5 Reasons Why Trimming Your Service Offering is a Good Idea

increasing-profits

The terms “trimming services” and “gaining business” don’t seem as if they go together. At first glance, you’d consider them in stark contrast to one another. But I’ve pounded the minimalist drum before with my stance on firing horrible customers, and this time, I’m taking aim at a similar plague that gunks up even the most well-oiled computer repair businesses.

We’ve been taught from a young age that more is always better. More of everything. It’s a mantra that spans generations and only becomes more ingrained in the way we run our lives. It’s no surprise that we tend to corner our businesses into the same tunnel vision thinking. More services = more business = more money. Right? Sadly, wrong. The service portfolio your computer repair business is toting likely has a few “deadbeats” that need to be cut, dropped, or in other words: removed for good.

If you think I’m just preaching a hypocritical sermon here, I can proudly say that my company FireLogic has been outsourcing numerous offerings that we used to handle in-house. And in some cases, we’ve dropped previous services completely that didn’t make sense financially or strategically to continue offering. iDevice repair and motherboard-level laptop repairs are two items we used to handle in-house. Now we have trusted specialists that we outsource the work to and merely upcharge the labor to cover time “managing” the repair for the customer. Cisco related work? I wish I knew where to even begin handling such networking needs. And Android app development? We dropped that outright altogether after finding it to be a black hole in time, expense, and most of all – frustration.

Some technicians may call us crazy for turning extra revenue down. But not all revenue is good revenue. I’m certainly not alone in believing that you have to know when to put your foot down and trim services. Co-founder of cloud collaboration software company 37 Signals, Jason Fried, recently penned a spot-on article along these same lines. “Profits aren’t everything. Sometimes you have to prune your winners. That way, you can focus your attention on your bigger winners,” Jason cleverly wrote. And I agree 110%. When you’re wasting time and resources on a bunch of so-so money makers, you can’t give the shining stars you offer the focus they deserve. Very succinctly, Jason wrote, “The more balls in the air, the less time each one spends in your hands.”

Need persuading on why you should consider trimming your services back? Here’s 5 things you should consider for your own company’s portfolio.

5) Ask yourself what your real money makers are

I don’t care how impressive your service offerings are. You can offer everything under the sun, but if even 40% of them aren’t actually profitable for you, then it’s time to reconsider where your efforts should be spent. As I mentioned earlier, I put my foot down on numerous services we offered that didn’t make financial sense anymore. Charging around $100 for an iDevice repair that takes 2 hours to fully complete plus the time spent managing part orders? Not worth it. Same goes for motherboard or video card repairs on laptops which require chip-level precision labor. It’s much more feasible to outsource the work to a trusted third party that handles such services day-in and day-out. I’d rather be consulting on my winners.

For our company, it’s almost 10x more lucrative to focus on money makers such as Google Apps training and support or malware cleanup or even website design. These services tend to bring in higher value customers which tend to garner more repeat business. And this brings me to item #4.

4) Are your services attracting unprofitable customers?

Going off my example above, what kind of customers do iDevice repairs usually attract to my business? Ones that are looking for a price that usually affords for no markup; ones that are generally one-off and will rarely come back; and ones that provide little in the form of word of mouth referrals. I’ve already established in previous articles how valuable word of mouth is to any successful computer repair business. Do the majority of services you offer have a recipe for bringing in the customers you cherish most? If not (and especially if they aren’t profitable, per #5 earlier) what’s the reason to keep offering them? Sure, taking in a few bucks is better than starving, but the computer repair business that realizes which services need to sink in order to keep the company afloat are the ones that will flourish in the long term.

3) You can’t be great at everything

If your service portfolio is two pages long (Word pages, that is) then something is seriously wrong with this picture. Either you A) don’t have a lot of confidence or expertise in a few things or B) you love over-promising and under-delivering. Some of my company’s core strengths are Google Apps support, traditional break/fix, and website design. Sure we have a scattering of other items we advertise, but our best referrals come from the above. And the referrals are mostly excellent long-term clients which offer repeat business and aren’t afraid to call us in for our expertise.

If you think you’re great at everything in the computer repair field, be honest with yourself. I personally have little experience in Linux and don’t even advertise it with a 5 foot pole. Why overextend myself just to grab customers I know I can’t properly support? Is fumbling around for 10 hours just to bill out 2 hours a viable profit structure? I don’t think so. Focus on what you’re good at, and you’re bound to do much better financially (and mentally) than being the jack of all trades for IT repair.

2) Customers can tell when you’re bluffing

Don’t kid yourself. Customers aren’t stupid by a long shot. Even if you’re dealing with (what some of my customers consider themselves) the Luddites of the 21st century, common sense spans all computer skill levels. If you’re taking on jobs that are outside of your true core expertise area, you’re bound to be found out at some point. It may not be as easy for clients to notice on simple residential repair jobs, but enter the small business realm and your desire for presenting a false veil of expertise may be the death of many budding customer relationships. While I admit that some jobs do require “training time” which has to be spent onsite in the course of a repair, making this the rule and not the exception is a big mistake. Remember: bad word of mouth spreads faster and sticks harder than positive tongue.

