Off the back of the piece I wrote about pricing being all wrong something else that sprung to mind during some conversations around that was volume and how the volume of calls affects the price. Let’s get into that a bit shall we?
More Volume = More Profit Fallacy
Over the years, talking to a lot of clients, they seem to have the needle stuck in this particular groove that, giving more volume means more profit for you.
It doesn’t.
If you lose money on the calls, then getting more volume just means you lose more money.
It’s really very simple.
Sure, you and your techs (if you have employed field techs) can be busy fools running around like dafties sorting out the clients and customers problems for them but that’s a bit pointless if you’re doing it for free or at a loss.
Put it this way, if from the get-go they came along and said they wanted you to run around fixing stuff for nothing, you’d likely point them politely to the door and say, no thanks.
In short, volume means nothing unless you are making something on it. If you are losing on it, it’s not worth the bother.
I’ve seen so many repairers fall into this trap where they think a big name, a lot of volume etc will net them a fortune only to find, it doesn’t and never would.
Low Volume
This shines a light on another issue, where contracts are low volume it’s a problem.
All too often low volume contracts will be either specialist products that take time, often involving more than one visit as there’s no way you’re gonna hold stock of any parts or, the sales are low in your area of the brand and you hardly see any and again, you don’t stock for it as it’s not viable to do that.
In either case the chances are that a good many calls will involve at least two visits so you need to price accordingly for that. If you don’t it’s not worth doing and most probably down the line you’ll get hacked off with it and ditch the contract anyway.
These days, with so many rebranded machines out there, that’s a problem as you get so much diversity in the products, it’s impossible to often know what you’re going to, let alone have the parts to fix it. But, I’ll get into that in more detail some other time.
That low volume and product diversity gives you yet another issue, you can’t get familiar with the products.
You then end up standing in someone’s kitchen looking at some strange applaince with no clue of how to switch the damn thing on let alone repair it. You’ll work it out of course but, it takes you time and usually, with the rates in the industry and the number of calls you need to do in a day to make ends meet, you just don’t have that time to spend.
And then you get a lot of techs, especially the ones that just don’t give a toss, trying to write the machine off through ordering a load of parts and so on.
The customer gets what they want: a new machine. However, the client gets a hefty bill to swap the machine and the hassle of dealing with that.
High Volume - No Consistency
This is one of the main reasons I chucked I with repairs.
We did a lot of work for Domestic & General (DAG) at the time and it was okay, we got a range of machines but it kinda followed the market where DAG didn’t have a deal with OEM service like Whirtlpool, BSH, Indesit etc.
So we saw a lot of Beko, Electrolux Group and so on as that sold in volume and the odd weird thing they’d send our way.
The world changes and DAG wanted first of all for us to do fixed cost repairs including parts. Which for me was DAG (an “insurer”) wanting us to undewrite any potential losses on parts and the rates on offer were pretty crap anyway. I politely declined this work as to me it was nuts. I still have no idea why any repair of sound mind would do this sort of work.
Anyway, they funnelled all the decent volume stuff back to OEM service and all we were left with were the dregs, all manners of garbage and absolutely no consistncy in volume or the products, or even brands.
Essentially we were being saddled (as I saw it) with all the crap nobody else wanted. And that was the end of DAG for me and, ultimately, the end of NWAR at the time, as it was then.
The reason I jacked it in was that there was, with the rates being paid, no way on Earth to make money doing work for DAG, no way at all.
You couldn’t predict what you’d get, stock parts for it, get parts easily, get any tech support at all or often even a parts drawing and a lot of it was just junk.
Chances of any decent paying work from it, zero.
So the thinking ran that, if it wasn’t mkaing any money, wasn’t liable to for the foreseeable future and was a major pain in the ass to deal with with, why do it?
Even with a decent volume of work, it wasn’t worth it and, it’s easy to become no more than a busy fool in the appliance service game.
And bear in mind that more premium work, higher rates for insurance work and out of warranty work these days is vanishingly small, you’re doing it all for a low warranty rate with no way to boost the revenue from it.
Low Volume - No Consistency
By now on the chart in my head I guess you know where this one will land.
If you have diverse products, in low volume, with no parts etc you really need to be paid very well to offer an even remotely decent service.
Another Way To Look At It
If you are a brand owner for example and you’re looking to get work done by some form of repair network what you see is that you’re perhaps punting out (for example) 1000 calls a year.
You don’t have to be a genius to get that if that’s costing you £65 a call on average that you’re spending £65K a year on gettting that amount of work done which, in 2024 is ludicrously cheap. You’d struggle to employ two ful time techs for £65K these days let alone the cost of stock, vans and all the rest of it so, that’s the bargain of the century.
This a as a big spend to one party normally who will take and distribute the calls for you so, for arguments sake let’s say you add a bit and bump that up to a round £100K PA plus stock and some other bits and bobs.
You need to remember that this equates to less than 100 calls per month spread across the UK. Sure, there will be some areas of concentration so a few repairers will get a bit of volume but most will be unlikely to see more than perhaps two or three calls a month.
It ends up with a few agents that care and look after the work but the bulk most probably couldn’t give two hoots if they get or don’t get the work, unless they want the kudos of claiming to be an authorised service agent or whatever.
For the repairers this is often just add on work that they will do so long as the rate is okay and it’s no or not a lot of hassle.
As soon as that changes, so does their attitude to the work. It's all about perspective.
More About Caring
You might read all this and dismiss it as me being all “negative” and whatever and that’s fine, I’m sure I can find a big enough bucket of sand for you to stick your head in somewhere around here.
For all the people that want to learn, read on.
The guys see product A all the time, they know it, they have parts for it, they are confident in fixing it and even when they come across a new model or whatever it’s not usually the end of the world to work out the new one. This is their bread and butter stuff and whilst it won’t get them a Ferarri (or a nice VW even) they at least get a bit out it.
If they get some more premium work (vanishing all the time, another article) then that’s great.
They’re happy with that.
You then go to them with product B that they get one or two calls a week even from and it’s something they don’t know, don’t have parts for and don’t see often enough to be bothered about.
How do you think that goes?
This isn’t me being negative or positive and not about that at all, it is a realistic appraisal and is bog standard, basic behavioural economics at play. Humans are humans, they do human stuff.
Now, translate that to the service that the end customer gets. For product A, it’s pretty good to pretty great, at least most of the time.
For product B, it's totally the opposite and yet, it’s the exact same people working on what is, to many, very similar products, but to a field tech, they’re not the same at all.
The trick is making the field techs care enough or, having the time and reward to care enough to ensure that all get the service level that is required.
And that is the goal and reason that many need help with this kind of stuff as it is not as straightforward as many peolpe believe it to be as in, you just subcontract work out and everyone will fall over themselves for you because, the won’t.