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We are currently running a research project aiming to build a picture of what the field service engineer of 2022 will look like.

What tools we he use? What skills will he need?

The research is being run in partnership with field service management providers ServiceMax and thanks to their support we have been able to run a prize draw for those who have taken part in the research and we are pleased to announce the following winners so far: 

• John Mackrell, Business Change Manager, British Gas
• Neil Taplin, Operations Director, Arqiva
• Stuart Morris, Support Specialist, Glory Global
• Toin Jansen, Service Director, Tennant
• Bill Taylor, Engineering Services Manager, CDW
• Erik Huysmans, Service Manager, AGFA

Emails will be sent to each of the individual winners listed above across the next 24 hours so congratulations to each of you! So thanks to all of you have entered and taken part in the research to date.

 

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If you are not a winner - don't worry there will be one more draw this time next week once the research is closed - and if you haven't taken part yet then you can complete the research here and upon completion you will be able to enter the prize draw* - with prizes including £50 Amazon Vouchers plus tickets to field service conference Maximize Europe (worth $250)

 

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*Prize draw entry available to field service practitioners only (i.e. Field Service Management Professionals or senior IT and Business Leaders working for an organisation that operates a field service division. 

 

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Our world is changing.

Field service technology is evolving at breakneck speed. The role of field service within the wider business has grown from cost centre, to profit centre and is now rapidly shifting towards being the primary revenue source as companies leave behind them traditional break-fix models and adopt outcome based service solutions. SLAs are becoming replaced with guarantees of uptime. An asset in the field can request it's own maintenance call in advance of failure. Expertise no longer needs to be flown in it can now simply be dialled in.

So what does all of this rapid change within the field service sector mean for the field service engineer of the future? What exactly will the field service engineer of 2022 look like and how will he differ from the field service engineer we are accustomed to today?

However, with an ageing workforce crisis looming large as the existing last of the baby boomer workforce reaches retirement, it is perhaps one of the most important question field service organisations must address as they look to replace their leaving 'boomer workforce with a millennial workforce that have wildly different attributes, needs and skill sets.

 

With this in mind Field Service News is working in partnership with field service management provider ServiceMax from GE Digital on a research project that is seeking to establish what field service professionals believe the requirements will be for field service engineers and technicians in the not too distant future.

Now as we reach a half way point through the research we reflect on the interim findings and at the same time to turn to any field service professionals who have yet to take part within our survey and ask you to help us build an even more complete picture of what the field service technician of 2022 will look like?

Findings so far:

1. The predicted ageing workforce crisis amongst field service organisations is very much real

When we hear talk of an 'impending crisis' it may be only natural to think that there is a healthy dose of hyperbole within the headlines. However, in this instance an ageing workforce is certainly a looming problem and unless companies address this issue now it could indeed be a crisis for some.

Indeed, 81% of field service professionals that have participated in our research so far have indicated that the for their organisation an ageing workforce will pose some threat to their service delivery across the next 5 years.

Within that 81% of respondents 13% feel that the threat their company faces is severe stating that it is a 'major issue we are facing that could put our field service operations at risk.' Meanwhile, 45% of those who stated an ageing workforce was a concern stated that the risk was significant and stating that 'unless we address the issue quickly we are likely to face major disruption to our field service delivery.'

The same amount of respondents also stated that they see it [an ageing workforce] as 'a possible issue that we need to be aware of', whilst just 17% of field service professionals that have responded to the survey so far believe that the risk to their business is limited.

2. People skills are becoming increasingly more important in field service technician recruitment

The old cliche of a field service engineer being a reclusive creature often found in dark corners more happy in the company of his tool kit than with those dreaded customers who always just seemed to get in the way of him doing his job are now very much a thing of the past.

Indeed, over the last decade we have seen the field service engineer evolve from the character mentioned above into a role which regularly includes additional elements within the job description such as brand ambassador and trusted advisor. And as we move towards an ever more digital era - where often the field service engineer may be the only face to face contact your customers may have with your organisation - especially in business to consumer industries.

