Value and Price: Understanding the Forces that Influence Service Revenue

This article was first published at Field Service News.

I am often asked by clients to help them implement strategies to grow their service revenue.

Often these engagements occur because a client perceives that they are not getting their fair share of revenue and it’s impacting the profitability of their company.

Developing new revenue streams does not happen by magic, a consultant doesn’t just waive his wand and suddenly sales take off. Increasing top line service revenue takes a little work but the results of this effort can pay off  handsomely.

All too often, Field Service management teams attempt to solve their revenue woes without first understanding their root cause.

They assume that the reason why more customers are not purchasing services from their company is that they price is too high. After all, that’s what their customers are telling them, so it must be true.

Companies that get caught up in this line of reasoning often find themselves implementing sales strategies based on some form of price concession, discount, or gimmick.

For example, charging the customer a small upfront contract fee for the right to purchase Time & Materials (T &M) service at a discounted rate, or treating service contracts as though they were a paid-up T & M retainer and allowing customers to carry unused portion of the retainer into the next year.

The assumption behind these pricing strategies is that more customers are likely to purchase the service because it is more affordable.

Unfortunately, the logic behind this line of reasoning is a bit flawed. Sure, the company may be able to secure more equipment under contracts through price adjustments. However, they will more than likely need to sell more service contracts to achieve the same gross margins as before the increase.

A company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.

For example, a company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.

At issue, price may not necessarily be the only reason why companies don’t buy service. This assumption would hold true if all customers are price sensitive. The truth is all customers are not. It typically a small percentage.

More importantly, customers will always point to price as their primary reason for not buying services if they are not presented with other compelling reasons to buy.

The reason many customers do not purchase service is because of the perceived lack of value.

Customers think prices are too high when they do not recognise or understand the value they will receive from the service provided.

The problem is that it is difficult to articulate the value of service.

Most companies, particularly manufacturers, don’t know where to begin.

The more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.

As consumers, we’ve all become accustomed to describing value in terms of the tangible aspects of a product. For example, its size, colour, workmanship, reliability and price. However, service is an intangible. How does one describe the value of something that is intangible?

The answer is by making distinctions about it. In other words, by describing the service in terms of the problems it solves, the outcomes or results it create, and/or the time it takes to complete.

Indeed, time is usually one of the biggest value drivers in field service.

Consider this, the more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.

Assuming no difference in price, which service offering sounds more appealing?

  • A) a service contract that simply provides parts and labour or,
  • B) one that provides 7-day by 24- hour coverage, parts, labor, same day onsite response time, remote support, and guaranteed uptime.

My hunch is that you picked B. This offering provides more value. Don’t you agree?

Unfortunately, most companies are not making these types of distinctions about their service offering.

It is should comes as no surprise that customers think the price is too high and don’t buy service contracts, and instead choose to take their chances and purchase service when needed on a Time & Materials basis.

Don’t misunderstand me, I am not urging field service companies to sell service features or outcomes they can’t deliver.

On the other hand, I am recommending those companies who are struggling with selling service contracts consider whether their service offerings or portfolios are defined with the customers’ perception of value in mind.

For the service to have value, it must be described in terms of the experience or outcome provided.

Does it save time or money? Does it increase machine utilization? Does it improve the quality or cost of operations?

By defining the portfolio in this way, Field Service companies can test different offerings through competitive analysis, survey research, and conjoint (i.e., trade-off) analysis.

They would, of course, need to ensure they can deliver on the promise of the portfolio prior to offering it to the customers.

Conducting this type of research, also allows companies to determine which service offerings are most optimal or in demand by their customer base.

All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions

In addition, distinctions provide the basis for differentiation and creating a competitive advantage. All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions then one that does not.

Some segments of the market may even pay a higher price for high value services particularly if they cannot purchase them elsewhere.

With the trend towards offering anything (e.g., products) as a service (XaaS) and Smart (i.e., IoT) Services, Field Service companies will need to become more adept at selling outcomes.

To do so they must be able to describe distinctions and articulate value. XaaS and Smart Services will not just sell themselves.

Field Service Executives are advised to start developing these skills now with service offered on existing equipment so they learn to be proficient at selling service contract when their XaaS and Smart Service programs are actually launched.

