January 14th marked the start of the AHR Expo in Atlanta at the 1.4-million sq. ft. Georgia World Congress Center. With 50-thousand attendees, that place was a madhouse. I, along with the rest of the ServiceTrade team, was engaged in back-to-back conversations with commercial mechanical service contractors about their growth goals. As we usually do, we made a lot of people very uncomfortable. How? By asking difficult questions and presenting hard data that shook long held beliefs about their businesses. It’s the moment you realize that you’re running your business blind based on gut instincts and then data comes along and knocks the wind right out of you. It hurts. Here’s an example from AHR:

Contractor: What does ServiceTrade do?

Me: ServiceTrade helps commercial service contractors be more valuable to their customers and grow their business.

Contractor: The only thing holding us back from growing are inefficiencies in the office and cost control hiccups. Can you help with that?

Me: We can definitely help there, but how much revenue do you drive per service technician per year?

[Long pause]

Contractor: I’ve never thought about that metric. Based on our total service revenue from last year and the number of techs we had on staff, we did great! We made about $200k per tech.

Me: Our mechanical customers drive $400k to $500k per service technician by focusing on customer service and repair opportunities, but we can talk about back office operations if you’d like.

[Crickets]

Examples like this are common, even among our own customers. We perform account health calls with our customers to compare their performance against a benchmark in their industry. Most are caught completely off guard by what they discover. They never bothered to look at their quote approval rate, they just assumed it was over 95%. They never checked their average days to invoice, they just assumed it was under 5 days. It reminds me of something our CEO always says:

Do you know what happens when you assume? You make an ass out of you and me.


Almost every contractor claims to be data driven. However, the reality is that most contractors are rarely collecting the data they need to make good decisions about how to grow. Sure, they can all tell you their margin across different divisions down to the penny, but you’ll rarely meet a contractor who is paying attention to growth metrics like the:

  • Ratio of PM/inspection to quoted revenue
  • Repair quote volume and quote approval rate
  • New contract sales opportunity and close rate

I’ve met far too many contractors that “just know” these metrics. No data to back them up, just pure instinct. Do you know these metrics for your business? Do you have good data to back them up? Check out ServiceTrade’s business analytics features.

Reals, not feels. That’s what you have to remind yourself every time you attempt to make a data-driven decision. As tempting as it is to rely on your gut and your feels to make decisions, the data and the reals don’t lie. Data doesn’t care about your opinion so don’t be surprised when the data disrupts your worldview and punches you in the gut. As much as it hurts, that’s a better outcome than trying to grow a company by feeling your way through the dark.

Here are a few more blog posts about metrics for service contractors that you might find interesting:

Check out this image from an Amazon notification that I received during the holiday season.  It included imagery of the product (some black pajamas), a map of my neighborhood that indicates the location of my house, the current location of the delivery driver (the Santa sleigh), and a caption telling me Santa (aka Amazon) was just seven stops away and would deliver my package before 2:15pm.  It is interesting to see how much information Amazon provides as part of their customer experience, especially when compared to the data we observe in ServiceTrade. Amazon knows that it is almost impossible to give the customer too much information, and yet most commercial service contractors completely ignore this lesson.

Currently, fewer than 2% of ServiceTrade work orders include a notification to the customer that the technician is en route.  The feature is an easy one for technicians to access, but they just don’t do it. It’s a shame, because Amazon is not a fool. They know that customer loyalty stems from winning the information arms race.  Customers LOVE to know what is happening, especially if it involves zero effort on their part to dig the information out of the supplier. If it is simply offered as part of the service experience, it creates positive feelings about the service brand.  The notification creates a dopamine response from the anticipation that something good is about to happen. That little jolt of feel good neurotransmitter goes a long way in justifying higher prices during the next contract negotiation.

How easy is it for you to measure the number of digital records you transmit to your customers as part of your service experience (marketing impressions per service or MIPS)?  Do you hold technicians accountable for generating en route notifications, before and after videos and pictures, deficiency records documenting equipment failure risks, review requests to boost search engine optimization?  If not, why not? ServiceTrade measures all of these MIPS so that it is easy for you to monitor your success in sharing rich service records that keep the customer engaged and delighted in your work. Amazon knows there is no such thing as too much information.  Isn’t it time that your service business took that lesson to heart?

