Strategic Service Management

By Shannon Rentner, Director, PR, Servigistics

Interactive Marketing is cool, innovative, slick, forward-thinking, and creative.  B2C companies that employ interactive marketing on their websites, in their ad campaigns, marketing collateral, etc. make companies with static websites and non-interactive collateral [what is the opposite of interactive?] look like Sunday school teachers from the 1970’s using flannel boards to illustrate Bible stories.

Consider some of these inventive examples of interactive marketing:

• Real women’s stories about financial planning for Wachovia Securities. What a refreshing way to present the client case study: http://www.planforwhatsnext.com/
• Remember Harold and the Purple Crayon? UPS tapped this magical marker idea for their whiteboard campaign where the long-haired guy illustrates what “brown can do for you”: http://whiteboard.ups.com/
• What if you live to be 100? How will you take care of yourself? Genworth Financial created the Genworth100, a website that featured the oral history of several centenarians as a way to pitch their financial planning services.

It’s entertaining, eye-catching, fun and informative.

But for B2B transactions, turn off the talking head.

When I’m sitting at my computer at the office doing research or evaluating potential vendors, I want the flannel board approach - let’s be old school: get me right to the point - something I can quickly read and process. Clear, Concise, and Direct.

Don’t make me sit there and listen to some dumb talking head spewing fluff. When I want a client case study, I’ll click on it and then it better be a good story illustrating what the potential vendor can do.  Otherwise, I’ve lost patience and will move on to the next vendor.

How does this relate to service?

The other day I was driving home from work and saw a car with ricohteknoforce emblazoned across the side and rear. So, when I returned to work, I decided to visit the website to see if this was another Geek Squad post-sale service play.  The answer: yes and no - more of a B2B IT outsourcing play.  Nevertheless, I was completely rattled by the talking man. I just wanted to navigate the page to see what Ricohteknoforce offers. http://www.ricohteknoforce.com/

Seriously, no one listens to it. So just save him for later. If I want to hear someone speak to me, allow me to click on it - don’t throw him at me while I’m sitting in an open office and pressed for time.  Consumers, on the other hand, have the time and privacy away from work to enjoy such leisure viewing and listening activities. I don’t.

But I also rip off the wrapping paper from my presents rather than slowly untying a bow, unpeeling tape, and neatly unfolding the pretty paper. Those people drive me nuts.

What do you think?

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 Shannon Rentner, Director, Servigistics

We’ve been saying it ever since I started working here: post-sale service can not only be a competitive differentiator, but it can also be a source of revenue. Yeah, yeah, and I sound like a broken record - oh wait, people under the age of 30 may not understand that reference to records….

In fact, service made the cover of BusinessWeek once again – but as fellow service blogger John Wild points out – “What was missing was the Business to Business sector in which extreme customer service is so important now.”

Wild also reminds readers that “the end business customers (those that rely on the equipment they’ve purchased or leased to remain performing or to be service ready) are a fickle bunch. They’re paying for performance (up time) and expect it. Let them down, and they’ll start looking elsewhere for products that perform better or that are serviced better. So this challenge hits right at home in the field service and service parts logistics environment.”

That means that the right part better arrive with the right technician at the right time at the right location…or else you’ll miss your SLA or the client will simply do business with someone else in the future.  

Why some many business publications fail to mention B2B post-sale service is perhaps due to the fact that it’s just not sexy.  After all, the fun comes from buying – not maintaining or repairing, right?

Wrong. Post-sale service  is sexy. It’s sustainable, socially responsible, profitable and catching on. Hope your business is ready!

by Shannon Rentner, Director, Servigistics

In a recent article in Manufacturing Business Technology, “Brains and Brawn: Manufacturing has a future in the U.S.,” AMR Research analyst Bill Polk discusses the future of US Manufacturing, or to be more exact, whether or not the US has a future in manufacturing.  This was a topic I reported on over 10 years ago as a technology reporter at the Austin Business Journal, but the focus was on wafer, or semiconductor, manufacturing.

At the time, Austin was trying to recruit more fabs, or wafer fabrication facilities, which was a big boon to the local economy. However, fabs were already going overseas in droves. And was that necessarily a bad thing for the American economy? After all, so the discussion followed, as long as the design remained in US-based companies, the US could maintain its leadership and places like Taiwan or Singapore were much more cost-effective than locations in the U.S. or Europe.  And workers could turn to service-related jobs.

