Strategic Service Management

It’s that time of year again. MillwardBrownOptimor have published their Top 100 Brandz ranking, and corporate marketers are either celebrating or justifying in boardroom around the globe.

But should marketers alone take in these findings? Or does customer perception break down any barrier between Service and Marketing that may exist on Org Charts?

If you are in either Marketing or Service, I recommend you take in the “Trends” on page 10 of the report. What are its key SSM implications?

As people stay in during the recession, home shopping / home services are on the rise. Not only does that mean more deliveries, but also a greater need for repairs as users invest, for example, in coffee machines to cut down on trips to coffee houses. Do you deliver? Have you optimised your routing and scheduling? Is your parts planning reliable? Do you have the required visibility to exceed your customers’ expectations in your management of vans and technicians?

People buying equipment for home use, or putting off major new investments (which goes a long way to explaining the 22% hit suffered by the car segment), opens up an opportunity for service parts pricing. How are you positioned to take advantage of it?

Apple grew 14%; BlackBerry 100%. Where once we had phones, now we have… handheld life organisers. This trend is supported by growth in network brands: Vodafone is up by 46%, AT&T by 67%, O2 by 36%. We are increasingly connected, which (when managed…) benefits our efficiency (in and out of the office). But it also means our expectations rise. Why can’t a delivery be scheduled more accurately? Why can’t a tech turn up with the right part? We are all more aware of technology’s potential – and accept no excuses for failure to leverage it.

Such increased technical sophistication also means we are often happy to fix minor problems ourselves – a scenario that expedites repair time and dramatically reduces costs for all involved. Do you have the technology to remotely support your customers?

At Servigistics, we have long underlined product commoditisation. Branding is a critical path to differentiation. Is it achieved through good marketing? Is it achieved through good service?

Let’s look at it this way: I would challenge anybody to achieve differentiation in 2009 without good marketing or good service. Which is why SSM goes beyond managing your Service operation, and encompasses your entire business. And, in your quest to win and retain customers, you create fictitious barriers between Service and Marketing at your peril.

best,

g.o.s.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

The good news is… looks like I’m not alone.

The bad news is…

Well, come on – people shouldn’t be dreaming dreams in 140 characters, or dream of the new iPhone hardware as they ponder whether to splash out or not. That’s not what the resting hours are for.

This is what happens to us when we overdose on technology. It happens to all of us, at some point – and the effects are clear to see. Because, fundamentally, we are hunter/gatherers, not e-mailers or twitterers. And, at least in our sleep, we should revert to our fundamental nature.

Our fundamental nature… are there aspects of it that we may want to dust off for the workplace? Or would that simply go against centuries of evolution theory?

Some of the most successful sales people I’ve worked with don’t appear to have embraced the great technological revolution. Their world doesn’t appear to move any faster now than it did five, ten years ago; they still listen and observe, like old-fashioned hunters. But wise hunters, who know that it will be easier to gather the prey when it approaches them rather than to chase it round in circles. (And they have embraced the good technology bits, by the way – just not the distractions.)

In a world where the divide between sales and service is increasingly blurred, similar key considerations apply. Sure, techs have to be more proactive. But, in getting the job done, they should never jeopardise the possibility to take in the environment around them, and consider how they may turn it to their advantage.

If today we live in the iWorld, then the ‘i’ can often be seen as standing for ‘instant’. And when great service is instant, everybody is happy – especially the customer. But, when a compromise has to be made between great service and instant service… compromise on quality at your peril. And, once you’ve got job done as quickly as possible, to keep your customers happy – why miss out on an opportunity to spend five minutes finding out what’s going on at a site? Why not try and gather further info that will increase your colleagues’ (and company’s) effectiveness?

If that’s what being hunters and gatherers is all about, then a “back to basics” approach (supported by technology for storage and analysis) is not necessarily a bad thing…

April 16^th, 2009

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

About a month ago, Managing Automation publisher Heather Holt-Knudsen wrote a piece called “Project 1985″. The article is both light-hearted and stimulating: in it, Holt-Knudsen sets out to live for a week without post-1985 technology (although, within a few lines, such total ban was lowered to using phone ahead of e-mail, not using one-line replies in e-mail, no texting, and only tweeting once a day).

