Building Your Service Business
Mar 16, 2022
Have you ever done the maths on how many boiler services are required to pay yourself or another engineer a decent wage plus all the overheads necessary?
In this months Boiler Business Column, we will look at why we should focus our marketing and business systems on attracting and serving selected annual "service" customers. Why are service customers just as important as installation customers.
Before sharing my views, let's look at some basic numbers.
I will base these figures on a recent poll in The Boiler Business community. We asked the community what they charge homeowners for their "standard" annual boiler service with no parts required. Using the answers from 170 Gas Safe Engineers from across the UK, we found £80 is the average cost to homeowners. With most engineers being VAT registered, we will deduct the VAT and use £66.66 for the following calculations.
100 x standard services @ £66.66 = £6,666
500 x standard services @ £66.66 = £33,330
1000 x standard services @ £66.66 = £66,660
We will point out that some engineers answered that they charge less than this figure. At the same time, many more answered to be charging above this figure. Before reading the rest of this article, please complete these equations based on the fees that you currently charge your customers.
100 x standard services = £ SPACE REQUIRED
500 x standard services = £ SPACE REQUIRED
1000 x standard services = £ SPACE REQUIRED
Why should we focus on building the service database?
Although building your service database to 500 or 1000 may seem daunting when you first start building your business, ask yourself how long it would take to grow these service numbers through only installing boilers?
On our Marketing & Sales training day, we discuss long term strategies to build your customer database. We always make the case that if you can learn how to attract customers for boiler installations, you can use the same methods to attract customers that are seeking a new supplier for their annual boiler service. Yes, you need multiple boiler services to make the same money as a boiler swop, but long term, look at the lifetime value of another 5, 6, 7 or 10 new customers. That £80 service could be £400 over the next five years. And the added bonus, with every new customer, comes more opportunities for future referrals and database growth.
So what's your capacity?
Understanding your personal capacity or that of your team is essential to controlling the numbers. Working flat out Five days a week, twelve months a year minus holidays, one person could complete the following volume over the year.
230 service days year x 4 services day = 920 services year
230 service days year x 5 services day = 1,150 services year
The problem with the above figures is the sheer volume of customer service that comes with those numbers. If you are a one-man-band, out in the van doing the work, who will answer all the calls & emails and arrange the work with the customers? So, we have to plan our business, know what we are building and know the required numbers to achieve it.
Added Value over Volume
Rather than pushing the volume up, another option is to focus your marketing on attracting customers that are happy to pay more for their boiler service. Service plans are an excellent way to add more value to the service and increase profits. Or service & repair plans for the more experienced repair specialist.
How about working on the tools Three days a week, nine months a year?
That's 117 service days per year. 5 services per day. 585 services per year. Personally, I like the plan for servicing 3 days a week 9 months of the year. That's an excellent place for a family man, allowing every school holiday off with the kids. Can you make the numbers pay enough for this laid back lifestyle business?
Let's look at the numbers again
117 service days year x 5 services day = 585 services year
585 x standard services @ £66.66 + VAT = £38,996 Net
585 x standard services @ £83.33 + VAT = £48,750 Net
585 x standard services @ £100.00 + VAT = £58,500 Net
Could you lead a comfortable life on these figures working 117 days a year?
So, what do you want from your boiler business?
A service-based specialist could be your future if you plan the numbers.
What are your current service fees? Could you charge more in the future? What is your service capacity? Can you make the sums work?
This article is based on tasks within the Built to Last Marketing & Sales training day. For more Industry-focused Business chat, videos & future training dates, join us on Facebook www.facebook.com/groups/TheBoilerBusiness