However, it appears that the discussion has once again shifted dramatically. Perhaps it’s no longer about geographical and political boundaries - .ie. where a product is made or designed. After all, the new catch-phrase is GLOBALIZATION and most companies employ people of all nationalities - all the way down the proverbial food chain from C-Level Executives to Fab workers. Therefore, corporate entities often exist beyond country borders.  Here at Servigistics, a US-based company, I work with colleagues in Asia, India, Europe, and South America. We have the same goal: to deliver the best solutions and the best service for our clients, regardless of nationality or country origin.  And at the end of the day, we want our company successful because it’s what helps feed our families.

Now consider Sematech - the Austin-based Consortium that played a vital role in revitalizing semiconductor manufacturing and development in the U.S. at its inception. Today, it’s no longer about bolstering US semiconductor companies but now serves as the “world’s catalyst for accelerating the commercialization of technology innovations into manufacturing solutions. By setting global direction, creating opportunities for flexible collaboration, and conducting strategic R&D, SEMATECH delivers significant return on investment to our semiconductor and emerging technology partners.”

How does this relate to Polk’s article on American manufacturing? As another well-known analyst is known to say, “Manufacturing will continue to go East and service will head West.”  The problems in supply chains will continue to occur, but it’s simply a matter of growing pains. But post-sale service on those goods is another supply chain story and that will most likely remain regionally-based.

However, his final point concerning U.S. manufacturers’ “heritage of craftsmanship,” using Harley Davidson motorcycle as an example of US-based manufacturing, appears more of a marketing discussion than a manufacturing issue. Harley embodies an American concept, an American image of freedom and individualism on the open road. Would that change if some of the components were manufactured in China or India? What’s even more significant, IS every last piece on a Harley Motorcycle made here in the US?

That being said, we still want to be in touch with our own culture, our own region, our own locale. So Polk’s call for “products that are innovative in design and function, and of unquestioned quality” is a salient point.  But apart from food or local arts and crafts, the origin of where a product is manufactured seems moot.

But where do I go if it’s broken?

Shannon Rentner, Senior Manager, Servigistics

Driving home from work the other evening I was listening to the radio and heard a commercial for AT&T’s new service: ConnecTech. Now, when I first heard the announcer say ConnecTech, I honestly thought he was saying “Kinetic” but with an initial “o” sound.  So it’s a difficult to pronounce name, it goes to show that service is selling.

Forget about Target partnering with Zip Express. The new belle at the ball who claims to “out-Geek” Best Buy’s Geek Squad (forgive the mixed metaphors) is AT&T’s ConnecTech, which is now available for residential customers in all 50 states, whether they use AT&T or not. Customers can request home theater installation, computer and home network setup, and a host of TV, computer, and network repairs - all right at home.

So, I may not need AT&T as my cell phone carrier and I may already have a DSL provider, but I certainly will need help at some time for a malfunctioning computer or a broken plasma TV that I won’t want to lug into the local electronics store.

So once again, it comes down to the service - especially when spending for new products is almost nil.

By Sebastian Urbina, Product Manager, Servigistics

With the worst economic crisis in decades, it is understandable that companies, and people, for that matter, are looking for all ways to reduce expenditures, too bring costs down.  However, is this the best of ideas? 

However, there is a flip side to this.  Consider this situation.  You are choosing between two plumbers, both seem to be equivalent in terms of skills, knowledge and functionality; however, one is 15% more expensive than the other.   But what happens when you your toilet backs up at midnight after you are paying for the night of bad Mexican food?

Who is most likely to show up quickly before the water exits the bathroom onto the bedroom carpet?  The plumber that charges an average price to or the one that charges above average prices.   Remember, both can get the job done.   Since both you and the expensive plumber know that you could get it fixed cheaper, you’d expect the expensive plumber will provide better service to ensure repeat business.

This phenomenon has been studied in terms of paying employees more.  Efficiency wages have been discussed extensively since deciding to pay $5 a day, doubling the salary of most workers in 1914.  There are all sorts of benefits from efficiency wages, but they can be summarized simply by “those who get paid more work harder.”