The project never actually took off. In Part 2 of the article, Holt-Knudsen recognises that the issues that frustrate her about technology today do not actually lie within technology itself, rather in the way we have allowed ourselves to become addicted to it. As she points out, “Perhaps all I need to do is ease up versus completely give it up. It’s like what any successful diet requires: portion control.”

Information overload is a danger to which we are all exposed. Whereas in 1985 obtaining data was the key challenge, today differentiating what holds value from what does not is often the main issue. So, when technology does what technology should do (and lends a helping hand), it should be welcome. Turning our back on technology for the sake of it is not progress.

Back in 1985, my interaction with IT was limited to Nintendo handheld games such as “Donkey Kong”. But I remember with equal fondness University life, and research undertaken at library desks with paper books (remember them?) as Internet terminals were only just emerging - the nearest to a computerised search was the process through which you located the book you needed. So, for all the cursing I occasionally do when my Inbox is overflowing, I am forever grateful that I have the opportunity to do what I do at this moment in history - in an age when technologies are at their most interactive, interoperable (hey, when I started out on a Macintosh LC II I couldn’t share files with the rest of the world…) and deliver measurable results.

The same principles apply in Service. We sometimes curse at talking heads and IVR menus, longing for that old-fashioned human touch instead of technological abuse. At the other end of the relationship, somebody may well be counting the beans and the saved costs, though not necessarily the lost customers. But the technology in itself is rarely flawed: rather, we should marvel at what techies all over the world have achieved, and ensure their output is channeled in a value-adding fashion. When it improves productivity and the customer relationship, when it increases visibility over the Service operation and reduces costs, when it improves efficiency throughout the supply chain… basically, when it makes life easier for everybody involved, then technology has delivered upon its timeless promise. That’s the dessert we all wait for.

Now - where did I put that Rubik’s cube? Because let me tell you - you couldn’t find the solution online back in 1985…

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Earlier this week, The Economist reported on how staff-motivation schemes may be feeling the impact of the recession. You may be experiencing it yourself: as corners are cut, those elements that are not seen as directly linking to revenue, and which take up time that could be devoted to primary activities, are most endangered. Of course, the line between perception and reality is blurred: as The Economist reports, “Towers Perrin, a consulting firm, found that between 2002 and 2006 companies with excellent records in motivating staff generated an average annual return over the period that was 9.3 percentage points higher than that of the companies in the S&P 500 stockmarket index”. Their message is clear: dismiss the value of motivation at your peril.

This article in last October’s Harvard Business Review did a pretty good job of pinpointing four key areas to focus on for motivating employees. However, in times of trouble, our focus shifts towards corporate stability, rather than individual benefits. We can go back to basics, and Maslow’s Hierarchy of Needs: we pursue Self-Actualisation and Esteem only when Safety is taken care of. When this is no longer a given, our perspective changes – and, with it, our behaviour. The best healthcare and pension plans in the land are worth nothing without a job underpinning them.

If this blog entry could guarantee you safeguarding your job, it probably wouldn’t be publicly accessible – and I would retire on selling the formula. But this is anything but The Age of Guarantees. Furthermore, how you go about re-engaging your staff (and yourself?) within your organisation depends on specifics that a generic entry cannot address. You should be aware, however, of changing behavioural patterns around you.

But I will make one point I believe is relevant to us all. As you look to cut costs, close that deal, refocus… don’t lose sight of the importance of customer service.

Companies that excel in customer service foster an atmosphere that improves both internal and external relationships. Furthermore, remember:

·         Winning a new customer costs as much as five times as much as retaining an existing one – and that’s before you’ve built up any loyalty or knowledge;

·         Customers who become advocates are an amazing marketing tool; unhappy customers are a potential barrier to growth;

·         Dealing with happy customers motivates staff. Solving issues for appreciating customers gives a great buzz. But dealing with unhappy customers, not being able to help them… that leads to high turnover rates. And high agency fees…

·         If your products and service are at the premium end of the scale, this is the time to be engaging with customers – to ensure you are not threatened by low-cost alternatives

This is not just about niceties. Even in a recession, excellent customer service makes sound financial, commercial sense – throughout your value chain. It’s only normal for you to lose sight of this, at times. But, if you let your competitors make the mistake on a long-term basis and you keep your eyes on the prize, you will come out of these time a stronger player for it.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Greetings from Paris.

That always sounds extravagant, doesn’t it? Well, don’t get carried away. I have a checkered history with accommodation in this beautiful city, and tonight’s tipped the balance the wrong way.

