When Being Big Enough Isn’t Enough: The Case for Using Econometric Models in Service Market Planning

Assessing market demand is critical for making optimal decisions with respect to investment and resource allocation.

As Field Service Organizations (FSOs) strive to build and grow profitable businesses, they must develop and implement strategies based on valid and reliable market research.   Assessing market demand is critical for making optimal decisions with respect to investment and resource allocation.  For example, it might be important to know the size and growth rate of a market segment prior to building a marketing strategy, establishing a division, or developing a service offering for it.  If the market segment is large and growing rapidly then a more aggressive investment may be warranted. Taking a more conservative approach could lead to a miscalculated decision that results in a significant loss or failure for the company.

While obtaining a granular level of data on the size and growth rate of a market segment can help service executives make better decisions and ensure better results, it is surprising that many do not attempt to obtain this level of insight.  Instead, service executives often rely on gut instinct or settle on an order of magnitude, given some related indicator.  For example, we often hear service executives claim that the service market must be big because the sales of the product are so high.  In other words, its “big enough” to warrant an investment.    

The problem with this type of market analysis is that it assumes that 100% of people who have bought a product will also purchase the service. It also does not take account the size of the installed base, competitive issues, or other constraints or factors influencing demand such at technology trends, economic trends, or market trends.  More importantly,  it does not provide any hard data into the size of the market or its growth rate. 

While surveys and secondary research have merit when it comes to market sizing and forecast, they too have their shortcomings.  Surveys and secondary research can of course provide insight into size and growth of a market as well as answer questions with respect to who buys, what do they buy, and factors influencing supply and demand.  However, they do not actually measure the actual size and growth of the Total Available Market (TAM) for the service under consideration.  In addition, a shortcoming of secondary research that we hear often is that it is not specific enough or tailored in its the perspective. Questions about the research methodology may also arise when the source is an industry analyst. 

Ultimately, a good TAM analysis is one that takes into account the size and growth rate of the installed base as well as the serviceable value of the installed base along with its anticipated growth rate.  We have found econometric market models to be very effective methods for conducting this type of service market analysis.  A good econometric model considers several data points related to buyers and products including but not limited to the number and types of buying organizations, equipment penetration rates (i.e., shipments), population density, and replacement rates.  These factors help in determining the size and value of the installed base while surveys and secondary research provides data points (e.g., price points, average spend, etc.) necessary for determining current and projected revenues and/or expenditures for a given service.     

Building an econometric model to determine the size and forecast of the TAM for services may seem like a lot of work. However, the efforts are worth it and can prevent a company from making serious mistakes and/or miscalculations about their market opportunity.  Several years ago, a client of mine gave a presentation at an industry conference where his competitors were present.  The presentation showed that his service business was growing twice as fast as the market. Although he had commissioned our firm to build a TAM model, he chose to compare his company’s revenue growth to market size data from an industry analyst’s report (i.e., secondary research). This analyst provide a market size estimate and forecast that was more conservative than ours. After the presentation, I asked my client why he didn’t present our data.  “We based our investment and resource allocation decisions on your model not the secondary research. We want to keep this fact a secret from our competitors as long as we can” was his reply.  Had his company relied only on secondary data they would have had different results.   His answer provided that his investment in building the market model was well worth it.   

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The Secret to Selling More Service Contracts

This article first appeared in Field Service News on May 28, 2018

Field service executives often face challenges when it comes to generating additional service revenue for their companies.

They often face resistance from customers as evidenced by low contract attachment rates. The natural tendency is to blame the price as the reasons why customers aren’t purchasing more services contracts.

After all, this is the feedback they received from their sales teams and from the customers.

Being logical and rational business people, field service executives try to solve the problem by lowering the price, after all, if the customer says that the price is too high, it must be the reason why they are not buying, right?

To quote, the popular song by George and Ira Gershwin, “It ain’t necessarily so!”. While price may be a factor in the purchase decision, seldom is price the only reason why customers don’t purchase service contracts.

In market research studies that I have conducted for clients in a wide array of technology service markets, I have found that price is often low on the list of criteria that end-users consider when selecting and evaluating service providers. Criteria such as quality of service, knowledge and skill of service personnel, breadth of service offering, and vendor’s knowledge of their business are perceived by customers to have higher importance than price alone.

