PM's Are More Than Just Preventative Maintenance
At Deion Associates & Strategies, Inc., we recently had the opportunity to deal with a company that sold and serviced office equipment. They sold equipment as well as service contracts which included service calls when a various piece of equipment stopped working properly (downed equipment), and periodic Preventative Maintenance Service Calls (PM’s), as well. When a piece of equipment was “down”, the customers looked for immediate service, especially due to the dependency on printers, copiers and fax machines. They indicated that their sales were declining because they were spending an inordinate amount of time answering service calls for “downed equipment” and that this was preventing them from attending to the other aspects of their business.
The scheduling and expense traveling across their vast customer service region to respond to service calls was seriously restricting the time available to engage in sales work as well as PM’s. In fact, due to scheduling issues, they had ceased providing any PM’s to their customer base. They indicated that there just wasn’t enough time for PM’s.
We reviewed this issue in detail and concluded various issues, tactics and strategies which we recommended to the company. Following is a description of our recommendations and the ensuing results.
PM’s can be scheduled in a coordinated fashion that is conducive to the best use of critical staff time. Scheduling can be arranged in a specific geographical area preventing the cris-crossing of the market area in a non-profitable manner just to answer service calls. In order to reverse the current process, we recommended that when a technician was in a specific area to deal with a service call, that every effort be made to provide PM’s to other customers in that geographical area. This was in an attempt to address preventable “down times”, thereby potentially reducing the immediate response service calls which couldn’t be scheduled in a coordinated fashion.
After implementation of this tactic, the company almost immediately noticed that they were able to prevent impending equipment problems (due to customer misuse or worn equipment parts). This allowed the company to alleviate a potential problem, and also allowed them to address the issue in a more scheduled, coordinated fashion, rather than having a customer initiate a service call because the equipment was down. It must be noted that when a piece of vital office equipment is down, the customer wants it operational immediately! Down time means the customer’s employees can’t do their jobs.
As this process continued over a month or so, more customers were able to receive PM’s, and the service calls for downed equipment appeared to be significantly declining. Additionally, the service technicians were receiving requests for additional supplies, equipment upgrades, and in a few instances, requests for additional equipment and newer replacement equipment. This revised attention to PM’s was resulting in increased sales even though no sales efforts had been engaged. The initial intent had merely been to reduce the amount of avoidable service calls. But now, the company engaged all of their service technicians into some basic sales training programs to provide them with the product knowledge and skills necessary to identify potential customer needs, allowing them to sell/up-sell while on a PM or service call. Technicians were now providing the sales staff with qualified sales leads for products and equipment.
As down time service calls decreased, a full-fledged PM program and schedule was created. Service technicians became duly authorized sales lead generators, and sales increased. As down time service calls decreased, travel time became more coordinated, and a significant reduction in overtime was also realized. Needless to say, due to the increased sales and operational profitability, the company was able to increase the compensation for some individuals and was also able to provide additional bonus incentives for other employees.
In conclusion, PM’s are More Than Just Preventative Maintenance!! They are a source of reduced operational expenses, a source of increased qualified sales leads and a source of increased revenues.
If you would like to further discuss this issue or any other accounting issues, don’t hesitate to contact us at: Deion Associates & Strategies, Inc.
