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Hotrod and I moved into our Utah home a few months ago. Since then, we have hired a slew of service contractors to help us with everything from cleaning to concrete to landscaping to solar panel installation. In many cases, I’ve tried to hire people — if they would only show up. I’ve been standing on my doorstep with a blank check (credit card! Venmo!) at the ready and have not been able to give anyone my money.
To be fair, I’ve found a few terrific service providers along the way. What makes them terrific? They show up and do the work. (And they get extra points for being nice.)
Therefore, your service technicians’ close rates should be very, very high. The close rate is the number of closed calls divided by calls run.
What’s an acceptable close rate? If the tech follows a simple sales process, he or she could close every job. A good sales process goes something like this: the tech shows up, does a needs assessment, offers options and prices, asks for the sale, gets the signature and payment, and can do the work. Each one of those skills is trainable, meaning a tech could learn the steps necessary to be successful.
Real life isn’t perfect, so we don’t expect perfection. However, customers don’t want to shop for PHCP services. They don’t want to spend all day interviewing a service provider. They want to get problems solved. They want your tech to be the one!
Technicians may not make a sale if they don’t get there fast enough, they say or do something that doesn’t sit right with the customer, they demonstrate a lack of technical expertise, or the price is just not affordable for that customer, etc. Some of those things are fixable, and some are outside of the tech’s control. I suggest that a rock bottom acceptable close rate is 75 percent. Based on your experience, statistics and training, you may aim for 80 or 85 percent.
What to do about a low close rate
Note that there are a few statistics we can use to measure a service technician's performance. The main ones are:
• Total revenue;
• Average ticket (total revenue divided by number of closed calls);
• Labor as a percentage of revenue (gross wages divided by total revenue);
• Close rate as a percentage (number of closed calls divided by calls run).
All are important; however, the most important is the close rate. Is your tech capable of helping customers buy something? Suppose the average close rate at your company is 80 percent and one of the techs has a close rate of 35 percent. You and your tech can take steps to improve that statistic. However, the statistics don't tell you why the number is what it is.
1. Ride shotgun. Many contractors make the mistake of trying to diagnose and coach a tech’s performance from the statistics alone. To find out why a service tech is struggling, you’ve got to ride along and see the tech in action. Review your sales process on the way to the job. Then, notice the on-the-job performance, and break it down after the sale.
What steps worked? What steps were skipped or done poorly? Then you can have a relevant coaching moment. You could help the tech with some behaviors that may specifically address the steps in the process that he or she could do better. The tech can adopt the suggestions and see if the close rate goes up.
2. Practice safe sales. You also can practice in your training center. You want to give your techs time to practice their skills — communication, operational and technical — in a safe place. They can interact with each other and try on each other's words and behaviors.
The great sales trainer Harry Friedman shared a story that has stuck with me for decades. He said that in golf, for instance, we know an eight is bad. Suppose you are golfing and playing a par three, and you shoot an eight — a snowman — well, that’s bad. But why did you get the eight? Was it because you hit the ball 150 yards straight as a Scud missile onto the green, and then you putt, putt, putt, putt, putt, putt, putted until you finally sank it?
Or did you shank it, 25 yards at a time all over the fairway, and then drain a 30-footer? Those are different skill challenges, and those problems need to be coached differently. Your coach wouldn’t know how to coach you until he or she saw you play.
That's what riding along and role-playing and practicing can do for you. Observe what your techs do and, as their coach, you can then offer constructive behavioral changes: “Try doing this instead of that.” We waste a lot of time with pep talks when specific course correction will do much more to improve the statistics and your techs’ success.
3. Follow up on the nos. Here’s another vital action to take when a tech’s close rate is low: call your customers. Call the ones who said, “No,” and say, “Mrs. Fernwicky, our tech was there last week. You had a problem and we didn't fix it. I’m calling to check on you. Did you get the problem taken care of? Could we be of service to you?”
Sometimes she’ll say, “Oh, I just decided to do it myself,” or “I found someone else.” You might find out that she is unhappy and your company made a mistake. Maybe there was some confusion or a lack of communication. You may find yourself in a customer recovery position. That's good to know, and you can take steps to rectify the situation. It may provide some insight for you, your tech and your team.
Throughout, continue to communicate with your techs that a low close rate is fixable. You are responsible for helping your techs be successful: “We've got to help you get better; we want you to win if you're going to hold this position.”
Communicate with your customers, too. Find out from them how you are doing. Reviews are vital, and a phone call or face-to-face conversation can shed light on what you need to do to earn their business.
4. Moonlighting. Another cause of a low close rate is moonlighting. It’s a heartbreaker, but it happens. A tech may say to the customer, “I'll come back later and I'll do the job for a lot less.” Now, the customer may or may not tell you about it. They may not know the tech is moonlighting if he shows up in your truck after hours.
Follow up by checking GPS records. Moonlighting is stealing, so get the facts and address the situation appropriately.
In our industry, people aren’t shopping — they are buying. The key to your tech’s success, and your customer’s satisfaction, is to close the call and fix the problem.