Contracting is a transactional business. You may have just completed a commercial roof installation for your best client, but there is no guarantee that you will ever work for them again. If that client does call with another building in need of a new roof, there is a good chance that the work will go "out to bid." Maybe you win the bid. Maybe you don’t.
Buildings are bought and sold, and facilities managers move on to other jobs. The current owner of "your roof" may not even know that you are the contractor who installed it. The new facilities manager may not know that you did a perfect job installing their last roof two years ago. When it is time for a new roof on another building, he may be starting from scratch because he doesn’t know your company exists.
How can a commercial roofer move from a transactional contracting business to a repeat service business? Running a dedicated service department in your commercial roofing business can help create long-lasting, repeat business relationships with your customers. A high-performance service department can provide value to a commercial building owner well beyond just fixing leaks and sealing penetrations. This can lead to a relationship where future roofing projects are awarded sole source, breaking the "out to bid" process that is common in construction.
What does a service department do?
A commercial roofing service department serves three primary roles:
1) Repairing roof leaks – the most obvious role. A service department needs to have skilled technicians capable of finding and repairing roof leaks. This applies to both the roofs you have installed for an owner and the other buildings under their ownership. It is not uncommon that an owner will need to have an old roof serviced for a few years while a new roof is budgeted for. It is important to be able to keep leaks under control during this time. If a contractor has helped to control roof leaks during this time, it is much more likely that they will receive a sole source contract for the roof replacement.
2) Sealing roof penetrations for new roof top equipment – the most immediately lucrative role. It is very common for new roof top equipment to need to be added to commercial roofs during tenant improvements. These jobs range from sealing in a new exhaust fan, to patching dozens of penetrations for a complete changeout of the roof top HVAC system. The sealing of these penetrations needs to be completed by an authorized contractor to keep the roof warranty intact. Building owners will often require their tenants / general contractors to only use the roofing contractor who installed the roof to maintain their warranty. This allows for higher profit margins than typical bid out work.
3) Performing Roof Inspections – the most important role. The commercial roof service department needs to offer annual maintenance agreements that include annual inspection of the roof. These inspections are not free. An inspection will include a summary of the type of roof membrane, approximate age and overall condition. An inspection will also identify any deficiencies in the roof system that could lead to leaks and provide pricing for these recommended repairs. The roof’s condition should be graded from an "A" that has a decade or more of life remaining to an "F" that needs to be replaced in the immediate future. For roofs at or nearing the time of replacement, budgets should be provided for the upcoming replacement or recoat. A service department should be able to inspect all types of roofs, not just the roofs installed by the contractor. This is key as it will allow ownership to approve maintenance agreements for an entire portfolio of buildings.
How do you run a service department?
You should think of your service department as a separate business within your roofing business. The service department should have dedicated technicians who only work in service and dedicated management and administrative staff. Like any business, your customers are the most important part. Technicians need to be able find leaks, seal penetrations and perform inspection, but they also need to serve as the face of the company. This means they need to be able to communicate well, articulate the issues they found on the roof, and instill confidence in clients that their roof is in good hands. Service technicians also need clean attire with your company logo and well-appointed company trucks. Your service department management and administrative staff are critical. The need to be highly responsive and manage the day-to-day workflow, providing a high level of service to your clients. While your production department may complete one roof replacement project for a quarter million dollars, the service department might complete 100 repairs for $2,500 each. This means a lot more scheduling, dispatching, coordination and paperwork. High gross margins are necessary to cover this overhead, but typically a higher net profit can be earned on the service revenue and on full roof installations.
With a good team in place, you now need a way to run your service department. The good news is that there is technology available to make this happen. Roofing software tools facilitate the scheduling and dispatching of technicians, the creation of inspection reports, the approval of recommended repairs, the production of budgets, the sending of invoices, and many other tasks. A service department can be run without roofing software, but the investment in these tools will pay dividends towards the growth and success of your service department.
All about the data
Your service department is now providing the three types of work to your clients and your team is providing great service to your clients. This puts you well ahead of most of your competitors. However, there is another product that you can provide to clients that is the most valuable of all, data. Say you have a maintenance agreement for a portfolio of 30 commercial buildings. There will be some new roofs and some old roofs. As you respond to leaks, perform inspections, complete recommended repairs and submit budgets, you are developing valuable data. Your roofing software will be able to prepare a budget matrix for the entire portfolio including budgets for inspections, upcoming repairs, and future replacements. This is a tremendous tool for asset managers as they develop their future capital plans. Most importantly, this gives the roof visibility, and it is very likely that roofing projects will be elevated up the list of needed capital improvements. Since you have provided this data, your firm is very likely to be selected for future roof replacement projects.