Yale Appliance’s service techs handle over 37,000 calls a year.
By Steve Sheinkopf, Yale Appliance
In his latest blog for Yale Appliance, CEO and BrandSource member Steve Sheinkopf explains why service is so critical to the appliance business and why so many retailers and vendors don’t offer it.
August 10, 1993 — I remember that day as if it was yesterday.
One of my customers had an ignition problem with a new professional range, so I sent an independent service technician after weeks of begging. The next call was from my frantic customer, saying the range blew up. The firemen doused his new kitchen with water, making the problem much worse, and my next few months were spent helping him with his insurance company.
This story was part of a disturbing trend. Products broke, and I had to beg companies to fix their products and manage that repair with often unfortunate results. So, we opened our service department almost 30 years ago.
Today, we have one head of service with an overall manager; a customer service manager; a full-time trainer; one parts manager with a staff of three; two regional supervisors of 12 to 14 techs each; and 15 people answering the phone. That’s what it takes to log over 37,000 service calls a year.
The Home Depot
No, I am not insulted. Yale Appliance is not national and only sells to a small part of the country. (Plus, we don’t buy affiliate links from any website.) These are all good companies, depending on what you are considering. Yet it is somewhat ironic that none offer any kind of appliance service.
There are two reasons why retailers chose not to: Time and mostly money.
First, it takes time to be efficient. We are almost 30 years in the business and are always learning. Service also needs to be a priority with the management structure, independent of sales. Most stores want to sell products; that’s easy. What happens after that is the tough part, namely delivery, installation, and service being the hardest.
But the main problem is the expense. Our service department is budgeted to lose $1.2 million this year alone. Manufacturers do not compensate for the actual cost of repairing their products in warranty, so we fund it out of marketing. The ability to fix expensive appliances is the best marketing, far better than seeing my face on TV or in a magazine.
It’s odd. Your car dealer is probably more invested in service, along with strict NPS (Net Promoter Score) metrics from the brands. Yet, in the appliance industry, many stores have stopped service completely while overspending on marketing.
Most retailers’ explanation is “The manufacturer will handle it.” However, it’s not a reasonable explanation for us when they aren’t doing it here in Boston.
For many brands, there are even deeper issues. The years of good factory service are mostly over for lack of funding. For a brand, service is an expense, not a mechanism for customer recovery and brand loyalty. Brand loyalty is not quantifiable on a profit-and-loss statement or a balance sheet. So many brands have deemphasized service, and many more do not employ a single technician.
Big companies are also a different breed. Will a CEO spend $50 million to $100 million building a nationwide service network? Then recommit $20 million annually? How will they sell that to investors? It will take years to see results, with the next CEO receiving the credit. Instead, most big companies will invest in marketing and product development for a much quicker return on their investment.
Unfortunately, these days bad customer service becomes amplified on social media and is a bigger issue than ever. So, there is no brand loyalty because loyalty is about what happens when problems arise.
That said, there are still great service companies in different parts of the country. Don’s Appliances, a fellow BrandSource dealer in Pittsburgh, is a great service company. Four out of the six brothers work in the service department. LG just hired the best service manager, Bill Lange, with an actual budget. Whirlpool has also made a better investment, and Sub-Zero has invested in parts and a more responsive service department. They have made it a priority.
That’s commitment and what it takes to run a service department.
Remember, sales may be profitable, but you are still spending most of your time trying to solve problems without a support staff. Appliances require service 9.7 percent of the time, just in the first year. Poor delivery and installations add 20 percent to that figure. The number escalates from there.
You will not grow unless you can solve your customer’s service problems.
Steve Sheinkopf is CEO and third-generation principal of Boston’s Yale Appliance, a BrandSource member and 97-year-old premier destination for premium appliances, plumbing fixtures, lighting and service.