Nick Frank, Founder of Si2 partners outlines some fundamental steps that field service organisations can take to ensure their field service technicians hit the holy grail status of ‘trusted advisor'
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Aug 22, 2017 • Features • Management • management • Nick Frank • Si2 partners • Trusted Advisor
Nick Frank, Founder of Si2 partners outlines some fundamental steps that field service organisations can take to ensure their field service technicians hit the holy grail status of ‘trusted advisor'
In Field Service we have heard a lot about the undoubted benefits of developing the Trusted Advisor skill set, but very little on how leaders can achieve this goal. It is about time we looked at this journey from the perspective of the service technician, what kind of behaviours we expect of them and the support that they need.
In my experience, there are four key elements that enable a service professional to develop into a Trusted Advisor.
1. Fix yourself first!
The key to providing excellent customer care is to first know you! What you are good at, where you struggle and how you generally interact with others. Know this and you can start to develop some of the behaviours and capabilities needed to be a Trusted Advisor. Most important is to learn to be customer centred. In any interaction with your customers, a good rule of thumb is that the communication should be 2/3 the customer and 1/3 yourself. The customer must be allowed to explain their situation and expected outcomes.
The service provider should focus on questions that clarify the situation, take the actions required to address the concerns or issues, or explain the benefits of what has been done.
However, just being customer centred is not good enough. We have to know ourselves well enough to keep our emotions in check to stay assertive and solution focussed through the customer interaction.
2. Understand the business goals
The key reason for developing the Trusted Advisor skill set is to support our companies growth. This is not about being nice!! It’s about building a relationship where customers are open to a conversation on maximising value from their equipment. Tech companies such as Oracle have been starting to see this form of ‘Customer Success’ management as a key organisation capability, but it is equally important to equipment manufacturers.
To be able to deliver on this goal, service team members need to understand:
- How the business makes money and their contribution to that process.
- The expectations on them as a Trusted Advisor and where on the Support to Sales continuum we want them to be. This is key! One of the major reasons these initiatives can fail is that the service technician feels they have to sell, which can quickly destroy the ‘trust’ in the relationship. This is when communication and re-enforcement of the message is critical to success.
- The wider business offerings the company provides and the value they can bring to the customer
- In your industry, what does the customer really value and trust.[/unordered_list]
3. Fix the Customer
Only when you understand yourself and the customer, are you ready to act as a Trusted Advisor. There are some helpful guidelines that really can help technicians do an excellent job.
- Make sure there is a clear process and expectation for the customer interaction. For example I have heard many service managers use the mantra; ‘Fix yourself, Fix the customer, Fix the situation’
- Develop communication skills required to be successful such as ‘Active Listening’ to develop empathy with the customer, ‘Talk well’ to quickly identify the issue and ‘Develop Rapport’ to build the relationship.
- Make it easy to accesses information on the customer such as problem & upgrade history, BOM, visits and orders.
- Provide tools and training that helps technicians identify pain points and articulate the value of different options the customer might have.
- Provide a clear path to closing the sale that does not compromise the relationship. In most customer environments, trust is created because there is not a sales discussion but a benefits discussion. To close the sale, the Technician needs to have a very easy process that allows the customer to take the next steps without feeling they have been pressured. Generally this is either a lead generation process where inside sales will follow up and close the opportunity, or it might be the availability of a fast and easy order placement to satisfy the need for ‘low value’ orders.[/unordered_list]
4. Motivation - Practice makes Perfect
But how to ensure motivation? Some people are motivated by money and some are more motivated by solving the customer’s problems (generally technicians). There is no right or wrong answer, it all depends on your people and what makes them tick. Whatever direction you choose, you should make sure that the Trusted Advisor role is embedded in their job profile through balanced performance measures. Another important facet to motivation is to share best practices and experiences with colleagues.
Have senior technicians coach or mentor the more junior. Use direct customer feedback insights and processes to demonstrate that Trusted Advisor behaviour does make a real difference to customer’s satisfaction and loyalty.
Developing Trusted Advisor capability in your team is very much a management art. So gaining different perspectives from internal and external colleagues is extremely important as you raise self-awareness, discover the secrets of consultative selling, coaching and best practices.
If you would like more practical advice on how to get the most from your service operation, you can contact Nick Frank at nick.frank@si2partners.com
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Aug 10, 2017 • Features • Management • management • James Alexander
The New Driver of Business Success
Senior managers from all types of businesses in all types of industries are discovering that one role takes the spotlight in deepening key relationships—the field service engineer. No one has more potential impact...
The New Driver of Business Success
Senior managers from all types of businesses in all types of industries are discovering that one role takes the spotlight in deepening key relationships—the field service engineer. No one has more potential impact on the success of the company and its key customers than the FSE...no one. High-performing field service pros are where the action is, orchestrating a superb customer experience, proactively preventing problems before they occur, and leveraging relationships to rock out customers and lock out the competition.1
Research Validation: What Execs Say
Following are some executive comments taken from my research2 that reveal the power of the stellar field service professional.
