastinate getting the repair. That’s about the worst thing you can do with a cracked windshield as the cracks can grow and lead to more costly repairs and more damage to the vehicle if they start to leak.
Facility owners and managers handle their building systems and equipment a lot like most car owners handle their cracked windshields: defer repairs to avoid hassle. Yes, sometimes it’s an issue of cash flow. More often than not, however, I’m willing to wager facility managers are just like me and willing to procrastinate to avoid the phone-call rodeo, the scheduling nightmare, and the overall inconvenience of working with service companies. At least, that’s what I thought before I tried Safelite. Talk about easy.
I scheduled my repair online, received one quick call to confirm insurance details, and my part was done. They showed up at my office, completed the repair, and I just had to give the service tech my credit card. No hassles. Throughout the service cycle, they sent me useful notifications that reminded me about the upcoming appointment, notified me that the technician was on his way, provided my receipt, requested feedback, and requested reviews. Every single one of those MIPS (read about Marketing Impressions Per Service) reinforced what makes Safelite so much different and better than their competition: convenience. In addition to reinforcing the value for me, some of those marketing impressions helped Safelite extract value from me.
For example, when they asked, I left a review. I was happy to! That’s going to drive more customers to Safelite as they outrank their poorly-rated, less-convenient competitors online. On top of that, they managed to upsell me on new windshield wipers. From the moment I started scheduling the repair online until the technician was in the parking lot, they didn’t miss a single chance to try and sell me more products and services. Every single marketing impression I received leading up to the appointment contained all sorts of ancillary offers like new wipers and windshield treatments. I was happy to spend more money with Safelite because they had been so reliable thus far that I trusted their recommendations.
Service contracting should be this convenient for facility owners and managers. They shouldn’t defer repairs in an attempt to avoid the hassle. Instead, they should prioritize the services and repairs you perform because they know it’s going to be easy compared to the mountains of other work they need to get done. Put yourself in their shoes and think about what it’s like to work with your contracting company. What steps might cause frustration? Here are a few common examples:
Calling to schedule an appointment and connecting with someone who doesn’t understand your facility which leads to long hold times or callbacks.
The “phone-call rodeo” to confirm dates, times, and equipment details because the contractor doesn’t have organized records.
Having a technician show up who is not qualified to perform the correct work because a dispatcher didn’t have access to the location details, equipment information, or service history.
Forgetting your appointment date or time and being caught unprepared when a tech shows up at an inconvenient time.
Being handed a pile of loose, triplicate forms that need to be filed and collect dust as opposed to searchable, digital records that include complete service history with pictures and videos.
Receiving a quote as an email attachment that can’t be opened on a smartphone and must be printed off, signed, scanned, and returned as an email.
Having questions about past services and needing to go through another phone-call rodeo to get the answers.
The list goes on. These pain points are cracks that can grow into a chasm between you and your customers. With technology, like ServiceTrade, that’s designed to help your entire team collect, organize, understand, and present service information to your customer online, you can eliminate all of these frustrations. Instead of the phone-call rodeo, give them a way to access rich equipment history and request services online. Send them MIPS that remind them about upcoming appointments, notify them when the tech is on the way, summarize completed work, request reviews, and provide online quotes with pictures and videos that can be approved with the click of a button. Give them this level of customer service and they’ll be happy to pay you more for the premium you provide because they will trust you more and appreciate how easy you are to work with. Don’t let the small cracks in your customers’ experience grow beyond the point of repair. Give them the Safelite experience so they can see that you are the most convenient, trustworthy contractor to work with.
AI, IoT, M2M, Big Data – The Alphabet Soup of Technology Jargon You Need to Understand (Part 2 of 2)
This week’s post is a continuation of an introduction to AI, IoT and Big Data with the help of the 1984 movie The Terminator. Re-read that post here.
Let’s rearrange the AI, IoT, and big data alphabet soup of technology jargon to come up with a simple question that helps you cut through the hype and delivers some focus for your technology strategy. I am going to drop a few words from artificial intelligence, Internet of things, and big data to make my point. Here we go:
“How can you use the Internet to collect data about customer equipment so that you and your customer can make intelligent decisions about services that will minimize risk, expense, and business disruptions caused by suboptimal equipment performance or equipment failure?”
