Back in 1992, if you were between the age of about 5 and 55, you likely shouted some form of the following movie quote:
“You can’t handle the truth!”
That classic line is from the Oscar winning film “A Few Good Men.” But what is missing from the memory of most people quoting that scene is the following:
Col. Jessup: You want answers?
Kaffee: I think I’m entitled to.
Col. Jessep: You want answers?
Kaffee: I WANT THE TRUTH!
Col. Jessup: YOU CAN’T HANDLE THE TRUTH!
Did you catch it? “I think I’m entitled to.” Now, if there had been a contract in place, and they had the ability to quickly and easily look up what they were entitled to, then perhaps that whole discussion would have been settled much quicker.
Obviously, that’s a bit of a stretch when it comes to capital cases in the courtroom – but how many times has a customer called in because they ‘thought’ they were entitled to some work or parts on the equipment? Entitlements are a huge determinant when it comes to your service organization operating as a cost center or value add profit center within the business.
In the first few blogs we covered the foundational pieces of a modular approach. But now that you have your installed base mapped out, and understand where your technicians are supposed to be, how will you ensure they are doing the work your customers are entitled to? And perhaps even more important, ensure that you are billing appropriately for the work that is being authorized and completed?
That’s why our next area of focus is going to be on entitlements. Entitlements give insight into exactly what level of service the customer is supposed to receive. This includes things such as cost for spare parts, billing rates for labor, response times, and penalties. Let’s imagine for a second that you have two contract customers who have a machine down at the same time, and only one technician in the area with the skills required to get them up and running. How would you decide whom to prioritize when it comes to completing their service?
Well, customer A has a 24-hour response time in their contract, while customer B has a 72-hour response time. But, if you don’t know what they are entitled to, then you may end up servicing customer B first and accruing penalties for missed SLAs with customer A. Or on the flipside, customer B is upset because they had to wait 71.5 hours for you to respond to their issue, even though that is what you are contractually obligated to do. But then there is a great lead generation opportunity to feed back into the system for the sales team, and they can upsell the customer to a higher tier of service with faster response times. But, you can only achieve that level of transparency with insight into the entitlements.
Listen, service engineers by their very nature are a helpful bunch who like to make their customers whole. If they don’t have visibility into what parts or service is actually included in the contract with the customer, they are going to default to whatever is going to achieve the highest levels of customer satisfaction. What does that mean? A great relationship between the customer and technician, but likely a high level of leakage for your organization. Leakage typically falls under two areas: contract and warranty. Simplified, it means you are giving away something for free that you should be charging for. Now what is the module that will allow instant insight into what service the customer should be getting? And what module is also available to the technician while on site?
I’ll pause for a second while you answer…
No longer does the technician have to call into the back office to check while being put on hold so someone can run to the file room and look through what is supposed to be an organized file cabinet. We all have seen it; that room is actually filled with stacks and stacks of file boxes, that no one dares to open because then they are responsible for organizing it. The engineer and the customer don’t have the time to waste waiting for a response on entitlements. The customer needs to be up and running, and the engineer has many more jobs to complete that day.
Having easy access to the information that allows you to see what service a customer should be receiving allows you to complete more work, shorten your days sales outstanding (DSO), increase your revenue generation, and increase customer satisfaction because your customer will know when you are going above and beyond — resulting in higher net promotor scores.
Pitney Bowes is a great example of a company that was able to utilize insight into customer and part information that was needed while technicians were on site. In the first year, while they were still implementing the system and training everyone how to use it, they saved $800K in leakages alone!
Focus on making that shift from cost center to revenue generator, and earn your seat at the table!