Make Way for a New Marketing Power:

Service Marketing

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In this week’s blog post, I am sharing an article that first appeared in Field Service Digital on July 15, 2016.  The article was written by Derek Korte, editor at Field Service Digital and a senior editor at Original9 Media.  

Thanks to technologies like the IoT, and enticed by the promise of more revenue and a cozier relationship with customers, traditional manufacturers are now getting in on the service game. It’s a shift that not only blurs the lines between manufacturing and service, but also how companies market those products and services.

Sure, tried-and-true product marketing strategies are still relevant, but service marketing is a different beast entirely, says Michael Blumberg, president of the Blumberg Advisory Group. Below, he explains service marketing’s growing importance — and why it’s so hard to do well.

Is service marketing now more important than product marketing?

It’s not that product marketing is less important, it’s that service marketing is becoming more important. There are several reasons why: First, many companies have made it a strategic priority to build and grow their service businesses. Second, they recognize that services can be sold independently from products and, in some cases, in lieu of products. Third, they recognize that service marketing is different from product marketing and a different approach is need. Fourth, they understand they have to step up their marketing game if they are going to generate more service business.

So products might sell themselves, but that’s not necessarily true with services?

That’s true. You can sell a product by showing the customer the great things it can do because it has cool features, such as the IoT and augmented reality. On the other hand, service is intangible.

There is nothing you can show or demonstrate to the customer before they buy it. Just because a product has certain features, doesn’t necessarily mean that they will buy the service and support that comes with it. This is different sale all together.

How do you convince customers to invest in an unfamiliar service — especially if they don’t immediately know why they need it?

You have to focus on the economic value to the customers of having (or not having) the service available when they need. When you understand that, you can start selling services around that value proposition. Companies that struggle with service marketing can’t explain this benefit to the customer. Instead, they talk about service as an insurance contract. That’s a very general term. It doesn’t tell them anything about how the service will be provided, when it will be provided, or what outcomes it will produce.

What are the biggest differences companies should consider when marketing services, rather than products?

In a product sale, you sell the customers on the form, fit, and function of the product:. You basically sell them reality: what it does, how it works, its dimensions, etc. When selling services, you also have to sell customers on perception: the outcome or defined level of service they can expect. Bear in mind, you also have to sell reality, which is also known as the actual capability to serve, by describing or showing all resources that make it possible to deliver that level of service.

Is it fair to say service marketing is a lot harder — and a lot more work — than product marketing?

It’s a lot harder for a couple of reasons. First, service is an afterthought for many companies. They think that because the customer owns the product, they’ll buy the services, too. That’s often not the case.

Secondly, you can’t market a service like you would a product. Marketers talk about the four principles or Ps of marketing — product, place, promotion and price. But those principles are product-oriented. They don’t work with services marketing. Why? Services are intangible, and it’s hard to market something that’s intangible. To market services, companies need a new mix — the Seven Principles.

Are new technologies changing how companies market their services?

Service technologies like IoT, Big Data, and even field service software enable companies to collect and analyze very granular data about service events, product usage, failure rates, etc.

This information enables them to offer very tailored and customized solutions to their customers in terms of service coverage, response time, pricing levels, etc. The technology also helps companies be more precise about who they market to, when they market to them, and what they market.

Any standout companies that are doing this well?

Siemens, GE, and Philips are doing a pretty good job in marketing their service. They’ve made service marketing a priority because they understand services’ strategic value to their bottom line. They have carefully designed their service portfolios and pricing strategies to meet customer needs and requirements.

Their service marketing and sales people are adept at articulating the economic value of their services, and they are properly trained and incentivized to sell those services. They are effectively leveraging technology to find new market opportunities and exploit existing ones.

Are you interested in growing your service business? Check out my online training course where you will learn strategies, tactics, and insights for Successful Service Marketing ™. As a starter, I’ve put together a brief video that describes the course content. You can access it here.

Got a question? Click here to schedule a free consultation

The New Field Service Workforce

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There has been a dramatic shift over the past 5 to 10 years in the way work is performed in the U.S. and Europe as more and more workers join the gig economy.  By definition, a gig economy is an environment where temporary positions are common and organizations contract with independent workers for short-term engagements.  In other words, people are increasingly taking on freelance work.

According to the US Bureau of Labor Statistics, 53 million Americans are currently working as freelancers.  By 2020, 50% of the American workforce will be engaged in freelance activity. Furthermore, a study published by the Freelancers Union and Elance O-Desk indicates that freelance work contributes $750 billion annually to the US economy.

The gig economy has played a significant role within the Field Service Industry.  It is driven by the trend of many companies to implement variable workforce (VWF) models. This is a business model in which a field service organization (FSO) relies on a contingent workforce to manage peaks and valleys in labor demand.  Earlier this year, Blumberg Advisory conducted an extensive research study to examine the impact of VWF models on the Field Service Industry. The study, sponsored by Field Nation, revealed  that 8 out of 10 FSOs have implemented VWF models to manage over one-half (53%) of their workforces.

