Small Change, Big Savings: Retail Client, Ohio

The Results

DWM's retail client has experienced an overall savings of 8% for work orders performed by DWM. The success comes after the client lifted their rate cap and allowed DWM to utilize a total cost to completion method.

The Challenge

The major challenge for DWM was the common misconception that low hourly rates automatically translate to cost-savings. The problem with this ideology is that typically, lower hourly rates mean inexperienced technicians spending more time on site, resulting in a higher invoiced cost for our clients. When we explain to clients that utilizing "more expensive" technicians will result in overall cost savings, we typically experience a fair amount of skepticism.

However, with rate caps, we are only able to access 85% of our technician Network. The 15% we can’t access with rate caps in place are generally our top tier of technicians who are the most well-trained, best-equipped, and who have the fastest overall completion times. We find that as a rule, the “more expensive” techs (based on hourly rates) get the job done significantly faster than the techs who may charge less per hour, meaning a lower invoiced cost for our clients.                                                                       

The Solution

DWM has adopted a more progressive approach to total cost control, one that focuses on total cost to completion rather than hourly rates. As skeptical as our client was of our plan to control costs without a rate cap, they agreed to move to toward our total cost to completion model, lifting rate caps for 2016. Under this model, DWM still captures hourly rates for all technicians, but only utilizes them as a quick benchmark for our service coordinators to determine whether or not the selected technician will be able to complete the work order under the Not To Exceed. As a result, DWM has been able to realize 12% cost savings for their national retail client.