September 13, 2005
THERE’S NO PROFIT IN WINDSHIELD TIME
By: Matt Michel
One of the blessings and curses of an in-home service company vis-à-vis a fixed retail location is the ability to go to the customer instead of waiting for the customer to come to you. It’s a blessing because it offers a degree of flexibility the retailers envy. It’s a curse because without discipline, the flexibility leads to an unfocused, inefficient service and marketing effort.
Retail operations like McDonald’s and Starbucks seem to be opening on every corner. They’re ubiquitous because they understand the opportunity that exists in a relatively small geographical area. Even big boxes, like Home Depot locate 10 to 15 miles apart. If a Home Depot can survive on a five to eight radius, why do you travel more than 30 miles between calls?
Gotta Make Those Yellow Pages Pay
Here’s the problem. Take out a big ad in a yellow pages directory serving a 2500 square mile territories and you feel obligated to take every call that comes your way no matter where it originates from because you’re spending a small fortune on the ad. Stop!
Does 30 Miles Between Calls Make Sense?
Windshield time, the time spent driving between calls, is the bane of service efficiency. There’s no profit in it. It’s lost time. Windshield time represents fully burdened costs without revenue. In metro areas especially, it makes little sense to drive 30 miles between calls.
In metro areas a 30 mile travel distance can easily translate into a 90 minute travel time if the traffic is heavy. For example, a couple of weeks ago I spent 2-1/2 hours to cover 20 miles in our nation’s capitol. There are marathon runners who can cover this distance faster on foot.
A couple of days ago, I drove 35 miles to a meeting paced the entire way by an air conditioning service truck. When I finally exited, the Sprinter van kept going. Unless the tech was taking a trip in the company truck, it’s hard to see how this is profitable.
Not Just Distance, But Travel Time
Travel time matters more than distance. I live in a Dallas suburb that’s fairly inaccessible. It’s bordered by lakes to the south and north. The roads into the town reach around the lake or pass through heavily congested surface streets. While the demographics of my town are attractive, its inaccessibility gives it a travel time that’s double a comparable distance on the other side of the lake. Nevertheless, I continually see trucks from companies located 30 and 40 miles away.
Define a Service Territory
My guess is that unless you operate in a rural market, within a five mile radius of your shop is more business than you could possibly handle. You fly by it rushing from call to call. Maybe you’re in a position where you feel it’s necessary to accept all calls that come your way. If so, set *some* limit. Define some radius and stick to it.
Contact competitors outside your defined service territory and work out an arrangement where you will refer calls to them that are outside of your territory, but within theirs if they will do the same. You will still have overlaps where you compete, but outside of these areas, you aren’t competing.
A Core Territory
Next, define your core territory. This is the territory where you want to focus your marketing efforts. It might be as small as a single zip code. It may be a five mile radius. It might be a 20 minute drive time radius.
Concentrate all of your discretionary marketing in your core territory. Even if you take calls from the next time zone, why spend money marketing to distant areas that cost more to serve than your surrounding geography?
Pound your core territory over and over and over again with outdoor, direct mail, door hangers, cable (and yes, you can target zip codes with some cable companies), and other marketing. Keep at it until you’re close to a household word in the area, until the referral machine kicks in, until you have a measurable share of the households in the area on your customer list. What’s measurable? Try two to five percent of all households or four to ten percent of owner-occupied households.
Units of Common Interest
Frankly, I recommend focusing down to individual subdivisions. Find units of common interest where homeowners talk with each other. This could be an area served by a single elementary school. It could be subdivisions with a homeowners association. In short, find an area where you can afford to become the dominant marketer for a period of time. Become the neighborhood specialist.
Once you’ve attained a level of recognition, you can back off slightly and deploy your resources to the next area. Marketing is like pushing a car. It takes a lot of effort to start it rolling and less to keep it moving. Once your marketing has momentum, you can devote resources to the next area, so long has you don’t let the momentum stop.
Minimize Windshield Time
What every service company should strive for, but will probably never achieve, is a situation where your customers are so concentrated that you can run maintenance all day and never travel more than a block between calls.
Think about it. What would happen to your applied time if you were able to attain this level of concentration? Could you pay your techs more and still drop more to the bottom line? Would your marketing costs fall as referrals pick up because more and more neighbors use and recommend your company?
Windshield time may be a fact of life. There’s still no profit in it, so do what you can to minimize it.
Source: Comanche Marketing. Reprinted by permission.
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Copyright © 2004 Matt Michel
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