Small Integrator Implements Profitable $150/Month Service Plan

Four-person Gulf Coast AV in Biloxi, Miss., sells service plan with 20 free hours of labor for $150/month, and ‘trains’ clients to expect service calls only on Tuesdays.

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Implementing recurring monthly revenue (RMR) is kind of like riding a bike: The hardest part is simply just getting started. But once you are onboard, you will never want to get off.

Walt Reardon, president and founder of Gulf Coast Audio Video LLC in Biloxi, Miss., is a perfect example of that. He is also proof that you don’t have to have a massive staff to implement a service plan and start earning RMR.

With humble beginnings about 15 years ago as a television calibration service provider, Gulf Coast AV has grown faster than Reardon even expected. At the advice of his accountant back in 2001, Reardon positioned the company as a luxury audio-visual and smart home integrator by charging a premium for design and installation services.

Gulf Coast AV has amassed “thousands of customers” over the past two decades, and is a Gold Level Control4 dealer, regularly completing installations that range from just a few thousand dollars up to $100,000+ whole-house automation and home theater systems. The company currently has four employees plus Reardon, including three who manage different aspects service, from DirecTV to Control4 programming.

One key to Gulf Coast AV’s consistent, incremental growth is selling service plans only to those who really need it.

“If we see a customer every couple of weeks, or if they’re people who normally call us at 10 o’clock at night, we’ll tell them they need to be on the plan,” says Reardon.  

The company has three service plan tiers: Gold, Silver and Bronze:

  • The Gold package, which Reardon sells for $149.99 per month (plus tax), provides access to a dedicated line, which gives those customers priority service, and also entitles the customer to 20 complimentary service hours.
  • The Silver plan offers a $50 price reduction and six service hours.
  • The Bronze plan offers basic services like remote assistance and after-hours support without any complimentary service hours for a fee of $49.99.

Reardon finds that customers tend to burn through the 20 service hours in less than six months, “and then we can start billing them for service again,” he says. “We’re not losing money on it.”

Even when customers run out of free hours and have to pay for service, they like the other advantages of the plan. “They like that they can get ahold of us whenever they need us, and they jump to the head of the service line,” says Reardon. 

“When people call or text, they receive a message that says, ‘If you’re a Gold level customer, call our dedicated Gold support number, otherwise, we’ll get back to you the next business day.’ Then we list our business days and hours.”

— Walt Reardon, Gulf Coast AV

Reardon has organized the company so he primarily rolls service trucks on Tuesdays, and says he’s “trained” many of his customers to call for service on Sunday night or Monday morning so they can get on the Tuesday schedule. But Gold customers don’t have to wait. It’s not unusual for Reardon to provide next-day or even same-day service to his Gold level clients.

Reardon rarely has to actively sell the service plans—text messages do it for him. “When people call or text, they receive a message that says, ‘If you’re a Gold level customer, call our dedicated Gold support number, otherwise, we’ll get back to you the next business day.’ Then we list our business days and hours.”

When a customer calls the support line and receives that message, the customer typically calls back the next day asking Reardon what the Gold plan is and how they can sign up. In fact, although Gulf Coast AV offers three tiers of service plans, Reardon says every customer on a plan has invested in the Gold package. In all, the company has 10 clients contracted on a service plan, with several more in the works.

Pushing to Next Level

Reardon recently got a “nudge” to be more proactive in selling service plans when Ihiji announced its Race for RMR (Revenue, Margaritas and Retirement) contest that rewards integrators for expanding their service department with help from Ihiji ServiceManager

“Everybody likes a competition,” says Reardon, noting that the Race for has helped kick start his efforts to sign more customers onto Gulf Coast AV’s service plan, which has been grossing thousands of dollars in recurring monthly revenue for the custom integration firm over the past six months.

Ihiji launched the Race for RMR competition at CEDIA 2016 in Dallas, Texas, providing dealers with an opportunity to increase their revenue through service plans and earn monthly prizes, as well as an expenses-paid Mexico vacation at the conclusion of the contest. The goal is to increase industry revenue through service contracts by $1 million dollars in time for CEDIA 2017.

“We have about 10 customers on our Gold level service plan, and if not for the competition, we might have remained at that level for a while longer,” admits Reardon. “The contest has encouraged me to push forward, instead of staying where we are for the time being in terms of service plan customers,” Reardon says. “Each new customer on our service plan represents more money coming in, so that’s good.”

When it comes to expanding the firm’s RMR, Reardon wisely notes that it’s not just a matter of signing on customers, but providing the level of service and support required after they come onboard. But he’s seen the benefit over the past six months since investing in Ihiji ServiceManager, and believes it’s worth pushing hard to grow his service offerings.

“We have two customers right now who are prime candidates for the plan, and once we reach that next level of pricing for Ihiji Invision, there’s no reason not to sign the next eight or 10 customers,” Reardon explains, referencing the new Ihiji Invision tiered, monthly, subscription-based pricing plan.

Ticketing System Saves Time, Money

In addition to increasing revenue through the service plans, Reardon finds he’s able to provide a higher level of service to all his customers by leveraging the service ticket tracking capabilities of Ihiji ServiceManager.

By providing access to a comprehensive database of all Gulf Coast AV customers, ServiceManager permits Gulf Coast employees to provide a more cohesive service experience to customers. For instance, if a technician visits a customer’s home for a repair, and a different Gulf Coast technician encounters the same problem three months later, the system provides a clear record of the problem and solution.

“I tell my techs: ‘Don’t make the entries verbose. Keep them short and succinct,’” Reardon says. Whether the technician is in the office providing phone support or onsite at a client’s home, they can view a complete equipment list, track trouble tickets, and troubleshoot without starting from scratch each time.

The system also allows Reardon and his team to spot trends in service problems—and use those trends to avoid future equipment issues, saving the company time and money and resulting in an overall better technology experience for customers.

Reardon says he’s spotted two circumstances where specific equipment brands—reputable brands that typically offer superior results—don’t work well together.

“These two pieces of equipment don’t yet have the HDCP handshake figured out when they’re playing 4K content. By switching to HD service, we can temporarily solve the problem until the manufacturers work the bugs out,” he explains. “When we look back at our trouble tickets in ServiceManager, we can see this pattern of problems occurring over the past six months.” Until the problem is solved, Reardon knows not to design systems with this combination of equipment.

“Each new customer on our service plan represents more money coming in, so that’s good.”

— Walt Reardon

Reardon also likes the ability to view the status of any open or pending tickets at a glance. Previously, the company maintained a record of all service calls in Google calendar, but it was difficult to search for specific customers, and impossible to find open tickets easily.

“Because I can see a status report of every open ticket, things don’t fall through the cracks. We know if we’re waiting for a part or waiting for a customer to call us back,” he notes.

Reardon is also impressed by the level of support Ihiji offers. “If I have a problem or question, I can call or use their tech support on the website, and I get an answer. During normal business hours, I’ll get a response within 15 minutes.”

He says the Ihiji team has even taken his suggestions for improvements and enhancements to the ServiceManager platform. “That’s worth the cost, because I can’t think of another company that provides that level of support to its dealers,” he says.