Walk Before You Can Run

A Blue Print for Creating an IoT Enabled Field Service Organization

Despite the enormous benefits of IoT, field service leaders face many challenges to implementing IoT platforms.   First, many of these leaders have not defined a clear outcome for IoT projects.   In other words, they haven’t created solid use case or achieved clarity around what types of actions, decisions, or benefits they can obtain from IoT.  The possibilities are endless and often overwhelming.   Second, these leaders need to create a clear road map with respect to when, how, and where they will implement IoT.  Questions often exist as to whether they should implement IoT on their existing installed base or roll-out with new product releases.   Applying IoT to an existing installed base may seem like a time-consuming and arduous task.  However, the benefits that a FSO can achieve when a large segment of their installed base is IoT enabled is significant.  Third, IoT produces a vast volume of data.  FSOs are often not sure how they will make sense of all the data or how they will ensure that actionable and measurable results will be achieved from this information.   Fourth and most importantly, many field service leaders are concerned that they must overhaul their entire service delivery processes prior to taking advantage of IoT.  This seems like an impossible order when they may have millions of dollars invested in the current ways of doing things.

Implementing IoT does not have to be this challenging or complex.  Ultimately, field service leaders desire a solution that helps them achieve actionable and measurable results in a reasonable time frame.  More importantly, they want a solution that does not bog them down with tons and tons of meaningless data and one that enables them to work with their existing service delivery processes and systems infrastructure.

Quite often, corporations that implement IoT solutions do so within the context of a Digital Transformation (DX) initiatives.  These initiatives typically involve a complete re-design of the service model.  While they have positive impact on the customer experience and share-holder value in the long run, they maybe counter-productive to the near term objectives of field service leaders to support their customers’ installed base on an efficient and productive basis.  This is because DX initiatives require corporate buy-in, multi function coordination, dedicated investment capital, and considerable time to implement, whereas field service leaders are more pragmatic and want results now.

The best approach for field service leaders is one that enables them to implement IoT in parallel to larger, corporate DX initiatives. By doing so, FSOs can realize short term gains within the context of serving their current installed base using the FSO’s existing infrastructure and service business model.  This approach reduces the requirement to re-design the entire business model and postpone the realization of results that are possible through IoT.

Field service leaders can think of this transformation as “a walk before you run” approach to implementing IoT.  It requires field service leaders to think of IoT in terms of moving from a reactive service model, to conditional, to prescriptive and finally to a predictive service model.  Reactive service is the modus operandi of most of today’s FSOs.  Service is provided when the customer acknowledges they have a problem and request a solution.  Conditional service represents the next phase in the transition to IoT.  It uses IoT technology to monitor the customers’ installed base and provide alerts to the FSO that service is required. This enables the FSO to be more responsive to customer issues, ensure first time fix, and minimize downtime.  A prescriptive model is one in which the alert includes a recommendation or instruction about what action the FSO should take next.  Predictive service goes one step further. It monitors the customer’s installed base to anticipate service events and take corrective action before they occur thus avoiding downtime altogether and eliminate operating costs and overhead from the service operation.

The time for FSOs to think about implementing IoT is when they are replacing or upgrading their Field Service Management Software.  Perhaps the requirement for IoT alone is the primary reason why a FSO would want to upgrade or replace now.  Assuming this is the case, FSOs are advised to seek out software vendors who offer IoT feature functionality as part of a complete solution. This will minimize the number of moving parts (e.g., vendors, applications) that need to be included in the solution.  This in turn will lead to reduced implementation costs, an efficient process, and less headaches for the FSO.  In addition, it will ensure that the IoT solution works within the context of existing service delivery processes and procedures as opposed to the other way around.  In this way, FSOs can walk before they run.

 

Schedule a FREE 30 minute consultation

Data – The DNA to Developing Your X-Factor in Business

If in the past you interviewed any great business leader about what it took to build a great business, they would probably have pointed to three (3) basic elements:

  1. People – Comprised of all layers of personnel, from C-suite executives to the warehouse clerks, who bring vision, creativity, leadership, and passion to bringing products and service to market, and pleasing customers.
  2. Process – The structured and disciplined series of actions, steps, and procedures personnel must complete to perform the work of the company. These processes are only as good the people who design, manage, and perform them.
  3. Technology – Systemic infrastructure that automates processes, tracks and controls transactions, and reports on the company’s operational and financial performance.

