The Three-Ring Rule

By Andrew McCoy and Fred Sargent | Jun 15, 2012




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It never fails. Five minutes before the end of the workday on Friday, the phone rings. Just as the last remaining people in the office are ready to rush out the door and head home, a customer calls with an urgent problem requiring immediate assistance from one or more of the electricians who all left work to begin their weekends at least an hour ago.

In a small number of electrical contractor (EC) organizations, knowing the likelihood of the time-consuming complications that could possibly beset them if they lift the telephone receiver, the late-afternoon stragglers in the office might simply allow the incoming call to roll over to the answering service, leading to an uninspired attendant announcing in a monotone, “Please hold,” and eventually returning to the line to explain that the office is closed and will be open again Monday morning.

In some other EC firms, a nice person with good intentions (but possibly without authority) may make a conscientious effort to answer the call and explain that the office is closed, the electricians are lost to after-hours pursuits, and the customer ought to please call back on Monday morning.

In well-honed, service-based EC organizations, however, a late-day summons will always lead to fast action because these ECs are equipped to respond to such a cry for help and because they recognize the long-term potential in maintaining a reputation for being highly responsive. They are geared to deliver top-quality service around the clock, any day of the year.

After two rings, an assistant lifts the receiver, politely greets the caller, asks the nature of the call, and transfers him or her to an appropriate service representative who searches a customer database to locate the caller’s account information. The service rep gathers the information needed to generate a new work order ticket, and within minutes, a field technician has been assigned the ticket, provided with a brief containing the relevant job details, and dispatched.

This ever-ready mode of operation is an essential ingredient in what business pundits refer to as “customer relationship management,” and it is a fundamental requirement for the enduring success of any field service organization.

Successful service providers intuitively understand that, to excel in today’s competitive environment, they must go beyond the time-tested adage that “the customer is always right.” Instead, customers must always be satisfied, quality must always be delivered, and value must be perceptible. Service practitioners must attempt to manage and exceed customer expectations.

How can an EC that has made a strategic decision to shift the center of gravity of its business from a conventional contracting model to a service-oriented approach prepare to position itself to meet the unpredictable demands of that challenging way of operating? Mona Electric Group, which serves the market area surrounding Washington, D.C., provides a successful example of how an EC can differentiate itself with its dedication to a high degree of responsiveness.

By nature, providing electrical contracting services is unpredictable. Few customers call when their electrical systems are performing properly, and even fewer customers are willing or able to wait if their network is down. In the competitive climate of electrical contracting service work, an EC often can create the most value through availability and responsiveness.

Vincent Mona—known throughout the electrical contracting industry as “Cap”—founded the company in 1966 with a vision for accomplishing many things, prominently among those goals was for Mona Electric to develop a rock-solid reputation for always being accessible and responsive to all of its customers.

To convey a sense of appreciation of the importance of the needs of all incoming callers, Cap would have to rely on what we would today think of as a “low-tech” solution. In the 1960s, the only technology that most ECs had available to manage a field service organization was a conventional telephone system. It was not thought of as a “land line” because it was the only thing the telephone company had to offer: plain old telephone service (POTS). Without the benefit of voicemail, caller ID, three-way conferencing, and other features in telephony that today might be thought of as “high-tech” (a term that almost nobody had begun to use in everyday speech in 1966), Cap Mona instituted a very simple policy: the “three-ring pick-up.” During normal business hours, the phone would never ring more than three times before a person answered it.

Jason Howell, who today is vice president of Mona’s VDV division, stresses the importance of being available and, even more to the point, having knowledgeable staff. Achieving the enviable position of having developed a base of customers who regularly call in and depend on Mona for their service needs clearly amounts to what he considers “winning half your battle.” But each time the phone rings, the second half begins. Howell insists that he and his staff are always keenly aware, “if you’ve messed up on a service call, you might not get that customer back.”

ECs who plan to succeed in electrical field service work must understand the connection between meeting customers’ immediate needs and building long-term relationships with them. Unlike conventional project-based construction in which winning a contract commonly provides almost no assurance of repeat business, properly managed service work routinely leads to recurring revenues—in other words, the possibility of creating customers for life.

It is a regular part of business strategy in many industries for companies to studiously calculate the “lifetime value” of keeping their various categories of customers. In a classic treatment of the subject published by James L. Heskett and colleagues, “Putting the Service-Profit Chain to Work” (Harvard Business Review, 1994), the writers note, “The lifetime revenue stream from a loyal pizza eater can be $8,000, a Cadillac owner $332,000 and a corporate purchaser of commercial aircraft literally billions of dollars.”

In that vein, based on a typical cost of common examples of ordinary residential, commercial or industrial electrical service-call requirements, an enterprising EC focusing on the real opportunity in service work can begin to calculate the potential lifetime revenue for his or her business.

Mona Electric and other service--oriented ECs understand that it virtually does not cost any more to pick up the phone by the third ring and that the potential value of the lifetime revenue stream that may result has an even nicer ring to it.
It’s Friday afternoon again, and this time you are a homeowner, a construction manager, or a facility operator with a major electrical problem that has just erupted. Who will you call, the EC who answers or the one who lets you go to a machine?

The authors acknowledge the contribution to this article of Chris Ternes, a graduate research assistant in Virginia Tech’s Department of Building Construction.

About The Author

MCCOY is Beliveau professor in the Dept. of Building Construction, associate director of the Myers-Lawson School of Construction and director of the Virginia Center for Housing Research at Virginia Tech. Contact him at [email protected].


SARGENT heads Great Service Forums℠, which offers networking opportunities, business development and professional education to its membership of service-oriented contractors. Email him at [email protected].





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