I am here for a two-day User Conference with our European Pricing customers. And ‘here’, more specifically, is the Radisson SAS near CDG: convenient, practical, respected. The sort of place you associate with good service; an impression that I have had reinforced in the past few weeks, during which I’ve dealt from afar with the hotel’s Commercial Department to get the event set up. Nothing has been too much trouble for them.

Then came tonight. I cleared customs, and duly waited for my shuttle bus at Terminal 2B. It’s a Sunday night, so I appreciate the service will be relatively infrequent. Some thirty minutes later though, having seen the Hilton’s shuttle go past me for the fourth or fifth time, it’s hard not to wonder.

A couple of hotel guests waiting with me are on the phone to the hotel, who assures them it’s ten minutes away. Trouble is, they had done that 25′ earlier - equally abruptly. Now it’s bad enough when expectations are mismanaged by the local pizza delivery joint: but this is a hotel brand that prides itself on service, leveraging it to charge a premium price. Does it know what’s going on? If not, why not? If so, why the blatant misinformation?

In the end, I waited 50′ for the shuttle. How long the other two guests waited, I daren’t imagine because when it finally arrived, there was only one seat available. Since they were travelling together, they kindly offered it to me. They weren’t as docile towards the driver or the hotel reception, over the phone. The waiting had been bad; the deceit, unnecessarily aggravating. I wouldn’t want to be in the driver’s shoes as he heads back to pick them up from here, which he seemed to be doing - even after Reception had guaranteed them another shuttle was already en route and would be with them five minutes after ‘mine’…

Whatever you sell, your customers are not idiots. Most customers tend to have greater patience than you may think. They accept things go wrong - indeed, fix their problems well and their loyalty will be higher than had they never existed. That’s why Dell showcases its Enterprise Command Center to illustrate how it helps its customers: because doing so exceptionally well is a true competitive differentiator.

What customers don’t accept is being lied to. That’s just insulting. While it’s no more insulting than it ever was, it is easier to get found out, since there are just too many sources of information available for customers not to verify what they’re being told. And it’s too easy for customers to share their dissatisfaction within minutes, as you are proving by reading this.

If you can’t always be truly exceptional, at least always be exceptionally true.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

When the company that’s owned the top spot in the Interbrand Global Brand List for the past eight years makes a move, others follow. Or, at the very least, they take note.

Coca-Cola has released… no, not its secret formula, but the carbon footprint of its various brands. That’s right: we now know that “a 330ml can of Coca-Cola sold in Great Britain has a carbon footprint of 170 grams and the same sized can of ‘diet Coke’ or ‘Coke Zero’ has a footprint of 150 grams. A 330ml glass bottle of ‘Coca-Cola’ has a footprint of 360 grams”.

So - what does that mean? Does it make Coca-Cola green, because it’s facing up to its corporate social responsibility and working on programs to reduce its footprint? Given what happened when it tried to improve its formula in the 1980s, could this be a key strategy for the company - as it leaves the product alone and looks at how CSR can enhance the brand? That was the view the Chief Executive took last year…

Will you soon be surrounded by analysts measuring your company’s carbon footprint? Or is that already the case? Of course, not everybody’s customers react as strongly as Coke’s when products are tweaked - most welcome changes. And, in companies where funds are harder to come by, product managers are still likely to shout louder. Yet this announcement is unlikely to remain isolated… would you bet against carbon footprint becoming an integral part of Annual Reports, alongside EPS and ROCE, in ten years’ time? That’s the way the Environmental Protection Agency is heading in the US…

But don’t panic just yet. Service can play a major role in reducing carbon footprint - all along boosting profitability. Cutting unnecessary trips through routing and scheduling and by ensuring techs have the right part, reducing inventory levels, improving remote support… it’s only natural to look at this from a business perspective, and to how it improves first time fill- and fix-rates, or calls/day. And there’s nothing wrong with that. But you know what? There’s nothing wrong in acknowledging that it cuts down your carbon footprint, either. That’s when it all starts tying together. Neat, eh?

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

I wanted to expand on the concept covered in the previous entry to explore a key benefit of excellence in service - one that is all the more critical in the current climate.

