The Service Council™ recently concluded its annual Service Leader’s Agenda benchmark survey. This is a research effort where we summarize critical focus areas, internal/external pressures, investments and transformations. It is always a great signal to the market of how best-in-class organizations are building their priority lists. (We recently walked through these findings on a Smarter Services™ Webinar, which you can access here). You can derive a lot from how investments are either contracting or being dialed up. Here are just a few of our observations and viewpoints.
On Technology & Digital Transformation…
Digital transformation, digital transformation, digital transformation – the dominant theme of the last several years. While 6 out of 10 service executives are planning to increase their year-over-year technology investments, this is a 15-point drop year-over-year from 2022 (76%). That is not insignificant. The recent State of the Market Digital Transformation benchmark survey revealed the #1 new technology investment was Field Service Management (FSM) and the #3 expanded investment was Customer Relationship Management (CRM). This is also not insignificant. These investments signal a theme: “consolidation”. Service executives have long wrestled with too many disparate customer databases and redundant technologies within the enterprise. A race for market share appears to be upon us, as FSM and CRM tied at 40% market share each, according to a Service Council™ recent LinkedIn poll.
On Customer Understanding…
4 out of 10 service executives plan an increase in “customer understanding” investments. Why is that significant? Investment in customer understanding was completely absent from year-over-year investment trends. With customers demanding accessibility, speed, agility and personalization, we are witnessing service executives invest much deeper in “voice of” type analysis, but also projecting the path forward and predicting customer expectations over the next 5 years. What are the priority areas being looked at closely?
- How dependent on, accessible and effective is our self-service platform?
- Do customers truly prefer the lower cost remote support option service executives are building greater energy around?
- How important is speed and responsiveness vs. credibility and capability?
- Are customers willing to pay for predictive, proactive and more advanced services?
- Is sentiment, loyalty, retention and advocacy impacted negatively where customer effort is seemingly increasing in a self-service type setting?
These are just some of the areas we hear as top considerations of deepening customer understanding.
On Hiring & Training…
Whoa! Stop the presses. Service executives are shifting attention from acquisition and onboarding to retention and engagement. I heard during our board meeting from countless board members the notion of having a blank check to hire as many frontline agents as they could attract. I don’t hate it. In fact, this is an encouraging trend. According to the 2022 Voice of the Field Service Engineer (VoFSE) benchmark survey (~2,000 technician respondents), 65% of Gen Z, 67% of Gen Y and 54% of Gen X indicated they were not committed to the profession (either they’re not sure or definitely not). 1/3 of these younger demographics would be departing the role within 1-3 years. Labor shortage much?
On Compensation…
Building on the shift to engagement, 3 out 4 service executives are planning to increase frontline wages. Engagement is certainly dependent on wages (other 
considerations: listening, mental health & wellness, career path, training, etc.). We continue to hear a focus on hiring for will and training for skill. With digital transformation efforts pointed towards upskilling and reskilling and creating the same empowerment potential regardless of experience, upping the ante to attract the right talent is not only a good approach, but a requirement. The tricky side of this is not disenfranchising your existing frontline agents and seeking to increase their wages on a similar if not larger scale (shouldn’t they be rewarded for loyalty and longevity?).
You know what’s great? We talk about burnout, engagement challenges and the requirement to increase wages for our frontline. Lost in the shuffle are our service leaders who are steering the ship. Very encouraging to see that just slightly below frontline, 65% of service leaders indicate leadership wages will increase year-over-year. This is a very well deserving focus on retention of leadership. We continue to hear more and more about succession planning and the future development of service leadership.
On Growth & Expansion… 
An interesting trend that we have been following very closely is how many service leaders are investigating the ability to reconstruct and standardize their global commercial offerings. In a recent research project conducted by the Service Council, nearly unanimously, there are greater than 3 versions of service offerings (bronze-silver-gold-platinum, tier 1-tier 2-tier 3, basic-premier-exclusive, etc.). An ongoing trend that is worth following is the movement to predictive and proactive service which has dominated the agenda for the last 5+ years is starting to shift towards “how do we commercialize these offerings”.
Further to service product portfolio expansion, 56% of service leaders plan to increase the number of products under service and 42% plan to increase their service operation globally. Expanding your service organization globally requires many considerations including standardization vs. localization, digital platforms and more. This trend seems ambitious, but it also signals that 2023 will be a year of “growth,” rather than “business continuity,” despite economic headwinds and economic and geopolitical uncertainty.
On Supply Chain…
We continue to hear a strong focus on creating resiliency, agility and redundancy with supply chain efforts. In a recent podcast featuring Shannon Beecher, Vice President, Service Supply Chain of IBM (link). Shannon talked about near- and on-shoring, the importance of re-manufacturing and circularity and much more. The Circular Supply Chain can be a source of replacement parts, cost reduction, revenue and can be the critical ingredient to customer experience. A common theme we are following closely is the deployment of incentives to customers, partners and extended service networks for the return of dirty core to fuel the circular economy.
Summary
Lots of competing priorities. How are you dialing up or recoiling on investments? Are they different than your peers? We would love your feedback. To stay up to date with our new research and participate in forthcoming surveys, sign up for our newsletter.
