Your Business Toolbox: Maximizing Resources in Service Part 2

Why Do Dealers Need to Maximize Their Service Resources?

In part 1, we discussed the fact that many dealers lose money in their service department and the first few steps you can take to move toward the goal of profitability in your service department.

Remember to stop viewing service as a “necessary evil,” and think about all of the benefits an efficient service department can provide:

► Additional Revenue
► Deeper Customer Relationships
► Consistent Work for Your Team
► Future Replacement Lead Opportunities

Companies with well-run service departments can generate $30,000+ per month with a single service truck while consistently generating replacement leads. BDR has developed a business strategy called Leveraged to Prime™ to help you make sure you are leveraging all your resources to maximum effect.

Leveraged to Prime: To make investments or improvements to maximize the performance of a resource and achieve superior results.

During part 1, we looked at the first to steps to maximize your service resources:

Maximizing Service Step 1: Utilize and Optimize Flat Rate Pricing

Maximizing Service Step 2: Great Truck Stock

To read part 1, click here.


Maximizing Service Step 3: Maintenance Agreements

Maintenance agreements are a tool to “weatherproof” your company. Rather than falling victim to the ups and downs of the weather, great companies use maintenance agreements to fill in the gaps and provide work for technicians during the slower times, while delivering a steady source of replacement leads.

If you don’t have a maintenance agreement program or have one that needs a refresher, plan to involve your entire service team as you build or refresh your program. By soliciting your team’s input, you will be generating buy-in. It won’t just be the company’s program; it will be their program. Everyone in the service department plays a role in maintenance, so be sure to include everyone right from the start.

Next, determine your program offering by identifying the different levels of service you will offer. Today’s consumers are used to having choices. You can start with one offering, but consider eventually moving to at least two choices. Advanced companies offer up to four maintenance agreement options to give their customers plenty of options.

Most importantly: price all your maintenance options to make money. Under-priced maintenance agreements are one of the biggest “profit losers” for the average dealer. With a shortage of labor, you can’t afford to send out valuable technicians to do maintenance work that doesn’t make money in hopes of a replacement sale at some point in the future. Price competitively at the entry level, but make sure your other choices have sufficient profitability as you add value to your offerings.

Then develop your process with your team to communicate your company’s maintenance choices to customers. Don’t overlook this educational step. BDR sees many companies where even senior technicians don’t understand the company’s maintenance agreement options and their value points for the customer. You need everyone on the service team to understand and be able offer maintenance agreements. Think about including your sales team as well, so they can position and offer maintenance agreements during the sales process.

Lastly, set and manage your goals. Set an annual goal for the number of maintenance agreements then break it down into monthly, weekly, and daily amounts. What gets measured, and what gets managed? Look at your progress frequently. If you’re falling behind, get the team together and go back through the program and the benefits of maintenance to them, the customer, and the company.

Weatherproof your business with a great maintenance program, and you’ll soon be leveraging your service resources to Prime.


Maximizing Service Step 4: Replacement Lead Generation

Your service department should be a primary source of replacement leads for your company. When your technicians are in a customer’s home, they need to have a process in place for recommending replacement equipment when appropriate. These service-based leads can be some of the best ones your company generates. These customers already know and have a relationship with your company—often leading to less competition and higher closing rates.

To start this step, meet with your team to establish your company’s parameters for recommending replacement equipment. Will it be based on the age, repair history, or efficiency of the existing equipment? That’s up to you, but be sure to establish clear guidelines that everyone on the team agrees with. If everyone buys in to the parameters for recommending replacement, they are more likely to apply them in the field.

You will also need to develop a clear process for lead transfer. Can technicians close the sale right in the field? Absolutely, but think about it this way – would that be leveraging your resources to Prime? Will the Technician take enough time to communicate the value of all your equipment options, including high efficiency, as well as the accessory and financing choices your company offers? Wouldn’t their time be better spent transferring the lead to your sales team and then moving on to the next service or maintenance appointment? BDR recommends having technicians transfer leads to the sales team to follow up on, which helps ensure each customer will learn about the value your company provides and all the great product choices you have available.

Keep educating your team on these processes. Set time aside to work on how your team can present the replacement recommendations to customers as well as how they need to write them up on an invoice. Similarly when transferring leads, walk through the process and explain why leads are being transferred. Most companies that use this process make sure to give their technicians a spiff for the leads they generate.

Develop and fine tune your processes for recommending replacement options and lead transfer and before long you’ll develop a new, steady stream of replacement leads that will help leverage your company’s results to Prime.


Leverage Your Service Resources to Prime

Today, dealers must be efficient and profitable in service. Maximize your service resources by:

1. Utilizing flat rate pricing
2. Having great service truck stock
3. Offering and managing maintenance agreements
4. Generating replacement leads

Remember, success in business is about the journey, not the destination. It will take time to reach your goals. Keep working on the 4 steps described above and you’ll quickly be Leveraging your Service resources to Prime.

Consider attending BDR’s 1-day Successful Service for HVAC course, which goes in depth on all the topics covered in this article.


About the Author:
Scott Tinder is a BDR Trainer and Instructional Designer. He leads BDR’s Successful Sales for HVAC, Successful Service for HVAC, PreWall 1: 4 Steps to $1 Million in Revenue, and Wall 1: 6 Steps to $3 Million+ in Revenue courses.

 

About BDR:
BDR is a premier provider of business training and coaching services to HVAC contractors. BDR is an authorized training provider for International Comfort Products.
 

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