We know that the service department is probably the single largest contributor to the margin of your organization. But when I would ask you: when do you know you are doing a great job? What is your reference, your yard stick? We know the call for...
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Oct 19, 2021 • Features • Joe Kenny • Coen Jeukens • Digital Transformation • servicemax • GLOBAL • service profitability
We know that the service department is probably the single largest contributor to the margin of your organization. But when I would ask you: when do you know you are doing a great job? What is your reference, your yard stick? We know the call for great, greater and greatest. CFO’s want even more margin contribution. CEO’s want to have more revenue and market share.
In this article, Coen Jeukens, VP of Global Customer Transformation at ServiceMax, and Joe Kenny, Vice President, Global Customer Transformation & Customer Success at ServiceMax, will show you some basic building blocks to manage your Service Profitability & Growth agenda.
It is an age-old dilemma for Operations Managers. Your CEO wants XX% revenue growth, your CFO wants XX% cost reduction, your CRO wants better references and higher NPS scores, and you are supposed to deliver all of this with zero additional investment, because – of course – you have been doing this for years with no additional cash, so why would you need it now?
To top all of this off, you had very little idea of where you stood, operationally or financially, at any given time. And this was due to the fast that access to real time data, a current view into work in process, and accurate financial information was all impossible to come by.
Historic Challenges
I often speak at conferences and participate in webinars, and I often relate this anecdote – in March I would lay out my operational plan, based on the most recent P&L statement I had received (January’s), intending to address performance weaknesses I had uncovered. My team would execute the plan and in May I would receive my March P&L to see if the response to January’s performance shortfalls were successful of not. It was madness.
Now, layer onto that, the fact that 30, 60, 90-day invoicing accruals were also Operation’s responsibility, even though we had an AP department. This process greatly impacted both revenue and cost, as the cost of service was consumed, but the associated revenue may not have arrived in 90 days.
Enter the Age of Digital Transformation
Fast forward to today, and service operations managers have been given a lifeline—digital transformation. Digital transformation can be like a light switch, illuminating what is happening in real time, allowing service operations leaders to adapt to circumstances immediately. They can reallocate precious resources instantly, validate payment status and credit status prior to service delivery, and see and understand the impact of operational plans in real time.
Digital asset and service management platforms can provide real time performance measurements, both foundational and top line. This includes data round first time fix rate, mean time to repair, mean time between failures, and equipment up time. With this data, operations managers can organize and drive for peak utilization of labor resources while ensuring that the training and quality of the work is optimal, thereby increasing the efficiency of their organization and lowering the cost to deliver excellent service.
With today’s platforms, functionality and tools, service operations are finally on par with our commercial partners and can see, and act, on upsell, cross sell, renewals, and service contract extensions instantaneously. In addition, we can support sales by identifying and helping them target competitors’ equipment for targeted replacement, becoming the eyes of the commercial team on the customer’s location.
Newfound Financial Control
Utilizing a digital solution allows for real time tracking of labor, parts consumed, travel, and any other costs associated with a service call, regardless of whether it is a T&M call or in support of a warranty/service contract entitlement. This is a key advantage that enables service operations leaders to not only manage labor and parts expenses far more granularly, but they can also evaluate the revenue associated with the service provided to validate if the pricing is correct based on their revenue and margin targets.
This ability to understand the Cost to Serve an asset or entitlement agreement in real time is a huge step forward for service operations. It gives them the data they need to truly align entitlement pricing, cost control, operational efficiency and productivity to accurately manage and forecast their performance and address fundamental issues that are obstacles to achieving their own performance objectives.
The evolution of equipment and asset service management platforms has greatly assisted service operations professionals in attaining the insight, visibility, and control that their commercial and financial counterparts have enjoyed for decades. As asset and equipment maintenance and service becomes a larger and larger part of most organizations’ revenue and margin contributions, it is important that they equip teams with the technology that enables them to better manage and control their operations.
ServiceMax will be exhibiting at the Field Service N Expo on October 27th and 28th and can be found on stand B6.