This statement is no longer complete to model modern day businesses, especially those involved in service.   Why not?  The statement doesn’t include the most crucial elements of managing a service business; data.

Data enables service companies to forecast and anticipate when, where, and how often service will be required.  This in turn enables the provider to ramp up or scale down service resources (e.g., people, parts) based on demand patterns. In addition, it provides service providers with the business intelligence they need to guarantee specific levels of service to their customers.  Furthermore, data forms the basis of a service company’s research and development efforts.  By examining trends and patterns in the data, a service company can identify opportunities to help their customers in new and better ways.  More importantly, data allows a service company to optimize (i.e., make the highest and best use of) service resources, improve service productivity, maximize efficiency, and enhance the customer experience.

Typically, when service businesses face financial troubles it is because they do not appreciate the importance of data to their business.  Without the ability to utilize data to manage service capability, service quality (i.e., performance) suffers, customers become dissatisfied and eventually leave.   In addition, service providers miss the opportunity to offer high margin, value-added services to their customers, such as 4-hour response time, remote telephone resolution, or overnight delivery of spare parts.

Data becomes ever more important as we consider one of the most significant trends impacting the Technology Industry, “Servitization”.  This trend describes the transformation that many companies are undertaking as they move from primarily selling products to generating a sizable portion of revenue and profits from services.   Ultimately, the path toward Servitization leads companies toward offering anything as a service (XaaS).

To deliver on this outcome in the high-tech industry (e.g., copiers), the provider of the XaaS solution must ensure the machine is available and running at optimal performance when the customer needs to use it.  Otherwise, the provider cannot deliver on its promise.  Neither the provider nor customer can afford extended periods of equipment downtime, or else they lose money since their revenue is tied to outcomes.   This means the provider must be able to anticipate problems before they occur and avoid them, or quickly mitigate or resolve them once they do occur.   With this data in hand, the provider can ensure resources are available when needed and that the customer receives the outcome it purchased.

Given the crucial aspect of data to managing a field service business, it is no wonder that Artificial Intelligence (AI) is becoming so popular in Field Service.  These tools enable service providers to quickly and efficiency analyze large pools of data to diagnose, anticipate, and predict service events.  Data, leveraged by AI, provides field service companies with the unique X-factor they need to achieve achieve exponential growth, exceed customer requirements, and maximize financial returns.

Schedule a FREE 30 minute Consutlation

Paying For Field Service With Bitcoin – Is That Even Possible?

This article was originally posted in February, 2018 on Field Technologies Online.

There has been a lot of buzz lately over Bitcoin.   With the tremendous volatility in the price of cryptocurrencies over the past 12 months, the emergence of new cryptocurrencies almost every day, and threats of government regulation, it’s hard not to take notice. Chances are you either think Bitcoin it is the next biggest thing since the Gold Rush or you think it’s the worlds’ biggest Ponzi scheme.

Regardless of your opinion of Bitcoin, you are probably wondering “What in the world does Bitcoin have to do with field service?”  In a word, “everything”.  Why? Bitcoin and cryptocurrencies are based on a powerful technology called the blockchain, a decentralized and distributed digital ledger that is used to permanently record transactions across a network of computers.  Each transaction is securely packaged together with other transactions in a block.   The data on the blockchain cannot be altered or duplicated, and no single entity owns the blockchain since its stored in a network of computers. Furthermore, the data is both anonymous and public. Anyone can view the transactions in the blockchain while the identities of the sender and receiver remain anonymous.

Another aspect of the blockchain is a “smart contract’.  This is a computer program that controls the transfer of digital currencies or digit assets between parties under certain conditions.  In other words, the smart contract provides “if”, “then” instructions regarding the sequence of events or transactions that are to occur.  The digital assets that are part of the transaction maybe in the form of data, video, audio file or text.

