When it comes to servicing your company’s products, your customer has only 3 choices – you (either direct or through an authorized service channel), an independent service provider, and in-house service. In a majority of cases, there are on two viable alternatives – you and them (aka in-house). Since you are trying to make money for your service operation, your strategic objective should be to retain your customers for the long-term growth of your business. Therefore, your service strategy must focus on helping your customers get the best long-term value from your product by crafting alternative services that offer unique value propositions so your customers can choice the alternative that works best for their business.

Why Did Your Customer Purchase Your Product In The First Place?

Answering this question is vital to deciding how to make money selling your services.  By now, most people have seen this famous quote:

“People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!” – Theodore Levitt

In other words, people buy your products and services because they need or want an outcome.  In the Levitt quote, the hole is the outcome and the drill the product.  Doctors buy a blood analyzer because they want to know PSA, blood glucose, or other parameter while their patient is still in the office.  We buy luxury cars because we want to feel special as we haul the kids to soccer practice.

By getting to the heart of why our products are purchased, and the operating conditions surrounding its use, we can design services and service plans that focus on providing the desired outcomes in the most cost effective way for the buyer. This design process help some sellers understand that they had to offer 24/7 on-site support to semiconductor fabs, hospitals, credit card processors, food processing facilities and public safety departments at all levels of government.  It also lead analytical and life science suppliers to provide annual validation and verification services of products used in processing FDA regulated materials.

The challenge for small and mid-size product suppliers is how to provide 24/7 field service globally, especially when each customer may only have a very small number of very reliable products installed.  It is also the reason why these customers frequently opt for self-service; the technicians are on-site and so response time is no longer a concern. And you can make a good profit supporting this special category of customers. How, you ask?  Here is a partial list of services you can offer customers that want their own on-site technicians to handle equipment repairs:

  • Customized service training
  • Technician certification
  • Escalated technical support (they provide Level 1 support)
  • Remote support
  • Consigned inventory with quick replenishment
  • Failure analysis reports
  • Remote performance monitoring
  • Pre-scheduled equipment verification and refresher training
  • Software upgrades
  • Technician “report cards” showing additional skills needed

A special case in service and support occurs when one of your technicians quits or retires from your company and joins your customer.  You may be upset because your lost the skills and experience of the technician but your company gained an internal advocate who will work to keep his income by recommending your products when the opportunity arises. And the customer will be happy with the uptime of his equipment. Not a perfect win-win situation because you probably lost years of experience and relationships with other customers, but not like losing a field technician to a competitor.

Selling Service Contracts

Like all sales, service contract selling is about making it easy for the prospect to buy.  In the case of equipment services, the prospect is already your customer but she still deserves your best advice on how to support the equipment.  What can be a better relationship builder than you saying to a high-availability customer “We have a number of standard service contracts but they are unlikely to fully allow you to enjoy the results you promised your boss when you selected our equipment?  However, we also have a well-defined support plan for people like you that are better served by having an in-house technician perform first line service and support.  Let me show you what is included…” Do you think your company’s image will improve after that discussion?  Do you think the equipment owner will feel that she really did make the right purchase decision?  You bet!  And, if this conversation actually occurred during the buying process, you may have had a lockout specification.

So don’t be afraid of in-house field service; consider it an opportunity to take care of another class of customers!