3 Ways To Improve Your Close Rates On Service Agreements

A down economy can make it difficult for service companies of any type to sell their service agreements. People are reluctant to buy something without knowing what the true value of the product or service is first. So what can you do to move potential contract customers off of the fence? Believe it or not, you have many of the tools necessary to make this happen already. And, putting those tools to work for you is easier than you may think. Let's take a look at three of you biggest assetts that can help you to grow your company.

Use Your Technicians

Your field workforce is one of the first places to look to for spreading the word about the value of your service contract offerings. Your technicians, while directly in front of your customers, can ask subtle questions and drop off brochures. Take, for example, the following scenario:

Your technician has just finished repairing your customer's refrigerator. The refrigerator is a few years old. Your technician tells your customer what they did to fix the problem and then hands them the bill. He/She states how incredibly expensive it is to fix these new fangled appliances and then asks your customer if they have ever thought about purchasing a service agreement. Depending on the customer, they may reply with something like "yes but I thought it would be too expensive" or "no, how does it work?" This is the perfect time for your technician to give your cusotomer a brochure about your coverage options and then refer them to a someone who specializes in selling contracts within your office.

The best part about the above example is that your technician is not really performing a hard sell to your customer. They are merely dropping off some information about other services your company offers, then referring them to someone who is more informed on how to close the sale.

Praise Your Referrals

You've heard the saying "word of mouth advertising". Well, when it comes to selling service contracts, this is one of the most effective ways to get people interested. A simple conversation by one of your customers at work or with a neighbor could turn in to a contract sale and all you had to do was provide great service. If you want to close more contract sales, then give your customers some incentive for helping you out. For example, send out a communication to your customers (via email, post office, or technician) letting them know that for every new customer they give you they will recieve a $25 gift certificate from a restaurant or retail store of their choice. Give them all of the inforamtion that they will need in order to take advantage of your offer and then follow up with each customer and let them know how appreciative you are for their help. By presenting them with a gift certificate and calling them personally to thank them helps you to establish a solid relationship with each of your customers. A good relationship leads to more sales opportunities and, in this case, more referrals.

Don't Forget Your Auto Attendant

Depending on the size of your company, you may have an auto attendant or some way for your customers who call you to be directed to the correct department via your phone system. If you have an auto attendant, you probably also have a music on hold feature so that your customers are not left with dead silence while on hold or being transfered. Both of these features are excellent ways to let your existing and potential customers know about other products or services your company offers. In essence, you have a captured audiance. Take advantage of that time and be sure to add messages such as up coming sales, why they should purchase your service contracts, and maybe some tips on how to manage problems that may come up involving the items that you cover under your contracts. Your customers don't want to hear silence while on hold, so give them your best deals while they wait.

Closing the sale on new service contracts can be difficult at times. Take advantage of all the tools at your disposal to make this process easier. Your technicians get face time with your customer. Get them to drop off some of your brochures while they are still on the call. Your current customers are an excellent selling tool. Create reward programs for the ones that refer new customers your way and be sure to follow up with them to thank them personally. Finally, if you have an auto attendant and/or music on hold, make sure that you add informative messages that help to sell your products and services while your customers wait on hold. You have already paid for each of these tools. Give them the opportunity to pay you back!

Do you use the tools mentioned above now? What are some of the tools you use today to help close the sale of your service contracts. Give us your feedback below.

         

Good Customer, Bad Customer - Learn how to know the difference

Do you find that some of your customers with Service Agreements seem to call for service more often than others? Have you ever performed an analysis of the number of service calls per customer Service Agreement? If the answer to each of these questions is yes and no respectively, you could be losing profitability on some of your issued Service Contracts.

In essence, the more service calls you have on one specific Service Agreement throughout the course of a year, the lower your profitability is for that Agreement. Performing a basic calculation can help you to understand what your company's actual loss is on a specific Service Agreement. Start by taking your average cost per service call and then subtract it from the total price that you sold the Service Agreement for to your customer. Depending on the Service Agreement selling price, more than three service calls per year may render a Service Agreement unprofitable. If your company is supplying service to a high number of Service Agreements annually, the losses from each contract with over three service calls could add up quickly.

To keep track of the number of service calls, start by performing an analysis of any Service Agreements coming up for renewal within the next two to three months. Chances are good that you will find a small percentage of customers that knowingly or unknowingly may be taking full advantage of their Service Agreement. So how do you handle "bad" customers that fall into this category? In some cases, the first inclination is to cancel the contract. However, if you are in the process of trying to build your business, canceling one contract or a number of contracts because of too many service calls may be taking your business in the wrong direction. Therefore, canceling one or more Service Contracts should ONLY be used as a LAST RESORT. That said, let's take a look at some ways of mitigating against service contracts that may be unprofitable.