For the last decade, my career has been centered around recruiting and managing millennials. Plus, I am one.

When we talk about recruiting and retaining millennials, I know what a lot of people are thinking: I don’t want to.

Millennials have been labeled as entitled, unfocused, and job jumpers. Some even call us narcissistic. When you think about the stereotypical millennial, this may resonate:

 

“The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants.”

Said every generation about the next. Don’t believe me? This quote is from Socrates.

Love them or hate them, millennials should be embraced into your organization. That is, unless you’re ok not employing anyone between the ages of 23-37. This makes millennials the largest generation represented in the workforce today. We’re extremely underrepresented among skilled trade workers in the U.S.. There are a higher number of skilled workers over the age of 45 and a higher number of them between 55-64 getting ready to retire. So during the skilled labor shortage, the largest generation available to you is being underutilized. That’s the bad news. You need millennials in the business and in your industry, and right now, they’re not there.

The good news is that once you start attracting millennials, they can help you attract more. If you create an environment to retain them and help them to thrive, they’ll not only be the future leaders of your company, but they’ll help drive you forward.

So, what do they want? Millennials prioritize these five attributes when looking for a job opportunity:

  1. Money
  2. Job security
  3. Benefits
  4. Time off
  5. Great people

It doesn’t sound too different from what previous generations valued. What is different is how we define each of these. Remember, I’m an older millennial, and in 1998, I was 14 and a freshman in high school. This was the same year that Amazon started selling more than books and Netflix made it possible for me to rent movies without leaving the house.

About a decade later, I’d graduated college and moved to Montana with the dream of being on ESPN someday. It was also the time we went from

to

Suddenly, information was in the palm of our hand and we were connected with people across the country and around the world. We had an inside look into people’s lives. This was also the time of the great recession with home foreclosures, the stock market crash, and bank bailouts. And in 2008 we went from 630,000 Americans who were unemployed to 11,400,000.

Millennials grew up in a world of constant innovation throughout our adolescence. We became used to instant gratification, information at our fingertips, and glorified easy-money lifestyles. While many of us were impacted by the recession in our adult lives, we’ve really only seen a growing economy and we’re trying to optimize our own growth through it.

So let’s look at those five priorities again.

Money. As always, money is important. But what I hear is that millennials don’t want to pay their dues. They want it now. They don’t want to work for it. Well, you could blame Mark Zuckerberg. He became a millionaire at age 22 and a billionaire at age 23. So in one year, he want from a millionaire to a billionaire. It took Warren Buffett 26 years to do the same.

Social media has opened the door for us to see those glorified lifestyles. We get to see the best part of people’s lives. Lifestyles and experience let us show off the best part of our own. We want to be able to afford it. The skilled trade industries are increasing wages at a slower rate than others. Be competitive. Know what industries you’re competing against for employees.

Job Security. While most millennials don’t remember details around the last recession, we weren’t blind to the millions of people who were suddenly employed. For older millennials, we entered the job market and were suddenly competing with people with 10, 20, 30 years’ experience for entry-level jobs. Meanwhile, Zuckerberg went from a millionaire to a billionaire. So job security meant having the experience, the skills, the ability to self-improve, grow, and have the opportunity for growth.

It’s not just the second-highest priority that millennials look for while job searching, it’s also the second-highest reason why people leave their existing jobs.

Most millennials would prefer staying with the same company for the long haul but only if the growth opportunity exists. Ask yourself, when you have millennials who were in the business for a short period of time, how valued did they feel? Did they make an impact? Did they have an opportunity to grow, and did they know that?

Benefits. Traditional benefits like healthcare and retirement still apply – but those have become basic requirements. Lifestyle and experience have really expanded the concept of benefits.

This picture of me was part of a recruiting campaign for a company I worked for. There isn’t a software company that doesn’t advertise benefits like free snacks and things that some people call silly or distractions like Nerf guns, video games, or beanbags. They all play into the concept of lifestyle and experience that aren’t restricted to after 5pm. Ask yourself, what kind of lifestyle are your benefits supporting? Fun and fitness? Fun and creativity? Furry friends?

