Embrace Your Competition: A Critical Success Factor

A client was recently the target of negative advertising by one of his competitors. The two-page ad depicted a cartoon image of a shark in business attire wearing a Rolex watch with the caption “Some Suppliers need a Vice President of Service because they depend on Parts and Service Dollars…”  The second page described how the advertisers’ product engineers are measured on customers use of their parts and services including a 5-year warranty,

From my perspective, these types of claims are troubling for several reasons:

  1. These type of advertisements “trash the competition”.   Sales and marketing professionals understand that going negative is not good for business.  Most manufacturers would not use this approach when it comes to selling their equipment in their primary market. Yet some believe anything is fair game in the Aftermarket.
  2. It demonstrates negativity on the advertiser’s part with respect to the role and value of service to the customer.  Their claim overlooks the importance of service to KPIs like First Time Fix rate or Customer Satisfaction.  This implies that service is not necessarily needed and not strategic to the customer or the manufacturer.  This is just flat out misleading.

I have also seen negative advertisements and claims made against Third Party Maintainers (TPMs) and generic parts manufacturers, and I don’t like it either.  Trashing the competition is just wrong.  The quality and reliability of products and services from these third party suppliers can be just as good or better as those form the OEM.   Furthermore, many OEMs also market and sell 3rd party services of their own.

The bigger issue is not about whether OEMs are better than TPMs, or if genuine parts are better than generic, or even if creating a VP of Service and/or operating service as a profit center is good for business.  Rather, the issue is competition is good for both business and in the Aftermarket for several reasons:

  • Legitimizes the market– Markets are defined by the presence of competition. To win business, competitors must actively market their products and services. As a result, customers are aware of options available to them.
  • Creates choice– Competition offers customers the freedom of choice. The theories of capitalism and free trade are built on this basic premise.
  • Improves quality & efficiency– Competition in the Aftermarket forces third parties and OEMs to continue to find ways of improving the quality of products and services offered while at the same time finding ways to cut costs and improve efficiency.   In other words, competition raises the bar and results in better prices for customers.
  • Leads to innovation– In addition to raising quality and improving costs, competition drives service providers to become innovative. Without competition, it is hard to know whether service providers would focus on finding ways to add value. Would service providers be just as compelled to invest in new systems and technology like SaaS, Mobility, and IoT if not for the impact that competition has on innovation?
  • Leads to greater cooperation– OEMs have the choice to subcontract service to TPMs/ISOs. This helps them improve their cost structure, service delivery and obtain capabilities that they may not otherwise be able to build themselves. Under this scenario, OEMs and ISOs can gain knowledge from each other and use this towards driving innovation, reducing costs, and improving quality

In summary, competition provides benefits for the customers, OEMs and third-party providers. Technology vendors can also benefit from competition in the Aftermarket.  Based on my perspective, if a company resorts to trashing their competition, they are probably troubled in some way.  On the other hand, if a company is concerned about their competition, they should probably focus within their organization to find ways to leverage forces to their strategic advantage and develop a higher value proposition.

Post your comments or questions below!  

What Smarketing Looks Like

(And Why Your Company Needs to Adopt It)

This article is reposted with permission from Tenfold Blog (www.tenfold.com).

Smarketing is a new buzz word in the world of sales and marketing. Actually, it’s a contraction of sales & marketing. Hubspot defines smarketing as: “…the alignment between your sales and marketing teams created through frequent and direct communication between the two.”

Since a company’s end goal is always the same, it makes perfect sense to integrate sales and marketing processes in the pursuit of those end goals. Establishing this common ground makes the process of acquiring leads and converting them a lot smoother. It also makes more sense for a consumer to undergo a more cohesive experience. A disjointed experience between sales and marketing can lead to consumer confusion and lost opportunities. A consumer should never feel like they’re being tossed around.

Instead of treating sales and marketing teams like two competing units, a company that takes a cooperative approach makes them all part of the same team. Bringing them together as allies will positively impact a company’s bottom line as well. In fact, some companies that have joined their sales and marketing forces reported a 20% revenue growth.

So, what does smarketing look like within a company?

It starts with a framework

First, a company’s sales and marketing teams need to be on the same page regarding their target market and what they consider a warm lead. They should also know what their respective objectives are. How many leads should marketing be bringing in? How fast should sales follow up with a lead? How many times should they follow up? Making sure everyone is aligned makes the process so much more straightforward. It’s like a team playing together on a  soccer field; the infield and the outfield both know when and where to send the ball. A clear sales and marketing strategy is vital.