One senior executive from a huge telecommunications company talked about it in terms of competitive advantage: “Our lifeblood depends on the capabilities of our top field service personnel to differentiate our company from others in the industry. They understand our customers’ issues and are creative in developing solutions to address them. They have become evangelists for our products and solutions and are often used in presales situations to demonstrate our capabilities.”
A global head of services for a manufacturing company put it this way: “Our field engineers make one million customer calls per year. When they build deep relationships, our customer loyalty soars. We must maximize this opportunity.”
Obviously, this is a topic of significance to business leaders and an evolution/revolution worth pursuing!
FLASH POINT: Unleash your service brilliance!
The Attributes of the Brilliant Field Service Professional
OK, so you’re convinced. But you’re probably wondering: What does a brilliant FSE look like?
Brilliant service professionals are, well, brilliant, and their glow lights the way to stellar performance.
Figure 1 illustrates the attributes of the Brilliant FSE. Let’s review this diagram from right to left, starting with the results: repeatable, sustainable performance.
Repeatable, Sustainable Performance
When FSEs rock, the outputs are repeatable, sustainable, value-adding performance. The impact is huge: Loyal customers get phenomenal value from their investment in your company and sing your praises far and wide. Your company achieves strong, profitable growth, in both products and services, and locks out the competition. And you, the brilliant service pro, get the rewards and recognition befitting your contribution and your status. Sounds like a classic win-win-win to me!
Trust-Building Behaviours
Top performers get brilliant results by behaving differently from average service providers. They must do many things well, but the very best service pros act in ways that quickly build and maintain integrity. They ooze credibility as they proactively build trust.
Tools
The service rock star is a big believer in using tools. He enthusiastically embraces any checklist of required actions, set of practices, or relevant case study that can help him retain quality while doing his job faster and easier.
Competencies
Five competencies are integrated within the brilliant FSE:
#1 Value-creating mindset. The brilliant field services pro possesses a view of life based on creating value. He understands the big picture and collaborates with customers and colleagues to deliver business results and personal wins.
Here are what executives have said on this topic:
- “They build upon their credibility and relationship skills to find bigger customer needs and recommend appropriate solutions.”
- “They understand the big picture.”
- “Our top performers have a holistic viewpoint. They clearly see the importance and the fit of services and support as part of the overall solution when combined with hardware, software, and consumables. Our average performers fail to leverage the strength and diversity of our entire organisation.”
- “They have a program-level horizon instead of a project-level horizon.”
- “They look beyond their role with regard to ‘what would the CEO want to know?’”
#2 Customer acumen. The stellar FSEs knows a lot about his customers. He understands his customer’s industry, his customer’s markets, his company’s competitors, and his customer’s competitors. Furthermore, he is savvy about business in general.
Executive comments regarding customer acumen include:
- “They have knowledge of both the customer’s environment and our business. They take the trouble to understand more, and it pays off.”
- “They have a better grasp of overall business needs.”
- “They bring a rich portfolio of practical experiences and relationships with others, and they possess an understanding of business dynamics and market trends.”
#3 Relationship skills. The brilliant FSE knows that relationships are what matter in work and in all aspects of life. He is a master of the four core relationship skills of listening with intensity, probing with purpose, presenting powerfully, and acknowledging concerns.
Again, here are some direct quotes from my research participants that emphasise the criticality of these skills:
- “My top performers possess not just adequate or good communication skills, they have great communication skills.”
- “They communicate the invisible well.”
- “They display superior creativity in listening to customer issues and creating a solution strategy that clearly shows how it solves the problem quickly and thoroughly. The differentiator is their level of creativity, their understanding of issues, and the speed with which they react.”
- “They are superb communicators with clients, team members, and management within our company.”
- “They find a way to outline options and pros and cons to the customer in such a way that this becomes the customer’s direction.”
#4 Engagement management. The very best understand the steps to getting things done, how problems are solved, and how to best interact with the customer. Internally, he uses the knowledge management system, follows procedures, uses prescribed tools, and provides accurate updates on all work in a timely fashion.
#5 Technical proficiency. The brilliant services pro knows enough about his technology, products, and services to get things done. Interestingly, deep technical know-how is not vital in most situations.
Here are some comments from my research that demonstrate this point:
- “My star performers are all good technically, however, most are not technical experts--they know when to bring in technical gurus when needed.”
- “Interestingly, many of my people who customers see as trusted advisors are only technically adequate. They deliver their value through helping customers connect the dots--showing how the best use of our solutions can have a big impact on that customer’s issues.”
If You Want It, You Can Have It
So there it is: Five competencies that are enhanced by tools and mobilized by trust-building behaviors that will yield the results that customers crave and executives yearn for. Like anything of value, it will take some work, but the good news is that the attributes are known, the skills determined, and the steps to success defined. If you want it, you can have it.
Endnotes
- I talk in detail about the rising criticality of services within product companies and the opportunities and challenges it brings in my book Seriously Selling Services: How to Build a Profitable Services Business in Any Industry.
- Alexander, James A. 2007. “Transitioning Technical Experts into Trusted Advisors.” St. James City, FL: Alexander Consulting.