I believe the same occurs when you pay for service or anything that is continual and will result in repeat business.   It becomes particular important when you are paying for use of a resource that is constrained.  Consider you are one of the many airlines that run on the same engines.  In an airport, there is a freeze over that breaks the engine of all airplanes on the ground.   All the airlines have a maintenance contract with the same manufacturer.  However, since this is an unexpected event, the manufacturer can not provide service to everyone.  Who do you want to be, the company the pays the lower maintenance fee or the one the pays the highest.  Even if the contract is the same for both, who do you think will be able to fly the planes faster?  Without a doubt it will be the one that pays the most money.  When decisions need to be made on how to allocate resources, resources get allocated to those that produce the most revenue.

Another example is software licenses.  You pay for maintenance upgrades, improvements and support.  Let’s say two companies are asking for different enhancement requests of equal complexity.  They both run the same software and have similar contracts.  However, there is a fixed number of developers that can get the enhancement finished.  Who do you think is going to get their request finished first?  Everything else being equal it will be the client that pays the most.

Paying more has its benefits.  You are able to demand more.  However, this only works when there is a promise of continual business.  Paying more for the same computer from Best Buy if it comes with a service contract will be worth far more than some cheapie off the internet - at least when a virus wipes out your hard drive and you need it repaired/recovered.

As times become worse and if the economy doesn’t improve, consider when you to cut costs what it actually means to pay less.   In theory, when you cut the cost it might not been much, but in situation when you need the service, it might just no be worth it.

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 Shawn Lane, VP, Product Marketing, Servigistics

I recently had the pleasure of chairing a day of the European Strategic Service Management conference in Brussels.  And it was pleasurable, unusually.  I attend lots of tradeshows and events, but this one was genuinely interesting, partially due to the quality of the attendees.

Attendance wasn’t as high as expected, largely due to corporate cuts in travel expenses.  But those that were present tended to be more senior in stature and surprisingly candid in their conversations.  This show ended up being a true collaboration among leaders in their respective fields.

The second reason I enjoyed the show was the topic.  This is the first event that has been specifically labeled “Strategic Service Management,” and it truly was about the business STRATEGY.  Everyone was talking about how the service arms of their businesses were crucial in delivering profits, particularly in today’s economy when new product sales are down or flat.  Service has long been a strategic topic for businesses, but only now is the world beginning to recognize this fact.  Past conferences I have attended have focused on only one area, such as field workforce management, or parts management, or warranty management.  This is the first show that brings all these topics together as a holistic approach to the service business.  Kudos to WBR for arranging a conference that deals specifically with this topic.

People from a wide variety of industries attended this show, including healthcare, industrial equipment, consumer electronics, enterprise computing, oil & gas, construction equipment, and power generation.  Despite the diverse industries, there were several consistent themes not only in the presentations, but also in hallway discussions.   The buzz was in the following areas:

• Centralized vs. Decentralized Service Organizations
• Training & Knowledge Management
• Service versus the Sales team
• Compensation and Incentives for Customer Service
• Decision Support & Workflow Automation
• Customer Satisfaction Surveys
• Telematics & Remote Diagnostics

I don’t have the space or time to address all these topics today, so I’ll start with organizational theme.

Centralized vs. Decentralized Service Organizations

Ah, the classic management dilemma.  Should we centralize our resources and organizational structure to drive efficiency and standardization, or should we decentralize to achieve more customer focus?  And what about the 1980’s style Matrix organization that tries to do a bit of both?  Companies go round-and-round on this topic, generally switching back and forth as management changes occur.  Unfortunately, there is no ‘one-size-fits-all’ answer to this question, and I heard presentations from companies moving towards both.

As for Matrix organizations, it seems like everyone but the management consultants hate the idea.  But I did hear an interesting podcast about managing in a matrix organization on Manager’s Tools.  Their basic premise is that matrix orgs are inherently inefficient, but if you’re stuck there, you should know how to manage through influence and through clear operating principles.   (http://www.managers-tools.com)

Of all the presentations I heard, Ivin Smith, Vice President, Customer Service & Worldwide Technical Support, Pitney Bowes, had a good perspective on this topic that summed up the attendees’ opinions well.