To sign up for the FSN Expo please click here.
Further Reading:
- Read more about Digital Transformation @ www.fieldservicenews.com/digital-transformation
- Read news and articles about ServiceMax @ www.fieldservicenews.com/servicemax
- Read more articles by Coen Jeukens on Field Service News @ www.fieldservicenews.com/coen-jeukens
- Read more articles by Joe Kenny on Field Service News @ www.fieldservicenews.com/joe-kenny
- Find out more about ServiceMax @ www.servicemax.com/uk
- Follow ServiceMax on Twitter @ twitter.com/ServiceMax
Aug 25, 2021 • Features • Coen Jeukens • servicemax • Leadership and Strategy • GLOBAL
In this new article for Field Service News, Coen Jeukens, VP of global customer transformation at ServiceMax, explains how to create a custom fitness plan to keep your assets in shape...
In this new article for Field Service News, Coen Jeukens, VP of global customer transformation at ServiceMax, explains how to create a custom fitness plan to keep your assets in shape...
Do you have this feeling that the battery of your phone drains faster and faster? Internet forums are full of testimonials and resolutions for keeping your battery in tip-top shape. How does this apply to B2B products, equipment and assets? Can asset owners monitor the performance of the equipment, and what handles do they have to maintain output/ outcome at the nominal level promised at point of sale?
For many years I’ve captured the digital and service transformation journey in a single tagline: “from fixing what breaks to knowing what works.” The message is driven by a simple principle: customers expect things to work. Even more, they expect the outcome of the asset to be stable over the lifecycle.
Another simple truth is that everything eventually deteriorates and breaks. This prompts the following questions:
- What is the life expectancy of the asset?
- What do I need to do to keep the asset in shape?
- What can I do to extend the life cycle of the asset?
Building a Fitness Plan
Preventive maintenance might be the first thing that comes to mind as the way to keep your assets in shape. But what does preventive maintenance (PM) prevent? And how does it affect asset performance and life expectancy? This was a tough question to answer when one of my counterparts in procurement, who was looking to reduce the selling price of a service contract, asked me, “What will happen when we reduce the PM effort by lengthening the interval?” This was even more difficult to answer when it became a numbers game, and the purchaser asked me to prove the offset between PM and break-fix.
So where do we look next? I propose condition-based maintenance.
We know that the performance of an asset will deteriorate over time, and we know the rate of deterioration will depend on various attributes like aging and usage. Because these attributes are measurable, we can use them as levels to trigger a service intervention.
So rather than taking a one-size-fits-all approach based on time intervals, you can create a custom fitness plan for keeping your assets in shape. One that looks at the condition of the asset in relation to its expected performance. This can look like an intervention being triggered when the output of an asset or the viscosity of a lubricant drops below a certain threshold.
To continue with the fitness metaphor, we often don’t just want to stay in shape—we also want to increase our longevity and even get in better shape as we age. When it comes to your assets, this is where mid-life upgrades, booster-packs and engineering changes come into play. And in the same way that you use predefined levers to trigger service interventions, you should use these levers to trigger updates, upgrades and lifecycle extensions.
Both of these service strategies use asset health at the core of your service delivery model, steering you away from ‘fixing what breaks’ and towards ‘knowing what works.’
A Real Life Example
Imagine you have a pump and valve combination that has a nominal capacity of 140 m3/h.
If you used a preventive maintenance model that runs every 6 months, it would not take into account the age of the pump and valve combination, nor would it account for the corrosiveness of the transported materials.
But if you took a condition-based approach using IoT-connected sensors, you could measure attributes like vibration, temperature, and energy consumption and use them as indicators for asset performance. For example, if the capacity drops below 130 m3/h, a service intervention would be triggered. It’s like the pump saying: “I’m not feeling well, I need medicine.” On top of this, if you detect the pump is consistently pushed beyond original specifications, you can know that it’s necessary to initiate an upgrade conversation to safeguard asset health and durability
Asset Centricity
The common theme of these service strategies is asset centricity. It’s about putting asset health at the core of your service delivery model and continuously comparing an asset’s current output with its expected performance.
