Amazon Plumbing? Google HVAC? Navigating the Digital Service Contracting Landscape.

What does it mean when two of the biggest names in Internet technology jump into the service contracting business? It means that service contracting is a huge and lucrative market that is due for a shake up (or a shake down, depending on your perspective). Amazon and Google are both taking on initiatives that will plug them into the world of home services (light commercial as well, and I am certain that some level of industrial capability will ultimately follow), and I believe there are lessons to be learned by observing how these new entrants operate. Learning and reacting thoughtfully could yield some nice opportunities for growth and profit. Poor planning and stubbornly insisting that nothing needs to change will yield abundant misery and sorrow.

So what exactly are Amazon and Google up to that will have an impact on the service contracting space? Amazon has quietly announced a local marketplace for service contractors. A Forbes magazine article describes their plans, and here is the money quote:

“Amazon Local Services is a new and simple way to buy professional services from pros such as plumbers, auto mechanics and yoga instructors,” said a promotional video on the site. “We’ve handpicked some of the best pros in your neighborhood and require them all to be licensed, insured and background-checked.”

Now, my focus in this post is not auto mechanics or yoga instructors, but instead the folks ServiceTrade calls customers. Some of these are plumbing, HVAC/R, kitchen equipment, and other specialty tradesmen that offer repair, upfit, and maintenance services for property and equipment at the customer’s home or business site. Amazon plans to step in between the customer and the contractor to moderate the transaction – and take their fair share of 10 – 15% for their trouble. Amazon is an expert at driving efficiency in logistics and offering customers very low prices for everything they sell. Now they are bringing this efficiency and low price strategy to local services. Low prices, minus 10 – 15% sounds like a painful bargain for the service contractor that does not have a plan to respond to this strategy.

How about Google? Well, they bought a company called Nest that makes smart thermostats and smoke/CO detectors. Here is the money quote from a Forbes article on this acquisition:

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” said CEO and cofounder Tony Fadell in a blog post.

The key term here is the “conscious home.” A home that is “conscious” is one that is aware of what is happening and can help Google respond to help meet the owner or occupant’s needs. With the thermostat and other devices in every room collecting information about the home environment, Google will be well positioned to help the homeowner get more value from their home ownership experience.

Google and Amazon are both in the business of using massive amounts of computing power to organize information to help their customers make thoughtful buying decisions. Isn’t the goal of any service business to organize information and provide expertise so the customer gets good value for the money that they spend upgrading, maintaining, or repairing the important things in their life? If you are a service contractor, how are you going to get better at knowing your customers and organizing that knowledge to help them make good decisions on equipment and services that improve their lives? How are you going to monitor their equipment usage and behaviors to make thoughtful recommendations in the manner of Google and Amazon? Or is your plan to simply let Amazon and Google own the customer relationship and instead settle for a 10 – 15% discount on the lowest price in the market?

Here are some broad recommendations I believe will help you have a thoughtful response to these new entrants:

Upgrade your approach for managing and using customer information
If your information about your customers is still trapped inside an accounting application running on a PC server in your office (or worse, filing cabinets), you are not well positioned to respond to Amazon and Google. I assure you that the systems and structure that Amazon and Google use to understand customer needs looks nothing like an accounting application. Great customer service will be defined by a rich mobile and cloud experience that allows your employees and your suppliers and your customers to collaborate online to deliver memorable outcomes that build your brand value with the customer. A PC server based accounting application will not distinguish you in this online fight for customer attention.

Invest in “smart” technology expertise
You need to have your own story regarding how you are going to monitor the needs of the customer and be responsive. Remember Tony Fadell from Google talking about the “conscious home” above? Think about smart electric meters, smart water meters, smart thermostats, and other connected sensors that allow you to be informed, thoughtful, and responsive on behalf of the customer. Be creative in offering maintenance contracts enabled by smart devices that make your services sticky, responsive, and invaluable for the customer. These types of “monitoring” services have existed for many, many years in the realm of security and fire systems. Bringing them to other areas outside security and fire in order to be proactive in customer service makes perfect sense.

Embrace Google and Amazon and others as a source of leads
You should be connected to these new entrants (and perhaps some of the older Internet players in the service contracting space like Angie’s List, Home Advisor, etc), but you should use them ONLY to establish a connection with a customer that you subsequently OWN. Avoid any contract with these entities that prohibits you from serving the customer independently after first touch. Deliver a memorable service during first touch, and then stick to the customer like glue using your upgraded customer service capabilities from recommendation #1 above. If you are memorable and attentive with a perpetual service approach, you will not have to ultimately settle for a 10 – 15% discount off the lowest price in the market after the first call.

You do not have to own massive amounts of computing capacity to enable a thoughtful customer service approach that makes you memorable for your customers. However, you do need to embrace cloud, mobile, and smart technology as a means to remain competitive in a customer service world that is increasingly defined by information, knowledge, expertise and online connections instead of simply local presence. Customer service does not begin and end in the parking lot or the driveway of the customer any longer. It extends to the boundaries of the Internet. Create a memorable online AND local experience for your customers and you will stick to them like glue. Miss this opportunity and you will be managing labor and truck maintenance in order to serve someone else’s (Amazon, Google?) customer for a 10 – 15% discount off the lowest price in the market.

Introducing the Digital Wrap: Deliver More Service Calls to Get More Service Leads!

Want More Service Call Leads? Deliver More Service Calls!

There is an old saying in sales “Activity yields Activity”. The more outbound calls you make, the more inbound calls you receive. The more conversations you have, the more clients you will gain through the insights those conversations yield. The same holds true for service calls. If you can get the service call flywheel spinning, then it will continue to spin under its own momentum, and speeding it up gets easier the faster it is moving. This trick only works, however, if you really understand the concept of perpetual service and embrace technology that automates your ”service call” marketing engine.

Why do you “wrap” your trucks in your logo, brand promise, and phone number? So when it is parked at the jobsite, others can see that their neighbor (residential or commercial) trusts your company. The “wrap” doesn’t do much good when your truck remains idle in your parking lot. The same can be true for your service activities. These activities can become your “digital wrap” when you capture them electronically and forward them to your customer via the Internet. If your customer service management application knows where you are and what you are doing, then both your customers and others in the “digital neighborhood” should be able to easily see and share that information. An email in their inbox is easily searchable, and your client can forward this to their friends and family as evidence of your good work. This doesn’t happen when your customer service approach is limited to accounting information on a multi-part paper ticket that likely gets trashed by the customer.

Another way that service generates leads is the opportunity for discovery that occurs at the customer site. If it is easy to share that discovery with others in your company and also back with the customer in the form of photos, audio memos, online quotes, and service reviews, then you have created potential service call leads for the future. Now the online customer can see and reflect on what you’ve found when it is convenient for them. During the initial service call, when you are trying to get them back to work by fixing their equipment, the timing is typically not right to review and discuss other service opportunities. However, if you create a digital catalog of those opportunities for sharing, your initial service will almost certainly yield future services. Future service calls will not happen if you expect the tech to remember it and write it down for the office to type it into some note field in an antiquated PC application and “maybe” have that delivered to the client. That new revenue opportunity is lost forever.

Marketing for service contractors is increasingly moving from the physical space to the digital space. Your truck “wrap”, your local radio commercials, and your billboards need to be augmented by digital calling cards that gain impressions because they are so easy to move around in the online “neighborhood”. If these digital impressions require “extra activity” above and apart from your typical customer service routine, it will never get done. If it is built in to the way you execute customer service, it will add speed to the service call flywheel. If you want more service call leads, then deliver more service calls after you embrace perpetual service and get aboard the ServiceTrade bandwagon.

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.