From our Twitter chats to Dreamforce 2013 panels, service revenue has been a hot topic of conversation this year. Service organizations want to know how to transform from being cost-centers to profit-centers. According to a recently released survey from the Field Service Blog, conducted in partnership with Servicemax and the SmartVan, nearly 50 percent of companies in Europe have cracked the profit-code and are driving significant revenue from their field service organizations.
Cracking the Code
The 2014 European Services & Trends Report includes responses from more than 100 service executives from cross-industry, cross-vertical manufacturing companies in the European region, including companies such as Dell, Bayer Healthcare and Johnson Controls. Here are a few noteworthy statistics from the survey:
- 31 percent of respondents said that over 35 percent of their company’s revenue comes from services.
- Field service organizations in Europe reported 35 percent or higher profits from service, opposed to the 26 percent reported by U.S. respondents.
- Over 66 percent of European respondents view their organization as a ‘profit-center’ rather than a ‘cost-center’.
- Nearly half of the European companies surveyed (43 percent) see diversifying their business as an effective growth strategy.
- 44 percent of European respondents viewed their technicians as qualified lead generators, while only 31 percent said they incentivize techs to directly sell parts/services.
How European Organizations Are Driving Revenue
So, how do these companies drive revenue? According to the survey, European organizations that are “focusing on customer satisfaction and loyalty through service professionals are garnering revenue and profit as a result.”
These same results have been found in the United States, as well, according to Aberdeen’s report, “State of Service Management: Outlook for 2013.” Competition and reduced customer spend are causing many organizations to focus on service as a way to grow customer loyalty and profit. What’s more, top-performing service organizations in the United States have a first-time-fix rate of 89 percent, which, according to Aberdeen’s “Field Service 2013: Workforce Management Guide,” is one of the main drivers of customer satisfaction.
Download the full report here: “European Field Service Trends Report”