Making new “past” customers sounds a bit like an oxymoron, doesn’t it? No different than saying you want to grow your business but we only service what has already been sold. Good luck growing the business!
Every time I ask a contractor how they plan on growing their business, I get a blank stare followed by, “I guess we will have to spend more money advertising.” When asked what they would advertise, normally you’ll hear something along the lines of, “Well, furnaces and air conditioners, I guess.”
I will tell you this; most companies don’t have access to the capital required to acquire new customers in great abundance. The average cost of acquiring a new customer is in the range of $600 to $1,000 each. That is not good advice today!
New past customers
If you were asked who your business comes from, the answer is consistent. Almost all of your business comes from past customers. Sound familiar? Then it only makes sense to increase the number of past customers equivalent to the increase in business you are projecting. Hence the term, “new past customers.”
Creating “new” past customers is easier than you might think. We need to create a low-cost, low-risk product or service that consumers could benefit from any time of the year, regardless of heat or cold. A product, when properly promoted, has a needs score of over 50 per cent. This is the percentage of consumers that will see, hear, or consume it on social media, and could use the product within the next seven days.
You might be wondering what type of product would foot this bill. It’s yearly maintenance of course. It is the lowest cost, lowest consumer risk, and yet a highly valued product/service that everyone benefits from at any point within the calendar year.
Creating the plan
When it comes to annual maintenance, not all are equal and not all provide value to the customer; create a plan that wows the customer. Sit down with your team and create the physical attributes of what furnace maintenance could and should look like. Do the same for air conditioners, heat pumps, boilers, fireplaces, HRVs, ERVs, HEPA filters, humidifiers, and any other product you may handle that could benefit from an annual cleaning. Look at add-on items as well, such as filters and replacement media. Your goal is to create a service that, in most cases, can be performed in just under an hour. Once you have made your confirmed lists, the time allotment is just under sixty minutes and then place a value on it.
When determining your fair market price remember a couple of key items. Number one, remember the acquisition of a new past customer is between $600 and $1,000. Number two, the customer is paying you to come in and introduce yourself and your company. Number three, consider this a first date and act accordingly. It means having the customer join you in the basement. And finally, number four, new past customers can provide an average of $800 in annual revenue or $8,000 over a 10-year lifespan. Now, place your monetary value on the service and try to remain in the market value pricing. Now you have a plan and a price point.
Add 30 minutes
Now that we have created our task list that can be completed in just under an hour, let’s add thirty minutes to the appointment when scheduling your technicians. Remember, we have been invited into the home to educate consumers on their current system. We may want to run a risk assessment to determine the number of years of useful life left.
This approach allows the technician to explain what they are doing to extend the life of the system and when to start budgeting for a replacement without selling a system— let your sales department look after that end. Use the extra time to answer any questions the consumer has, and talk about new products and market trends. If there are government rebates and incentive programs, now is a good time to educate them.
And should they wish to move forward on any of the products or services discussed, book an appointment with someone else to come out to sell them. Our goal is to make a memorable impression without pushing or trying to sell something other than what we are there for. If you find yourself in a small company, play off the other technicians to come in and sell so this visit can conclude with a separate visit.
There is an old saying that goes — “Consumers love to buy, but they hate being sold to.” Your first impression is not to sell; that will come later in the relationship.
Shout it out loud!
An additional approach to keep the homeowner informed and coming back for more service work is as simple as a company sticker. By applying one to the product, it can let the consumer know when maintenance was performed and when to schedule their next appointment. Tell everyone what you are doing and target social media. Small-town newspapers, flyers, sports clubs, and door hangers are just a few examples. Every service visit becomes an opportunity to conduct maintenance. Cleaning could be a free add-on to all new installations for the first year.
Once your phone starts ringing, the rubber will hit the road. Think about ways to convert the call into action. If a customer calls and asks how much for a maintenance check and we respond with $150 bucks, we lose! If we reply with, “Have you ever done business with us before? No, great! Thank you for reaching out. When we come out to perform a maintenance check, the technician will invite you to the basement with them and they will perform a 20-step inspection, which will include cleaning all areas in and around the unit. They will provide you with a written report on any findings and, based on your satisfaction, will book next year’s visit. For that, we charge a fee of $X. Would morning or afternoon work best for you?” And we have a new and satisfied customer. Congratulations!
Following this step-by-step, albeit a condensed version, you will be well on your way to creating new past customers. For the next issue, we will take a look at the next step. :