Most companies know service is their most profitable business. The majority understand selling service agreements is the best method to capture this renewable, high margin revenue and build the value of their company. Many believe they are doing a great job growing this business. For almost all the only measuring stick is comparing results to previous years. Every firm can do a better job growing their service business. Far too many continue doing the same things they’ve done year after year. For those that have adapted their business model, the results have been dramatic. For those that haven’t, the opportunity is there for the taking.
Owners and operators understanding the profit potential, the positive impact of customer relationships, and the financial stability that comes with a solid base of service agreement customers. Lacking, in many cases, is the expertise and understanding of current service marketing concepts. Customers in today’s marketplace are looking for solutions that demonstrate value. A recent survey revealed that purchasers of service will look beyond price if the service provider can create a package of services tailored for the client’s specific needs. Survey participants were clear in conveying that most service agreements they review look the same. Special requirements for things like response times, equipment replacement offerings, or an annual set price including part and repairs are often not presented. Almost all stated the agreements were difficult to understand or unprofessional in appearance and content.
Many service providers admit they have been “too busy” to focus on their RMR service business. Service agreements are sold, but not on a consistent basis. The reasons vary, but they usually fall into one of the following areas.
- Selling agreements that are “me to” commodity in structure, not solutions to needs. This results in losing business to low cost providers.
- Struggle to locate and qualify end user decision makers who purchase service agreements.
- Utilize service agreements that are unprofessional in appearance and content.
- Don’t have the ability to bundle services for multiple systems a growing trend with end users.
- Underestimate the need to offer inclusive coverage’s like parts replacement, after hour service, and detector cleaning/sensitivity testing.
There has never been a better time to focus on growing RMR service revenue. In far too many cases service customers have not received what they contracted for or response times have risen to unacceptable levels. All it takes is the right sales strategy, tools, and training. Most importantly it takes a commitment to do it today, not next month or next year.