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It seems that customer experience is the number one metric that Field Service Organisations are seeking to improve in today’s business environment, but it is an uphill task if your field service technicians don’t have access to the key details of each and every job to hand as they arrive on your customer’s site. The answer writes Michael Blumberg is investment...


Customer Experience is the single most important factor in driving customer loyalty and retention. In fact, market research studies show that it costs five times as much to attract as new customer as it does to keep an existing customer satisfied. Repeat customers also spend on average, 67% more than then one-time buyers.

Furthermore, just a 5% increase in retention can yield profit increases in the range of 25% to 95%. Let’s face it, the customer experience does not end once customers make a purchase. It is just beginning. Original Equipment Manufacturers (OEMs) not only have a responsibility to keep their customers satisfied through-out their buying journey and ownership lifecycle. They also have an opportunity to strengthen their relationship with customers and create more value for them by providing quality, aftermarket services.

There are many factors that influence Customer Experience when it comes to field service. The two most important factors by far are speed of service resolution and first time fix rate. A service provider can excel in every other area of consideration. For example, courtesy of service personnel, ease of doing business, accuracy of billing, experience and knowledge, etc.

However, if takes too long for the FSE to resolve the problem or if the Field Service Engineer (FSE) needs to return because they didn’t fix the problem right the first time, the customer will be unhappy. If this remains a persistent problem, Customer loyalty and retention will suffer.

To prevent this problem from occurring, Field Service Organizations (FSOs) must be aware the bottlenecks, or, barriers, which prevent their FSEs from providing excellent speed of service and first time fix rates. For example, technicians may have: 

• Insufficient knowledge to address the issue at hand: For example, they may lack the skills to solve the problem right the first which can result in either a repeat visit or the need to dispatch a different FSE to the customer site, thus extending the length of the downtime.

• Inaccurate or partial data about customers and/or products: FSEs must spend additional time onsite attempting to understand the customer’s problem when this type of situation occurs. Not only do run the risk of making inaccurate repairs when they rely on inaccurate or partial data, they also run the risk of impacting the quality of future repair if they do capture complete or accurate data.

• Inability to communicate effectively with remote experts: This can happen when the remote support expert is not able to understand or  visualize the issue described by the FSE and/or when the FSE doesn’t understand the corrective action suggested by the remote experts.

• Inaccurate spare parts inventory - Service visits are closed incomplete or extended when this FSE doesn’t have the right part on hand.

• Non-existent audit trails to track previous service requests or warranty information - This means that FSEs lack the right information to properly troubleshoot, diagnose, and repair the problem. Not only does it increase the chance of a repeat service visits, it results in a situation where the FSO may not be meeting their contractual obligations or providing more service then the customer is entitled to; both have consequences.

Given that FSEs spend almost 1/3rd of their time at the customer site, OEMs must do anything they can to help FSEs avoid these bottlenecks. To ensure FSE optimize the customer experience, companies can turn to several solutions, including:

• Utilizing online forms to capturing critical service information

• Providing FSE with online access to Knowledge resources

• Improving parts availability through catalogs and inventory tracking apps

• Offering remote support to guide technicians to make better diagnostic and repair decisions

• Maximizing customer lifetime value through instant quotes and contracts

All these solutions are currently through commercially available, end-to-end field service management Solutions.

Benchmark research by Field Service Insights indicates that these types of solutions have a measurable impact on improving Key Performance Indicators (KPIs) related to field service. For example, companies who implement these solutions can increase FSE utilization and calls completed per day by 25% and 30% and reduce service resolution time and calls requiring second level support by 56% and 64%, respectively.

These improvements validate the tremendous impact that field service applications, such as those described above, have on enabling FSEs to deliver a better Customer Experience.

Michael Blumberg is Founder and Executive Director of Field Service Insights and CMO of Mize, Inc. Deliver 

Field Service Insights is a subscription-based, membership website headed up by long-time fieldservicenews.com associate columnist Michael Blumberg. Fieldservicenews.com has arranged an exclusive free trial period to this exciting new members community for field service professionals.

Michael Blumberg himself tells us more...

At Field Service Insights, every month, we bring you thought-provoking content designed to help you thrive in core areas of your business.