In most cases, you will always want your customers to renew for another year of contract coverage. Aside from the fact that renewals help to generate more revenue for your company, they also help your business to address any abuse of service calls that may have occurred during the previous year's contract coverage. The first course of action is to determine whether or not all service calls on a specific Service Contract were for repair on a single item or if they were repairs for multiple items. If you find that, for example, you had a customer with three service calls on a single item such as their dish washer, you may want to raise the premium for coverage on that specific item during the renewal process. This will help to cover any additional expenses your company may incur on any subsequent service calls for the next coverage year.

Although raising the premium on a specific item should be used as your first line of defense to mitigate your losses on a specific Service Contract, it is also a good idea to offer your customer any possible alternatives. Using the example above, try contacting the contract holder to see if they may be interested in updating their ailing dish washer. Helping your customer to recognize and justify the benefits of purchasing a new dishwasher vs. spending more money on a higher coverage premium will go a long way in helping you to build a trusting relationship between you and your customers. By persuading them to purchase a new dishwasher, you also help to create a win win situation for you and your customer. You and your business no longer have to service a failing dish washer. And, assuming that your business is setup to sell them the specific replacement item, you could potentially see some extra sales and service revenue at the end of the sales transaction. Your customer wins because they get a new appliance that is more energy efficient and less costly to maintain. They also get to reduce their coverage costs on that item when it is time to renew their existing Service Contract with you.

In a different scenario, if you find that each of your customer's service calls were each for repairs on different items, you will want to dig a little deeper in to each call and item serviced. If you find that each of the items serviced were relatively new, you will want to do nothing more than raise the price of the entire Service Agreement using a standard cost of doing business percentage increase. Giving your customer a small increase in their contract renewal price makes it easier for your customer to want to renew because they understand that there are usually increases in premiums for products providing coverage. For your business, newer items help to lessen the chance for subsequent service calls during the next contract year. In essence, you are looking to sell more Service Contracts that cover newer items. That is because newer items covered under your Service Agreements usually require fewer service calls and help to create close to 100% profitability for the next contract year.

However, if you find that all of the items serviced are older, you may want to re-evaluate the cost of maintaining those items as you should expect to have many more service calls during the next contract year. Re-evaluating Service Contract renewals should take into consideration the age of each item covered, the parts that you may have to replace and the time that will be required during the entire service call process. Once you come up with your total costs to service these items, you will want to pass them on to your customer during the renewal process. It is important to note here that the higher contract renewal price may scare your customer away after your evaluation. But, the money saved by not having to send a technician out to the same property over and over again should justify the loss should your customer decide not to renew their service contract with you. The object here, is to present your customer with an alternative to having no coverage at all. Ultimately, your customer will make the decision that is best for them. If they choose to renew at the higher contract price, you and your customer are both covered for any unforeseen problems that may be experienced during the next contract year. If they choose not to renew, you have done nothing more than reduced your overall expenses for the next year.

So, there you have it. Service Agreements should always be an important part of your business. But any service/repair company can expect to have "bad" customers. Luckily, you have the power of the renewal process to compensate for any losses experienced during the previous contract year. Use it to your advantage, but be sure you take the time to investigate the details of each "bad" contract. As an alternative, you can suggest that your customer update/upgrade their heavily serviced item. Finally, you don't want to lose a customer if you can help it. But, if the loss helps to keep your company in the black then you can rely upon the fact that you will no longer lose money on that specific Service Agreement moving forward.

How do you handle "bad" Service Contract in your business today? Give us your feedback below.

         

Simple Service Agreement Packaging Means More Sales And Less Confusion

So you think selling Service Contracts is an important part of your business?  Have you made it easy for your customers to pick the best contract for their needs? If you haven't, you may be pushing potential customers away without even knowing it. It is very easy to overwhelm your potential customers when trying to sell them a Service Contract. I have seen many website offering four, five and sometimes even six different Service Contracts to their visitors expecting them to read through each and every one of them to find the one that best fits their needs. However, people these days don't have the time or the desire to look through one option let alone five or six, especially when it comes to Service Agreements/Contracts. I don't know about you, but I can find better things to do with my time and I want the selection of a Service Contract to be as easy and painless as possible. So what is a good rule of thumb for making it easy for your customers? Let's take a look at one of the most successful companies in the world and how their model for making choices easy makes them the biggest cash cow on the stock market.

Apple Inc. offers products from iPods to Macintosh computers. Have you ever noticed that when they offer a product that there is only three options to choose from? Apple does this on purpose to stay with their consumer goal of keeping things as simple as possible. There options are fairly straight forward and based upon storage size. They offer iPods, iPads, and iPhones that are Small (16Gb), Medium (32Gb), and Large (64GB). Three options to help make the decision of which product to buy quick and easy. If Apple can make their buying process easy for millions of consumers and be successful, it stands to reason that all product choices should follow the same model. Let me explain how this applies to the way you offer your Service Contracts to your customers.