First, identify the objectives of each function.  If these objectives are similar across product lines or geographies, then centralize it.  In his case, Ivin chose to centralize Pitney Bowes’ technical support and training structure.  Rather than treating technical knowledge and product skills as an after-thought to be managed by region, the centers were staffed by training professionals who developed certification processes world-wide.  By the same token, he decentralized areas where objectives may differ and more customer focus could be generated.  Pitney Bowes moved to a decentralized structure for major account focused regions and commercial focused regions.

Secondly, drive the P&L responsibility down as low in the organization as possible.  Ivin assigned P&L responsibility all the way down to the Service Manager level.  This discipline ensures focus on both revenue generation as well as profitable and efficient operations.

Finally, develop effective operating principles that are clearly communicated to the organization.  The catch-phrase is PRIDE, which stands for the components of their operating principles.  Ivin has issued a card to each service engineer that outlines Pitney Bowes’ service operating principles and holds his service department accountable for acting to these principles in their daily work.    OK, issuing a card does seem like a very AMERICAN management practice – but hey, sometimes those Americans get it right.

By Sebastian Urbina, product manager, Servigistics

On a commuter flight one Friday night from NYC to Atlanta, I ended up speaking to the two people sitting next to me.  That should worthy of note in and of itself. I generally limit the comments to my row-mates to “Excuse me” as I head to the restroom if I’m on an inside seat and “You’re Welcome” if I’m the one inconvenienced by their bodily needs.  I’ve had overnights flights in which we haven’t even reached that level of communication due to the  “don’t bug me I’m on the plane and don’t want to know your life story” approach.

This time, my row-mates were two consultants from competing software companies.  I originally thought it was funny and tried making fun of the situation, but they didn’t seem to care.  Both were road warriors with years of experience as the Monday morning to Friday afternoon.  Me, a former cubicle monkey converted into a stay-at-home-laptop-on-lap-coach worker, was eager to hear the war stories.  However, one of the consultants, a married woman, was talking about her husband.  Normally, this would be enough for me to tune out the conversation as old woman’s gossip, but this was interesting.

She was talking about how her husband, a non road-warrior, complained when airplanes were late and plans went awry.  She would just tell him to relax and not worry about it.  Apparently, the discussions went on ad nauseum and the husband simply could not understand how she would not be bothered by incompetence.

It wasn’t until he became a fellow road-warrior himself that he understood her patience and stopped complaining.  She explained that the experience of being on flights so much taught her that “stuff happens” so it no longer caused her grief or stress. Once her husband started travelling he developed the same tolerance.

The actual underlying problem here is not that airlines have poor service.  (As someone once stuck in the airport at the beginning of a month long back-packing trip through Southeast Asia, I can assure you they do.)   The problem here is that expectations are poorly managed.

People buy airline tickets expecting a service, a service that includes on time arrival.  That is why airlines have schedules.  Services based on a schedule are generally controlled tightly, just as anyone trying to get on a German train arriving at a station 2 minutes too late can tell you.  We do understand that things happen; however, we believe these are rare events that generally do not affect us - especially if we only travel sporadically. Now the veteran air commuter had enough experience to know that she had to reset her expectations.  When things went wrong she expected it and, thu,s was not fussed or stressed.  She is a much happier person than her husband was as her expectations were in-line with the service offered.

This got my thinking into the wider range of services.  I started feeling that most angry customers are probably a result of improper expectations.  If you buy a 30 year old car and the radiator falls out are you upset?  You probably are somewhat, but less than if you had just bought a brand new car and the same thing happens.

Lets analyze this situation, in both cases you are buying a car (new to you) and it breaks down shortly afterwards.  The difference in reaction is complex, but it is fully based on your expectations.  You do not expect a new car to break down but you could expect a very old car to have problems.  The person who bought the new car will cause havoc and complain about the quality of product.  This drop in customer service can have serious consequences for a company.

However, it is not enough to simply try and reset expectations.  Lower service expectations come with a drop in revenue.  There is a joint Toyota-GM car factory in northwest United States.  The cars coming from the factory are identical but the GM cars were selling for less money purely based on the brand on the car.  This was a result of the expectation placed on the car based on the manufacturer.