With over twenty-five years’ experience in the field service industry, we are continuously researching and evaluating industry trends, benchmarks, and state of the art. We are skilled at helping field service leaders anticipate the future, overcome obstacles to growth, and implement lasting change.

Field Service Insights was created based on the thought that providing overall service or having exceptional customer satisfaction is not easy. We know that field service leaders must continually deliver exceptional service, demonstrate value, and contribute to their company’s bottom line.

 

"Let’s face it, Field Service Organizations can’t invest in new tools or strategies simply because of their competitors. Analysis and due diligence are required when making these types of decisions..."

 

We understand the many challenges field service leaders face. We are aware that they don’t have access to unlimited capital resources. Every decision must lead to measurable results. Positive impact is key from day one.

Let’s face it, Field Service Organizations can’t invest in new tools or strategies simply because of their competitors. Analysis and due diligence are required when making these types of decisions.

Our mission at Field Service Insights is to provide field service leaders with insights and perspectives that can transform their business and provide added value for their customers. We want to help them shorten the learning curve and accelerate their transformation process.

By joining Field Service Insights, you will gain access to the latest strategies, tools, and perspectives on Field Service Management to help you increase service revenue, boost profits, and customer satisfaction.

For a limited time, we are offering Field Service News viewers a FREE 3-Month Individual Subscription of Field Service Insights.

 

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Michael Blumberg, President of Blumberg Advisory Group and founder of fieldserviceinsights.com discusses some of the most crucial mistakes field service companies can make when utilising contingent or seasonal labour...

Field Service Organizations (FSOs) in North America, UK, and Europe are increasingly turning toward crowdsourcing platforms and subcontractors to augment their field workforce.

This type of outsourcing strategy enables FSOs to become more agile in meeting customer demands for service. As a result, they [FSOs] are able to reduce costs and improve service productivity. In addition, crowdsourcing and contingent labour helps solve the problem of finding skilled labour on a rapid basis.

Turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force.However, turning to subcontractors and crowdsourcing platforms does involve relinquishing some level of control over the labour force. Naturally, questions emerge about the reliability, expertise, and quality of technicians that are sourced through these options.

Over the last two years, we have spoken with dozens of companies who have or currently utilize contingent labour to either augment their existing workforce or gain greater agility and efficiency over the entire field service delivery process. The majority are satisfied with their external providers and report positive results on key performance metrics such as First Time Fix and SLA Compliance/Onsite Arrive Time.   On the other hand, a few anomalies exist where the performance of contingent labour did not meet the FSOs expectations.

Quite often, FSOs who experience subpar performance make critical mistakes when retaining and managing contingent labour.

Here is our perspective on the biggest mistakes they need to avoid:

1. Failure to fully vet individual technicians doing the work

Don’t assume that every contract technician (e.g., subcontractor, freelance, crowdsource) you dispatch has the skills, training, and experience necessary to complete the work properly and in a timely manner. Insist on viewing background checks, certifications, and credentials of every contract technician assigned to your company.

2. Failure to train and onboard technicians

Quite often companies issue work orders without to contract technicians without training or guiding them on how they'd like the work to be performed.

For example, they do not explain how they'd like the tech to greet the customer and/or notify the customer when the work is complete.  Fortunately, Internet-based learning systems make it possible for companies to train and onboard contractors in a cost-effective and rapid manner.

3. Failure to communicate with contractors

This is the biggest mistake that a company can make is hand off work orders as if they were tossing a hot potato over a fence.

This will result in problem with respect to key service performance metrics such as SLA compliance, First Time Fix, and No Fault Found.  It is important that companies provide contractors with detailed and specific instructions about the activities they need to perform on each assignment.

At the same time, contractors also need to communicate with the companies that hire them on the status of calls, issues or problems they are experiencing, and results of their actions.

4. Failure to integrate contract or crowdsourced technicians into their service delivery process

Problems can occur when there is too much of an arm’s less relationship between the company and the contractor.  In other words, there is little accountability, visibility, and control between the company and contractors/technicians, and vice versa.

The key to success lies in treating contractors as an extension of your company.  Companies can achieve this outcome by leveraging communication technology, collaboration tools, and workforce automation software.  Relying on these systems will ensure the company achieves best in class service performance through its contractor network.

In summary, FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labour. This does not necessarily mean that they must make huge capital investments.

