Field service leaders are increasingly expected to add revenue to the balance sheet — and technicians are the front-line salespeople capable of turning happy customers into paying customers. Service’s growing financial might is catching the attention of finance executives — particularly CFOs — who are paying close attention to how service teams can support the company’s long-term growth goals.
Mike Vaughan, CFO of Liftech Equipment Companies, a Syracuse, N.Y.-based lift truck distributor, has watched his company stand out from regional competitors by focusing on long-term, service-based relationships with customers. Here, Vaughan shares his take on why CFOs should pay attention to field service.
First off, why should CFOs care about field service?
I stay in tune with the value of field service because, in my role, I focus on how we can differentiate ourselves from the competition — and our service team is a big part of what lets us do that.
Years ago, the main differentiator between dealers was the quality of their equipment. But with improvements in technology, everyone’s equipment is similar today. The industry’s basically gone from being a bunch of sales companies that happened to repair equipment to being service companies that also sell equipment. Now, our primary tool to differentiate is our people.
Why is there now more focus on field service from the financial side of the business?
I think more CFOs are focusing on the parts and services aftermarket for equipment because it has become a critical element to establishing growth and profitability. In fact, if parts and services and rentals can produce enough profit, this can cover the operating costs of an entire dealership.
Having a strong service operation also lets us be more aggressive with selling our equipment — and it’s helped us define our brand. We’re seen as Liftech, rather than as another forklift dealer. Having a strong service team is good for our manufacturers, too, because we end up using more OEM parts. For manufacturers, a strong aftermarket service operation signals a financially healthy, viable equipment dealership.
What’s the biggest challenge you face in differentiating the service you provide to customers?
The biggest challenge is the limited availability of skilled technicians, and this is important from a talent aspect as well as staying competitive. The more we can dominate the market and become the preferred employer for these workers, the better.
The key to being a good equipment dealer is your ability to service the product. When 80 percent of the total cost of ownership is going toward operating and repairing equipment, the quality of the ongoing service you provide becomes a significant factor for customers when they’re evaluating different equipment providers.
How does technology factor into building a strong service organization?
We’ve been investing heavily in technologies that make a difference to technicians, especially how they present themselves to the customer. The worst thing is for our techs to be stuck at a job site and not be able to reach out for help when they need it. All of our techs have iPads, smartphones and laptops. And they have a direct line to a support center. We even use FaceTime to communicate. Our goal is to make our technicians as self-sufficient as possible, with every answer they need right at their fingertips.
We’re also trying to stay ahead of our customers’ changing needs. We need to change and adopt technology as fast as they do or we’ll be behind the curve. It’s really important to know how fast things are changing outside the industry and embrace that change so we stay relevant and useful to customers, who expect us to respond to their needs using the most up-to-date technology that they’re using.