By Billy Marshall, CEO, ServiceTrade
Everyone knows Amazon has been on a tear for the past 5+ years. A big part of that success has been the Prime subscription program. Amazon customers who subscribe to Prime receive the following benefits:
- Priority shipping.
- Prime videos, music, and books.
- Photo storage.
And there is a long laundry list of other Prime benefits. Most folks probably only care about one or two of the benefits, but which parts of the bundle are valuable to which customers probably varies considerably. So Amazon includes a bunch of stuff to cast the widest net into the market. They are committed to the costs of most of these things anyway, so why not maximize the revenues across their most attractive customers while getting the glow of a great customer service reputation? It also leads folks to spend more time and money with Amazon products.
So, what are you doing in your mechanical service contracting business to get more by doing more for your best customers? Do you have a Prime program? Is there a tier of service that includes the basic preventative maintenance program PLUS a bunch of extras that get them to pay upfront?
Here are some suggestions for how to form a program that pays you similarly to how Amazon is paid.
- Give it a name. Sales people cannot talk about your program and customers cannot reference it if it doesn’t have a name. Amazon chose “Prime,” whose root is from the Latin word prim or primo, meaning first, as in first in line. This is a good name because it conveys some meaning while also being easy to remember. You should do likewise. Names like “Premium” or “Platinum” or “Gold,” are unimaginative, but connote value easily.
- Charge a subscription fee. You should collect a monthly, quarterly, or annual fee in exchange for the program. Try to price it where the average customer would happily pay for the benefits and you would make a decent margin. Some customers will be more profitable than others, but maximizing profit is not the angle for the program fees. Locking the customer as their preferred vendor is the goal.
- Offer expedited service response. Everyone likes the idea that they will get priority (hence the “Prime” name) service relative to others. If you are committed to great service, make the promise to your best customers that you will respond with skilled technicians within 2 hours. Maybe there is also a promise to return a call within 15 minutes. You are probably committed to it anyway, so why not get credit for it?
- Include basic maintenance services. If there is a PM protocol for the equipment that will be under your care, and you are committed to delivering the work, build it into the program. It makes it easier to schedule the maintenance when it is included, and you will get opportunities to upsell based upon the maintenance reviews.
- Offer a lower rate on all planned services. It is good for both you and the customer for all services to be planned instead of emergencies due to failures. When you quote repairs and upgrades that can be scheduled instead of emergency, the rates will be cheaper. The more customers you get into proactive mode instead of reactive emergency mode, the more efficient you can be with your scarce technician resources.
- Offer an online account. Give your customers a reason to come to your website. Show them online details of their plan, history, equipment, quotes, etc. It lowers your cost and makes your company more memorable.
- Offer a performance guarantee. After you get their equipment into good order AND you have a regular maintenance routine to expose any risk, offer emergency service response at program rates. It shows your confidence in your plan, and it incentivizes the customer to approve your quotes for repairs so that the equipment stays in the program. When customers feel that you have been thoughtful in meeting their needs with a premium customer service program, they will happily pay a program fee to claim their membership. You can use the steady cash flow and predictable schedules to hire and grow and expand the program.
ServiceTrade makes software for mechanical service contractors that helps deliver your premium program by streamlining service operations, selling more services, and creating a convenient, online customer service experience. Visit us at servicetrade.com.
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