best practice webinar service economics · a global service improvement company focused on the...

Best Practice Webinar

Service EconomicsProfitable Growth Through

Brand Driven Services

Hosted by

[email protected]

1 © 2010 - All rights reserved Noventum Service Management Consultants Ltd.

o@se cest ateg es co

November, 2010

Before We Get Started

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• Visit www.servicestrategies.com/blog to access our library of recorded webinars


About Service Strategies

A global Service Improvement Company focused on the technology services sectortechnology services sector

Offerings include consulting, training, standards and certification for service organizations and professionalsg p

Our programs are designed to improve the performance of Support Field Service Professional Services eService and Web SupporteService and Web Support

Our career development and training programs are designed for service professionals at all levels


About Our Presenters

John HamiltonJohn Hamilton is president of Service StrategiesCorporation, he has more than twenty years ofsoftware engineering and service industryexperience as well as significant international

Steve DowntonSteve Downton has worked with leading edgeservice companies for the past twenty five yearsand has benchmarked the industry since the earlynineties His new book titled Service Economics experience, as well as significant international

experience working in Asia and Europe.nineties. His new book titled Service Economics,is receiving outstanding reviews.


We are specialised in Strategic Service Management

Growth

ovem

ent

Impr

o

Margin


Recent clients


The need for growth from services

Sales in decline

Product revenues decliningProduct revenues declining

Profitability under pressure

Long term competitive pressure


Long term competitive pressure

GDP per Sector


Source: The World Factbook, CIA, March 2010

High Value Service Business = Corporate Value= Corporate Value

Source: Noventum’s Manufacturing Survey 2009


Sou ce o e tu s a u actu g Su ey 009

Traditional product revenues are declining

Stage

ExperienceCustomisation

Deliver

ServicesC i i

Make

ServicesCustomisation

CommoditisationMake

GoodsCommoditisation

Extract

CommoditiesCommoditisation

10 © 2010 - All rights reserved Noventum Service Management Consultants Ltd.10

Stage±4 00

g

Experience ±4.00

Deliver

Services ±1.00

MakeMake

Goods ±0.15

Extract

Commodities ±0.03


Price per coffee cup

Service Business StrategiesgBrand Driven

Compelling value propositionSolving complex service challengesSolving complex service challengesGlobally-consistent servicesUnique knowledgePromoting experienceSuperior Customer Experience

People DrivenPeople DrivenLimited ability to differentiate on value proposition Long-term personal relationshipsUnderstanding and addressing specific customer needsCo-create solutions Continually build and maintain strong relationships

Price DrivenCommodity like propositionCost leadership and economies of scale is key to survival

Feature DrivenSlightly better perceived benefitsSLA based, high performanceConstant pressure to add extras

Driven by

Cost leadership and economies of scale is key to survival


Examples of Brand Driven Strategies

•Compelling value proposition•Solving complex service •Solving complex service

challenges•Globally-consistent services•Globally-consistent services•Unique knowledge•Promoting experience•Promoting experience•Superior Customer

ExperienceExperience


Growth drivers

Un-met customer needs

Willingness to partner

Focus on core capabilities

Complexity

Increasing expectations

Changing demographics

Experience = Value


p demographics

Understanding un-met customer needs drive growth

ExplicitSay

Think

ObservableExplicit

DoUse

Think

Tacit

L t tKnowFeel

Use

Latent Feel Dream


Challenges to generate growth

Need to fully understand customer needs

Need to innovate with servicescustomer needs services


Challenges to generate growth

Need to better utiliseknowledge gained

Understanding at C-Levelknowledge gained


Different Services Growth Strategies

New AcquireDevelop Services

Acquire New

Capabilities

Existing Capabilities

into New

Service Offering

ExpandQuick Wins:ExistingServices

Expand Existing

Capabilities

Quick Wins: Make Better

Use Of Existing Capabilities

Partnering / AcquisitionsOrganic


Speed of growth

Typical Quick Wins

• Improve Customer Loyalty with better Customer Experience

C t C t i it I iti ti Customer Centricity Initiatives

Customer Experience Management programs

• Enhance Existing Service Propositions

Review Customer ‘s Value PerceptionReview Customer s Value Perception

• Improve Services Sales capabilities

Better serving the Installed Base of Customers

Develop Trusted Advisor Competencies


p p

Sustainable Growth Initiatives

I l t S i D l t PImplement a Services Development Process

Un-met customer needs

Increasing expectations

Education

Health care

Offices

TotalPotential

Market stability

Price Pressure

Growth perspective

Markt size

Market segments

FSS

EuroService

Metos

Bouter

Zw anenburg

Prolux

2

3

4

5

6

7

Com

pany

Gro

wth

(%)

