There must be a special DNA segment that prevents some Company to fully explore its Service business...
Dear Fellow Innovator,
I have been recently invited at two different Clients' events,
whose contrast in approaching their "Service" side of the business
made me wonder once more if there is any special cause
why Service is often poorly embraced, despite its promising returns.
The first event was a workshop about the latest cooperative trends
into the healthcare industry, between public institutions and private companies.
Here the "service" idea was fully embraced.
the levels of interaction with the client have been clearly defined by a framework,
where Service Levels were assigned to distinct Goals:
Service Levels and their Goals:
Level 0: providing a solution
Level 1: providing a service that take care of your solution
Level 2: providing a service that take care of the process that uses your solution
Level 3: providing a service that take care of the Client's business relying on your solution
Level 4: partnering with the Client to share the risks and rewards of a business relying on your solution
The degree of complexity, of responsibility, of risk, grows with the service level.
But the same does the level of customer's understanding, of customer relationship, and, of course, the level of margins.
The second event was an in-house exposition - an open day organized by an OEM whose business in these days is steaming full power ahead.
Here I felt a bit like going back to my first years of work experience
when the company I worked for, just bought by General Electric,
had only an embrional Service business.
At that time, only the level 1 was offered to Clients:
namely: Spare Parts, installation services and trouble shooting.
It took just few years to GE to reshuffle the Service organization
introducing Service Agreements, Global Services, and risk-sharing retrofits and revampings.
It was tough, but it was rewarding:
After few years the Service component of the business was almost half of the total revenues,
with a contribution level that was on average 2.5 times the one of the "products" business.
The basic ideas about Service Market model, Service value proposition
and Service organization have been used by me on a couple of recent projects
aimed at boosting the Service side of a small Rotating Equipments OEM and of
a provider of complex industrial plants systems, resulting in an increase of
service revenues up to 30% in certain segments, after just a couple of years.
So the question remains:
what prevents companies to pursue a better service strategy?
Today, with all the best practices and tools out there, I found only one reason:
It must be genetic.
In case you do not feel this way and you are ready to embrace a new course for your service business, You may want to consider to give me a call, to set-up an appointment to know more about how I can help you in this initiative.
Just give me a call at +39 349 648 2225
(you have plenty of time: Now, at breakfast time, when you drive to work, wait at the airport...)
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