 

So it is perhaps little surprise that we see that 54% of respondents to our survey stated that they 'absolutely place people skills at the top of their list when recruiting new FSEs'.

In fact, alongside those that put people skills at the top of their list of skills for new techs a further 43% stated that they 'certainly pay more attention to people skills today than they would have done a few years ago,' whilst just a nominal 3% of respondents replied that 'whilst people skills are nice to have, technical skills are the major facet they are looking for in new field service engineers."

3. There can be little better for training new field service engineers that the experience of older engineers

Indeed, it seems that this is the accepted wisdom amongst many field service organisations with 59% of our respondents confirming they have programs in place for older technicians to support younger technicians.

Further to this an additional 16% of our respondents stated that they are currently devising such a strategy whilst just under a quarter of companies stated that they didn't have anything in place to harvest the knowledge of their older technicians before they walk out of the door.

 

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How does this compare with your own experience?  If you haven't done so already please do take just a few minutes to complete our research survey.

PLUS! not only will you help us build an even clearer picture of what the key thinking is around what the field service engineer of 2022 will look like, but thanks to our partner on this project ServiceMax by GE Digital, we have a number of prizes to give away including three £50 Amazon vouchers plus a number of free tickets to Maximize Europe conference (worth $215 each!) - but you can only find the entry for the prize draw at the end of the survey so if you want to win - you better complete the survey ASAP!*

 

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Click here to go to the survey now 

 

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*Prize draw available only to field service practitioners and dependent entry is dependent on consenting to T&Cs

Research conducted by Bill Pollock, president and principal consulting analyst at Strategies For GrowthSM (SFGSM) reveals that selecting a Field Service Management (FSM) solution often requires months – if not years – of due diligence to reduce the “long list” of potential vendors and solutions down to a carefully selected “short list” of possibilities...

Making a decision based on your own research is often a daunting task, collating and interpreting RFP information and sorting live demonstration ‘vaporware’ from actual, live software capabilities.

The following provides an additional set of information that your peers in the industry consider fundamental to the decision – data your team can use to make a final, intelligent choice that grows with your business into the future.

The results from SFGSM’s 2017 Field Service Management Benchmark Survey clearly identify four specific factors cited by half (or nearly half) of the survey respondent base when making their respective FSM vendor and solution decisions, namely:

• 50% Prefer a solution that interfaces with Customer Relationship Management (CRM)
• 47% Prefer to work with a single provider of Field Service functionality
• 47% Prefer a solution that is intuitive and easy to train on
•  45% Prefer to invest in a solution that fosters Sales and Service collaboration

Another 35% also cite their preference for a solution that rolls out quickly.

While each (or all) of these factors may have contributed in some way to your decision-making process, your final decision is likely to rely more on how the FSM solution you choose will address your greatest challenges, provide the greatest opportunities and benefits for services delivery improvement, and allow you to compete head-to-head against your strongest competitors.

Compounding the importance of your selection, the chosen solution must also provide the ability to improve existing customer satisfaction levels, and increase the services organisation’s contribution to the company’s bottom line. Quite an undertaking, to be sure; but certainly doable – but, only with the most effective and robust FSM solution in place, and a full complement of vendor resources to support it over time.

Functionalities to Look For When Selecting & Evaluating an FSM Vendor/Solution

Gartner cites six categories of FSM enablement that should be included in any (i.e., every) FSM solution – at least every FSM solution that is strong enough to run the entire organisation’s services business. They are:

1. Demand Management – including customer portals, multichannel customer communications, IoT integration, triage support, field work order/appointment request, field quoting, field parts sourcing, ticketing system integration and long-cycle work requests.
2. Work Planning – including forecasting, scheduling optimisation, parts demand planning, purchasing, Geographic Information Systems (GIS) integration, customer communications and third-party service enablement.
3. Technician Enablement (Mobile) – including Global Positioning System (GPS) integration, routing, equipment history/site details, social collaboration, customer communications, knowledge base/work instructions, purchasing & quoting/sales and tool management.
4. Work Order Debrief – including work order financial information, customer forms, site evidence, equipment updates, recommendations, payment collection and customer surveys.
5. Operations – including invoicing and price books, installed equipment manager, maintenance agreement management, maintenance plans and quoting, warranty management & warranty claims management, revenue recognition enablement, reverse logistics management, depot repair, equipment supersession, engineering change requests and fleet management.
6. Analytics and Integration – including field service performance management; cross-functional predictive analytics; alerts, notifications and gamification; and Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and GPS integration.

