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Maintaining a “Head Start” in Your Proactive Support Journey

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In a previous blog post “Proactive. Predictive. What’s the Difference?”, I outlined the various components of a proactive support strategy. As a refresher, here they are below:

1- Predictive Service / Maintenance
2- Resource Planning for Predictive Service Operations
3- Proactive Operations Management
4- Proactive Installed Base Management
5- Proactive Customer Communication

In speaking to organizations about their proactive journeys, it has occurred to me that service leaders agree on the necessity of a proactive support strategy, but they’re waiting for the right technology or the right stage of data maturity prior to embarking on their proactive journey.

While I agree that you need a well-established data framework to make proactive customer management decisions, I would encourage leaders to take active steps to get started and to make proactive a business priority. It won’t be long before customers begin to demand this and it definitely won’t be long before competitors begin taking a more proactive approach to customer management. In fact, many organizations have already put programs in place, and while these programs might still be in their infancy or only touch upon one of the proactive strategy components, they are already providing valuable information and insight to the early movers.

The use of the Internet of Things (IoT) data to support predictive maintenance has been taking place for some time now, especially in industries with high-value assets such as Aerospace & Defense, Medical Devices, and Oil & Gas. Organizations in these industries are getting much more precise in identifying future failure events and are getting more intelligent about incorporating data capturing sensors into future iterations of their products.

Organizations in High-Tech manufacturing are taking the lead in proactive installed base management by getting smarter about the coverage of their service agreements and initiating appropriate sales, marketing, and awareness actions to increase revenue capture and to enhance customer retention.

We’ve also seen organizations in High-Tech Manufacturing take strides in proactive customer communication and management. One TSC member in particular has developed a proactive outreach and support program that is based on a customer health index. This index accounts for all the things positive and negative that have happened to that customer and all of the events that are likely to happen in the future. The purpose of the health index is to mobilize necessary customer management resources to prevent a future escalation. This involves prompt resolution of open customer requests, improved response for new customer inquiries, and greater communication between the service provider and the customer. Such customer health indices are becoming more common given the benefits associated with avoiding a customer issue versus resolving a full-blown meltdown.

And in the areas of proactive operations management and resource planning, we see progress as well. In fact, I had the opportunity to discuss the proactive concept with the team at Stedin on a recent webinar (Download Recording) hosted by TSC partner ClickSoftware. Here is a short excerpt from our interview that focuses on the predictive field service and operations management.

Q: How does Stedin view the concept and idea of predictive field service?
A: Predictive Field Service fulfills a vital role in driving the operational excellence within Stedin Meters & Connections. It’s more and more becoming the basis for meeting our goals on first-time-right-customer, first-time-fix, and net promoter score. These in turn allow us to meet our legal obligation of offering all our 2 million customers a smart meter by 2020. We have also followed the concept of Think Big, Start Small.

Stedin has embraced the Agile mindset, and for us this means we like to start new initiatives by first proving our assumptions with a small and relatively easy to realize proof of concept before moving on to bigger initiatives. Digital Transformation

Q: Which areas of the 5 (highlighted by TSC) are ones where Stedin is actively making investments? Why?
A: For now, we have been focusing on predictive operations management and predictive resource planning because these were the areas we thought we could make the quickest and easiest improvements. They are also the areas where the biggest benefits and return of investments could be made.

What’s also important to mention is that every project we do has to have direct added value to the four operational goals within Meters & Connections: Quality & Safety, Productivity & Finance, Employee Satisfaction, or Customer Satisfaction.

Our conversation then focuses on the specific (and very interesting) predictive solutions that Stedin is actively using and the accompanying results experienced. You can listen into our conversation via the on-demand webinar. Feel free to skip through my part at the beginning, especially if you have read my first blog. On listening to the team at Stedin, one can see the predictive and proactive isn’t a future state, it’s something that’s very real right now.

For more insight to how service leaders are incorporating proactive service as part of their overall digital transformation, see our research on Digital Transformation for theService Enterprise.

Sumair Dutta previously served as the Chief Customer Officer for The Service Council™ (TSC).

2012 Service Management Expo (Birmingham UK) Post-Event Analysis

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The 2012 Service Management Expo held in Birmingham UK in late September was a success on many levels. Representing “Europe’s only dedicated event for field service management,” the Expo welcomed more than a thousand leading UK- and EMEA-based professionals in the service management industry over two days, focusing on the key issues that comprise Smarter Services, including driving efficiencies; providing high-value, low-cost service; and cultivating a service culture to drive revenues.

Participants were treated to more than 20 speakers who touched upon topics including service team transformation, unleashing the hidden potential in service management and investing now for a stronger future.

The Service Council’s opening day Keynote centered on “Smarter Services: Learning from the Leaders”, where Bill Pollock, President & Chief Research Officer, was honored to present highlights from our current benchmark survey on “The Role of Service Culture in Driving Service Revenues.” Key takeaways from the Keynote included:

  • 79% of respondents cite service as a “top priority” within the organization (although more than a third of this response represents organizations that are “lacking in the resources to manage it effectively”)
  • 67% of respondents report that service is currently being managed as an independent profit center with its own P&L, with 25% running service as a cost center
  • Half (49%) of respondents are currently developing and/or improving the specific metrics, or KPIs, they require to measure service delivery performance
  • 40% of respondents are currently in the process of automating existing manual activities

To support the specific findings from the survey, individual case studies were also presented for six representative services organizations on key service performance-focused initiatives including benefiting from call deflection (Acer India), use of technology for expediting revenue recognition (Amtrak), turning information into insights (IBM), impact of Customer Care Teams (Philips Healthcare), customer advocacy (Sears Home Services) and staging a market turnaround (Sprint). More information on each of these case studies is available to members of The Service Council via the Thought Leadership icon on our website (www.theservicecouncil.com).

