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Expanding Your Service Area: When More is Less

Originally published: 12.01.19 by Terry Nicholson


In the land of milk and honey, where opportunity is abundant, we rarely think “less is more.” After all, who wants less money, less vacation time, less fun, less success? The list could go on and on. But as business owners, it’s hard to imagine that less may, in fact, be more. Time and time again, I’ve seen that chasing more, often leads to less.

The situation occurs because you exemplify service excellence. You’re committed to delivering outstanding customer service. Your positive reputation is spreading in the community. Customers are referring their friends and family to you. You’re growing year after year.

Because of your many happy clients you are serving, you start receiving service requests from homeowners outside of your immediate service area. You start thinking to yourself “more business is good!”

That voice in your head says that one happy customer in the new area could lead to more happy customers, and you have the manpower availability at the present moment.

In your head it’s a no-brainer, and for most service professionals in the same situation, that temptation wins out before they’ve even considered all of the pros and cons.

Scheduling service calls outside your service area means accepting more consequences such


as:

  1. More technician windshield time
  2. Increased fuel and vehicle expense
  3. Increased technician compensation paying techs for driving, instead of repairing
  4. Less gross margin dollars per hour
  5. The occasional repair requiring a non-truck stocked part
  6. The occasional call-back
  7. Etc.

Plus, you are going to have to honor your warranties and guarantees. If you think there is nothing worse than running a call-back or warranty call, think again! Running a call-back outside of your service area is a real money loser.

In addition to the above reasons, also consider, as is so often the case, when it rains it pours.

Even though you may have taken the call outside of your service area because you had the labor availability, once you’ve taken the call, doesn’t it almost always seem that you start receiving more calls in your immediate area?

Now you’re overbooked or you can’t provide timely service. The end result is, you lose business to your competitors and your good reputation is weakened.

This is how more, quickly becomes less for your business.

Therefore, it’s wise to develop a plan on how you are going to successfully manage expanding your service area. Here is a proven step-by-step method you might find helpful:

Identify Your Primary Service Area

This is where you would prefer to do business, and if you could, you’d keep your entire team busy in this radius and never leave. Circle this area on a map and post it on the wall for all to see.

By posting a map on the wall for your call takers who are booking your appointments, they know where the best, most profitable area is located.

Identify Secondary Area

This is the area you are willing to serve if you can’t keep your staff fully booked in your primary service area.

On the same map, draw a border in a different color around your second-choice service area.

Establish Dispatch Fee

You may actually have different dispatch fees for each service area. For example, your dispatch price in your primary service area may be $89, while in your secondary service area it may be $109.

This will help offset some of the additional costs of doing business outside of your primary service area.

Resist the Temptation ... Just Say No

When service requests come from homeowners outside of your identified service area, resist the temptation and politely inform the caller they live outside your service area.

This commitment to service excellence in your defined service zone will allow you to continue to gain market share. As you expand your customer base inside your primary zone and continue to fill in more customers in your secondary zone, you will eventually want to redefine your service zones again.

Either by widening your service zones by expanding your primary and secondary area so each covers a larger area (see chart).

Or, by developing a third zone that expands your service area out further, with each zone having a different dispatch fee.

Whatever method you choose, knowing when more means less, and developing a service zone expansion plan, is how you turn your company into a real, money-making machine!

 




About Terry Nicholson

Terry Nicholson is chief success officer and leading HVACR expert at PRAXIS S-10, the fastest growing success college for contractors. Visit praxiss10.com for additional information.




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