How To Offer Your Contracts The Right Way

Service Contracts can quickly become very cumbersome in what they cover. So, the best way to make them easy to choose is to put together packages much the same as Apple does with storage size. Start with a basic package that may cover common items. For example, if you are selling contracts to repair home appliances, a basic appliance repair contract would cover the basic appliances found in the home like a stove, refrigerator, dishwasher, and maybe a garbage disposal. If you are selling Contracts for home/office computer equipment, a basic Repair Contract may cover one Personal Computer, a printer, and one DSL modem.

Once you have the basic package built, you can add other items in a tiered format and/or add other coverages to create the next two levels of contract packages. For example, using the basic Appliance Repair Contract package above, maybe you want to provide a Contract package that adds repair services for a washer and dryer for the advanced package. For a premium package, you may want to add replacement coverage to all items covered under the advanced package. You can mix and match the coverages as you see fit, the key is to keep your contract packages to a maximum of three making the selection process very easy for your customers. Another way to make it easier for your customers is to name and price your packages using the hierarchy method (i.e. Bronze, Silver, and Gold or Basic, Advanced, and Premium). This makes it easy for your customers to quickly pick out the package that will best fit their needs. For example, some customers may go straight to the Bronze package because they know it is the cheapest, where others may go for the Gold package because they know it will provide the maximum amount of coverage.

Contract Add-Ons

Once you have created your three contract packages, the next step is to offer coverage on the items that may not be included in those packages. Continuing with our appliance repair example above, maybe you want to offer coverage on a per item basis for items such as a microwave oven and/or a water heater. You would simply add any Add-On items you may feel are profitable to your business and beneficial to your customers to an Add-On section of your contract. Each item would have a coverage price associated with it that is added to the total of the chosen contract package. Allowing your customers to choose Add-On items makes it easy for them to customize one of your packages to meet their needs exactly. Give them as much flexibility as you can here by adding any/all items that they may be looking for coverage on and that your technicians have the ability to service.

Other Optional Products or Services

While you have your customers attention, you can take the opportunity to inform them on other products or services that your company may be offering. Using the appliance repair example above, maybe you have other products like stainless steel hoses or ice makers that your customers might be interested in. Now is a good time to offer such retail items and add them to the total bill. The same principle applies to other optional services such as dryer duct cleaning. If your customer does not need any of your optional products or services now, that's OK because they now know that you offer such items and will know where to come to get them if/when they need them in the future.

Service Contracts should be an important part of your business. If you sell them already, remember to keep the selection process as simple as possible for your customers. If you are getting ready to sell them in the near future check out our blog post: On The Fence About Selling Service Agreements? for some more good information and other tips on how to get started. Remember your customers are just as busy as you are. Making the buying process an easy one will make them appreciate your business and keep them coming back. Also keep in mind that if Apple can be successful using a simple selection criteria, then so can your business.

Does your company make it easy for your customers to buy service contracts? Tell us what works best for you below!

         

How Important is your Website? Let Me Count the Ways

Does your company have a website? If not, you may be losing out on a lot of potential business. Websites today account for much of the incoming business to service companies. It is one of the most important tools your company should be using to bring in and keep customers. Why you may ask? Well for starters, your website is there for your new and existing customers when you aren't. Customers can access your website 24 hours a day to get information on your products and services, your working hours, specials that you may be offering, and much much more. It kind of works like your inside administrative/call center staff as well as your inside/outside sales staff without having to pay it an hourly wage or salary. Most importantly, the website that you use will become increasingly more important to you and your customers as time marches on. It goes without saying that you can pretty much do anything you need to on websites today including selling, servicing, informing, and directing your customers in the direction you want/need them to go.

Is there a cost associated with getting your website to do what you want? You betcha. But the cost of not having a website available to new and existing customers is much higher. People expect your company to be accessible and online 24 hours a day. They also expect to find what they are looking for and then a method for taking some form of action (i.e. purchasing your products/services online). However, as important as it is for your company to be doing business online, sometimes it is not economically feasible to go from 0 to 60 in the first version of your website. So, let's take a look at how your website should evolve as your business grows.

Brochure Website

Your first step in creating your online presence is to create an online version of your company brochure. Using a website as a brochure allows you to provide pertinent information to your viewers at an economical cost to your business. A brochure website should contain basic information about your company including how to reach you via the phone or email (Note: use a contact form for email and not an email address to keep from being Spammed), what types of services you provide, some reasons for why your customers should pick you rather than your competition, and possibly any specials or promotions that you may be offering. It is typically made up of text and images, but with a design that appeals to the eye and is functional for navigating your site.

Depending on your needs, you may be able to find a website hosting company that is free. Some free sites that you may want to look into are: Wix and Network Solutions. These two sites allow you to build and host a free website. However, building a website that is free may make it hard for your customers to find you unless they are being directed to your site via some form of company literature like your business card or maybe a work order/invoice. This is because you are not given an Internet domain name that fully reflects your business (i.e. http://www.yourbusinessname.com/). The free sites tack your business name to the beginning of theirs (i.e. with Network Solutions - yourbusinessname.networksolutions.com) which makes it difficult to get to your website if someone hears your name and just wants to pull it up quickly.

