In 2019, there’s a fresh wave of ransomware hackers targeting US-based fire and life safety contractors that have legacy server systems. Several have been either forced to pay a bounty or face devastating disruptions when the cyber attack is unleashed.  If you believe you are safe because no one is going to notice or care about your business, you are wrong. And the weakest link on your network that hosts your legacy server systems is no match for the professional criminals that are extorting you.

 

Now is the time to move all of your critical customer operations data to a modern cloud architecture.  It is no longer a matter of being competitive in customer operations in your market. It is now about a choice to remain an ongoing business concern or be wiped out by a cyber criminal.  The idea that you want to connect all of your technicians and all of your customers to a server on your network for them to collaborate in delivering your service value opens up innumerable vulnerabilities.  It is just a crazy idea. If instead, they are all connecting to Amazon’s network (all ServiceTrade applications are protected by Amazon’s security) or Google’s network or Microsoft’s network, you are largely insulated from attack.  

No one keeps their financial assets in a safe on their property any longer – they trust a commercial financial institution to be a good steward and use computers to deliver interesting applications to protect those assets while growing their value.  It is time to take the same approach with what is arguably the most valuable asset of your business – your customer operations data. Who do you serve? What is the schedule? What equipment do they have? How do they pay you? What is your contract with them?  What new opportunities for revenue are at their locations? If this information is protected by Amazon or Google or Microsoft, your business can continue to deliver value everyday. If it is vulnerable because of a legacy server on your network, that value can slip away pretty quickly.  Don’t lose what you have worked so hard to build simply because you did not take the time to transition to a modern customer management platform.

 

Need help buying SaaS software?

You’ll always make good software-buying decisions when you follow the 6 pieces of advice in the Software Buying Guide for Commercial Service Contractors. Download and read it here.

Commercial service contractors know a thing or two about continuing education (CE). Depending on your line of work, ignoring CE is not an option if you want to stay in business. Regardless of your line of work, encouraging CE throughout your team will keep you evolving and moving forward.

Most of the continuing education available is technical training where technicians learn about systems, safety, and code. But where are your techs and office staff learning how to use the systems you use in your business and how to give their customers a great customer service experience?

ServiceTrade Certification is online courses that teach users in all roles how to use the ServiceTrade web and mobile app. There are role-based courses for technicians, office users (schedulers, dispatchers, salespeople), and administrators (users with management permissions.)

The companies that get the highest return on their investment in ServiceTrade use the greatest number of its features. The average growth rate across our customer companies in 2018 was 18%, but it was even higher for those that take advantage of everything the app offers.

Application development moves fast. You’ve probably heard that we update our web app every two weeks (here are the release notes) and the mobile app quarterly (here are the release notes for that.)  With so much changing in our app all the time how do our users keep up?

The answer is simple, we update the online courses in ServiceTrade Certification as we evolve our applications. Your ServiceTrade Certification subscription gives you access to all the how-to instruction for new features.  

For example, we just completed a revision to our ServiceTrade Certification Course for Office Users.  Here are a few of the things we updated:

  • We added instructions about navigating the ServiceTrade web app that shows new users know where to find what they’re looking for.
  • How to set up customers and their associated locations so when you need their data in the future, it’ll be logically organized.
  • We renovated our jobs page, where you’re likely to spend a lot of your time managing the work you do for customers.
  • When the work is done, completing a job signals to your teams that post-job customer engagement and invoicing can proceed.

If you aren’t familiar with these parts of the web app, the course will teach you both how to use it and why it matters.  If you’ve previously been certified as an office user, log in to the ServiceTrade Learning Center and select the office course. The platform will automatically show you which lessons have been updated, making it really easy for you to only see what’s new if that’s what you want.

So, are you an office user?  If you are already ServiceTrade Certified, take a few minutes to see what’s new in the course and start using these new capabilities.  If you aren’t yet certified, you can learn more about the ServiceTrade Certification program at https://www.servicetrade.com/services/certification-courses/

 

Go to the Learning Center to take the course.