The blockchain provides an optimal platform for managing diverse types of transactions on low-cost/no-cost basis given the smart contract feature, the fact that no single entity controls the blockchain and that it is highly scalable and secure.  There are also several use cases for blockchain technology in the field service industry including but not limited to:

  • Managing Smart Devices and IoT –  the blockchain offers a low-cost, highly scalable, and decentralized network for managing IoT enabled assets and related transactions.  The blockchain ledger provides an objective and verifiable record of what has occurred on the IoT platform making it possible for stakeholders to verify activities that occur on the network or on connected devices
  • Asset Tracking – using blockchain addresses, a service provider can track all assets (e.g., sensors, devices, equipment, etc.) on the network. It provides an efficient and fast way of collecting information.
  • E-Commerce –  the blockchain and cryptocurrency provide an optimal mechanism for monetizing IoT related service activities (e.g., monitoring, alerts, actions, etc.).
  • SLA Management –  smart contracts can be used to operationalize and monetize SLAs and maintenance procedures related to specific events observed on the network.
  •  Spare Parts Management –  the blockchain ledger provides an effective method for tracking the history and authenticity of spare parts.  For example, the ledger can provide details of failure rates, refurbishment dates, and whether it’s an original/genuine part or generic/imitation part.

While the probability of Bitcoin reaching $1,000,000 anytime soon may seem like a pipe dream, it is highly likely that we will see commercial applications of blockchain and cryptocurrency applied to the field service industry within the 1-2 years.   In fact, there are several start-ups and Fortune 500 companies who have invested in or developed applications for field service and related industries.  For example:

  • Intel earlier this year invested in Filament a provider of blockchain solutions for Internet of Things (IoT) and the enterprise.  Filament’s blockchain technology is designed to facilitate data and e-commerce transactions on industrial and enterprise machines and sensors.
  • IOTA, whose partners include Microsoft and PricewaterhouseCoopers, is a cryptocurrency that provides IoT participants an easy, fast and safe way to exchange, buy and trade datasets.
  • IBM and Lufthansa Industry Solutions have launched the Blockchain for Aviation (BC4A) project, which concerns the use of blockchain for reliable and transparent maintenance operations.  It creates a digital ledger that allows industry participants (i.e., airlines, MRO teams, and OEMs)  to record flight events, operations conditions and scheduled aircraft maintenance checks, and cross reference these data sets against each other.
  • Engineers at GE Global Research have developed a blockchain application for the renewal energy market.  It uses smart contracts to manage how much money a consumer wants to spend on electricity, how many kilowatts they want to buy, and at what price. Energy can be purchased in real-time when it is needed based on the capacity required any given time.

It remains to be seen whether cryptocurrency will replace flat currency (cash) as the preferred medium of exchange among the world’s economies. However, blockchain technology is certainly gaining traction as a lower cost and more democratic alternative for managing transactions than centralized data networks.   While I wouldn’t recommend converting your entire stock portfolio into cryptocurrency, I do suggest we keep an open mind about how blockchain technology and cryptocurrency will revolutionize field service. In a few years, it will be used everywhere around the world for field service applications in some capacity or other.

What’s in Store at Field Service USA 2018?

Location for Field Service USA 2018

This month I interview Sara Mueller, Executive Program Director, Field Service Events at Worldwide Business Research (WBR) about challenges and opportunities facing the Field Services Industry, and why Field Service executives should attend Field Service USA 2018 in Palm Desert, California from April 17-20, 2018.

BLUMBERG: What are the Biggest challenges in the Field service industry?

MUELLER: In talking with our attendees, speakers, and people who I speak to when researching topics for our conference, I’ve found that one of the challenges that field services executives have is finding ways to do more with less.   Basically, they want to leverage technology to make things faster and efficient.   The challenge for our conference participants is deciding where to invest by determining which technologies will move the needle on service.

BLUMBERG: In your opinion, what is the most important trend in Field Service?

MUELLER: By far, its “Next Generation IoT”!   For leading edge organizations who have been using IoT for years and years, the question has now become “What do we do with all the data?”  Field Service companies are now using data to make better business decisions about Field Service operations. The conversation has moved onto the topic of using Artificial Intelligence in predictive maintenance scenarios and reducing the dependency on Field Service engineers.

BLUMBERG: One of the most anticipated annual events in Field Service is Field Service USA.  What is it and why should people attend?

