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50 Observations About the Art of Service

I’m not sure what prompted me to write this list or why I stopped at 50. These are presented in the order I jotted them down, so there’s a randomness (it also shows they way my thoughts bounce all over the place, which may or may not be a good thing). If others jump out at you that I’m missing, send me an email at matt.michel@serviceroundtable.com. Over time, with your help I might be able to compose a more complete list (though it will never be *a* complete list). Heck, I might even categorize them and publish one of those silly little books and retire to a boat with a satellite Internet link.

50 Observations About the Art of Service

1. In-home service providers are invited guests in their customers’ homes. Act like one.

2. Labor is your most perishable commodity. You cannot inventory it.

3. Service is a show. Put on a good one.

4. In-home service is local. Act local. Look local.

5. Low price in-home service companies usually cannot afford to provide much service.

6. People judge service quality based on the things they can see. Clean everything you touch.

7. Shoddy looking trucks imply shoddy work. Clean, professional trucks imply clean, professional work. Keep your trucks clean and well maintained.

8. People do not understand the cost of service. They do not comprehend what it costs to put a truck at their door. Thus, any hourly rate, no matter how low, seems like a lot to a consumer.

9. A complete repair involves fixing a broken problem and fixing a broken customer.

10. Customers are not always right and it’s folly to attempt to persuade them otherwise..

11. Beneath their fury, angry customers are hurting customers. Listen with understanding while their anger runs its course. Reacting to their anger makes it worse.

12. You cannot win a fight with a customer because even if you do prevail, they will spread poison about your name to everyone they meet.

13. When there’s a problem, customers usually want less than you’re willing to provide. When resolving problems, ask customer what they want and try to give them a little more.

14. The impression formed when the phone is answered colors everything that occurs afterwards.

15. People want to talk to people, not machines.

16. People’s perceptions are their reality.

17. Good service is impossible without good dispatching.

18. In a small service company, everyone should either serve the customer or service someone who does.

19. People judge technicians based on their human relations skills, not their technical skills.

20. Poor quality sales and marketing material implies poor quality work, while overly slick sales and marketing material implies overly slick business practices. The challenge is to design professional material that is not overly slick.

21. Unapplied (i.e., unbilled) labor is usually the single greatest cost for a service company.

22. Fixed, turnkey repair prices seem lower to most people than fixed material and variable labor prices.

23. People prefer to know what a repair will cost before work begins. Use flat rate pricing to remove uncertainty.

24. Companies that do not charge enough to cover their costs, fund future growth, and generate a return on the owner’s investment are subsidizing the customer.

25. A company that fails serves no one.

26. Unless you remind them, people forget the name of your company the moment the truck pulls away from the house.

27. No one wants to hear that something can’t be done. Rather than tell people what you can’t do, tell them what you can be done.

28. Customer churn is the single greatest marketing cost.

29. Usually, there is more business within five miles of a service company’s shop than the company could possibly handle. Still, they drive past it, dispatching trucks to calls 30 miles away.

30. Only employees make money on windshield time.

31. The cost of training is less than the cost of not training.

32. Service employees cannot treat the customer better than the boss treats them.

33. Service businesses are built on relationships.

34. Companies that serve at the customer’s convenience can charge more than companies that inconvenience the customer.

35. You can afford to give price breaks to customers who are willing to inconvenience themselves by waiting until it is convenient for you to serve them. These customers help you become more efficient and cost less to serve.

36. Because call takers are often the first point of customer contact, service companies should be willing to pay a couple of dollars above the market to hire quality. This is a marketing expense.

37. The world’s greatest mechanic, who lacks people skills, is unqualified for residential service.

38. Sales is the art of helping people buy. Sales is something you do for people, not something you do to people.

39. The best informed customer is the best customer. Better informed customers know more, want more, and spend more.

40. Everyone is not your customer. People’s needs and wants differ, making it difficult, if not impossible to serve everyone well. Pick the customers you will serve well and meet their needs precisely.

41. Technicians are teachers as well as mechanics. They teach customers.

42. People buy whenever they 1) recognize a need or want and 2) discover a satisfactory solution they can afford. The key words are “recognize” and “discover.” Often, discovering the solution causes them to recognize the need or want.

43. People with less money cannot afford cheap solutions. They cannot afford to pay twice.

44. It is the height of arrogance to withhold information from customers and to make decisions for them. Never assume customers will automatically want a repair and not a replacement, or vice versa. Give them their options.

45. People like choices, so provide them. Offering a single choice is an invitation for customers to call a competitor.

46. The best salespeople are usually the best educators.

47. Trust is built one experience at a time. Yet, trust is fragile. A mountain of trust can be undermined by a single broken promise.

48. People buy for their own reasons, not the company’s.

49. People are interested in their needs and wants, not the company’s.

50. Any work that results in positive gross margin is better than sitting around the shop. When technicians are idle, marginal business makes sense.

Matt Michel

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