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The LAER Effective Company
Imagine you work in an organization where you get paid up front and every time you get called to provide a service, you are essentially eroding the organization’s profitability. Your organizational motto is “Get in, get out, and get to the next job”. Now imagine you work at another company where you also get paid in advance, but during each call for service, you help the customer get more from their purchase and expose them to new value-added services, in addition to fixing the problem. Finally, imagine the differences between the two organizations in terms of:
Before we detail all the differences (and there are plenty!), we have to answer the most important question: Why would I even want to change to this new Field Service organization?
In the new consumption-based world that customers are dragging suppliers into, the majority of revenue will actually come after the initial sale and installation of a product. Service interactions become key opportunities for suppliers to earn the right to expand their share of a customer’s wallet. With the 35-40 on-site incidents per month, each field service engineer is in a prime position to support this goal. In fact, when Field Service organizations effectively implement industry best practices to drive customer adoption of products and services, account renewal rates increase by up to 7 percentage points. In addition, cross-sell/upsell opportunities are generated at less than $15 per lead, significantly lower than traditional methods.
To keep your Field Service organization relevant, you will have to bring that imagined new field service organization to reality while continuing to fulfill your foundational service charter. Here are some of the changes you’ll need to grapple with:
You can’t cut your way to growth so there will be less emphasis on the number of incidents per day and you will need to redefine direct hours in utilization calculations to reflect the new work. Your service level agreements will begin to shift away from response time commitments and more towards resolution time, and ultimately uptime commitments. Additional focus will also be placed on first visit repair rates and customer satisfaction. Lastly, new KPIs will need to be incorporated, including customer health and annual contract value.
Traditional field services is very focused on the hardware, whereas the new organization will require a focus on customer adoption of the technology and delivery of business outcomes. As a result, the skills required for field service engineers are changing from technical skills to business skills, from troubleshooting hardware/software to troubleshooting the business process, and from a focus on the product to an orientation on what the senior executive needs. In summary, instead of focusing on what’s wrong, field services engineers will need to be able to describe what “right” looks like.
The old adage is that you get what you pay for. Changing compensation practices from MBOs based on productivity and efficiency measures and towards incentives that support lead generation and a focus on contract renewals will need to be added.
With the help of smart, connected products, adoption has become a data and process-driven effort that provides field service engineers with the right information to present new and exciting ways to help customers while on-site. Other technology enablers include entitlement tracking, knowledge management platforms, and mobility platforms.
The fundamental charter of Field Service organizations will still be based on responding quickly, fixing the issue in one visit, and not having to return in the foreseeable future for the same or a similar problem. However, it will be critical to gain cross-functional support and adjust measures of success to enable customer profitability and product pull through.
I will go into more detail on each of these topics during my Field Services Power Hour, “The New Field Service Organization: New Adoption Role, New KPIs, New Technology, New Compensation,” at our upcoming Technology & Services World Conference. In addition, we have a number of fantastic sessions on related topics including:
Read more posts in the LAER Effective Company series:
Post Date: October 2, 2018
See which key field service trends you need to embrace to succeed.
Vele Galovski is vice president of support and field services research for TSIA. Using his nearly 30 years of industry experience, he has consistently helped companies both large and small drive double-digit top-line growth with a proven retain, gain, and grow strategy. Vele has also written a book, The Perpetual Innovation Machine, which describes a holistic approach to management based on ambitious goal setting, data driven analysis, skillful prioritization, inspiring leadership, and the lost art of employee engagement.
The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.