This article was adapted from The Brilliant Service Professional: Building Trust, Creating Value, Having Fun, by James “Alex” Alexander, and can be purchased on Amazon.com or the Alexander Consulting website.
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Jun 28, 2017 • Features • Management • Jan Van Veen • management
In a new feature series Jan Van Veen explores what are the common factors in an organisations DNA that makes them stand head and shoulders above the rest of the competition...
In a new feature series Jan Van Veen explores what are the common factors in an organisations DNA that makes them stand head and shoulders above the rest of the competition...
We have discovered 4 winning habits of long-lasting achievers in service, which sets them apart from competition. These long-lasting achievers see that change and innovation in their organisations is energising and easy and that their people pursue opportunities that go beyond business-as-usual.
Everyone in their organisations has the opportunity to be highly influential In every manufacturing industry, there are exciting – but challenging- changes taking place; involving Servitization, Internet of Things, Big Data, and so on. Customer needs and expectations are shifting, as is the competitive landscape. The speed of change will only continue to increase.
And this will offer huge opportunities for existing manufacturers, and new entrants into the sector.
Many people in manufacturing companies have identified the changes, their impact, and the potential opportunities.
They also see their companies stagnating and dropping behind, despite many attempts to increase a sense of urgency and get buy-in. This often leaves them feeling disappointed and frustrated, yet they are still eager to make a difference.
The 3 Dominant Problems
Most leaders in manufacturing face 3 problems relating to their ability to adapt for more success today, and in the future. One of the concrete consequences, is slower growth of their service business.
Slow change: Whether it is regarding small changes or larger change, it seems to be that many forces repel against it. A lot of energy is wasted in resisting change and in turn, fighting resistance.
There is limited clarity in direction, limited collaboration between departments, a conflict of objectives, too much uncertainty and fear, and a lack of passion and engagement from employees.
As a result, performance issues continue without adequate and timely interventions. Projects and strategies slow down or at worst, fail during execution. Consequently, employees show signs of being worn-out of yet another change initiative.
[quote float="left"]The ‘4 winning habits’ are in fact, the missing link to increase and sustain momentum, to continuously adapt, drive change and innovate their business- including driving a strong service business
Being stuck in “business as usual”: There are very few ideas and initiatives beyond small, incremental improvements, if any at all. Whether it is about product innovation, new services, sales approaches or delivery processes, most changes are focussed on incremental improvements of the status-quo. Of course, this is important, but not sufficient to be successful in our changing world.
Lack of influence: Most people within a company, from the operation specialists, to the CEOs, feel disappointed or even frustrated due to having limited influence to make a real difference.
What makes matters worse, is when they see good ideas and concerns failing to resonate with their organisation.
The 4 Winning Habits
The long-lasting achievers experience the same challenges and opportunities as those who stagnate. They have access to the same market for clients, same technology, same market for talents, and the same knowledge and expertise within the industry.
We can also point out that they have similar visions and strategies, change management, communication strategies and budgets for the change initiatives.
It appears that the ‘4 winning habits’ are in fact, the missing link to increase and sustain momentum, to continuously adapt, drive change and innovate their business- including driving a strong service business
The 4 habits are:
- Direction: Everyone shares a clear and succinct picture of changes in the industry, where the company is heading and what needs to change over the coming years. They all understand how they can contribute to the change, and ultimately, fit in.
- Dialogue: Across all teams and levels there is a constructive and forward-looking dialogue on performance, progress, priorities and aligned actions. Everyone feels secure and confident to adapt and try new approaches.
- Decision-making: Everyone has the power to make decisions within their role, to adjust, perform and improve. There are adequate guiding principles to ensure coherence and alignment of all decisions.
- Discovery: Everyone is aware of (potential) trends, opportunities and threats and the best practices available. They spend time in exploring, testing and learning. There is more focus on new things which go beyond the current core business, which is imperative for future success.
Over the following months, we will elaborate upon each of these habits and support our content with real-life examples.
The Result
The results long-lasting achievers obtain with these 4 winning habits is deep-rooted.
Fluid change: Everyone is passionate and keen to make a difference. They all recognise the need to change and adapt. They collectively think and act to achieve greatness. Change energises!
Pursuing opportunities beyond “business as usual”. Everyone is sensitive to threats, opportunities and obstacles, and behave in a coherent and forward-looking way.
Highly influential: The CEO, operational specialists, and anyone in between have influence to drive change and innovation, and make a positive difference.
They therefore discover:
- More real value innovation, like service innovation.
- Higher growth rates and margins
- Better customer loyalty
- Higher employee engagement
- Better retention and attraction of talents[/unordered_list]
The Essence
If you assume that the focus is about change management and buy-in, then you have missed the point:
It is about making change management obsolete.
There is no need to cope with resistance against change, because the changes come from the ‘bottom-up’.
I believe this is the power of combining business innovation on one hand, and talent development and empowerment on the other.
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May 23, 2017 • Features • Management • management • Bill Pollock • IoT
Bill Pollock, President Strategies for GrowthSM takes a look at some of the findings of their 2017 Field Service Management Benchmark Survey to explore exactly what the impact of IoT is set to be in 2017...