By looking at current performance, expected performance and demand, you can also advise your customers on when it’s time to downgrade or upgrade the asset. Through this asset-centric lens, you can truly become a fitness coach, advising your customers on the right fitness program that will keep their assets in tip-top shape.
Learn more about IoT and condition-based maintenance here.
Further Reading:
- Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
- Read news and articles about ServiceMax @ www.fieldservicenews.com/servicemax
- Read more articles by Coen Jeukens on Field Service News @ www.fieldservicenews.com/coen-jeukens
- Find out more about ServiceMax @ www.servicemax.com/uk
- Follow ServiceMax on Twitter @ twitter.com/ServiceMax
Aug 24, 2021 • Features • Coen Jeukens • servicemax • Leadership and Strategy • GLOBAL
In this new article, we look with SimPRO at how field service organisations can consolidate and fully integrate new technologies within their existing technology ecosystem...
In this new article, we look with SimPRO at how field service organisations can consolidate and fully integrate new technologies within their existing technology ecosystem...
What's in your current tech stack?
Over the past 10 years the field service industry has seen a boom in technologies aimed at streamlining daily operations. Adopting new pieces of software has since become key to running a large and successful field service business and solving everyday problems in the office and the field. Office managers and admin teams use accounting software to invoice and track cash flow, stock management software to oversee stock levels and order job-specific materials, and mobile apps to schedule field staff and communicate job-specific information. On top of this, teams in the field are utilising technology to help cost and quote jobs, submit health and safety compliance, communicate effectively with customers using email and SMS automation, and much more. As new technologies have gradually been adopted however, many businesses are noting a common issue: The different pieces of software in their tech stack do not integrate with one another, resulting in too much time spent on double data entry and a lack of reporting capabilities. If this sounds familiar, it may be time to update your tech stack to ensure all the software and apps your business is using integrate with one another.
What should you look for when identifying the best tech stack for your field service business
Is it cloud-based?
Does it integrate with your accounting partner?
This one is a deal-breaker. If the tech you’re using to track timesheets and travel times, manage stock levels, raise POs and quote jobs does not integrate with your accounting software how will you ensure your invoicing is accurate and you’re reporting on all accrued costs?
Does it integrate with your key suppliers?
Managing stock levels and ordering job-specific materials requires time and resources. When it comes to choosing a piece of software to streamline the process it’s advisable to choose one that both allows you to order stock as part of a specific job and syncs with your key suppliers catalogues. This integration with key suppliers not only saves time, but will ensure you have up-to-date pricing for more accurate estimating.
Does the mobile app act as more than a timesheet?
For bigger businesses in particular, having your field staff head into the office daily to collect and submit paperwork wastes precious time. To ensure field staff are maximising their billable hours businesses need to choose the best mobile app for their workflow. When picking a mobile app it is important that it can assist with the scheduling and dispatching of field staff, as well as tracking their progress in the field. But more than that, it’s key to choose an app that acts as a medium for field staff to upload job notes and photos, submit compliance forms and quote from the field.
Are you able to automate your customer communications?
In order to automate customer communications your SMS or automated email service needs to be able to pull data from both your scheduling system (to update customers about your expected arrival times), and your accounting system (to send and chase up unpaid invoices). If these systems don’t integrate with one another this could lead to wasted time spent on double data entry.
Can you report on productivity and profitability?
As well as the additional administrative time caused by non-integrated technologies, another limitation you may encounter is the shortfall in your reporting abilities. By ensuring all the technologies you’re using talk to one another you’re also ensuring you can report on all aspects of your business in real-time. This is invaluable as reporting not only allows you to track the productivity and profitability of jobs, but also enables you to highlight areas of improvement and potential cost savings.
It is safe to say that more and more technologies will continue to emerge in the field service industry. When it comes to assessing whether your business needs to add these to your tech stack however, the most important thing to consider is whether it fully integrates with your entire technology ecosystem. Only when your tech stack is integrated will you reach peak efficiency, grow your business and grow your profits.