This type of situation created a conundrum: you need high expectations to ensure a price premium, but they can’t be too high or those expectations will result in terrible costumer service, which would undermine the process.

Managing expectations should thus become paramount for any company.  Set them to high and bad costumer service will skyrocket; set them too low and you will end up being priced down.   I guess the obvious solution is to set high expectations and deliver on them.

My row-mate would not have had discussions with her husband about the pathetic state of the industry, if the industry had been able to deliver on the costumer’s expectations by simple changes unrelated to weather, like increasing flight times (giving greater margin of error) and increasing maintenance cycles (reducing unexpected mechanical problems).  Guess we know what the industry values.

By Shannon Rentner, Senior Manager, Servigistics

Forrester Research just published two reports in December that demonstrate how critical customer experience is a company’s competitiveness.

While I can’t include the entire report here, if you have Forrester access, you should check them out:

• December 12, 2008. Customer Experience In A Down Economy, by Harley Manning and Moira Dorsey
• December 12, 2008. The Customer Experience Index, 2008 by Bruce D. Temkin

Some key points that we’ve been making have been verified in these reports. For example, in the “Customer Experience in a Down Economy” report, Forrester affirms that there is a direct connection between “a great customer experience and increased revenues.”

In the “Customer Experience Index, 2008,” Forrester reports that a good customer experience fosters customer loyalty. While that may sound banal, customer loyalty translates into additional purchases by the customer. In fact, according to the March 24, 2008, “The Business Impact of Customer Experience” report, “customer experience quality could cause a swing of $242 million for a large bank and $184 million for a large retailer.”

While banking doesn’t require service parts or service techs, a retailer just might. Consider once again, Best Buy, the nation’s largest electronics retailer, with $44 billion in annual revenue. While it, too, is getting pounded by the drop in consumer spending, Fitch Ratings, a leading global rating agency committed to providing the world’s credit markets with independent, timely and prospective credit opinions, says that Best Buy’s reputation for outstanding service that helped it become the number one electronics retailer will help it weather the storm.

[The day after this post, The New York Times reported that Best Buy will have to cut workers due to significant losses. The CEO Bradbury H. Anderson, said in a statement, "We believe that there has been a dramatic and potentially long-lasting change in consumer behavior as people adjust to the new realities of the marketplace."  One new reality, as we've blogged about in the past, is the  "repair vs. replace" attitude for consumers and industrial customers alike, putting a critical emphasis on getting service parts management in order. Companies that can perform well on after-sales service will have a clear advantage in this market, according to Walter Weart, Outsourced Logistics.]

In fact, Best Buy’s technical support business, aka Geek Squad, has been such a huge profit center for the company that other retailers are jumping on board. Target recently hired Zip Express, a company started by a former Best Buy employee, to compete with Best Buy on service.[1] Once again, this demonstrates that it’s not just about the price.

Finally, speaking of electronic gadgets and service, “The Business Impact of Customer Experience” report found that a cable television provider and a cell phone provider were most prone to customers taking their business to a competitor based on customer experience. Therefore, service delivery is extremely important in those asset-and-field-service intensive environments.

Like always, we welcome your feedback. Have any good/bad service experiences to report? We’d love to read about them!

[1] Zinn Fromm, Laura. “In Hard Times, Is Best Buy’s Best Good Enough?” The New York Times, Dec. 7, 2008.

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.

by Sebastian Urbina, Product Manager

A month ago I thought I had found a killer deal on a new HD TV: a 37” High Definition TV for $450 at an online retailer.

I had never used the retailer before, but since I’m technophile, I went ahead with full confidence in the website. After all, I trusted the site that referred me, and they do analyze the sites they refer users to. Additionally, I was paying with my trusty American Express with their great consumer protection policies.

I was excited. Not just with the new TV, but also with having found a good deal.

There is something magical about high definition that makes college football so much better; it’s almost like you are there. Of course, nothing is like being at the stadium. Nevertheless, I wanted my High-Def TV, and I wanted to see the individual leaves of grass on the field.

It turned out the price was actually $500 as I had to pay for shipping, but $500 for a new HD TV seemed pretty good.

