Lessons Learned from Amazon Prime
What are you doing in your mechanical service contracting business to get more by doing more for your best customers? Do you have a premium program like Amazon Prime that includes exclusive benefits covered by the price of a subscription? Is there a tier of service that includes the basic preventive maintenance program plus a bunch of extras that entices customers to pay upfront?
Here are some suggestions for how to form a program that pays you upfront and smooths out your labor demand curve.
1. Give it a name. Salespeople cannot talk about your program and customers cannot reference it if it does not have a name. Amazon chose “Prime,” whose root is from the Latin word “prim” or “primo,” meaning first, as in first in line. It is a good name because it conveys some meaning while also being easy to remember. You should do likewise. Obvious choices are names like “premium,” “platinum,” or “gold,” which are unimaginative but at least connote value easily. Ideally, you can name your program in a way that has meaning, rhythm, and rhyme so it is easy to say and easy to remember.
2. Charge a subscription fee. You should collect a monthly, quarterly, or annual fee in exchange for the program. Angle for an annual fee for the obvious reasons, but offer other options that might appeal to different customers. Try to price it at a rate the average customer would happily pay for the benefits and that would provide you a decent margin on average. Some customers will be more profitable than others, but maximizing profit is not the reason for program fees. Locking the customer in to your services as the preferred vendor is the goal.
3. Offer expedited service response. Everyone likes the idea that they will get priority service. If you are committed to great service, go ahead and promise your best customers that you will respond with skilled technicians to any problem within one or two hours. Or promise to return a call or web inquiry within 15 minutes. You are probably committed to it anyway, so why not get credit for it?
4. Include basic maintenance services. If there is a preventive maintenance protocol for the equipment that will be under your care, and you are committed to delivering the work, build that into the program. Including preventive maintenance makes it easier to schedule (you do not have to ask customers or wonder if they will pay), and you may find opportunities to offer additional services.
5. Offer a lower rate on all planned services. It is good for both you and the customer for all services to be planned instead of waiting for emergencies caused by failures. When you quote repairs and upgrades that can be scheduled instead of performed on an emergency basis, the rates will be cheaper. The more customers you get into proactive mode instead of reactive emergency mode, the more efficient you can be with your scarce technician resources.
6. Offer an online account. Give your customers a reason to come to your website. Showing them online details of their plan, history, equipment, quotes, etc., saves your employees time. It also sets your company apart from the competition and makes it more memorable.
7. Offer a performance guarantee. After you get their equipment into good order and you have a regular maintenance routine or remote monitoring to expose any risk, offer emergency service response at the subscriber program rates. This approach shows you have confidence in your plan, and it incentivizes the customer to approve your quotes for planned repairs so that the equipment stays in the program. Any equipment exhibiting failure symptoms that are noted and quoted by you is excluded from the plan if the quote for planned repair is rejected or ignored.
When customers feel that you have been thoughtful in meeting their needs with a premium customer service program, they will happily pay a program fee to claim their membership. You can use the steady cash flow and predictable schedules to hire, grow, and expand the program.