FSS

EuroService

Metos

Bouter

Zw anenburg

Prolux

Perceived benefits

Suggest initiatives for improvementInternational key account management

Ability to partner with different vendors Regular operations reviews

Turn key project managementConsultancy on environmental issues

Direct interface with R&D team

Up to date on technological developments<2 hour response on questions

Demonstrate commitmentSLA compliance reporting

Spare parts availability < 24 hrsAbility to train operators on site

Dedicated field engineerConsistency processes

Free of charge software updates

C titi i i

Notimportant

StrategicDifferentiators

TacticalDifferentiators

ImportantVeryimportant

MissionCritical

Market segmentation

Competitive analysis

Strategic differentiation

Identify growth opportunities

Industry

Retail

0

1

-20% 0% 20% 40% 60% 80% 100% 120%

Relative Market share Importance to customer

Customer Satisfaction

Competition’s performance rated by customer

Equipped with modern material

Well trained engineers

Competitive pricing24 x 7 availability Quallifiers

Nice to HaveAccess to reporting through the web

Ability to monitor installed base


g y pp

Understand customer needs first

Service delivery

Closing the loop to:•Improve Performance•Increase Profitability Service delivery•Deliver Customer Satisfaction

Servicepropositions

premium

serviRisk M

anagBasic req

Market and customer

propositionsceement

uirements

nationalmulti-site

lowfreq

ad-hoc

volume

Low m

argin

strategicpartners

customer needs eBusiness Services

multi siteinternationalmulti-site


Relational brand values are the differentiatorsdifferentiators

Thought leader

Relationship Values

oug t eade

Understands my business

Demonstrates

ServiceResponsiveness

Flexibility

CustomerPrice

Service Values

Reliability

Competence

CustomerSacrifices

Time

Conflict

Product Values

Quality

Customization

Alternatives


© 2010 - All rights reserved Noventum Service management Consultants Ltd.

Brand Driven Customer ExperienceC t E i F db k

Customer satisfaction Score

Importance for customer Score

Customer Experience Feedback

Ease of doing business withUnderstand my business st

omer

Industry leaderKeeping technology up-to-date Flexible solutions by

the

cus

Flexible solutionsProcess cost reductionQuality of solutions offeredS d f f i pe

rcei

ved

b

Speed of response for repairs

valu

e as

p

1 2 3 4 5


Bra

nd v

Customer Experience Management - B2B

CustomerActions

On-stage Back stageCustomerPerception

Brand values

Processrequirements

What they promised

Reliable

Quarterly review

Manage ServiceLevels

Report

promised is also

delivered

Lab manager

Performance

KnowledgeLeadership

I am impressed

ith th i

Results interpretation

with their knowledge


ResearchOn-site trainingEquipment operator

Customer Experience Management - B2C

CustomerActions

On-stage Back stageCustomerPerception

Brand values

Intake by phoneRegister service

callSupported quickly and

professionally Quality

Intake by phone

Verify warranty

Order serviceparts

Intake viawebsite

Easy and Design & parts

Reception technician

stylish website

gFunctionality

Sustainability

My machine ready for

another 10 years

Planning


Customer Customer visit

Value created through service

T f C t

Strategic Business Partner Brand

Knowledge Driven Services

Brand Driven Services Type of Customer Relationship

Trusted Advisor

PartnerDriven

People Driven

Product Support

Availability Services

Vendor

Solution provider

Price

Feature Driven

Warranty

Gross Margins

Price Driven

Initial marketing and sales cost

Cost to Serve


Maturity Levels in Services

B i


Type of Business

Strategic Differentiation

Business Objective

Manage the total customer experience as expected by the customer

Knowledge Driven Services

Profitable Growth

Differentiation

Make sure the customer will enjoy the

High value added services, driven by knowledge of customer & technology

expected by the customer

Availability Services

Product Support Services Cost Centre +

Profit Centre

Make sure the customer is satisfied with the product and will repurchase

Make sure the customer will enjoy the benefits of using the product

Warranty Services Cost CentreRepair / replace the product


The cost of a poor customer service strategy

Type of Customer R l ti hi

customer service strategy

Relationship

Trusted

Strategic Business PartnerKnowledge Driven

Services


Vendor

Solution provider

TrustedAdvisorAvailability Services

Product Support Services Vendor

Warranty Services

I iti lInitial marketing and sales cost

Cost to ServeGross Margins


WORLDWIDE HEALTHCARE EUIPMENT Top 3 leader in healthcare equipment and services

Business Issues

•Service Delivery organisation

Objectives

•Assess cost reduction potentialnot suitable for growth in emerging markets

Activities Undertaken ResultsActivities Undertaken

•Led international executive task force to redesigned entire service delivery organisation for

Results

• Double digit improvement of gross margins in emerging

k tservice delivery organisation for emerging markets and low end product support

markets


Idea Generation Through Idea Generation Through R hR h

Opportunity Identification & Opportunity Identification & St tSt t

Coaching &Coaching &O i l S iO i l S iResearchResearch StrategyStrategy Operational ServicesOperational Services

Service Innovation Programme Strategic Advisory Performance Enhancement

Academic BoardAcademic BoardAcademic BoardAcademic Board Client TeamsClient TeamsClient TeamsClient Teams

ConsultantsConsultantsConsultantsConsultants ValueValueMethods & ToolsMethods & ToolsMethods & ToolsMethods & Tools

InsightInsightValueValue

CreationCreation

PartnersPartnersPartnersPartnersRoundtablesRoundtablesRoundtablesRoundtables


Webinar Hosted by

[email protected] – Corporate800 552 3058 T ll F


800.552.3058 – Toll Free

best practice webinar service economics · a global service improvement company focused on the...

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