Using common terminology

In addition to functioning within the same framework, a company’s sales and marketing alignment depends on using common terminology for the entire funnel process. Having set terms and terminology will not only make the discourse between departments clearer, it will also make the process more streamlined for the customer. If sales is using one set of terminology and marketing is using another, they risk sending mixed messages to the consumer.

Frequent sales and marketing meetings

Saying that a company’s sales and marketing teams work together sounds nice in theory, but it must also be put into practice. Regular meetings provide the physical coming together of the sales and marketing teams and focusing on a common purpose. Sales and marketing management should also work closely together to ensure objectives are being met or to establish those objectives.

The purpose of the meetings is to track their collective progress and hone the smarketing process. Bringing ideas, resources, and suggestions together in meetings can bolster the entire process. Bringing the teams together face-to-face as allies reduces any antagonism, replacing it with the constructive opportunity to build on each other’s success instead.

Create boundaries

Even though the purpose of smarketing is to bring the sales and marketing teams together, there must still be delineation between their respective responsibilities. Clear boundaries must be set between where marketing ends and sales begins so intrusion can be avoided. After all, sales and marketing are two different specialties that require different skills. Employees must know what their particular roles are in a company and how they fit together to keep friction to a minimum.

Closed loop reporting

Anyone from sales or marketing should be able to tell where a particular lead is in the sales and marketing process. They should never be left wondering: “Hey whatever happened to that guy I met at that seminar in June?” They should be able to open up a program and see exactly where that guy is in the buying process. Business 2 Community recommends using both marketing automation software and CRM software to provide data access for both teams and build transparency.

Closed-loop reporting also offers more opportunities for two-way discussion and input between sales and marketing teams. They can check in with each other to enhance the process or give each other valuable customer insight. Aligning sales and marketing processes makes both sides feel they’re working towards a collective goal.

The moral?

Creating a sales-marketing alignment plan can boost a company’s bottom line by creating an opportunity to build each other up rather than tear each other down. Environments, where the sales and marketing teams are competitive rivals, don’t make much sense when the main objective is the same.

To create sales and marketing alignment, a company needs to improve the relationship and conversation between the departments. Smarketing puts sales and marketing on the same team for the benefit of the company as a whole. Now that’s smart marketing!

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The Most Empowering Question You Can Ask

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Have you ever felt stuck when it comes to growing your service business? For example, you feel that things are stagnant or perhaps just not going as well as you’d like.  If your answer is yes, then chances are that you have been doing the same thing over and over again and expecting a different outcome.  That’s called insanity!!

You know you need to make a change but you are not exactly sure how.

All of us in business have at one time or another felt this way.  Most people in this situation ask themselves…”What should I do?”  “What should I do to get better results?”   The truth is this is a poor question to ask.  It is a poor question to ask because it is a disempowering question.

Disempowering questions seldom give us new insights or perspectives that lead to real change.  This is because our mind always tries to find a way of answering our questions. When you ask yourself “What should I do to increase service sales?” you come up with a million different answers.  One answer may be advertising, so you spend money on advertising only to find that it doesn’t help. You may again ask yourself, what should I do to increase sales, and your mind answers…”invest in Search Engine Optimization (SEO)”.  You invest in SEO, yet still you observe little or no improvement.

You continue to ask yourself the same question over and over again and get answers like do more networking, do thought leadership marketing, do price discounts . . . but still no improvement.  Soon you find yourself running around in circles doing different things. You keep doing more and more different things in hopes of getting better results but nothing happens. That’s crazy!  If you keep this up, soon you are likely to hear a small voice inside your head say “Woe is me, what should I do, I don’t know what to do, poor me!”

Poor you is right!

Can you see why asking yourself “What I can do to increase sales?” is a disempowering question?  Asking this type of question creates a vicious cycle that you have to break before it breaks you.  You can break it by learning how to ask empowering questions.  The most empowering question you need to ask and answer if you are trying to grow your service business is, “What value does my company bring to the marketplace?” In other words, what is you value proposition?

The truth is you can’t improve your sales until you are clear about the value you provide. Without a clear value proposition, spending money on advertising, incentives, networking, and other forms of marketing is throwing good money after bad.