When we talk to commercial service contracting companies about going paperless, the conversation usually starts with how they envision paperless processes will benefit their back offices by saving time and money. They want to send invoices faster, save money on postage, and reduce tech phone time.

Going paperless definitely results in these and other improvements in administrative efficiency. But once companies start making the transition, we usually hear that it takes their techs longer to fill out a form on a tablet or their phone than it did on paper.  And we don’t disagree with them. Pencil whipping paperwork is just faster.

However, these same companies find that moving the information online is worth every bit of additional effort when the ultimate goal is to make your customers’ lives easier. Going paperless necessarily means capturing, organizing and communicating that information in a more effective way that meets (and hopefully exceeds) your customers’ expectations.  If you focus solely on the administrative efficiencies, you’ll miss the bigger picture – the opportunity to improve the customer experience and drive scalable growth.

What Do Your Customers Expect?

In short, they expect access to the information they want, when they want it. (You can thank companies like Netflix and Amazon for this on-demand mentality.)  Remember when you used to have to watch the local news to get the weather forecast? Or better yet, when the Weather Channel made everyone’s lives a little bit better when they brought us weather every ten minutes through their segment local on the 8s? Today, you just open your favorite weather app on your phone, or, if you’re like my 5 year old, you just ask Alexa.     

Your customers’ expectations are similar when it comes to engaging with you.  Imagine a facility manager or building owner who has been running between meetings all day. He finally gets some desk time – at 9 pm, and wants an update on the work that was performed by your techs earlier that day. He needs details now and he can’t wait to call your office tomorrow morning when your first staff person arrives at 8 am.  

How Going Paperless Improves Customer Experience

The most detailed information in the world is of little use to your customers if it’s all on paper copies of quotes, work orders, and invoices filed away somewhere in your office.  Or if they have to call your office during normal business hours to get it. Let’s look at a few ways going paperless improves the customer experience and strengthens customer relationships.

The customer can engage with you 24/7 from any device.

Like I said, today’s consumer expects access to the information they need, when they need it.  We can do everything from our phones these days. Order groceries. Buy a birthday present. Make a tee time. Why not make it as easy as possible for your customers to engage with you?  So whether they need to submit a service request, review the work your techs did that day, or approve a quote, they can easily do so from their computer or phone.

The customer can speak with any employee to get an update.

They don’t have to wait until you track down the person (or people) who did the work.  So when a new tech goes out on a service call, he can quickly see what work has been done on a piece of equipment by previous techs by looking at the service history.  He can immediately jump into an intelligent conversation with the customer, and not have to tell the customer he’s going to have to get back with him after he makes a phone call.

Building trust isn’t limited to face-to-face interactions.

As you grow, it’s difficult to scale the personal touch that you built your company on. The good news is, going paperless provides ways to build trust through online interactions with customers.  You can’t attach pictures, videos, and audio notes to paperwork. You can’t tell a rich story about the services provided with paperwork. All you get is chicken scratch in broken English. Going paperless means collecting rich media in an organized way that lets you easily share it with your customers and show them what’s going on with equipment.

Share urgent or essential information with customers in real time.    

I remember the first time my weather app sent me a push notification about a serious storm that was sweeping through the area. I was about to leave my office and head home. Because of that notification, I made the safer decision and delayed my commute until the storm passed.

You can do the same for your customers. Take the facility manager or building owner from my earlier example. Would he prefer to be notified about a serious equipment issue while you are on site and can address it, or wait to get a call about it later, which forces him to schedule another call and wait for you to come back out? You guessed it.  When it comes to information that is essential to your customers, sooner is better. Pushing notifications to your customers regarding essential or urgent information will set you far ahead of your competition.

Ready to Get Started?

Anyone who started down the road of going paperless will tell you it takes more than scanning all those piles of paper into pdfs and saving them to your desktop.  Going paperless is a big step in the bigger journey of digital transformation – a journey that requires a company to take a closer look at their business processes and how they deliver customer service.

