Sales Archives - Page 3 of 4 - Sales DNA and a Service heart

Equipment as a Service

Do you want to own a car, or do you want to drive it? Do you want to buy and maintain a piece of equipment, or do you want to operate it?

In our business practise we often have these conversations when reminiscing on what really matters to end-users. We tend to believe it’s about outcomes and value, call it Servitisation. Still we see a lot of conventional decision making focussed on the product and associated Capex.

Voice of the Customer

According to a research by Accenture^[i] around 10% of the life cycle cost is linked to designed and acquisition. The other 90% of cost is incurred during maintain, operate and disposal. Thus, it is not surprisingly that we witness an increase in customer awareness concerning the maintain and operate phase of a product.

The maintain and operate phase is as important to the customer as it is to the supplier. Witnessing dwindling margins on the product sale, suppliers are (re)focussing on the profitable margin contribution of maintain and operate services. At the same time customers are trying to reduce their operational expenditures. Focussing on the voice of the customer is often the path to finding a long-term partnership compared to short-term commercial “victories” of either party.

We want to reduce our operational expense but realise that we need the supplier in the long run.

Why should I own the Product

The road to servitisation often starts with a simple question: “if I only want the value/ outcome of a product, why should I bear the risks of owning it while the supplier holds all the knowledge about the product”.

Rolls Royce “invented” Power-by-the-hour offering because the Royal Airforce demanded a fixed cost per hour in 1962.
Philips created Pay-per-Lux in 2015 as a result of an academic experiment with Schiphol Airport only requesting light.
Bosch Siemens Hausgeräte offers refrigeration-as-a-service to housing corporations reducing total cost of ownership while at the same time minimising ecological footprint.

The common thread in the above three examples is that these manufacturers transformed their business model from one based on Capex and Title Passage to one based on Pay-per-Use and partnership.

It’s a matter of looking at a bigger picture beyond the typical functional boundaries inside any organisation:

Apart from the one-time-sale, what is the “win” for a manufacturer in selling a piece of equipment the customer is not able to use?
Apart from a short-term saving, what is the “win” of a discount for a customer when it stiffens innovation?

The transformation towards outcome-based service contracts enables both manufacturer and customer to define mutual and sustainable value.

A Product is the carrier of its Outcome

Leap of Faith

To a certain extent buying/ selling a Service rather than a Product is a leap of faith. Both manufacturer and customer are in for a paradigm shift.

A manufacturer will have to recalibrate from the concept of infrequent revenue recognition to sustainable margin contribution.
A customer will have to disconnect the outcome of a product from owning it.

Thus, we see manufacturers and customers not completely abandoning the Capex & Title Passage business model, but we see them adding a business model based on outcome-based services once their mindset embraces the bilateral value promise.

Gartner^[ii] expects that by 2023, 25% of commercial or industrial OEMs will offer IoT-connected product(s) via outcome-based service contracts

Seconding the transformation towards outcome-based services is the rise^[iii] of the role of the Chief Revenue Officer (CRO). With a lesser margin contribution from the product sale organisations are looking at means to tie in the margin contribution of services. With a CRO organisations are putting all their eggs in one basket regarding to drive sustainable and profitable revenue growth. Companies with a CRO are leading with outcome- and subscription-based service offerings.

Digital and Connected

In an outcome-based model the focus shifts from Owning to Using. Digital technology and connected products are the key enablers in understanding and managing product usage.

It starts with creating full visibility of how a piece of equipment performs in the business context of your customer and how costs are incurred in doing so. Next, you’ll need to have a set of levers to be able to influence the both maintenance and operate activities. Lastly, you’ll need to understand how your customer will make money by using the outcome in order define a pricing model.

In a business model based on title passage and transfer of risk to customer there is a lesser motivation for the supplier to invest in digital and connectivity. The greater the motivation is in an outcome-based model where all maintain and operate risks remain with the supplier. Technology becomes a means and necessity to mitigate those risks.

Digital stream lines operations
Connectivity creates visibility and transparency

Customers expect things to work

A second reason to invest in digital and connectivity is an increasing customer expectation that products simply must work. This implies two things:

Prevent a product from breaking.
When it does break, minimise the impact on operations.

Using technology allows us to pre-empt a failure and to minimise the impact of downtime on operations.

In an outcome-based business model both customer and supplier have an aligned interest to ensure availability of the outcome “when needed”. The last two words are essential, because no matter how much you’ll invest in preventing downtime, ultimately any product will break or need maintenance. Thus, it’s the combination of technology and understanding the outcome requirements of your customer that defines the ability to monetise outcomes.

Mutual benefit

With new outcome-based variants in the offing, we often hear the doubt: “What happens when the outcome is made available by supplier, but it’s not utilised by customer”.

For nearly two decades we are familiar with the copying machines example where you pay per copy. Over the years copier companies have perfected their outcome-based model with their customers to mutual benefit. The mechanisms they have created:

Provide consultancy and software solutions to make better and more usage of the deployed copying machines.
If utilisation goes up, the copying machine is replaced by a larger model and the former model is deployed at customers with a smaller demand.
Use price breaks and contract duration to cater to customer cost predictability expectation.