While most vendors will say they offer all of these functionalities within their FSM solution offerings, it is more than likely that there will be significant gaps in key categories such as work planning, technician enablement, and analytics and integration (among others).

However, each of these areas will be critical to the overall enablement that your FSM solution is needed to provide and, therefore, must be included in the FSM solution that is ultimately selected and implemented.

Marne Martin, CEO, ServicePower, a leading provider of field service and hybrid mobile workforce management solutions, agrees that all six of these areas must be addressed in any FSM solution, noting “For organisations looking for a single vendor, end-to-end solution with an easy integration process to existing CRM or ERP packages, ServicePower is a great fit.”

“ServicePower supports a seamless integration mechanism to any CRM, including the launch of an App for the Salesforce AppExchange and new prebuilt connectors to most major software packages.”

 

“Our solution provides a full complement of mobile workforce management functionality, from consumer entitlement, to schedule optimisation and contractor dispatching, work order management, enterprise mobility, asset, inventory and contract management, and 360° BI (i.e., Business Intelligence).”

She further adds that, “While most FSM vendors also offer ‘scheduling’, ServicePower’s solution is the only one on the market designed to improve the customer experience though real time AI (i.e., Artificial Intelligence) and robust mobile functionality, while streamlining service operations with integrated hybrid workforce management functionality.

SFGSM’s survey results validate the effort ServicePower has expended in extending our solution to include the full spectrum of functionality required to manage a mobile operation, from entitlement through a plug and play intelligent consumer portal to warranty management and BI.”

Making the Final Decision – It’s Time to Decide!

The Cloud has normalised the playing field for most FSM vendors and their customers.

The options are many, the costs have come down (i.e., through the proliferation of the subscription basis model) and the FSM solution alternatives are “all over the place” with respect to the comparative breadth and depth of product functionality, strategic partnerships, FSM vendor acquisitions, “new” product roll-outs and the like.

However, in deciding which is the best fit for your field service operation, today and for the long term, one thing remains clear – the field service operations at your organisation will remain the central focus of your role and responsibility.

Why would you want to go with a vendor that doesn’t provide it all?

 

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"Bill Pollock, President Strategies for GrowthSM takes a look at some of the findings of their 2017 Field Service Management Benchmark Survey to explore the degree to which UK Field Service Organisations are  investing in new technologies and analytics…”

Each year, Strategies For Growth^SM (SFG^SM) conducts a series of Benchmark Surveys directed to the global services community. The preliminary results of the 2017 Field Service Management (FSM) Benchmark Survey clearly reflect that UK/Europe Field Service Organisations (FSOs) are continuing their focus on addressing the top market drivers that impact their geographic marketplace – and in many cases, at a significantly higher rate than their global respondent counterparts!

For example, UK/Europe FSOs currently place their greatest emphasis on dealing with such key market drivers as:

1. Customer demand for quicker response time;
2. Internal mandate to drive increased service revenues;
3. Need to improve workforce utilisation and productivity; and
4. Need to improve service process efficiencies.[/ordered_list]

In fact, the 2017 results clearly show the increased importance of making process improvements compared to just one year earlier when process efficiencies did not even place among the top three market drivers. Therefore, it should come as no surprise that UK/Europe FSOs are continuing to invest more in new technologies – most notably, the Internet of Things, or IoT, and mobile tools – in support of their respective field forces.

Susannah Richardson, Account Director, mplsystems, concurs with these findings stating that, “We’ve seen our customers increasingly asking about what further functionality they can add into mobile applications to improve effectiveness of their field force.It’s no longer simply about field technicians being at the right place at the right time with the right parts, but also about them being empowered to excel in the service that they offer and to provide additional services.”