To realize the full benefits of going paperless, don’t limit your business by thinking small and focusing solely on administrative efficiencies. The real value is in improvements to customer engagement and service. A better customer experience means happier customers and a competitive advantage in your market.  Going paperless allows you to leverage the power of the internet to drive truly scalable growth.

Think back three months ago to the start of the year – did you set goals for your business? Of course you did. But how do you know your goals are focused on the right things?  That you are monitoring the right numbers?

To help make sure you are on the right track, we’ve put together three questions for you to answer. The end of the quarter is a great time to run a diagnostic check on your company’s performance. 

Don’t avoid this exercise just because you are nervous about what the numbers might tell you.  A clear understanding of where you stand currently is essential if you want to set realistic goals that will move your business forward.

Here are the questions you should answer about your business:

  1. What is your revenue per technician?
  2. What is your ratio of maintenance work to repair work?
  3. What is your ratio of revenue delivered to revenue available?

A Closer Look at Key Metrics

Let’s take a closer look at each of these questions.  Below, I’ve outlined some benchmark data from high performing companies and tips to improve performance for each.

Revenue Per Technician

Technician revenue will vary by specialty.  Generally, we see the following annual averages among high performing companies:

  • Fire protection technicians (extinguisher): $200k/year
  • Fire protection technicians (sprinkler and alarm): $300k+/year
  • Mechanical service technicians: $400k/year – $500k/year

All too often, we find commercial service companies that want to improve their numbers but are fixated on too small of a piece of this equation – usually utilization of technician time.

To hit the $400k+ mark, you have to think bigger.  How much are you charging the customer? Market leaders can charge more.  Are you finding high margin work that doesn’t require as much labor? This includes repair work.  

Let’s look at how you can maximize repair work opportunities.

Ratio of Maintenance Work to Repair Work

Tracking this metric shows you where opportunities for generating more revenue may be falling through the cracks. To increase repair revenue, you’ll need to track:

  1. The number of deficiencies techs are reporting;
  2. The number of those deficiencies that convert to quotes; and
  3. Your approval rate on those quotes.

Our data shows that high performing companies convert at these rates:

  • Mechanical services: $1 of maintenance revenue to $4 of repair revenue
  • Fire protection: $1 of inspection revenue to $1 of repair revenue

For example, a fire protection company performing $5M in inspections should expect to generate an additional $5M in repair work from deficiencies found on those inspections.  While a mechanical company performing $3M in inspections should expect to generate an additional $12M in repair work. Think about how that could impact your 2019 earnings.

Increasing Quote Volume

Giving your techs the ability to gather detailed information about deficiencies is a surefire way to increase quote volume.  (To learn how one of our customers increased their quote volume by 50% using ServiceTrade, click here.) This means providing technicians with mobile applications so they can go beyond describing deficiencies to showing them – through photos and videos – which can be quickly communicated to your sales staff, who can turn them into quotes.

Increasing Quote Approval Rate

Your quote approval rate is determined by dividing the sum of approved quotes by the total number of quotes sent. For a more in-depth discussion on measuring quote approval, take a look at our previous post on the subject.

We talk to people all the time who say they have a 90% approval rate. But when we dig a little deeper and ask questions, we find they don’t actually know their approval rate. They’ve never measured it. On top of that, they send out a very low volume of cherry picked quotes. If your approval rate is in this range, take a closer look at how you are collecting the data.

Many factors improve quote approval rates, but the top 3 factors that we’ve found are:

  • Turn quotes around within 24 hours of finding the problem
  • Include rich media (photos, videos, audio) of the issue
  • Offer a frictionless quote approval experience in which your customers can view and approve quotes with only a few clicks

By doing these three things, your online quote delivery process will earn a 3x approval rate over traditional quote delivery processes.

Ratio of Revenue Delivered to Revenue Available (Done versus Due Ratio)

Finally, you want to track your done versus due ratio.  To calculate this number, divide revenue delivered (or work that is DONE – the amount of planned work completed and invoiced) by revenue available (or work that is DUE – the total amount of work authorized by maintenance contracts or approved quotes.)  