Time off. Growing up in a world when you’re constantly connected means that work doesn’t happen between 9-5. You aren’t restricted to an office or a desk. Because we’re constantly connected, the flexibility to step away is more important. We want the ability to take care of our personal lives, even if that’s during the week. Things like taking extended vacation is highly valued. I know these things are easier to do with office staff than with technicians, but I’ve talked to several companies who have worked with technicians on creating some level of flexibility. Get creative. It takes some work, but that work pays back dividends.

When millennials talk about time off, it’s not about unplugging. We’re addicted to our phones. We don’t unplug that much. It’s more than anything about flexibility.

Great people. Back during that recruiting campaign I mentioned earlier, I did a radio ad with a tagline “I have fun at work.” I wasn’t lying. I had a lot of fun at work. When I left six years later, the people were the hardest thing to leave. Looking back, the people kept me there for an extra year.

There are studies that show that having a work best friend increases productivity, job satisfaction, and retention. Those miscellaneous reasons in the chart above why people leave are often because of a toxic workplace and bad managers. So great people make a big difference.

Know what is important to all your prospective employees. Give your managers the resources and support to create an environment that makes everyone thrive. Millennials may value things a bit differently, but you’ll find that at the end of the day, they share common personal and professional goals with your more experienced employees.

It’s always interesting to look back at our blog posts at the end of a year and see what our readers were most interested in. In 2018, there was a clear theme:  Using technology to do more and earn more. Here is the top 10 list from 2018:

  1. How to Make Billions Selling Nothing – The Story of Red Hat
  2. Jeff Bezos’s Advice for Service Contractors
  3. What skilled labor shortage?
  4. What’s technology worth? How to value your technology investments.
  5. 254,484 Quotes: Rich, Fast, and Easy
  6. An Easy Differentiator for Service Contractors
  7. A Story of Growth – AAA Fire Protection
  8. Soon: The Smart Service Revolution
  9. Good is Not Good Enough – How Amazon Raised Expectations to Feel Good for Commercial Service Contractors
  10. Fraud Doesn’t Pay, But Consistent Results are Worth Billions

 

Our favorite read from 2018 is the new book Money for Nothing: How Commercial Service Contractors Earn More Pay for Less Work by Billy Marshall and Shawn Mims. Get your copy at Amazon.com.

We hope Money for Nothing, these posts, and those to come in 2019 help you achieve your audacious goals. Happy new year!

As VP of Customer Success at ServiceTrade, what everybody calls me at work is “that guy who can answer your questions about integrations.” The number of meetings I’ve been called into to discuss integrations with customers has gone up dramatically in 2018. I’ve noticed a theme in a lot of these conversations: customers aren’t really comfortable talking about integrations. They don’t know the terms, they don’t know where to start thinking about it. So today I want to tell you some basics about how to integrate good software with ServiceTrade.

Good software should have an easy-to-find API. If you aren’t sure whether a software application you’re considering has an API, it should be as easy searching Google for “____ API documentation.” No search results is a bad sign!  Good software is often found on Zapier.com, which is an integration platform that moves information between web applications automatically. If a software application is on Zapier, you can be assured that it definitely has an API, it’s modern, and that it should play nicely with other pieces of good software. If you’re buying good software, you can avoid getting trapped by bad software decisions.

To set the stage to talk about good software integrations, it’s important to understand that everything in life – including software – has a special purpose. It has one thing it was designed to do and if you expect much more out of it, then you’re going to have a bad experience.

Let’s use an analogy. If you had to choose between those two vehicles:
If I want you to hop into one, head around town, pick up groceries, drop off the kids. Which one would you choose?

The car. That’s an easy one.

I’ll ask you another easy one.  What if I want you to tool around the bay, do some fishing, and some sunbathing.

Right. The boat.

Let me make it a little bit harder. What if I ask you to do both of those things? What if I ask you to run some errands, pick up the groceries, then head out and do some fishing and some sunbathing, then head on back home?

I think you’d tell me that you’d hop into the car to do the first set of things and head down to the boat to do second of things, then you’d get back into your car to head home.  That seems pretty obvious.

