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.
Perpetual Service – Creating Service Contracting Value in a Connected World
Service Contracting value no longer begins and ends in the driveway or parking lot of the customer. Showing up on time in clean uniforms and doing the job correctly are simply table stakes in a world where everyone is seeking the attention of the customer from every corner of the globe. Billboards in your service area with catchy slogans and stickers on equipment in the crawl space or on the roof are also no longer the standard for making an impression. The opportunity to serve your customer and be relevant to them extends to the boundaries of the Internet. Perpetual service is both a mindset and a technology approach to creating enduring value for your service contracting business. It is about a capability that affixes your brand first and foremost in the mind of the customer so that you extract the maximum value from every service call and from every service opportunity.
The Brand Premium Branding is all about the experience a customer has with your company. Historically, that experience occurred exclusively in physical space – their home or business location, on the highway next to one of your trucks, in a local newspaper, on a billboard. Increasingly, that experience is defined by the Internet – their email inbox, the browser on their tablet, smartphone, or laptop, LinkedIn, their text application, Twitter, Facebook, Google. Companies that are absolutely not in the service contracting business are nonetheless becoming relevant and extracting a brand premium based upon their Internet expertise – Angie’s List, Home Advisor, Porch, FM Facility Maintenance. Being local is no longer a requirement for brand relevance in service contracting. If your brand is not first and foremost with your customer, you will simply become the labor bureau for some other brand. Your business will be managing trucks and technicians for a small markup on your fully loaded labor expense – if you are lucky. With perpetual service, you establish a brand connection with the customer that allows your company to extract the full value from each service opportunity without some intermediate party skimming the brand premium off the top. If your brand is not where it can be easily found (inbox, browser, etc.), you will become increasingly irrelevant in a connected world.
The Technology Mandate Connecting with your customer using technology cannot be an afterthought – it must be built into the way you deliver service. It is not an appendage, it is the core of the business. Every service activity that you take should yield a corresponding brand impression with the customer. A technician indicating he is enroute to the job yields a text message or email to the customer indicating who is coming, their estimated arrival time and how to contact them in case the plan has changed. A photo of impaired equipment yields a web impression educating the customer about the perils of poor equipment maintenance and asking them to approve a quote to execute the repair. A request to sign off on the job yields a full color service review on the tablet with before and after photos and acknowledgement of other items that should get attention from your company. A service delivered yields a request for an online review that generates localized search content to place your web search results above others in your market. A freeze warning email the night before a hard freeze cements your value with your customers, and you spend the next day picking up the customers of others that did not forewarn – and you stick to them like glue because of your technology enabled perpetual service capability. Smart meter monitoring on the electrical circuits and the water meters lets you react before the failed freezer spoils thousands in inventory and before the failed toilet connector floods the home with 4 inches of water at 3am. Embracing technology is critical in the quest for perpetual service value.
The Cloud and Mobile Gateway These technology enabled service capabilities, along with ever important productivity enhancements stemming from perpetual connections not only to your customers but also to your technicians and to your suppliers and business partners, will not be centered on a PC server running in the office closet. You have likely already moved your website into the stewardship of a digital marketing firm that hosts it at some reliable cloud provider. Why did you do that? Because the online connection to your customer is too important to entrust to a fragile, ill maintained, difficult to use and stagnant operating environment on a PC server in your office. The only effective connection to a PC server in your office is via the local area network, and very little of what matters in your business happens in the office. Perpetual service is not possible until you move your operations to the cloud. If you insist on leaving your accounting in a closet, that is fine because your accounting capability WILL NOT distinguish you with your customers. Running your service operations on a PC server and expecting that server to be at the center of the connected world of service contracting is lunacy.
The ServiceTrade Promise ServiceTrade is not the answer to all perpetual service opportunities. We are simply a leading voice in the connected world of perpetual service. If you want your service capability to drive perpetual service connections to your customers, we are a good choice as one of your service technology partners. If you want to be the foremost brand in your market and extract the corresponding premium instead of being relegated to being the labor bureau for another brand, tune into what we and others are saying about perpetual service.
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?
The Tesla Lesson: 4 Takeaways for Service Contractors
I am a big believer in market signals. I think Tesla is one of those signals. As a breakthrough company with a skyrocketing stock value, Tesla is clearly doing many, many things correctly and making very few mistakes. I believe there are some lessons in the Tesla experience that service contractors should be learning.
As context for everyone that lives under a rock, Tesla is a manufacturer, distributor, and customer service company for electric vehicles. Specifically, these are are not your Aunt Minnie’s electric hybrid Prius, or Civic. These are high performing vehicles that have a style about them that does not signal “compromise.”
