Free Resource: The Practical Playbook For Service Income Growth
Today we’ll be talking about the second of the three core strategies to drive sustainable service income growth (SSIG):
- Improve Contract Retention
- Increase Contract GP
- Grow New Contract Sales
Increase Contract GP
This is all about increasing Service Ops efficiency, which reduces labor hours per contract. Ultimately, this results in an increase in revenue per labor hour across your whole team.
When you free up labor hours from your existing contracts, you can use that extra capacity to meet future demand from a growing contract base.
Here are the 3 steps to increasing contract GP with a Predictive Maintenance Platform:
- Recruit, Protect & Develop Skilled Labor
- Automate Time-Intensive Tasks
- Reduce On-Site Labor With Virtual Services
For the full service guys, profit from service contracts has a non-trivial, direct impact on the bottom line (and SSIG).
For best effort guys, increasing contract GP is a way to create a hyper-competitive offer without sacrificing contract margin.
Step 1: Recruit, Protect & Develop Skilled Labor
Protecting Your Labor
Committing your company to digitally transforming your service delivery translates into an even more fulfilling career trajectory, even for your more senior, experienced technicians. Transitioning senior technicians into Virtual Technicians and scaling all that experience across accounts and technicians helps keep your most valuable assets in your workforce. It also demonstrates a clear career path for the rest of the Service Ops team.
According to an industry poll conducted on LinkedIn, the average cost of losing a 5 year technician is at least $50,000 dollars. Additionally, the average time needed to regain productivity after losing a 5 year technician was at least 6 months.
Recruiting Your Labor
A Predictive Maintenance Platform provides you with a whole new “tool kit” that can be used to recruit younger, more tech savvy/hungry technicians. From mobile apps to Service Ops Analytics, integrating data into service delivery creates a desirable career path for the next generation of technicians.
A Predictive Maintenance Platform also provides a more attractive work environment for younger techs joining the field. A study by Dell found that access to new technology on the job is a big factor for Gen Z workers when considering where to work.
Developing Your Labor
With a Predictive Maintenance Platform, machine data collection provides the training tools to rapidly accelerate the development of a greenhorn into an A Tech. One year with a predictive platform is conceivably worth three or more years traditionally. Virtual technicians can digitally “look over the shoulder” of younger techs prior to dispatch, while they’re on site, and post visit ensuring meaningful lessons are absorbed.
Step 2: Automate Time-Intensive Tasks
A crucial automation opportunity for big efficiency gains lies in:
Technician PM Audits.
The nClarity System will automatically generate these reports using data fed from the nClarity Pulse pre and post PM, and will flag reports for review based on metrics that do not meet standards.
At times we need them most, there is too little manpower to deliver audits. And in the end, preventable failures in full service (& to a degree, best effort) scenarios happen too often.
A Predictive Maintenance Platform automates the audit process by automatically pulling the actual machine state just before and just after the PM.
Check out this 3-minute video walkthrough of David Vogel, nClarity Operations Manager, walking through a quick PM Audit in the nClarity Dashboard.
This kind of optimization really moves the needle when it comes to increasing contract GP and efficient expansion of labor capacity (these benefits extend to subcontractors too).
Step 3: Reduce On-Site Labor With Virtual Services
Allow me to state it clearly: This is the Money Shot.
Virtual Services don’t require an expensive truck roll to perform regular inspection, and they take a fraction of the time to inspect and diagnose equipment.
Real-time data collection gives ultra high-resolution visibility into equipment performance without the need to go onsite.
With access to high-resolution data from each piece of equipment, a Virtual Tech can:
- Remotely diagnose and prioritize machines prior to a PM
- Dispatch techs into the field with Intelligence (See R5 Graphic below)
- Prevent costly and disruptive equipment failures (that can hurt contract GP in a full service scenario) by identifying early warning signs of degradation before they become critical
When you get your dispatch right to the power of 5 (R5), you completely eliminate the wasted hours and convert them into billable hours that can be reallocated to growing service income.
This is why an hour of Virtual service is easily worth 3-5 hours of service out in the field.
Learn How To Grow Your Service Income
By integrating predictive maintenance technologies to make every facet of Service Operations more efficient, the resulting increase in productivity will generate more revenue per labor hour and clear a path to sustainable service income growth for your organization.
Read our practical playbook on how to use this technology to unlock a clear path to sustainable service income growth.