We have seen throughout this blog how service delivers profitability on a sustainable basis. It helps you retain profitable customers at a time when, rightly or wrongly (don’t get me started on this one - not here…) marketing spend is typically cut; it offers differentiation at a time that product commoditisation is rife. Sure, mass customisation is happening; but technology makes that easier to copy than differentiation built on people and processes; differentiation, that is, built on service.

So these uncertain times call for proven solutions and methodologies. As President Obama said on the steps of the Lincoln Memorial on Inauguration Day, “Our workers are no less productive, our minds not less inventive, our services no less needed, our capacity remains undiminished”. He was addressing a US crowd, but such statements ring true around the globe. Yet what these times are compromising is the critical link between that invention and the financial gains it stands to deliver.

Let’s take one simple example, since everybody else seems to be doing the same: Twitter. Do you tweet? I’ve only just started (feel free to follow me), out of a mixture of curiosity and fascination. The phenomenon itself is gathering attention, but so is curiosity over how it will make money. Indeed, is there any money in Web 2.0? I expect Apple and its network of independent iPhone Apps writers would merrily tweet ‘yes’. But, for many, the question mark (and the cloud of the previous dotcom crash) hovers.

With service, there are no such debates. There is room for constant improvement, in which technology (including Web 2.0) can play a significant part; but the fundamentals are a given. Look after your customers, and they’ll look after you. And, when the winds are howling and the levies are cracking, as is the case all around us, it’s imperative to ensure we excel at the basics before attempting to stretch. Many a great offerings have failed due to bad timing. But there is no such thing as a bad time for great service. Service always delivers.

That’s what makes service sexy. Because it’s not about comparing a sweaty technician with a funky website. It’s about knowing whom you can count on when it matters. And, if your customers can count on your service infrastructure to deliver, so can you - to deliver profits. And that’s always worth tweeting about.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

Earlier this month, we looked at the Convergence Economy – and how the paths of Manufacturing and Service are uniting to differentiate successful OEMs from tales of woe. That was less than three weeks ago – so what’s happened since?

Regardless of where you are reading this, some companies will have gone bust. Others will have made the headlines for their request for state assistance. When did interventionism suddenly become acceptable again?

There are fundamental economic issues, as well as moral, discussions to be had here – only ‘here’ is not the place. Servigistics’ concern, both as individual corporate citizens who now indirectly own a stake in some of the world’s leading brands as well as a corporation dedicated to helping leading global players, is that the companies who today benefit from State Aid will tomorrow benefit the countries supporting them – through taxation, innovation and employment opportunities. It is an aspiration which belongs to no political affiliation, but again illustrates how these are times of convergence.

State Aid that is not linked to a fundamental shift in strategy is unlikely to yield the long-term results required – and may only serve a political purpose (although, in the automotive industry, the concept of a “domestic car industry” is now blurred – or at best emotional). It is widely accepted, for example, that many problems in the automotive industry, while exposed by the downturn, were not caused by it – not least its tendency to run at full (and expanding) capacity regardless of the state of the economy. Sooner or later, something would have to give – and, boy, has it given. Which is why there is a sound argument (put forward by, inter alia, the likes of “The Economist”) for not supporting manufacturing – if all it is going to do is manufacture items nobody currently wants at prices nobody can currently afford.

Those “ifs” are the key to the argument. If State Aid enables long-needed business transformation and refocus on principles (e.g. R&D into alternative fuels, as is the case in the UK), then it goes beyond the purpose of a short-term band aid. Alternatively, it may be prolonging the agony at the expense of more creative organisations.

This is not the place for company-specific considerations. But, as we raise our heads above the water and consider what the post-downturn model may look like, here are some generic thoughts for you to dwell upon:

·         Companies that have mastered flexibility in both manufacturing and service are faring better in these troubled times;

·         OEMs that meet the convergence criteria in offering products and services are less likely to make the headlines for the wrong reasons;

·         When it’s genuinely customer-focused and market-oriented, innovation pays. Companies that have reached the top through innovation in their field should continue to enhance their proposition by focusing on core capabilities while enhancing their secondary capabilities through best-of-breed partners

Selling global strategic service management solutions requires worldwide travel. So in addition to our blogs about post-sale service and the related solutions, we also want to offer our readers valuable hints and tips about places that meet the necessary standards for cleanliness, Wi-Fi connectivity, and thriftiness - all the while ensuring you can actually tell when you’re in Amsterdam rather than Düsseldorf, Paris rather than London – off the beaten “chain hotel” path. You’ll also find information on local eateries, running locations, and offer transportation tip for the cost-conscious but curious business traveler.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