 

“We’re also seeing organisations looking at ways to better manage the planning of their workforce in real-time. Typically planners spend lots of time managing exceptions, such as: emergency jobs; customer changes or job overruns and delays; even if they have scheduling in place, too often these are not flexible enough to handle live situations. We are seeing lots of interest in our new scheduling algorithms to handle real-time changes and IoT feeds (AESOP) and so improve efficiency in both planning teams and the field workforce.”

However, one of the greatest differences reflected in the UK/Europe survey results is in the percent of services organisations that are currently developing and/or improving the Key Performance Indicators (KPIs) they use to measure service performance; (i.e., cited as a top strategic action by 65% of UK/Europe respondents, compared to only 47% overall.

Richardson agrees that, “Business analytics are a large part of all of our customers’ field services and business operations, which is why it is such an integral component of our solution offerings. Traditional measures don’t offer service performance, as they are operationally focused and don’t reflect customer experience. However, now we’re seeing our clients using our analytic tools to develop their own dashboards as they have become increasingly focused around KPIs specific to the service and experience that they are delivering to their customers.”

Another key factor that may be used to explain the heightened focus of UK/Europe FSOs for stepping up to improve their lot is that they continue to lag slightly behind their global counterparts with respect to service profitability (mean average of 35%, or slightly lower than the 38% attained among the overall respondent base, both in 2015/16 and 2017 surveys).

In addition, at a mean average of 81%, UK/Europe FSOs are also currently falling somewhat below the global survey population with respect to attaining desired levels of customer satisfaction (i.e., 83%). However, the research also strongly suggests that the market recognises the importance of stepping up to the challenge of improving their performance for these two key metrics.

Based on these survey findings, and other corroborating research, it is not surprising that the UK/Europe field services community also recognises that it will need to increase its investments in mobile tools and new technologies to compete effectively in an expanding global marketplace. In addition, it also understands the importance of building an effective Key Performance Indicators (KPIs), or metrics, program to measure the impact that its strategic actions, technology investments and resource acquisitions will actually have on the organisation’s performance moving forward.

 

While UK/Europe services organisations cite current investments in mobile tools to support field technicians as somewhat lower (27%) than the overall survey base (40%), future plans (i.e., over the next 12 months) for integrating new technologies are reported virtually at par with the rest of the world (i.e., 35% in the UK/Europe, compared with 37% for the global survey base). Accordingly, these data suggest that the adoption of new technologies in the UK/Europe may be roughly only one year behind that reflected by the general survey population (which is mainly comprised of respondents from the Americas).

Planned strategic actions by UK/Europe services organisations through 2017 reflect an even more dynamic, rather than static, approach to the field services marketplace. For example, 54% of respondents plan to develop and/or improve their use of field service KPIs, or metrics; and just as many plan to improve planning and forecasting activities with respect to field operations (54%).

What these data primarily show is that the UK/Europe field services community recognises the need to take specific strategic actions to enhance and improve existing service processes and operations, and that these actions begin first and foremost with the need to develop and/or improve the use of service metrics and KPIs.

These actions are then complemented by the need to invest in the right mobile tools and technologies to empower their resources both in the field, and in the back office;, to improve existing processes; to meet the growing needs of customers; and make greater contributions to the organisation’s bottom line.

 

However, the greatest impact on the future of Field Service Management is most likely to come as a result of the growing acceptance of Cloud-based technology. Among those UK/Europe organisations currently planning an FSM implementation in the next 12 months (or considering doing so in the next 12 to 24 months), a Cloud-based solution is preferred by 40% of respondents, compared to only 20% citing a preference for Premise-based – basically, a 2:1 ratio in favour of Cloud.

However, roughly two-out-of-five respondents (40%) remain undecided at this time (compared to only 33% for the general survey population). Still, Cloud-based FSM solutions appear to be the dominant preference, regardless of global geography.

