Service and repair business owners and managers have their favorite techniques to boost their profits. Some try everything they have ever heard about, and many try one technique or none - they are just trying to hang on and keep up with the business; no time for new ideas or attempts to increase profits to make the business worth more or return more to them for their years of hard work.
Somewhere in between these types of operators are the discerning and successful owners and managers who have control of their business and are willing to not only look at but closely examine modern business practices to bring more to the bottom line of their profit and loss statements, while building sound customer relations and assuring a sterling image for their business in the community.
I have compiled those techniques that are in use by businesses nationwide that routinely contribute to increased profits and build customer loyalty, confidence and satisfaction (translate that to more repeat business). Maybe you are using some of the practices already, maybe all of them, but there are businesses out there that still offer opportunities for the owners to build value, for themselves and for their customers.
Use the techniques I review as a checklist for your business. Scrutinize the ones you are not applying to your business and see if you wouldn't benefit from those you have not tried. Not every profit-making technique is listed here, but these are the ones you should look at if you're ready to venture into using new techniques - because other companies are, and they are using them successfully.
No. 1 - Service Agreements
You have been hearing me promote service agreements for the last few years. Ever since I hopped on an airplane to go see a company after hearing about how they were selling thousands of service agreements, I wanted to know how they did it, and I found out. (In a few words, customers get a discount on all their service and repair work if they are a service agreement customer.)Service agreements offer so many opportunities for your business to profit, plus they benefit the customer, too. With a simple agreement form, the customer pays a nominal fee annually in exchange for an inspection of all the systems in their home and some simple preventive maintenance. Since problems are identified early, before they become emergency or urgent situations, the customer saves money.
They also save on the cost of a service call for the technician to come out to the customer's home. Since there may be more than one job that needs to be done, or more than one system in the home that could use updating, repairing or needs attention, the customer saves even more from the benefits of add-on job pricing in the flat rate manual.
Your company benefits in many ways, too. Since the inspections can be scheduled with some flexibility, they can be completed during slow times. They typically generate business; technicians earn more and the slow times are no longer slow. Technicians need to be trained to look for common problems and ethically suggest work that the customer needs.
That nominal fee the customer pays for the agreement adds up. Multiply a fee times a thousand or several thousand and you will see what an improvement those fees make to the cash flow of the business.
Recently, we discovered that long-term service agreements are also attractive to both the business and the customer. Five years or even lifetime agreements generate predictable revenue - not traditionally available in a service and repair business, and an important consideration on sale of the business.
No. 2 - Scripts For CSRs
If you want an overnight improvement in the efficiency of your customer service representative, the people who take the calls to your business, the important first contact with your business, make certain they are using a script. A little training is necessary, but it will pay off quickly.Scripts move the call along, saving time, permitting CSRs to take more calls per person per day. They gather the necessary information and, most importantly, schedule the service appointment. The script allows the CSR to comfort the customer while the data needed is noted. At the same time, the script guides the CSR through the call, avoiding price quotes (never!) but informing the customer that they will be given a price for the job before any work begins. (“Remember: 'We charge by the job ... not by the hour.'”)
Without a script, the call taker may wander through the call and spend too much time without obtaining the information needed. (Have someone call your business with a simulated problem and see how the call takers handle it. Good CSRs will process the information smoothly and schedule the service call.)
No. 3 - Menu Flat Rate
By now, many companies have understood flat rate pricing is the only way to keep customers happy and maintain satisfactory margins in the business. However, to adopt flat rate pricing without a quality flat rate manual is a challenge.How you use flat rate can be as important as the decision to switch to flat rate. The manual needs to be effective in communicating to the customer that the job has a specific price, one they can see in the book. Small, hidden columns of numbers only contribute to the mistrust the customer may have for service companies, who they suspect may arbitrarily price the jobs.
A quality flat rate manual, like the Maio Menu system, also simplifies the technician's job for selling add-on jobs because the add-on jobs are shown next to the typical jobs. Since a decision to have the add-on job done at the same time as the main job saves the customer money, the decision is easy for the customer. The technician's work is made easier.
Also, in a quality flat rate manual you'll see the discounted price, the one service agreement customers get. (Customers always inquire: “How do I get the discount price?”) So the manual encourages customers to purchase a service agreement at the same time - if it's the right manual.
No. 4 - Yellow Pages Update
Service and repair businesses need to generate new customers for service and repair work every day. Most use the Yellow Pages to solicit this new business, but you know by now some directories are more effective than others and, certainly, some ads are more effective than others.Although we could spend hours talking about the dos and don'ts of Yellow Pages advertising, there are a few tips that can increase the productivity of your ads. And that is what you want: productivity. You need calls from customers who schedule service appointments.
Since you may place ads in more than one book, you need to measure their effectiveness. How much business was produced from each ad in each book? The only way to be sure is to record the responses from the ads and total the business produced from each at the end of the ad's run.
That means you have be able to have customers identify the ads (place numbers or code words in a corner of the ad). Have the CSRs ask which ad the caller saw and note the numbers or codes on a log. Otherwise, you are guessing when you look at advertising productivity. You cannot rely on the directory's sales rep analysis; they don't have the data.
Another key ingredient to successful Yellow Pages ads is an ad that jumps off the page at you. Check in your local book and you'll see what I mean. A bunch of the ads look the same and a few come alive. They have pictures of the owner (not bland mug shots) and modern trucks. The copy gets your attention (for example: “60-minute service!”) without listing 47 brands of machines or types of services that are performed.
We have researched these factors and found that old-fashioned, bland ads do not work. Don't spend your limited advertising budget on non-productive ads.
It pays to hire professionals to design your ads; don't let the Yellow Pages company rep suggest you use their budget clip art or standard-format ads. They'll look like all the other ads - ones that do not attract business.
No. 5 - Professional Technicians
If you inquire about the professional qualifications of any company's technicians, the vast majority of owners and managers will quickly respond that their technicians have the most up-to-date, professional, technical training available. They will report, “They can fix anything!” However, professional technical training is often not enough.Of course the technicians need to be able to service modern equipment or repair faulty systems, but what really is needed is professional customer service training.
Specifically, dealing with customers, pricing the job, acting professionally in the customer's home, maintaining a professional appearance, keeping the customer's home clean and completing the job in a timely manner. There are many more actions that technicians need to know, but those few illustrate that technical training is not enough.
Part of the professionalism relies on managers. Professional uniforms are one example. Incentive pay for technicians is another. If managers are not setting up systems for their technicians, they are letting them down. Technicians can only do their best job if they are supported from the office.