In order to define your value proposition you have to answer 3 additional questions:

  1. Whom do I serve?
  2. What problem do I help them solve?
  3. What results do I help them achieve?

These answers provide input to the value proposition formula, which goes something like this…l help X, solve Y, so that Z. Here, X is the answer to the question, whom do I serve; Y identifies what problem you help them solve; and Z clarifies the results you help them achieve.

For example, my value proposition is, I help service managers and executives gain access to new perspectives, strategies, and insights about service management so that they can increase sales, boost profits, and delight their customers.

Once you determine you value proposition and consistently apply it you’ll achieve better results:

  • You’ll gain clarity about whom you help
  • You’ll be more certain about how you help them
  • You’ll be more effective in finding more people like them
  • You’ll find yourself working with people who really understand and appreciate the value you provide them
  • You’ll close more sales

Remember, if you are feeling stuck in your business or career, and nothing seems to be working, you are probably asking yourself disempowering questions. Break the cycle of despair by asking empowering questions, instead!

Now it’s your turn.  Complete the value proposition formula (I help X, solve Y, so that Z) and share it with us in the Comments section.  We’d love to learn what you’ve developed and how you think it has helped or will help you company get more business.  If you need ideas about what to do now that you’ve developed your value proposition, schedule a free consultation today.

The Fine Art of Selling Services

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Managing a Field Service Organization (FSO) as a profit center has become a strategic imperative for many companies.  In order to carry out this mission, field service executives must continually focus on top-line revenue growth.  Yet, research indicates that nearly three-quarters of FSOs are struggling to achieve this objective. My personal observation is that they haven’t mastered the fine art of service sales and marketing.  At issue, field service executives often confuse marketing with selling, and selling with marketing.   While there is some overlap, the two functions are significantly different.

Marketing is Not Selling

Marketing is a set of processes, activities, and/or instructions a company utilizes to create value and customer demand for the products and services it offers.  Basically, this is about turning a need into a want through promotional activities.  According to Jon Janstch, of Duct Tape Marketing fame, marketing is getting someone who has a need to know, like and trust you.

In contrast, selling involves the fine art of persuasion.  It requires that the salesperson utilize a planned, personalized communication to influence a customer’s purchase decision.  Not only must a salesperson uncover a customer’s needs and wants, they must persuade the customer as to the merits of buying their product or service.

Telling is Not Selling

A common sales strategy that FSOs utilize is to involve field service technicians and managers in the sales process. The conventional wisdom is that since these people deal with customers every day, they are perceived as individuals the customer can trust for advice. As a result, they are in the best position to advise the customer on additional products and services they may need to purchase from the company.

This strategy is based on the premise that the field service technician/manager functions as a brand ambassador. Their focus is on building a relationship by solving problems, uncovering new opportunities, and telling the customer how their company can help.  This seems more like marketing than selling.  Indeed, the problem with this approach is that it often results in free consulting. In essence, the customers may not buy but instead rely on information their brand ambassador shared with them and seek competitive bids, or simply choose to do nothing at all.  It also assumes that that service salesperson can spot opportunities and effectively open up a sales dialogue with their customer.

A Structured Sales Process

Field-service leaders can avoid free consulting, increase their prospects, and improve their team’s sales closing rate by implementing a structured sales process and training their service-sales people on this process.  The sales process consists of three basic steps:

  1. Relationship Building: There are two critical aspects here. The first is bonding and rapport. This is how a salesperson gets a customer to know, like, and trust them.   A sale cannot be made without bonding and rapport.   The second aspect is known as an upfront agreement. This requires mutual consent between the salesperson and customer that each is open and willing to participate in a sales conversation. It also requires that when asked about moving to the next stage of the sales process, the prospect can provide a yes or no answer.  Upfront agreements help salespeople know where they are in a sales process with a customer and keep the sales process from stalling or falling apart.
  1. Qualifying: Sales processes may break down if the salesperson hasn’t done a good job of qualifying the prospect.  Qualification is more than just determining if the client has a need and budget.  It’s really about understanding their pain (i.e. problems).  The truth is that people don’t buy just because they like something; they buy to alleviate a pain they are currently experiencing or will experience if they don’t own the product or service. The greater the pain, the more likely they will buy.  It’s the job of the salesperson to uncover this pain.  Once done, the salesperson can discuss the budget that is required to resolve this pain.  In other words, the “pain conversation” puts the budget discussion into context for the customer.  Of course, understanding how decisions are made within customers’ organizations is also part of the qualifying process.
  1. Closing:  The closing step involves two parts, fulfillment and post sell.  Once you understand the customer’s pain, budget, and decision process then you can have a conversation about how your service will solve their pain, what the investment will be, and what it will be like to work with you after they accept your proposal.  That’s basically what fulfillment is about.  Post sell means confirming they are happy with the decision they’ve made.