But when it comes to software, a lot of people think, “You just asked me to do car things and boat things . . . I’ve got to have a carboat!  How am I going to do car things and boat things unless I go buy one of these?”

This looks a little ridiculous, it doesn’t make any sense, and I think it’s obvious when you look at this photo why. This is not a very good car. And it’s not a very good boat.

When you’re looking to solve your business problems, that is the perfect time to be thinking about choosing the right software application for each of your specific problems. It’s also the perfect time to make sure you’re not about to make a carboat-buying decision.

So what should you look out for?  If you hear:

  • “Well, it wasn’t designed to do that, but it could.”
    • They mean that 8 months and thousands of dollars later, it still won’t do what you want.
  • “I think there’s a workaround.”
    • They mean it’s going to be harder and more complicated than you want.
  • It doesn’t have all those things you said you needed, but it should get the job done.”
    • They mean it doesn’t have the things you need and it won’t get the job done.

We do not tell people that ServiceTrade is going to solve all their business problems. We often point out all kinds of things that we aren’t the best choice for like payroll, accounting, truck tracking, payment processing, and sales CRM. We like to talk about ServiceTrade as good software that you can integrate with other good software to solve those problems.

So rather than focusing on making a carboat, focus on easing the car-to-boat transition. Or, bringing it back to software, easing the transition from one piece of software to another piece of software. At the end of the day, that is what integrating is all about – easing the data transition from one system to another system.

But if you aren’t careful, you’re going to end up with a very bad car-to-boat transition.

Let’s define 4 stops on the road to success so we don’t drive a boat into a car.

1. Know what you want.
You’re going to have all kinds of questions about how things work, and that’s good. I recommend working a structure around those questions called “if this, then that.”  It’s very simple: If this thing happens, then this other thing should happen. If you use this formula to think about what you want to happen in an integration, you can hand this to any software developer and you’ll be way ahead of the game.
2. Document your ideas.

      1. Determine the source of record – where your information originates and what direction that data should sync.  Here’s an example using Pipedrive (a CRM) and ServiceTrade.
      2. Create a Flowchart.
        Create a visual representation of your integration. Check out this example from the online cloud-based application at app.flowmapp.com. I used this tool to document the service workflow for a ServiceTrade customer to clearly demonstrate where ServiceTrade fits into their existing business process. You get a really nice visual representation of your integration and gives you a good way to make sure you’ve covered all your requirements.
      3. Document a scope that includes:
        • Description
        • Requirements
        • Desired user behavior
        • Deliverables
        • BudgetFor documentation, use online collaborative tools like Google Apps. The sharing feature and version control of shared files gives you a single source of record for your integration documentation.
      4. Test cases
        This is a more detailed version of your “if this, then that” thought process. It’s clearly-defined step-by-step processes that ensure that you can test that the integration is working like you expect.

3. Manage the project.
Use project management software to organize your thoughts, your plans, and your team around the integration. Take a look at Asana and Trello.

4. Do the work.
Who is going to do the work? Is it you? This is the reaction you should have to that question:


There are lots of places to find qualified developers to write integrations for you. The first stop you should make is ServiceTrade. We’ve gotten pretty good at integrating various web apps with ServiceTrade. But we’re not the only game in town, you can look at hiring a freelancer from Fiverr, Upwork, and Freelancer. With everything you’ve documented, toss it to a developer and let them bid on it. You’d be surprised by what you can get done on these sites.

If someone else is doing the work for you, what are you responsible for?  Testing, testing, testing, testing, and testing again.

You’ll also be responsible for documentation for the business processes that you want everyone to follow. No matter how obvious steps are to you as the creator, it’s definitely worth documenting it for the rest of your team.

Here’s a list of applications that ServiceTrade customers have integrated with our app to expand the power and functionality of our application. It includes things like CRM, custom notifications to customers, after-service surveys, general data sync for additional file backup or sending notifications to Slack channels, custom forms, accepting credit card payments onsite, the possibilities really are endless.

Commercial service contractors, do delays in sending repair quotes to your customers impact your approval rate? How much? Are quotes more likely to be approved if they are paper or digital? Do pictures and videos help? These are easy questions to answer! Simply connect a business intelligence (BI) tool, like Amazon QuickSight, to the application you use to build and send quotes, like ServiceTrade, and analyze the data. It’s easy as pie.

