The Cost of Nothing29 Jun, 2004
The Cost of Nothing
“It was nothing, just a dirty toner sensor. It will work as good as new now.”
I have heard those dreaded words uttered by service technicians quoted back to me on numerous occasions. That simple statement is capable of transforming a customer’s behavior from pleasant to displease once they receive a bill of more than $100 for a service call that the tech had said was “nothing.”
Unfortunately, there are those unsuspecting techs that have been told that their customers are on maintenance agreements when in actuality the agreement has not been renewed. And if a tech has worked on a certain customer’s machines for several years, sometimes they won’t even bother to get anyone to sign the service order. It is viewed as a simple no charge service call.
It can take several attempts to have the customer pay for the renewal of the service agreement and some claim that they are cutting back on expenses. “The tech had told us that our copier was as good as new and the service call was nothing. We have no intention to pay $100 for nothing.”
Nothing can have a very high price.
If you crunch the numbers there is the cost of the tech’s cell phone, which connects to his lap top computer, which dials into an Internet service provider to obtain the information the dispatcher had entered into the master computer system. The 2004 City Map Book (Map Quest takes a long time to get misleading information) allowed him to drive 20 miles across the toll bridge. The cost of the techs labor hour, hiring, training, 401K, health insurance, vacation and sick time, training, parts, technical manuals, car stock, and a percentage of overhead are a few costs that crossed my mind.
The basic tech mentality is to be a worker-bee. They traditionally downplay the value of their technical knowledge and trouble-shooting talents. Techs have learned that when a customer asks, “What did you do to fix it?” what they really want to know is, “Does it work now.” Techs tend to simplify the issue and leave on a positive note.
It is important that technicians are trained (and receive ongoing reinforcement) to understand the value and importance of what they say and how they say things to a customer.
The tech that earns $15 per hour has an hourly cost (burden rate) to your dealership of $50 to $90 per hour. The technician’s cost to the dealership is the same each hour, whether they are driving, troubleshooting, instructing a customer, doing a preventive maintenance call, attending a company meeting, talking to their friends in the parking lot, going home early, or fixing the equipment.
Every time a tech asks me if it is, “alright if I don’t charge the customer, all I had to do is re-attach the sorter?”
I respond with, “Do you want to receive mileage reimbursement for driving to the customer? Do you want to be paid for the one hour (you logged on your service report) it took you to hook the sorter up? Do you want to accrue sick and vacation time for this hour? Should we deduct a portion of your health insurance and 401K costs the company pays for you? Should we lower the amount of per diem we pay when you attend out-of-state training? At the company sponsored picnic should we change the menu to hotdogs instead of ribs?”
Very quickly, the tech understands there is a high cost of his doing “nothing” for an hour.
Techs, dispatchers, service managers, sales reps and company owners must understand doing something for free has a cost. Every time labor is given away, or you pay labor hours to someone that is doing nothing, you are digging a hole that will require twice as much work to refill.
Full time service techs in the United States are paid for eight hours per day, 40 hours per week, 52 weeks per year. It cost the dealership the same amount of money for the technician’s hour whether or not any customer is paying for their time and knowledge.
Teach your techs to appreciate the cost and worth of their time and knowledge. There is a cost for the tech to walk in the customer’s door. If a customer requests a field service call, the customer and the tech must understand there is a cost to the dealer and a price to be paid by the customer.
A tech that has adequate training and experience, and is able to identify and correct a problem in 30 seconds, should not be penalized by a customer. Would the customer feel that they have received a greater value if an incompetent tech spends 60 minutes trying to figure out how to properly attach a sorter?
These same principles are increasingly important when dealing with digitally connected equipment. Each dealer must draw a very wide and thick line when dealing with customers who are having network problems. If you help correct a network-related problem once at no charge, it will always be expected in the future.
Dealers have created a self-defeating CPC pricing scale. If a customer is paying under one cent for all inclusive CPC coverage, there is nothing left to pay for any network coverage. Teach all your staff, including the equipment sales reps, to value the networking knowledge your technical staff has acquired. Labor hours that are given away have the same cost of those labor hours that are sold.
Just because our staff is knowledgeable and able to repair or key stroke a solution effectively, there is no reason not to charge for that know-how. There is enormous value in knowing what needs to be done, as well as the simple task of doing it. If the solution to the problem was really “nothing,” the customer would not have called seeking the assistance of a professional.
Never tell a customer “It was nothing.” A four-year-old piece of equipment will never be as “good as new.” Every field tech must be taught to maximize the worth of their ability. Never discount your knowledge. Common words and expressions, spoken in haste or from customer familiarity, can come back and haunt the dealer.