The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract.

This is because they have no way of logically defending the value of the service being purchased. Stated another way; they are not able to differentiate the benefits of service contracts from time and materials service. The problem is that Field Service Organizations (FSOs) often attempt to sell service contracts without providing justification about why a service contract is better than simply paying for service on a time and materials basis.

A common saying among sales professionals is that customers buy emotionally and then defend their purchases logically. All too often, FSOs provide little emotional reason why a customer should purchase as service contract as opposed to T & M and even less logical supporting evidence about why a service contract is more valuable.

To achieve high attachment rates, FSOs must be able to articulate the value of their service offerings to customers as well as to their own salespeople. The value proposition must impact customers’ emotionally by addressing their fears, worries, doubts, and concerns about the impact of service or the lack thereof on their operations.

For example, fear of excessive equipment downtime, lost revenue, low machine utilization levels, or the possibility of quality defects. Of course, the FSO needs to provide logical supporting evidence why their service offering will eliminate these issues.

FSOs achieve this results by articulating, either through a sales conversation or marketing collateral, what’s included in a service contract that is not included in time & materials. This requires they do an effective job in defining the coverage, entitlements and resources available to the customer through a service contract.

They must be able to answer the customer primary question “What’s in it for me?”. If the only difference between a service contract and time & materials is that the customer can prepay for service, then there is no emotional value or logical contrast. However, if the service contract provides a preferred level of service (e.g., 4-hour response time, 99.9% uptime guarantee, 7 by 24-hour coverage, parts, etc.) or preferred price structure then the customer is presented with some real value and contrast.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They do this by offering more value in a service contract than the customer could possibly receive through time and materials services.

Fundamentally, FSOs can deliver better service to customers under contract.

This is because the contacts provide data about the installed base and service demand requirements. As a result, FSOS can anticipate service events and be more effective at planning and allocating service resources. This, in turn, makes it possible for FSOs to provide a guaranteed level of service to their customers.

Honesty is always the best policy especially when it is supported by a guarantee and exceptional service!

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The Role of Data in the Servitization Journey

Data is becoming more important as we consider one of the most significant trends impacting the technology industry, "Servitization".

Several years ago, Blumberg Advisory Group worked with a company that provided hardware maintenance on film based photo labs found in big box retail outlets. Their service revenues and profits were declining because digital photography was replacing the need for film based photo labs. Although the client offered a new digital based technology to replace film based photo-labs, these systems were not being installed at the same rate as the older systems were being phased out.   Digital systems didn’t require as much service and support. They were less complex and easier to maintain than their film-based cousins.

Our client required a new strategy to offset their declining revenues and profits.  They needed a solution urgently or the parent company would shut down this division.  If we did not know the importance of data or the concept of managing the capability to serve, we would have probably recommended that the client lay off some of its field service workforce to reduce costs and improve profits.  This could have led to a downward spiral of layoffs, company morale and growth.

So what steps did we take?  We analyzed their data.  We reviewed their field engineer utilization rates, customer response times, field engineer skill levels, and the equipment on customers’ premises.  In conclusion, we found that their field engineers were not being completely utilized.  We found out that these engineers had further knowledge and expertise in supporting other types of equipment found on the customer site.  They were typically able to respond to a customer request within four hours even though the guarantee was for eight.  

Based on our analysis, we recommended that they expand their service footprint to other types of equipment located on the customers’ premises, i.e. electronic cash registers and point of sale equipment.  We also recommended that they charge a premium price to customers who required faster (e.g., 4 hour) response time.  As a result, this client went from losing 20% of their profits per year to a 50% increase in new business within 24 months of implementing our recommendations.

Ultimately, the key to our client’s success lied within the data.  Data is becoming 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).  In other words, their business has reached the stage of development where they are no longer selling products or solutions to their customers, but outcomes.   For example, instead of selling a copier machine they are selling their customer the right to use the machine to produce a certain number of copies over a specific period or time.

To deliver on this promise, the provider must not only have great people, process, and technology but access to data related in terms of machine condition and performance (e.g., alerts and notifications), parts availability, field engineer location and skill sets, diagnostics, etc.  With this data in hand, the provider can ensure resources are available when needed and that the customer receives the outcome it purchased.  The data is made available through technologies like the Internet of Things, Artificial Intelligence, Virtual Reality, etc.   Examples of companies that are along the servitization journey are Rolls Royce, ABB, Siemens, Kone, and General Electric. They have generated profitable income and know that a truly exceptional service business is built on four foundations – people, process, technology, and data.

