By Joanna Rotter, content marketing specialist, MSI Data
Machines are getting more complex and service organizations in nearly every industry are feeling the pressure to monitor and keep their customers’ equipment up and running. Here’s why establishing a preventive maintenance program is a great place to start, and tips you can share with your field services clients for kicking one off in their businesses.
Customers purchasing equipment today have higher expectations than they did even five to 10 years ago. Not only do they expect a quality piece of equipment (quality is no longer a differentiator, it's the rule), they demand service expertise and a true partner to maintain their equipment and keep it running at peak performance.
This is good news for your service business clients that have a huge opportunity to expand beyond break-fix calls and create a recurring PM program that secures revenue streams and improves customer relationships.
Why Preventive Maintenance Is Good For A Services Business
As service organizations, when your clients sell preventive maintenance contracts, it gives them a leg up beyond break-fix competitors and makes their businesses more secure. Here’s how:
- Selling A Solution In Addition To A Product: As the demand for strong service programs has grown and machines have become more complex, customers now expect a long-term maintenance solution to keep their equipment running, not just a product. This opens up a new revenue stream for equipment manufacturers on top of product sales.
- Greater Financial Stability: The more long-term service contracts your clients sell, the more secure their revenue streams become. Why? Because service contracts guarantee regularly recurring payments and increase chances for loyal customers and upsells.
- Stronger Customer Retention Rate: Service businesses are finding it’s easier to build strong relationships with customers when they have regular contact through maintenance visits. Largely, this is because they are the most educated about their customer’s equipment. By constantly tracking and monitoring equipment, service organizations hold the keys to the data that makes their customers’ businesses more efficient.
Companies that sell service contracts out-perform those that don’t. So, instead of focusing solely on selling a product and waiting for the customer to call when something's not working, your services clients will want to get out ahead of the problem and set up regular PM visits.
Why Preventive Maintenance Is Good For Customers
As services providers, your clients’ number one goal is to keep customers happy. With that goal in mind, PM contracts shouldn’t be a tough sell since (in addition to establishing recurring revenue for your field services clients, they benefit customers in two distinct ways:
- financial benefit
- peace of mind
According to a recent article written by Caterpillar in Equipment World, world class businesses spend 60 to 70 percent of total maintenance hours on preventive maintenance, compared to the industry average of 35 percent. As a result, world class organizations end up spending less than 3 percent total revenue of maintenance compared to the industry average, 8 percent.
(source: Equipment World)
In addition to the financial benefit they gain from investing in recurring PM contracts, customers can rest assured their equipment is being taken care of over as opposed to waiting for it to break down under a break/fix set up. Customers today expect more from an equipment purchase; they want field services businesses’ expertise and a lasting service partnership.
And, as you know, when customers are happy, the business is happy — with consistent referrals and a consistent revenue stream coming from pre-scheduled maintenance visits.
Tips For Establishing A Preventive Maintenance Program
Here are some steps that you can share with your field services clients to help get them started on the path to a consistent PM business model:
- Designate Technicians as Sales People. To establish a consistent PM program, you need to sell contracts. And, who better to sell services than the service team itself? When they’re in the field to install equipment or respond to a break-fix call, technicians can sell a service contract on site. Suggest to your clients that they equip their employees to do so.
- Use Service Technology To Make Maintenance As Efficient As Possible. Delivering quality preventive maintenance services can be difficult without the right software to organize it all. Provide your clients with an all-in-one field service suite that gives back-office workers the tools they need to schedule maintenance visits in advance and the mobile tools technicians need to see service history and equipment details, what’s covered under warranty or contract, and scheduling alerts.
- Use Data from IoT Sensors To Automate PMs. Traditionally, PM schedules have been established based on set time intervals. For example, you might change the filter in the industrial heater every three months. With IoT sensors and new access to machine data, service businesses can set up parameters that trigger alerts and organize PM visits around when the equipment needs it.
As customers continue to expect additional benefits and lasting relationships with their dealers, more service businesses will include service contracts as a standard sales initiative. Thanks to advancing technology, machines are increasingly complex, which emphasizes even greater need for a mobile management system and strong customer service.