Iterative Process

It is important to understand that the sale process may involve multiple, iterative conversations. This is because very few products and services can be sold in the first conversation.  The failure of the salesperson to effectively address one step of the process may impact their ability to address the next stage and thus jeopardize the sale.   If this happens, the salesperson must go back and repeat the sales process from where it failed.  This may mean they have to review or revisit previous steps with the customer to get the sale back on track.   It’s also important that understand that “speed kills” when it comes to the sales process. In other words, rush the sales process and you may lose a customer.

Think about your last conversation with a salesperson.  If you purchased from them, chances are they effectively addressed every stage in the sales process.  If not, it was probably because the sales process broke down.  Also, evaluate your own company’s selling process and closing rate.  Does your company follow a structured sales process or are service salespeople simply winging it?   If you follow a process like the one outlined here, do you know which steps are working well and which require improvement? If you’d like to learn more, schedule your free service sales strategy session today.

Turbocharge Your Service Business

Maximize Revenue through Market Research

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In my last series of blog posts I wrote about what it takes to build a Successful Service Marketing™ program.  To review, I described the strategic concepts of service marketing and introduced you to the 7 Ps. These are of course very important concepts. However, there are a few more concepts you’ll need to master if you are going to win at service marketing. If you’re going to be successful at service marketing or any kind of marketing, even if it is product marketing, you have to have good knowledge of your market.  You get that knowledge through market research. If you know who buys, what they buy, and why they buy then you can sell more to them and get them to buy more often.

Market research also provides the insight needed to communicate effectively with your current and prospective customers. It helps determine what messages, what images, what ideas will resonate with them and get their interest to want to buy from you.  Marketing is about taking a need and converting it into a want. You may need a watch to tell time but you want a Rolex because of the status and prestige associated with owning one.  So when you have really good market research of who buys, what they buy and why buy, then you can construct your message in such a way that you turn a need to a want.   In the field service world, you customers may need to know that they can get service on their equipment when it is down but what they really want is a guaranteed Service Level Agreement with a 4-hour response time.

Good market research not only helps in creating a service portfolio your customers really want but it helps in developing an optimal pricing strategy for that portfolio.  Chances are that you are familiar with cost plus and competitive pricing strategies. With cost plus pricing, you calculate what it costs to deliver service and then mark it up by an amount to cover you profit.  With competitive pricing strategies, you conduct market research to find out what your competitors are charging and then price your services at a lower amount.

A third type of pricing strategy is called value-in-use pricing. It basically involves measuring the economic value or loss to the customer of not having the service available in a timely manner.  This can be significant.  For example, a manufacturing facility may lose millions of dollars every hour its machines are down.  Therefore, they may be willing to a pay premium for faster service.  Market research can help you understand your customers’ value-in-use and determine whether or not you should pursue a cost plus, competitive, or value-in-use pricing strategy.   You’ll need to understand all three pricing strategies and how to effectively leverage market research to maximize service revenue and optimize profits.

The final aspect that you have to master to win service marketing is called ‘‘Invisible Selling”. This is based on the premise that you win business not by pushing your offers onto prospects, but by pulling customers towards you. One of the ways you pull customers to you is through indirect marketing as opposed to direct selling.  What’s an example of indirect marketing?  It’s an article or white paper that demonstrates that your company understands the problems that companies in your market are experiencing and that you have solutions to these problems.  It’s about using social media and public speaking opportunities to influence others to want have a conversation with you to learn more about what you do, and how you can help them.   It’s about positioning you and your company as experts and trusted business partners.   By the way, seeding your thought-leadership content with market-research data is a sure-fire way to build credibility with current and prospective customers.  Once you establish credibility they follow you and then it’s only a matter of time until they become your customers.

When you put all the elements of a Successful Service Marketing™  program together, when you fully understand the strategic concepts of service marketing, when you effectively apply the seven principles of service marketing, when you learn how to optimally price your services, when you use market research effectively, and implement an invisible selling strategy, you’re going to experience incredible results.  Your marketing program will be extremely successful, your sales will take off, and your business will skyrocket.