Going back to our own examples. An airline buying power-by-the-hour has a genuine interest to fly the planes. A building owner buying pay-per-lux or refrigeration can only last when having tenants. If you can find the right driver to bill your outcome, outcome-based services are the way forward. In the end we want to use products. We need medical equipment because we value life. We require construction equipment because we need buildings to live and work. We need transportation means because we want to travel. Looking forward, the Gartner prediction may be conservative.

^[i] Insight into Asset Lifecyle and Total Cost of Ownership – Accenture 2012

^[ii] Critical Capabilities for Field Service Management, Gartner 2019 – G00436216

^[iii] Anticipating the Information Needs of the Chief Revenue Officer in 2023, Gartner 2012, G00239551,

3 Reasons Why Results Matter More Than the Product

Increasing machine uptime is at the core of what we do for our customers. We know that more than anything, our customers rely on machines to be online and fully functional in order to deliver results. From the small parts that make up a gamma ray machine to the pipe used in oil extraction, each part contributes to the general function and health of a machine. When the focus of service shifts to outcomes, it is not the value of the product/equipment that drives the equation. Even small and inexpensive components such as a pump or valve may have a tremendous impact. Service is a key component of a machine’s functionality, regardless of the size of the component, and as an organization we are laser-focused on minimizing unplanned downtime to ensure machines deliver positive results.

This perspective is driven by the need for tangible results and marks a tremendous shift in the industry we’ve witnessed over the past couple of years to outcomes over products. An outcomes-based model is where manufacturers focus on selling outcomes of a particular product rather than selling the actual product. For a solar panel farm, for example, the outcome is hours of energy created. Service teams and service providers will someday operate according to this model: instead of promising reactive repairs, service organizations will be responsible for ensuring that equipment is consistently delivering a valuable outcome by maintaining it proactively. Essentially, both the manufacturer and the service providers will be laser-focused on one thing: tangible results.

Here are three reasons why results are more valuable than the product itself – hint: it has to do with their value add past the point of sale:

Uptime Has a Direct Effect on a Company’s Bottom line: Equipment can have every cutting-edge capability in the world, but unless that machine is running smoothly and consistently, it isn’t contributing to company productivity. Like an old consumer appliance that sits stagnant collecting dust, equipment plagued by repairs and downtime draws valuable resources away from the company mission, whether that is to serve patients or facilitate renewable energy sources.
Steady Streams of Revenue: In an outcomes-based model, OEMs have the opportunity to continue providing service well past the point of sale, generating a regular cadence of income for the entire machine’s lifecycle. Since the goal is not only machine uptime but machine output, a product never leaves the cycle of service. Many companies already have service contracts in place which ensure a schedule of service in return of a regularly billed fee.
Customers Value Results, and So Should You: Delivering memorable, superior customer service alongside your product offering is pivotal in customer retention, service delivery, and contract renewals. A company who delivers outcomes and always-on machines differentiates themselves from competitors by providing their customers with more than reactive repairs. Customers are receiving more than machine repair, but peace of mind and the ability to rely on projected bottom lines. In the end, this is a less risky, and more valuable model of service.

Each of these key reasons proves a central point: the future of field service is only as strong as the outcomes it produces. And as the industry moves towards an outcomes-based model, machine uptime, productivity and efficiency becomes a meaningful reality down to each and every small part.

This article is published in ServiceMax Field Service Digital on July 31st, 2018

Driving Revenue Growth

Today most service executives have a revenue growth target. After having delivered cost reductions for decades, the switch to delivering revenue growth is easier said than done. Where cost control stays within the current paradigm, growing revenue requires an entrepreneurial mindset.

When sales people need to grow revenue, their first response will be “Give me a new product, with more features at a better price point. And yes, we need a marketing budget too.” Let’s transpose this mindset to the service domain.

Give Me a New Product

Take a look at your current services portfolio. When is the last time you reviewed this portfolio? How did the services in your portfolio come to be? Was it an internal push or did you create a dialogue with your customer to develop these services?

Whether we use the word disruption or not, there are several changes to take into consideration.

Customer behaviour
Technology
Business objectives

There are two significant trends we see at play today.

From Product to Output to Outcome based services
From Reactive and Preventive to Condition-based and Predictive services

Give Me More Features

At home you may have a lot of products laden with features you do not use. Those features have been added by the supplier to cater to a multitude of use-cases. You may have a comparable situation with the “features” on your services portfolio.

In growing revenue, the most important thing is to have a dialogue with your customer to change the feature push into a feature pull.

A preventive maintenance example:

You can split the preventive maintenance job into three pieces:

The execution of preventive maintenance
Creating a report on the findings and activities done
Communicating about the job

Many customers see the execution of preventive maintenance becoming a commodity. They expect to get a report free of charge but will acknowledge its value increasing from a compliance point of view. The eye opener may be communication. When offering choices like email, telephone, video conference or communication on site, a growing group of customers will choose the latter. With equipment becoming so complex, customers want an expect to say something sensible about it. Often this visit turns out to be the largest cross and upselling opportunity.

