Connected Field Service: IoT and Improving Customer Success

Feb 21, 2022 • News • Digital Transformation • IoT • servicenow

As we have already seen so far in this series of features from the latest exclusive Field Service News white paper, each of the three pillars of field service success - the asset, the engineer, and the customer - are intrinsically linked and can be improved through IoT adoption within field service operations...

We have already touched upon several ways the field service company can improve customer satisfaction and drive customer success by leveraging IoT connected asset data. So far, we have discussed:

Reducing potential downtime
Increasing the speed of issue resolution
Delivering service in a more convenient manner

However, there are many other vital areas where customer success can be improved when a service provider embraces and fully leverages IoT. In this final section of the report, let us consider some additional areas where this could happen.

IoT Creates a Path to Servitization:

In a world of connected field service, where the service provider leverages IoT, the potential to introduce a servitized offering becomes measurably more tangible.

While the topic of servitization is vast and the subject of many articles and papers in and of itself (for further information, a good start is to visit https://www.fieldservicenews.com/blog/tag/servitization-and-advanced-services ), a reduced overview of the concept is “a blend of product and services is created to produce a holistic approach to meeting the customer’s needs.”

For the customer, this has multiple benefits:

It moves the service contract to one that is centred on uptime.
It moves the responsibility of maintaining an asset to meet these uptime agreements onto the service provider/manufacturer.
It allows the customer to focus on their core area of expertise (often selling the outcome of the servitized asset) rather than the operation of the asset itself.

For the service provider, servitization can lead to much more deeply engrained customer relationships, more extended service contracts and greater profitability across the long term. If undertaken correctly, the servitization model can offer a significant win-win situation for both parties.

In such a model, where uptime guarantees are the primary metric of success, the ability to track asset data in real-time via IoT is central to many successful servitized service portfolios.

Greater Visibility = Greater Trust

Another major facet of using data for a field service organization is when it comes to building deep customer relationships that are built on a foundation of trust; the transparency that IoT data can provide is crucial.

One approach to enabling such transparency is building customer dashboards to see vital operational metrics of their asset.

The ability to surface the critical insights that IoT data can offer is an exceptional way to allow customers to see not only how their assets are performing but also to highlight the value of the service provided.

Such dashboards can also truly empower the field service engineer to outline the value of the service they have delivered when on-site. Such a tool can allow them to truly evolve into an ambassador role that can further cement the trust within the relationship between the service provider and their customers.

Optimization of Each Asset via Wider Install Base Data

One final significant benefit that can be introduced as we look at how we can leverage IoT-based asset data is optimizing individual assets by collating the comprehensive data of an install base and looking at the broader data to identify further efficiencies.

Again let us use our earlier simple example of the vending machine as an illustration. Hypothetically, a water reservoir for the machine could be maintained at a set temperature.

The temperature water in this reservoir is kept at could hold several different variables:

If the temperature is held at a higher temperature, then the speed it would take to produce a coffee would, of course, be faster.
Maintaining the water at a certain level could mean less strain on the elements within the asset to heat the water to a point where it is suitable for serving drinks.
Yet, maintaining the water in the reservoir at a higher level will consume more energy and lead to a higher operating cost.

By applying data analytics to the full manufacturer install base, an optimal temperature for the water in such a reservoir could be determined based on the balance between reducing energy consumption (i.e. reducing cost) and fastest production of the product (i.e. increasing productivity).

While this example is deliberately simplistic to illustrate the point, the concept can be applied to far more complex situations given the vast amounts of data available for analysis that an IoT-connected install base can provide.

The simple equation of reducing costs and increasing productivity is a compelling offering that a service provider who embraces IoT can leverage. In doing so they can seek to ensure longer, more profitable agreements with their client base.

IoT and Outcome-Based Service Models

The ultimate endpoint of a focus on customer success, it could be argued, is the outcome-based services model that has been gaining traction amongst manufacturers and service providers for some time now.

However, much as we saw in 2008 when an economic downturn became a key driver for service to move away from a cost centre to becoming more widely accepted as a profit centre, so to now. As we face ongoing economic uncertainty as the fall out of the pandemic continues, we see increased discussion of outcome-based solutions as an emerging force within service design as companies on both sides of the provider/customer equation seek to mitigate potential financial risk.

As Bulent Cinarkaya, GM of Field Service Management at ServiceNow, explained on the Field Service News Digital Symposium.

“There is a question of derisking that must be considered.

“When you look at history, there are always economic booms and economic downturns. The critical question we must address is how do you protect your business when the times are tough?

“When we look at customer behaviour during challenging economic environments, customers prefer to buy services rather than products.

“Additionally, manufacturers are always researching and adapting to use more effective business models and the latest trend we are seeing is outcome-based business models.”

The reason this is important in the context of an ongoing economic downturn is threefold. Firstly, such models place customer success at the heart of their strategy and, in doing so, help support the business ecosystem and keep both service provider and their customers financially secure.

"In an outcome-based model, you own the product. You’re not selling the product; you’re not leasing the product. You’re selling an outcome, which means that your contract terms come to the forefront, and you have to meet those terms..."

Secondly, it creates deeper, more robust relationships between the two parties. When cash flow is reduced, when cost-lines are critical, being an integral part of their clients' workflow is vital to protect you from the risk of being underpriced by the competition and losing that business entirely.

Finally, as Cinarkaya outlines, it creates an ongoing, reliable revenue stream that helps manage cash flow for their own business - however, the move to outcome-based models is not necessarily an easy one to make, particularly without IoT.

“With outcome-based service you can bring a steady stream of recurring revenue to your business, but it comes with a challenge of course.”

“In an outcome-based model, you own the product. You’re not selling the product; you’re not leasing the product. You’re selling an outcome, which means that your contract terms come to the forefront, and you have to meet those terms.

“That is where IoT plays a really key role. Without IoT, I’m not sure how you can achieve what you promise as an outcome, which is how you will drive your revenue. Without IoT I’m not sure if you will be able to meet the demands of such agreements.”

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