For those that do not watch the stock market, Tesla is a high flyer. For every $1 in car sales, Tesla (NASDAQ: TSLA) gets almost $10 in shareholder value in return. Contrast that with Ford (NYSE: F), a fine company with very good management, which gets approximately $.40 (yes, forty cents) in shareholder value for every $1 in car sales. The market believes Tesla is onto something special and that it will dramatically outpace all others in this segment – otherwise the share price would make no sense.
Here are the lessons that I believe service contractors can take from Tesla:
The market values products that dramatically lower fuel consumption.
The market is signaling that fuel prices are going to continue to spiral upward. If fuel was going to be $2/gallon or even $3/gallon in the future, Tesla would not even exist. As a service contractor, you better have a strategy to use less fuel per revenue dollar in the future or you will find yourself in a dramatic squeeze. What are you doing to pack more revenue into every mile driven by your techs? Raising fuel surcharges is not the answer. Something along the lines of “plan a better route and offer more value at each stop” is the right strategy. Increase your service revenue density per mile is a lesson from Tesla.
The market values products that require minimal maintenance.
Tesla’s vehicles require far less maintenance than conventional cars. Some of the maintenance is delivered over the air in the form of new firmware for the drive system. All customers want to buy a product that is maintenance free. How will you drive revenue growth for products that require ever decreasing levels of maintenance? Expand your service area? See above on revenue per mile – difficult to do with ever rising fuel prices? Expand your expertise offered to your existing customer base? Yes. Expanding your service density per customer location is another lesson from Tesla.
The market values predictive maintenance with a single point of accountability.
Tesla monitors the health of the cars and initiates service with the customer based upon the exact situation of their vehicle – not some vague timeline. Tesla shows up with a loaner and takes the customer vehicle to the shop based upon setting an appointment with the customer interactively using the Tesla interface in the car. Equipment will be increasingly connected to the Internet (see Internet of Things) and monitored for service requirements by the manufacturer. How will you be the source of knowledge and data for the customer when the customer is connected directly to the manufacturer via the Internet? Collect an extraordinary record of the customer’s service needs via mobile devices, aggregate data to discover opportunities for better outcomes, and use the Internet to connect to your customer is another lesson from Tesla.
The market values a direct connection with the manufacturer.
Tesla sells direct, with the customer doing most of their education and interaction via the Internet. Manufacturers will increasingly connect with customers via highly interactive, multi-media and multi-modal experiences regarding their product and its advantages. What will you do to be a part of that conversation and express to the customer all the things the manufacturer does not know and cannot know because you are the one with the experience on the ground? The answer is not “well I guess the technician will show ‘em some stuff while he is there, before he leaves behind a handwritten, tobacco- and coffee-stained invoice with a bunch of cryptic codes from my accounting system” Wrong answer. You better be thinking about how you express your expertise to your customers online, interactively, with “rich media” and “big data,” because I can promise you that the manufacturers that you currently represent are going to do it. Embrace technology that connects you directly to your customer with rich media and a data-driven approach to service management is another lesson from Tesla.
Fortunately, none of these lessons have to be scary lessons. Yes, manufacturers have big capital to do big things, but they move slowly and spelling “customer service” would be a challenge even if they read this blog post. And big capital is not a requirement for fantastic systems in a world with ubiquitous mobile platforms (smartphones and tablets) and cloud computing.
With just a little bit of cash flow, you can make investments in capability that will cement your relationship with your customer in a world where they value everything I described above that Tesla is delivering. You can increase service density per mile, increase service density per location, collect an extraordinary record to drive expert service, and connect to each customer in a manner that educates them regarding the value you provide. Or you can wait for the manufacturers and other third parties to insert themselves between you and the customer so that every time the phone rings it is a dispatch to “their” customer. You decide.
4 Ways Service Contractors Can Grow Sales Without Selling
Services businesses are “the gift that keeps on giving” in the revenue department…if managed effectively. Unfortunately, many are not very well managed and somehow lose their connection and relevance with customers. The success of Angie’s List and other similar customer advocate intermediaries is a direct result of service vendors inability to remain relevant and build long term value through their customer base. For the vendor that is paying attention and wants to avoid the fate of having every job delivered by a customer service web engine that siphons off valuable margin, here are some tips for growing that do not require massive investments in sales and marketing.
Never Miss a Service Call
When a customer calls, whether a new prospect or an existing customer, how effective is your company at responding? An effective response is directly proportional to the immediate visibility the customer service rep has to supply and demand.