We see two growth levers:

Suppliers adding communication “features” enter in a dialogue of value and drive new revenue streams
Suppliers adding features enabled by service and digital transformation are more connected to their customers leading to more sustainable revenue

At a Better Price Point

We’ve heard various asset operators say: “Less service is more”. Meaning, the lesser a piece of equipment requires servicing, the more the operator can drive value from its use.

We also hear that OEMs providing basis break-fix and preventive maintenance services saying that these services are becoming commoditised and are under severe price pressure.

Of course, you should continue your efforts in improving your internal efficiency and curbing your cost, but the move forward is to develop services higher up in the value chain.

We see a shift:

From Price to Total Cost of Ownership (TCO) to Value based proposals

We Need a Marketing Budget

In Sales, growing revenue is driven by touch points, leads and conversion of those leads into a sale. In Service we have plenty of touch points and we are driven by customer satisfaction.

We drive incremental sales while performing a maintenance job
We use customer satisfaction to the benefit of higher renewal rates attach rates post point-of-sales

Though these two actions do increase revenue, they build on existing customers in the service domain. To grow revenue further, you need to tap into a base beyond your existing service customers.

Sell services at time of product/ equipment sales
Sell services to adjacent and competitor equipment

To convince these “new” customers you need to be able to articulate how good and valuable your services are. Call it marketing.

This article is published in ServiceMax Field Service Digital on June 25th, 2018

Battery Gate

The dust is settling over Battery Gate. I’ve heard many woes and seen people in disbelief. Is this really happening? Is a mobile phone the only product affected? Social media exploded with conspiracy theories and various law firms have started class actions. What can we learn from Battery Gate?

Sales and After-Sales

A relationship between Supplier and Customer starts with an initial sale. With array of tools Suppliers bid for repeat purchases:

Dazzle them: Brand/ customer loyalty
Force them: Technology/ customer lock-in
Convince them: Maintenance & Value-added Services
Help them: Operate & Ease-of-use Services

In the case of the phone we can see multiple types of product related repeat purchases:

	Revenue	When
New phone	$999.00	In x years
Extended warranty	$199.00	Point of sale
Battery replacement	$79.00	Approx. after 2 years

In this example the supplier drives its revenue figures through product sales and has little incentive to lengthen the life cycle of the product. After-sales revenues even jeopardize future product sales.

Many OEM’s/ Manufacturers will find themselves in exactly the same position: after-sales revenues are a welcome addition to sales revenues as long as they don’t compete.

Doing the right thing

So, what is “doing the right thing”? In case of Battery Gate consumers got the impression that the supplier was purposefully reducing the product life cycle, thus forcing earlier product repurchases. We’ll probably never know all supplier considerations in their course of action, we do know Battery Gate back fired … to a certain degree. Analysts predict that the supplier may see “mild headwinds” (see inset).

When considering “doing the right thing” from the customers perspective, the concept of Total Cost of Ownership (TCO) could come into play: the optimum of both the initial/ capital sale and the operational expenditures throughout the life cycle.

Does this mean we would rather buy a phone with a longer life span and user replaceable parts? I guess here we must make the distinction between “needing” and product and “wanting” a product. If you want the new functions and features you’ll probably forgive the supplier. Your repeat purchase will be the next product. If you need the product to generate output and outcome for your organization, you’ll drive your supplier, or third-party maintainer, to deliver after-sales services.

Loyalty

Would a Battery Gate in your industry impact your NPS and revenue stream? Would the headwinds be negligent, mild or violent? I believe being honest and transparent is your route to loyalty and repeat revenue.

After:Market 2017 – Unleasing Service 4.0

Last week 250 service leaders attended the 11^th edition of After:Market in Hamburg, Germany. For a number of years, I’ve chaired this event and presented keynotes. Over the years I’ve seen a change in dynamics both in attendants and topics covered. Not only is aftermarket reiterating its value contribution, aftermarket is also positioning itself at the core of business transformation.

To my great pleasure a growing number of attendees is having job titles like business development and sales & marketing. This year even procurement was present. The sheer observation that other functions are having an interest in service is the equivalent of “likes” on social media. The buzz is out. Service people knew that they mattered, now other functions are recognizing it.

Amongst the participants I detect a drive to unleash service on two levels:

Doing things right – Daily many service people keep our assets afloat and take a pride in helping customers. To keep up with the pace of technology advancement and customer expectations, many service executives are shopping for state-of-the-art tooling.
Doing the right things – Having all the data and touch points in grip, there is a realization that service is sitting on top of a gold mine to adapt/ change the business model. These service executives are shopping for how-to-get-buy-in handles.

In my presentation “what service manager should know about sales” I mentioned a window of opportunity to initiate business transformation. If your it is the goal of your organization to grow your business rather than increasing sales, then service can lead the discussion by role playing a product-focus-scenario versus an outcome-based-scenario.

During the networking breaks and social activities, you can feel a common sense of direction. Service is working hard to get its act together on the basics. At the same time service is preparing for that opportunity to contribute to and drive the new business model.

At After:Market many speakers have shared their take on servitization, service design, product-as-a-service, digital, IoE and event procurement-psychology. Great and inspiring stuff. Especially when you tie it all together to create momentum to start your own transformation journey.

I’m looking forward to next year’s edition … and to hear from you how you have applied the insights in your organization.