My Recommendation: The best path is to fork out a little money on a monthly basis for a site that uses your own domain name. Making it easy for your customers should be the first priority when designing and publishing your brochure website.

E-Commerce Website

The next step for your website is to allow your customers to purchase your products and/or services online where applicable. This will usually include some form of shopping cart application that is integrated into your existing site. You have two options when creating your shopping cart. Your first option is to find a web hosting company that you can link your website to that will handle all of your inventory and transactions. You simply add your inventory along with your pricing to a template based inventory application and then add a link to your existing website that will handle all transaction based customer traffic. Some sites allow you to customize the shopping experience for your customers by allowing you to add your logo to the top of the page. The hosted shopping cart option is usually the most affordable and includes a set monthly fee depending on the package you select. One website that provides this type of service is PayPal. Just add your information, link your website and you are good to go.

The other option for selling goods and services online is to hire a web developer to build a shopping experience that caters specifically to your business. A good developer, if they don't already have a template, will build an inventory system and shopping cart that works the way your business does. They will also build it into your existing website so that your customers are not redirected towards another website for transaction purposes. The pros to this type of solution is that you get to customize every aspect of the shopping cart to suit your business's needs, have it blend into your existing website, and is usually a one time fee as opposed to a monthly fee. The cons are that this solution can become costly in a hurry with adds/changes as the project moves along and will require you to hire a developer anytime you want to add or change any aspects of the online application unless you signup for some form of ongoing service contract.

My Recommendation: Go the Paypal (or similar) route here. Unless you need your customer experience to be completely seamless or a customized shopping cart/inventory system, the outsourced path is more affordable and doesn't eat up your time coordinating with a web developer.

Full Service Website

As your business grows, you will want to give your customers an immersive online experience and provide them with a full service website. A full service website will build on the above shopping cart application by allowing your customer to come back to your site to schedule service calls, track any/all of their customer information, renew any service agreements they may have with you, and do just about anything else that you can think of to provide your customers with a self service alternative. Because the experience you need for your customers is specific to the way your company does business, this type of online capability is usually a custom built application that integrates fully into your website. For a full service website to be justified, you will typically need to find functions or processes that are performed within your business by your employees that can be handled online. Freeing up your employees time to do more important tasks helps to insure that your customized online application is providing your business with a return on investment. This is important as developing a custom application will be fairly expensive, both in time and money.

Possible Alternatives To A Full Service Website

Depending on your business model, there may be some alternatives to creating a full service website. There are many companies out on the web today that offer several service oriented solutions that would typically be built into a full service website. Functions such as contract management, service call scheduling, and customer management to name a few, can be purchased on a monthly basis from any number of online Software As A Service (SAAS) companies. Typically, you will pay on a per employee or transaction basis based upon the number of employees that you will need to have access or the number of transactions that will process through the online service. In my experience, this pricing model can become very expensive, especially for small businesses. It can also become very hard to predict your monthly expenses if your company suffers a lot of personnel turn over. However, the flexibility that SAAS companies provide your company may help you to justify some or all of the costs associated with using their services. Be aware that you may need to purchase services from several different SAAS companies depending upon your needs and how much accessibility you expect to deliver to your customers. Unfortunately, there is little to no integration between each offered online service that you may sign up for potentially making tracking of a customer, order, part, or service call very difficult and possibly very time consuming. Some sites that provide different SAAS services are SalesForce.com, Service Max, and TOA.

My Recommendation: If you choose to go down the SAAS path, try to find one service that meets the majority of your business needs and that will allow you to negotiate a fixed monthly cost. If you find that you need more than one service to give your customers a truly full service experience, look for online services that integrate easily into other online services. SalesForce.com is a good example of an online service that provides quick integration between different services as they work with many partners to insure that integration is seamless.

As you can see, your company website is very important to the survival of your business and will become increasingly more important as your business grows. If you have not thought far enough ahead in your website endeavors, you may be setting up your company to lose a lot of potential business. Make no mistake, every one of your customers will be looking to your website, not only for basic information, but to handle all of their needs online. These days, everyone is looking to get action NOW and not when someone can answer/return a phone call or get around to it. A good website will make this happen and help you to capture new potential business and retain existing customers. So if you have not planned a path to some form of full service website, my advice is to start doing it now. Technology and the web moves fast. Don't let your company fall behind no matter how big or how small it may be.

Do you feel that your website meets the needs of your customers? Have you put together a long term plan of how your website will evolve as your business grows? Let us know below.

     

On the fence about selling Service Agreements?