In 2017 and beyond, the focus will likely be even stronger on the customer in terms of striving to meet (and exceed) their demands, preferences and expectations – or “back to the basics”. UK/Europe FSOs will continue to plan to accomplish this mainly by improving the processes they use for delivering their services; the KPIs they use to monitor their improved performance over time; investing in new tools to support both field technicians and customers; and integrating new technologies into their existing FSM or Service Lifecycle Management (SLM) systems.

 

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Richardson and the team will be attending Field Service Management Expo next week where mplsystems will be unveiling a new genetic algorithm based scheduling tool, to find out more visit them on stand N650 and for those unavailable to attend you ca contact Richardson directly at susannah.richardson@mplsystems.co.uk

 

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Jan Van Veen guides us through the findings of the research his organisation have recently undertook to establish what drives momentum and continuous improvement amongst service organisations...

More and more manufacturing companies are recognising the huge potential in services and understand that pursuing these opportunities, is not easy.

Growing a solid service business, affects its business model, and therefore requires active support and buy-in, with the service department- from many stakeholders and the management board.

As a business leader, you are likely to recognize the following:

• Ongoing performance issues with few adequate and sustainable interventions.
• A slow execution of strategies and projects, with limited results.
• Too little attention for preparing future success in a rapidly changing corporate world.
• Lack of collaboration and alignment between departments.
• Lack of ‘buy-in’ for driving service business.
• Lack of members, within an organisation who understand the impact of IoT, Big Data, cognitive computing, and globalisation- failing to actively to collectively upon it.

In my experience, the biggest obstacle for companies is their ability to adapt to, and drive necessary change. Common approaches, such as change management and leadership, more communication and training, stronger business cases, and increasing the ‘sense of urgency’ has unfortunately made little difference.

But, just imagine how it would be if everyone in your company was eager and passionate about driving changes, adapting to them and seizing new opportunities. If colleagues from all departments joined forces and collectively got things done.

Imagine not needing to push, mould, or fight resistance.

What if your people were so engaged and committed that they naturally drive success and change? This may sound unrealistic, but what if you could actually achieve it?

This very idea inspired me to investigate into manufacturing companies. I delved into the ‘key success factors’ for quicker, easier, change and adaptation.

Not only was this for long-term business and service innovation, but also streamlined strategy execution, project implementation, and immediate intervention for performance related issues. My aim was to find the root cause for the lack of change, growth, and adaptability in businesses.

During the year 2016, I conducted research with a range of manufacturers.

Most of the 89 participants in the research were manufacturing and technology companies in the for B2B sector.

They ranged in size from 500 to over 10,000 employees, and into multi-billion US dollar annual revenues. They are typically driven to make significant changes by external influences such as Internet of Things, Big Data, algorithms, commoditisation, globalisation, and so on.

The Findings:

The results of the research indicated that most companies lacked ‘momentum’ for continuous change and adaptation.

Typical symptoms of this are:

• Inadequate levels of collaboration between departments and teams.
• Inadequate levels of coherence of initiatives and strategies across the organisation.
• Inadequate levels of engagement from employees.

The organisations still maintain the traditional ‘top-down’ plan and control management approach,Inadequate levels of engagement from employees which induces resistance to change, therefore reducing ‘momentum’.

The most successful companies withhold more momentum, and are more capable in adapting to, and driving change- making them thrive. Typically, they benefit from higher growth figures, stronger service businesses, better customer loyalty and higher people engagement.These companies have adopted stronger ‘sense and respond’ management practices, which prevent resistance towards change, from the existing status quo.

So, what is Momentum?

An organisation has Momentum when its people are fully engaged. They continuously drive change and sustainable growth in line with an overall strategy but without detailed centralised control. They have an emotional connection to a bigger purpose and feel confident to make interventions in products, services, business models and performance. They are sensitive to threats, opportunities and obstacles and quickly adapt to them. Above all, they are eager to work as one team and use change to generate energy, not burn it.

How to get more Momentum?

The research report provides an overview of the Momentum Framework, which is based on the best practices from the most successful companies.

