Greater Efficiencies Mean Higher Service Profits

By Jack Miller, Service Company Solutions

(First of three parts.)

Are you looking for ways to increase the profitability of your company? Who isn’t?

So let’s look at the options: Lower your costs, raise prices or improve efficiency. Which of those do you have the most control over?

In our industry, we use a lot of canned terms, including “first-call completes.” Let’s look at this as a way to improve profitability. How much does it cost every time you send a technician to a customer’s home? Just sending them out to make the diagnosis incurs a cost. Then after the issue is determined, perhaps you don’t have the part on your truck. So your technician must coordinate with the office, get the part ordered, and schedule a return visit.

Now your cost to send a trained technician out to a customer has doubled.

Here is another way to think about it: Consider that you only get paid on completed jobs, and the average tech manages just eight stops per day. If you have a 63 percent rate of first-call completes, that’s five completions per tech per day. If you are netting 20 percent profit overall, only the fifth completion gets you past break-even and into the black.

What if, out of the tech’s eight stops, you get one more completed call? Do you realize your profits would double? That’s right, double!

So how do we reduce the number of trips to a customer?  First, pre-diagnose or triage the appliance beforehand.  Second, look up parts and check inventory before heading out. And third, look to see if additional parts are needed.

Doing a little research before hitting the road, and having a good working knowledge of the product, will significantly increase your first-call resolution. 

If you are not familiar with Service Company Solutions, we have a tool called MPH Diagnostics that can perform all of these pre-visit functions in a matter of seconds. It is a helpful timesaver for experienced technicians and serves as an excellent resource for less experienced service techs and customer service agents. 

The principle here is simply that doing pre-diagnoses before spending the time driving to a customer’s home will pay for itself, time and time again. Spending less time driving and more time repairing the appliance by reducing callbacks will improve efficiency and your bottom line. Also, by avoiding that second trip, you’ve opened a slot for another customer and another first-call complete.

It takes small changes such as these to make huge differences in your bottom line.

Using the MPH Diagnostics tool, you can triage the jobs before even leaving the office to increase first-call completes, improve customer service and reduce erroneous diagnoses. Enter the model number of an appliance and the MPH Diagnostics tool will search a massive database of completed repairs to find common parts used, part numbers, customer-reported issues, any additional parts used, and other pre-call functions, all at your fingertips in seconds. Service Company Solutions compiled the data from hundreds of service companies and thousands of technicians to build a massive record of tens of millions of completed repairs. You can find more information about this and similar products at ApplianceBlueBook.com.

Over the next few issues, we will be looking at more efficient ways to locate parts and set professional pricing for professional service.

Let’s work to ensure that service time is an asset to your business and not a financial burden or “necessary evil.”

Jack Miller is a managing partner at Service Company Solutions (SCS), a Bedford, N.H.-based software and resource development company that tailors its tools and products to the appliance repair industry.