Our survey was closed earlier this week and the results are being compiled. Stay tuned for several research analysis outputs available in our readership library soon (including the summary findings this Friday!).

Until next time, keep your customers satisfied!

Has Your Organization Embraced A Smarter Services Culture?

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The Evolution of Services

Henry Ford once said, “A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” This quote dates to the early 1900’s, and as the founder of one of the leading pioneers in the manufacturing-centric automotive industry (and global economy, during this era), Henry Ford was well ahead of his time. Many manufacturing-centric organizations have and still face stiff margins as a direct result of product commoditization, Low Cost Country Sourcing (LCCS), economic climate pressures and increased customer demands, resulting in a challenging environment in which to compete based solely on product alone. Enter services.

Services, traditionally viewed mainly as a cost of doing business, over time has evolved to be embraced as a strategic profit lever. Roughly two-thirds (67%) of responding service organizations to The Role Of Culture In Driving Service Revenues benchmark survey indicate they view service as a strategic profit center. We have witnessed many noteworthy occurrences over the 21st century of this evolution from a cost center to a profit center. Digital Equipment Corporation’s evolution into a services-led organization began in 1957 with the establishment of its core philosophy, “Do whatever it takes to make our customers successful”. In 1994, 3 years prior to its eventual acquisition by Compaq, services accounted for 46.5% (US$6.3 billion) of total annual revenues (US$13.5 billion). Of course, we’re all familiar with Louis Gerstner’s successful turnaround of IBM, including his Operation Bear Hug strategy, which emphasized “The customer was going to drive everything we did in the company”. (Who Says Elephants Can’t Dance?, 2003). When Gerstner left IBM in 2002, services accounted for roughly 45% (US$36.5 billion) of total revenues (US$81.0 billion).

Are Services Becoming Commoditized?

In the book The Experience Economy, co-authors Joseph Pine & James Gilmore address the phenomenon of commoditization in the global economy. Their suggestion is that in sequence, we’ve witnessed how commoditization swallows raw materials and then goods, with services next up on the menu. Pine & Gilmore conclude, “You are what you charge for. And if you’re competing solely on the basis of price, then you’ve been commoditized, offering little or no true differentiation. What would your customers really value? Better yet, for what would they pay a premium? Experiences. The curtain is about to rise on…a new economic era in which every business is a stage, and companies must design memorable events for which they charge admission”. Interesting viewpoint…

Smarter Services

The Service Council defines Smarter Services as a company-wide recognition of the role and importance of service as it impacts customer centricity, satisfaction, loyalty, retention and the overall customer experience. It represents the healthy balance that links issue resolution, service profitability and happy customers; and delivers a consistent and effective customer experience across all channels at every phase of the customer journey.

The Service Index

The Service Council has established a proprietary benchmark framework that services organizations can use to measure the efficiency and efficacy of their service operation: The Service Index. The Service Index measures seven essential factors, including: People, Process, Data, Customers, Parts, Technology and Social Media.

  • People: How engaged are your employees? Are they motivated to be engaged?
  • Process: How automated is your service delivery process?
  • Data: Have you established a repository of / access to data that enables issue resolution? Have you eliminated data gaps, which create profit gaps?
  • Customers: Are your customers happy, loyal and retained?
  • Parts: Are you balancing lean principles with parts availability? Are you realizing profit margins on parts pricing?
  • Technology: Are you realizing the true automation potential of technology? Has your organization embraced the use of technology?
  • Social Media: Are you leveraging social insights to understand brand receptivity, and to proactively/predictively improve the customer experience?

Recommendations: Your Path To Smarter Services

The Service Council recommends global service organizations consider the following actions to embrace a Smarter Services culture:

1)    Establish meaningful metrics to measure service performance (i.e. The Service Index and its impact on Service Profitability: Smarter Services).

2)    Embrace a predictive service model, leveraging social (media) and local (voice of customer/market) intelligence to understand and be more responsive to your market.

3)    Move beyond a one-size-fits-all approach to service: a diverse customer base requires a diverse approach.

4)    Understand the expectations and requirements of specific customer segments, and alter your services in accordance with the current and potential value of those segments.

5)    Avoid overinvesting in specific aspects of the experience and service delivery process that customers do not value commensurately with the cost of delivering them.

6)    Create more predictable customer behavior and, ultimately, higher loyalty and retention within your company’s most important segments.

7)    Foster collaboration across the entire enterprise. Every customer interaction point is an opportunity to impact customer experience.

8)    Embrace Feedback Loops: listen to your customers, employees (regardless of hierarchy), channel partners and the overall marketplace.

9)    Track and trace cost avoidance opportunities (e.g. asset-centric industries: non-serialized components and warranty tracking; and professional services-centric industries: call avoidance opportunities, such as the Sprint case study).

10)  Understand the importance and potential impact of service and lead the Smarter Services revolution!

TSC Launches Service Connect

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The Service Council has launched “Service Connect”: a new networking site that allows service-industry professionals to share, shape, and sharpen ideas in an direct and immediate way.

Activate Your Service Connect™ Membership Learn More

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