While the economy is slowly showing signs of recovery, many integrators have shifted their focus to service and maintenance to remain profitable. At the same time, they have been subcontracting installation to reduce costs.
As an article on Automated Buildings’ website discusses, field service companies are looking to increase their margins on installation projects. One way for companies to improve margins is to use a CRM system. This way the system can send reminders to the sales team when contracts are up for renewal. It’s always easier to sell an established product to a current customer than it is to go out and find new business. These customers are also good prospects for upsells from the project team.
These existing customers can also benefit from value-added services such as analytics, remote monitoring and benchmarking. These tools not only help with customer retention, but with selling to new clients. Integrators can also use these tools to identify broken or faulty equipment, staying ahead of a call from an upset customer. Integrators are also focusing on lowering their installation margins.
As the Automated Buildings article mentions, the strategy of lowering the installation margin means the integrator will most likely take a short-term hit on the overall contract price, which is balanced out with a successful maintenance contract. This is more likely if the original project is at a lower cost to the customer, but is certainly not a guarantee. In the current economy, this is a higher risk, as many customers have opted to move to a per-visit contract, rather than a preventative one.
This is where using a viable CRM tool can also come in handy. If customers are on a per-visit maintenance contract, only requiring service when something is broken, this can be managed and monitored within the CRM. This also enables the sales team to establish a better relationship with these customers, with the goal of selling them a full-service contract.
Source: Automated Buildings, October 2012