By Andrew P. McCoy and Fred Sargent
Published On June 15, 2023
We have often cited barbers as unique examples of businesses that benefit from earning recurring revenues—almost automatically—every day. We were wrong about that, which is an important mistake to learn from.
In virtually any field, an organization’s ability to develop a steady stream of recurring revenues is a primary factor in guaranteeing their mere existence, let alone success.
Capturing recurring revenues
The part that we missed in our oft-mentioned observation about barbers was that their recurring revenue is not necessarily automatic. We soon appreciated our mistake when we visited a barber for an interview for this month’s column. We came away with a new appreciation for the barber’s everyday business experience. Better yet, we got an insight into how any organization—including electrical service and maintenance contractors—can improve their chances at capturing recurring revenues time after time.
Anthony Mankoski operates a one-man barber shop in an elite private club that has been a center-city gathering place for hundreds of business executives for nearly a century and a half.
We expected the sheer number of club members would have immediately assured him of plenty of business and kept him fully occupied when he took over the barber shop a few months ago. But it seemed as though everybody already had a barber.
It took quite a while for Mankoski to ramp up his business. And to continue the growth, he applied a principle that service-oriented contractors and many others can borrow to promote their own line of work and build an ever-growing customer base—prescheduling. Before customers leave the barbershop, they are gently pressed to schedule their next haircut.
“A good haircut should last about four weeks,” Mankoski said, “but without prescheduling, customers may not return exactly that often. Without prescheduling, customers may miss two or three haircuts a year. And that adds up to some significant money.”
The lesson here for any aspiring service contractor is straightforward: at the completion of a service call, try to set a date to come back. There’s always more to do. In this column, we often extol the virtue of continuing to build a service and maintenance customer base. The larger that customer base grows each year, we have said, the better it is for any contractor’s business.