Big Box/Utility Competition Part 3

March 28, 2003

Worried about manufacturer competition? (continued)

By: Matt Michel


Become The Customer’s Advocate
Bigness is impersonal. It’s also frustrating. People bureaucratically adhere to policies without exception. As a service company, you can make exceptions. You can go to bat for the customer. You can fight the good fight with the big, bad manufacturer over a warranty on the homeowner’s behalf. By doing so, you endear yourself to the homeowner. You become their protector.

Collect and file all warranty information for the homeowner. Then, inform them that all they need to do is call you and you’ll run interference for them and get things taken care of. Make sure the homeowner knows that you are on their side.

Be Easy To Do Business With
I’ve mentioned before how G.E. stole my wife’s business from Appliance Tech, a local appliance repair company that did everything right. She switched to G.E. because they allowed her to schedule service online. Appliance Tech did not. Thus, my wife could schedule service at 10:30 p.m., after the kids were in bed. G.E. used technology to become easier to do business with despite their bigness.

Juan Cardona with JC Heating and Cooling in West Virginia added AOL Instant Messenger as a service to his deaf customers. He figured it would be easier for them to communicate with his company. The IM information is on the company website and IM remains active whenever the call taker is working. A surprise is that others contact JC by Instant Messenger. JC gets about one inquiry a day by IM. Why? Some people are more comfortable using IM than picking up the phone and Juan has made it easier for them to do business with JC.

The application of technology is probably the greatest risk to small service companies. Technology and systems are enabling big companies to market like small ones, to segment down to a segment of one. Fortunately, small companies are just as able to deploy technology as large ones. Don’t get left behind.

And If All Else Fails…
Some manufacturers, like G.E., manage to develop a functional national service arm. Most cannot and do not. Service looks attractive. They see higher margins than they earn on product. And they’re arrogant. They figure a group of MBAs can come up with a better system.

Maybe. Yet, the strength of any system is the execution. When something doesn’t work quite right with a service company, the owner steps in and makes a couple of fast changes. It may not be easy to make tweaks and adjustments in a small business, but it’s infinitely easier than making changes in a large business.

In corporate American, long term means next quarter. Few manufacturers have the patience or luxury to develop a service arm. Even when a visionary identifies a path and set out to execute it the right way, a shift in the corporate tides can destroy years of effort overnight, often when the company was at the very brink of success. I’ve seen it, over and over.

Manufacturers can develop and launch a service business, but it’s unlikely they will do it well. They make things. They’re good at it. You service things. You’re good at that. You may know you’re unlikely to make a decent air conditioner, faucet, lighting ballast, and so on. It takes a very smart, experienced group of people with a manufacturer to understand they are unlikely to provide decent service. Find them, and then ask them to homecoming.


Source: Comanche Marketing. Reprinted by permission.
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Copyright © 2002 Matt Michel

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