OK, maybe it’s not that easy if you don’t have access to all these applications. On top of that, you also need loads of data that spans enough time to find statistically significant results. Don’t have access to all of those resources? That’s OK. We do. We analyzed 254,484 quotes created in ServiceTrade between January 1st, 2017 and July 31st, 2018 that were submitted to facility customers. From that data, we found that if you want to get quotes approved, they should be fast, rich, and easy.

Fast

We analyzed the time between when quotes were first created to the time they were first submitted to the customer to determine how much delays can impact the approval rate. This analysis does not take into account the time between the initial discovery of quoted opportunities to the time the quotes were created, but still offers a glimpse into the impact of delays on a customer’s probability of saying “yes.”

There’s no real surprise here. The longer it takes to get quotes into your customers’ hands, the less likely they are to approve them. The approval rate drops less quickly than I would have expected, but drops nonetheless. Turn quotes around as quickly as possible for the best outcomes.

Rich

Here’s your get rich quick tip of the day: Take more picture and videos, but not too many. Analysis of quote attachments, like pictures and videos, suggests there’s an optimal quantity that can maximize your quote approval rate; it’s 5. Fewer than that and you probably aren’t showing customers the full story and why they should approve your quote. More than that and you are likely overwhelming your customers with too much information.

Easy

Companies like Amazon and Uber set a high bar for customer experience and convenience. Data shows that commercial facility customers expect the same from you. You’re not going to spend billions of dollars on infrastructure to revolutionize commercial service contracting. However, simple conveniences go a long way. For example, sending quotes to customers online in a format that includes rich media and easy, one-click approval makes a big difference. Our data shows that ServiceTrade quotes that are viewed online are approved at a significantly higher rate than those that are not. For those that were not viewed online, this data does not distinguish between those that were delivered in a more traditional manner (email, snail mail, etc) or were just ignored by the customer. Either way, more views online mean more approvals.

You’re competing for a share of your customer’s attention and wallet. Their flooded inbox and growing to do list make it easy for them to lose track of priorities like your quotes for equipment repairs. Data suggests that email reminders give your customers the extra nudge they need to remember and prioritize your quotes. Reminders have diminishing returns but are effective at boosting overall quote approval rates.

 

Data knows best. Make your quotes fast, rich, and easy to get the highest quote approval rate. Want to dig deeper into your own data? Check out the Amazon QuickSight reporting enabled by ServiceTrade.

Shelley Bainter asked me to write this blog post explaining why I decided I needed to write The Digital Wrap and Money for Nothing in support of ServiceTrade’s marketing strategy.  It’s a great question. Interestingly, the books are mostly an extension/expansion/elaboration on a collection of blog posts and research that I along with Shawn Mims delivered in connection with ServiceTrade marketing activities.  There are two fundamental reasons that I write, and the books are just an outgrowth of those.

The first fundamental reason I write is because it helps me lead. I believe the best way to prove you are sane enough in your thinking to lead an organization is to commit your most important thoughts to coherent prose.  It did not surprise me at all when I read that Jeff Bezos banned Powerpoint in executive meetings at Amazon and instead required all important decision matters be committed to six-page memos with narrative structures.

If you cannot tell the story you want others to believe and commit to action, you are not prepared to lead. So I use writing to organize the ideas I want ServiceTrade to embrace and extend to our customers as our value proposition. It proves to myself that I am coherent in my thinking, and it gives my executive team something to debate, debunk, or improve for their own narrative purposes with their teams.

The second reason that I write is because I am a big admirer of the trick that two other MIT alums pulled with their company, Hubspot.  Long before Hubspot had a product that was worthy of market leadership, the two founders, Brian Halligan and Dharmesh Shah, had a concept that was worthy of market consideration.  They coined the term and wrote the book Inbound Marketing. It gave the new company, Hubspot, standing in the market prior to the product Hubspot having any significant leading features. Customers will invest in leadership ideas and demonstrate patience with the product if they see a bright future. Halligan and Shah demonstrated leadership and bought their company mind share that they were later able to convert into market share as the product matured.