If you are really interested in achieving extraordinary results, then 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 to schedule  a consultation.

The Service Marketing Mix

Understanding the 7 Principles

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One of the reasons service executives struggle when attempting to grow their businesses is they try to apply product-marketing concepts to service marketing. This is like trying to hammer a square peg into a round hole.  The 4 P’s marketing mix is one such concept that works great for products but not for services.  It’s based on the theory that the success of a company’s marketing program is based on how well the company manages strategies and tactics related to product (i.e., design, form/factor, etc.), price, promotion (e.g., sales, advertising, etc.), and place (i.e., distribution).

The problem is that these 4 P’s do not apply to services. First, service products are intangible and difficult to describe.  This begs the question, how can you promote something that is difficult to describe?  Another problem for service marketers is that place has a very fuzzy connotation in service marketing because there are multiple entities involved in service distribution. Sometimes they cooperate, other times they collaborate, and still other times they compete.  Services can be offered by one entity, ordered through another, and delivered by a third.  Without well-defined product, promotion and place strategies, all that is left is price and that becomes a slippery slope for service marketing.  Sales and marketing can never be just about prices because customers will always find a way to negotiate price.  In product marketing, the 4 P’s makes it possible for a seller to justify the price.

For the past 20 years, I’ve devoted a great deal of time and resources to understanding this dilemma, in the process developing my own theory about service marketing.  I determined that a Successful Service Marketing™ mix is actually based not on 4 but on 7 key principles.  These principles are:

  1. PORTFOLIO: Often described in terms of a service-level commitment, such as 24/7 with a four-hour response time. The more distinctions you can make to define your service portfolio, the more likely you will be to fulfill the needs of prospective customers.
  2.  PROVIDER: Tangible elements of your service infrastructure, such as your call center, self-service portals, enterprise systems and service technology that make it possible to deliver on the promise of your service portfolio.
  3. PROCESS: The steps your customer must take to request the service, and the tasks that occur to deliver the service. For example, performing front-end call screening and diagnostics before dispatching a field technician.
  4. PERFORMANCE: Evidence that you can deliver on your promise, such as KPIs, customer satisfaction results and customer testimonials.
  5. PERCEPTION: Your ability to win business and retain satisfied customers is based on your ability to influence their perception of you. This goes beyond simply promotion through advertising, branding, and communications. It gets to the essence of who you are, what you stand for, and how you portray yourself in the market.
  6. PLACE: Services distribution channels can be complex.   Quite often, consumers can purchase service from one place, order or request it from another place, and have it delivered to them at a third place (e.g., onsite, depot, remote, etc.).  Sometimes it’s the same company delivering this service. Other times it’s not.  Regardless, the service marketing mix must deal with these complexities.
  7. PRICE: Of course, there is always the issue of price. The important thing to remember is that price is a function of value in use and perception that consumers have about your company (i.e., expertise, experience, capability).

Many people have asked me why I haven’t included “People” as one of the Ps in my service marketing mix.  While people are important to the success of any endeavor, I feel very strongly that their ability to deliver exceptional results is a function of the 7 Ps that I’ve identified above and not the other way around.  Ordinary people can achieve extraordinary results when there are great strategies and tools in place.

Please let me know what you liked about this blog and your key takeaways.  If you’ve found this blog of value and think your colleagues or business associates could benefit from it, kindly share it with them.

If you are really interested in achieving extraordinary results, then 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

 

Keys to Successful Service Marketing

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Service Marketing was a relatively new concept when I began my consulting career back in the 1980s.   High-tech service companies were just starting to run as profit centers and focus on marketing their services.  As a result, there was very little attention placed on service marketing in business schools at that time. The emphasis was on product marketing.  All the marketing literature and textbooks, all the courses, and all the conventional wisdom on the topic of marketing were centered on products.  I learned very early in my career that it is extremely difficult to market services using product-marketing ideas.  It was like trying to hammer a square peg into a round hole!

I really wanted to help my clients solve their service-marketing challenges so I began an amazing journey of helping these clients discover, develop, and implement best practices for successful service marketing.  First, I learned as much as I could about product marketing and then looked at which aspects applied to service marketing and which didn’t.  Basically, I reverse engineered product marketing to determine lessons I could learn when it came to a different kind of marketing altogether.