Are you having reservations about selling Service Agreements as part of your company’s products and services? If you are, the good news is that you are not alone. There are a lot of companies out there that are not selling Service Agreements today. Some may have thought about it, but decided that it would be too much work or that it was too complicated to get started. If you are one of those companies that are on the fence as to whether or not to sell Service Agreements, let me help by providing some guidance.

Types Of Agreements

First, let’s start with the different types of Service Agreements that are being offered today. One of the most common is the Preventative Maintenance (PM) agreement. This type of agreement provides your customers with pre-scheduled times when your technician will come out and make sure that everything is working and will stay working for a specified period of time. The PM Agreement is typically used within companies that are servicing items that are seasonal such as Air Conditioning and Heating.

Another type of agreement is the simple Maintenance Agreement. This agreement provides your customer with parts and repair services for an item or items when they breakdown. A Maintenance Agreement can apply to anything from appliances, computer equipment, medical equipment, or anything and everything that has the potential for needing service.

The next type of agreement is sometimes called a Replacement Agreement. It provides your customers with replacement coverage should an item become impossible or highly unlikely to repair. In some cases, the Replacement Agreement is offered in combination with the above mentioned Maintenance Agreement. This provides the customer with a possible "Full Coverage" solution.

Finally, there is the Services Only Agreement. This type of agreement provides your customer with a set list of services that are made available during a specified period of time. The Services Only Agreement is typically used within the Veterinary or pet industry as well as other industries that provide services other than repair type services.

Why Service Agreements Are Good

So why offer Service Agreements to your customers? One reason is to develop customer loyalty. Customer loyalty allows your business to build a set number of customers that you know will call you when they need service regardless of whether or not the service is covered under their agreement. A loyal customer is also more inclined to listen to you when you have a new product or service that may help them to save money over time. Ultimately, having customer loyalty provides your company with better up selling/cross selling opportunities while your technician is in front of the customer and when you may be helping them over the phone.

Another reason to sell Service Agreements is to entice potential customers with discounted service rates and product offerings. If you are offering a set list of services for a flat fee, customers see value in that and usually don’t think twice about jumping in. The same rule applies when selling/including consumable items within the total cost of the contract. The more money you can save the customer over the long run, the easier it will be to get them on board with your Service Agreement offerings.

The biggest reason for selling Service Agreements is to create an incoming stream of reoccurring revenue into your business on an annual basis. As long as you provide your customers with great service all of the time and provide them with plenty of notice of expiration, they should have no problem renewing their agreement with you every year. The better news about generating a reoccurring revenue steam is that all of that renewal revenue typically goes straight to your bottom line and what company doesn’t like that?

Some Things To Do Before You Get Started

So, what are some of the check list items you should know before you start putting together your Service Agreement offerings? Well one of the most important items is making sure that you have the workforce to support the extra service call volume that your agreements will generate. Remember you want the customer to renew each year, so don’t let your service calls go out more than a day or so before you can provide service.

The next checklist item is to create a pricing structure for each of your agreements that is simple and straight forward. Include your costs that will be associated with supporting the agreement, but don’t make the pricing so much that your customers won’t be interested. It is also a good idea to provide different levels of agreements. For example, maybe a gold, silver, and platinum plan or something similar that will give your customers a set number of choices to choose from. Note that too many choices have a tendency to overwhelm people, where as a good, better, and best approach provides your customer with choices that will make it easy for them to choose the agreement that is just right for them based upon their needs.

Another checklist item is providing some flexibility with your agreements. As I noted above, you don’t want too many choices in the way of a base Service Agreement. However, your customer may need coverage on an item or items that may not be covered in one or any of your base service agreements. In this case, give your customers the ability to select add-on items to augment one or all of your agreements. That way your customer gets a Service Agreement that fits their needs perfectly. Just like your Service Agreements, you also want to make your add-on items are attractively priced for your customers, but be sure not to cut your business short when it comes to your costs.

The last checklist item that I am going to cover is one that, in my eyes, is the most important and that is creating your Terms and Conditions. Each of your Service Agreements should come with a professionally created (by a lawyer) set of Terms and Conditions. The inclusion of this legal document helps to protect you and your customers in the event of a misunderstanding and leaves no confusion as to what is covered under your agreements and what is not. It also sets limits as to what the damage will be in the event of arbitration (your preferred path) or litigation in a court room. Note that it is important to keep this document up to date as your business changes. Shop around for some legal advice on how and who can help you create this. The money you spend will be worth every penny.

So, there you have it. Service Agreements are a great way to create new business and revenue. But, there are some things that you need to do before selling Service Agreements to your customers. I have listed a few of the most important items to help you get started. If you would like an excellent resource for getting your company in to the Service Agreement business, check out this excellent video called Service Agreement Success from Gary Elekes on Contracting Business. It is a little long but chalk full of great information on getting your business started selling Service Agreements. If you get to the point that you would like to sell your Service Agreements online, check out our Service Plan Builder tool. It makes it easy for your company to sell and process your Service Agreements online.

