In the face of technological changes, companies in age-old industries must rethink how they compete, regardless of a long precedent of success. On this episode of Mastering Innovation on Sirius XM Channel 111, Business Radio Powered by The Wharton School, guest Jamie Smith, CIO and Senior Vice President of ServiceMaster, delved into how his 90-year-old home services company is adopting new technologies and business models.
ServiceMaster is the parent company of Terminix, Merry Maids, and a large range of other home and business services. Smith shared how the on-demand and gig economy in which they operate is precipitating business model changes, while branding, social media, and millennials are becoming increasingly significant to the firm’s success. Part of the company’s new strategy is to digitize traditionally analog services, even testing technologies such as robots and drones to play larger roles in their customers’ experiences.
An excerpt of the interview is transcribed below. Listen to more episodes here.
Harbir Singh: As you go forward with customers’ perceptions of need for greater safety and so on, what are some of the innovations down the road that may be critical?
Jamie Smith: One of the most impactful changes in the last 12 months has been rolling out with a startup partner we have called Dispatch.me. We rolled out an “Uberfication” of the Terminix process. What that means is, you get the standard “on my way” notification, you know when the technician’s coming, and you can rate them. It sounds like a simple add-on to a service where you would think, “Oh, that’s a no-brainer,” but what we found was our NPS (Net Promoter Score) is up over 40% in just that one year, resulting in customers staying with us longer.
It really helped us illuminate the dark spots in the customer experience where we couldn’t see where things might be going wrong, and we can intervene within minutes, not hours or days. That was great as a starting point, and that’s helping us instrument the customer journey. As we look forward in innovation in the pest space, there are certainly a lot of Internet of Things-type innovations: connected pest traps, more monitoring, and even things like drones to understand where and when we would apply some of the treatments. One of the least popular jobs for us in the Terminix business is crawling crawl spaces to see if there’s anything under there. We’re actually looking at leveraging robots that the technician can deploy. That really helps us keep our technicians longer, and then there’s a little bit of a “wow” factor there for the customer.
Singh: Jamie, I think this is a fascinating point you just raised, the Internet of Things and how it may impact services by Terminix, for example, and also the use of drones. Tell me more about that. That’s really innovative.
Smith: We see a lot of promise in our American Home Shield division. The reason is right now, we wait for something to be broken and then a customer to call us before we come out and fix it. More of the dark assets in the home are getting lit up. If you have a Nest, it can tell how much your air conditioner is running, so you don’t necessarily need a smart air conditioner if you have this one device. We’re working with our appliance partners that are rolling out hundreds of connected appliances. The beauty of that for us is not just we can react more quickly. That’s great, but we want customers to see us as this proactive force in their life, so that we can get out there before they’re sitting in a hot home or before they have a cold shower in the morning. We found out that people are very, very passionate about hot water, by the way. That’s one of our most escalated things.
If we can prevent that from happening with these sensors, it changes how they think of us. Part of that is because the average customer uses us two and a half times a year, so we’re not a big part of their daily life until something’s broken. But with Internet of Things and connected homes, we definitely want to be that proactive force and something that’s relevant every single day. Drones are also potentially important for our ServiceMaster Restore business. They often go into places after a hurricane and/or major flooding fires, so they need certain things like being able to survey very quickly and understand where the damage is or actually being able to communicate. A lot of times the cellphone towers are down. We’re looking at some things that will allow us to leverage that technology to communicate better when we’re in one of those events.
“With Internet of Things and connected homes, we definitely want to be that proactive force and something that’s relevant every single day.” – Jamie Smith
Singh: Tell me more. What technology would you use for communicating if the cellphone towers are down? I assume it won’t be using landlines. Is it satellite-based technology?
Smith: We’re looking at some of that. We’ve actually talked to people, very similar to a small-scale Google Loon, creating a regional network. There isn’t something we’ve hit yet which is the perfect solution, because often you don’t have electricity either. We’re still searching for the best innovation there, but the other thing that we’re finding is, if you don’t have that communication network, drones are more and more a part of these events and not just ours. There’s a need for some air traffic control as well – almost, can you do drone-to-drone communication?
Singh: All of this requires investment, and it requires new standard operating procedures. Of course, it can give you advantage as a larger player. If you were to invest in some of these technologies like drones and the communication technologies between drones, is it the kind of investment that requires a 10 to 15-year horizon? Or is it through continued miniaturization, becoming a lot more affordable for your business, for example?
“We will benefit greatly from autonomous vehicles, but we know that our help in that isn’t going to move the needle. We’re not necessarily investing. We’re looking to partner.” – Jamie Smith
Smith: As an example, at Terminix, we have a fairly large fleet of trucks. We will benefit greatly from autonomous vehicles, but we know that our help in that isn’t going to move the needle. We’re not necessarily investing. We’re looking to partner. But for something like drones, the other challenge we have is less money and more skill set. We don’t have a lot of Internet-of-Things-engineered drones, so you have to think about that. One way we’re solving that is, we have just announced a home services accelerator that we are pioneering with a partner here in Memphis, trying to attract some of the best minds and providing that seed level investment. We’re also working across the startup ecosystem to try to find promising technologies. Whether it be something that would have been a great feature but isn’t a full app and we can’t integrate it, or something else, we’re trying to look a little outside of how we would run a normal project for these slightly longer time horizon type innovations.
About Our Guest
Jamie L. Smith was named Senior Vice President and Chief Information Officer of ServiceMaster in 2015. As CIO, Smith is driving ServiceMaster’s IT strategy, services and operations, and aggressively delivering innovative and transformational solutions to enhance the experience for customers, employees and franchise owners.
Prior to joining ServiceMaster, Smith served as Director of Infrastructure and Sales Finance for Nissan North America, leading all infrastructure delivery for Nissan’s Americas Region, and IT applications services for Nissan Motor Acceptance Corporation and Infiniti Financial Services. Before Nissan, he worked for IBM and PricewaterhouseCoopers as a consultant; Levi, Ray and Shoup; and was a co-founder of Focus Consulting, LLC. Smith holds a bachelor’s degree in business administration from Iowa State University. You can find his articles on LinkedIn.
Mastering Innovation is live on Thursdays at 4:00 p.m. ET. Listen to more episodes here.