Second, I identified companies who already were doing a good job at service marketing. In other words, they had already gone a long way to crack the code of service marketing.  I researched what they were doing well and advised clients to model their success on these early exemplars.  In essence, I bench-marked the best practices in service marketing and then showed my clients how to implement them.

Third, I found in one individual a great teacher, mentor, and coach who helped me excel at service marketing.  That person was my late father, Donald Blumberg.  A prolific author and speaker on the subject of service strategy, he taught me what it takes to build a profitable service business and guided me in establishing my own perspectives on service marketing.

As a result of our collaboration, I developed my own understandings about successful service marketing.  I started to write articles and give speeches on service marketing, which led to more consulting work, which in turn led to greater learning on my part.  Over time, I became an expert at service marketing as I helped my clients increase revenues, boost profit margins, and improve market share.

I’m sharing this information because I want you to know that you can achieve these results, too.  More importantly, you can accomplish them in a fraction of the time it took me.  You don’t need to spend years reverse engineering product marketing or bench-marking best practices.  Instead, I’ve created a new online training course that will provide you with 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 am also providing a $100 discount on the purchase of this course during the month of May.  To take advantage of this discount, enter code SMK100 when you register.

Please let me know what you liked about this blog and your key takeaways.  If you’ve found this blog of value and think your colleagues or business associates could benefit from it, then kindly share it with them.

 

Is it time for a mid-course correction?

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The summer is here and with it brings the beginning of the second half of the year. This is great time for re-evaluating progress in meeting our business goals.  It represents a half-way point to determine if we are on track for the year, if we need to change course in direction, or simply act with greater resolve and urgency to achieve our outcomes.

One thing that we uncovered in our recent Readership Survey is that a large percentage (47.7%) of subscribers desire to learn about strategies for achieving better results. The most frequently occurring response when respondents were asked about what they want to achieve in their business over the next 3-5 years in “growth”.  I think that it is safe to say that many of our readers can benefit from strategies that will help them achieve higher levels of growth.

In my attempt to provide readers with more of what they want, let me give you some action steps to follow if you find that your actual growth for this year is not in line with your original target.   First, remember that the trend is your friend.  This means that you need to periodically evaluate your market to determine if the trend is working in your favor.   You’ll want to get a handle on the size and growth rate of the market you serve, the level of competition, industry dynamics, buyer behavior, and purchasing criteria.   You can uncover this information through internet research, market surveys, analysts, and other secondary sources of data such as articles, press releases, annual reports, etc.

Assuming you’ve concluded that the market you serve is large and growing, then you need to ensure you have the right marketing strategy in place to capture your share of this opportunity.  Think of your marketing strategy in terms of a triad.

market strategy triadAt the base of this triad is your company’s performance.  The ability of your company to deliver on its promise is critical to keeping customers. If they are happy with your service, they will tell others and you will gain word of mouth referrals.  The second side of the triad is the value your company provides to customers. Is it defined in a way that the value is clear and compelling to current and potential customers?  Value is often defined by the quality of your offering and the little things you do to win over the customer.  For example, are you providing them with options so they get exactly what they want?  It also includes offering great service and support before they buy.

The third side of the marketing strategy triad is your tactics.  You want to make sure that you are implementing tactics that will drive customers to you and encourage them to do business with you.  Tactics to consider are pricing, social media, advertising, promotion, etc.  Most importantly, the tactics you use must be consistent with the other elements of your triad.  In other words, your advertising and pricing tactics must align with the value you provide and the performance you deliver, and vice versa.

This triad provides a good framework for evaluating the results of your marketing efforts. Like most frameworks, they are only effective if use them as an analytical tool.  If sales are not where you want them to be then look at your marketing strategy triad. Use it to evaluate how effective your performance, value, and tactics are in attracting and keeping customers.  It will provide you with insights on how and where to improve.  If used consistently, it will enable to you win more than you fair share of business.

