PSI June2017

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Selling service contracts t is surprising how little time is invested by Ibusiness owners and management in the security sector in growing the service contract base and related income streams. From our experience working with security installers, at least 80% of management time is invested in designing, quoting, project managing, installing and getting paid for the installed system. Yet most of the profit and the value of the company are in the service area. There are so many opportunities to develop the service business, but without the right mindset it will not get the focus. It is good to remind ourselves of the benefits of selling service contracts: • increases company value • provides recurring income stream. • delivers higher margins • provides follow on sales in call-outs, extra works and upgrades. • provides the means of repeat customer contact • reduces the threat of competition. • generates a positive cash flow. Recognising the benefits, develop a plan to accelerate the development of your service business. Set some key objectives for what will be achieved over the next 12 months and identify what needs to be done differently. For instance if you wish to grow the sales of service contracts linked to your own installations you might follow these five steps. • Minimise downtime • Replace consumable items on a planned basis, avoiding unnecessary call-outs. 2. Sell more service contracts to end clients at point of sale Secure the service contract at the same time as the systems installation order. For this to be achieved, the salesperson has to believe in the value of the contract to the customer and to the company. The system quotation should always include a service contract which is separately priced. 3. Sell more contracts to the end client when the initial installation order is won through a contractor Most contractors will only concern themselves with the initial installation and the warranty cover. If a service contract is to be secured, then the end client needs to be contacted as part of the sales process when the installation is handed over to the client. 4. Sell more contracts as the warranty expiry approaches If you have not been successful at selling contracts at the same time as the installation order, make sure you have a sales process in place with sales letters and follow up as the warranty expiry approaches. (continued over) In the first of a new series, Jim Rathbone of Rathbone Results looks at why growing your service contract base is the key to increasing value 1. Develop an improved quotation template for selling service contracts Communicate the value of your service proposition and the merits of taking out a service contract. A summary of the benefits of the preventative maintenance should always be provided e.g. • Peace of mind through regular servicing. • Extend equipment life • Safeguard the protection of property, assets and employees. • Ensure the system performs to its optimum throughout its life. • Achieve compliance with H &S standards • Reduce risk of unexpected costly breakdowns. www.psimagazine.co.uk 25
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