I really don’t care if the data is “big” or “small.” I don’t care if the information that comes over the Internet is generated by a “thing” or by a person holding a smartphone taking photos of an impaired piece of equipment (although “things” are often cheaper than people as collection devices). I also don’t care if the “intelligence” is artificial or natural so long as it is smart and not dumb. The overall direction of technology, of course, is toward bigger data, more things connected to the Internet, and more intelligence that is artificial versus natural as computing gets cheaper and people get more expensive.
Now that we have generated a simple test to cut through the hype and focus our innovation lens on practical and actionable solutions, what are some examples that illustrate the potential value of this strategy? How are you currently and in the future going to collect data over the Internet to make more intelligent decisions regarding equipment services that should be delivered to optimize performance? You don’t have to wait for the day that the terminator is a reality.
Real World Example: AI at Work
The favorite workflow of ServiceTrade customers is the recording of equipment deficiencies by technicians using the mobile app and the subsequent online review of a quote by the customer to approve a related repair. Let’s see if this workflow meets the test of our strategy.
Are we collecting information about equipment via the Internet? Yes. In this case it is photo, video, audio, and text captured by the technician that illustrates the problem to the sales person in the office and ultimately to the customer.
Are we using intelligence? Yes. The technician knows this situation can lead to a failure, otherwise why record it? The sales person also recognizes the problem because of the detailed data set, and she applies the correct quote template for repair based upon prior experiences – how much time, which tools, which parts, etc.
Finally, the customer can trust the information to make a good decision because he sees and hears the problem. Just like the “look through” scenes in The Terminator, we know that intelligence is being applied because we can see it happening. The customer sees what the technician sees.
Real World Example: How IoT Reduces Chaos
Sensors are getting super cheap and the power requirements are getting so small that battery life is often measured in years. Consider fire sprinkler customers that have risk of pipes bursting due to freezing in certain areas of their facility that are not temperature controlled. Setting up a temperature sensor that generates an alert below freezing temperature could easily trigger a response to turn on some space heaters. If the heaters are connected to some sort of “smart” electrical circuit, perhaps they deploy on the signal without any other intervention. This seems like a small thing, but during cold snaps in normally moderate climates, it is amazing how many sprinkler pipes freeze. OK, does it pass the test?
Did we collect data on the Internet? Yes, through an ad hoc temperature sensor.
Are we using intelligence? Yes, intelligent people know that water freezes at thirty two degrees, and we know that plugging in a space heater will keep the temperature above that threshold.
Did our decision and action avoid disruption and maintain optimal facility performance? Yes. Great, we are off to a terrific start with our AI, IoT, and big data strategy!
Real World Example: Big Data Brings About Better Decisions
Big data is simply a buzzword for datasets that are generally so large that a simple tool like Excel with a human interface might struggle to parse any intelligence from the data. All of the data in ServiceTrade is automatically ported over to Amazon’s Redshift/QuickSight big data analytics platform. A simple analysis will show customers spending habits related to emergency service versus planned services (preventative maintenance and planned retrofits and repairs). During an annual review with a challenging customer that insists on minimal preventative maintenance, you might be able to demonstrate that a similar customer that opts for maximum preventative maintenance is spending significantly less overall during the course of the past 3 years. No one could parse that amount of data in Excel, but QuickSight handles it easily with just a few clicks. OK, does it pass the technology strategy test?
Did we collect data on the Internet? Yes, all data in ServiceTrade is collected over the Internet because ServiceTrade is a SaaS application.
Did we make an intelligent decision to lower expense, lower risk, and optimize performance? Hopefully the answer is yes because ideally the customer buys into your premium program based upon the analysis that indicates lower total costs.
Let’s quickly contrast these straightforward examples of effective and simple technology deployment for achieving a mission with a “technology solution trying to find a problem.” Google, Snapchat, Intel, and a host of other technology heavyweights have spent years and hundreds of millions of dollars on “smart glasses” that combine cameras, heads up displays, natural language recognition, cellular networking, etc. Some vendors in the contracting space latched onto this science experiment and began selling it as the productivity solution for all of your problems. It enabled customer collaboration, technician training, remote diagnosis, and a host of other benefits (according to the vendors). It didn’t work.