Bill Pollock, President Strategies for GrowthSM takes a look at some of the findings of their 2017 Field Service Management Benchmark Survey to explore exactly what the impact of IoT is set to be in 2017...
There have been myriad times in recent years when a new technology seems to control the conversation in the business world – and, particularly, in the services sector. And, field service is typically one of the first areas where customers and users catch their first glimpse and initial understanding of what each of these “new” technologies can do for the industry.
However, it usually takes a while longer before they truly understand what these new technologies can do specifically for their respective organisations.
Many of these new technologies enter the mainstream of the business world – and the global services community – after some initial fanfare, trade press, blogs, tweets and white papers, etc.
10 to 15 years ago, RFIDs were all the rage, with seemingly every article and white paper talking about the potential use of RFIDs for everything from tracking parts shipments, to identifying personal items that consumers send to the dry cleaner for laundering.
For example, 10 to 15 years ago, RFIDs were all the rage, with seemingly every article and white paper talking about the potential use of RFIDs for everything from tracking parts shipments, to identifying personal items that consumers send to the dry cleaner for laundering.
The evolution of RFIDs, however, was fairly steady to the point of almost being modestly linear over the next decade and a half.
But, fast forward to 2017, and Tesla Inc. founder and CEO, Elon Musk, has recently announced the formation a new company, Neuralink Corp., which The Wall Street Journal describes as a “medical research” company that plans to build technology “through which computers could merge with human brains”, essentially using embedded chips to upload and download thoughts directly from humans. In less than a couple of decades, RFIDs went from the “talk of the town”; to a backdrop of steady (albeit non-glitzy) market adoption and deployment; to a virtual science fiction-like catalyst between the technology of today and the advanced future.
That is why the introduction and accelerating proliferation of the Internet of Things (IoT) in field service is such a big deal. Because, as most industry analysts tend to agree, the projected growth path for the full integration and convergence of the IoT into the global services community – particularly in field service – are stunning!
While some new technologies start out like “gangbusters”, many quickly turn into fads, or segment specific applications, as only a small percent actually do become “game-changers”. And this is where the convergence of field service and the IoT seems to be so much different than the rest.
As technology companies actively tout the capabilities (and supposed uniqueness) of their respective IoT-based applications, Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) solution providers tend to focus on how their embedded Field Service Management (FSM) solutions are also bolstered by the IoT. And, then, there’s Augmented Reality (AR) – which could not exist in its present form without the functionality of the IoT. In fact, many services industry analysts have stated that there could be no servitization – at all – without the IoT.
Maybe so; maybe not. There certainly could be no Augmented Reality (AR) without the IoT. And AR is already one of the “shining lights” among the “new” technologies that has staked its claim as the “next big thing” in field service.
However, even as the services community continues to talk about the gradual introduction of AR into their field service operations, the technology is already morphing and converging with other related technologies, most notably, Virtual Reality (VR). This “new” new technology is already being brandished as “Mixed”, or “Merged Reality” (MR) among the global technology leaders (i.e., depending on which one of the leading technology providers you follow).
Still, the results of Strategies For GrowthSM‘s (SFGSM) 2017 Field Service Management Benchmark Survey reveal that while “new” technologies provide a host of specific benefits for Field Services Organisations (FSOs), most are still not ready to embrace the full potential of all they can ultimately offer.
However, both the need – and the perceived benefits – are there.
For example, the top opportunities, or benefits, of acquiring and integrating new technology are cited as:
- 44% Ability to run a more efficient field service operation by eliminating silos, etc.
- 39% Improve customer satisfaction
- 35% Ability to provide customers with an end-to-end engagement relationship
- 30% Establish a competitive advantage
- 26% Improve field technician utilisation and productivity
- 25% Reduce Total Cost of Operations (TCO)
However, as boldly as these opportunities and benefits are cited, less than 10% of respondents presently claim to be leveraging Augmented Reality (AR) into their field service operations – although 18% say they would be either “very” or “extremely likely” to do so in the next 12 months.
There are twice as many respondents (37%) who say they are “not likely” to do so, compared with 18% of the more progressive respondents who will be moving forward with AR.
The survey reveals similar findings with respect to VR – perhaps the advent of “Mixed” or “Merged Reality (MR) will move the market somewhat more forward during what seems likely to be a period of accelerating growth in acceptance.
As reported in the SFGSM survey, it is still somewhat comforting that the respective levels of interest in acquiring these new, IoT-powered, technologies continues to grow:
- 31% Are currently integrating new technologies into existing field service operations
- 37% Plan to integrate new technologies into existing field service operations in the next 12 months
- 36% Are interested in learning more about the IoT and AR
Once again, the impact of the convergence of field service and the IoT looks to have an increasingly strong acceptance for the foreseeable future.
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Mar 23, 2017 • Features • Future of FIeld Service • management • Mark Brewer • field service • IFS • Servitization • Uncategorized
Mark Brewer, Global Industry Director - Service Management, IFS explains how the field service sector is being undeniably changed by the growing shift of companies towards servitization...