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Field Service Scheduling Software and What You Need to Know

Scheduling software has long been a foundational technology for field service companies allowing them to meet customer demands.

This article initially appeared in Field Service News – September 7, 2018

 

Michael Blumberg, President of the Blumberg Advisory Group lifts the lid on all of the key aspects of this crucial tool…

If you have spent any time in Field Service, you probably understand the importance of managing service delivery functions against key performance indicators (KPIs). Among the most critical KPIs in the Field Service Leaders track are First Time Fix (FTF), Service Level Agreement (SLA) Compliance or Onsite Response Time (ORT), and Mean Time to Repair (MTTR). These KPIs measure the effectiveness of a Field Service Organization (FSOs) in delivering quality service in a timely manner.

The inability to meet KPI targets may result in exponential costs, customer attrition and loss of revenue; whereas the ability to exceed customer expectations can result in customer appreciation followed by an increase in profit margins and sales. To effectively schedule/dispatch the right technician to arrive on time with the right parts and skillset plays a significant role in meeting these outcomes. This is definitely not a small feat for your typical FSO.

Scheduling and dispatching Field Service Engineers (FSE) poses a challenge for most FSOs, particularly those with more than 5 FSEs. The reason behind this is there are many variables and factors involved.

An FSO with only one or two FSEs and a few customers may not perceive scheduling to be a major challenge. The volume of service requests may be relatively low while the options of who, when and where to send them may be rather limited. Scheduling becomes more of a challenge as the volume of service requests (i.e., customers) and the number of FSEs increases.

Adding to this complexity are the business objectives and/or constraints an FSO must optimize to meet its scheduling requirements.

With additional constraints or objectives, the more difficult it becomes to produce a solid schedule. For example, if the objective is to only meet a response time commitment to the customer, then the decision is easy – assign the FSE who can arrive in a timely manner at the customer’s site.

If FTF, MTTR, and/or SLA Compliance targets are also part of the equation, it becomes even more difficult to produce that solid schedule. Adding a profit margin objective, high call volumes, multiple geographies, and a sizable pool of FSEs, the decision becomes even more overwhelming.

The reason why scheduling is so excruciating of a task is that there are numerous factors that an FSO would need to create and evaluate to determine the optimal assignment for each FSE.

This is a time-consuming activity that requires an extensive amount of computational power to achieve. Many companies have suffered from a loss of time and resources in dealing with confusion and potential human error. The solution is Dynamic Scheduling Software.

Dynamic Scheduling Software provides FSOs with the feature-rich functionality that streamlines, automates, and optimizes scheduling decisions.

This technology ensures the FSO sends the assigned technician to the right job having the proper skill set and arriving on time. These applications typically leverage a scheduling engine that optimizes FSE job assignment. Scheduling engines vary in their complexity ranging from those based on business rules to Linear Programming (i.e. goodness of fit) techniques, Operations Research Algorithms (e.g., Quantum Annealing, Genetic Algorithms, etc.), or Artificial Intelligence (AI)/Self-Learning applications.

The complexity of the scheduling problem, number and types of resources involved, duration of tasks, and objectives to be optimized play a role in determining which scheduling engine is most functional.

Critical factors to consider may include whether the scheduling engine can handle:

  • Multi-day projects or short duration field service visits,
  • People and assets (e.g., tools, parts, trucks, equipment) or solely people,
  • The number and types of KPIs that are part of the objective, and
  • Route planning requirements.

In evaluating Dynamic Scheduling Software, FSOs are also advised to consider the following criteria:

  • Cloud versus On-Premise Deployment Options
  • Speed and Ease of Implementation
  • Integration with Back-office Systems
  • Availability of Real-time Visibility by the Customer
  • FSO Requirements for Best of Breed or Integrated Enterprise Solution
  • Total Cost of Ownership
  • Return on Investment
  • Vendor Industry Knowledge and Experience

There are over a dozen software vendors who offer some form of dynamic scheduling functionality for field service.