MUELLER: Field Service USA is an event created by World Business Research (WBR) in 2003.  It brings together cross industry service & support executives to network, benchmark, and share best practices and strategies for advancing service operations.  The event features big forward-looking keynote speakers as well as smaller group, niche discussions so that attendees can learn and network from the wealth of people who will be at the conference.

BLUMBERG: Field Service USA seems like a more intimate event than the large industry conferences and exhibitions with hundreds of vendors and thousands of participants that business executives often attend.  Was this format created by design?

MUELLER: While we have experienced growth in the number of participants and always looking for more, WBR events have always been a small intimate gathering.  We are interested in building relationships among  executive director positions and above.  Our objective is to have the appropriate number of participants so it’s easier for them to talk to their peers.  We strive to have a balance of peer to peer exchange with participation from the best of the best vendors at our conference.

BLUMBERG: Can you provide me with an overview of they key topics that will be presented at Field Service USA 2018?

MUELLER:

  1. Transitioning to XaaS – selling a product to selling an outcome or service; it needs to be a company-wide, cultural shift
  2. Using AI to move toward autonomous service
  3. Leveraging big data
  4. Generating more service revenue
  5. Team building – recruiting, retaining, and engagement. The higher level of employee engagement the higher levels of customer satisfaction.

BLUMBERG: What is going to be different about Field Service USA this year?

MUELLER: We attempt to build on the success of previous years by keeping what works and getting ride of what doesn’t.  This year we will have more talks around to topics of Machine Learning, AI, and AR.  We are also adding discussions on the topic of service revenue and team building, and this year we’ve added “industry board rooms” which are industry focused board rooms, on the first afternoon of the main day of the conference.  Of course, we are still offering the same interactive formats that get people talking to people who have been in their shoes before. We are also keeping things fresh by bringing in new speakers from Otis Elevator, Robert Bosch, Nokia, BP, Comcast Business, Haier America, Dish Network, Jacobs Engineering, and NCR to name a few.

BLUMBERG: Why did you choose to make these changes?

MUELLER: This event has grown. Its the largest event that WBR produces.  We want to give people the big conference feeling by having key notes but will also want to bring people together talking.  I found that when I was doing my research, every business executives brought up some aspect of team building, recruiting, training, and employee engagement. Given the fact the service revenue generation is one of our main themes and more of our attendees are responsible for this, we’ve added it to our agenda. It ties back to the shift in the business model from cost center to profit center.   We see the attendees are positioning themselves that way (e.g., as profit centers) and more and more of our attendees are focused on marketing issues.

BLUMBERG: What is one thing that people will miss if they do not attend Field Service USA this year?

MUELLER: We all get so caught up in the day to day of our jobs and group think within our own companies that we lose sight of the big picture.  Its good to get other perspectives.  People attending Field Service USA consistently have been leaders in the markets they serve, and I think its because they attend.

BLUMBERG: If someone needed come up with one reason why to attend, what should it be?

MUELLER: People will benefit no matter what their objective is for the next 12 months to 3 to 5 years.  We have small group discussions and lots of carefully planned out network events and parties.  There are lots of ways to build relationships, have fun, network and find new answers.

Does Field Service USA 2018  sounds like an event you would like to attend? Register using code: FS18BLUM to instantly save 20%* on your ticket! Book online at www.fieldserviceusa.com or call 1-888-482-6012.

Service Contract Sales Secrets: Q&A With Michael Blumberg

This article was originally posted on Field Service Digital as in interview between Derek Korte and Michael Blumberg.  Michael will be hosting a FREE Webinar on February 28: Key Strategies for Increasing Extended Warranty Revenue. Click here to register for this event. 

Most service organizations know that long-term service contracts are one of the holy-grails of service revenue and profitability. Yet, despite their importance, many organization don’t know how to effectively market and sell them. Michael Blumberg, president of Blumberg Advisory Group, recently released new industry research with some key insights for service executives on this important topic. We sat down with Michael to ask a few questions about his findings.

What surprises you most from the survey?