Mark Brewer, Global Industry Director - Service Management, IFS explains how the field service sector is being undeniably changed by the growing shift of companies towards servitization...
When I first started working in the field service management (FSM) space more than a decade ago, the industry landscape looked much different than it does today.
Ten years ago, organisations were looking to automate their field service processes in an attempt to decrease unpredictable costs and inefficiencies while gaining a little more control and visibility over an otherwise unpredictable industry. The core focus was scheduling and dispatch. Today, the focus has shifted, moving from core functionality towards a new, more holistic emphasis on the end customer.
It is estimated that the field service management market will grow from $1.97 billion in 2015 to $5.11 billion by 2020.
Low profit margins, increased competition and growing consumer demand fuelled by technological revolution have contributed to a major shift in the field service management market, both in demand and vendor response.
As field service organisations look to find new innovative ways to maximise operational efficiency and reduce operational costs, enterprise software vendors have established a sweet spot, spurring a flurry of field service management vendor acquisitions.
This change has created a fundamental shift in field service management, from expectations through to functionality and approach. As product-based organisations transition towards servitization and as traditional field service organisations look to adapt and grow, the following trends have emerged in order to enable the transformation.
1. END-TO-END. A NEW APPROACH MOVING AWAY FROM BEST OF BREED
Ten years ago, service organisations were simply looking to automate their existing processes.
In the majority of cases, schedules were generated on whiteboards or spreadsheets, paper work orders were manually distributed and communication between the field and back office was limited or non-existent. Best of breed solutions provided badly needed automation enabling organisations to increase efficiencies and reduce costs. Automation is now a given.
Today it is all about the data. As technology has advanced, organisations are now able to capture the data required to drive key business decisions at the highest level.
Where an automated solution provided process efficiency, an end-to-end intelligent service solution provides the seamless data flow required to optimally drive and scale the business while delighting customers. With end-to-end field service management, an organisation has access to real-time data, empowering fact based decisions and future plans.
2. CONSUMER-DRIVEN PRODUCT AND SERVICE DIRECTION
Now more than ever, today’s consumer is empowered and knows what they want. The world has become smaller thanks to globalisation, social media and connectivity in general.
Experiences are more important than ever as today’s customer has a multitude of platforms available to make their voice heard. Customer engagement is now imperative.
The shift now is moving away from selling products towards delivering ‘product-as-a-service’
The shift now is moving away from selling products towards delivering ‘product-as-a-service’. Where price has traditionally been based on product output and performance, now ‘contract value’ is based on a defined outcome, thus moving away from a transaction based model to a value based partner relationship. A field service organisation needs the right platform to facilitate this change in order to drive value from the product throughout its entire lifecycle.
3. REINVENTING OPTIMISATION
Whilst Servitization can be a strategy to drive enhanced revenue, this should not be to the detriment of service execution. Service will always be measured by how well you perform, and that means optimising the entire service chain from human capital to parts and logistics.
It also encompasses real-time measuring and monitoring of service execution enabling the transition to a proactive ‘manage by exception’ model, rather than providing a reactive response.
Optimisation is no longer viewed in isolation, optimising intraday schedules and inventory. Rather it should be considered holistically in an effort to deliver flawless end-to-end service.
The most successful field service organisations have a clear understanding of the end consumer’s expectations for today and tomorrow
The first step is to ensure they have a strong foundation or platform to start from. Core processes and systems should be running optimally to allow an organisation the ability to effectively scale and adopt new technology.
Organisations must embrace change with an enterprise-wide change management strategy.
Lastly, the most successful field service organisations have a clear understanding of the end consumer’s expectations for today and tomorrow to ensure these can be met or exceeded today as well as anticipated for the future. Value added service is no longer optional, it is the very future of service.
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Mar 08, 2017 • Features • Management • Astea • infographics • management • Outsourced Field Service • outsourcing • field service • infographic • Service Management Software
This great infographic from the team at Astea covers some of the key challenges and some top tips for ensuring any outsourced field service operations continue to uphold your brand standards and ensure your customer satisfaction levels remain high.
This great infographic from the team at Astea covers some of the key challenges and some top tips for ensuring any outsourced field service operations continue to uphold your brand standards and ensure your customer satisfaction levels remain high.
Want to know more? Field service professionals can access an accompanying white paper "Outsourcing Field Service" after claiming their free subscription to Field Service News!
Click here to subscribe and get the white paper sent to your inbox now!
Subscription offer only available to Field Service Practitioners. Terms and Conditions apply. See here for details.
Feb 28, 2017 • Features • Management • management • field service • Jim Baston • selling service
Jim Baston continues Charlie’s journey as the serialisation of his service oriented book beyond Great Service continues as we bring this section on “The Revelation” concludes...
Jim Baston continues Charlie’s journey as the serialisation of his service oriented book beyond Great Service continues as we bring this section on “The Revelation” concludes...