Taken in pieces, elements of the technology make sense. A small, bluetooth camera clipped to the bill of a ball cap with a similar bluetooth earpiece all tethered to the mobile phone will enable the technician to fire up a FaceTime call with a colleague. The two can then collaborate via shared images and a real time conversation to diagnose a problem. The challenge with jamming everything into a new form factor like glasses is that it is a laboratory exercise instead of a solution to a problem. It is Frankenstein as compared to the terminator. Frankenstein was great science, but yielded only chaos and misery when deployed beyond the lab. The terminator, by contrast, was built for accomplishing the mission in the field.
Your objective is to assemble the terminator and avoid Frankenstein. The examples above clearly indicate that AI, IoT, and big data are already a part of the arsenal of technology you are using for the benefit of your customer. It really is not rocket science, and you really can embrace new innovations if you are willing to explore and set aside the intimidating jargon in favor of a elegant strategy. Your strategy should simply be a trend of collecting more data via the Internet so that you can intelligently make service decisions that optimize the performance of your customers’ important equipment. Any innovation that meets this simple test is putting you on a good path for adding more value. Stay focused on the mission, and the right solutions will present themselves as obvious candidates for your premium service program.
If a Tree Falls
My wife and I love hiking and camping with our dogs. It’s our escape. So, last year, we took a trip up to the beautiful Grayson Highlands in western Virginia for a quick weekend trip with a couple friends. Hiking along those exposed ridges at a relatively high altitude provide some of the best views you’ll find in southern Appalachia. The first day was absolutely gorgeous. After a long day of backpacking, we decided to set up camp just off the ridge in a little patch of woods. Not long after we set up camp, we had to turn in early because of a constant drizzle from a small storm. We were all wiped out, so it wasn’t a problem. At least, not for the first couple hours. That small storm turned into a massive thunderstorm and it was blowing right over the ridge we were camping on.
My wife, Jessie, shook me, but I was already awake. Nobody could sleep through that noise. “It sounds like lightning is right on top of us!” she said. It was loud, but I wasn’t concerned. “Count the seconds between the lightning and the thunder. The lightning is a mile away for every 5 seconds.” I recalled from my time in the Boy Scouts. At this point, we were at 15 seconds. 3 miles. No problem. It was loud, but we were safe and that put Jessie at ease. The dogs, not so much.
Unfortunately, that 15 seconds quickly turned into 10, then 5, then 3. “Half a mile? We’ll be fine. At least we’re not out on top of the exposed ridge!” I thought to myself. Jessie, on the other hand, was not feeling great about the situation. She gets sweaty palms when she’s anxious and, at this point, they were sopping wet. That’s when it happened. CRACK! The light was blinding and the sound deafening. Zero seconds. It was right on top of us. Then again. CRACK! This one was different. It was followed by a long, low creaking moan and hard, leafy thud. A tree just fell in the forest and we heard it.
The next day, we were a little shaken up, but everyone was OK, even the dogs. We found the fallen tree about a hundred yards away and decided that we’d never camp on a ridge during a storm again. We hiked back down to our cars and couldn’t wait to get home to sleep with a solid roof over our heads.
This is a true story, mostly. The trip, the storm, and the nervous wife all happened. The falling tree, not so much. It seems like a plausible story, but it’s fiction: The same kind of fiction that your customers receive from other, less-reputable contractors. Your customers have been burned by bad contractors that told them plausible stories about their building assets just to, ultimately, be disappointed by bad outcomes like unexpected equipment failures and exorbitant expenses for unnecessary work. They are wary of touching that hot stove again.
If a tree falls in a forest and no one is around to hear it, does it make a sound? An age-old debate. Sorry, I don’t have an answer for you on this one. I do, however, have another question for you. If you tell your customer a tree falls in a forest, will they believe you? Those other contractors have made it difficult. How about if you show them this?
Absolutely, they’re going to believe you because those disreputable contractors have made your customers skeptical. You can write pages describing the work you perform for them or spend hours on the phone with them, but they’ll still question you regardless of your company’s reputation. Instead, show them. Show them pictures of the leaking system. Show them videos of the failing asset. You should even show them when things aren’t broken just to reassure them that their equipment is in good condition. Show them everything. You’ll stand out from all the other contractors as transparent and trustworthy and they’ll be happy to pay a premium for your reliable services.