Streamline your tech stack with cloud-based job management software, simPRO. This end-to-end system provides solutions for every field service workflow, including service, project and maintenance jobs, and integrates with key accounting software and suppliers.
simPRO can help businesses of all sizes streamline their processes and increase visibility, ultimately increasing profitability. Interested in aligning your tech stack with simPRO?
Further Reading:
- Read more about Digital Transformation @ www.fieldservicenews.com/digital-transformation
- Read news and articles about SimPRO @ www.fieldservicenews.com/simPRO
- Learn more about how SimPRO can help field services organisations @ www.fieldservicenews.com/all-about-simpro
- Find out more about simPRO @ www.simprogroup.com
- Follow SimPRO on Twitter @ twitter.com/simprosoftware
Jun 01, 2021 • Features • Coen Jeukens • servicemax • Leadership and Strategy • GLOBAL
Do you know what your maximum service revenue potential could be based on the product units your organization sells? Is your current service revenue less than this maximum? Do you have a process to upsell service contracts into your existing...
Do you know what your maximum service revenue potential could be based on the product units your organization sells? Is your current service revenue less than this maximum? Do you have a process to upsell service contracts into your existing installed base? Coen Jeukens VP of global customer transformation at ServiceMax explains more...
If you gave one or more puzzled looks while reading that, chances are you are suffering from upsell leakage.
In my previous article on revenue leakage, I defined two types of leakage: contract and non-contract leakage. In this article, we’ll define upsell leakage. It is very likely that upsell leakage at your business could be twice as big as the other two combined.
Understanding Upselling Leakage
As a service organization, you’d like all your customers to buy your premium service. Some customers will buy ‘gold’ service level for their installed base, others will be happy with ‘basic’ service. It all depends on the use case of your customer and their propensity to value the services you offer. As use cases tend to change over time, you may want to consider setting up an upselling program using the touchpoints from your service delivery.
“If you don’t ask, you don’t give them the opportunity to say yes.”
Not having such a program deprives you of revenue potential; being the delta between your current service revenue and ’gold’ service level.
Defining the Upsell Service Revenue Potential
To quantify upsell leakage we can use a mechanism known to Sales as TAM (Total Addressable Market). Suppose you sold 1,000 units at $10,000 each. Suppose a ‘gold’ service contract has an annual selling price of 12% of the unit selling price. This would put your service-TAM at $1,200,000 per annum.
Imagine your service department has 600 of those 1,000 units on their radar screen. The rest is sold via an indirect sales channel and/ or lost-out-of-sight. This gives an installed base visibility of 60%. Let’s assume those 600 units generate a service revenue of $400,000, split across:
- 10% of units are in (OEM) warranty and don’t generate revenue (yet)
- 50% of units have a bronze, silver, or gold contract generating $240,000
- 40% of units don’t have a contract and generate $160,000 in Time & Material (T&M)
With the above figures, you currently reap 33% of your service-TAM and you have an upsell potential of $800,000. Monitoring this upsell leakage metric should give you the incentive to put a revenue generation program in place.
Identifying the Metrics that Impact Upsell Leakage
In the numeric example, we’ve touched on three metrics that impact upsell leakage.
- Installed base visibility: It all begins with installed base visibility. Units not on your radar screen will not contribute to your service revenue! This is easier to manage for units sold via your organization’s direct sales channel, though it does require an effort to manage the life cycle from as-sold to as-maintained. For units sold via the indirect sales channel, you’ll have to exert extra effort to get access point-of-sale data, maybe even ‘buying’ the data.
- Attach rates: Both warranty and contracts are attached to the unit, thus driving attach rates. Attach rates are ‘boolean,’ they say something about having an attached contract, not about the amount of revenue you get through that contract. Attach rates start at the installation/ commissioning date of a unit. Either Sales makes the attached-sale at point-of-sale of the unit or the Service department drives the attaching post-point-of-sale. The driving metric for Service is to maintain a continuum of attachment throughout the life cycle of the unit.