1) Strong core offerings foster clients, not mere customers

Fellow industry colleague Brad Kendall has this down to a T. I had the chance to interview Brad for an upcoming computer repair business ebook I’m writing (set to release this Christmas) and he knocks it out of the park. His own well-received ebook “From a Commodity to an Expert” goes into detail as to why choosing a path of expertise is much more profitable (and sane) for computer repair technicians. If you’re in this business for the long haul, would you rather be courting customers or solidifying rock-solid clients?

Too many technicians associate themselves with the services they offer as mere commodities. Let’s face it: many aspects of our industry have become commodities in the simplest form of the term. Whitebox custom PCs? OEM PC builders dissolved that venture some ten years ago. In-house website hosting? GoDaddy turned into the Walmart of web hosting in a matter of half a decade. There’s no reason to force ourselves to compete in areas which provide such low margins. Your computer repair business will never afford the economies of scale that allow such large corporations to thrive, so don’t get caught thinking you can.

Turning that thinking on its head necessitates a recognition that becoming an expert is what drives the best computer repair businesses to the top of the heap. Pull up your local Craigslist ads and do a simple search to see what bargain bin technicians are offering and at what price. They claim to handle ANY computer repair for flat fees that would be unimaginable to most of us.

These technicians aren’t competition for your sliver of the market, for they bring zero expertise to the table. Therefore, they’re relegated to offering the lowest prices in order to merely get consideration from the “bottom feeders.” You reap what you sow, goes the famous line. It holds ever more true in the computer services industry. Expertise allows you to charge what you’re worth and bring in the customers clients that will keep your company growing.

Take a few minutes to skim your own service offering and see where you could tighten the belt. Your computer repair business is in need of a spring cleaning for the better. Have your own thoughts or suggestions on how to trim service bloat? Let’s hear about them in the comments area!



Derrick Wlodarz

About the Author

Derrick Wlodarz
More articles by me...
Derrick Wlodarz is an IT Specialist that owns Park Ridge, IL (USA) based technology consulting & service company FireLogic, with over 8+ years of IT experience in the private and public sectors. He holds numerous technical credentials from Microsoft, Google, and CompTIA and specializes in consulting customers on growing hot technologies such as Office 365, Google Apps, cloud hosted VoIP, among others. Derrick is an active member of CompTIA's Subject Matter Expert Technical Advisory Council that shapes the future of CompTIA exams across the world. You can reach him directly at derrick@wlodarz.net.

Comments (6)

  • tf76 says:

    This is a great article. Especially if you’re a one man show like myself :)

  • Clay says:

    This was an excellent read for me…i am a recent grad trying to get my business underway and have recently found myself in a number of the situations you speak of. I’m working just to work and its proving to be more of a headache than anything. I have turned to site building mainly because it is my money maker, but mostly because I’m looking for one area of focus. Thanks

  • Shaun says:

    Good read. I agree. We are going over the list of services to see what isn’t working for us. (good to review often) One mistake I made over the past years was not looking at the numbers. I felt busy and successful because I was just that. Busy, not successful based on my bank account. Reviewing numbers proved I was doing something wrong. I was busy losing money because I allowed “customers” to push me into discounting my rates and took any job thrown at me. (I also over promised/under delivered) Today I seek “clients” and price my services at rates that allows me to do business. Once again, good read from TechNibble. I hope everyone just getting into the trade studies this website as they did their cert exams.

  • Mark says:

    Your mention of Linux brought up a thought of every time I get a call for help with Linux. The potential customer is likely throwing salvaged parts together to make a computer, fishing for free advice, and unlikely to be able to afford my services.

    About a year ago I was thinking of doing iDevice repair, but the precision needed to do the job right and minimal profit turned me off real fast. And with Apple changing their designs every year in the direction of smaller and unrepairable, it’s becoming more and more of a question of “why would I want to offer iDevice repair”? It doesn’t make sense to offer that service.

  • Matt says:

    It can definitely be beneficial to focus on the services your business does best that also bring in the best money.

    It’s a great idea to outsource where appropriate. That way you’re still able to take care of customers’ needs.

    In my own business, since I’ve only been running it full time for a little over a year, I still need to pretty much take any kind of work I can get. I hope in the future I will have the luxury of being able to narrow down my service offerings to the ones that bring in the most money and play to my strengths.

    Matt
    Your Friendly Neighborhood Computer Guy
    http://www.yfncg.com

  • Sree Byrapaneni says:

    Great article, its very true.

    Thanks,
    WWW. Compbug.com
    Troy, MI based computer support company.