Sound like a lot of work ot show pictures and videos from every job to the customer? It’s not. Technology makes it easy. All of your techs are used to taking pictures and videos with their smartphones. Getting that rich media in front of your customers is another challenge altogether. Ad-hoc emails with attachments are not the answer. Instead, let software like ServiceTrade, solve that problem in a scalable way. ServiceTrade logs every picture and every video your techs take and automatically organizes them against jobs and quotes that are effortless to share with your customers. For example, after your tech snaps a couple pictures and a quick video of an equipment issue and collects the customer’s signature, all of that information, the pictures, the video, and the signed work order, will automatically be sent to the customer’s inbox. That’ll show them!
Service Certainty
Who has better pizza, Domino’s or Papa John’s? I do a lot of presentations about these companies and when I pose this questions to audiences, usually they’re split right down the middle. Personally, I’m a Domino’s fan. From a value perspective, however, our opinions about who has better pies don’t really matter. Here’s what really matters:
Domino’s is CRUSHING Papa John’s and they have been since 2009. In fact, Domino’s stock has outperformed Amazon, Apple, and Google in the last 9 years. For every dollar you invested in Domino’s in 2009, you’d have $36 as of the writing of this blog post. Compare that to $10, $5.50, and $2.75 for Amazon, Apple, and Google respectively. Papa John’s, on the other hand, would be worth a respectable $3.75, but it’s been on a steady decline for the past two years.
These numbers are surprising considering how ubiquitous Papa John’s marketing is. It’s practically impossible to watch sports without hearing their slogan, “Better ingredients, better pizza.” They’re everywhere. Domino’s spends plenty of money on advertising too, but their marketing strategy went a very different direction starting in 2009. It’s best summed up by their CEO, Patrick Doyle, who said:
“We are as much a tech company as we are a pizza company”
What technology do you think he’s talking about? Their accounting platform? Their point of sales systems? Their pizza ovens? No. He’s talking about their customer-facing technology like their Pizza Tracker and mobile apps. While Papa John’s has been pouring money into billboards, radio ads, and TV spots, Domino’s hired the best web and mobile developers, built an incredible R&D team, and took a massive risk on the future of smartphones. In fact, an interview in 2015 revealed that around 300 of their 700 employees at their corporate headquarters were focused on technology, not pizza (or accounting). Here’s another one of Doyle’s quotes:
“We believe by transaction counts we’re in the top five of e-commerce companies in the world.”
That’s unbelievable for a pizza company. On the other hand, Papa John’s sales are sinking and their stock price is sliding. They’re trying to blame their poor financial performance on the recent drama and viewership decline in the NFL. The reality is that they got left in the dust. Nine years later, they’re trying to catch up to Domino’s with Papa Track, their answer to the Pizza Tracker, but it’s too little too late. They’re sitting at the starting line coughing up dust while Domino’s is off to the races.
Domino’s figured out how to differentiate their offering with something more valuable than close-ups of melty cheese and empty platitudes like “Better ingredients. Better pizza.” Really? Does anyone buy that Papa John’s really has superior ingredients and better pizza? Can they prove it? Sadly, I’ve heard a lot of service contractors use a very similar line. “Better techs. Better service.” Really? Do you think anyone is buying that? Even if they do, it’s impossible to convince the customer that it’s true. So, why bother? Instead, take a page from Domino’s book. Offer customers a better experience with service certainty.
Domino’s thoughtful investments in technology are cutting edge because they focus entirely on the customer as opposed to logistics and accounting. Everything they build is for the customers’ express benefit. In some cases, they even added administrative work for their in-store employees to improve the digital outcome for the customer. Their Pizza Tracker is semi-automated, but Domino’s employees still have to manually update the system a couple of times to alert customers about the progress of their pizza. For example, every time a pizza is ready for the oven or put in the car for delivery, whether or not the customer is actively using the Pizza Tracker, some Domino’s employee has to update the system just in case a customer decides to check in on their order. They sell more than 2 million pizzas a day. If we assume an average of 1.5 pizzas per order, that works out to almost 1 billion manual system updates a year. That’s a lot of Domino’s data entry! And, for what? The customer. It’s that simple.