FSOs experience challenges to crowdsourcing when they underestimate the level of due diligence, systems, and processes they need to put in place when utilizing this type of labourRather, they are urged to design and implement processes and procedures by leveraging existing infrastructure when they can.

Devoting the time and effort to this initiative will pay off. Our research suggests that FSOs who have an unpleasant experience with contingent labour do so because they rush into the decision without much thought, planning, and preparation.

Basically, they are looking to solve an immediate problem with no consideration to future. In other words, they are taking a tactical approach to labour shortages where a strategic solution is required.

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Michael Blumberg, President, Blumberg Advisory Group and founder of Field Service Insights outlines how service organisations are overlooking the fundamental difference between a customer not seeing value in a service offering and a customer objecting to price and explains why understanding these are two very different things can open up a world of increased revenue streams...

Field Service Executives often face challenges when it comes to generating additional service revenue for their companies.

They often face resistance from customers as evidenced by low contract attachment rates. The natural tendency is to blame the price as the reasons why customers aren’t purchasing more services contracts.

After all, this is the feedback they received from their sales teams and from the customers.

Being logical and rational business people, field service executives try to solve the problem by lowering the price, after all, if the customer says that the price is too high, it must be the reason why they are not buying, right?

To quote, the popular song by George and Ira Gershwin, “It ain’t necessarily so!”. While price may be a factor in the purchase decision, seldom is price the only reason why customers don’t purchase service contracts.

In market research studies that I have conducted for clients in a wide array of technology service markets, I have found that price is often low on the list of criteria that end-users consider when selecting and evaluating service providers. Criteria such as quality of service, knowledge and skill of service personnel, breadth of service offering, and vendor’s knowledge of their business are perceived by customers to have higher importance than price alone.

The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract. The truth is “your price is too high” will always be an objection that customers provide when they cannot justify the value of a service contract.

This is because they have no way of logically defending the value of the service being purchased. Stated another way; they are not able to differentiate the benefits of service contracts from time and materials service. The problem is that Field Service Organizations (FSOs) often attempt to sell service contracts without providing justification about why a service contract is better than simply paying for service on a time and materials basis.

A common saying among sales professionals is that customers buy emotionally and then defend their purchases logically. All too often, FSOs provide little emotional reason why a customer should purchase as service contract as opposed to T & M and even less logical supporting evidence about why a service contract is more valuable.

To achieve high attachment rates, FSOs must be able to articulate the value of their service offerings to customers as well as to their own salespeople. The value proposition must impact customers’ emotionally by addressing their fears, worries, doubts, and concerns about the impact of service or the lack thereof on their operations.

For example, fear of excessive equipment downtime, lost revenue, low machine utilization levels, or the possibility of quality defects. Of course, the FSO needs to provide logical supporting evidence why their service offering will eliminate these issues.

FSOs achieve this results by articulating, either through a sales conversation or marketing collateral, what’s included in a service contract that is not included in time & materials. This requires they do an effective job in defining the coverage, entitlements and resources available to the customer through a service contract.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They must be able to answer the customer primary question “What’s in it for me?”. If the only difference between a service contract and time & materials is that the customer can prepay for service, then there is no emotional value or logical contrast. However, if the service contract provides a preferred level of service (e.g., 4-hour response time, 99.9% uptime guarantee, 7 by 24-hour coverage, parts, etc.) or preferred price structure then the customer is presented with some real value and contrast.

Ultimately, FSOs must be able to help customers defend their purchase of service contracts. They do this by offering more value in a service contract than the customer could possibly receive through time and materials services.

Of course, the best way win over customers is by being honest and letting them know exactly how service contracts enable you, the service provider, to provide a better level of service.

Fundamentally, FSOs can deliver better service to customers under contract.

This is because the contacts provide data about the installed base and service demand requirements. As a result, FSOS can anticipate service events and be more effective at planning and allocating service resources. This, in turn, makes it possible for FSOs to provide a guaranteed level of service to their customers.

Honesty is always the best policy especially when it is supported by a guaranty and exceptional service!

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Michael Blumberg, President of Blumberg Associates and Founder of Field Service Insights offers us an in-depth look at how the key market forces that influence service revenues...

I am often asked by clients to help them implement strategies to grow their service revenue.

