Serving Up a Smarter Fleet
Make HVAC Service Calls Profitable through Advanced Tracking Systems
When a spell of hot weather hits your region, you know the phone is bound to start ringing. Customers are sure to call when they discover problems with the air conditioning equipment they rely on to survive the heat. But, when the service calls start piling up, maintaining profitability can be difficult.
If you are struggling to find ways to increase profits from service calls, experts in fleet management say that the advanced technology on the market today can help improve efficiency and reduce costs.
According to Joyce Tam, director of product marketing at Trimble, “The capabilities of modern field service management solutions can improve a company’s profitability and level of service by enabling every aspect of a mobile operation to be identified, measured, and analyzed.”
And with that data, contractors are able to optimize their processes to ensure that they are making money on every service call.
Increasing Efficiency and Profits
By investing in a combination of software and GPS technology, contractors can track every detail of their fleet.
Jennifer Davis, president of Davisware, shared a typical example of how contractors can maximize profits on service calls. “Let’s consider your average two-hour service call,” Davis said. “With the use of a GPS tracking system, the technician’s hours are captured for him. Most technicians start the clock for the customer when they are set up and begin working. If you allow GPS to determine that, it starts when they actually arrive on-site. On average, the difference here is 10 minutes per call. If a residential technician performs five calls per day, this is over four hours of time per week that now becomes billable.”
Further elaborating, Davis continued, “If you use conservative numbers, the average service call is $190-$400 per call, with an average profit margin of 25 percent. This translates into two extra calls per week per technician at an additional profit of $47.50-$100 per call. If you have a fleet of 10 trucks, this additional profit would be $24,400-$52,000 annually.”
And, she added, “This is just one area of added profit.”
In addition to increasing billable hours, fleet management solutions can enable contractors to improve scheduling and dispatching.
According to Andrew Chermark, vice president, sales and marketing, Smart Fleet Inc., “Most dispatching is done on the fly. Send the closest crew and, with messaging, you are always in touch. All a driver has to do is just push a button and it takes them right to the job.”
Ashley Jones, director of marketing, NexTraq, said automating a formerly manual dispatching process can increase contractor productivity and, in turn, profitability.
“With comprehensive routing, scheduling, and dispatching capabilities, HVAC companies can complete more jobs in a day. What would it mean in terms of profits if a technician could get two more jobs done each day? Multiply that by the number of employees and the numbers quickly add up,” she said.
By tracking service vehicles with GPS, Tam said, “Managers can use fleet management to find the closest vehicle to a job and make assignments based on real-time schedule status.”
Everybody knows gas is expensive, but nobody knows this better than a contractor maintaining a fleet of service trucks.
While advanced fleet management helps reduce truck mileage, it also results in reduced fuel costs.
“The average commercial service truck runs 141,000 miles,” said Davis. “Each mile saved is added service days in the service vehicle. A fleet management system equates to an average of a seven-mile-per-day reduction per truck. With 10 trucks, this is 70 miles per day. The industry average cost is 80 cents per mile. This is a savings of $56 per day or $14,560 annually for a fleet of 20 trucks.”
Tam added, “Other ways fleet management helps increase profits include reducing fuel costs by monitoring driver activities such as speeding, excessive idling, and route deviation.”
She also pointed out that fleet management can help contractors save on payroll expenses.
“The technical payroll report matches the technician to the job. If a company finds a saving of 15 minutes per technician and you multiply that times 200 technicians by 365 days a year, that’s quite a savings,” she said.
Davis added that there are other areas where fleet management reduces costs but concrete numbers are hard to provide. She listed vehicle maintenance costs, phone costs, and dispatching costs as falling into this category.
All of these, she noted, “translate into real dollars saved in overhead personnel.”
Summing it up, Chermark said, “This technology can revolutionize the way you run your business and allocate jobs. Reducing fuel and labor costs is inevitable.”
One of the keys to maintaining a profitable business is, of course, keeping customers happy. And applying the knowledge gained from vehicle tracking can actually aid contractors in satisfying their customers.
“Successful fleet managers know that information collected throughout the workday about dispatch efficiency and field service workers’ activities allows them to compare planned work with jobs that are actually completed,” Tam said. “They can then adjust schedules and reassign work to ensure quality of service, worker productivity, and — ultimately — enhanced customer satisfaction.”
She continued, “These solutions can help boost customer satisfaction by enabling better communication, such as answering more customer service calls per day and mitigating return visits by getting the right worker to the right job at the right time.”
Tam also noted that increasing efficiency through optimized routing can allow contractors to offer greater appointment flexibility to customers.
And not only do customers want flexible appointment times, they also want assurance that the technician will arrive at the time they selected. “By scheduling jobs and using dispatching capabilities along with an in-vehicle Garmin device, HVAC companies can guarantee an estimated time of arrival. The days of vague service windows are over,” Jones said. “With an increasingly competitive and crowded marketplace, HVAC companies need to provide the highest level of customer service.”
The Latest and Greatest
Furthermore, the experts pointed to advances in fleet monitoring systems that provide even more opportunities for contractors to maximize profits.
According to Tam, “One of the key advances in fleet management technology is the rise of cloud computing. The cloud is important because it takes away the overhead cost of managing a system and a host locally. Cloud-based field service solutions don’t need ongoing IT infrastructure maintenance and support, and upgrades are simple. By using the cloud-based solution, you can easily access your applications no matter where you are.”
Davis said, “Some of the cool advancements we have implemented advance connecting together vehicle tracking and field service technology.”
She explained, “To the layperson, this means using the GPS data to create the billing lines on the service order and using the GPS to start and stop calls. Companies are boasting a 10-15 percent increase in billable hours from this technology alone.”
Along the same lines, she said, another advanced technology is tracking first-time fix ratios.
“By tracking problem codes, equipment information, and previous history, companies are starting to be able to dispatch technicians not only in terms of who is closest, but also according to who is qualified and who has the greatest percentage of likely parts to be used on board their trucks. A first-time repair is 80 percent more profitable and increases customer satisfaction, so sometimes the closest technician is not the right technician to send to the job. Companies are beginning to focus on dynamic decision making to determine the best tech to send,” Davis said.
Jones said, “In the telematics industry, we are seeing technology move beyond your basic track and trace features. GPS fleet management solutions are becoming a business tool for HVAC companies in virtually every aspect of their businesses — whether it’s integration with back office applications, streamlined routing, scheduling and dispatching capabilities, or mobilizing the workforce. By mobilize, I mean the move toward mobile applications that keep employees out in the field in better communication with the office. That can mean accepting a job from their phone or updating a maintenance ticket.
“Telematics is changing the way service companies do business and a large part of that is increased productivity, which means increased profitability.”
Publication date: 8/19/2013