Obviously, Domino’s has limited the cost of these billion customer updates substantially with a technology-enabled process. They’re not picking up the phone and calling their customers multiple times per order to update them on the progress. That would be ridiculously cost prohibitive and annoying for the customer. Yet, that’s exactly how most service contractors think about solving the same problem! Better call the customer or send them an ad-hoc email to let them know what’s going on with their service. That’s an expensive approach so it’s either reserved for premium clients or doesn’t get done at all. Why not give every customer a great experience and let technology solve that problem by incorporating it into the standard workflow? For example, instead of having techs call, email, or text to alert the office and customer that they are on the way to a service call, incorporate technology (like ServiceTrade) that will, with a few clicks, log the techs drive time, update the office staff, and send an en route notification to the customer with a picture of the tech and estimated time of arrival. Or, instead of signing a paperwork order, waiting for it to get back to the office, scanning it, and emailing it to the customer with an ad-hoc summary and picture attachments, how about incorporating technology (like ServiceTrade) that will automatically send all this information to the customer the moment they sign the digital work order? Even if it adds a few new points of quick data entry, it’ll remove a boatload of calls and emails.
For Domino’s, however, there were no cost savings with their new workflow. They weren’t calling or emailing the customer to update them on their orders in the first place so these billion data entry points were a net new expense. Despite that, they don’t even think twice about the cost because they understand the value of MIPS, or Marketing Impressions Per Service. MIPS is the heart and soul of Domino’s customer experience strategy. For each service (or pizza) delivered, a series of useful notifications are sent to the customer updating them on their purchase. In Domino’s case, customers receive push notifications on their mobile device throughout the process. From prep to bake to delivery, customers are notified about every step and each notification links back to the Pizza Tracker, the visual manifestation of MIPS.
When you order a pizza for an office full of hungry coworkers or a house full of famished kids, you want certainty about your order. Hangry and anxious, they’ll look to you for one answer: When will the pizza arrive? At this point, you can either be a zero or a hero. If you’re in the dark and you leave your compadres in limbo, the anxiety will escalate and you’re going to be a zero. Compare that to the certainty of “it just got boxed up and should be here in 12 minutes.” That’s more like it! You’ll be the hero. Next time you want a pizza, who are you going to call? The company that made you a zero or the one that gave you certainty and made you a hero? When your customers have failing equipment or systems in their building that impact their tenants, customers, or coworkers, do you think they’d rather have the hero or the zero? This doesn’t just apply to emergency service work. For standard maintenance or inspection work, they’d rather be certain about what’s going on so they can keep their colleagues up to date, make arrangements on their end, and have peace of mind about the work being performed.
At the end of the day, all facility owners and managers really want is certainty. Strategically, that means certainty about their facility budget. Tactically, that means certainty about the facility services they receive from day to day. They want certainty about everything from when the tech will arrive to how they should resolve equipment issues. MIPS give your customers tactical certainty by giving them the information they need to make good decisions on a service-by-service basis. Service certainty can distinguish you from the unpredictable, unreliable competition.
That Awkward Moment
I love asking business owners and managers “Who do you think you are?” I’m not trying to pick a fight. What I’m really asking is “What makes you different and better than your competition?” But that’s a pretty boring question. Generally, those who give me a concise, thoughtful answer run growing and profitable companies. Those who can’t, don’t.
We’ve written a lot about figuring out what makes you different and better than your competition, but sometimes being committed to your unique value proposition leads to difficult conversations with customers and prospects. Being different will certainly help your company stand out relative to the competition, but it can also feel pretty uncomfortable at times. I will never forget a customer visit with Billy that illustrates just how difficult being committed to being different can be. We were visiting with Randy and Rebekah Akins, the owners of Aztec Fire and Safety in San Diego California. Randy was on the phone because he could not get to the office that day, and Billy, Rebekah, and I were sitting in Rebekah’s office. Randy led off the conversation with an observation on why he had abandoned his last customer service platform and selected ServiceTrade.
“The last application we used really screwed up our QuickBooks, and the most important thing ServiceTrade can get right is an elegant integration with our accounting application,” Randy declared through the phone speaker.