Similar to inbound marketing for Hubspot, the concept of a digital wrap for ServiceTrade is new and novel among service contractors seeking technology solutions to enhance their business.  The digital wrap gives ServiceTrade something cool to share with prospects in order to challenge their notion of what it means to be competitive in a world dominated by digital experiences from Amazon, Uber, Netflix, Apple, and others.  How am I going to compete with an online customer service experience when my customers are comparing me to these mega digital experiences? ServiceTrade has a novel concept called the digital wrap that enables scalable and memorable online customer engagement.  Writing the books gives our small company standing in the market because we are talking about something unique, differentiated, and important.

You don’t have to publish books to benefit from these reasons that I have adopted for writing. Use the concept of narrative memos like Bezos does to force you and your management team to organize your thoughts into ideas that can be acted upon.  Build compelling stories about your unique capabilities to share with customers in the form of blog posts or videos. It is easier for a customer to consider your product when they see or read a story that compels them to change their assumptions because they believe you are predicting the future.  A good story helps them buy into your value.

=-=-=-=

We’ll give the first ten readers to respond a copy of Billy’s new book, Money for Nothing. Send your request and mailing address to  shelley.bainter@servicetrade.com

Megabrands like Amazon and Domino’s are outselling their competitors and changing consumer expectations by going on offense and providing better customer experiences that are convenient and transparent. As easy as it is to dismiss these examples because they are seemingly unrelated to service contracting, even the local mechanic is giving their customers a better service experience. Take a look:

Do you trust that this mechanic delivered the services they were supposed to? Of course, you do. You watched them do it! The mechanic could have hoarded this video to play defense and cover their own ass in case the truck owner decided to fight the bill. Instead, they sent this to the customer online in order to be more transparent and provide a better customer experience than their competitors.

Be more like the mechanic. Be more like Domino’s and Amazon. Stop hoarding data just in case you have to defend your invoices. Go on offense and start sharing content with your customers to give them more than your competitors ever will – a contractor they can trust.

Every Sunday evening I receive an email from the software investment banking team at Key Bank Capital Markets. The subject line of the email is “Software Valuations,” and the email contains a link to a weekly report that details the valuation metrics of about 100 different software companies. All of these companies are public corporations, so their stock information is readily available for the folks at Key Bank to analyze. Most of the companies they follow are software as a service (SaaS) companies, and because ServiceTrade is a SaaS company, this report is very interesting to me as the CEO and a shareholder of ServiceTrade. It is my job to maximize the value of our stock for the benefit of all of our shareholders, and the Key Bank team helps me do this through their analysis of SaaS company valuations.

Here is an annotated version of a table they publish for about 70 different SaaS companies. I limited the table to 10 of the entries to make a point about the importance of growth to shareholder value.

 I sorted these from high to low based on the value-to-revenue multiple. The value-to-revenue multiple indicates how much the total of each company’s outstanding stock is worth as a multiple of their anticipated 2018 revenue. The number-one performer is Shopify, with a value-to-revenue multiple of 17.2X. The total value of all outstanding Shopify stock is equal to 17.2 times the revenue expectation for Shopify in 2018. You are reading that correctly. Investors are willing to buy Shopify stock at an extraordinary premium because they believe Shopify is going to grow, grow, grow. And Shopify is delivering on that promise. Note that Shopify expects to grow revenue by 51.1 percent in 2018 compared to their revenue in 2017. That’s a terrific growth rate. Also note that Shopify has a value of NM (Not Measured because they are not making a profit) in the category of price-to-earnings. That’s because Shopify is going to lose money in 2018. They will probably also lose money in 2019 and 2020 because they are investing like crazy to continue to grow. Despite this lack of profit, their stock is still extremely valuable.

Contrast Shopify with ChannelAdvisor. Their stock trades for just 2.9 times the revenue expectation for 2018. It’s interesting that Shopify and ChannelAdvisor offer a similar value proposition with their software applications – they both help small merchants sell their products online. The biggest difference is that Shopify is expected to grow 51.1 percent in 2018 and ChannelAdvisor is expected to grow only 6.8 percent. The expectation of growth explains why Shopify is almost six times more valuable than ChannelAdvisor.