- Service revenue contribution: Within the subset of attached contracts, you’d like to have as much revenue contribution as possible, ‘gold’ service being the holy grail. Per service contract you could have any of the following revenue contributions:
- OEM Warranty: 0% of Service-TAM
- Enhanced Warranty: 33% of Service-TAM (only the on-top-of OEM warranty piece)
- Extended Warranty or Basic Service: 67% of Service-TAM
- Gold: 100% of Service-TAM
Remedying Upsell Leakage
The overarching paradigm to growing service revenue is twofold: increasing your installed base visibility and making sure you have attached offerings to those units.
Getting visibility on units sold via the indirect channel is slightly more complicated, but once you quantify the associated service-TAM with those units, you may have the ‘funding’ to ‘buy’ the data. This may even lead to revenue sharing models with your channel partners. The last piece of the puzzle is using the visibility of the upsell leakage gap whenever you have a touchpoint with your customer.
Note that the original (service) contract has been drafted many months ago by people who are further away from the business, who could not 100% envision the service reality of today. You thus may end up in an entitlement conversation where the customer has an urgent requirement whereas the contract ‘only’ covers for the ‘basics.’ The delta is an upsell opportunity. Either resulting in an upgrade of the service contract or maybe only upgrading an incidental work order. In case the latter happens more often, you have the data points to convince the customer for the former.
Now, understanding that upsell leakage is potentially twice as big as contract and non-contract leakage together, you may have found your compelling reason to start another revenue growth project.
Learn about ServiceMax Entitlements here.
Further Reading:
- Read more about Leadership and Strategy @ www.fieldservicenews.com/leadership-and-strategy
- Read news and articles about ServiceMax @ www.fieldservicenews.com/servicemax
- Learn more about ServiceMax Entitlements @ www.servicemax.com/asset-360/warranty-contract-management
- Read more articles by Coen Jeukens on Field Service News @ www.fieldservicenews.com/coen-jeukens
- Find out more about ServiceMax @ www.servicemax.com/uk
- Follow ServiceMax on Twitter @ twitter.com/ServiceMax
Sep 01, 2017 • Features • Management • Outcome based services • Products as a Service • Coen Jeukens • Servitization
Coen Jeukens, CSO, D-Essence, explores the developing world of Products as a Service and the increasing drive both from customer pull and vendor push towards outcome based business and service models...
Coen Jeukens, CSO, D-Essence, explores the developing world of Products as a Service and the increasing drive both from customer pull and vendor push towards outcome based business and service models...
When we need light, we buy a bulb. When we need a hole, we buy a drill. It is so engrained in our thinking to own products whilst we actually need the outcome. More and more we see upstart businesses cater to this “new” demand. They sell a product as a service (PAAS). How are you preparing your organisation to sell your product as a service?
We move water
At the After:Market 2016 event in Wiesbaden a German manufacturer of pumps introduced his company with the words “we move water”.
With those simple words he set the stage for his PAAS business model. Selling the pump is not his goal; it is a means to start an outcome-based discussion with his client.
In doing so he enters in a conversation where he truly understands what drives his customer. Because the conversation goes beyond the pump, he has created a new business model where he earns money with moving water.
The additional benefit is for the environment. Instead of designing your product for repeat sales you will wind down a track where you deliver outcome at a minimal material/ energy footprint.
Transforming legacy businesses is possible
Understanding the effort it takes to transform a legacy business, University of Cambridge professor Andy Neely asked the panel of the Field Service Summit 2017 in Warwick what successful transformation examples should encourage others to follow suit. Both Boeing and Philips demonstrate you can have best of both worlds.
It may scare corporate executives and sound very blunt but exploring PAAS is a “do or die” message.
Via one business unit customers can buy the product in a legacy CAPEX/ OPEX mode. Via another business unit customers can buy the output/ outcome of the product. Depending on his propensity, a customer can choose between a jet engine and a “power by the hour” propulsion solution or a bulb and a “pay per Lux” illumination solution.