Obviously, no two Dynamic Scheduling applications are alike. Each one has their points of differentiation. The best solution is a function of the level of importance the FSO places on each criterion and how each vendor meets these criteria.

Regardless of which vendor is selected, the benefits of Dynamic Scheduling are clear.

In fact, industry benchmarks show that companies who implement these types of solutions can achieve a 20% to 25% improvement in operating efficiency, field service productivity, and utilization. The impact on bottom line profitability and customer satisfaction is substantial. To enable FSOs to provide customers with an Uber-like experience and significant profitability, FSOs should consider deploying Dynamic Scheduling Software as part of their service delivery infrastructure.

Avoiding the Four Biggest Mistakes FSOs make when using Contingent Labour

This article first appeared in the June 18, 2018 online issue of Field Service News.

Michael Blumberg, President of Blumberg Advisory Group  and founder of FieldServiceInsights.com discusses  some of the most crucial mistakes field service companies can make when utilising contingent or seasonal labour…

Field Service Organizations (FSOs) in North America, UK, and Europe are increasingly turning toward crowdsourcing platforms and subcontractors to augment their field workforce.

This type of outsourcing strategy enables FSOs to become more agile in meeting customer demands for service. As a result, they [FSOs] are able to reduce costs and improve service productivity. In addition, crowdsourcing and contingent labour helps solve the problem of finding skilled labour on a rapid basis.

However, turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force. Naturally, questions emerge about the reliability, expertise, and quality of technicians that are sourced through these options.

Over the last two years, we have spoken with dozens of companies who have or currently utilize contingent labour to either augment their existing workforce or gain greater agility and efficiency over the entire field service delivery process. The majority are satisfied with their external providers and report positive results on key performance metrics such as First Time Fix and SLA Compliance/Onsite Arrive Time.   On the other hand, a few anomalies exist where the performance of contingent labour did not meet the FSOs expectations.

Quite often, FSOs who experience subpar performance make critical mistakes when retaining and managing contingent labour.

Here is our perspective on the biggest mistakes they need to avoid:

1. Failure to fully vet individual technicians doing the work

Don’t assume that every contract technician (e.g., subcontractor, freelance, crowdsource) you dispatch has the skills, training, and experience necessary to complete the work properly and in a timely manner. Insist on viewing background checks, certifications, and credentials of every contract technician assigned to your company.

2. Failure to train and onboard technicians

Quite often companies issue work orders without to contract technicians without training or guiding them on how they’d like the work to be performed.

For example, they do not explain how they’d like the tech to greet the customer and/or notify the customer when the work is complete.  Fortunately, Internet-based learning systems make it possible for companies to train and onboard contractors in a cost-effective and rapid manner.

3. Failure to communicate with contractors

This is the biggest mistake that a company can make is hand off work orders as if they were tossing a hot potato over a fence.

This will result in problem with respect to key service performance metrics such as SLA compliance, First Time Fix, and No Fault Found.  It is important that companies provide contractors with detailed and specific instructions about the activities they need to perform on each assignment.

At the same time, contractors also need to communicate with the companies that hire them on the status of calls, issues or problems they are experiencing, and results of their actions.

4. Failure to integrate contract or crowdsourced technicians into their service delivery process

Problems can occur when there is too much of an arm’s less relationship between the company and the contractor.  In other words, there is little accountability, visibility, and control between the company and contractors/technicians, and vice versa.

The key to success lies in treating contractors as an extension of your company.  Companies can achieve this outcome by leveraging communication technology, collaboration tools, and workforce automation software.  Relying on these systems will ensure the company achieves best in class service performance through its contractor network.

In summary, FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labour. This does not necessarily mean that they must make huge capital investments.

Rather, they are urged to design and implement processes and procedures by leveraging existing infrastructure when they can.

Devoting the time and effort to this initiative will pay off. Our research suggests that FSOs who have an unpleasant experience with contingent labour do so because they rush into the decision without much thought, planning, and preparation.

Basically, they are looking to solve an immediate problem with no consideration to future. In other words, they are taking a tactical approach to labour shortages where a strategic solution is required.

Why The Customer Experience Should Be At The Heart Of Marketing and Selling Services

Consumers now reside in a digital world where instant gratification is the new currency. The rise of Spotify, Netflix, Amazon Prime Now and Uber ensures they can avoid any pain points and get what they want and when they want it in a new on demand economy.