This document describes the following topics of the Momentum Framework:

• The three Momentum Perspectives, driving the underlying philosophy and culture.
  • People drive change
  •  Capabilities drive performance
  • Future success lies beyond business as usual
• The Momentum Practices, consisting of the following three sections:
  • Compelling direction
  • Strategic dialogue on all levels and across all departments and teams
  • Continuous learning, as an organisation and individual

Are you interested in driving more Momentum for easier and efficient ongoing change, just like the industry leaders? Download your free report now @ www.moremomentum.eu/report

 

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The 'uberization' of field service is a topic gaining much traction of late, could the gig economy alleviate pressures for field service companies meeting ever increasing customer expectations of shorter appointment windows or will it present too much of a challenge in terms of maintain brand standards in an age where customer satisfaction reins supreme?

This excellent infographic from ClickSoftware reveals some interesting findings from a recent research project they've undertaken on this topic...

 

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Want to know more? A full white paper based on this research is available to Field Service News subscribers. If you are a field service professional you can subscribe now for free and get this white paper sent straight to your inbox. Simply click here to subscribe now!

 

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Bill Pollock, President, Strategies for GrowthSM guides us through how he sees the future of our industry shaping up in the next few years...

As we enter the uncharted waters of 2017, it becomes increasingly important for Field Service Organisations (FSOs) to understand the specific impact that the next 12 months (and beyond) will have on the quality of their field service operations.

In fact, the future state of Field Service Management (FSM) will depend largely on what strategic actions global FSOs plan to take in the next 12 months or so.

Since these actions will be directly linked to the multitude of drivers that are most likely to influence decision making within the global services community, this would be a good place to start.

 

The results of Strategies For GrowthSM‘s (SFGSM) 2016/17 Field Service Management Benchmark Survey reveal that the top drivers cited as influencing FSOs today may be categorised into three main areas:

1. Customer demand and/or preferences
2. Need to improve service workforce utilisation, productivity and efficiencies
3. Internal mandate to drive increased service revenues

When asked to cite the top three drivers currently influencing their ability to effectively manage field services operations, 56% of respondents cite customer demand for quicker response time, and nearly one-third (32%) cite customer demand for improved asset availability.

However, the need to improve workforce utilisation and productivity is also cited by a majority (51%) of respondents as a top driver, followed by the need to improve service process efficiencies (39%).

An internal mandate to drive increased service revenues is then cited by 31% of respondents as one of their top three drivers.

Once the key market drivers are firmly identified, FSOs need to create – and implement – the most effective strategic planning actions to address them head-on.

As reported in the SFGSM survey, the most commonly implemented strategic actions, currently, are:

• 48% Develop and/or improve KPIs used to measure field service performance
• 40% Invest in mobile tools to support field technicians
• 36% Automate existing manual field service processes and activities
• 31% Integrate new technologies into existing field service operations
• 30% Provide additional training to field service technicians and dispatchers
• 26% Improve planning and forecasting with respect to field operations
• 25% Increase customer involvement in Web-based service process
• 24% Provide enterprise-wide access to important field-collected data

These data strongly suggest that there is a pattern of synergy among the top four cited strategic actions that builds a foundation for all of the other actions that will ultimately be taken by the organisation; that is, that nearly half of the FSOs comprising the global services community already recognise the need to build and/or improve their KPI ¬-measurement program – this is essential!

This is the first step!

However, along with the development and/or improvement of a KPI program, nearly as many organisations also recognise the need to invest in state-of-the-art mobile tools to support their technicians in the field, while concurrently, automating their existing manual field service processes and activities to provide an enterprise-wide foundation for collecting data and information, and disseminating this process to field technicians (and, in many cases, to their customers) on an as-needed basis.

Further, about one-third of FSOs recognise the need to integrate new technologies into existing field service operations to make it all come together.

 

This synergy is built on, first, ensuring that there is an effective KPI measurement program in place, and using that program to establish a benchmark, or baseline, for measuring the organisation’s current field service performance.