This article is published in ServiceMax Field Service Digital on November 1st, 2017

Product as a Service

When we need light, we buy a bulb. When we need a hole, we buy a drill. It is so engrained in our thinking to own products whilst we actually need the outcome. More and more we see upstart businesses cater to this “new” demand. They sell a product as a service (PAAS). How are you preparing your organisation to sell your product as a service?

“We move water”

At the After:Market 2016 event in Wiesbaden a German manufacturer of pumps introduced his company with the words “we move water”. With those simple words he set the stage for his PAAS business model. Selling the pump is not his goal; it is a means to start an outcome-based discussion with his client. In doing so he enters in a conversation where he truly understands what drives his customer.

“If you make a fantastic long lasting products, how do you earn money when the market is saturated?”

Because the conversation goes beyond the pump, he has created a new business model where he earns money with moving water. The additional benefit is for the environment. Instead of designing your product for repeat sales you will wind down a track where you deliver outcome at a minimal material/ energy footprint.

Transforming legacy business is possible

Understanding the effort it takes to transform a legacy business, University of Cambridge professor Andy Neely asked the panel of the Field Service Summit 2017 in Warwick what successful transformation examples should encourage others to follow suit. Both Boeing and Philips demonstrate you can have best of both worlds. They serve customers in a hybrid model. Via one business unit customers can buy the product in a legacy CAPEX/ OPEX mode. Via another business unit customers can buy the output/ outcome of the product. Depending on his propensity, a customer can choose between a jet engine and a “power by the hour” propulsion solution or a bulb and a “pay per Lux” illumination solution.

“Do you need a bulb or are you in need of light?”

Dialogue inset is a freely edited transcript of VPRO Tegenlicht documentary “don’t own, enjoy” November 8th, 2015 (Dutch). A variant of the message in English can be found here.

Why should you explore PAAS

It may scare corporate executives and sound very blunt but exploring PAAS is a “do or die” message. If you don’t do it, somebody else will. At best it is your current competition and you can see it coming. For the worst, you will face competition from newcomers starting with a clean slate.

Record labels were so focussed on holding to their CD product revenue stream and deliberated so long on legal download options, they were decimated by services like Spotify.

How do you assess your organisation?

“Products are meant to deliver a solution.”

Using a more positive approach: the more you understand how the outcome of your products generates value to your customer the more you establish yourself as long term partner in both a profitable and sustainable way.

Where to start

In the example of Philips Lighting, a small team beyond the radar of product based business model executives designed the “pay per Lux” solution. Upon demonstrated success with a launching customer the new PAAS solution was put in the spotlight.
Setting up a sandbox environment with servitisation minded people is essential, as you will be in for a paradigm shift:

When you sell Outcome there is no title passage of the Product. This means the product remains on your balance sheet.
As supplier you will be responsible for and remain in control of all CAPEX and OPEX cost components.
You need to understand your customer to define a “pay per use” earnings model.

Understanding cost

In the Philips Lighting dialogue the customer asks for a Design, Build, Finance, Maintain and Operate solution. This DBFMO framework can be used to understand total cost of ownership.

Design and Build lead to the commissioning of a Product. Maintaining the Product safeguards the Output of the Product. Operating the Output provides an Outcome. The Outcome generates Value.

Maintain and Operate are stated in terms of OPEX. When adding Finance services to your portfolio, you can transpose Design and Build CAPEX into OPEX too.

Design-for-Operate

With PAAS the total cost of ownership shifts from customer to supplier. As a result the supplier is incentivised to throw in all his expertise to continuously optimise product, output and outcome.

In order to make pay per use profitable all cost elements of DBFMO need to be designed in unison. Call it design-for-operate. Where design-for-service supplements design-for-manufacturing, design-for-operate augments the former two.

“Business models based on breaking products should not be accepted”

Pay per use

Where design-for-operate drives towards minimising waste and cost, engineering the right pay per use model determines your revenue. This is where entrepreneurship and partnership kicks in.

Pay per use is a bi-directional handshake between supplier and customer that takes it to the next level compared to a typical sales-purchasing relationship. Instead of a cost/ revenue conversation about products and output your dialogue will evolve into an outcome based profit/ value handshake.

Your customer will help you define the pay per use drivers. If you really understand his business and you are confident in the capabilities of your own organisation to generate outcome that makes your customer succeed, your customer will be inclined to enter into a partnership to make you succeed as well. As a result de pay per use drivers will be fair, sustainable and durable to both parties.

Don’t own, enjoy

Ownership comes with responsibilities. Why should a customer have to carry the risk whilst the supplier is the expert in both understanding and influencing risk. A PAAS model is the ultimate form of “back to core business”. The supplier managed DBFMO, the customer uses the outcome to generate value. In return the customer pays for use.

Does pay per use really work for both parties or do words like partnership, fair and sustainable sound altruistic? The IT industry does give us insight into what is to come. Because SAAS solutions are available for consumers as well, first hand experience is changing our perceptions, attitude and decision-making regarding cost and value.

Published in Field Service News issue #xx (July/August 2017 and website

What service managers should know about sales

Service is probably the single largest contributor to an organisations profit margin. Service has the most lasting and trustworthy relationships with customers. Still, in the board it is a sales game. If service wants to lead, it has to understand sales.

In the boardroom

Let us be witness of a business plan review meeting:

Exhibit A: our targets are more ambitious than our current performance.
Exhibit B: we face increased competition, increased customer volatility and shorter product life cycles leading to declining market share and diminishing attach rates.

Now suppose the CEO invites you, the field service manager, to pitch a solution to this non-sustainable situation. Are you prepared? Will your message and vocabulary resonate with the board members?

For as long as I can remember, field service managers bring a message of reality. About healthy and sustainable profit margins. About attach rates and trusted relationships.

What do you think the sales manager brought forward as solution? A message of hope: “if we introduce a new model, add a new feature or drop the price, we will regain market share”.

“When it comes to choice, a message of hope prevails over one of reality.”

What makes the clock tick?

The ugly truth of corporate economics: it’s all about sales and success is measured in revenue figures. Add to that the sales perception that after-sales does not exist without an initial sale and you know the picking order is set. To complete the picture, factor in mind that most CEO’s have a sales background.

“Sales first, then after-sales.”

Sales targets

Sales is a big numbers game. Product hero’s playing with capital expenditures. Going for the win is putting in a peak performance in a short period of time, balancing effort and reward. Asking sales to include Opex related propositions in the sale does sound altruistic considering that doing so complicates, lengthens and may jeopardise the sale.

What about profitability? In the sales mind-set profitability is not a driver or performance indicator. Not because they don’t care, far from that. Because in most customer organisations the decision making unit for both Capex and Opex are different entities optimising their own silo.

“Profitability, who cares? Certainly not sales.”

Funnelling leads

Sales vocabulary uses words like suspect, prospect, lead and qualification. Elias Lewis has put these words in context in 1898 when he conceived the sales funnel. This funnel is engrained in every sales process. It is in the DNA of sales people to convert leads into a sale.

“What we need? Leads, more leads and qualified leads.”

Qualification

One of the most important steps in the sales process is the qualification of a lead. Here sales balances effort with reward. When service starts feeding the funnel, it is crucial to know the difference between a lead in the eyes of a field service engineer and a lead according to sales.

In the eyes of sales service-leads are a big bag of small peanuts. Converting those requires a lot of effort with small reward. For sales to follow-up on service-leads, those leads need enrichment and qualification.

Window of opportunity

Though the clock ticks sales, typical sales solutions to the corporate challenge fail to reverse declining market share or do so at the expense of profitability. In both cases the course is not sustainable.

This is good news as it provides the opening for the field service manager to come forward with his ideas.

“Growing sales is an operational process. Growing your business is changing your business model.”

Find the right tune

Although ideas have been voiced for many years at field service conferences, they will be new for sales once rephrased in sales vocabulary. It will become a customer touch points game with roles for hero’s and ambassadors. It is the perseverance of sales to get to a customer on board. It is the caring mindset of service to keep a customer happy. It is their joint effort to come up with new business.

“Find the right mix between sales DNA and a service heart to develop new business.”

How will sales react? As long as the field service manager doesn’t gloat over his profit contribution and trustworthy customer relationships … and sales can stay in the lead, then sales will go along.

“Field service managers can lead by following.”

Published in Handy Little Book for service Managers (edition 2017) and website

Demand generation: A Groundhog day experience

The profit contribution of services compared to product profits has been the subject of many workshops over the past decade. Still, achieving a true shift in sales focus is a “Groundhog day” experience writes Coen Jeukens, Service Contract Manager, Bosch Security Systems

At the Copperberg April 2016 UK Field Service Summit service industry experts had their own groundhog day experience when discussing the “Demand generation” topic: what can the service manager do to go beyond the daily break-fix mode towards cross and upselling.

In five consecutive rounds the same discussion was reiterated varying the contributing industry experts. The individual rounds revolved around common convictions like:

Should we dilute customer trust created by service engineers with potential alienation when stepping into a commercial role;
Service is about helping customers, not selling to customers;
Service and sales have different counter parts and decision making units;
What is a meaningful incentive for service people to spot sales revenue and vice versa;
Service and sales people have different DNA.

When looking at the discussions at an aggregate level, demand generation is possible when taking the following recommendations to heart:

Use service engineer more as a brand ambassador than sales-lite;
Empower service engineer to become a hero on site;
Incentivise customer feedback instead of monetizing prospects/ leads;
Feed customer feedback into marketing function;
Creation of a “product” development function for services;
As service manager, do not boast yourself as being a profit centre, but emphasise your contributing role in co-creation with sales.

The service engineer as brand ambassador

Comparing the amount of customer touch points and level of client trust, service engineers do have an edge over sales representatives. Though it sounds tempting to dual use service engineers as sales-lite, don’t do it.

Engineers gain their stature through technical competence and stamina to prolong the operational performance of a piece of equipment. As such the engineer is the perfect ambassador for brand loyalty.

In analogy with politics, the ambassador is an important player in a multi-faceted sales game: the ambassador provides intelligence, sales translates intel into leads and deals, while fencing the ambassador’s neutrality.

When contemplating to add a sales role to service engineers, do balance the risk and reward. Bear in mind that from a decision-making unit (DMU) perspective the service engineers’ counterpart is the end user and not the asset owner/ buyer. At best the end user will decide on OPEX matters.

When it comes to CAPEX the end users’ role diminishes to that of influencer.

Hero on site

Other reasons not to mingle sales and service objectives are the differences in DNA and aspirations. A sales representative strives to become trusted business advisor in order to generate long-term revenues.

A service engineer by default has a long-term relationship, a high level of trust and an advisory role. The service engineer wants to be the hero on site, he wants to be able to help.

As a hero on site and brand ambassador, the service engineer can use his stature to open doors and generate leads on two levels:

OPEX leads: consumables and wear & tear components
CAPEX leads: generate demand for new offerings

Empowerment is the key on both levels:

OPEX leads: It is easy for a service engineer to convince an end- user to buy small maintenance related components. It makes him a hero if he can supply and install them right away. Any “delay” in conversion of lead into sales not only deteriorates the sales momentum, it also affects the hero status of the engineer.
CAPEX leads: In his default mode, the service engineer will try to fix the existing equipment compared to suggesting a replacement or new buy. When hinting towards the latter, the service engineer puts his hero status at risk because the conversion of the lead into a sale falls outside his control. Nothing is more deadly for a hero than raising an expectation he can’t deliver.

Incentivise customer feedback

Frequent customer touch points and a high level of trust put your service engineer in a unique position to be the eyes and ears of your organisation. Capitalising on that position requires a multi-tired approach.

In analogy with the concepts of “big data”, capturing the sensory output of the service engineer is step one. The interpretation of that data into a lead is step two. The conversion into a sale is step three.

When the collection of data is driven by an intended use for sales, you may not only miss out on many subtleties of customer feedback, but also bias the observation with short-term gains.

Apart from asking your service engineer to collect specific data that is not in his DNA, you may also risk the neutrality of your ambassador/ hero.Ideally you may incentivise your service engineers to collect customer intelligence and feedback regardless of its conversion into sales.

Feed marketing

Information collected by service engineers is a valuable addition to the data input of your marketing function. Once in your marketing process it augments existing data and will result in better quality leads.

Better leads are more prone to be picked up by sales. Follow up by sales will make the service engineer feel taken seriously.

Not only will this boast his hero on site stature, he will also use his trust with the customer to make him decide positively on the sale.

Knowing service engineers have access to high quality and individual customer intelligence, using that information may also inspire you to rethink the workings of marketing.

Markets are less homogeneous than a decade ago. New technologies and the growing importance of customer experience will even further individualise customer behaviour.

Services development function

Acknowledging declining profit margins and fierce competition on products, transitioning to a more customer/ services centric earnings model is the logical way to go. The customer intelligence and feedback from your ambassadors and heroes will become vital in understanding his needs.

Where your products development department can tell you everything about your products and their roadmap, any service engineer can tell you how your customers use those products and how customers experience their use.

The combination of product and its use open up new sales opportunities. As use is the dominant factor, the appearance of the offering is customer specific.

Setting up and embedding a services development function in your organisation will enable you to add service revenue streams in an efficient manner.

Your service engineers will be the prime suppliers of input to your service development function. Similarly to proving input to your marketing function, the engineer and customer will feel appreciated when they receive feedback that their information is taken seriously.

Service as contributing centre

In achieving demand generation, adding sales roles and goals to the service department may sound as a logical thing to do. The profit contribution promise may even tempt you further.

Apart from the considerations in the previous paragraphs, beware that the creation of a secondary sales channel does invoke competition between the sales and service department. A competition that more likely will emphasise differences and prejudice than seeking the common ground.

Success lies in positioning your service department as a contributing centre. Let sales be in the lead. Use the traction of the sales department to get organisational and CEO buy in.

Make sales the internal hero by feeding them with high quality service engineer data. Empower your service engineer and make him the external hero.

As finishing touch, invest in a service marketing and services development function. Sales and service seek the commonality and acknowledge each other’s strength.

Published in Field Service News issue #13 (July/August 2016 and website

Aanbestedingen: een complexe materie

Een gezond bedrijf zal altijd proberen om ook andere opdrachtgevers te werven, naast alleen het werken voor het ‘vaste klantenbestand’. Om nieuwe opdrachten binnen te krijgen, wordt veelal ingetekend op aanbestedingen, in de hoop de opdracht gegund te krijgen. Dit onderwerp stond deze keer ter discussie in ons traditionele ‘Zwaardgesprek’ in het Veranderhuis in Doorn.

Twee partijen, één prijs

Hoe kun je als servicemanager deelgenoot worden van het besluitvormingsproces, wanneer het om grote uitgaven gaat, vraagt Coen Jeukens zich af.

Want daar wringt nu net het schoentje. Die besluitvorming vindt meestal plaats door de financieel deskundigen, die nu niet bepaald de personen zijn die de meeste ervaring hebben in de – technische – praktijk.

Als verkoper heb je te maken met twee inkopende partijen, zegt hij. “Je hebt de grote inkoper en de gebruiker. Soms maak je verlies op de verkopen, maar haal je dat terug door de winst uit het onderhoud. Hierin moet je een balans vinden. Je moet denken volgens Opex (Operating Expenditures) en Capex (Capital Expenditures). Breng dus niet alleen de vaste kosten rekening, maar denk ook goed na over de variabele kosten die je in de contractperiode kunt verwachten.”

De toegevoegde waarde

Volgens Peter Gerritsen is het belangrijk om ‘partner te worden van je opdracht- gever’.

“Processen zijn in de praktijk niet altijd op elkaar uitge- lijnd. Je moet zoeken naar de toegevoegde waarde in de keten, waarbij je de opdrachtgever met de juiste dienstverlening en service- aspecten specifiek ontzorgt. In een aanbesteding kan de klant vragen naar respons- tijden, maar dat is niet altijd de beste deal”, vindt hij.

“In een dialoog kan blijken dat de eindgebruiker soms meer gebaat is bij service- differentiatiekeuzes, zoals hersteltijd en/of beschik- baarheidsgaranties.”

Goedkoop dealen

Eric Steffers meent dat het al dan niet aan- besteden van een klus afhankelijk is van de branche. Zo heb je de ‘zekerheidszoekers’, die gegarandeerd willen dat zij altijd – bijvoorbeeld – een lift kunnen gebruiken.

“Dan kun je een aanbieder hebben die je een product levert dat in beginsel een hoge uptime heeft, maar hoe is het over tien jaar?”, vraagt Erwin Koster zich af. “Ben je na vijf jaar aan een vervanging toe of heb je regelmatig downtime, dan is een opdrachtgever daar niet gelukkig mee. Ziekenhuizen bijvoorbeeld kiezen voor zekerheid en beslissen dus niet alleen op basis van de prijs.”

De overheid wordt als voorbeeld genoemd van een organisatie die meestal maar twee of drie jaar vooruit kijkt. Zij kunnen dan trots melden dat ze dit jaar ‘goedkoop’ hebben kunnen inkopen.

Totaalpakket

In de periode dat Gerritsen bij Philips werkte, merkte hij dat het bedrijf de servicedienstverle- ning wilde clusteren en als een integraal totaalpakket wilde aanbesteden. Zoals tegen- woordig steeds meer contracten worden geof- freerd als een contract in de vorm van TFM (Total Facility Management) of IFM (Integrated Facility Management), waarbij er wordt ge- werkt met SLA’s (Service level agreement) op de aangeboden integrale diensten.

Hierbij zijn total cost of ownership (TCO-) en life cycle cost (LCC-) denken belangrijke pijlers. Als de aanbesteder denkt en handelt volgens TCO, kunnen servicemanagers de te behalen voordelen in Opex ‘verrekenen’ met de Capex.

Gaat de klant enkel voor de laagste Capex, dan komt de servicemanager met zijn Opex niet eens aan het woord.

Belangrijk daarbij is dat klanten te maken hebben met slechts één aanspreekpunt en dat je als bedrijf niet te maken hebt met honderden leveranciers.

“Bij Philips had je vroeger een veelvoud aan toeleveranciers. Dat hebben ze nu terug
weten te brengen naar een serviceprovider die een overzichtelijk aantal gekwalificeerde toeleveranciers aanstuurt. Dit bevordert de bestuurbaarheid en transparantie binnen de servicedienstverlening en scheelt aanzienlijk in de omvang van organisatie en contracten.”

Nood aan een eenduidige interpretatie

Soms is een dialoog, alvorens de aan- besteding wordt gedaan, helemaal niet mogelijk. Bedrijven kunnen lijsten invullen waaraan de opdrachtgever punten geeft.

Het is belangrijk om ‘partner te worden van je opdrachtgever’.

Jeukens vindt dat je in zo’n geval moet zorgen dat je bovenaan de lijst komt met je puntentelling: “Als je bovenaan de lijst komt, kun je vervolgens in gesprek met de opdrachtgever. Dan kun je je profileren.”

Gerritsen meent dat je in een aanbestedingstraject scherp moet kijken naar tegenstrijdigheden in terminologie en de duidelijkheid van de behoeftestelling. “De inter- pretatie hiervan moet vooraf eenduidig worden gemaakt in een dialoog tussen opdrachtgever en poten- tiële opdrachtnemer. Het venijn zit ’m hierbij dus in de start. Veelal wordt hiervoor een kans-risicodossier opgesteld, mede met als doel de bid/no bid beslissing goed te kunnen onderbouwen.”

De kleurrijke kamer ‘The 50’s’ wijst de bezoekers erop dat zij hun successen moeten vieren.

How, what and why

Jeukens kan daarin mee gaan. “Hoe, wat en waarom? Elk van deze vragen moet je door- gronden bij de klant. Daarbij moet je vooral focussen op het waarom!”

Koster: “Zit de klant op de hoe, benadruk dan het onderscheidend vermogen van je organi- satie. Zit de klant op de why, werk dan aan het opbouwen van partnership en investeer in de relatie/toekomst. Een klant zoekt een partner voor een zekere toekomst vol innovatie en optimalisatie van dienstverlening en dat tegen een gunstige TCO. Een what-klant zit dan weer enkel op de Capex.”

Jeukens: “De klant heeft vaak ‘hoofdpijn’ door de complexiteit van techniek. Heb je een why- relatie met de klant, dan kun je de klant op dat vlak ontzorgen. ‘Technik fürs Leben’, zeggen wij altijd.”

Knikkers of KPI’s

Over het algemeen wordt beoordeeld op de ‘knikkers’. Hoe kun je daar met een aanbeste- ding verschil in maken, vraagt Bob van den Heuvel zich af.

Koster meent dat het verhaal begint vóór de aanbesteding. “Vraag je af wat je écht wilt en wat je KPI’s (kritieke prestatie-indicatoren) zijn. Als een KPI zorgvuldig is gedefinieerd, kun je daarop sturen. Als er een onhaalbare of onwenselijke KPI opgenomen staat in een aanbesteding, dan krijgt de aanbesteder niet wat hij wenst. Juist door advies te geven vóór de aanbesteding, kun je ervoor zorgen dat de KPI’s zijn afgestemd op de behoeftes van de opdrachtgever”, stelt hij.

“Hierbij is het van groot belang de opdracht- gever volledig te informeren over de huidige en toekomstige mogelijkheden. Profileren als innovatieve en betrouwbare leverancier is van groot belang.”

Gerritsen haakt hierop in: “Is een KPI onjuist gedefinieerd doordat bijvoorbeeld het effect van je handelen als opdrachtnemer pas na twee jaar is terug te meten, dan ligt een proactieve dialoog over dit onderwerp met je opdrachtgever voor de hand. Natuurlijk moet deze informatie dan ook aan de andere partijen in het aanbestedingstraject bekend worden gemaakt. Dit betreft ook het financiële aspect. Het is fijn om een opdracht te scoren, maar als blijkt dat het financieel niet juist uitkomt door
bijvoorbeeld het verifiëren van de opgegeven conditiestatus van installaties middels de NEN 2767 en het bepalen van het meerjarenbudget, heb je als opdracht – nemer en opdrachtgever alsnog op termijn een gezamenlijk probleem. Veelal moet dit alles binnen drie maanden na ingaan van het contract onderling zijn bepaald en opgelost.”

Samenwerken

Sales en service moeten daarin samenwerken en op één lijn liggen. Als de service en beschikbaarheid niet toereikend zijn, kan sales wel punten willen scoren, maar dan gaat het niet goed”, zegt Steffers.

“Niet in alles kun je de beste zijn, maar je kunt wel gezamenlijk de klant bedienen.”

Gerritsen wijst ook op het gevaar als je een klus samen met andere toeleveranciers wilt realiseren. “De bepaling van een ‘make or buy’-strategie en de procentuele verdeling hiervan kan van cruciaal belang zijn voor een succesvol contract. Er hoeft maar één ‘dissident leveran- cier’ te zijn en alles kan tegenlopen bij het nakomen van je integrale contractuele afspraken.”

Toch menen de aanwezigen dat je wel moet samenwerken en dat dat in de toekomst zeker een toegevoegde waarde heeft. Steffers noemt als voorbeeld de synergie tussen de liftmonteur, de copiermonteur en de koffie- apparatenmonteur. “Alle drie moeten op locatie komen en het hele pand doorlopen. Voeg de klussen samen, en je hebt eenmaal voorrijdtijd en er loopt maar één persoon door het pand. Wellicht vindt de klant dit ook veel prettiger dan al die verschillende poppetjes over de vloer.”

Let wel, meent Koster: “Bij clustering van services moet het belangrijkste uitgangspunt het optimaliseren van de dienstverlening zijn, en niet slechts het verlagen van de kosten. Het afbreukrisico van één aanspreekpunt is groot als er op bepaalde vlakken kennisgebrek is.”

Vertrouwen

“Het verhaal begint vóór de aanbesteding”, meent Erwin Koster (l).

Waar je als opdrachtnemer goed op moet letten, is dat je een realistische afspraak maakt met je klant. Het voorbeeld wordt genoemd van een toeleverancier die door het strak voorgeschreven KPI-regime niet meer aan zijn diensten kon verdienen. Het personeel mocht bijvoorbeeld niet meer pauzeren. “Dan heb je als hoofdaannemer een kritische onder- grens overschreden”, vinden de managers.

Aandacht voor innovatie

In de wereld van de techniek is innovatie een must. Maar ziet de klant deze meerwaarde wel? Steffers en Koster noemen een mooi voorbeeld van innovatie. Zij weten dat spraakverbinding in een lift gewoon is, maar dat de techniek tegenwoordig meer mogelijk- heden biedt.

“Mensen die in een lift vastzitten, hoeven niet meer te wachten tot de monteur komt. Zij kunnen via moderne apparatuur direct contact hebben met de ‘monteur op afstand’. Die komt in beeld en kan mensen voorbereiden op wat er gaat gebeuren. Bijvoorbeeld door te zeggen: ‘Schrik niet, de lift gaat nu een klein beetje omhoog.’ Tevens kunnen op afstand aanpassingen aan de installatie worden gedaan en meldingen op een scherm worden getoond. Dit is van toegevoegde waarde voor opdrachtgevers en geeft veel vertrouwen.”

Gepubliceerd in Service Magazine editie april 2015