Why should you explore PAAS
It may scare corporate executives and sound very blunt but exploring PAAS is a “do or die” message.
If you don’t do it, somebody else will. At best it is your current competition and you can see it coming. For the worst, you will face competition from newcomers starting with a clean slate.
Record labels were so focussed on holding to their CD product revenue stream and deliberated so long on legal download options, they were decimated by services like Spotify.
How do you assess your organisation? Products are meant to deliver a solution.
Using a more positive approach: the more you understand how the outcome of your products generates value to your customer the more you establish yourself as long term partner in both a profitable and sustainable way.
Where to start
In the example of Philips Lighting, a small team beyond the radar of product based business model executives designed the “pay per Lux” solution.
Upon demonstrated success with a launching customer the new PAAS solution was put in the spotlight.
Setting up a sandbox environment with servitization minded people is essential, as you will be in for a paradigm shift:
[unordered_list style="bullet"]
- When you sell Outcome there is no title passage of the Product. This means the product remains on your balance sheet.
- As supplier you will be responsible for and remain in control of all CAPEX and OPEX cost components.
- You need to understand your customer to define a “pay per use” earnings model.[/unordered_list]
Understanding cost
In the Philips Lighting dialogue the customer asks for a Design, Build, Finance, Maintain and Operate solution.
This DBFMO framework (in the image above) can be used to understand total cost of ownership. Design and Build lead to the commissioning of a Product.
Maintaining the Product safeguards the Output of the Product. Operating the Output provides an Outcome. The Outcome generates Value. Maintain and Operate are stated in terms of OPEX. When adding Finance services to your portfolio, you can transpose Design and Build CAPEX into OPEX too.
Design-for-Operation
With PAAS the total cost of ownership shifts from customer to supplier. As a result the supplier is incentivised to throw in all his expertise to continuously optimise product, output and outcome.
With PAAS the total cost of ownership shifts from customer to supplier.
Remember: business models based on breaking products should not be accepted.
Pay per use
Where design-for-operate drives towards minimising waste and cost, engineering the right pay per use model determines your revenue. This is where entrepreneurship and partnership kicks in.
Pay per use is a bi-directional handshake between supplier and customer that takes it to the next level compared to a typical sales-purchasing relationship.
Instead of a cost/ revenue conversation about products and output your dialogue will evolve into an outcome based profit/ value handshake.
Your customer will help you define the pay per use drivers. If you really understand his business and you are confident in the capabilities of your own organisation to generate outcome that makes your customer succeed, your customer will be inclined to enter into a partnership to make you succeed as well. As a result de pay per use drivers will be fair, sustainable and durable to both parties.
Don’t own, enjoy
Ownership comes with responsibilities. Why should a customer have to carry the risk whilst the supplier is the expert in both understanding and influencing risk. A PAAS model is the ultimate form of “back to core business”. The supplier managed DBFMO, the customer uses the outcome to generate value.
In return the customer pays for use.
Does pay per use really work for both parties or do words like partnership, fair and sustainable sound altruistic? The IT industry does give us insight into what is to come. Because SAAS solutions are available for consumers as well, first hand experience is changing our perceptions, attitude and decision-making regarding cost and value.
“Philips Lighting – a PAAS dialogue – “pay per Lux”*
Customer: “I need light in my office.”
Supplier: “How many bulbs do you need?”
Customer: “I don’t know. You are the expert. What do you advise?”
Supplier: “Our proposal contains 100 bulbs of model abc. This is an investment of xyz.”
Customer: “I want the energy bill of the bulbs to be included in your proposal.”
Supplier: “Our renewed proposal contains 90 bulbs of our newest energy efficient model.”
Customer: “I want you to design, build, finance, maintain and operate the solution.”
Supplier: “We have developed a special lighting solution for you. Low on energy, sustainable in materials usage and easy to (de)install. We name it ‘pay per Lux’.”