Second, there needs to be a comprehensive internal effort to bring the technical aspects of services operations into the current (and future) timeframe – this can be done mainly by investing in an effective package of mobile tools to support the field force.

Finally, it will be the integration of these new technologies (e.g., mobility applications, the IoT, wearables, 3D printing, Augmented Reality (AR), etc.) into the overall mix of resources and tools deployed by FSOs that will empower the field force do their jobs more productively and efficiently.

The desired results, of course, would be the improvement of service delivery performance and the resultant improvements in the levels of customer satisfaction (and retention). Even the concept of Servitization, or the “transformation process in which a manufacturer shifts from a product-based business model to a services-based business mode”, could not exist in its present form without the power of the IoT behind it. In fact, it may be argued that there would be no Servitization without the IoT!

Among the many benefits that an IoT-powered Servitization model brings to the table are:

• Provides a competitive advantage with respect to the organisation’s ability to offer a state-of-the-art, differentiated, services offering that may also be “branded”, thereby providing an additional means for marketing and promoting its services to a hungry-for technology services marketplace.
• Yields increased margins for the services organisation, resulting both from improvements made on the supply side (e.g., by cutting the costs of delivering services through remote means) and the demand side (e.g., the ability to charge a premium price for premium services); etc.
• Provides the ability to more evenly forecast, predict and realise revenue streams through the implementation of remote diagnostics and predictive modeling.
• Fosters more meaningful partner relationships with customers through the sharing of equipment service data/ information, and allowing customers to be more proactive in the ultimate service and support of their installed base of equipment (e.g., initiating service calls, ordering parts, tracking problem resolution, etc.).[/unordered_list]

The future looks particularly bright for the global services community! How do we know that?

Because the future is already here – especially among the more progressive – and aggressive – FSOs that will likely lead the rest of us through these uncharted waters in 2017 and beyond.

It just looks like now may be the time for all of us to follow their lead!

 

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Michael Blumberg, President of Blumberg Advisory Group gives us an insiders view of how to ensure our customers understand the true value of extended warranties and service contracts...

Warranty Attachment and Renewal rates are Key Performance Indicators (KPIs) that measure how successful a company is in marketing and selling extended warranties and extended service programs. Ideally, a company would want to achieve attachment rate of 50% or higher and renewal rates of 75% or better. This is considered best in class performance.

Only a small percentage of companies have been able to achieve these targets.

Key findings from Blumberg Advisory Group’s recent survey on extended warranty benchmarks and best practices indicate that only 30% of companies have achieved attachment rates of 50% or more. In fact, 16.7% have achieved attachment rates of 70% or better. While the majority (59.5%) of companies experience renewal rates of 75% or more, only 22.5% have achieved renewal rates greater than 90%.

There are several best practices that companies can pursue to achieve best in class performance on KPIs related to marketing and selling extended warranties and extended service program. Most significantly, service portfolio design plays a critical role in influencing attachment and renewal rates. The truth is that customers will purchase these programs if they feel that they will effectively meet their needs. That’s’ why it is important to specify what’s included in the program from the perspective of features, resources, and coverage.

 

It important to include both basic and value-added services as part of the program. The more extensive and focused the services, the more likely the customers will be to buy. Nearly all the companies surveyed (93.2%) provide basic corrective failure as part of their program. Only 50.4% include preventative maintenance. Less than 40% offer a broader array of value added services such as calibration, inspection, recalls, and disaster recovery as part of the portfolio.

Indicating the level of service commitment, the customer can expect to receive is also important when it comes to selling extended warranty and extended service programs. Only 58.1% of companies have defined onsite response times as part of their programs, 39.3% specify parts delivery times, 29.9% and 31.6% respectively commit to the repair time and remote resolution times, and 15.0% will provide a loaner unit if repair time target is not met.