A few days later, the door bell rang and I received the big box. Like a kid on Christmas morning, I ripped it open and started arranging it in my living room. Within moments, I was watching Judge Judy in High Definition. I would have chosen another show, but really, Tuesday early afternoon the channel selection, is well, limited. Despite my lack of interest in the show, Judge was crystal clear, and I could see every pore in her judicious face.

A month later the unfortunate occurred: My TV wouldn’t turn on.

Now the fine print of a purchase comes into play. The TV is branded “Scott;” turns out it’s basically a rebranded Aiko. Another company I had never heard of. There is a refrub in the fine print. Turns out refurb means refurbished, which means this was broken, but the manufacturer hope it’s fixed. I called the online retailer. They told me I have to contact the manufacturer, but it should be covered since I’m within 90 days of the purchase date.

I contacted them and explained the situation; they tell me to send them a receipt. I forwarded the confirmation email in and was told to wait 5-7 business days before I’d learn if the warranty was approved.

A week later I called to check in and was told that the receipt hadn’t been received. Fortunately, I wrote down the name of the agent that I had talked to the week before and asked for her. She informed me that I can’t just forward the receipt because it’s too easy to modify. They need it faxed in. So I called the retailer, who told me how to get a receipt form their website and how they could fax it in. I went online, created a pdf of the website and emailed it in. Apparently, that was enough to satisfy the receipt requirement. Next, I had to wait for the warranty department to come through.

A week later they contacted me and requested that I ship them the bad TV. That would cost me $100 - A quarter of the price! Good service would have offered me one of three possible solutions:

1. A refund
2. An in-home technician to service it
3. A new TV with return shipment paid for so that I can replace one with the other and ship the bad one back.

Not this company. I called them multiple times, argued with costumer service, asked to speak to the warranty department, supervisors, and different agents - all to no avail.

The retailer is equally unaccommodating until I threatened to dispute the charge through my credit card company.

So now I’m fuming. Do I waste another $100 chasing a TV that may be returned to me bad again or attempt to recover the cost through my credit card? Why do I have to be in this position? It’s a bit frustrating that all it would take to make me a repeat costumer would be good customer service. And instead of ranting about what went wrong, I could be lavishing praise on them for taking care of a frustrated costumer.

In the future, I’d rather pay more for a product – if it includes outstanding and reliable service – than find the best “deal.” After this ordeal, good service is worth the extra money.

You know how when you buy a new car, you start seeing similar cars everywhere but never noticed it before? I think I’m starting to feel that way about service. I’m starting to see examples of the good, bad and the ugly of service everywhere. I can’t believe that I’m starting to talk service with friends outside of work.

For example, I was catching up with a classmate a few days ago. We hadn’t talked in a few weeks, and we were talking about how work was going. Now this friend works for a large hardware, software, and services company; she manages one of the storage divisions. About a month ago, a big software company teamed up with one of her competitors to create a new fit-for-purpose storage device that was better, faster, and cheaper than anything comparable on the market. I asked her if this new offering scared her.

“No, it really doesn’t”, she said quickly and firmly. I was amazed, I rattled off details about throughput, software specs, price, and applications. I expected her to at least show a chink in the armor, some sign that this seemly disruptive technology would be a threat. “You made a lot of good points, some people will jump to try the latest and greatest, but what happens something goes wrong?” The smug smirk on my face fell.

“You mean you’re betting that service is the differentiator for your products?” I asked.

“Listen, when you talk about products in the dollar range we’re talking, feature, functions, and speed are important but the number one reason people make this level of investment is reliability,” she said. “People will pay for the security and integrity of their data.”

To try and counter her, I mentioned a bit about their redundancy and security features. “It’s not about RAID levels and hardware specs, it’s about who is standing behind the products and answers the phone when you have a problem,” she said. “Both of these companies have a record of poor support and service, reputation means a lot in this market.”

Then she added, “Not to mention, this is a new and untested product, and you know the history of first versions in the technology market.”

She’s right. A few years back, I had to buy a high performance storage array and selected the leader, which was almost double the cost, based on their support agreement terms and levels. I went with the leader based on the experience and reputation of service. I didn’t want to trust our data to a new upstart for fear they wouldn’t be there when I needed them.

I hate to lose a debate, but I conceded.

