How to Improve Your Customer Value and Make More Money

This article will teach you how to increase your average customer value and make more money for your service business. The calculator is at the bottom of the article.

If your service business is receiving fewer repair leads since the mandatory stay at home orders were announced, you’re not alone.

We manage digital marketing campaigns for more than 40 service businesses across the US, and we can tell you first hand that there has been a 20-30% drop in demand for repair services in many markets.

How this drop affects your business depends on many factors including your current online visibility and reputation, the strength of your warranty contracts, the nature of the competition in your market, and how the consumers in your market have been affected by the coronavirus situation.

Even if your call volume hasn’t plummeted, now is the time to strategize and plan so you stay ahead in the coming months.

This article is going to present to you one of the strategies we highly recommend (even in economically stable times) to increase your revenue on a limited budget.

That strategy is called cross-selling: the action of selling additional products or services to an existing customer.

When people think of cross-selling, they think of companies like McDonald’s (Do you want fries with that?) and Gas Stations (Would you like to add a car wash to your purchase?), and even the cell phone companies (Want to add an extra line for your teenager for only $20 / month?!).

Cross-selling isn’t just a strategy for restaurants, retailers and eCommerce websites. 

I recommend that service companies use this strategy to offset the cost of their marketing.

Think of it this way:

Let’s say I pay $25 per lead for my appliance repair company. Without a cross-selling strategy in place, my average repair ticket is $200. If my technician runs 5 calls per day, I pay $125 for my marketing and he generates $1,000 in revenue. That leaves me a total of $875 left to cover payroll and other expenses.

Now, let’s say that I pay $25 per lead and I DO have a cross-selling strategy in place. My average repair ticket increases to $300. Under the same conditions, my technician is now generating $1,500 in revenue. In this scenario, he’s more than covered his marketing costs with some to spare. And guess what, my marketing expenses don’t increase!

The goal of this strategy is to maximize the value of your customers by selling more of your essential services.

Let’s dive into how to set up a cross-selling strategy for your service business.

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    Step-by-Step Guide: How to Use Our Customer Value Optimization Calculator

    This section will give you step-by-step details on how to use our Customer Value Optimization calculator. Your goal is to get your technicians selling enough add-on services to generate the revenue to cover his/her marketing expenses. Our calculator will help you do that.

    Watch Video Instructions

    Step 1: Determine Your Marketing Costs Per Technician

    Before you get started, you’ll need to gather a few pieces of information. 

    You’ll need to know how much you currently spend on marketing per monthDon’t forget to include fees from your marketing agency, Google & Bing Ad spend, Angie’s List Ads, Yellow Page Ads, Yelp Ads, etc.

    If you keep your accounting records up-to-date, you should see this number on your profit & loss statement under Marketing or Advertising Expenses.

    Enter your data into the yellow fields below. The calculator will automatically calculate how much you spend per technician each month for marketing.

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    Step 2: Create Add-on Services

    Now you need to create your cross-sells.

    Think it through for a while. How will you Super Size your service?

    Some add-on services to target customer concerns during the COVID-19 situation include: 

    • Washer & Dishwasher Disinfecting/Cleaning Service
    • Dryer Vent Cleaning (Remove dirt & germs + harmful lint)
    • Dryer housing cleaning (unit only)
    • Refrigerator Coil Cleaning (Remove allergens, bacteria, and harmful debris)
    • Second Appliance Add-ons at a reduced fee.
    • In-house extended service agreement.
    • HVAC tune-up or inspection (Replace dirty filters–really highlight the disinfecting aspect).
    • Refrigerator water filter replacement
    • Annual service agreements or unlimited service calls.

    Once you’ve defined your Add-on Services, adjust the Service Fee and Conversion Goal columns until the Monthly Upsell Earnings field is equal to or greater than the Marketing Cost / Lead field.

    Be sure to set goals that are realistic. For example, don’t expect that 50% of your customers will want to buy a dryer vent cleaning service. Your technicians will struggle to meet such an ambitious goal and become discouraged. Shoot for a 15% or less conversion percentage to start.

    Adjust your numbers monthly until you find a winning combination of price point and conversion percentage.

    Step 3 : Review Your Technician Goals

    The calculator will automatically enter the number of times the technician needs to upsell each service to meet the conversion goals you set in step 2. If the monthly sales goals seem too difficult, adjust your pricing and conversion percentage in step 2 until you set realistic expectations.

    Step 4: Print Your Monthly Sales Goals

    Once you’ve calculated your sales goals, hit the PRINT PDF button to generate sales goals to share with each technician. (Don’t worry, you don’t have to give us your email)

    Now that you know exactly how many add-on services the technician needs to sell to cover his own marketing costs, you can easily create incentive plans for technicians who sell more than you require because you know exactly how much it costs you to keep his schedule full.

    Technician Cross-Sell Calculator

    Note: This calculator works best on a desktop computer, laptop, or tablet.

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