The top take away is that the configuration of extended warranty and extended service programs has a tremendous influence on the sale of these programs. In other words, the length of coverage, level of customization, processes engaged and resources employed in delivering the warranty and entitlement levels offered play a key role in driving sales. This is an “eye-opener” because many companies have the view that a warranty is a warranty. However, our findings suggest that the more distinctions that can be made about the program, as defined through the configuration, the more effective the company will be at selling it.

Is there anything more important to service profitability than contract attachment and renewal rates?

Some field service executives may argue that KPIs associated with service costs and productivity such a first-time fix, cost per service event, mean time to repair, etc. are more important to service profitability. However, without service revenue there can be no profits at all. Contract attachment and renewal rates are the KPIs which measure how well a company is doing with respect to securing this revenue. The truth is that service contracts can be very profitable in and of themselves. One reason is because they provide an annuity for the service provider in the form of a recurring revenue stream. The second reason is because a sizable percentage customers who purchase a service contract require very little service or no service at all. This means the service provider doesn’t incur significant costs in servicing that customer.

How do companies successfully market and sell service contracts to customers? After all, they do little good if customers don’t buy them.

Most companies rely on sales aids (e.g. brochures) and direct sales. Usually, these activities occur at the product point of purchase. However, companies who continue to sell service contracts after the product sale are likely to generate additional service revenue. Other sales and marketing tactics which have proven to be effective include customer testimonials, reputation management, telemarketing (i.e., outbound sales), public relations (e.g., press releases, article placement, etc.) and analyst reviews.

You identify 50 percent attachment rate and 75 percent renewal rates as best in class. Why are so few service organizations able to achieve those levels?

First, service organizations need to adopt the right mind set about extended warranty and extended service programs. They must understand that service is separate, distinct, and unique from products. This means that service leaders must place as much time and effort into configuring, marketing, and selling service contracts as their counterparts in the product organization place on designing, marketing and selling products. After all, service won’t sell itself. Just because the customer owns the product doesn’t guarantee they’ll buy the service. Second, the service organization must have the right systems and processes in place to market and sell service contracts. For example, processes and systems that facilitate a company’s ability to configure, price, and quote customized service contracts. It is astonishing to learn that approximately, one-third of the survey respondents utilize spreadsheets to perform these functions.

How do you envision new technologies (e.g. IoT) impacting traditional service contracts — and how will smaller firms keep pace?

These technologies will either make selling service contracts a dream or a nightmare for service providers. While recent technologies like IoT, AI, and big data will make it possible for companies to deliver outcomes, it is the service contract that defines what exactly the outcome will be. It provides the terms and conditions, the hours of coverage, the level of availability, the resources provided, and the processes engaged in delivering the agreed upon outcome to the customer. In many ways, selling an outcome based contact is no different than a traditional service contract. That’s why companies of all sizes need to become proficient at configuring, marketing, selling, and managing service contracts. Gaining mastery over this function is how smaller firms can keep pace.

Register for Free Webinar on February 28

What Makes Successful Digital Transformation? – Podcast

Field Service — FMS

Michael Blumberg (President & CEO of Blumberg Advisory Group) sat down with Todd Stewart of In the Know to discuss why digital transformation is one of the hottest topics within the field service space. 

Digital Transformation occurs when an organization leverages the use of  advanced technology to change the way they conducting business. By doing so, these companies can run a  more responsive business operation and gain greater market share.

This is especially true in the Field Service Industry. One example of this positive impact is the use of Internet of Things (IoT) to remotely monitor equipment performance. By continuously monitoring sensors related to a particular piece of machinery, a Field Service Organization(FSO) can predict when service is needed or know as soon as there is a failure. At that point, the FSO can contact the customer to provide information to fix the problem, analyze what personnel or parts need to be sent onsite to resolve the issue, or provide information to the customer to avoid the impending problem all together.

Learn more about Digital Transformation by listening to this podcast.

 

 

Sales and The Field Service Engineer

Questions from Kris Oldland, Publisher of Field Service News

The following is a compilation of a 4 part series from Field Service News called ‘The Big Discussion’ All four questions with the answers from Michael Blumberg appear here to give you a clear picture on his views of the role of Field Service Engineers in sales to existing customers.

“In the Big Discussion we will take one topic, bring together three leading experts on that topic and put four key questions to them to help us better understand its potential impact on the field service sector…”

It is often said service technicians are the greatest salesmen – what are your views on this?