ACCOMMODATION

Amsterdam is, unsurprisingly, awash with chain hotels - both in the centre and near Schiphol Airport. But the centre also features a number of small hotels built within traditional Dutch buildings. They lack the size and scale to command great star ratings, but how long are you going to spend there? Our favourite is the Bellevue, a recovered building with Wi-Fi throughout where the rooms offer comfort you’d expect for a lot more than the €77/night we paid (the beds alone just about warrant that…). But the hotel’s biggest asset has to be its location - just a few minutes’ walk from Dam Square, and literally two minutes across the road from Central Station. Breakfast is served from 7am on weekdays - when we were in town, the selection was broad (from cooked to staple Dutch ham and cheese), although the more time-constrained amongst you may need to allow for an extra few minutes as there was never more than one staff on hand.

FOOD

You won’t struggle to find a cuisine of your liking in Amsterdam. Indonesian and Argentine restaurants are all over the place, and there are even a few Italian and… er, Dutch places, too. On our last trip, we opted for an Indian meal at Moti Mahal, just five minutes from the hotel en route to Dam Square - and our hunch was rewarded with a fine selection.

After enjoying your meal, you won’t be short of options should you care for a pre-bedtime drink - either in a traditional Dutch bar, or in a more ‘international’ environment (the city’s not short on Irish or British-style pubs, which can be useful if you’re missing a sporting event). Just remember that “Coffeeshops” are not the best places for a coffee…

GETTING IN AND OUT OF THE CENTRE

When arriving via Schiphol, Amsterdam’s ring road is no smoother than most others in Europe - hopping in a cab can cost time and money. Since trains connect Schiphol and Central Station every quarter of an hour and take between ten and twenty minutes, costing just over €3, the railways offer best value on all fronts. It is also the reason why we prefer to stay centrally and travel in the morning rather than stay near the airport, if we have to make that choice - with additional savings on hotel costs.

MIND MY BIKE

You have little to fear from car drivers in the Netherlands. But watch out for cyclists! They will rarely stop, and could come at you from any angle. The Dutch pedestrians have little problem with this - each and every one of them has been, or still is, a cyclist themselves. But, if you’re not used to it, make sure you take every care.

RUNNING OPTIONS

To maintain your fitness, get on over to Vondel Park - in the south-west of the city. It’s not bike-free, but it’s a safer option than most.

OTHERS

Oh, one could write a whole book on this section… But we won’t bother. Just enjoy the canals. And, if your watch has GPS and indicates sea level, don’t look - or you might get a sinking feeling.

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

For anybody who has just landed on Earth from a far-flung planet, here’s a very brief (and over-simplistic) overview of global economics:

• Once upon a time, people made things for people who would buy them. This was called the ‘Manufacturing Economy’;
• Then, as raw materials and labour, got expensive, people slowed down on making things, and spent more time selling things you could not actually touch or feel, such as financial products. This was called the ‘Service Economy’.
• Then a lot of people who had sold a lot of financial products suddenly realised there was a big hole in the economy, and thought that maybe making things was not that bad, after all. But people across the Service Economy had learned some valuable lessons about looking after customers once things had been made, too. So then…

Well, then is now. The next stage is the one we’re writing now. How is today’s history looking?

Our children, and our grandchildren, will be the ultimate of judges of that - if not in the classrooms, then certainly with their payslips, which will determine how many of our “financial programs” they find themselves funding. But some trends are already emerging - and could prove valuable for any Manager.

• Successful OEMs will need to master both Manufacturing and Service, providing both quality products and after-sales services. As Pierfrancesco Manenti at “Manufacturing Insights” predicts, “Manufacturers will enhance their capabilities as providers of services”. Excelling at either manufacturing or service may suffice in certain B2C industries, where replacement costs are ludicrously low; but they are the exception. And no strategy should be based upon exceptions;
• Successful OEMs must not forget what made them successful in the first place - and continue to leverage their core expertise while building new strengths around them. But that need not entail developing those new capabilities in-house - as we saw previously, collaboration is an effect of the downturn that has benefits to contribute in times of growth, too. And outsourcing / acquiring skills is nothing to be ashamed about if it allows companies to deliver excellence in the fields that made them leaders

Balancing the quest for in-house improvement with the ability to identify areas where procuring those capabilities externally is the wiser option will be a hallmark of any successful manager in the current downturn, during which ROI will be a key decision influencer. But this is a valuable skill that should not be thrown out with the doom and gloom when the economy starts to recover. Servigistics is a software solutions company, recognised as a leader in its field - a field that, while we may expand, we will generally stick to. Yet there are manufacturers who seek to maximise the value of their SSM operation by developing in-house solutions, when the cost of a Servigistics implementation could probably be covered by the savings realised in the additional development time of a bespoke product. I’ll leave you with that thought.

