A large part of the job of a Service Executive is to grow your service business. This is true even if you are not a profit center, especially if you are one. And the key to successfully growing your business is to focus all your planning efforts on customers and prospects. After all, they are the ones with the money. They are the people who will buy your services.
While it sounds logical, many people do what they always did:
- Initially, they figure out what they want to sell.
- They spend a lot of time figuring out how to commercialize the idea.
- Finally, they are surprised when their sales forecasts are not achieved.
When planning to grow revenue, you have three separate paths to follow simultaneously:
1. You must honestly understand the service delivery capabilities of your organization. This means the services they can and cannot deliver, how satisfied your customers are with the current service delivery, and how profitable your delivery is for your business.
This information comes from a few sources:
- Feedback from after-transaction surveys
- Talking to your customer-facing technicians and support engineers
- Comments from your partners in sales
- Words you have heard when meeting with customers
2. You must get an unbiased view of the services your customers and prospects want and need, how important each service is to them, and how much they may be willing to pay. Otherwise, you will never grow your service business.
- The best way is to have several one-on-one meetings with key customers representing a broad section of your customer base.
- As in 1 above, talk with sales, your customer-facing technicians, and support engineers.
- Talk with the technical people in your company who spend time with your customers.
Search the web and spend some time at trade-shows
3. You must take a broad and deep view of your customer base.
- Segment your customers based on your product families and their service needs.
- Use your CRM and Service Management Systems to identify key service drivers like total outcomes per unit time. For example, some car owners drive between 0 and 50 miles daily, while others may go more than 100 miles daily. Each segment will have different service needs. Other variables may be in-house maintenance, vendor-performed maintenance, or third-party service. And it is always valuable to know their in-house cost of downtime, e.g., semiconductor equipment downtime may result in lost revenue of more than $100,000 per hour.
- Combine the segmentation data with the data from 1 and 2 above to get a good picture of what services your customers want and need and which ones you can quickly deliver.
You are now ready to preliminarily figure out what new service products your customers may purchase and, possibly, how much they will likely pay for them. And, of course, the list will only include services that your team is currently capable of delivering or can learn with a small investment.
Now, you must become (or engage) a service marketer and start testing your ideas by talking to potential customers. These talks should be structured to ensure you get answers to the same questions so that you can compare and evaluate the feedback you receive. This is also the opportunity to discuss prices to determine your customer’s willingness to pay. And it would be best if you collected feedback about the skills your team possesses that will be employed to deliver the new services.
You can apply the previously determined key service drivers when you have collected sufficient information. You must see if different customer segments want other products or similar products with slightly different components.
You will have to obtain agreement/approval from the other business stakeholders. This includes sales, marketing, finance, and the CEO. An ROI calculation and a margin analysis will no doubt be expected.
It would be best to ask the CX or customer success group to project these new services’ impact on customer retention.
What to do when you have successfully checked all the boxes:
- Upgrade the company website
- Train the people who will sell and deliver the new services
- Forecast the change in revenue and profitability for your business
- Either bask in the glory of success or hide if things go wrong.
Good luck, and expect success as you grow your service business!
This post originally appeared on Field Service Insights on July 19, 2019.
To learn about 15 KPIs for Your Aftermarket Service Team to grow your service business click here.
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization start to grow your service business, please get in touch with us or check out some of our free articles and white papers here.
Photo by rawpixel.com from Pexels