Service technicians bring a perspective and outlook that makes them great at sales in certain situations. For example, where the sale solves a critical problem for the customer.

Basically, customers appreciate the fact that service technicians are problem solvers and place the customer’s need first. As a result, the service technician has trust and credibility with the customer.

In turn, the customer is highly likely to act on the service technician’s recommendations. Sometimes, the only way a technician can solve the customer’s problem is by having them buy something new like a spare part, new piece of equipment, or value-added service offering.

In these situations, the sale is not viewed as a sale at all by the customer but merely as an attempt by the technician to solve the customer’s problem

Is there a difference between selling service and selling products?

Yes, there is an enormous difference.

Selling products requires the salesperson to focus on the form, fit, and function of the product and how it meets the customer’s needs. Selling products is about selling the tangible.

Selling services requires the salesperson to focus on how the service can help the customer solve a problem, improve their situation, or achieve a better outcome.

More importantly, it is about selling the intangible.

Is incentivising service technicians to “sell” opening up new revenue streams or putting their “trusted advisor” status at risk?

Technicians represent a ready and available channel for generating incremental service revenues.

After all, they are at the customer site almost every day.

However, service technicians may become over-zealous or pushy about selling, and jeopardize their “trusted advice” status, if they lack proper sales training or if their performance measurement system and company culture are too focused on sales.

What impact does the rising uptake in outcome based services have on the relationship between service and sales?

Selling outcome based services requires greater collaboration and communication between service and sales than ever before. Service needs to understand and support the solution that the sales force crafts for the customer.

The sales force needs to have a clear understanding of the capabilities of the service team to craft the right solution.

Basically, service and sales must work as a team. In addition, the service organization must be proficient at sales so they can add-on additional services to better meet outcomes as these opportunities present themselves.

Schedule your FREE 30 minute Consultation

Digital Transformation Trend: Changing “Business as Usual”

The following is an excerpt from an article we wrote for XM Reality.  You can get a copy of the full article here http://resources.xmreality.com/blumberg-new-reality/

customer service

Perhaps the trend that is having the greatest influence on the adoption of AR/VR/MR platforms is not the affordability or stability of the technology but the commitment by today’s leading corporations to embrace Digital Transformation (DX). Rather than utilizing technologies simply to streamline and automate existing business processes and transactions, digital transformation means utilizing technological innovation such AR/VR/MR to change the very way business is conducted, resulting in new business models and cultures.

DX has had an overwhelmingly positive impact on the performance of companies that have pursued this strategy. In fact, in some instances it has resulted in a winner take all scenario. According to Constellation Research Founder and Principal Analyst Ray Wang, “digital leaders in almost every industry are taking 40% to 70% of the overall market share and 23% to 57% of profits. In some markets, if there are one or two major players, they are taking up to 77% of the profits”.

These findings suggest that DX could lead to a “zero-sum” game for selected field service providers. Therefore, it should come as no surprise that businesses across a wide range of industry segments are investing heavily in DX technologies. Indeed, worldwide spending on DX is estimated to approach $1.2 trillion by 2017 year-end, according to International Data Corporation, an increase of 17.8% over 2016. IDC predicts this market will continue to grow at a steady rate of 17.9% over the next three years, reaching $2.0 trillion by 2020.

Most business experts and industry pundits agree that DX investments have the greatest impact on a company’s performance when they achieve two major objectives. First, they make business operations more responsive by leveraging digitally connected product-service offerings, people, and assets. Second, they lead to innovations that transform how customers, partners, employees, and things communicate with each other. For field service organizations, the outcome of meeting these objectives incudes a more enabled workforce, enhanced customer experience, and improved overall collaboration and performance.

Clearly, AR/VR/MR technology is well suited to meet these objectives and deliver outcomes. At a macro level, it changes the way field service business is conducted, by bringing a problem to the expert rather than the other way around. As a result, it shortens the time it takes to resolve a customer’s issue and avoids the high costs associated with sending a technician to the customer site. In addition, it helps FSOs overcome resource constraints. For example, utilizing this technology, a technician at a customer site can simultaneously offer remote support to a second customer at another location. Furthermore, the technology facilitates greater collaboration and performance among technicians. A “top-gun” technician with deep domain knowledge and expertise can provide remote guidance to a less experienced, “novice” engineer. Technicians can also use annotations as part of AR sessions to overcome language barriers that may exist between people in different geographic regions. Lastly, AR/VR/MR provides an immersive experience to the customer, enhancing their experience and enabling them to be self-reliant when it comes to resolving basic issues.

