The new operating model for technology suppliers is driving revolutionary changes in the role of Field Service workforces. This represents a significant opportunity for technology service suppliers as Field Service people can move from the cost center to the revenue generating side of the business. Field Service people are ideally positioned to drive more revenue with customers, because they are with the customer on a regular basis and already have the ‘coveted trusted advisor’ relationship with customers.
What is needed to unleash the revenue generating power of Field Services is the development of several capabilities:
- The skills to interact and communicate with customers in ways that focus on the customer’s business outcomes as well as their personal motivations and issues.
- The ability to think and act pro-actively in the interests of the customer, where they can help the customer to achieve business outcomes, and
- The ability to create win-win, balanced outcomes with the customer
2. 1. Dramatic Shift in Revenue Sources1. Dramatic Shift in Revenue Sources
2. Shifting the Focus of Technical Services2. Shifting the Focus of Technical Services
3. Three key challenges to be Overcome3. Three key challenges to be Overcome
4. Embedding New Capabilities4. Embedding New Capabilities
Today’s Agenda
6. 1. Dramatic Shift in Revenue Sources1. Dramatic Shift in Revenue Sources
2. Shifting the Focus of Technical Services2. Shifting the Focus of Technical Services
3. Three key challenges to be Overcome3. Three key challenges to be Overcome
4. Embedding New Capabilities4. Embedding New Capabilities
Today’s Agenda
7. Power Sources for Technical Support
Revenue
Generation
Power
Knowledge
of Customer
Knowledge
of
Capabilities
Trusted
Business
Partner
Relationship
8. Estimate Your Revenue Generation Potential
Current Potential
Knowledge
of
Capabilities
% use their deep knowledge of your
capabilities to proactively address their
customer's real issues
20%
90%
50%
50%
% use their knowledge of customers
to address the customer's real issues 20%
Knowledge
of
Customer
% have a trusted business partner
relationship with their customers 60%
Trusted
Business
Partner
Relationship
23%2%% of People LeveragingRevenue
Generation
Power
9. What’s getting in the way?
• Fear of compromising
their special relationship
• Internal organization
• New ways of thinking and
working
Flickr: stevensnodgrass
10. 1. Dramatic Shift in Revenue Sources1. Dramatic Shift in Revenue Sources
2. Shifting the Focus of Technical Services2. Shifting the Focus of Technical Services
3. Three key challenges to be Overcome3. Three key challenges to be Overcome
4. Embedding New Capabilities4. Embedding New Capabilities
Today’s Agenda
11. 3 Challenges
Technical Support People Need to…
Reactive Technical
Machine
Down
Costs
Off spec
Software
bugs
Parts
availability
Internal
pressure
Process
capability
Lack of
resources
Business
results
Trust Fear
Lack of self
confidence
Unbalanced
Proactive ‘Real Problem’ Win win
12. 1. Dramatic Shift in Revenue Sources1. Dramatic Shift in Revenue Sources
2. Shifting the Focus of Technical Services2. Shifting the Focus of Technical Services
3. Three key challenges to be Overcome3. Three key challenges to be Overcome
4. Embedding New Capabilities4. Embedding New Capabilities
Today’s Agenda
13. Embedding
•Don’t leave them on
their own
•Address their
barriers
•Change their habits
•Teach them how to
learn
Unleashing Field Service Power Requires
A Shift in Behaviors
Field Service Engineers are constantly
thinking of the customer’s challenges,
and how to address them.
through...
14. Unleashing the Revenue Generating Power of
Your Field Services Workforce Webinar
Unleashing the Revenue Generating Power of Your Field Services Workforce Webinar:
http://bit.ly/1v4zyVk
Field Service people are ideally
positioned to drive more
revenue with customers. In this
webinar you will learn how to
empower Field Services to
become the trusted business
partner that customers want
and generate the revenue that
you want.
1.00 Good afternoon and welcome to our webinar.
My name is Paul H, based in Cambridge, MA
Fabrizio Battaglia based in Italy
For the last several years we, along with our colleagues at Global Partners have been involved in a transformation that is going on in technology industries in electronics, healthcare, software and others.