If you missed the earlier parts of this series you can catch up by clicking here
As you may recall, Charlie comes to the realisation that the highest level of service that his company can provide is by helping the customer be better off for having hired them. That will require his field service team to be proactive in looking for and recommending products and services that will benefit the customer and help them achieve their business goals. Charlie’s plan to get his technicians to sell seems to come off of the rails by the technicians’ reluctance to act as salespeople for the company.
Fortunately for Charlie, his very able service supervisor Ken, helps him sort things out. As they sit together going over the details of their service meeting, Ken points out:
“What Angus said Charlie, was that it was not the technician’s job to ‘sell’. He didn’t say anything about the technician’s responsibility to help the customer run their facilities better. Actions speak louder than words and Angus’ actions—as you just pointed out—clearly indicate he believes that serving the customer in this way is very much a part of the technician’s role.”
“Ken, you’re going to have to slow down. I’m getting dizzy. Isn’t ‘selling’ and speaking to the customer about things they should do to run their facilities more effectively the same thing?”
It’s why there are very few service companies that could honestly tell you they are fully satisfied with the work being generated by the field service team
Ken continues: “Let’s say you go to the doctor with a headache and you’re prescribed a pill to relieve the pain. Have you been truly served?”
“I guess so. I wanted to get rid of my headache and the doctor gave me the medication to do that,” says Charlie.
“Hmmm. Let’s compare that to an emergency service call. The customer calls complaining of no heat. We go to the site and find a blown fuse. We replace the fuse and get the heat back on. The customer signs our work order and we leave. Is that a comparable situation?”
“Sounds like it to me.”
“Unfortunately Charlie, I don’t think that the customer (or patient in the case of the doctor) was well served. Would you not think that the doctor should at least ask a few questions to explore the possible cause of the headache? Where does it hurt? How long have you had it? What have you taken so far to relieve the pain? That sort of thing. Would you not expect basic information to be taken, including your pulse and blood pressure, or have your ears or throat checked? If something of concern was found, would you be surprised if further tests were suggested? And, based on the results, would you consider recommendations for a particular medication or a change in diet to help you get better as a sales pitch?”
“No. Now that you mention it, I would expect those basic actions. Without them, the doctor might provide me with temporary relief but overlook the cause, which could have a troubling impact later on. And as for the recommendation for specific medications or diet, I would see that as part of the process to help me get and feel better.”
“Right!” exclaims Ken. He stands and becomes more animated.
The challenge then is to help them recognise the difference and encourage them to speak with the customer about what they feel would be in the customer’s best interest to do
… “I don’t sell, Charlie. I simply use my expertise and experience, and ask a few questions about the situation and the customer’s goals. Then I bring to their attention the types of remedies they might consider to reduce energy, increase tenant comfort, improve operational performance and so on. The customer then makes a decision on what they want to do. I don’t try to force or convince them against their will. I simply assist them to make informed decisions which will help them operate more effectively.”
It’s now that Charlie stands up and gets animated. “So, if I understand you Ken, what you are saying is that Angus and the rest of the team don’t see themselves as salespeople flogging Novus services, but rather as recommenders of our services when they see that as solving a customer’s problems. The challenge then is to help them recognise the difference and encourage them to speak with the customer about what they feel would be in the customer’s best interest to do. Have I got that right?”
Thinking about your business:
- If you have a formal or informal expectation for your technicians to generate opportunities in the field, how do you position this activity with your field team? Is this a selling activity or a serving activity?
- Does your team fully grasp the important service they are providing?
- Do they see it as important a service as their ability to fix or maintain the equipment?
Next time we will look at some of the hurdles that Charlie will need to address if he is to be successful.
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Jan 12, 2017 • Features • Management • management • Microsoft 365 • eBECS
Stephen Wilson, CMO, eBecs looks at why understanding customer expectations is perhaps the biggest challenge and requirement for field service companies in 2017...
Stephen Wilson, CMO, eBecs looks at why understanding customer expectations is perhaps the biggest challenge and requirement for field service companies in 2017...
How do you ensure that your field service technicians are completing their jobs effectively and fulfilling customers’ expectations? First, you’re going to have to identify what your customers’ expectations really are. Many businesses assume that because they know the product or service, they know best what customers need. This assumption is incredibly risky. It can lead customers to feel like they’re not valued, that their needs aren’t going to be met, and in the end selecting another company to do business with.
What can you do to better understand and meet your customers’ expectations in order to keep customers satisfied and loyal to your business?
Customer Information
Part of being able to meet your customers’ expectations is ensuring that your technicians are provided with all relevant information before they leave for a service call.
Technicians can easily view past call notes, identifying any challenges that may not have been anticipated, thus saving everyone time.
Keeping customer information all in one place improves future service calls as well. Technicians can easily view past call notes, identifying any challenges that may not have been anticipated, thus saving everyone time.
Touch Points
Where do your customers interact with your company? What is their experience along all touch points? Your customers’ experience, from everything from your website, to the emails from your team, to the technician they interact with, matter. Even more importantly they all need to align with your brand and business image.