Uh oh, I thought to myself. This is about to get really interesting. Billy didn’t let it go as I hoped he might. Randy had just signed up with ServiceTrade the week before, and I guess Billy was pretty confident that Randy had already written and mailed the check because his first response was a verbal punch in the mouth for Randy.
“Well then, you are likely to be disappointed with ServiceTrade if an elegant QuickBooks integration is what is most important to you. We focus most of our research and development spending on innovations that help you make more money from your customers through great customer service. We believe making more money and great customer service is far more important than how you send the information to your accounting application.” Billy wasted no time getting to the heart of the conflict, and Rebekah and I stared awkwardly at each other wondering what was going to happen next. I personally was happy that Randy was not in the room because he seemed to be spoiling for a fight after wasting a year or more on an application and then switching to ServiceTrade to solve what he felt was his most important problem – QuickBooks integration.
My response to the situation.
“That’s a pretty arrogant thing to declare in the first meeting with a new customer. Basically, you are telling me that what I want is not important and that you guys know better than the customer. We are going to be very disappointed if you can’t help us with this QuickBooks problem.” Randy wasn’t backing down either. I felt I should do something, but this experience was like watching a train wreck, and I felt paralyzed. I literally couldn’t speak or move. Billy continued with “We certainly don’t mean to be arrogant, and you guys are important to us. I hope the QuickBooks thing works, but it might not. If you stick with us, however, I can promise you in six months you will be thrilled with how much easier it is to take care of your customers, deliver more services, raise your prices, and attract new customers.”
“We have already written the check, and we plan to make every attempt to be a good customer. I hope you are right because our last experience with technology was a huge disappointment,” Randy closed the door on the fight, and we moved onto more comfortable ground with a conversation regarding the training and data migration plan for Aztec.
Fast forward eight months and Billy and Randy are best buds. Randy and Rebekah’s business is growing like crazy, and they feel like ServiceTrade has made them stand out in their market. They are selling more services, earning a premium, and attracting new and better customers to their brand. Billy took a calculated risk in that first conversation because he knew that the best ServiceTrade could do regarding a QuickBooks integration was not going to impress anyone. QuickBooks is low cost, basic accounting application that is easy to use, but it has severe limitations regarding how third-party applications interface with it. There are no APIs for the desktop version. Besides, having a QuickBooks integration is not what sets ServiceTrade apart in the market. We know who we are as a company, and our mission is to help commercial service contractors use technology to deliver amazing customer service and become more valuable to their customers. QuickBooks has no bearing on that mission.
Do you know who you are as a business? Do you know what makes you different and special in your market? Can you confidently tell your prospects that you don’t care about being the low price leader and explain what unique value you can offer them instead? Can you explain why your program will reduce inconvenient and expensive breakdowns in the future? Do your customers know who you are? Commit to being different, even if it means being uncomfortable, in your early engagements with customers and prospects to overcome the bad habits they’ve learned from your low-end competition.
The Death of Blind Trust
Service contractors, beware. Blind trust is dead and as the “youths” say, pics or it didn’t happen. Pictures and videos are the new currency of trust thanks to technology that makes it so easy to capture and share them. Social media and modern ecommerce have trained us to expect images as tangible evidence that stories are true and products are real. Asking your customers to blindly trust your expertise without providing visual proof is like buying products online that don’t have pictures. It won’t happen. My wife and I had a recent experience with a Toyota dealership service department that’s a great example where a couple pictures could have made the difference between us being lifelong customers and abandoning the dealer completely.
When we purchased Jessie’s Prius, we bought a package of ten services at a discount from their counter rate. We drop her car off for service every few months and every once in a while they warn us about small issues like bad windshield wipers. Whenever possible, I take care of small issues myself. Changing out a set of wipers isn’t exactly rocket surgery.
We were satisfied with the Toyota dealer until last month when they performed a thorough inspection for the 75k mile service. That’s when the recommendations and repair suggestions came out of the woodwork! We expected some, but this list was just ridiculous. My favorite was that they still recommended new windshield wipers because they weren’t replaced by Toyota last time we brought the car in. They just carried the recommendation over despite the fact that there were obviously new wipers on the car. That particular misstep had me questioning the rest of the quoted work.