However, the ‘we want it now’ consumer continues to evolve and now expects a personalized experience too. If online services know what their favorite movies, TV shows and music they like, surely retailers will know what they like too.

Tech savvy users are looking for businesses to lead the way with new technology that continues to treat them as unique individuals. A generic marketing e-mail with their name pasted at the top in a different font is no longer going to cut it.

The evolution of the customer experience has even given birth to the phrase Martech which is the blending of marketing and technology. Industries across multiple industries are all facing the same problem as the digital transformation of everything gathers pace.

Keeping up with all the latest trends across the digital landscape is no longer an option it should be compulsory for anyone serious about the future of their business. The good news is that you are not alone and the fact that 76% of field service providers were reportedly struggling to achieve revenue growth should be the only wake-up call that you need to take this seriously.

However, there are numerous field service winners here too. For example, in 2017 there are many organizations providing seamless digital experiences and delivering faster resolution times. It is often said that technology works best when it brings together and here is a selection of great examples.

The Value of Improving the Customer Journey

Personalization is much more than just another industry buzzword but a reaction to the demand driven by consumers. Providing the right experience at the right time is an art that many are still learning to master. But, the ability to increase 15% percent of revenue and lower the cost of serving customers by 20% is a language that every member of the boardroom will understand.

Do Not Underestimate the Importance of Customer Service

According to Microsoft, an incredible 97% of consumers advised customer service is critical to their choice or loyalty to a brand. But it’s also crucial to remember how this is across self-service, social, phone, mobile and a plethora of devices.

The divide between offline and online is disappearing. No matter what device we have at hand, wherever we are located and if we are using our keyboard, touchscreen or even voice, the experience should be the same.

Poor Customer Service Will Be Punished

It is well understood that it costs businesses more to acquire a new customer than it does to keep an existing one. Savvy consumers will happily shop around for the best deal. Ironically many companies seem to treat their current clients with contempt arrogantly and assume they will stay with them regardless.

The reality here in 2017 is that 64% of consumers have switched providers in at least one industry due to poor customer service according to Accenture. We no longer suffer fools gladly, and a lack of patience or frustration will ensure most consumers will switch providers after only one negative experience.

In this digital age, loyalty must now be earned rather than taken for granted. The only question that remains is what are you doing about it?

Time Is Money

An Amazon Prime account makes one-click ordering and delivery within 2 hours a reality. Maybe, we shouldn’t be too surprised how our time is becoming increasingly valuable. Forrester recently advised that 73% of consumers will happily admit that their time is the most important factor where businesses need to focus.

Pain points such as long-winded automated phone menus, cumbersome online chats or waiting around between 9 am and 6 pm for somebody to call you will no longer be tolerated. Organizations need to manage the expectations of their customers and remove friction to offer a truly simplified service in a timely manner.

Make Way for The Internet of Things (IoT)

With 50 Billion internet-connected devices by 2020, the time to take IoT seriously is right now. Consumers do not care about your product roadmaps; they now expect the same experience with any of their devices.

There is already a long line of competitors offering similar services. Failing to keep up will leave your brand looking like a tired Sears or J. C. Penney store that failed to keep up with the speed of hyper change across the digital landscape.

OVERALL

Advances in machine learning, deep learning, and artificial intelligence have already made real-time personalization a reality. A dramatic rise in expectation levels means that users of all ages now demand the same experiences across multiple platforms.

Mainstream audiences are looking for businesses to lead the way and provide the wow factor through technology based solutions. However, sometimes, they just want greater digital interaction and to be treated as a unique individual from a fellow human being.

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Customer Service Success or Failure

customer service

Any company wishing to succeed must strive to provide great customer service.  With today’s culture demanding instant gratification, customers do not hesitate to take to social media to inform everyone of a company’s failure. So how does an organization arm itself not only to provide great service but to know what to do if they fail?  Here are some articles which discuss both success tactics and also give examples of failures and how to avoid them.

10 Reasons Organizations Fail To Deliver Great Customer Service
By Shep Hyken

Customer success or failure starts from company leadership.  This includes the company’s vision of how to provide great service, the training process including onboarding and ongoing training, and how employees are treated. In addition this article discusses the importance of hiring the right personnel to carry out the mission of great customer service and then celebrating their successes.

