If you are old enough to remember playing in the streets till the streetlights came on, then you must remember playing red light–green light. It was our introduction to learning when it was safe to run, walk, and, most importantly, when to stop. Throughout this article, we are going to use this analogy to manage the ability to grow our business. We will learn when to grow aggressively, when to grow cautiously, and when to slow it down to a crawl.
Remember from the last issue, our quest is to build new past customers. So, walk and capture as many long-term customers as you can. The customers that can bring in $10 a month for the next twenty years are more valuable than the one-off ones. Monthly pay is the way to play.
Our goal is to convert as many of the maintenance visits into “monthly club members” or MCMs. If your first-year goal is to complete two hundred maintenances at $150, that equates to $30,000 in revenue. If you convert 50 per cent into MCMs, that is an additional $9,000 per year or $39,000 in year one; do that for the next 10 years at the same rate of conversion, and the five-year revenue is a staggering $285,000.
This does not include any extras or replacements. Based on 500 MCMs, you should be able to count on an additional $425,000 in replacement opportunities per year.
Monthly vs. cash on-site
Cash on-site customers are only your customer until you walk out the door. Our ex-utility, now retailers, figured this out a long time ago. They captured over 50 per cent of the households in Ontario. Do the math. That leaves half of the homes still up for grabs. By having the customer become an MCM, the relationship has a certain amount of bonding.
What should an MCM package look like? It could look like discounted rates, modified ranking in scheduling, or additional monthly specials. Be creative and think like a retailer. At this point, you should have your maintenance plan, your MCM package, and even multi-level incentives. Now what?
Assess your program with your staff to ensure everyone under your roof believes that the product you are presenting is a huge benefit to the customer. Seeing is believing and believing is seeing.
Train, train, and train
If you think it will be a cakewalk, it will not. It is a major cultural shift for everyone. Switching from the get-in/get-out mentality is a change of our basic nature, especially for the veteran technicians that might be on staff.
As technicians, we were trained to fix everything and maintain nothing. When we get to the home, typically, we would head straight to the basement to fix the problem. After, you’d leave and head onwards to the next call, while revenue is collected by the office.
Business has shifted and this approach doesn’t work anymore. We need to build relationships and communicate effectively with our customers, limit our service calls to no more than five per day, and engage the customer on the importance of scheduled maintenance. Nowadays, the technician should invite the customer into the basement, create an invoice before the repair is completed, explain the possible savings if they have an MCM, and offer a deep discount on the tune-up if they sign-up for an MCM. Then collect the fees and paperwork.
Not every repair can be solved with a tune-up, so train accordingly. We don’t want $300 repairs turning into $150 maintenance.
A typical example may sound something like — “The cause of the failure is due to a dirty flame sensor. The fee to remove and clean the flame sensor is $X. However, the dirty flame sensor is a sign of a lack of maintenance. It also indicates that other areas of the furnace need attention. I suggest that rather than spending $X to just clean the sensor, for an additional $50, we could perform a complete tune-up on the entire piece of equipment. How would you like me to proceed?”
Wait and listen. If approved, then proceed and invite them to stay while you do the work. Conclude with, “Now that we have the unit tuned up, I highly suggest that this be performed on an annual basis so as not to create an untimely call out again. We have an MCM plan that is only $10 a month and it comes with all these benefits plus a tune-up once a year. The good news is that you can save $50 on today’s visit by taking advantage of this offer. How would you like to proceed?”
So what if they say no? Once the technician returns with the service order and cheques, have your customer service representative reach out — “I noticed you didn’t take advantage of the $50 savings yesterday. Before I process this invoice, would you like to reconsider? I would simply apply the payment to the invoice and the balance would prepay your plan for five months. Your first payment would come out on the 15th, six months from now.”
After a year of practice, the MCMs will start to grow and grow! It is not unusual for a company to have 4,000 to 5,000 MCM customers. They have a very strategic way of using MCMs to drive revenue. They don’t just schedule them based on a calendar date but strategically on their departmental needs.
Proceed with caution
Once you have an established number of MCMs, go through and colour-code them. Red for equipment under five years of age, yellow for equipment six to 10 years, and green for equipment that is over 10 years old.
When the company is steady in all departments, this should be when red MCMs receive their visits. This is for when there are several MCMs due, and you want to put technicians on full-time. But this does leave the opportunity to sell add-on products.
During slow service times, look to yellow to fill up the service schedule. These are the MCMs that are going to drive service. At this point in the equipment’s lifespan, they are starting to age and reach the end of its warranty period. Preventative warranty service would be in the best interest of the customer. Add-ons are always an opportunity.
When installations are slowing down, green MCM equipment is coming to the end of its useful life. This is the time to start talking about replacements, heat exchangers failing, or expensive parts now out of warranty. If the unit checks out, leave the customer knowing that they are still in the clear. Your closing statement should be something like this — “I would highly suggest you start to budget for a new system in the not-so-distant future. For now, you are good to go.”
More than anything else, make sure the customer believes that your work is done with their best interest in mind. The benefits will soon return to you tenfold!