Why is any of this relevant to your business? It is very relevant because their business model is similar to yours in that they sell a subscription program to their customers. If you are following my advice and developing a subscription program for maintenance, monitoring, and inspections for which you sell an annual or longer contract, your business is similar to these companies, and investors will ultimately value your business in the same way they value these businesses. The point I am trying to make is that growing is better than grinding when it comes to creating value for shareholders.

Grinding means pushing everyone in the organization to squeeze more profit from the current revenue stream. I have nothing against profit, and I think you should aim to be profitable. But grinding does not significantly increase the value of your business if there is the possibility to grow the business instead.

Growing is much more fun for everyone than grinding, for all of the obvious reasons. Growing means that new stuff is happening all the time. New products are being introduced to the market. New customers are being served. New employees are joining the company to help take care of the new customers. New promotions are being handed out because there is more responsibility to be shared. New offices are being opened. New equipment is being purchased. New tools are being deployed. New training is underway on how to use new tools. New, new, new means fun, fun, fun.

Grinding sucks because old tools are breaking and not being replaced. Old employees are leaving and not being replaced or taking on more responsibility for no increase in pay. Old customers are complaining because they are not getting good service. Old trucks are breaking down and disrupting the workday. Old, old, old means suck, suck, suck.

What is your plan for growth? How are you going to orient your company in a direction that gets to the fun of growing? It begins with a commitment to growth. If there is no expectation in the company that growth is an important metric, then no growth will occur. Set growth targets as part of your planning process, and don’t be shy about asking people to stretch to achieve something ambitious. For organic growth, plan to grow by 10 percent per year, and think about pushing for 20 to 30 percent (depending on the size of your company). All the best employees in your business will rally around the growth goal because none of them signed on for a career in which not much was achieved. Your employees will get much more career development from an aggressive growth strategy.

Maximizing the value of your business is the most tangible outcome associated with a successful growth strategy. The difference in valuation of the companies tracked by Key Bank in the SaaS market based on their respective growth rates is extravagant, and it should be a lesson for anyone who wants to build value with a subscription business model. The intangible value of having a growth strategy is that you will attract, develop, and retain a better class of employees who value your company because they expect to experience greater career development. They will be exposed to ever-increasing levels of responsibility, which leads to higher job satisfaction and better retention. Growing is fun and grinding sucks, so aim for growth and get more pay and have more fun along the way.

You won’t make your customer feel good if you provide convenience, transparency, and avoid bad surprises. Those are the bare minimum to meet their expectations.

From my last blog post:

Dr. Feelgood, from the 1989 Mötley Crüe single, was a drug dealer who got the name because he made his customers feel good. This kept his customers coming back for more. Do you make your customers feel good? It doesn’t really matter if you do a good job for them. If you don’t make them feel good about it, they won’t come back for more.

Obviously, commercial service contractors shouldn’t give their customers illicit drugs, but they can stimulate the same brain receptors that release dopamine, the feel-good hormone that drives positive reinforcement in the human biological reward system. Unfortunately, that same reward system has negative reinforcement mechanism called cortisol, the stress hormone, that’s easily triggered by bad customer service. Understanding what triggers these hormones is fundamental to creating an amazing customer experience that reduces stress, gets customers hooked to your brand, and differentiates your company from the competition.

In my previous post, I dove into the three stressors that trigger cortisol in your customers: inconvenience, uncertainty, and bad surprises. This week, I want to shift gears and talk about the three dopamine triggers you can take advantage of to make your customers feel good. Unfortunately, it’s much more difficult to elicit a dopamine response in your customers than a cortisol response because the typical triggers like sex and drugs are not tools you get to use. Instead, you’ll have to rely on subtle psychological triggers that require finesse to provoke.

Good Surprises

Our brains are wired to be delighted by good surprises. Neuroscientists from the Baylor College of Medicine conducted a research study in which volunteers played a computer game where they were presented with a red and blue deck of cards with the objective of accumulating as many points as possible by determining which deck contained more “reward” cards. They could select to flip the top card of either deck to receive a reward card that gave them points and triggered the cha-ching sound of a cash register, or a card that would remove points from their accumulated gains. Over time, they would learn which deck gave them more reward cards so they could accumulate points faster. Researchers modeled the volunteers’ expectation of reward based on their selections to classify gains and losses as expected or unexpected. On average, an unexpected reward resulted in highest release of dopamine, the feel-good hormone.

