Follow these key strategies to drive field service revenue through uncertain times
As the saying goes, when the going gets tough, the tough get going. And we know service organizations like yours are still going and serving customers safely, even through a global pandemic.
But is it possible for your service business not just to survive but thrive through this major disruption? The answer is a resounding yes. And we want to share the top three strategies you can start using today to boost your bottom line.
We’ve gathered feedback from dozens of Service Pro users and industry experts to discover best practices for increasing your service revenue during turbulent times. Read on to learn three key strategies for growing your business through uncertainty.
Analyze and Expedite Your Cash Flow
Simply put, cash is king. But do you know where your cash flow comes from at any given time? To better understand and optimize your service revenue, start conducting a weekly cash flow analysis to see where your cash comes from, identify gaps in your budget, and find liquidity to fill these gaps.
Another consideration to quicken your cash flow is your speed of service. Many service organizations extend work-in-progress (WIP) by 30 to 60 days. It is important now more than ever to maintain your WIP at 24 hours or less. After all, the faster you get invoices out the door, the faster those invoices will be paid. A faster WIP also makes it easier to track where and when you can expect your cash flow to come in.
Prioritize Account Needs
Did you know that for most service businesses roughly 40% of total revenue comes from just the top 2% of customers? And about 30% of revenue comes from the next 8%. That means about 70% of your service revenue comes from only the top 10% of your customers.
Find and focus on the companies that make up your top 10% to make sure you maintain a solid cash flow. Don’t shy away from these accounts – now is the time to be in front of them as much as you can.
Build and Use Scripts
As a service provider, you know the importance of preventive maintenance for keeping your customers’ equipment running strong. Completing scheduled maintenance brings in revenue for your business and also minimizes liabilities for your customer.
During times of economic turmoil, your customers may want to delay preventive maintenance or ask for discounts. When this happens, it is important to have a script in place to persuade your customers to follow through.
Create a script for any objections your customer might have to performing preventive maintenance. Include points on repair before failure, maintaining safety, and increasing equipment uptime. Make sure everyone in your organization is familiar with the script and can confidently respond to customer objections when needed.
To summarize, this pandemic has been tough on the service industry. But there are a few things you can do to make your service organization even more profitable starting today.
First, forecast your cash flow. It is good practice to try to minimize your WIP to 24 hours. This makes your cash flow more predictable and eliminates the wait time before you get paid.
Next, determine who your most valuable customers are. Remember the top 10% of your customers make up 70% of your revenue. Prioritize these customers and learn what their needs are so you can better serve them.
Lastly, to retain consistent preventive maintenance work for your clients, develop scripts to address common customer objections and teach your staff how to use the scripts. Often customers will try to reschedule their maintenance, which puts their equipment at a greater risk of breaking. It also limits the amount of work you have available and may tank your cash flow.
For even more expert advice on maximizing your service revenue, watch the 60-minute webinar recording.