Are you currently selling Service Agreements for your products and/or services? Do you have some advice for those just getting started? Let us know below…

     

Technician vs. Customer – The winner is not always obvious

Imagine, if you will, that after placing a service call you are at home or work and a technician has arrived to fix a specific problem. Now imagine that when the technician has completed the repair he/she begins explaining what the problem was and how they resolved it. Thinking about the explanation, you realize that what they have just explained makes no sense. You politely ask the technician, how could the problem be resolved when your solution defies all rules of gravity? Even though you have brought science in to the equation, the technician still insists that what you are saying is wrong and that the way he/she fixed the problem is the right way. You explain to him/her again how what they have just said could scientifically not be possible. At this point, the technician has become defensive and your questioning has instigated an argument. You realize that the discussion is going nowhere but downhill and you concede or agree to disagree with the technician and they get in their vehicle and leave.

Forgetting for a moment what the actual problem was and/or how it was resolved, I want to bring your attention to the bigger issue in this scenario, that being that the technician chose to argue with the customer. In the service industry or any other industry for that matter, arguing with the customer is or should be construed as a cardinal sin. One simple rule takes precedent in these types of situations, and that one rule is followed by large companies such as Home Depot, Lowes, and many many others. The one simple rule that should have governed the above scenario is that THE CUSTOMER IS ALWAYS RIGHT. If your technicians don't understand this simple phrase it could be devastating to your business and here is why...

Something that is not always seen through the eyes of a technician is that companies, service or otherwise, work very hard and spend a lot of money to obtain just one customer. When the customer finally spends money with your company, it is important that they stay happy with your services and your employees. When a customer experiences a pleasant person, even when ironing out a problem, they are more likely to do two important things to help make your company more successful. First, if they purchased a service agreement from you, they are more likely to renew that agreement. When a customer renews a service agreement, that revenue goes straight to the bottom line and all your company had to do was to keep them happy. Second, a customer that is happy with ALL of their experiences with your company is more likely to tell other people about who you are and what you do, but most importantly how well your people handle tough situations. This is FREE advertisement and, in addition to the increased revenue from their renewal, a happy customer has now also brought your company more customers and a larger bottom line.

So how do you handle training your technicians to be better prepared in situations such as these? For starters, make sure they know and follow rule number one above – The Customer is Always Right. The next step is to teach your technician how to diffuse a potentially bad situation with a customer. One way to do this is to have the technician go over what they did to fix the problem step by step with the customer. It may sound elementary, but another way would be to draw the customer a picture as to what caused the problem and then showing how the problem was resolved. As a last resort, your technician may want to tell the customer that if the problem comes back, call them and they will return to take another approach.

The truth is there are many different tactics a technician can use to help the customer understand the solution. In some cases, none of those tactics may work to console the customer if you are dealing with someone who just wants to be difficult. If the customer just won’t understand the solution, don’t argue with them. If all else fails ask them to talk to a manager and provide them a name and a phone number. Sometimes, the customer just wants to make sure that the work that was done was done in the best way possible. A manager can validate this for them without causing an argument and while backing up the work done by the technician.

In the case of technicians vs. customers, the “winner” should always be your customer. After all, they are the ones paying your bills and keeping your company in the black. Teach them strategies for avoiding bad situations and tactics for dealing with those situations should they arise. There are many resources out on the web to aid in educating your techs. Check out this excellent paper written by William K. Pollock from Strategies for Growth titled Empowering Field Technicians through Technical and Customer Service Training. Search around and pick some tools that apply to your business. If nothing else, just keep reminding your technicians that The Customer Is Always Right no matter what.
Do your technicians know how to handle difficult customers? If so, how do you educate them to make certain that they leave the customer happy? Let us know below.

       

To Sell Or Not To Sell - That is For Your Techs To Decide

Anyone doing business today knows that you must tap every resource you have at your disposal to increase revenue. One possible resource within the service industry is the service technician. That said, it is not uncommon to see technicians expected to act like sales people, pushed to sell more products and services for the company while also augmenting their salaries.

I have found that there are usually two camps of thought as to whether or not technicians should also be salesmen. The first camp believes that if the tech is on premise with a customer then they should take advantage of that opportunity to try and up sell a product or service. The other camp believes that the tech is there to do one job and one job only, to resolve the problem at hand and move to his/her next service call. From a business standpoint, I can see the argument for both camps of thought.

On the one hand, you have the tech in a position to take advantage of a captured audience. Once they have completed the service call, they can hand out flyers or begin a sales pitch making the customer aware of a sale going on for today only or on other products or services that they may benefit from. It only takes a few extra minutes and besides, what do they have to lose right?

On the other hand, the technician stands to create more revenue for the company by doing as many calls as possible throughout the course of the day. If the calls they are doing are COD related, the number of calls can make a huge difference in monthly revenue for the company. The technician has no time to stop and have a sales chat with the customer and must keep moving.