The way in which these programs are promoted can also impacts KPIs. Most companies surveyed rely on direct mail (74.8%) and brochures (68.0%) to sell extended warranty and extended service programs. Most respondents (58.5%) indicate that direct sales have been very effective when it comes to impacting attachment rates while only 26.6% believe that brochures are as effective. Interestingly, survey respondents agree that other tactics are just as effective. For example, 50% of respondents indicate that endorsements and testimonials are very effective as is reputation management (49.1%), telemarketing (32.0%) and public relations (28.9%).

 

Frequency of communication is also a critical driver when it comes to influencing attachment and renewal rates. Almost half (49%) of respondents indicate that they sell extended warranty and extended service programs any time after the original product sale which means the capture revenue at any point in time during the product’s lifecycle.

Only 28.0% notify customers 90 days or more in advance of when their programs are up for renewal and 36.0% provide more than 3 notifications that there contracts are about to expire. More importantly, most (60%) respondents upsell their programs during the warranty entitlement process.

As result, they experience incremental improvements in attachment rates; 36.5% indicate they have experienced a 10% to 25% improvement and 20.1% have experienced a 26% to 50% improvement from pursuing this tactic. In summary, the survey findings suggest that best in class companies follow a structure and disciplined approach to marketing and selling extended warranties and service programs. They do not view sales of these programs as a one-time even to be made only at the product point of sale. Indeed, they sell beyond the original point of purchase and align attachment and renewals with the customer entitlement process.

 

Furthermore, they promote their programs through a wide array of marketing communications tactics and rely on frequent and timely communication to get their message across. Most importantly, they ensure their programs are designed to meet the needs of their customer and are very specific about what the customer can expect to receive in terms of service feature, resources, and coverage.

 

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Research reveals that one third of organisations are challenged with gaps in skills, yet only 5% will increase their training to meet the changing customer demands in the future whilst 60% stated a future adviser should be able to handle complex interactions, yet only 11% stated advisers should have decision making skills...

Based on new research [1], UK customers are likely to find themselves dealing with contact centre agents who are untrained to service with their requests.  The research, commissioned by outsourced contact centre specialists Kura in partnership with the CCA (Contact Centre Association), set out to understand where businesses were positioned today and their ambitions for the future.

Responses from across 74 organisations were gathered to reveal current challenges, barriers to improvement and predictions for the future of the contact centre agent.

Although a third of organisations surveyed recognised that they have a skills gap with staff not fully equipped to answer the needs of their customers, only five per cent have committed to increasing their training budgets to address this.

“Whilst many organisations look to broaden their multi-channel offering, this places an added strain on agents who are then dealing with a greater number of channels.” said Brian Bannatyne, Kura’s Chief Executive. “While simple queries can be resolved through self-service offerings, more complex interactions across multiple channels would need to be handled by a well-trained agent.  If this interaction is dealt with poorly, it could have a serious impact on the customer relationship and future business prospects.”

 

Interestingly, according to the survey, the two skills most desired in contact centre agents of the future are the ability to handle multi-channel interactions (76%) and a high level of training to service complex interactions (59%) highlighting the increasing demands on contact centre agents.  This is supported by the fact that two-fifths of respondents believe that the primary purpose of today’s contact centre is to improve service by handling more complex requests.

“Based on the results of this study, most would agree that the days of the transactional contact centre are limited yet many are delaying the investment in agents that will be required to adequately service the customer of tomorrow.” added Brian Bannatyne.

“Not addressing this training deficit now will only cause greater frustration for agents and more problems down the line as the demands of the average customer continue to evolve.  At Kura, we do things differently, we’re not like other organisations, we’re building a unique culture that looks after people.  When you build a culture that looks after people, you grow people who look after customers.”

The key challenges identified by the contact centre professionals surveyed included ‘Increasing customer self-service’ (68%) and ‘Reducing customer effort’ (61%).

Participants in the research were from organisations in both the private and public sectors, including outsourcing organisations as well as in-house contact centres, responsible for different-sized operations.

 

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[1] These statistics are from new original research from CCA in partnership with KURA where 74 organisations shared their opinions on future service strategies – Oct, 2016.  The survey findings were analysed and interpreted in a desk research phase alongside contextual information from other sources including CCA’s research archive.

 

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