One of the ways that FSOs implement the VWF model is through a Freelancer Management System (FMS).  This is an integrated software platform that includes functionality for Vendor Management System (VMS), Human Capital Management System (HCMS), Service Ticketing System, on-line recruitment tools, and reporting & analytics. Approximately two-thirds of survey respondents use this type of solution to manage their contingent labor pool of field technicians.

The single biggest benefit of using an FMS, as reported by 70% of survey respondents, is scalability.  In other words, the ability to scale the workforce up or down based on service demands.   A majority of respondents also perceive access to a vibrant marketplace of freelance technicians (61%), the flexibility that an FMS has in managing W2 and 1099 employees (56%), and lower cost of overhead (54%) that results from using an FMS, among the top benefits.  Just under half of the respondents (46%) viewed lower direct labor cost as a benefit of using an FMS platform.

In addition to these benefits, FMS platforms have a measurable impact on field service financial and operating performance.  Indeed, companies that use FMS platforms report having observed a 6% or more improvement in field service key performance indicators (KPIs) such as field service productivity (i.e., # of visits per day), labor utilization rates, SLA compliance, recurring revenue, and gross margins.

Obviously, the gig economy has had a positive impact on FSOs who rely on the VWF model and FMS platforms.  However, many opponents of the gig economy believe that freelancing models take advantage of workers and therefore are bad for individuals.  The facts point to the contrary. In 2015, Field Nation, a leading FMS platform provider to the field service industry, conducted a survey among freelance workers to understand their attitudes and perceptions of freelance work.  An overwhelming majority indicated that the freelance lifestyle is both a personnel choice (88%) and their primary source of income (73%).  Almost all the respondents were satisfied with the work they do (97%) and the career choice they had made (95%).

These findings suggest that the nature of work within the Field Service Industry has changed for good. The days of individual commitment to a single employer and vice versa are long gone.  Freelancing is not a passing fad within Field Service .  Furthermore, Freelancer Management System (FMS) platforms make it possible for FSOs to achieve positive, measurable results from implementing a Variable Workforce Model. Clearly, the gig economy is here to stay.

Have a question? Click to schedule a consultation.

To obtain a copy of our new ground breaking report on benchmarks and best practices in field service staffing click here.

Excellent Advice About Leadership

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In this week’s blog I am sharing an article written by Suzen Leen. She is Head of Marketing at Kap Computer Solutions Pvt. Ltd.,AP, a pioneer in BULK SMS Solutions.If you are interested in writing a guest post for my blog, please check out my Guest Posting Guidelines

Following your instincts when it comes to leadership is a good thing to do, but you also must continue to learn and know what a good leader does. It goes both ways, and this article will help you figure out what it takes for you to be the leader that is required. Not only will you improve as a leader, but you will help other people.

Make sure to engage people as a leader. You must learn how to motivate, involve, and excite others. Inspire them to engage their passions, strengths, skills, and creativity in the tasks at hand. Do what you can to acknowledge and appreciate each person’s contributions and efforts. You should make them all feel like they did something to move the project forward.

Effective leaders are inspiring. You need to develop the ability to inspire those who work under you, motivating them to work toward a common goal. You can use public speaking to achieve this, but there are also videos, blogs, articles and other methods to convey your uplifting message to your audience.

Good leaders know how to nurture growth in other people. Take the time to support other people. You can do this by learning their strengths, work styles, and passions. Try encouraging them to seek new possibilities and challenges. Remember that every person has the ability to expand the potential of the company.

As a leader, you must have confidence. This will, in turn, instill confidence in your team. If your team sees you doubt yourself, they will begin to doubt you too. Always act deliberately and do not waver, but do not be afraid to change your mind. A good leader is flexible.

One of the most important aspects of any leader is the ability to create a sense of trust among their employees. Employees who trust their supervisor are willing to do more to help the company succeed than those who do not trust their supervisors. Always be truthful when dealing with employees.

Be sure to finish everything you start or you risk losing the respect of the people that work under you. Even if something seems particularly difficult, you should give it your all and see it through to the end. No one will look at you the same if you turn into a quitter.

Be a communicator. Communication is a major aspect of what makes great leadership. If you can’t communicate your goals and vision, then what is there for your employees to follow at all? If you have a tendency to “loan wolf” at work, break out of that habit and begin communicating with your teams.

You should also use Bulk SMS Marketing for instant results, so that you can communicate with thousands of people with a single click https://kapsystem.com can provide you the best Bulk SMS Marketing, even you can also use our API to use it anywhere in any software.

Are you interested in growing your service business? Check out my online training course where you will learn strategies, tactics, and insights for Successful Service Marketing ™. As a starter, I’ve put together a brief video that describes the course content. You can access it here.

I’d love to hear your feedback or answer any questions you may have.