In either case, there is usually resistance from the technician as to whether they should or should not be selling to as well as servicing the customer’s needs. There are some people who believe that they are not cut out to be sales people (like me). And then there are other people who could sell the Brooklyn Bridge if they were given the chance. The problem in either case is finding a happy medium and doing so without jeopardizing new and old ways of generating revenue for the company.

My opinion on this subject is simple and straight forward, let the tech decide. Don't force them into an uncomfortable situation. Most customers can see when a tech is being forced to do something that they are not good at, like sales. My philosophy throughout my management career has always been to take advantage of the strengths of an individual and let them do what they are best at. In this case, your tech will be much happier if they are fixing a problem and not having to act like a sales person when they have no desire to be a sales person. On the other hand, there are techs out there that are very good at selling. Again I say, take advantage of your techs strengths. If the tech is good at repairing things and at selling additional products and services, then by all means let them do both. In most cases, the tech that knows how to sell and is good at it is going to sell more than the tech that does not want to sell at all. They will also do it in a way that will not upset or push away your customers. In essence, the tech that knows how to sell and is comfortable doing so will make up for the tech that is more content while servicing the customer’s repair issues. Using this strategy, your company can both service its customers and increment sales at the same time while keeping both the customer and your technicians happy.

Do you think that your service techs should try and up sell to your customers? Do you find that some of your techs are willing to be sales people and others are not? Let us know by responding below.

     

Why don’t people buy Service Agreements?

I ran across this question in a Linked In Group and thought that I would address it in more detail in this blog.

So, why do people say No to service agreements? All of us in the service industry know that there is great value in service agreements for our customers. Why don’t they see what we see?

I think that most people steer away from service agreements for numerous reasons. One reason is that people in these fast paced times tend to be more reactive than proactive. There thought process is along the lines of - I will address the problem when it presents itself. You and I know that by this time it is too late. The customer pays a hefty price for not having the contract. Unfortunately, they don’t see the value until they see the repair bill.

Another reason is that people want to know that purchasing a service agreement can be justified. This is especially evident with people living in large homes. Why should I purchase an agreement when it would cost just as much to buy a new dish washer should mine go bad? What the customer fails to see in this situation is that, yes you could buy another dishwasher, but what if it isn’t the dishwasher that breaks? These types of customers also fail to take into account the total costs associated with a repair, specifically Time and Materials. Everything adds up quickly and usually in favor of a service agreement. Should of – Could of – Would of…

Lately, there has been a lot of bad press about service agreements (see Negative Press on Service Contracts?? Bantha Poodoo!!) and people are thinking that they are a waste of money. I see a lot of complaints about things such as - I never read the fine print – what do you mean it isn’t covered? They are afraid that if they purchase the agreement that what they need fixed will not be covered. In these cases, I blame the service company for not doing a better job of informing the customer before they purchased the agreement. Although, I have known too many people also who have said just give me the contract and never read the terms of the agreement and/or totally ignore the sales person when they are explaining the coverage.

This list could go on, but I am going to end it with one last reason. Simply put, I would say that people tend to say no to service agreements when they receive poor service from the service company. Unfortunately, there are too many service companies out there that do not see the value in providing near perfect service. As the saying goes, the first impression is the lasting impression and if your technicians do not provide exemplary service to your customers, your customers won’t think twice about saying no to a service agreement.

So, how do you respond to each one of these reasons? I have my opinions, but I am interested yours. Let us know below.

   

Ten Steps to Help Insure Your Customers Renew Their Service Agreement

Did you know that it is harder to get an initial service contract from your customer than it is to keep them coming back? To get your customer to purchase their first service contract you have to take in to account advertising costs, your sales person’s time, and the time it takes to process the contract. Oddly enough, once you have your customer signed up with their first service contract, it cost next to nothing to keep them coming back to renew. Yet, most companies lose their customers due to one primary problem, lack of proper service. When I say service, I mean everything that makes up that one service call that your customer is relying upon your company for. If you follow the ten steps below, your chances of getting your customer to renew goes up close to 100%.

1. Pick up the Phone

The first service call starts with how long it takes for your call center personnel to answer the phone to schedule the call. If your customer is forced to navigate through long menu trees or put on hold for long periods of time, they have time to start thinking about your competition. All kinds of things start running through their heads. I wonder if I called "so and so" if I would have to wait on hold? I wonder if the hold times are indicative of the way they service their customers once they arrive, if they arrive. Don't let your customer have time to think. Pick up the phone.

2. Be Professional and Courteous

The next step is to make sure whoever takes the call is professional and courteous to the customer. A friendly and professional voice goes a long way to helping the customer feel like their problem is important to you and your company. It may sound stupid, but have your call center people answer the phone with a smile on their face. The customer may not be able to see their smile, but they will definitely hear it. It is also important to be empathetic to your customer’s problems. Show them that you care about their problem and that you will do everything in your power to resolve it. Check out this article: Call center etiquette for agents for some more good information.