Highly productive companies will generally have a ratio around 95-97%.  Companies with low productivity will be closer to 75%. For a more in-depth discussion on this metric, read our earlier post on the subject.

Improving Done v. Due Ratio

The first step, and one we see many companies struggling with, is organizing and tracking this information in a manageable way. (Unless they are using ServiceTrade’s QuickSight capabilities.) But once you have a tracking system figured out, you can improve this ratio by prioritizing work related to higher margin contract maintenance, monitoring, inspection and planned repair revenue over unplanned service calls.

Setting Goals for the Next Quarter

Once you have determined your Q1 numbers, you can look to setting goals for Q2.  For example, to set your goals for revenue per tech, break down your first quarter revenue by corporate division and by technician.  How much revenue per day and how many jobs per day do your best techs drive? How do your best techs handle sending quotes?

Use performance of your best tech(s) as a goalpost for all techs.  Once your techs start hitting that number, move it out. Your goal should be to increase revenue per technician 20% per year every year, or approximately 4.5%-5% per quarter.  

Even if you don’t like the answers you find, you’ll feel more in control with a realistic snapshot of where you stand on these key questions. Schedule a recurring quarterly check-in on your calendar so that you can compare your performance quarter-to-quarter.    

Interested in learning how ServiceTrade can track these metrics and improve your performance? Schedule a demo with us today.

Do you have ambition to become the leading service contractor in your market? Does it feel like operational and administrative inefficiencies are holding you back? We get it. It’s not easy to lead the market when it feels like you can’t even get your own house in order.

We’ve helped hundreds of our customers streamline operations so they can stand out from their competitors to grow their businesses. They don’t, however, stand out from the competition simply because they have a better work order process. Instead, they lead their market because they have a better customer journey.

What is the customer journey?

A customer journey is the complete sum of experiences that customers go through when interacting with your company. From the marketing and sales cycle to service delivery to account management, the customer journey includes every transaction and every communication.

Actually understanding what makes your customer tick and offering a convenient journey will set you apart from the competition, reinforce how you are different and better, and help you win more business.

Stages of the customer journey 

The journey can be difficult to map because it will vary from customer to customer and won’t follow a perfectly straight path. However, there are five general stages that you can use to start.  These are:

  1. Seek: They need a contractor and will begin the search.
  2. Buy: They’ve narrowed down their options and will sign a contract.
  3. Onboarding: They’ve signed your service agreement and will prepare for their service relationship with you.
  4. Service: They are counting on you to keep their assets operational.
  5. Performance Evaluation: They assess how the relationship is going. This can go one of two ways: 1) they continue to work with you or 2) they don’t.

Mapping your customer’s journey

To start mapping your customer’s journey, ask two simple questions for each of the five stages.

  1. What do they need? Remember, what they really need might not align perfectly with what they think they need.
  2. How can you best meet their needs?

Let’s walk through the framework to help you get started to mapping out the journey unique to your customers.

Stage 1: Seek

What do they need?

They need to find a new contractor.  It could be that another contractor failed them, or they have a new building to manage with no existing contracts.  It’s difficult to find good contractors so they’ll search online, ask their professional peers for recommendations, conduct an RFP, or reach out to contractors they’ve trusted in the past.

How can you best meet their needs?

Make it easy for them to find you online. That’s their first stop and it’s relatively easy for commercial/industrial service contractors to show up in the top Google results compared to their residential counterparts. For more word of mouth recommendations from their professional peers, deliver a memorable customer journey that stands out from your competition.

Stage 2: Buy

What do they need?

They’ve narrowed it down to 2-3 potential contractors.  They need detailed information about how you will make their lives easier, save them time and money, etc. They’ll compare the quality, convenience, and price of options. Which contractor is different and better?

How can you best meet their needs?