This afternoon we would like to share with you our experiences and how our clients have capitalized on this transformation to drive their business growth.
Before we get started, a couple of logistical points
So let’s get started
1.07 PAUL We recently participated in a conference sponsored by Technology Services Industry Association at which they presented some surprising data.
TSIA tracks the revenue performance of the top 50 hardware companies worldwide that also provide technical support services.
What they have been finding consistently over the past few years is that the overall revenues for most of these companies has been dropping.
As this recent data shows, 74% of the top 50 saw dramatic drops in revenue for the 4th quarter of last year, while only 26% grew their revenue.
FAB: NEED A BETTER COMMENT HERE OR NO COMMENT, BUT THE ONE YOU HAVE IS NOT VERY INTERESTING
1.09 PAUL However, they also found that while product revenues for these companies have been dropping, in many cases precipitously, their service revenues have been increasing dramatically
This points to a shift in the revenue generating models for many of these companies and, as we will see, this has big implications for Technical Support organizations.
FAB: WE ARE HEARING THIS FROM MANY OF OUR TECHNOLOGY CUSTOMERS. FOR EXAMPLE,ONE HEALTHCARE TECHNOLOGY COMPANY RECENTLY TOLD US THAT BECAUSE OF WHAT IS HAPPENING IN THEIR MARKET, THAY ARE SHIFTING THEIR REVENUE GENERATING STRATEGY FROM EQUIPMENT TO SERVICES. AND THE REASON IS SIMPLE, HOSPITALS AREN’T BUYYING THE EQUIPMENT
1.10 PAUL:EXACTLY! THIS IS A GREAT EXAMPLE OF THE SHIFT FROM THE OLD REVENUE GENERATING MODELS TO THE NEW ONES
In the old revenue generating models, service revenue was derived from a simple model of landing new service contracts and focusing on renewal.
While this model/motion is still viable for companies, it is becoming increasingly difficult to renew those traditional service contracts as services become increasingly commoditized.
In response to this, supplier companies need to
Constantly prove the quantified value of their services and
provide a steady stream of new value added services.
All the while being vigilant to maintain the margins on service contracts by resisting customers’ attempts to gain more service than they pay for, a process we call value leakage.
Successful companies appreciate that the future success in growing service revenues will come from a new motion – land and expand.
In this new model, companies are continuously finding new ways to expand revenue streams with existing clients by shifting the focus of their companies from good supplier to trusted business partner
FAB: Tis is very interesting, but it looks a bit theoretical, can you give us a practical example?
PAUL: Sure, we have a customer also in the healthcare market, but providing commodity services such as food services. Their focus used to be on acquiring new customers and contracts, then retaining them at acceptable margins.
But as the market became increasingly competitive, their prices and margins continued shrinking. So instead of fighting that losing battle, they expanded the services they offer so that they now provide all non-clinical hospital services, from transportation to servicing high-tech hospital equipment to facilities management. As a result they can retain all of the service business for a hospital – and maintain account profitability.
1.11 PAUL, And technical service is in the best position to lead this shift.
Let me show you why.
1.12
Technical Support Service organizations have 3 sources of revenue generating power that that can be leveraged to capture these new growth opportunities
First is the TBP relationship. This means that when your TS people talk to the customer about a problem they are having with your product or service, the customer believes that the Tech Services person is motivated by a strong desire to solve his problem and not a desire to sell something.
Second is a deep knowledge of the customer. This means that your TS people understand what their customer is trying to achieve with the implementation of your products AND SERVICES
And finally, TS people have a deep knowledge of your solutions. This means that your TS people know how the products they are supporting today with this customer help the customer achieve what he is trying to achieve and how your other products, services and solutions could do that even better.
TSIA research shows that your TS people are visiting or interacting with customers 70 times per month. Imagine if in each of these interactions your people could leverage these 3 sources to not only improve customer loyalty but identify and capture new sources of revenue?
Fab: (Fab, you can change this, but I think you should say all of this.)
