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Five Steps to Service Profitability Without Annoying Your Customers

Written by Aly Pinder | October 27, 2014

Should service come free of charge? The customer is always right, so what if they feel they don’t have to pay for service?

This is the battle many service organizations face every day and with every strategic planning meeting. The answer isn’t an easy one, because we all want something for free or at least at a discount.

In researching many of your peers, service and manufacturing organizations of all sizes, the desire to drive profitable growth runs hand in hand with enhancing the customer experience. I don’t think these are mutually exclusive goals. Free service to a customer does not equate to quality service. And here lies the value proposition – exceptional, quality service will cost something. It is a much easier sale to position high value-add service offerings to customers and get them to want to buy-in as compared to the throw away services of the past (i.e., break / fix, reactive service).

But how can we attain this level of service? Recently, I was able to highlight some of the best practices of some top performing firms and have pulled out five key trends which will lead you down the path of profitability:

#1 – Build a service culture. This can be a difficult endeavor. Two aspects are integral to transforming the culture of an organization: leadership and hiring for culture. Senior leaders must communicate the strategy around service, and reward the behaviors that support that strategy. Employees follow leadership, but as importantly they react to incentives. Also, as employees leave the business it is integral that HR identifies and hires for this new service culture. These two changes can help transform the business both from within and from the outside.

#2 – Train sales on the value of service. Earlier, I discussed how customers expect service to be free. This is only the case if the sales and marketing teams haven’t communicated the value of service to customers. For this reason, if service is to become profitable the sales team must understand the value first. However, sales needs to believe that service will deliver the value that they say. Customers expect products may break every now and then, but service can never break. It must always deliver.

#3 – Listen and learn from your customers. Profitable service is the result of understanding what customers value and creating services to match. Aberdeen’s State of Service Management: Roadmap to a Profitable 2014 report showed that the Best-in-Class were 50% more likely than peers to proactively capture customer feedback in regard to product and service performance (66% vs. 44%, respectively). This is information that should help foster new ideas around how service can innovate to meet the demands of the customer and drive additional revenues.

#4 – Benchmark your performance against your peers and competition. Think of the most innovative companies you know (i.e., Apple, Google, BMW). Have they become innovation leaders because they made one great advancement and then rested on their laurels? These organizations got where they are because of an endless drive to improve. In order to succeed at service and drive revenues, organizations need to continuously look at the world around them to find ways to improve. The Best-in-Class are more than twice as likely as peers to benchmark service performance against peers and top performers in other industries (53% vs. 25%, respectively). Customer expectations won’t flatline, therefore service needs to evolve.

#5 – Find out what motivates your field service team. Happy employees lead to happy customers, and happy customers spend more. The transitive property isn’t only to be used in math class. The field service team is the face of the organization, often in front of customers at moments of crises. This flashpoint is an opportunity for service to be a hero and deliver a valuable reclamation of a bad scenario. Do you want someone in front of a customer at this moment who isn’t engaged? 

Customers shouldn’t be viewed as dollar signs. However, the sustainability of service is dependent on continuing to drive revenues for the business. The five steps outlined above aren’t easy but they will help you turn your service organization into a strategic unit which can grow profitably. If you take a step back, service can be simple – listen to the customer, empower your service employees, strive to continuously improve your products and services! Just remember if you aren’t investing in service, your competition is. 

Download the full Aberdeen Report, State of Service Management: Roadmap to a Profitable 2014