Supply visibility is knowing the current status of all of the field technicians that might be able to respond. I crack up when I see PC-based dispatch boards that represent “what was supposed to happen” at the beginning of the day but immediately become irrelevant when the day begins. If your dispatch board is not updated by every action the technician takes in the field (or does not take), it is irrelevant by 8:05 AM for making customer service decisions. Putting the customer on hold, or heaven forbid, calling them back when you know what is possible, is the kiss of death. Review the board and make the decision NOW about which tech will make it happen and when. If the decision has to wait until you finish a game of “phone call rodeo”, the customer will not be amused, and you will lose the call.
Demand visibility is quickly reviewing the customer history and having an educated opinion on what might be causing the problem. Providing some instant advice based upon your location record as to how they might reduce the severity until your technician arrives will gain you hours of cushion to get to the location. For example, knowing that the water cutoff is in the broom closet 12 steps from the front door. If you have to traipse back to a filing room, or if your technician reports are limited to scans of terse, hard to read, hand-written reports relating the history, you have little opportunity to establish credibility with the customer and move toward a solution in the first 2 minutes of the interaction. If it is a long run for the nearest technician, you are losing valuable points with the customer that may result in a lost customer when the next service opportunity arrives.
Maximize Maintenance Revenue
If the month of May has 285 maintenance services due, how many do you deliver? If your answer is less than 95%, your organization is not best in class, and you are missing revenue. Maximizing maintenance revenue requires 2 key capabilities: visibility to the undelivered work and customer scheduling efficiency.
When you have visibility to what is committed but undelivered, you can drive your technicians to respond. When you do not know what is happening hour to hour and day to day, and you are waiting on a folder to come back to the office to understand the productivity of a week of work, you have no hope of maximizing maintenance revenue; you do not know who is productive and who is goofing off. You need to know the productivity of every technician every hour of every day. The money is out there just waiting to land in your pocket, but you need constant visibility to take it all.
Committing the customer to the work is also a requirement to maximize maintenance revenue. Ideally, committing the customer to the work does not involve 5 phone calls to each customer. Having visibility to the customer preferences for service (never Tuesday, always early, etc.) as well as a notification system that allows you to easily connect with the customer lowers the expense and aggravation of committing the customer to the schedule. This customer engagement model for scheduling is a challenging technical problem, and I expect some very interesting innovations to emerge in this area.
Deliver More with Less
Growing without selling also means having capacity to deliver without expensive and slow ramp up of new resources (techs, trucks, admins). When you can squeeze more out of the current resources and just say “yes” to the calls that are already arriving, that is the ideal situation. Additionally, the ability to seamlessly “source” work to trusted partners when you have absolutely exhausted your ability to fulfill it with your crew is critical.
Squeezing more out of the current resources means that you have the visibility to where a well-applied squeeze will be effective. Squeezing your most productive tech as hard as you squeeze the loafer because you cannot see the results is a recipe for some pretty low outcomes – the best guy leaves and the loafer stays. It also means that your office crew is not covered up with mindless additional administrative work when new opportunities arise. How effective is your process in the office at scaling to meet new demand? Is it a miserable paper chase with stacks of folders representing different status migrating from desk to desk? Or is it a well oiled machine with instantaneous status alerts online that hardly notices an additional 15% uptick in orders?
Delivering more with less also means that you can have the ability to subcontract work to trusted providers with a click of the mouse. If your subcontracting process is not a simple redirect of work in your management application, with your subcontractors using the same technology platform and processes that you use to hold your techs accountable, then you have the wrong application and it is time to call ServiceTrade.
Fix Everything
The best sales lead in the world goes something like this:
“Yesterday while I was at your location, my technician noticed a problem with Equipment A. He documented it with photos that I have attached to the quote that you can review online. We can fix it this week, and all you need to do is click ‘Approve’ in the upper right corner of the online quote.”
As long as you are incurring the expense to go to a customer’s location, whether for a maintenance call or a service call, or even a sales call, you might as well maximize your opportunity by noting everything that you could do for the customer. When I say “note,” I do not mean some chicken scratch on a piece of coffee- and tobacco-stained paper that rides around in the truck for another week. What I mean is an organized record of digital artifacts, including photos, audio memos, and perhaps even video, that is easy to redirect back to the customer online to demonstrate your organization’s thoughtful stewardship of their equipment. Online quotes with photos are more than three times as likely to be approved by the customer than flat paper quotes delivered via mail or email attachments.
If you are ready to grow, but you are not ready to suffer the ramp-up of expensive sales resources, consider how these tips might generate the growth you want. Connecting with customers in the digital age is an amazing new opportunity for service companies. The ones that figure it out will grow with an absolute minimum of marketing and sales expense.