Often these engagements occur because a client perceives that they are not getting their fair share of revenue and it's impacting the profitability of their company.

Developing new revenue streams does not happen by magic, a consultant doesn’t just waive his wand and suddenly sales take off. Increasing top line service revenue takes a little work but the results of this effort can pay off  handsomely.

All too often, Field Service management teams attempt to solve their revenue woes without first understanding their root cause.

They assume that the reason why more customers are not purchasing services from their company is that they price is too high. After all, that’s what their customers are telling them, so it must be true.

Companies that get caught up in this line of reasoning often find themselves implementing sales strategies based on some form of price concession, discount, or gimmick.

For example, charging the customer a small upfront contract fee for the right to purchase Time & Materials (T &M) service at a discounted rate, or treating service contracts as though they were a paid-up T & M retainer and allowing customers to carry unused portion of the retainer into the next year.

The assumption behind these pricing strategies is that more customers are likely to purchase the service because it is more affordable.

Unfortunately, the logic behind this line of reasoning is a bit flawed. Sure, the company may be able to secure more equipment under contracts through price adjustments. However, they will more than likely need to sell more service contracts to achieve the same gross margins as before the increase.

A company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.For example, a company with a 40% Gross Margin target would need to generate an additional 35% in service revenue if they were to lower their prices by 10%.

At issue, price may not necessarily be the only reason why companies don’t buy service. This assumption would hold true if all customers are price sensitive. The truth is all customers are not. It typically a small percentage.

More importantly, customers will always point to price as their primary reason for not buying services if they are not presented with other compelling reasons to buy.

The reason many customers do not purchase service is because of the perceived lack of value.

Customers think prices are too high when they do not recognise or understand the value they will receive from the service provided.

The problem is that it is difficult to articulate the value of service.

Most companies, particularly manufacturers, don’t know where to begin.

The more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.As consumers, we’ve all become accustomed to describing value in terms of the tangible aspects of a product. For example, its size, colour, workmanship, reliability and price. However, service is an intangible. How does one describe the value of something that is intangible?

The answer is by making distinctions about it. In other words, by describing the service in terms of the problems it solves, the outcomes or results it create, and/or the time it takes to complete.

Indeed, time is usually one of the biggest value drivers in field service.

Consider this, the more distinctions that can be made about a service, the more tangible it becomes, and the higher the probability that more customers will buy it.

Assuming no difference in price, which service offering sounds more appealing?

• A) a service contract that simply provides parts and labour or,
• B) one that provides 7-day by 24- hour coverage, parts, labor, same day onsite response time, remote support, and guaranteed uptime.

My hunch is that you picked B. This offering provides more value. Don’t you agree?

Unfortunately, most companies are not making these types of distinctions about their service offering.

It is should comes as no surprise that customers think the price is too high and don’t buy service contracts, and instead choose to take their chances and purchase service when needed on a Time & Materials basis.

Don’t misunderstand me, I am not urging field service companies to sell service features or outcomes they can’t deliver.

On the other hand, I am recommending those companies who are struggling with selling service contracts consider whether their service offerings or portfolios are defined with the customers' perception of value in mind.

For the service to have value, it must be described in terms of the experience or outcome provided.

Does it save time or money? Does it increase machine utilization? Does it improve the quality or cost of operations?

By defining the portfolio in this way, Field Service companies can test different offerings through competitive analysis, survey research, and conjoint (i.e., trade-off) analysis.

They would, of course, need to ensure they can deliver on the promise of the portfolio prior to offering it to the customers.

Conducting this type of research, also allows companies to determine which service offerings are most optimal or in demand by their customer base.

All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions In addition, distinctions provide the basis for differentiation and creating a competitive advantage. All things being equal, Customers will always choose the service offering the provides more value as defined by more distinctions then one that does not.

Some segments of the market may even pay a higher price for high value services particularly if they cannot purchase them elsewhere.

With the trend towards offering anything (e.g., products) as a service (XaaS) and Smart (i.e., IoT) Services, Field Service companies will need to become more adept at selling outcomes.

To do so they must be able to describe distinctions and articulate value. XaaS and Smart Services will not just sell themselves.

Field Service Executives are advised to start developing these skills now with service offered on existing equipment so they learn to be proficient at selling service contract when their XaaS and Smart Service programs are actually launched.

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