Let’s get clear about something. Your service business is not different; your market is not different. I spend my day on the phone with contractors, just like you, and I hear these statements all the time. I want to serve them crackers with their whine. Pull your head out of wherever you have it stuck! My goal is to hear a few “pop” sounds after you read this column.
Let’s dissect your business. As long as you know how to create your company’s selling price for your services, the following five items are your focus, and they are every service contractor’s focus:
• The phone call from a prospective customer.
• The conversion from prospective customer to buyer.
• The maximizing of the buyer to buy more of your services.
• The management of your direct cost (material product and labor service).
• The management of your overhead cost.
Let’s take these one at a time.
The phone call
Nothing happens without a customer. No sales, no maximizing a sale, no material cost, no direct labor cost — and your company will still have overhead cost.
Turning every phone call into a service opportunity is your No. 1 priority. This means everyone who answers the phone in your business must understand every phone call is the beginning in this chain of operations that brings home the bacon. Would it make sense that your call center representative is a motivated high achiever in your company? Do you put your CSRs on a pedestal when you look at your company? Or are these hard-working people thought of as excess baggage you need to help you run your company?
I’ve worked with companies that include all the CSRs in every technician training, business development and sales meeting. Why? Because managers at these companies want all their employees to know how the company delivers services to each customer at every stage in the operation. And yes, the technicians and sales team take part in the CSR training as well.
I also know of companies that treat CSRs like gum on a shoe. Don’t be that company. Nothing happens without the phone call! Be ready to take your customer on an amazing journey. Elevate the CSR position in everyone’s eyes in your company.
When a customer agrees to have a service technician come to his home, the next step, conversion, is where you deliver what the customer wants. A 90% conversion rate, from shopping to buying, is expected when you put a service technician in front of your customer.
Here’s why: All these customers made it through the first funnel of your system, the call center representative. These customers know what to expect, particularly the service fee they will pay just for you sending a technician to their home. We call this a qualifier. This fee is not designed to cover all the costs of sending a technician to the customer’s home; it’s designed to qualify the customer as a buyer, not just a tire kicker. This process sets up your technicians to be 90% successful.
So what causes the 10% failure? It’s a few things. Price makes up about 2% to 3%, the right time makes up about 1%, and communication from technician to customer makes up 6% to 7%. I’ve worked with some contractors whose conversion rates were 50% to 60%, and together we uncovered that their company training for service technicians was nonexistent. In order to convert a call into a sale, your technicians need to communicate with your customers. In order for customers to say “yes” to your techs, they need to know, like and trust them.
As a technician, don’t think your customer is going to jump straight into trusting you from the get go.
Think about this for a moment. Would you buy something from someone you don’t know? Would you buy from someone you don’t like? Would you buy from someone you don’t trust?
No, no and no.
So don’t assume your customer would either. At Nexstar, we call this type of technician training the Service System. We train our technicians on how to build trust with their customers. It’s powerful; if you aren’t doing this, you can’t get to the next step.
Maximizing the buyer
I’ve seen companies go belly up by not maximizing service calls. If all your techs ever do is fix the minimum on every service — say a toilet flapper or a bib washer — they will spend most of their time driving around to twice as many service calls (assuming you have more service calls to run) and collecting small fees for their time.
On the flip side, when your techs uncover customers’ wants, needs and desires through a Service System process, they will be presenting multiple solutions that your customers want, need and desire. Maximizing sales is easy once your technicians learn which questions to ask.
Did you catch that? Questions.
Many contractors and technicians think we must always be selling, selling, selling. However, selling is a result, not an action. Asking questions to uncover a customer’s wants, needs and desires gives your service technicians information to then formulate desired results, or sales. Presenting customers with options that are congruent with their answers to technicians’ questions will allow them to maximize sales.
I hope by now you can see your company is not different, and your market is not different. A great business needs processes, both internal and external. If you don’t have the right processes implemented, your company is not different. Your company is broken. Fix it.
I will cover direct cost management and overhead cost management in my next column, but for now I will leave you with some advice: If you don’t know how to create your selling price, I highly recommend that you pick up a copy of Frank Blau’s new book, “Soaring with Eagles.”