Stand out from the competition by demonstrating how you will deliver a Money for Nothing program that minimizes downtime, outages, and emergencies which are cost prohibitive due to the shortage of skilled labor. Show them how they’ll receive rich information online about every service so they can trust that they are making the best decisions about their facility spend.

Stage 3: Onboarding

What do they need?    

They need a clear understanding of what to expect from you, and how they can prepare their team to work with you. They need to be reassured in every interaction with your company that they made the right decision in choosing to work with you.  

How can you best meet their needs?

Collect the names and roles of everyone that is on the customer’s team that will be involved. Implement a structured onboarding program to educate them on what to expect throughout the service cycle from appointment reminder to invoice and from equipment deficiency to quote. Set up their online account(s) and show them how to access their past and future inspection and maintenance details. Show them how you will make their lives easier.

Stage 4: Service

What do they need?

Historically, they’ve dealt with shady vendors, disruptions, phone-call rodeos, and piles of paperwork. They need to trust you and your ability to get rid of the inconveniences.

How can you best meet their needs?

Eliminate the paperwork and phone-call rodeos with a convenient online customer experience that makes your customer’s life easier and provides them with rich detail about the work so they can trust that you are delivering on your promises.

Stage 5: Performance Evaluation

What do they need?

They need confidence that they are making the right decision to continue to work with you.  They want to know they are getting their money’s worth. 

How can you best meet their needs?

Set up a series of regular check-ins with your customer to guide their facility spend plan to optimize planned repairs and maintenance to avoid unplanned emergencies. Use these check-ins to collect feedback about the relationship and act on it as necessary.

Make it easy

Offer a journey that simplifies your customer’s life and differentiates you from your competitors. Becoming the leader in your market is difficult. As Journey said, “Some will win, some will lose.” However, winning will be a lot easier if you spend more time thinking about your customer’s journey instead of your work order’s journey.

 

There is no such thing as an “all in one” software application for anything.  Like a unicorn, it is a neat idea (who wouldn’t want a friendly horse with a horn) that is nothing more than a fairy tale. Yet it is probably the most popular unicorn that commercial service contractors (and others as well) search endlessly to discover.   And yet it just will not die in the minds of those that seek it.

So what do software vendors do?  They play to market bias and adopt the “all-in-one” promise into their marketing messaging.  They pique your attention with claims of the elusive all-in-one software. However, when you take a closer look, you find the unicorn is simply a horse with a horn taped to its head. And the vendor trying to sell it to you is a charlatan.  Their website sucks. Their technology is server-based. (Which nobody should be buying in 2019). And their LinkedIn page shows they have like 9 employees, with the trendline going down, not up.

We have debunked the idea of a magical “all in one” application over, and over, and over, and over again. So you can imagine my shock when I saw a company that I admire marketing their application as an “all-in-one”.

ServiceTitan: “All in One” for Home Service Companies

ServiceTitan is a very successful company that offers a high-quality, modern customer service application for home services companies.  I admire their growth. I admire their management team. I admire their technology architecture. And in their marketing, they use the “all-in-one” label to get your attention.  I get the idea. I suppose it just makes sense if everyone is looking for “all-in-one” you might as well have them look at your application and decide for themselves which “all-in-one” is best for them.

But it’s just not true.  

How do I know?

Straightaway, ServiceTitan tells potential customers they will need to buy an accounting application such as QuickBooks or Sage Intacct.  “Wait a minute!” you say, “I thought ServiceTitan was an all-in-one?” Nope. Not really. That was just marketing.

Second, they promote several other integrated partner applications to their customers so that they can get greater value from the platform.  These include GPS tracking, pricing, and online review applications. “Wait, what about the all-in-one?” you declare again. Nope. Sorry.

Finally, they publish extensive documentation for developers to extend the application and integrate it with other applications via their Application Programming Interfaces (APIs).  “Wait!” you say again, “A true all-in-one doesn’t have to integrate with other applications because it should already do everything.” Sorry. That’s just not the case.

