Perhaps my favorite and most productive consulting activity is to go on a ride along. I hop in the truck or work alongside a team member. I open my ears and eyes, shut my mouth, and always learn something. Afterward, we debrief and examine what went right and what could be improved.
So much is required from a company’s team members, operationally and technically. And they are required to meet sales goals, too.
I believe that a nice, solidly skilled employee with a simple, friendly sales process is a gold mine of relationship-building, problem-solving and profits – except when that employee is talking about a company’s service agreements.
Recently, I went on a ride along, and the service tech was terrific. From the minute we arrived, “Timmy” charmed the customer with his Southern manners and calm, technical confidence. Timmy did a home survey and listened well as Mrs. Homeowner explained the challenges of the HVAC system. He did a fast and thorough diagnosis on the troublesome equipment. He made a successful presentation of suggested solutions, and Mrs. Homeowner said, “Yes,” to everything. She offered to make Timmy lunch, too.
Then, all the love and warm fuzzies went high-tailing it out of the room the moment Timmy started in on the service agreement: “Oh, Mrs. Homeowner, I notice that your service agreement has expired. Would you like to renew it?”
Mrs. H: “Um, sure. I guess. What is the service agreement for again?”
Timmy: “Well, we do a 39-point check on your HVAC system two times a year and make sure it’s running properly.”
Mrs. H: “OK. Wait. Didn’t you just do that?”
Timmy: “No, ma’am, I was troubleshooting the systems and found those problems.”
Mrs. H: “If you fix them, why would I need a 39-point check?”
Timmy: “Well, the service agreement also includes filter changes.”
Mrs. H: “Oh, yes, well, are you going to change the filters today?”
Timmy: “I could! They are free with a service agreement.”
Mrs. H: “How much is that?”
Now, at this point, Timmy fumbles for, then finds and presents, a 10,000-word, four-page agreement that lists – in eight point font – 39 technical activities, all for the super confusing price of somewhere between $189 and $529, depending on what is referred to in an asterisk somewhere. I am not exaggerating.
Well, it went from bad to worse at this point. Timmy never got lunch. He did complete the originally agreed upon work. Mrs. H did not buy a service agreement. Timmy changed the filters, but I am not sure that Mrs. H knows this as she and Timmy didn’t exchange more than a dozen words before we left. Ugh.
Here’s what’s wrong with service agreements:
- Don’t cover anything. As a homeowner, I am painfully aware of what a service agreement doesn’t cover. To make matters worse, technicians often give away a lot of service that the customer is not appreciating or paying for. It’s a lose-lose situation.
- Filled with asterisks. I hate small print, asterisks, and anything else that looks like the company is trying to pull a fast one.
- Painful presentations. Most importantly, employees are not properly trained to present the benefits in such a way that they don’t trip over themselves in the attempt. Maybe it’s because the benefits aren’t that impressive?
Bottom line: As a business owner, I understand why you offer service agreements. But why would your customer want one?
Ellen Rohr is an author and business consultant who offers systems for getting focused and organized, making money and having fun in business. Her books include “Where Did the Money Go?” and “The Bare Bones Weekend Biz Plan.” She can be reached at ellen@barebonesbiz.com.
