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Rapid Improvement Plan: Recurring Monthly Revenue Attachment

How we were able to raise our RMR rate across all our jobs.

I’m obsessed with Brad Hams and his book, Ownership Thinking: How to End Entitlement and Create a Culture of Accountability, Purpose, and Profit. Since late 2018 we’ve been working on eliminating waste at Livewire and wanted to update you on our progress to date.

Ownership Thinking relies on the constant rhythm of implementing Rapid Improvement Plans (RIPs), which are quarterly sprints aimed at eliminating waste in specific areas. We’re running four concurrent RIPs around the following:

  1. Reducing wasted trips to supply houses (Lowe’s, Home Depot, etc.)
  2. Eliminating rush charges from our courier service
  3. Reducing non-billable hours (Rework)
  4. Increasing attachment rate of subscription services (Invision and Security)

We just wrapped up Q2 running the RIP around recurring monthly revenue attachment (#4 above), and here are the results.

We wanted to increase our total recurring revenue attachment (RMR) rate across all our jobs and set a goal around hitting 14 percent or above. We’ve been trending at 9.4 percent, which meant we had our work cut out for us. The Ownership Thinking Steering Committee started brainstorming in early April, and we implemented the following changes to help move the needle north:

Pick A Plan: Every new Livewire customer is now required to pick their level of service. In other words, everyone is a subscriber. Each customer is directed to our service plan page at closing where they can pick one of our paid plans or choose “Limited Support” if they don’t want to pay monthly. That means we now have all clients actively choosing the level of support they expect vs. not defining our service levels consistently, which can lead to frustration later when we’re expected to be available nights and weekends at no charge.

Working the Call List: We’ve been testing out a new Parasol program (full disclosure: I’m a co-founder of Parasol) where they take all our phone calls (not just from our subscribers). Parasol sends us a list each morning of all non-subscribers who called in looking for support. We then asked our service coordinator to canvass the call sheet each morning to turn these casual callers into subscribers. We took it a step further and made sure that no one can get on our production or service schedule without first picking a service plan.

Referral Program: Most of our security and service subscribers are raving fans, so it seemed only natural to develop a referral program. We decided to offer one free month of service to anyone they referred in. Our graphic designer created a great campaign for us, and we sent it out to our current subscriber list.

Our efforts paid off and we ended the quarter at 14.29 percent attachment (an increase of almost 6 percent!), which qualified for our gold incentive tier where we shared 20 percent of the savings with the team (all incentives are self-funding). Each employee at Livewire just received a check for $279.22.

Next up for Q3 we’re tackling reducing waste by driving down extra charges from our courier service.

What are you doing in your company to incentivize great performance and eliminate waste? I can’t wait to write our next update installment in early October.

Stay frosty, and see you in the field.