Rolling more features like remote support into precision service packages can increase profit and ease burden on specialists.
An ongoing challenge for precision specialists is striking a profitable balance between the time they spend in the field solving technology problems with how much they charge customers for the work.
More dealers are developing annual precision service plans to provide a consistent revenue stream and reduce peak-season stress on technicians. But dealers are also realizing the need to evolve and enhance these plans as technology changes, to sustain profitability.
This is something Adam Gittins, general manager at HTS Ag, a precision dealership in Harlan, Iowa, did this year with the incorporation of remote support and a multiple-monitor charge into their precision service plans.
Starting this year, HTS Ag revamped its tiered service plans to include an additional charge for servicing multiple monitors. The additional charge can range from $150-$800 depending on the level of service plan purchased by the customer. The change has allowed HTS Ag to recoup revenue for time spent on lengthier on-farm visits.
“We’ve had service plans since 2008, but we were struggling with the fact that in some cases we’d spend several hours or all day on a customer’s farm, especially if they had a lot of equipment,” Gittins says. “We did an analysis of what these service plans cost us to deliver and it was apparent that some were profitable, but some were losing money because of how much time we were spending on some jobs.”
Gittins also incorporated remote support into the dealership’s top two service plans, to include Ag Leader’s AgFiniti remote support license, with the option of upgrading to wireless data transfer capability. The inclusion of remote support license increased service package prices by about $300.
While remote support could have been made optional for customers, Gittins says it made more sense financially both for the customer and dealership, and from a service efficiency standpoint, to make the offering standard in service plans.
“Bundling the service together made sense because it simplifies the sales process for us and provides an additional value to the customer,” Gittins says. “We explain to the customer that it would cost them more to purchase these services separately and we know it’s cheaper and more efficient for us to deliver precision service with the use of remote support to diagnose problems.”
Gittins admits there was a risk of alienating existing customers with “forced adoption” of remote support. But so far, they’ve had better than expected renewal of annual service plans since adding the platform.
“We went into this looking for a 50% adoption rate at the new price points, but are at an 80% renewal rate, with some overlap with existing plans,” Gittins says. “Our analysis took into account the 200 service plans we had sold making ‘X’ dollars per plan. By raising the price, we figured we could make twice as much money on half the number of sales, or at least make the same amount of money doing half the amount of work.”