Irrigation Service: A Profit Center or Necessary Evil?
By Monroe Porte PROOF Management Consultants

Times have changed. With construction profits growing thinner and thinner, subcontractors are turning to service as a profit center. The 1980’s saw mechanical and air conditioning contractors change their focus from new construction to service. As management consultants, we were part of a frontline effort to make that transition. We are now in a position to share some of these techniques with other industries.

Invest in a Dedicated Operation. New installations move quickly and require attention to details and a rigid schedule. It is unrealistic to think that your service department will succeed unless you dedicate a manager to be in charge of its success. Too many contractors want to make a commitment to service yet they treat the department as an ugly stepchild. Ironically these contractors will invest in trucks, equipment and buildings but not someone to run a highly profitable service department. No one in your installation division has time to fool around with service. It is doubtful this will change until you dedicate someone who has such time and desire to do so.

Treat New Instalaçãos as a Customer and Understand Your True Costs. We were working with an irrigation contractor who kept complaining about how much money the service department lost. While digging through the numbers, it became apparent that the service department is the servant of new installations. They fix all of new installation mistakes plus if a job detail is a little too technical, they take care of it. Clearly understand warranty expenses and what costs belong to the installation department.

Service Techs Must Sell and Price Jobs. If a sprinkler head is broken or someone needs to add minor irrigation service to another area, service techs should have a price list and be able to sell these jobs on the spot. No matter how you spin it, it costs at least $100 of a salesperson’s time to estimate a job. If you are estimating $300 jobs, the math of a $100 sales expense just does not work. If your water heater breaks, the plumbing company will not give you an estimate, they send a service repairman out to fix the problem and bill you accordingly.

Learn to Develop and Maintain Service Contracts. Too many irrigation contractors see maintenance issues such as winterization as a necessary evil of installing irrigation. By pre-selling contracts, you are collecting money in advance and pre-selling work for the service department. Consider adding a third service visit for the summer where the techs can review the system and sell upgrades. Look at service agreements as an opportunity to touch the customer, take care of their needs and sell additional work.

As you can see from the above examples, service can be quite profitable. You simply have to change your culture. Unlike a new installation, most service customers just want the system to work and they are willing to pay for that. If they had wanted a cheap irrigation system, they probably already owned one. It’s called a garden hose.

PROOF Management Consultants provides training and consulting for the construction industry. For more details please contact them at 800-864-0284 or www.proofman.com.