Without a little innovation and forward planning, providing field service as part of your business can prove to be a very costly endeavour. Indeed, if you’re not careful, then any value that you add to your business through such a provision will quickly be cancelled out at the actual cost of it.
There is no denying, of course, that providing field services will gain you a competitive advantage over your rivals, and in fact the level of service that you provide can often turn out to be the deciding factor for customers when choosing a product. If you’re providing great field service, then this will do no end to your reputation, and, if you’ve got the pricing right and your strategy proves to work, then it may even result in your service business actually turning more profit than the selling of your products.
However, this isn’t always the case for companies embarking for the first time on service businesses, and it can indeed be very hard to start making money from this side of the enterprise. But this isn’t to say that it’s an impossible task, and in fact, using your field service to turn profits might well prove to be more and more important as time wears on as your products become commoditised.
Developing profitable services can be the making or breaking point of the future of your business. Many companies, for example, enjoy a lot higher margins on their services than their products, and it is even more likely that your company will actually derive more sales from services than from your products.
But, this is the sort of thing that an organisation can only expect to enjoy if they work at developing their services slowly over time. If you try and jack up the prices of your services too high too quickly, then you may find that you lose a lot of customers and you might even struggle to break even.
Success in turning your field services profitable comes if you work at it methodically and slowly, firstly identifying which of your existing simple services you can start charging for, and then begin to drum up excitement for what you can offer with more complex ones.
The transformation can be tracked over a number of steps, and so, to help you, we’ve put together a list of 5 key implementations you can make to start turning your field services into revenue generating machines.
1. Begin Charging For What You Currently Provide
It is the case that some businesses don’t even realise that they are in fact already a field service company, but for some reason are choosing to miss out on revenues by not charging for some of the services they provide.
You may think that if you start replacing free with fee then you will scare off customers. And the truth is that yes, if you hike up the prices too much then your customers might start looking elsewhere. But, if you’re not greedy, then this shouldn’t be a problem, and what you will start doing is highlighting to your customers exactly where the added value lies in your existing service.
So, start making a small charge for this service, sell the service contract or warranty rather than just giving it away. You won’t immediately see a huge difference to your bottom line, but it’s the right place to start, and you will begin the process of turning a profit drain into a profit driver.
2. Schedule, Schedule, Schedule
As with so many areas of business, organisation is the key to turning larger profits. As soon as a customer makes the request for a service, then you of course must endeavour to get out to them as quickly as possible.
But the technicians that attend the job must be directed within certain catchment areas, so that they are not wasting too much time on the road travelling between call outs. This is a terrible waste of time and money, and will impact directly on your profits. So, cut the time and you cut the costs, and when you cut the costs you raise the margins.
3. Make Your Sales Team Focus On Services
Your sales team will of course be great at what they do – selling your products. But, in order to ensure that service side of your business continues to be profitable, then it will be down to your sales people to try and make sure that nearly everybody who buys your product will purchase a service contract as well.
To do so, your team will need to be focussed on often quite complex customer solutions. If you’re selling IT goods, for instance, then you may be able to offer remote monitoring as an add-on service. But, if you don’t point out to your customer exactly how much money they will lose in downtime if they do not opt for this monitoring service – through which you will be able to generate an early-warning system to alert all parties to a problem before it strikes – then the customer might not be convinced of the value of it. So, train up your sales team to be service-savvy, not just product-savvy, when drumming up business.
4. Market Yourself – Sell Your Successes
Just like you like to tell the world why your product is better than anything that they can get elsewhere, so too must you be equally as evangelical with your services. So, firstly, provide a great field service. Secondly, retrieve some testimonials from satisfied customers. Thirdly, get those testimonials on your website and any other promotional literature that you produce.
Furthermore, you should also be training, equipping and enabling your field service employees to sell further services whilst out in the field. They are the professionals, after all, who know exactly how servicing works in practice. So, don’t make your customer have to go online and register or make a phone call to purchase additional services – instead, empower your field service technicians with the ability to make actual sales whilst out on the field. Strike while the iron’s hot.
5. Make More Use Of Mobile
Constant connectivity is a term that is being bandied around the field services industries a lot more these days. And with good reason. Internet connectivity is now totally portable – and so is, therefore, all the power and information that the internet delivers.
Real-time data collection can be garnered from all jobs and added to a database, from which informed business decisions about the optimization of future operations can be extracted.
GPS tracking and route planning can also be optimized through the use of smart mobile technology, which will unlock the full profit potential of your field services.
What steps have you taken to make your field service more profitable? Share your thoughts with us in the comments below.