Make it, Sell it, Service it

By Giacomo Squintani, Marketing Manager EMEA, Servigistics

If you’re struggling as a manufacturer in the current climate (or if you want to avoid membership in this club), there is an article out there that is well worth your time.

It may well be that you’ve already caught “Britain’s Lonely High-Flyer” in this week’s “The Economist” - or maybe its introductory piece, “What Rolls-Royce Can Teach Britain”. Both articles look at Rolls-Royce, and how “the way in which it has melded technology and service” offers “much to suggest that it will weather an economic downturn better than its rivals”.

 ”The China Effect” has relegated Britain’s share of world merchandise exports to just over 3% - yet the UK ranks second for services. And, whereas Rolls-Royce generated only 20% of turnover through aftermarket in 1981, and 40% in 2001, post-sales now contributes to the majority of the group’s revenue.

 Can everybody be a Rolls-Royce? Can everybody implement strategies based on “adding value through the provision of product-related services”? Well, maybe not everybody can maintain products for decades… I don’t expect to be using the same digital camera in 2029, downturn or no downturn. But the principle is transferable - and we can all learn from the leaders. After all, “the success of Rolls-Royce suggests that the world will not be neatly divided into firms (or countries) that make things and those that sell services. Flying high depends on being able to do both”.

by Giacomo Squintani, Marketing Manager, EMEA, Servigistics

Last-minute shopping and trolley fights in the aisles. TV schedules crammed with repeats and specials. That sudden realisation you forgot to send someone a card as theirs hits your doormat. Yep, it’s that time of year again.

It’s that time when we look out through the mist of our window and hazard some predictions for the New Year. If you’re in Finance and you got your predictions right last year, why are you reading this? You should be enjoying your retirement. As for the rest of us, here are five predictions for 2009:

1.      Vendors will have to show unprecedented flexibility on payment terms. In software, SAAS will garner further popularity, both for its technical and financial benefits, and vendors unable to provide “software as a service” solutions may not be around to read the 2010 predictions;

2.      The roles of Field Technician and Account Manager will continue to merge, as companies seek both to reduce costs and leverage the on-site contact enjoyed by their The roles of Field Technician and Account Manager will continue to merge, as companies seek both to reduce costs and leverage the on-site contact enjoyed by their mobile workforce. The success of the new role (already in some places called Technical Account Manager), for employees and employers alike, will be heavily dependent upon clarity of goals and training in the newer part of the role, and on the ability to measure those;

3.      The drive to regain control of technicians’ schedules will encompass preventive, predictive maintenance and self-fix solutions. In its April 2008 “The Maturity of Product Service” report, AberdeenGroup spoke about an “increased focus of service and manufacturing firms on preventive and often predictive maintenance processes”, highlighting “the drive for zero downtime [as] the primary reason for the 41% increase in the percentage of assets being monitored remotely over the last year” - a trend which the current climate can only strengthen. In 2008, 26% of Best-in-Class companies had a Knowledge Management solution in place, against a general backdrop of 19%. Will you join the elite?

4.      Optimising after-sales pricing will play a critical role in driving profitability from stagnating sales volumes, and in locking out grey market competitors;

5.  Mobile devices will continue to deliver on their promise, limited more by privacy concerns than technology. Expect to receive time-limited, segmented special offers by SMS when your favourite retailer tracks you within half a mile of one of its stores before long, as the High Street fights back against the recommendations systems of its online competitors… and expect to deploy your mobile device more and more frequently in a business context.

Whether you’re managing the grocery budget or a multi-million dollar corporate budget, at times like these there is a danger of underestimating the importance of the long-term and making unhealthy decisions. So reducing SLA levels as a means to cut inventory is not recommended. Companies that prove uncompromising in their investment in service, on the other hand, will be best placed to ride the bumpy ride that 2009 will prove, and to establish strong foundations for the new world order that will follow, maybe sometime in 2010. But those who forget the lessons that have been learnt in recent years… they are in serious danger of making some costly mistakes all over again.

