Most businesses obsess over growing revenue by thinking up new ways to acquire more customers. Often overlooked are the clients they already have. Let’s explore some ways to grow average project size and increase your 2019 sales numbers by 10 percent or more.
Enhanced Warranty: What does your standard warranty cover? Consider extending your bumper-to-bumper warranty coverage from 90 days to 2 years for 3-5 percent of the project total. A $100,000 job could see an additional $3000 in enhanced warranty revenue by just extending the timeframe a little. The “bathtub curve” maxim dictates your systems will experience most of their tech issues within the first 90 days and then stay pretty steady for another 2-3 years after that. In other words, this is a low-risk, high-reward move. If your customers invest in an uplifted warranty 50 percent of the time, you’ve just added a ton of profit straight to the bottom line.
Also by Henry Clifford: Are You Ready for “Resimercial”?
Upgraded Interconnects: It’s easy to become complacent and just sell the same thing day after day. Why not add some language to your proposals that speak to the features and benefits of higher-quality audio/video, power, or data cabling? Imagine an easy flat percentage upgrade option at the bottom of your proposals. Manufacturers like Audioquest do a great job at setting integrators up for success. If you’re standardizing Pearl level interconnects, add Forest, Cinnamon, or Chocolate levels in a menu format at the bottom of your proposal. If your project has $2000 worth of Pearl cables and the client decides on the Chocolate option for a 50 percent premium, that’s another $1000 in revenue you wouldn’t have generated otherwise. Sales theorists preach the virtues of offering a “Good, Better, Best” scenario to clients, and interconnects are an easy way to do that without confusing the customer.
Presenting Security and Service RMR Every Time: Nothing moves the needle like generating recurring monthly revenue (RMR), and if your company isn’t involved in selling security monitoring or 24/7 remote support (full disclosure: I’m a co-founder of Parasol), now’s a great time to get in the ring. Imagine a day where you wake up and all your bills are paid on the first of every month. It won’t happen overnight, but the sooner you start, the sooner you’ll get there. By positioning service and support plans as an opt-out vs. an opt-in, you’ll establish early on that ongoing support is not only something you provide, but it’s also a paid service and part of your culture. It’s no different than the HVAC company or lawn service offering the same thing. Technology needs ongoing maintenance just like any other household investment. Start the conversation early with your customers about the importance of long-term relationships and watch your bottom line grow. Industry benchmarks suggest companies selling RMR should expect a 50 percent take rate when presenting to qualified prospects at each sales opportunity.
Customer Training Time: It’s easy to overlook the last few hours of any installation project and fail to price in training time effectively. It’s a common complaint we hear from installers and customers alike. By shifting to a model where customer training time is called out, you’ll be sure to lower the anxiety at the end of the project. Clients will know to expect it and installers will not feel rushed to their next job because of undersold hours. By capturing 1-2 additional hours per project, that could add up to thousands in new revenue by the end of the year.
Also by Henry Clifford: Rapid Improvement Plan: Doing The Job Right The First Time
Sell More Hours: Sales people always complain the installers aren’t working fast enough while technicians are quick to say the job is undersold. Who’s right? They both are. As with most things, the answer always lies somewhere between the two. If you’re not doing a teardown of jobs after completion to learn for next time, consider implementing an “after action” meeting involving the sales rep, project manager, and installers to tweak your processes. By constantly sharpening your edges, your labor numbers will get better and better with each new proposal.
Parts: Are small items like zip ties, screws, glow rods, or other consumables accounted for on each proposal? If not, consider adding a 5-10 percent line on each scope of work capturing these items. The auto repair business has been doing this for years successfully. Take a page out of their book and watch your profits surge.
By growing your average sale, you’ll make 2019 your best year yet!
Stay frosty, and see you in the field.