3. Ask the right questions

Be sure to ask your customers the right questions about their problem. The right questions help to insure that the information collected is accurate and sufficient enough to help get the call placed on the right service technician. If something is leaking, ask where do you think the liquid is coming from? If it is coming from an appliance, ask if the customer knows the brand of the appliance. The more information you can get from your customer the better. When you are done scheduling the call, close the customer call by asking if the customer needs anything else. Always let the customer know that you are there to help both over the phone and on property.

4. Schedule the Right Person for the Job

If you asked all of the right questions (see above) to schedule the service call, you should have enough information to schedule the best technician for the job. For example, don’t send a plumber to fix an A/C unit or a printer technician to fix a PC problem. Most customers see right through this tactic if they are watching over your technician. The chances may be good that sending the wrong technician may work, but are you willing to bet your customers renewal on it? Sending the right technician can mean the difference between an irate customer ready to tell the world about their bad experience and a customer who won’t think twice about renewing when the time comes.

5. Arrive On Time

Once the service call has been scheduled, the next step is all up to your service technician. It is important to note here that your service technician is the last person your customer is going to see. Therefore, to insure a great service experience (notice I did not say good) your technicians need to make sure that they do everything right. That starts by making it to the customer’s front door at the scheduled time (assuming they have a set time and/or date) and not being late. In most cases, your customer has taken time off from either work or something else so that they can be available for you to resolve their problem. Don't make them wait any longer than they have to. A customer that has a technician at the door on time, helps them to get to where they need to be sooner. This in turn makes for a very happy customer.

6. Project a Professional Appearance

Servicing your customer starts with showing them that you and your company are professionals and will do the necessary work in a professional manner. To project a professional appearance, make sure your tech arrives with a clean shirt tucked in to clean pants. Your technician’s tools should be kept in a well maintained tool belt or toolbox and their service vehicle should be spotless. Your customers want to see that you are as professional as you are good at resolving their problems. A professional look also gives them something more to talk about with their neighbors when recommending your company.

7. Listen to the Customer

Once your technician arrives at or through the front door, it is extremely important to listen to what the customer has to say. In most cases (not all), your customer will point your technician exactly where he/she needs to go and what they will need to do to resolve their problem. This can help to keep your technician from wasting time trying to troubleshoot something that is not totally related and instead get right down to resolving the real problem.

8. Be Neat and Respectful of the Customer's Home or Office

Your technician should be neat in everything that they do while in your customer’s home/business. Some examples of being neat are: putting down mats when working with items that may get messy and to where “booties” when traveling from the outside in. If you are servicing an office, be sure to respect the fact that your customer is trying to do business. Do your best to stay out of the way and not leave tools spread out across counters, desks or the floor.

9. Communicate To the Customer What Was Done To Fix the Problem

Communicate with the customer what was done and why. I have seen too many technicians come in the door, go to work, and then leave without saying much of anything as to what the problem was and/or how it was resolved. Most importantly, and I stress this point because I have seen it happen far too often, ask your technicians not to argue (for any reason) with your customers. This is one of those times when your technician should continue chanting a simple mantra (in their head of course) of “The Customer Is Always Right”. Even when your technician knows for a fact that the customer is just flat out wrong, they must bow to the customer and agree in some way without creating an argument. Sometimes, customers just need a few hours to think about what was done and how it was remedied. GIVE them that time. In most cases, they will come around and understand why your technician did what they did. However, if your technician allows the situation to get out of control, all bets are off. Worst case scenario is you lose that customer for LIFE and any possible referrals they may have talked to after their service call.

10. Thank the Customer

It goes without saying that most technicians are under pressure to get to their next service call. But, it only takes an extra minute or two to let the customer know how much you appreciate their business. Don’t let your technician just say the words as they are walking/running out the door. Have your technician stop what he/she is doing and look the customer in the eye with their hand reached out to shake the hand of your customer and say these simple words – “Thank you for your business Mr. Jones”. I know it may sound a little corny, but keep in mind that the last impression you leave with your customers is the one that may push them over the edge when trying to decide if they should renew their service contract with you. Make the most of those last few minutes with them and make them count towards keeping that customer for life.

Renewals cost you and your company next to nothing and are an easy way to keep your customers coming back. Therefore, take the extra step and devote some time to training your employees on how to handle your customers. Help them to learn the right ways of doing things. Teach them to be personable, not just technically proficient. Make sure they are on time and prepared with the parts and tools they need to get the job done efficiently and correctly. Your technicians are the last person from your company that your customer is going to see. Make sure they understand that and that ultimately the company depends on THEM being professional and doing everything right while in front of the customer.

NOTE: If your technician makes it in to the heart of your customer as an honest and professional person, just think how easy it will be to up sell your customer with other products or services. But that, my friends, is post for another time…

Does your company stress being professional to its customers? Do you have a good track record for keeping your customers coming back to renew? Let us know below!