Investopedia defines market research as “the process of evaluating the viability of a new service or product through research conducted directly with potential customers.” It also ” helps a company define its target market and get opinions and feedback from consumers or prospects about their interest in a product or service.”
This definition suggests that market research is a one-and-done process before launching a new product or service, but this is wrong.
Coincidentally, while writing this article, I received my weekly mailshot from Andrew Penny of Kingsford Consulting. Andrew defined this idea as “Opportunity Research,” and he kindly let me use it here.
Creating and Revising Plans
No one with financial authority creates a product or business plan and doesn’t review it periodically to see how the results compare to the plan or, more importantly, if any assumptions or situations have changed since the plan was created.
There is no rule about when different types of plans change, but here are a few examples:
- Strategic plans are reviewed during the fiscal year and reissued annually.
- Production plans are revised at least once a week.
- According to Product Plan, product roadmaps are reviewed and updated often: “More than two-thirds of product managers said they update their product roadmaps at least once a month. The most popular roadmap-update frequency for product teams is weekly.”
- Redesigning a business website, according to Studiovine, “depends on factors such as industry, technology trends, and user preferences. However, as a rule of thumb, a website should be redesigned every 2-3 years to keep up with the latest design trends, user behavior, and search engine algorithms.”
- Unfortunately, service product portfolios are generally only reviewed and updated when a new Head of Service is appointed or when the company’scompany’s significantly shifts.
- Service prices, however, are generally updated annually or more frequently if there is a significant inflationary increase.
What Is a Service Product Portfolio?
The Service Council recently shared a list of services typically offered by service businesses. Below is the list, along with the percentage of companies offering each and a brief description of the service:
- Installation, 100%, makes the equipment useable by the end user following delivery
- Service contracts, 94%, prepaid services with a guaranteed level of service
- Inspections/certifications, 88%, periodically inspect the equipment to ensure it is still performing like new or inspect and document the equipment’s performance to satisfy government, industry, or insurance requirements
- Service parts, 88%, sell spare parts to the end-user or authorized service organization
- Consulting/advisory, 88%, helps the end user improve either their use of the equipment or their overall processes
- Reports/training, 88%, ensures that the end users are using the product in an effective manner
- Time & materials, 81%, perform repairs on a case-by-case basis and charges for parts, labor, and related expenses
- Extended warranties, 81%, like a service contract but with the same minimal features as a factory warranty
- 24/7 on-call, 81%, an upcharge for providing service outside the standard 8-hour five days/week schedule
- Consumables, 81%, are parts used during the equipment’s regular operation. For example, equipment driven by an internal combustion engine consumes petrol, oil, and air filters
It is not unusual for an OEM’s service business to offer all these services and more that are unique to each product. Some of these services are often included in a higher-level service. For example, when I was supporting mission-critical data communications equipment, my standard service contract included:
- An annual preventative inspection
- All parts, labor, and travel with options for 5 or 7 days/week and 8 or 24 hours per day response, as well as 2- or 4-hour on-site response as an upsell to the standard next-business-day response.
- All software releases
- Refresher training during any service visit
- Multi-unit discounts
Why Perform Opportunity Research After the Initial Rollout of Each Service?
Change is constant in business, no matter how much people fight it. Many changes are small and come infrequently, but they still add up. This means your customerscustomers’ions and needs may change enough in a short time that your services no longer provide the same value they expected when they purchased them.
If you are unaware of these changes, you may be shocked when the customer fails to renew your service at the end of the coverage period. The only way to accurately know if your service products still meet customer’s needs is to ask them.
The easiest way is to perform a combined satisfaction and service product survey with a sample of customers in each segment for which you have a unique offering. If you do a survey each month, then you will see trends and can respond quickly. However, many companies perform this type of survey annually.
Annual surveys are valuable, but even bi-annual opportunity research surveys will provide actionable results. If you want to continue offering relevant service products, do not go longer than two years between surveys.
Actions After You Find Out You Must Update One or More Offerings
In most cases, the changes your customers indicate will be incremental. That may have cost impacts, and you may decide to increase or decrease the cost of the service. This is easy. The hard decision is when to implement the change.
Service departments like the features of each service to be the same for all like items. Nobody wants to manage some units at revision one and others at revision four (especially when they are next to each other at the customer’s facility). Updating the features is easy to manage, but what if there is a price differential?
You must be thoughtful when making any pricing decisions. The easiest way is to change the service but hold the in-place price until it is time for renewal, even if multiple units have different renewal dates. In that case, you might consider aligning prices unless the impact is significant. Whatever you decide, be fair and transparent with your customers.
Related articles:
- Make Decisions Based on Data, Not Opinions
- Every Go-to-Market Plan Needs a Value Creation and Monetization Section
About Middlesex Consulting
Sam Klaidman is the founder and principal adviser at Middlesex Consulting. He helps his B2B product manufacturing clients grow their service revenue and profitability by applying the methodologies and techniques associated with Customer Value Creation, Customer Experience, and Market Research to assist them in designing and commercializing new services and the associated business transformations. Contact Sam here.
Image credit: Photo by Lukas Blazek on Unsplash