Preventative Maintenance and the Service Agreement, Part 1
In Part 1 of a two-part blog, guest blogger Ross Atkinson talks to us about preventative maintenance and the service agreement.
There is a phrase you may have heard of before: it’s called preventative maintenance. If you are in the rental business, you are fully aware of the importance of keeping your equipment up and running as much as possible, generating revenue for your business. To ensure that this happens and to avoid those costly breakdowns, you need to spend time doing scheduled maintenance.
Just about every manufacturer has a recommended maintenance schedule. They offer defined job codes with the time necessary to perform preventative maintenance steps at scheduled intervals. These codes not only tell you the time required to perform the maintenance, they can also include detailed descriptions of the repair task and sometimes a list of the required parts. These schedules not only cover the primary equipment but also sub-components like an undercarriage. Many of the schedules are based on hours of usage whereas others are time based.
For rental equipment, it’s pretty easy to keep track of and know the timing of the maintenance needed because you are always in physical contact with the equipment when it comes back in off rent. Even if the equipment is out on long-term rentals or leases, factory installed GPS transponders are pretty common nowadays or can be installed by your dealership. Knowing the current hour meter or mileage reading is the key to estimating the timing of the next service interval and allows you to plan your service workload accordingly.
But let’s look beyond rentals. What about your customer’s equipment? As Ron has mentioned in his classes, it is your goal to give the customer the best service possible and to reduce the repair costs for the equipment they own. Why not use these same principals of maintaining a rental fleet to upsell and offer your customers the same service?
You see, I’m pretty passionate about this subject. I believe that dealers are leaving money on the table and missing an opportunity to offer exceptional service. Too many dealers have not even considered going down the customer preventative maintenance path. I was introduced to the concept of service agreements many years ago by a gentleman by the name of Mark Caldwell. The knowledge he had and how he went about selling service agreements to customers was truly amazing.
Mark created his own manual on the entire process, a good 3 inches thick. It covered everything from what was being offered to the customer cost savings formula to how it was to be implemented and managed. He used to say how so many service managers would convince management to buy a service truck and then try to figure out how they were going to utilize it. Mark managed to correlate the number of service contracts to a truck. Boy, did that make for an easy conversation with management to justify the purchase of a new service truck after signing the required number of contracts!
We will continue next week.