Separating the ServiceTitans from the Charlatans

So how do I square all of my admiration for ServiceTitan with my historical disdain for companies that, like them, make the “all-in-one” promise? More on that in a minute.

First, let’s answer a more important question. How can you, the commercial service contractor, know how to quickly spot a charlatan promising a unicorn but secretly selling you the same, tired horse with a taped on horn?  

Do a little research and answer some basic questions to look for red flags:

  1. What does their website look like?  Is it modern and mobile friendly, or does it take you back to the 1990s?
  2. Is their software cloud or server based?  No one should be buying server-based software in 2019.  
  3. Check out the company LinkedIn page.  How many employees do they have? What are their backgrounds?  Has the employee count grown in the last few years? Growth is good.
  4. Can their software easily connect with other applications? Look for a list of integrations or search for API documentation.  It should be obvious how the software can connect with other interesting applications to further extended its capabilities.

(For a more in-depth resource to help you with vendor selection and software buying, download our free software buying guide here.)

Rethinking “All in One” – What ServiceTitan Taught Me

I’ll admit it.  ServiceTitan forced me to stop and table my typical disdain for “all-in-one” promises from software companies.  They are a sound company with a high-quality product. And while they may not be an “all-in-one” application, they are “all-in” for their customers’ success.  Plus they are very focused on who that customer is – home service companies – and it shows on their website.

My advice to you? Stop chasing that elusive unicorn – stop looking for an “all-in-one” system because –  just like the unicorn – it’s only a fairytale. And it’s not what you really need.

Instead, look for the vendor that is “all in” for your success.  A vendor like ServiceTitan. They know your business, they understand their strengths and limitations and can connect you with trusted partners who can meet your needs that are outside their scope.  They’ve blazed a new trail for companies just like you in your industry who want to be innovative, and they’ve guided hundreds down the path before you. Just like ServiceTitan is “all in” for home service providers, ServiceTrade is “all in” for commercial service contractors.  If you want to learn how ServiceTrade is “all in” for our customers, schedule a demo today.

 

At ServiceTrade we know that you want to be the best commercial service contractor in your market. It’s difficult, however, to be the best if you don’t know what the “best” is. You could only guess about how your peers were performing, until now. We analyzed data from over 400 of our commercial service contracting customers to establish performance benchmarks. We used the same business analytics platform available to our customers, Amazon Quicksight, to audit growth statistics from 2017-2018 across every customer account and establish best-in-class benchmarks for the industry. Here’s what we found.

Revenue growth
Average: 17.9%
Top 25%: 54.7%

Customer count growth
Average: 7.5%
Top 25%: 38.4%

The top quartile in the above categories is not made up of only small companies as you may expect. That group of high performers is reflective of the company sizes found across the entire dataset. If you are a large contractor, aggressive growth is attainable.

Revenue per customer growth
Average: 12.7%
Top 25%: 44.4%

Revenue per job growth
Average: 6%
Top 25%: 29.9%

Companies that earned more revenue per customer and job found additional, high-dollar sales opportunities with existing customers such as repair opportunities and additional services. We’ve also heard from many of the top performers that they “upgraded” their customer base by firing the worst customers and selling to more valuable prospects.

As the adage goes, if you don’t measure it, you can’t manage it. This is true of your metrics compared to industry benchmarks. If you don’t measure how your company performs compared to the rest, you’ll never know if you are the best.

Do you want your customers to feel good about your brand? Try telling a great story. Research shows that storytelling has immense power to make us feel emotions as if we are a part of the story.

The Nike marketing department sure figured this one out. Get your Kleenex ready.

It gets you right in the feels, doesn’t it? But, why?

Simply put: hormones. Storytelling is one of many triggers that causes the release of hormones like cortisol and dopamine in our bodies that make us feel stressed and make us feel good.

In fact, there are six of these triggers that you can use in your service cycle to avoid stressing your customers out and to make them feel good. Check out my presentation at last year’s Digital Wrap Conference to learn about all six.