If they didn’t look at the wipers, how can we trust that they looked at anything else? There weren’t any pictures that prove that they did. They quoted us for tire alignment but they didn’t include a graph showing the results of the alignment test. They just said “Found suspension in need of alignment based on time or miles.” Then there’s the quote for replacing the brake pads and resurfacing the rotors without any pictures of the pad or rotor wear. The brake fluid is discolored? Show us. Pics or it didn’t happen.
We don’t like getting ripped off. Nobody does. Even the feeling that you might be getting ripped off is enough for someone to consider getting a second opinion. And, that’s exactly what we intend to do. We’re going to our favorite local mechanic who emails us pictures of issues before sending quotes for repair. Taking pictures and sharing them with your customers should be easy. If it’s not, you’ve got a problem. Don’t expect your customers to blindly trust you.
COUNT YOUR MnMs
“Money for Nothing” is the concept that you can charge a premium if you offer customers predictable facility outcomes at a predictable price. You should be more profitable when “nothing” happens: no emergencies and no system failures. These bad outcomes are undesirable for the customer and expensive for everyone, especially your company. Even if you charge the customer an exorbitant labor rate or emergency fee, being reactive costs a lot more than your tech’s overtime rate. The uneven labor demand of reactive work overextends your most expensive resource, skilled labor. Read our Money for Nothing blog post and check out Billy Marshall’s presentation, Money for Nothing: How Exceptional Service Brands Earn More Pay for Less Work, for a deeper understanding of the topic.
To understand how a Money for Nothing program works operationally, let’s talk about your technician Dan. OK, you may not have a Dan, but stick with me. Dan is the man. He’s been with you for years and he racks up all sorts of repair work and generates a lot of revenue for the business. He’s great at what he does and is irreplaceable in the face of the skilled labor shortage we’re experiencing. On a typical maintenance call, he may find a small equipment issue that has the potential of manifesting into a severe problem in the future. He reports the issue that makes its way to the customer as a quote. As usual, the facility manager, Stingy Steve, ignores the quote because he doesn’t think it’s all that urgent. Eventually, the equipment fails and Dan has to drop another job and work late to resolve the issue. Even though Dan the Man predicted the problem, Stingy Steve is still frustrated that he has to spend more money and deal with the hassle of an emergency.
That’s a bad customer outcome that could have been avoided. That’s how you lose customers. Dan did a great job reporting the problem and your team did a great job quoting it, but more effort should have been made to convince Steve that the minor repair was the right choice. Measuring the right performance metrics can help hold your team accountable for good outcomes and incentivize them to work harder for your customer to avoid situations like this.
Money for Nothing Metrics – or MnMs, not to be mistaken with M&Ms – are business measurements that will help your facility service organization effectively deliver on your premium service contracts and drive better customer outcomes. But first, what internal metrics do you currently use? Labor utilization summaries? Quote approval rates? Revenue per tech per day? These are valuable KPIs for measuring productivity and revenue, but what about customer outcomes? You can measure retention and customer lifetime value, but those are just the results of your performance. They indicate the overall “stickiness” of your brand and how effective you are at extracting dollars from your customers, but they don’t help you understand how you got there. We know that you can’t improve what you don’t measure, so let’s take a look at some key MnMs.
Suggested Repairs
How proactive is your team when it comes to equipment and system issues? Easy. Just track the ratio of reported, quoted, and approved proactive repairs as compared to more severe, reactive problems. The higher the ratio, the better job your company is doing at preventing future catastrophes. Even though these repairs produce less revenue, they will reduce the chance of a bad customer experience and can be scheduled during slow months.
Emergency Calls and Overtime Usage
How often do your customers have unexpected issues? For most service contractors, the answer is very seasonal, but you still have some control over the volume. More proactivity leads to fewer emergencies and happier customers. Measure the volume of emergency calls and overtime hours used for contracted customers to the total number of contracted customers by month to get a sense of what to expect from month to month. You know you’re doing a good job when that ratio drops for the same month year over year.
Hold your team accountable and incentivize them for “nothing.” Just like your program, your team should be making money for nothing: no emergencies, no failures, no bad outcomes. MnMs give you the numbers you need to set goals and realize outcomes.