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Jul 25, 2017 • video • Management • agile • Coen Jeukens • digital disruption • Field Service Forum
Kris Oldland, Editor-in-Chief, Field Service News talks to Coen Jeukens, Chief Service Officer, D-Essence who was the Chair at this year's Field Service Forum hosted by Copperberg about the key themes of Agility and Disruption in Field Service
Kris Oldland, Editor-in-Chief, Field Service News talks to Coen Jeukens, Chief Service Officer, D-Essence who was the Chair at this year's Field Service Forum hosted by Copperberg about the key themes of Agility and Disruption in Field Service
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Mar 07, 2017 • Features • Management • Coen Jeukens • field service • selling service
Coen Jeukens, Chief Service Officer, D-Essence describes himself as a business leader with sales DNA and a service heart, here he outlines the knowledge he thinks every service manager should have in his tool belt when it comes to selling service...
Coen Jeukens, Chief Service Officer, D-Essence describes himself as a business leader with sales DNA and a service heart, here he outlines the knowledge he thinks every service manager should have in his tool belt when it comes to selling service both externally and internally...
In the boardroom Let us start with an example of a typical business plan review meeting:
- Exhibit A: our targets are more ambitious than our current performance.
- Exhibit B: we face increased competition, increased customer volatility and shorter product life cycles leading to declining market share and diminishing attach rates.
Now suppose the CEO invites you, the field service manager, to pitch a solution to this non-sustainable situation.
Are you prepared? Will your message and vocabulary resonate with the board members?
For as long as I can remember, field service managers bring a message of reality about healthy and sustainable profit margins - about attach rates and trusted relationships.
What do you think the sales manager brought forward as solution? A message of hope: “if we introduce a new model, add a new feature or drop the price, we will regain market share”.
When it comes to choice, a message of hope prevails over one of reality.
What makes the clock tick?
The ugly truth of corporate economics: it’s all about sales and success is measured in revenue figures.
Add to that the sales perception that after-sales does not exist without an initial sale and you know the picking order is set. Also factor in mind that most CEO’s have a sales background.
Sales targets
Sales is a big numbers game. Product hero’s playing with capital expenditures.
Going for the win is putting in a peak performance in a short period of time, balancing effort and reward. Asking sales to include Opex related propositions in the sale does sound altruistic considering that doing so complicates, lengthens and may jeopardise the sale. What about profitability?
In the sales mind-set profitability is not a driver or performance indicator. Not because they don’t care, far from that. Because in most customer organisations the decision making unit for both Capex and Opex are different entities optimising their own silo.
Profitability, who cares? Certainly not sales.
Funnelling leads and Qualification
Sales vocabulary uses words like suspect, prospect, lead and qualification. Elias Lewis has put these words in context in 1898 when he conceived the sales funnel. This funnel is engrained in every sales process. It is in the DNA of sales people to convert leads into a sale.
One of the most important steps in the sales process is the qualification of a lead. Here sales balances effort with reward. When service starts feeding the funnel, it is crucial to know the difference between a lead in the eyes of a field service engineer and a lead according to sales.
In the eyes of sales service-leads are a big bag of small peanuts.
Converting those requires a lot of effort with small reward. For sales to follow-up on service-leads, those leads need enrichment and qualification.
What we need to grow sales? Leads, more leads and qualified leads.
Window of opportunity
Though the clock ticks sales, typical sales solutions to the corporate challenge fail to reverse declining market share or do so at the expense of profitability.
In both cases the course is not sustainable. This is good news as it provides the opening for the field service manager to come forward with his ideas.
Remember, growing sales is an operational process.
Growing your business is changing your business model.
Find the right tune
Although ideas have been voiced for many years at field service conferences, they will be new for sales once rephrased in sales vocabulary. It will become a customer touch points game with roles for hero’s and ambassadors. It is the perseverance of sales to get to a customer on board. It is the caring mindset of service to keep a customer happy. It is their joint effort to come up with new business.
Find the right mix between sales DNA and a service heart to develop new business.
How will sales react? As long as the field service manager doesn’t gloat over his profit contribution and trustworthy customer relationships … and sales can stay in the lead, then sales will go along.
Field service managers can lead by following.
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