“You’re right, they both are horrible at service and support,” I said.

“Wait until the finger pointing starts between them when an issue arises, that gets out on the Internet, and they will not be able to give them away,” she said.

“I bet they don’t have the technology to effectively manage their service chain between them,” I said, thinking of that possible opportunity.

“By that time, we’ll have our new products out that will complete very well with their offerings” she finished.

“Sometimes all you need is a small head start,” I piped up.

“Drink your beer,” she scolded.

It’s good to hear that we’re not the only company extolling the virtues [and profit margins] of service.

I just returned from ASU’s Center for Services Leadership Symposium on “Competing Through Service” in Phoenix, where an impressive array of industry leaders and academics discussed the growing significance of service as a competitive differentiator. Featured speakers included executives from Cisco, IBM, Sony, Cox Communications, Best Buy and even the online ‘upstart,’ Zappos.

While much of the discussion and presentations centered on service at the point of sale, I did take home some key points on post sale service.

According to Gary Bridge, Ph.D., SVP and Global Lead, Internet Business Solutions Group, Cisco Systems, automobile manufacturers make about 1 percent profit on the initial auto sale and 22 percent profit on the aftermarket services.

1. Sean Skelley, SVP, Services, Best Buy Inc., reported that Best Buy’s Geek Squad performs service on only 40 percent of the computers it sells and the remaining 60 percent comes from competitors purchased elsewhere.
2. A study on service from the hotel industry found that service recovery had a significant impact on customer loyalty – and future sales. Customers who experienced a service issue and received quick and helpful resolution reported that they were more likely to recommend the hotel to a friend or colleague than customers who experienced no service issues.
3. All the speakers agreed that businesses in the future cannot win on product price due to commoditization. Instead, businesses must compete with value – and service is an enormous factor in that.
4. James Alexander of Alexander Consulting shared that the majority of technology services organizations, to off-set shrinking profit margins on products, expect their field service techs to aggressively help sell services and solutions. Think about it– a field technician can actually visit a client’s home or business and assess not only the current problem, but can sell a system upgrade or even additional services – something that the front-end salesperson wouldn’t see.

More interesting facts, figures and anecdotes to come!

You know a business is a bit desperate when it hires a plane to write boldly in the sky, “SALE TODAY.”

I remember planes flying banner advertisements over the beaches of sunny Ft. Lauderdale over spring break, but they’d fly those things back and forth, usually announcing some type of event – like a happy hour drink specials, ladies night or a wet t-shirt contest. That’s one way to garner attention among beachgoers lying on their backs looking forward to a night of partying. It’s quite another on a weekday in Atlanta.

But this morning, as I hastily schlepped my coffee and laptop to my car, the “SALE” portion was already fading like the morning mist as the plane completed the “y” on “TODAY.” The worst part: As I drove toward the interstate, I never even got to see who was having the sale. What a waste of advertising.

Was it a clothing sale? Car sale? Home appliance sale?

Perhaps I’m a bit jaundiced, but with consumer spending down, it appears that people simply aren’t purchasing new products. Which is why, when my friend – no, not Joe the Plumber but the female equivalent, a stay at home mom – complained to her husband that she desperately needed a new washing machine, he asked her to see if the current one could simply be serviced.

Since the washing machine was no longer under warranty, she discovered that it would cost over $100 just to have someone come out and look at it, much less repair it. Follow-up trips and parts would add up, so she packed up her three children – all under the age of 10 - and drove to the nearest home appliance store. The one she wanted was priced well over $1000, far beyond her budget, and the lower-priced options weren’t near the same quality as what she already had. What could she do? The clothes had to be washed.

This seems like bad news for business, but there is a silver lining – for business and for “Hockey Mom” - and that’s SERVICE. Since most consumers are cutting spending on durable goods, they have to maintain what they’ve already got. Businesses with sub-optimized service centers may be taxed, but those that have optimized the people, parts, prices of those parts and the knowledge involved in repair/return have a significant opportunity in increase profit margins on service. If you can’t sell more washers/dryers, you can sell service on those already purchased.

Case in point: my friend walked out of the home appliance store not with a new washing machine, but with a new service contract on the appliances she already owns.

WIN/WIN for business and for the consumer!