Web Development Firm Monetizes Change Orders More Efficiently
Issue: Calls and emails for website maintenance and change orders are disruptive and they tend to interrupt workflow on larger projects and are not conducive to growth model.
Significance: The company is trying to work with high value customers who are on monthly retainer and SEO contracts. Small change orders, while billable are not worth interrupting the flow of projects under development.
Background: Company formed in 2001. At that time change orders represented 40% of all business. today they only represent 5% of revenue but consume closer to 10% of time.
Actions Taken: the company has tried to address this problem many times.
- Online Ticketing System
- Longer Wait Times for Changes
- Phone Tree to Screen calls
Roadblocks: Customers were very turned off by these changes and suggested that the reason they hired the company was for personalized service.
Desired Results: Reduce the financial drain of small change orders without creating bad-will with current customers.
- Reconsider intern model having administrative duties handled providing an opportunity for the development of homegrown talent
- Subscription model
a. Increase the number on this model providing a new revenue/profit stream
b. Annual flat fee + maintenance fee
c. Don’t focus on individual account profit as you may lose on a few however the average will end up being profitable
- Survey your best clients what is/are the value(s) they appreciate most e.g. turnaround time/responsiveness etc…
- Do not change your current model. Use it as an opportunity to upsell clients. Provide an incentive for your personnel when they do so
- Mini project, assign an account manager non-technical person have them identify the changes necessary then use a ticketing system for work completion. Schedule callbacks for higher level person with the customer within a specified time frame
- All change orders should have a specific minimum – half an hour or more?
- Quantify the value of marketing. Invest in marketing internally to grow revenue at times may be a loss leader. The relevance is not customer to customer but task to task.
- Identify your cost per customer take into account all components. Engage your teams understanding for the necessity of tracking costs. Best to fix this now to align your profit model moving forward.
The company instituted a a policy that all change orders have a minimum fee regardless of how small they are. This has resulted in better revenue and has allowed small change orders to be given the attention that the customers have come to expect.