Service Agreements Are the Asset You Are Not Tracking

In a field service business, two things carry most of the enterprise value and neither of them usually exists as a record: the service agreement base, and the work that technicians recommend on site.

Both are known to the people doing the work. Neither is in a system. That distinction is the whole subject of this piece, because it is also the difference between a business that can be sold and one that cannot.

The agreement base

A recurring maintenance agreement is predictable revenue, a scheduled reason to be in front of a customer, and the mechanism by which one-off jobs become relationships. It is the closest thing the trade has to an annuity.

It is also, very often, a spreadsheet. Or a set of reminders in a phone. Or a shared understanding that the Hendersons get a visit each spring.

• How many active agreements are there, exactly, today?
• Which ones renew in the next ninety days?
• Which lapsed in the last year and were never chased?
• What is the average value, and is it going up or down?

If those take more than a minute to answer, the base is not being managed. It is being remembered, and memory does not survive growth, illness or a sale.

Recommended work

A technician on a call sees things outside the scope of that call. A unit near end of life. A part that will fail this year. Work the customer should do and has not asked about.

In most businesses that observation is spoken aloud to the customer, sometimes noted on a paper ticket, and then gone. It is the largest untracked revenue line in the trade.

Where this sits in the order

Both of these are record-keeping problems, which means they come after the stack is built. There is no point adding a recommended-work field to a system nobody is using yet. Get the system of record in place, get the jobs flowing through it, and then add the field — at which point it takes about an hour.