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.