How Service Companies Can Earn Customer Trust and Keep It
By Leonard L. Berry

In this article Leonard Berry focuses on the idea of customer confidence which can be lost through poor customer service. Berry specifically cites the recent United Airline customer service incident which clearly failed on all accounts. He goes on to discuss ways to gain and to keep trust and also how to recover  that trust when it may be lost. He stresses the idea of being aware of and meeting a customer’s “perceived contract” and not just the actual contract.

NIGHTMARE: 7 Customer Service Blunders That Went Viral
By Patricia Laya

Patricia Laya outlines 7 customer service failures of both worldwide and regional companies who deal directly with consumers. She outlines how the companies responded and in many cases how their response changed after these consumers took to social media to get their story out to the public. Specifically she details the case of a musician who continued to write songs and make music videos about his terrible experience long after the incident.

The Power of Prevention In Customer Service
By Len Markidan

Len Markidan’s premise is that most customer service failures do not happen just once. If you are able to recognize the issues that recur and not only fix the individual situations, but also look for and fix the root problem, then you will experience greater success. Doing so gives your customers a better experience and saves your company time and money in the long run.

Why reactive service is a thing of the past?
By Sarah Nicastro

Historically, “service” had been viewed as something provided as a reaction to a problem identified by a customer.  More recently, we have seen a move to proactive service.  This article, first published on Field Technologies Online, was posted as a guest post from Sarah Nicastro on my blog site.  In the post she specifically discusses the importance and advantage of Machine to Machine (M2M) and Internet of Things (IoT) as tools valuable to both the service provider and the customer.

First-Time Fix Rate: The DNA of Field Service
by Michael Blumberg

In this blog post, I discuss the importance of First-Time Fix Rates, (e.g., the rate at which a field service company can resolve or fix an issue on the first attempt). This important Key Performance Indicator can not only make or break the relationship with a customer but also have a tremendous impact on the company’s cost of providing the service. I also discuss ways to improve this rate.

I welcome you to join the discussion. Do you have any customer service failures or successes to share? What lessons did you or your company learn? How have you been able to make changes to give your customers a better experience?  If you are looking to evaluate your own company’s customer service capabilities or looking to find ways to improve your service, contact me and schedule a free 30 minute consultation.

What’s on Service Director’s Minds

Nick Frank is a Co-Founder of Si2 Partners and this article is based on one first posted in Field Service Matters.

With customer expectations on the rise, field service organizations are constantly fighting to keep up. The service industry has shifted from a cost-centric and reactive approach to a value-centric and proactive approach. But aside from more demand from the customer, the transformation has also opened up new opportunities for service technicians, process, and technology.

Recently, I met with service and operations directors from the United Kingdom’s biggest organizations gathered at Field Service Summit. Field service leaders from manufacturing, telecommunications, and utilities met to exchange ideas and discuss opportunities and trends. Here are the most important topics they addressed.

On dealing with near-impossible expectations

Thanks to on-demand services such as Uber, customer expectations are higher than ever. Your customers want faster resolutions, more visibility into their service, and real-time communication with their technicians. But disruptions happen, and sometimes the customer wants more than you can give them at that moment. Here’s how the experts are managing customer expectations:

Set realistic expectations & don’t over promise

What do you do when the customer wants more than you can handle? Start by setting expectations. Before the service visit, know exactly what the customer wants accomplished and when. You always want to strive for a quick, first-time fix. But don’t over promise if you can’t deliver.

Let’s say a customer wants a tech to fix their washing machine the same day they call, but your techs are already booked for the day. Since it’s not an emergency situation, let the customer know they’ll have to wait, and schedule them for a different time slot. They might be upset that you can’t help them as soon as they’d like, but they’ll be more upset if you’re unable to deliver on a promise.

Let the customer set their own (controlled) expectations

Better yet, give your customer a range of options so they can set their own expectations. Most field service directors at the summit found that their customers want to be partners during the service process. Involve customers by allowing them to set their own expectations for the service visit. Just make sure to do so within in a controlled environment.

For instance, give them open time slots to choose from before they decide on their own. And if they want a higher level of service that will take more time and labor, let them pay more for it. This way you’re giving the customer more control throughout the process, but maintain manageable expectations.

