Many of us have had the experience of buying a car from a dealer, but then going anywhere but the dealer for additional services and add-ons. Oil change? Take it to Kwik-Kar. Major repairs? Take it to your local mechanic. While dealerships do a pretty good job of selling extended warranties (e.g. service contracts), they typically do a poorer job of selling add-on products and services.

According to Wikipedia, "the attach rate of a product represents how many complementary goods are sold for each primary product." Attach rates correlate with how well your service organization is meeting the twin objectives of high customer satisfaction and profitability.

What are the reasons for low attach rates?

• Perceived Value: In the auto dealership example, customers perceive the value and safety of having a dealer-sponsored extended warranty. However, they don't see the same value in their add-on services.
• Effortless Experience: Customers are looking for ways to simplify their lives in the things that they must do on a day-to-day basis. If they perceive complexity or difficulty in an add-on product, they will not buy it.
• Service History: The reputation of the service organization can have a direct impact on the likelihood of continued business. Given a high cost and low convenience, customers often will skip the service contract and substitute a 3rd party.

How does this impact the service organization? After the initial sale is complete, the service organization becomes the chief point of contact with the company. In that role, the service organization should be fully equipped to meet all the customer's needs. Those include:

• Service contracts: During a service call, the service organization has the opportunity to make it easy for a customer to renew an existing service contract or buy a new one.
• Add-on sales: Related to that, the service organization can also help sell add-on products or services based on factors of the current service. Marketing would get involved to ensure that the service person has the right offers for that customer.
• Ask the Expert: Service personnel should be able to answer any question.

As you ponder your own service organization, you will be able to come up with additional opportunities to leverage the service organization to improve customer service and drive profitable business.

 Attach rates are a simple way to gauge your progress in turning the service organization into a profit center. Daniel Goleman said, "To paraphrase business maven Peter Drucker, the purpose of business is not to make a sale, but to make and keep a customer."  Once you have the product strategy right, higher attach rates are a strong measure of the overall effectiveness of your service organization in serving customers and increasing profitability.