In many ways, AR/VR/MR pushes the boundaries of possibilities when it comes to providing high quality and efficient services and support to end customers. By overcoming limitations, FSOs experience improved performance in the areas of first time fix, remote call resolution rates, mean time to repair, and cost per service call. While effective field service leaders have always been committed to continuously improving performance in these areas, AR/VR/MR provides the technology to make step-wise (e.g., exponential) improvements as opposed to only incremental gains.

AR/VR/MR brings additional value in its ability to positively influence and enhance customer satisfaction as well as generate new and profitable sources of revenue for FSOs. For example, many early FSO adopters have been able to monetize their investment in this technology by offering AR/VR/MR enabled remote support sessions as a value-added, fee-based service to customers. These examples clearly demonstrate why FSOs should give serious consideration to deploying an AR/VR/MR solution today.

Call Michael for a FREE 30 minute Consultation

Gig Economy Plays a Crucial Role in Hiring freelance Telecom Field Technician

Ramya Sri Alluri is a Marketing specialist and Staff Author at FieldEngineer.com a freelance marketplace to hire a telecom engineers.

In today’s digital world, things are more difficult than ever when you’re competing. This is especially true with the global connectedness. Luckily, however, you can benefit with the advantage of a freelance marketplace that connects you to a telecom field technician or other talent you’re looking for. Businesses are finding numerous benefits of hiring a freelance telecom field technician from a freelance marketplace, such as:

Cost
A freelance telecom field technician can save you immense costs in your business. After all, once you start bringing people in it can sky rocket to mean that your payroll outpaces other costs in your company. So to keep that in check, consider freelancers as a budget option whenever you need it.

Speed
Speed is of the utmost importance in any business. If you lag behind the competition, you’ll find that your customers are going somewhere else. This can spell disaster if you don’t do something to correct it. Benefits of hiring freelance telecom specialists also include speed: you can talk with them instantly from anywhere else in the world and cut down on time costs that would otherwise make you miss important deadlines.

Convenience
It’s incredibly convenient to be able to use your phone or computer to talk with your workers. Whether you are in the office, at home, or in line for lunch, it takes a few punches on a keyboard or taps on your phone to get things running along smoothly. This kind of convenient workflow is quite priceless.

Integration
You can integrate the skills of your telecom hire with the others on your team. Some teams need various skill sets in order to achieve a complex set of directives from the top. If you feel this describes your company, then you’ll derive many benefits from using the marketplaces that connect your team together, no matter if they’re in Asia, Africa, or anywhere in between.

Capability
The worst feeling is when a client wants you to perform something for them but you can’t meet the capability. Having to say no is the worst fate of a business. If you do it too often, you’ll lose your reputation. A benefit of freelance telecom workers is they make you agile and scalable. You can add a few more man hours into the mix to bring a project in on time and under budget.

Security
Security is of the utmost importance for any business. If data gets into the wrong hands, such as customer lists or your secret recipes of how you deliver solutions to customers, then it could spell the end for your business. Enjoy the benefits of freelance when you have them siphoned off from certain knowledge just in case of a data leak. A telecom field technician only needs to know certain variables of what they’re working on.

Hiring new workers for your company can be a pain. However, it doesn’t have to be if you follow the right advice and emulate other companies that have had success in the industry before you. So you can have the most profit with least risk by hiring on freelancers to fill in the gaps needed to make your business a wild success.

Fieldengineer.com is an innovative digital marketplace that connects you with talent all across the globe. You can log into the portal from any computer, phone, or tablet. This makes it fast and convenient to use. In addition it’s free for businesses. Features include live tracking of your engineers and freelancers, management of work orders, fast matching with talent with our AI, and special APIs so you can run your business more effectively and streamlined.

Would you like to submit a Guest Post?