On developing service technicians

Most of the experts at Field Service Summit agreed that the people side of the service delivery is crucial. In other words, your techs, along with their attitudes and capabilities, determine the successful delivery of solutions for your customers. Think about it. Your techs make up most of your company’s interactions with your customers. As the face of your organization, it’s important that the tech makes a good impression. Here’s what the experts advised for developing technicians:

Help your techs become brand ambassadors

It’s crucial for technicians to have the right technical skills, but attitude and image are just as important. Coach your techs on how to represent the brand and company values during their service visit. They should be courteous, engaged, and dressed appropriately. Your customers should feel confident in their tech’s ability to solve their problems and think of them as trusted advisors.

Make customer feedback part of the service process

The best way to learn how your techs are performing is by asking the customers. Consider making customer feedback part of the field service process. Send your customers a survey immediately after the service visit so they can respond with the visit fresh in mind.

If the feedback is positive, send it directly back to the tech. In addition to learning what he or she did right, the tech will also feel good to know they had a positive impact on their customers. If the tech gets a negative review, have a manager deliver feedback. Set a meeting to discuss their performance and talk about ways they can improve for next time.

On the importance of service value over price

As products are commoditized, quality service and positive customer experiences become main competitive differentiators. Field service directors at the summit noticed that customers today are less competent technically, and care more about the outcome. Being said, it’s important to constantly communicate the value of your service, especially if you have not been as visible to the customer. Make sure they know what’s been happening in the background, and throughout the service process.  Here’s what the experts advised:

Demonstrate value with proof

As your company grows, be sure to document a service portfolio. Get your customer support team on board with your company’s value propositions and demonstrate them. Work with your customers to build case studies (with numbers) to use as proof points for potential customers.

Be a business partner

Just as customers should see techs as trusted advisors, they should see your company as a partner invested in their success. Customers are looking for more than just a fix — they want solutions. And they want advice on their assets in case the problem arises again. Let them know you’re always there for them, even when they’re not due for a service visit.

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Driving Revenue Growth without Losing Sight of the Customers

CUSTOMER SATISFACTION

Several months ago, Derek Korte, the editor of Field Service Digital solicited my opinion for article titled “Expert Roundtable: Never Lose Sight of Customer Satisfaction”.    The basic question that Derek asked was “How do service leaders ensure the important work involved in managing a service business get done while still keeping the needs of customers involved?”  After all, Derek pointed out, Field Service leaders have a lot on their plate. They must continuously balance the need to improve the quality, productivity and efficiency of service operations with the strategic objective to drive revenue and growth; all while never losing sight of keeping customers happy.

This dilemma is a challenge facing all businesses not just Field Service.  When it comes to practical advice, Peter Drucker said it best, “the goal of any business is to get and keep customers.”  This quote provides a good lesson for Field Service leaders.  Driving revenue and growth, and maintaining customer satisfaction is not an either-or proposition.  They are one in the same.

To achieve superior outcomes in these two areas, Field Service leaders must view themselves as business owners.  They must view themselves as owners of a business franchise called “service” whether they are equity owners or not.  In other words, they must adopt an “ownership” mindset.

To succeed as business owners, Field Service leaders must first have the right “seats on the bus” otherwise known as the right functions that manage their service business.  This includes functions such as service delivery operations (i.e. dispatch, field service, parts management, etc.), accounting & finance, sales & marketing and others.  Without the right functions, the business cannot perform.

Second, Field Service leaders must make sure they have the right people in those seats. This means they must find talented people to manage these functions.  The people can be groomed from within the organization or recruited from outside.  Regardless, field service leaders must develop performance standards by which personnel must adhere.  These standards should consider the characteristics, skill sets, experience and behaviors that service personnel must possess.

Third, Field Service leader must have clear outcome of where they are heading.  If they are going to drive growth, then they must have a map to help them reach their destination.  In business, another term for a map is a strategy and/or plan.  Without a clearly defined strategy or plan to follow, a business can’t go very far.