The Impact of IoT on Enterprise Service Management – Part II

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As follow-up to last week’s blog post, I wanted to share some more answers to Frequently Asked Questions (FAQs) about the impact on IoT on Enterprise Service Management (ESM):

  1. What new skills sets are required to support an IoT environment?   IoT generates an extensive amount of real time data, some of which of is unstructured. In order to make use of this data in any meaningful way, a service provider will need to employ “data scientists”. These are individuals skilled at analyzing and interpreting data through predictive analytics.
  2. What impact will IoT have on Call Center personnel? The always on nature of IoT and its ability to send automatic alerts to the service organization will reduce the demand for personnel that handle basic call handling and dispatching procedures. However, there will be a greater need for remote support personnel with the ability to monitor service events in real-time, apply predictive analytics, and initiate corrective action.
  3. What will be the role for Field Service Engineers (FSE)? IoT has the ability to improve the percentage of service events that are resolved remotely without dispatching a FSE.   This does not necessarily equate to a diminished role for FSEs. In fact, the need for FSEs will increase. First, FSEs will be required to deploy IoT solutions. Second, FSEs will be needed to provide onsite diagnostics and troubleshooting when remote resolutions prove ineffective. Third, FSEs will function in the role of onsite consultant in helping the customer obtain maximum benefit from the technology operating at their site.
  4. How will IoT impact the Supply Chain?  Most people agree that IoT will enable Supply Chain personnel to proactively ship a replacement part or consumable to the end-customer before the customer is even aware of their need. The reverse logistics supply chain will also benefit from IoT in the sense that it will gain better visibility into events occurring at the field level that impact demand on return center and depot repair operations.

I know that these answers barely scratch the surface of the questions people have about the impact of IoT on Enterprise Service Management (ESM).  In the weeks and months ahead, I will continue to share my insights on IoT and ESM.  As always, I am interested in other people’s perspectives on this subject.  Please feel free to post any comments, thoughts, or fun facts that could help advance the body of knowledge around this subject.

Seven Ways to Win at Service Marketing

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Revenue growth is probably the single most important objective for executives who are responsible for managing service as a profit center or strategic line of business.  “I want to double my service revenue in the next 3-5 years” is an incantation that I hear constantly from business owners and executives.  That equates to a 20% or more growth rate per year.  Sure, this type of growth is easily achievable if the market is growing at this rate or faster.  I’ve found that these high growth targets are often triggered by management’s desire to take back market share from competitors or increase the share of service revenue contribution to overall corporate revenue.

While high revenue growth in a low growth market is difficult, it’s not impossible. A little hard work is usually required to achieve this type of performance.  To understand where the emphasis is needed, let’s look at where service market programs may fall short:

  1. Service Portfolio not meeting customer needs: Quite often service providers fail to meet their revenue objectives because their service portfolio is no longer meeting customer requirements. In other words, they have failed to offer services tailored to their customer needs. For example, offering only next day response when customers require same day.
  2. Pricing not optimal: If your revenue is flat or declining, you might want to look at how you price your services. Perhaps you service prices are no longer competitive. On the other hand, you may be underpricing your services in relation to the value you provide.
  3. Failure to understand competitive threats:   Many service providers, particularly those that are divisions of manufacturers, fail to understand the competitive threat of “mom & pop” third party maintenance (TPM) companies and/or in-house service providers.  For example, they often under estimate the value that TPMs provide to their customer and/or fail to develop an effective value proposition to compete against them.
  4. Failure to articulate value: How well have you articulated the value of your service offering to current and prospective customers? Do they understand the cost of downtime or the pain points that your services help solve? It is important that you not only articulate value to your customers but make sure that your sales people understand it and provide them with the appropriate sale aides and marketing collateral to support it. 
  5. Lack of communication & follow-up: One way to increase service revenue is by improving contract renewal rates. These rates often decline though lack of consistent communication and persistent follow-up about the value of services provided, when contracts are up for renewal, special incentives for renewing, and information on when they are about to expire. 
  6. Not asking for referrals: Referrals are the best and least expensive source of qualified prospects. The problem is most service providers forget to ask for them. Remember your customers speak to each other. They may be involved in the same networks and trade associations, or call on each other for advice and guidance. Why not enlist them in your business development efforts? 
  7. Lack of customer appreciation:    Your customers will remain loyal to you and purchase more from you when you let them know how much you value and appreciate them. It’s the simple things like a courtesy phone call/visit, thank you card, small gift (i.e., rewards program), or special offer that let them know you value their business.

 

These seven areas have one thing in common, they all benefit from market research.  Whether its information that will help you redesign your service portfolio or modify pricing, market research provides you with an unbiased and unfiltered perspective on what your customers are actually thinking and saying. You will learn things that you may not otherwise from a sale’s call or courtesy call made by a company executive.

Before you conduct research or make any changes, it is important that you have a baseline assessment of how well you service marketing program is working. You may want to consider an audit from an independent and objective industry consultant.     Schedule a free consultation today to learn more.