Sales & Marketing

How Revenue and Growth Start With Strong Service Culture

For the first time since the recession, field service organizations appear to be focused on the future and not just the current year or quarter, according to The Service Council‘s latest study, The Role of Service Culture in Driving Service Revenue. It’s a bright one, too: 63 percent of survey respondents believe their service-related revenues are going to increase over the next year and almost everyone — 94 percent — agrees revenues won’t backslide in 2013.

How do they plan on doing it? By focusing on service, says Bill Pollock, the group’s president and chief research officer. Preliminary findings from the survey show how respondents appear to have their eyes trained on not just sustaining their current service revenues, but also reinvesting revenue to help develop new services and products that will help to drive future profits.

“The market is realizing that we’re pulling out of a bad economy,” Pollock says. “You don’t want to be that super-star company that took care of itself by cutting costs, but then falls on its face in an improving economy by not taking advantage by spending that money to take care of your future.”

Revenue Starts with Service Culture

Close to 80 percent of respondents said service is a top priority for their organization, and 86 percent said service revenues are important to the overall profitability of their company. Another 63 percent of respondents said a strong service culture leads to more satisfied customers.

Indeed, companies are realizing that service can lead to profits, too: Slightly under half the respondents even said their service departments operate as independent profit centers — not cost centers — the highest number The Service Council has ever recorded, Pollock says.

“There’s a pervasive recognition of the need to have a strong service culture in order to drive [service-related] revenues,” Pollock says. “And those revenues are going to be important to the overall contribution to the company’s profitability. … So it’s a two-phase thing: You need strong service culture to drive revenues — and that’s important to the profitability of the company.”

Enhancing Service to Expand Growth

Driving more service revenues sets the table for companies to grow. Introducing expanded or improved service offerings not only improves customer satisfaction and loyalty, but puts companies in a position to do more long-term good.

“Companies want to leverage everything they can out of a strong service culture,” Pollock says. “And that affects your revenue base, which allows you to start to take care of your future — to make sure you’re offering the right things to the right segments with the right marketing tools. And that trumps doing things immediately just to improve customer satisfaction. If we can enhance service offerings, the customers are going to be more happy, and we’ll also bring in new customers, so that helps the whole growth cycle.”

So companies are setting out to drive service revenues: 48 percent say they’re proactively marketing and promoting their service capabilities, while 29 percent are promoting cross- or up-selling opportunities, and about a quarter are working to increase the number of SLAs they sign. Almost 30 percent of companies say they’re planning to develop more improved service marketing tools like website content, white papers, and case studies  — what Pollock calls marketing collateral — within the next year.

“Companies are spending some of that money on expanding or enhancing their services, and some of it developing or improving their marketing tools,” he says.

SEE ALSO: Majority of Field Service Units Are Company Profit Drivers


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