Let’s not leave it twelve months to discuss these predictions - what are you expecting from the New Year? And, whatever your goals for 2009, here’s wishing you all the best in achieving them!

5.    Mobile devices will continue to deliver on their promise, limited more by privacy concerns than technology. Expect to receive time-limited, segmented special offers by SMS when your favourite retailer tracks you within half a mile of one of its stores before long, as the High Street fights back against the recommendations systems of its online competitors… and expect to deploy your mobile device more and more frequently in a business context.

Whether you’re managing the grocery budget or a multi-million dollar corporate budget, in times like these there is a danger of underestimating the importance of the long-term and making unhealthy decisions. So reducing SLA levels as a means to cut inventory is not recommended. Companies that prove uncompromising in their investment in service, on the other hand, will be best placed to endure the bumpy ride that 2009 will prove and to establish strong foundations for the new world order that will follow, maybe sometime in 2010. But those who forget the lessons that have been learnt in recent years… they are in serious danger of making some costly mistakes all over again.

Let’s not leave it twelve months to discuss these predictions - what are you expecting from the New Year? And, whatever your goals for 2009, here’s wishing you all the best in achieving them!

By Giacomo Squintani, Marketing Manager, EMEA, Servigistics

At Servigistics, we have been underlining the strategic value of service for manufacturers for several years now. But how has after-sales impacted other industries - industries where “after-sales service” does not always involve service parts, often embracing offerings which customers appreciate just as much? Let’s take a look at some of the vendors whose items you may be hoping to find in your stocking:

LiveNation

Remember record deals? An artist would submit a demo, and, if successful, sign for a record company. CBS, Atlantic, Motown… names that are entrenched in the minds of music lovers. But recording deals aren’t what it’s about anymore in a world where music downloads and cheap CDs have turned recorded music into little more than the opening gambit. Enter players like LiveNation, with deals covering both albums (the product) and tours (the service) for household names like Madonna, reportedly set to earn $120m over 10 years from the venture. CD prices may be falling, but concert tickets show no sign of doing so… How much is an album an artistic statement - and how much is it becoming a means to attract an audience?

Apple

As Harvard Business Review correctly points out in its December 2008 lead article, when the iPod landed in 2003 it was not the first of its kind. The Rio had hit the stores in 1998, and the Cabo 64 in 2000. The products had been there for some time. What was missing was a reliable, legal after-sales infrastructure to enrich the initial offering. Enter the iTunes Store - and enter a market revolution. By providing a means of enriching the initial product, Apple saved digital music from piracy - and, quite possibly, saved itself.

Low Cost Carriers (LCCs)

In a downturn economy, how will LCCs (who have cut just about all the costs there are to cut) fare against rising fuel prices and increasingly low levels of disposable income? What will determine their survival?

To a large extent, it won’t be fares. Of course, they will help - not least in ensuring passenger load factors (the percentage of available seats sold) still outperform those of the traditional, more expensive carriers. But the bottom lines of players like EasyJet, Ryanair and Air Berlin are helped by far more than mere e-ticket sales. A recent poll of 12,000 airline professionals found that 56% of them believed that “the best way at this time for airlines to effectively battle rising costs is to charge fees for amenities that were once included in the price of a ticket”. When announcing Q3 2008 net profits of €35m, Ryanair CEO Michael O’Leary commented that “ancillary revenues [...] grew by 30% to €111m. Ancillary penetration continues to increase, and we are on target to achieve our ancillary sales objective of 20% of revenues over the next 3 years”.

The initial sale truly is “breaking down”… Sure, good ideas have backfired on some airlines - a lot of it is about communication (to customers, staff and press). You can read a lot more about Ancillary Revenue in the Airline Industry here. But what’s happening in your industry? As service offers scope for competitive differentiation, are customers expecting more for their initial buck - or are they getting used to offerings being broken down into individual components?