P.S. Registration for the 2019 Digital Wrap Conference opened early this year with a great deal that only lasts through March. Check out the details at digitalwrapconference.com.

Much of the popular culture in management consulting today is focused on the customer experience. Matt Dixon, the author of one of my favorite management books, The Challenger Sale, is spending many of his cycles promoting another of his books, The Effortless Experience.  Shep Hyken is a customer service guru with a new book called The Convenience Revolution.  And my latest book with Shawn Mims, Money For Nothing, focuses on the science behind making a customer feel good about their experience buying from commercial service contractors.  

Yet even with all of this focus on customer experience, I still find that most service contractors remain firmly entrenched in a war to optimize the effort expended in their back office instead of directing their management attention to enhancing customer service. I have come up with a couple of questions that might help challenge that back office focus if the goal is to build a more valuable business.

Question 1: How easy is it to hire a new back office administrator versus hiring a new skilled technician?  

This is an easy one, right? The answer is that hiring an administrator is very easy when compared to hiring a technician. Management’s focus should be on maximizing the productivity of each technician so that they deliver the maximum amount of revenue each day while simultaneously eliminating the risk a customer faces due to potential equipment failure.  Your goal should be to increase revenue per technician 20% per year every year. Never yield in the pursuit of greater productivity for the technicians. Hiring administrators is easier, so transfer as much work as possible off the technicians and onto back office staff.

Question 2: How easy is it for your customer to review and approve a new quote? 

If the answer is that they have to download an Excel file or PDF, print it, sign it, scan it, upload it, and email it back to you, that answer sucks.  That is difficult. Not easy. Compare that level of effort with an online quote with pictures and video of the issue and a single button to push to “Approve” (or request changes) and provide a purchase order for billing purposes.  Oh, and it never hurts that when the customer has viewed the quote online, the salesperson knows it has been viewed and can follow up to answer any questions. Don’t make it difficult for the customer to give you more money and remove risk from their environment by upgrading or repairing equipment (which is also good for you).

Question 3: Which is more valuable: eliminating all administrative overhead or showing an ability to sustain 20% revenue growth every year?

Again, it is an easy answer. Eliminating all of the administrative effort is worth perhaps 5 – 8% of revenue. Growth is MUCH more valuable if you can demonstrate you have a systematic way to sustain it due to your customer sales and service approach.  If you ever intend to sell your business or bring on a new shareholder, focusing management effort and technology purchases on enhancing sales productivity is where you should spend your thought cycles and investment capital.

Question 4: How easy is it for you to show the customer the value of your work online?  

Or do you just send them an invoice with a bunch of text and cryptic accounting codes to represent the value you deliver?  If a customer has to wade through a detailed invoice, guess what is going to draw their eye?  You got it, the numbers on the far right and in the bottom right corner. Guess what they are going to want to talk to you about? The value you delivered? Nope. “Why does it cost so much?” is the most popular question generated by an invoice.

Make it easy for them to see that value without digesting a cryptic invoice.  It should be easy for them to see your work online in the form of service history for their equipment with photos, videos, risk assessments, quotes, etc. so that they see you are thoughtful and thorough in your approach to managing their important assets.

Question 5: How easy is it for your salespeople to show a new customer prospect how you are different?

Do you demonstrate the value of your unique approach to customer service?  Pitching a value proposition of “we try harder” or “we care more” or “we are cheaper” sucks. It is much better to show the customer an online experience where they can conveniently review and engage with your company on ways to reduce risk and eliminate disruptions through a rich set of service history and equipment risk analysis.  

If you cannot show prospective customers examples of this capability, what are you selling? Invoices? How do you expect to command a premium in the market compared to the low price competitor? Simple answer – don’t expect a premium and be prepared to compete on price.

I find all of these questions to be obvious indicators of where management should spend their effort – front office innovations that make customer service and revenue generation easier because the customer gets an effortless, or, better still, a feel good experience.  So where are you spending your management effort? Front office and feel good? Or back office? Think about it.

 

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: