August 29, 2019
Article was written by Hans Bracke, Salesforce Industry Solutions Lead Europe
Business strategies today are experiencing a major change in focus from products to services. As a result, the service and field service functions are steadily becoming both the new face of an organization and a trusted advisor. In particular, field service teams are now tasked with building and maintaining customer relationships, as they are on the front-line with the customers in person, and can provide valuable insights back to the rest of the business.
For decades, businesses differentiated themselves with the products they sold. However, competition is driving reductions in margin and is decreasing first-to-market advantage. The product-to-service shift taking place across industries impacts the whole business model, from underlying technology to organizational culture. This shift in business models highlights two trends in the business operating model that impact field service. First, the shift from product-focus to customer-centric. Companies are changing the way they work to deliver on customer expectations, enhancing engagement models to deliver transparency and drive value to the customer at each touch-point. The second shift is from products to services; the actual product is often not what the customer aspires to have, it’s the outcome. For example, a customer wants their house to be nice and warm as appropriate, it’s not about ‘owning’ a heating system. It’s about the outcome, the convenience, and the service. This changed view is not only playing into customer needs, but also provides a longer term customer relationship and revenue streams. This shift encourages companies to rethink how they engage with customers, leading to an increase in the importance and focus on service, and by extension, the field service organisation.
Here are three phases, often taking place in parallel, in support of customer-centric service and field service transformation:
Businesses have an ongoing need to reduce costs associated with serving each customer and understand how resources are being utilized. In the context of field service, many are leaning on the latest technologies to draw insights from relevant data points to optimize processes and operations. For example, implementing preventative maintenance, optimizing technician scheduling and providing cognitive, in-context advice to resolution are trends across industries that we see today. Optimizing for efficiency is often the first step for businesses–it delivers quick, tangible results, building and innovating on asset, performance, customer and engagement data, which delivers value as well as creates the foundation for the next steps in service transformation.
As new competitors and new products enter the market and businesses optimize for efficiencies, profit margins from traditional sales channels are on the decline. Organisations need to take advantage of each customer touchpoint to deliver on customer expectations. Service functions need to shift from a reactive service to proactively responding to specific customer needs with tailored products and services, driving up and cross-sell, and shifting the service organisation from a cost to a profit centre. This second phase focuses on close integration of business flows, data and insights from marketing and sales to service and field service to respond to market and customer needs transparently and deliver value regardless of the channel of engagement. Leveraging the combined value of customer, engagement, asset and service performance data, personalised actions and insights are presented to sales, service or field agents as well as to partners and customers, enabling field engineers to become trusted advisors, capture marketing, and sales data and where appropriate initiate up/cross-sell, or sales agents to provide operational and commercial status of ongoing work. One early adopter and success story of this strategy is Rolls-Royce Aerospace, which moved from selling airplane engines to a service model based on flying hours. They were able to deliver this service-focused solution through using in-depth insights into product, service and maintenance data to establish a new winning business model.
As businesses reduce the cost to serve and enable business lines to shift into services, frontrunners in the market are exploring new business models to differentiate through new ecosystem services. This phase is based on a deep understanding of customer behaviour and providing joint propositions which increase customer touch-points and broadens the customer base, enabled through new collaboration platforms. Vitality is one example of a company that has flourished with a new business ecosystem based on its life insurance business. They promote and reward a healthy lifestyle through partnership offers like groceries or health services. By doing so, they’ve increased their customer engagement, resulting in growing customer loyalty, new market segments, and new service revenues. Their new business model is a pivotal strategy of their customer engagement and has led to a new business mindset, enabled through technology, blurring the boundaries between business functions and industries.
Regardless of where you are in this journey–whether it’s efficiencies, driving customer centricity, or getting ready to embrace a new ecosystem play–it requires a new way of thinking, including a shift in business operating models and underlying technology, all leading towards a cognitive enterprise. As with every journey, it’s important to understand where you are today, what your gaps are, and what short and long-term objectives are required to deliver to your business’ goals, driving gradual change in people, processes and underlying technology platforms.
Connect with a field service expert to learn more.