Take advantage of this psychology and provide facility managers with the great surprise of an amazing customer experience. While all of your competitors manage their service cycle and customer service with calls, paper, and ad hoc emails, you’ll stand apart when you offer a convenient, novel experience that includes online summaries of services with rich media, automated notifications (MIPS), and the ability to leave reviews. Here’s what a facility manager told a service contractor about the online service reports (Service Link) he receives that include loads of pictures, videos, and audio notes pertaining to the services:

“I love this feature and report. Your competition has nothing like this.”

The unexpected surprise of a better experience made him feel good. Now, this novelty will wane, and that’s OK. After the novelty is gone, you’ll have set a new precedent for a great customer experience that your competitors can’t touch. Their approach will feel inconvenient and uncertain. As I discussed in the first installment of this blog post, that’s a formula for the stress hormone cortisol – and a bad customer relationship.

Storytelling

Everybody loves a good story. Entire books, like Jonathan Gottschall’s The Storytelling Animal: How Stories Make Us Human, are dedicated to the science of great storytelling. Gottschall tells us about an experiment performed by Paul Zak, a neuroeconomist, found that our bodies release more oxytocin, the hormone that causes empathy, when we consume information in a story format as opposed to a simple factual summary. College students were offered $20 to take part in a study where they were presented with either a story about a father and his dying child or a factual summary about the impacts of cancer on children. After the presentation, the students were asked if they wanted to donate any or all of their $20 to a cancer research institute for children. Students that were presented with the story had significantly higher levels of oxytocin in their blood and, on average, donated more money. A good story with a classic arc makes us empathize with the main characters. We feel how they feel.

After the novelty of your shiny new customer experience wears off, you can take advantage of this empathetic trait to trigger dopamine by telling your customers the story of the challenges your team overcame. Start by introducing the hero, your technician, with an en route notification and an in-person greeting when they arrive. Next, show customers the challenges that the hero faces with pictures and videos of the equipment issues. How ever will the hero succeed? Present a solution with an online quote that shows how your tech will save the day and an explanation of the bad outcomes that will occur if they don’t act. Those unfavorable outcomes are the villain that add tension to the story. Most importantly, show your customers exactly how the hero saved the day with pictures and videos of the repaired equipment. When you properly craft this story, your customers will empathize with the main character, your technician, and receive a hit of dopamine from the happy ending that avoided the perilous bad outcomes.

Anticipation

Interestingly, our bodies often reward us with more dopamine when we anticipate a reward than when we actually receive a reward. Robert Sapolsky, a neuroscientist, performed a study on monkeys that were trained to, after given a signal, press a button 10 times to receive food. The monkeys’ dopamine levels rose immediately after the signal, but subsided when they were done pressing the button. The anticipation of the food released more dopamine than the reward of the food itself. When the food was only dispensed 50% of the time, their dopamine levels doubled in comparison to what they were when then the food was dispensed every time. Just like a slot machine, the mix of anticipation and uncertainty about the reward yielded a significant dopamine release in the monkeys.

You’ve already shown your customers that you’ll give them a hit of dopamine when you show up with a novel customer experience and a great story. That’s their reward. Now, all you have to do is train them to anticipate it. Teach them to anticipate a feel-good experience when you give the signal of an appointment reminder or en route notification. You’re not going to have an exciting story for every service. For example, routine maintenance work and inspections where your techs don’t find any issues don’t make for an enthralling story. That’s OK. As the monkeys show us, you don’t have to deliver the reward 100% of the time. Instead of a mediocre story on every job, tell them an incredible story, full of challenges and and successes on the jobs where your techs save the day. The important takeaway is that you should give your customers the signal on every job in order to elicit their anticipatory dopamine response.

 

Just like Dr. Feelgood, you can keep your customers coming back for more. Instead of drugs, you can use consumer psychology to hack their evolutionary reward system to prevent the release of cortisol and evoke the release of dopamine. If you succeed in making your customers feel good, your service brand will be impervious to the competition and your customers will be happy to pay you more for the premium experience you give them.