Are You as Profitable During the Busy Season as You Think You Are?
Did you know that more contractors go out of business as a result of the "busy season" than they do as a result of the "slow season?" Incredible as it seems, it's true. Why is that?
I believe it's a result of "tunnel vision." "Tunnel vision" is a condition your service techs get when your dispatcher says, "You've got sixteen calls to run today and no one goes home until they're all taken care of."
At the same time, you're telling your techs to increase their average dollar amount per service call.
Rushing techs and long hours are the biggest causes of "tunnel vision," a low average dollar amount per service call, mistakes and callbacks, accidents, unbillable time, a high employee turnover rate and a lot of companies going out of business.
You don't make money by running calls. You make money ONLY by maximizing your profitability on every call... one at a time. This means doing more work per call and consequently, spending more time on every call. This means seeing fewer customers per day.
Will that hurt you? How can it?
Some might feel that, if you can't get to the customer that day, they'll call someone else.
Be advised, they already have.
During the busy season, customers tend to call more than one company right off the bat, and the first to arrive takes the call. The remainder are canceled.
So, what happens when one of your competitors reaches one of your previous customers before you do? Will you lose that customer permanently? Depends.
Personally, when I was running a service company, I didn't worry about losing a call with one of my previous customers to a competitor. Why? Because most techs have "tunnel vision."
They'd go out there and do one task and turn a blind eye to everything else. They'd repair a faucet and leave the same drain slow without even offering to clear it. They'd replace a contactor and leave the indoor and outdoor coils and blower wheel dirty. They'd add refrigerant without repairing the leak.
They were not providing "the ultimate service experience" and it never even occurred to them to offer a service agreement.
Look at your complaint records. You'll notice a pattern. As a rule, the most satisfied customers are those who spent the most money and the least satisfied customers are those who spent the least.
Customers who have their entire system looked over, be it plumbing, heating and/or cooling, and get everything that needs to be done completed on the same call are ultimately more satisfied than those getting the minimum amount of work done.
I knew that, just because we couldn't get to a customer quickly enough, we didn't necessarily lose the customer permanently. All we lost was a call that we didn't have the time for anyway.
Ultimately, them trying out one of my competitors for one call wound up to be a good experience for us. You see, customers tend to take the level of service they receive from top-notch contractors for granted. They think we're all alike. Sometimes a little taste of the "real world" brings the prodigal son home to stay.
So, to be profitable during the "busy season:
- Don't rush your techs. Allow them to do everything that needs to be done in one call. You'll make more money and have more satisfied customers.
- Don't overwork your techs. Most companies have a lower average dollar amount per service call during the "busy season" than they do during the "slow season," and late hours are the reason why. Don't let that happen to you.
- Monitor your dispatcher. They're usually more concerned with not having to deal with irate customers who don't want to wait than they are with profitability. Their favorite tech tends to be the one who runs the most calls in a day, not the most profitable. You'll have to listen for threats, some veiled, some blatant, to get techs to either hustle or work late into the night.
- Sell service agreements.