One of the biggest disconnects for a customer can be going to your website, expecting a certain level of professionalism, only to receive communications and experiences that don’t align. Regardless of the size of your company, holding your business to a professional standard at all touch points will ensure that customers’ expectations are being met. Adopting technology such as Microsoft Dynamic 365 for Field Service can help your business maintain a professional standard.
Time Management
When a customer has a problem, they want it resolved in a timely fashion. While they understand that they’re not your only customer, what expectations are you setting in regards to their service call? Are you even setting an expectation? One of the biggest disservices to a company is customers having low or no expectations at all. When customers’ expectations are met it builds trust in the relationship with the business.
When it comes to service calls, customers feel more comfortable when provided with a time frame, even before they submit their request.
Using a resource scheduling tool will help you to better calculate, with accuracy, when technicians will be able to complete work orders, and allow you to fit more work orders into each day. Setting those time expectations with your customers can provide huge benefits to your company, because the reality is, the competition likely isn’t making them or holding to them.
Customer Feedback
One of the most important aspects of understanding customer expectations is in getting direct feedback from them. Customer needs are continually evolving and changing, and to stay on top of it you must actively engage with customers.
Using an integrated system that automatically sends out a survey once a service call is completed is a quick and effective way to get immediate feedback. It will help you change and adapt your business to what your customer needs are.
Customer satisfaction is ranked as the highest metric in defining service success. It ranks higher than first-time fix rates and service cost.
Customer satisfaction is ranked as the highest metric in defining service success. It ranks higher than first-time fix rates and service cost. When customer expectations are met customers have more trust in the business and are more likely to use your services again in the future. Using an integrated Field Service solution like Microsoft Dynamics 365 to help understanding customer expectations will be a game changer for any business.
To learn more on how to understand your customer’s changing expectations and still deliver high customer satisfaction, sign up for the January 31 live webinar here
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Dec 22, 2016 • Features • Management • Arvik • Lucenre University • management • Shaun West • Uncategorized • Parts Pricing and Logistics
Value based pricing is a hot topic in industry today, but what exactly is it and why is everyone talking about it?
Value based pricing is a hot topic in industry today, but what exactly is it and why is everyone talking about it?
Is value based pricing simply about getting as much price from your customers as possible? Or is it about valuing your longer-term relationship with your customers, or perhaps improving your service? In fact it is each of these and potentially more. What is clear however, is that cost-plus pricing for services does not always offer the customer or the supplier the best value - yet there may now be options to combat this with value based pricing.
The following report co-authored by Dr Shaun West, Lucerne University and Dominik Kujawski, Arvik Bolting Solutions brings together good industry practices in a solid academic framework. The report provides business leaders with a guide on how to create a value based strategy to price B2B services - as such it is essential reading for all business leaders...
Why value based pricing?
During a conference we recently attended, a phrase that kept coming up in conversation was “We should all switch to value based pricing”. An increasingly topical statement in industry today, however, the approach of value based pricing is also one which is not being discussed any further. No one seems to be speaking about HOW to actually achieve this goal.
Pricing is not new- even Oscar Wilde said: “Nowadays people know the price of everything and the value of nothing”
Companies need to focus on customer value in developing pricing strategies as pricing pressure in the industrial B2B market has been increasing as a result of changing customer buying behaviors. In this article we’ll delve deeper into why value based pricing can be challenging and why it has a huge impact on companies’ business.
Is pricing really a strategic capability?
Pricing is an important management tool to help achieve the firm’s objectives and has a huge impact on the financial results. It is a multi-departmental activity influenced by several functions within the firm that may attach different importance to pricing and the value drivers of the business.
Every business manager needs to be aware that pricing has an impact on customer satisfaction and that pricing is not only dependent on price itself.
Pricing of services is dependent on situations in which a customer finds themselves in and the jobs in which they need to do at that time.
This relation of pricing to customer engagement in this process includes three strategies:
- Cost plus strategy;
- Competition/market base strategy;
- Value based strategy.
Cost plus pricing
The process of cost plus pricing starts with the firm determining the scope of their service. Here, a unit cost is simply calculated and a pre-determined margin is applied to set the price. This margin reflects the desired profitability of the firm. The customers are then told what will be ultimately delivered in exchange for the set price
Competition/market based pricing
This process begins with pricing based both on the scope and the costs, then additionally on what the competition charges for a similar service. Setting the price here has an influence on the market situation. Large competitors tend to have a scale advantage over the smaller ones since their fixed costs are mostly lower due to a larger customer base. The last step of this process is presenting the customer with the value that is being offered through the service.
Remember that data is in your CRM system and in the market – keep track of it.
Value based pricing
The value based pricing approach is based on analyzing each customer’s needs, pains and gains, and their willingness to pay. It depends on the customer interest and acceptance of price for a provided value. Here, the price is set for the offered value, and later the scope of the service itself is determined.
Calculating the costs in this strategy is also necessary as they used to make a reality check and afterwards calculate the margin achieved.
Listen to your customers
The process of pricing in cost and competition based strategies suggests to ask the question “why is the customer situated at the end of the process if all of the companies always state that customers are the most important?”. A juxtaposition to the truth, you will always hear stated that companies involve their customers in the co-creation of service value from the very beginning, but how can this be actually possible with a cost plus and competition based pricing strategy?