This is a terrific graphic. In short it says there is an incredible untapped reservoir in front of us. To give you an idea of the potential, one of our clients is in the process of changing its TS organization from one based on satisfying the customer by delivering good service, to one based on Total Customer Focus, which means helping the customer to achieve their most important business outcomes. In the process, they are unleashing the revenue generating power of their FS organization. Their goal is to engage their TS workforce of 4,000 people.
Imagine what can happen just be unleashing the potential of that many people.
1.20
Typically when we ask this question, the majority people tell us that 75% or more of their people already have this relationship
But when we then ask how many believe that the majority of their TS workforce have this deep knowledge of what their customer is trying to achieve and how they could help their customer reach those goals,
THE ANSWER IS MUCH LOWER, TYPICALLY around 30%
And when we then ask, how many believe that their TS workforce regularly uses their knowledge of their own products, services and solutions to proactively find ways to help the customer achieve his business goals, again the number is much lower, typically 30% or less
Fab: you know I am an engineer by training,. This does not sound very scientific. What do you intend to measure exactly?
PAUL: You’re right, it is only a rough estimate of the potential. What we want people to do is think about what could happen to their business if their TS people used their knowledge of the customers’ business and their knowledge of their own products and services to help their customers achieve their business goals.
The real value in the estimate is to ask the questions and then ask, what if you could simply double these estimates? What could happen in terms of expanded relationships, new revenue opportunities and increased customer loyalty?
Our clients who have done this have seen significant improvements in their revenues and margins as well as improved relationships with their customers.
FAB: So if the potential is this exciting, what gets in the way?
1.23
In our experience, there are a number of barriers that are preventing companies from unleashing this power
First is that TS people are concerned that they will compromise their ‘special’ relationship with the customer if they seem to be selling;
Or, there is potential internal conflict with sales and account management. Your company may be discouraging FS (deliberately or not) from using their power because they don’t want to conflict with sales and account management
And the third barrier is a failure to implement new ways of thinking and working with the customer
PAUL: LET’S LOOK more deeply at this third barrier and what you can do about it.
1.25
For each, there is a set of skills that FS need to be able to address
First, Tech support in most companies has usually been about reacting to customer requests. The metrics like response time, goals-setting and the entire culture is based on responding efficiently and effectively to customer requests and needs. Although your TS people may be very good at reacting to customer requests and problems, they very often do not know how to be systematically proactive in the interests of their customer.
Yet the Tech support person is in the perfect position to do this. Why?
They are at the customer’s site or interacting with the customer routinely and is observing how the customer uses your product. What issues do they have with it? What do they have to do to adapt it to work in their environment? What’s missing from your product that would make the customer’s life easier and his business better? If they can be trained to observe to train the customer in a specific way.
Based on these systematic observations, they can provide complete solutions pro-actively. Learn what the customer will struggle with in adopting your product and provide the solution to that problem
And third, discover the gaps in the customer’s knowledge and processes in using your solution to address their business challenges and provide information and best practices to fill the gaps.
FAB: Let me give you an example of the type of impact just a little bit of proactivity can create. One of our customers in Asia decided
PAUL: The Second challenges is they don’t know how to talk to the customer in ways that not only fix the customer’s technical problem, but address the customer’s ‘big picture’ issues. In other words, they are good at solving the technical issues that customers have, but not at addressing the business outcome issues that customers need addressed. And they are frequently not at all skilled at addressing the customer’s personal issues that in many cases are the real problem. We compare this to an iceberg, where 90% of the danger from an iceberg is below the water and difficult to see.
In one example, a Tech support manager used this ICEBERG discovery tool that we had taught him to get deep below the customer’s waterline. He discovered that the customer’s real issue was that he was not getting the support from his own company that he needed to deliver on a contract to his own customer. At stake was an initial contract worth hundreds of millions for our Tech support manager’s customer, plus additional contracts, referrals to other parts of the customer’s business and even referrals across the industry. By addressing the real issues, those below the waterline, the tech support manager became a trusted partner to his customer and helped him to capture these opportunities.
FAB: Because these new capabilities require a significant change in thinking and working, the way we work with clients is also unique
Fab presents Paul jumps in, this is casting a new light on an old problem. Now you have to change habits. Easier to be said than done.