Fourth and finally, Field Service leaders need to make sure their bus (i.e., their organization) is running efficiently. That it has a clean engine, good tires, etc. They also most make sure they have a GPS or dashboard to help them monitor their performance, the direction in which they are heading, and the speed at which they are going.  The engine, tires, etc. are a metaphor for state of the art service delivery infrastructure and related technologies that make superior service possible.  The GPS and dashboard are the Key Performance Indicators (KPIs) and operating benchmarks that help Field Service leaders keep course on their direction.

Now it’s your turn to answer the question: “How do service leaders ensure the important work involved in managing a service business get done while still keeping the needs of customers involved?”   What have you found that works and doesn’t work? If you’d like to read about other experts’ perspectives on this topic then read Derek’s online article.

Please also feel free to schedule a free strategy session with me today if you need more insight and guidance on how to improve service operations and drive revenue and growth while maintaining a high level of customer satisfaction.

Still looking for answers?

 

 

4 Ways Service And Support Adds Customer Value

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This is a guest post by Sam Klaidman. He is a consultant focused on Service Marketing and Customer Experience. You can read his blog and follow him on LinkedIn. If you want to guest post on this blog, email me at michaelb@blumberg-advisor.com and write “Guest Blog Guidelines” in the subject field.

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service and support

Today, customers are looking to receive more value from their partners than ever before. The two primary reasons are:

  1. Customers are “crazy busy” and need relief because they are drowning in problems, opportunities, issues, and challenges. This relief is one form of value added by the supplier (partner).
  2. Partners see many “similar” situations at their customer’s locations and so should have a good idea about what will work to help the customer and can be implemented with little effort or risk, with a high likelihood of success.

Almost sounds like the customer wants the supplier to solve their problems and expect no more that a “thank you.” The first part of the sentence is correct but not the second part; smart customers are perfectly willing to pay for value added services if they understand the benefits they will gain.

Who is best suited to deliver value-added services?

For a number of reasons, service organization are best situated to deliver value-added services to existing customers. Here’s why:

Of the two primary customer-facing organizations, the “sales” department is generally charged with selling products. Their compensation plans are based on closed business; they have marketing breathing down their necks pushing them to turn leads into orders and their nature is to be hunters.

The other group, services, is totally different. Their role is to make the customers successful; they enjoy helping customers, frequently have little or no revenue objectives, are totally familiar with the products and, organizationally, have seen all the customers and how they have attempted to solve their problems

How can Service and Support add value to customers?

  1. Technical people understand their product’s capabilities and limitations. When they are talking with individual customers they should be asking questions like:
    1. What exactly are you trying to do with our product?
    2. What do you wish it could do but have not found a way to do it?
    3. Where in your process is our product helping you? Slowing you down? Making it impossible to do everything you need to do?
    4. Do you know of any other products that help you do your job?

 

As they get a better understanding of the customers jobs-to-be-done, they frequently can teach the customer how to use the capabilities they already paid for and did not know existed.

  1. When we see how our product is integrated into the customer’s job stream, we frequently can identify unnecessary steps. By sharing this with the customer, we add value because we help them do their job quicker and easier.
  2. Many hardware owners are totally concerned with uptime; they bought our product because they needed to use it when they needed to use it. However, the person who sold the service contract, or the one who actually purchased it, may not have discussed the critical uptime requirements and so only discussed the standard plan. When the Service Marketing person works closely with the equipment owner, there are frequently creative ways for the customer to increase uptime (for an additional price) while the service group provides unique services that can be integrated into their workflow.
  3. Finally, if your service and support people identify a value adding opportunity but do not know how to actually accomplish the customer’s needs, they should get the case into the hands of the product manager. He can then research the feasibility of adding the feature, assess the market size and implementation cost, and potentially move ahead in a future upgrade.

 

Your service and support team has a number of separate roles to play. Here they are:

  1. Fix the customer’s problem. This is Job #1. Helping them get full value for money for their purchase is critical; without it there is no business relationship.
  2. Collect information about product performance and put into a useful format for your Engineering or Manufacturing departments to use to improve the products.
  3. Identify opportunities for the business to add additional customer value. The front line service and support professionals should always be thinking about ways that your customers can squeeze additional value from their purchases. When they find opportunities they must not only help their immediate customer implement changes but must also spread the word throughout your company so other customers can take advantage of these new findings.

 

If not already in place, these behaviors must become part of your company’s culture. People must be able do these things as though it were it standard operating procedure so that everyone wins!