Happy Holidays!<-->

By Giacomo Squintani, Marketing Manager, EMEA, Servigistics

Measuring Intangibles to Drive Customer Satisfaction and Sales

WBR recently hosted “Strategic Service Management 2008″ at the quirky, yet endearing, Hotel Le Plaza in Brussels. At the end of the event that combined the previous parts-focused Interlog and the field technicians-oriented Field Service to offer a more holistic (and relevant) view of the service business, Hilbrand Rustema of Noventum led a panel of industry leaders, including  Hans-Werner Albrecht of Pentax Europe, Harald Hofstätter of Gambro, Richard Burgess of Oracle, Ole Buus of Xerox and Paul de Swaef of Baxter Healthcare discussing the balance between tangible and intangible issues in Strategic Service Management.

The key point was how the focus of field engineers appears to be shifting away from traditional KPIs, such as number of visits/day, towards spending time developing relationships, gathering sales intelligence and keeping the competition out of the door. The participants agreed that they want field engineers to strengthen the corporate brand, the service brand; they want them to push additional services, gather information, and turn customers into our salesmen. They want them, pretty much, to add account management and pre-sales skills to their repertoire. That’s quite a (r)evolutionary shift…

Albrecht commented that “service is too often focused on the logic. There is a need to establish an emotional link”; Hofstätter spelt out the implications even more clearly, stating that “in my industry [medical], it’s worth spending half an hour with a doctor or a nurse for that emotional connection… it is dangerous to focus on optimising the number of visits/day”. Considering that scheduling optimisation is a key benefit of Servigistics’ Workforce Management Solution, I won’t deny that this suggestion sounded almost blasphemous… at first. Give it a few seconds to sink in, though, and it makes perfect SSM sense - as we’ll see shortly.

Burgess painted a typically British perspective, stating that Avery Weigh-Tronix found that its techs had served the company for an average of nineteen years. But their background and their British nature meant that their inclination was to “get in, fix the job and get out - it’s what we do”.

Ole Buus then crystallized the panel’s thoughts by stating that “Strategic Service Management represents the shift from technical service management to business management, from solving technical problems to solving customer issues”.  Neat. But how will this evolution be managed - and does the downturn threaten it?

I put my concerns to the panel, who appeared upbeat about the shift’s chances of survival. Albrecht replied that Pentax had processes in place to measure customer satisfaction. Great - because improving customer satisfaction is one of SSM’s true deliverables, with proven ROI. But what if the emphasis on ‘intangible’ means you can’t measure the benefits? Will Boards continue to support it without visible ROI?

Don’t get me wrong, the shift represents unquestionable progress and makes long-term sense. Techs are ideally placed to gather such intelligence, and should be encouraged to do so. But many visionary long-term strategies have been the victims of short-term-ism in troubled financial times.

How will companies balance management’s strategic vision with the risk of technicians abiding by more traditional, operational KPIs to protect their jobs? If this is not addressed, and the CFO orders a 20% headcount reduction, time spent helping their Sales colleague book their President’s Club tickets could suggest they’re slow and unproductive….

This is why I believe another way will prove to be the true SSM way, safeguarding the visibility and measurability that companies have spent years establishing. By breaking down the critical intelligence gathered by field technicians into basic components and feeding that into the corporate CRM system and processes that have so far been the primary domain of Sales and Marketing personnel, that intelligence can be measured, rewarded and acted upon. It can also ensure engineers are coached throughout an evolution that is asking them to move out of their comfort zone while continuing to promote the company’s values. And there is nothing intangible about this strategy - or about the results it can deliver if successfully executed.

This is why Hofstätter wasn’t being blasphemous after all. There is more to Workforce Management than scheduling optimisation. Leveraging mobility and Knowledge Management, it provides the necessary interactivity to capture the metrics that in Brussels were defined as ‘intangible’, ensuring they become actionable intelligence and avoiding the danger of another buzzword failing to deliver ROI.

SSM looks at the bigger picture, leveraging synergies. Whereas in the past technical and psychological barriers meant that CRM systems were the kingdom of Sales and Marketing staff, ERP systems were the kingdom of Finance and Administration, and Service used whatever disparate tools were left, in this brave new world those old barriers have been knocked down and common platforms established. That is one of the cornerstones of SSM, which delivers cross-functional decision-making support throughout an organisation to facilitate maximising service and profitability even as your employees’ skills (and needs) broaden.

Anyway, enough from me… what about you, and your organisation? Are service technicians broadening their role? How are you ensuring the time they spend developing relationships is measured? Is there increasing convergence between how your Sales and Service personnel are managed and rewarded? Let me know by commenting below. Let’s talk SSM.