Over the last few years, we’ve seen the incredible power of service take its rightful place as a key driver of business growth for forward-thinking companies. I’ve spoken before about the many different reasons why that is, but when the rubber hits the road, what does it take to make service a winner for your business?
Revenue, whether it be from service or anywhere else, doesn’t just suddenly materialize out of thin air when a business adopts servitization. Revenue comes from the same place it’s always come from: sales. Tapping the revenue-growing power of service really means redefining the boundaries of sales.
This has taken on even greater importance within the specific context of our current moment. While we’d love to think that businesses have been proactively moving towards new business models (and many have), an avalanche of reactive business decisions—responding to the current moment—make business changes like these even more important than before.
Now when we’re talking about the convergence of sales and service, I’m by no means suggesting that your sales associates should start taking appointments, nor that your service technicians should start cold calling people, but there’s an opportunity for collaboration, communication, and, yes, a little bit of cross-promotion. And this goes both ways, too. Sales needs to adopt a more service-oriented mindset, and service needs to be equipped with the tools to sell. And if you are struggling to drive innovation, get your sales, service and product people together to develop business models and manufacture products that drive service revenue.
What should this look like in practice? Let’s look at traditional sales roles first.
Going Beyond the Pitch
It’s one thing to start selling service. It’s something completely different to make service part of your sales DNA. Service done well represents an honest, reciprocal, and communicative relationship with your customer. Sales, of course, is often the first relationship that a customer has with your company. Because of that, you want to be able to say, “You know the great relationship you have with me? I want you to have an even better, more beneficial relationship with my team.”
For this to work, service can’t just be a line item in a contract. It needs to be a promise to support specific outcomes. Sales needs to say, “If you do business with us, we’ll keep output at 98%, we’ll resolve downtime in no more than 24 hours, and we’ll build in proactive measures to eliminate as many issues as possible before they even start.”
Of course, you can’t just say those things. You must have the tools, technologies, and team to actually get them done. Getting that right is something that I’ve talked about before (and will certainly talk about again!) but with the adoption of all of these new technologies, you can get sales on board by making them part of the training and decision-making process. Player-coaches will emanate the message and make it less of a top-down directive, and provide something organic that can drive the innovation in business models to meet customer demand and grow your service revenue faster. To make that work to its fullest, emphasize the benefits that service offers to sales—increased customer retention, and an opportunity to sell benefits rather than just products.
We know that this works. In a recent study that IFS developed with IDC, we discovered that firms with strongly-embedded, mature servitization plans are five times more likely to grow revenue faster than 5% annually. That’s no joke, and you can ignore that at your own peril. It also points out the symbiotic relationship between sales and service.
For sales to get the message, and become part of the team, service, too, must adopt a more sales-oriented mindset. Again—this is aided through smart service technology, which can instigate sales questions based on circumstances tied to customer needs and the new business models that can be enabled by technology. It can be as simple as knowing when an industry’s peak season is, and automatically scheduling service or providing targeted marketing during that season. You can also build triggers into your parts software that recommends a system upgrade after a certain cost threshold is reached. These simple things, built into a broader network of relationship building, double the benefit to your business. They help you sell, sure, but by being prescriptive, they allow you to build real relationships with your customers.
The bottom line is this: To compete in this changing marketplace, service and sales need one another – especially as you “servitize” and move towards outcomes-based service. Getting service right is paramount to the success of any brand or business today. Packaging that service in a way that builds up customer loyalty to your brand and topline revenue is a challenge that requires all hands on deck — and will pay dividends.
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