Now, how do we turn this approach around and place focus back on the customer? Straight away, let’s forget about pure cost plus strategy.
This ‘simpler’ pricing strategy shows that the supplier can have a lack of understanding of the customer value and as a result the customer offering can be weak.
In addition to this, the competition/market base strategy, which is endorsed by many companies, indicates that pricing is controlled by the market. As such, this removes focus from the customer and indicates that the supplier does not entirely understand customer value, showing that the resultant value outlined by the firms offering can also be low.
So, how should service companies price in order to bring the customer into the focal point? The answer is quite straightforward; by aligning pricing objectives, strategies and tools according to the holistic strategy of the company.
Note: pricing needs to be strategic… it must not be left solely to Sales,
Production or Marketing departments. It needs to be driven by management and agreed by all the departments influenced by pricing Companies should create more customer focused objectives to choose pricing strategies that consider customer value.
This means that when pricing services, you as a firm need to firstly understand how your customer creates value and secondly, where you and your equipment fit into this process. You need to know that pricing tools used also need to support the objectives of pricing and the pricing strategies. For example, a pricing tool supporting customer oriented objectives can be bundling as it is a way for firms to present the scope/price negations, thereby providing a different approach to customer value discovery and leading to improved customer experiences.
Source of pricing power
Here, a B2B example is given, showing that the source or pricing power comes from customer need states. Let me take you through the example of a simple bolt used in industrial equipment. Bolts are widely present in everyday life and more specifically, they are present in almost every technologically advanced machine or construction, from compressor valves and turbines, to the foundations of wind mills.
So, what is the price of tightening a single bolt? The price of a single bolt varies from market-to-market, from machine-to-machine and from company to company.
The most significant result of bolting, however, is the residual load that a customer requires from the bolting supplier. Now, to show where the pricing power of services come from, let’s imagine a situation where you exchange a single bolt worth a couple of dollars, in a compressor valve which is worth hundreds of thousands or install one in an offshore wind turbine, worth even
more. How much should the tightening of one bolt be worth to keep the compressor running or the turbine safe on its foundation?
In this case, bolting provides safety and savings on a huge scale however, the value of the service to each customer varies depending on the scope of the project. Here, not all customers are the same, so they should also not be treated with the same approach.
Customer value connection based on colors
Customer value connection shows that companies need to do what their particular customer values. If the value proposition you offer creates no customer value, it is then only a purely basic cost to your customer.
It is time to use the “knowledge” about your customers to move to customer value propositions and find ways to deliver what is really valued. Hence, what they are really ready to pay for?
Firms need to consider what is core and what is standardized.
It is important to be aware that pricing can be different for different modules. This means that the customer can pay a different price based on the “menu” or “á la carte”, and shows that there are multiple pricing points for services but what is really interesting, is that its components don’t change. So what is changing?
It is the location and more importantly the type of service provision together with the customer need state. In the first mentioned case, the compressor valve is available in a workshop where the bolt can be tightened with use of onshore equipment, in a quite friendly environment.
However, the tightening of wind turbine requires going offshore to harsh conditions with special trainings and guaranteeing the customer that a bolt tightened worth a percentile of the whole wind mill will provide safety from failing the whole project.
This clearly shows that the customer gets usage, location and utility from the supplier. And if a firm is able to segment customer needs states and purposes for buying. It is also able to find the right pricing points for it.
This helps to identify margin and revenue opportunities available to a company.
This shows that that customer value identification process work for product based firms too.
Pricing waterfall for value based pricing
A prototype of pricing waterfall diagram provides guidance towards value based service pricing. It considers the most important aspects of pricing, starting from benchmarking competitors to considering the customers’ willingness to pay. As such, it helps you to triangulate on the value based price that your customer is willing to pay.
The pricing waterfall presents that single, inflexible offerings can limit companies to sharing limited value. Whereas, flexible offerings respond to customers’ changing needs.
Also, flexible pricing based on all important factors helps to increase customer value. Offering flexible service dimensions that support customer choices, together with flexible pricing strategies can provide the supplier with additional pricing dimensions that can have a positive margin increase impact. The pricing waterfall also highlights the importance of triangulation of pricing based on market analysis, internal value creation and customer value.
Final comments
This article presents that pricing is a strategic capability and needs to be kept in line with the company’s overall strategy. There is a great need to focus on customer value creation during service pricing, and aligning strategies and tools to support the objectives set by the company. Understanding customer value rather than simply relying on cost-plus or market-based approach, is a key to pricing industrial services. Another very important step in the process of pricing, is margin calculation based on the identified costs and value price offered. It is essential to calculate the margins in order to assess the correctness and validity of the price.
To summarise, consistency in pricing is of great importance and needs to be maintained across all pricing objectives, strategies and tools used to determine the final price of a service offering. So after reading this article, ask yourself again, “Should I switch to value based pricing?”. The answer is not always, but one can learn to determine situations, locations, needs and pains to price according to value.
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