We held our final virtual CSO Summit this last month with over 20 senior service leaders participating across the globe. The focus of this November event was on maintaining and growing service revenue. The following three topics, which I will recap in this article, drove our discussion:

  • COVID-Driven Business Process Changes that Will Become Permanent
  • Changes in Sales Strategies (for Service)
  • Interest in and Progress Towards Outcome-Based Services

Joining us on the session was Kevin Bowers, Director of Field Service Research from TSIA. Kevin shared some of his research, insight, and experience on the discussion. Before we dig into the individual topics, it’s worth highlighting a quote from one of the participating service leaders regarding the impact of his service organization during the pandemic.

“Service is the generator of resilient revenue and the pandemic has made the rest of our organization realize and want to protect it.”

For years we’ve been talking about the need for service to have a seat at the executive table. It seems like the nature of the current pandemic has driven some organizations to arrive at that realization.

Topic 1: Service Changes That Will Remain Permanent After COVID-19

Of the various service changes discussed, the three below received the greatest amount of interest:

Increased Use of Remote Support Tools

While the use of remote support or virtual presence tools started out of necessity given restricted customer or site access, organizations are now seeing sustainable value from deploying these solutions. As one of the service leaders on our previous CSO Summit discussion stated, “When this is over, we won’t jump on a plane right away, but we will jump on virtual connection.”

TSIA’s field service research shows that 50-60% of service organizations are increasing their use of virtual presence tools. What we are seeing is that the mature service leaders are taking a step beyond experimentation and beginning to strategically think about integrating remote into their overall service portfolio.

[Read our take on remote support here]

Digital Field Service and Customer Training Methods

The pandemic has forced organizations to rethink how learning is delivered in a virtual world. Since travel is heavily restricted and reduced and it isn’t safe to bring a large group of people into a training center, organizations have had to be nimble in ensuring the delivery and efficacy of training material.

Those thinking short-term have just taken existing classroom content and made it available online, whereas others have used this opportunity to review their training programs and content to ensure the delivery of the right type of content at the right time. For instance, when it comes to engineer training, organizations have realized that not every technician needs to be trained on every procedure for every asset. Most engineers need to be proficient in the common service procedures on the most commonly serviced assets in the overall installed base. For exceptions, they can be fed just-in-time content or can rely on visual support tools that connect them with remote product experts. For improved learning, not only is more content going online, but it’s also being condensed into digestible chunks that align with the needs of the person being trained.

Heightened Value Placed on Employee Communications

One of the service leaders on the recent CSO Summit stated, “I make it a point to spend a good chunk of my day on communication with my front-line engineers. It’s tiring and not ideal to do this on Zoom or Teams, but it is worth it.”

COVID has made it difficult for service leaders to spend one-on-one time with their service teams as a result of reduced travel and increased safety measures. That said, service leaders now have the opportunity to get in front of a bigger group of service teammates in a shorter amount of time. While the quality of face-to-face interaction can never be replaced, service leaders can use this time to be in front of their managers and engineers on a more frequent basis. This is essential, especially to address the emotional and mental toll of the increased isolation created by COVID.

Topic 2: Sales Strategies that Leverage Field Service Engineers’ Relationships with Customers

The field service engineer often takes on the role of the trusted advisor to the customer and can share insight and knowledge to help the customer get more from their assets. This relationship can uncover new service or other sales opportunities that can be significant especially in a time of depressed sales. This relationship becomes even more important given the reduced in-person access that sales teams have to their customers.

TSIA’s research shows that more than two-thirds of organizations believe that sales practices will return to their pre-pandemic state. More so, research also found that in organizations where field service engineers conducted a formal review of features not utilized by customers, contract renewal rates were 9 points higher. These organizations are driving their engineers to not only fix the asset but also to fix their customers. There are a number of change levers that need to be considered to get your engineers to take on such a role, but once done, the impact can be significant.

Topic 3: Progress (or Lack Thereof) Towards Outcome-Based Services 

“Outcome-based services are really hard.” This was the constant refrain from participants at the recent CSO Summit. Not only do organizations need the technological and commercial maturity to support outcome-based models, but they also need the steel to absorb the potential dip in short-term capital-driven revenues while adjusting to longer-term sustainable revenue streams.  Outcomes also require a very different conversation around ownership and feature/functionality as the only thing that matters is the outcome that is being delivered. For instance, customers who are typically used to purchasing the latest and greatest products might not be prime candidates for these services. In a model where they only pay for the outcome, the service provider gets to choose which assets are needed to ensure the delivery of the agreed-upon outcome.

Despite the slow shift to outcome-based models, there is a greater appetite for experimentation from service leaders. Some are testing outcome-based models for a few select customers or product lines. Others are adding new managed services to target customer share of wallet with the idea of evolving into outcome-based models. And other leaders, especially in heavy equipment industries, are seeing a greater reliance on rental models which aren’t outcome-based but offer a subscription-style revenue stream to the service provider.

It’s been an enlightening year of CSO Summits and CSO-related discussions with the ServiceMax community. Service organizations and leaders have shown a great deal of resilience during a very difficult time. There has been an incredible investment in innovation, particularly in the areas of safety, security, and business continuity. We have also heard numerous stories of service engineers going above and beyond to ensure that their customers’ needs have been met. We expect to see and hear more in the coming months and will recap all of our takeaways in the next version CSO Report expected in early 2021.

[Next Up: 5 Ways to Identify New Revenue Streams]

 

ABOUT Daniel Brabec

Daniel Brabec is director of global customer transformation at ServiceMax. With a broad base of experience in training, course development and project management, Daniel brings a unique background to his role at ServiceMax. He has spent several years working in service technology, providing oversight to enterprise implementations of service management systems, and creating and delivering the training necessary for companies to change the way they manage global service organizations in North America, Europe, India, the Middle East and Asia.

ABOUT Sumair Dutta

Sumair Dutta is the director of digital transformation at ServiceMax. In his role, he works closely with ServiceMax customers to maximize the results from their business and digital transformation journeys. He works closely with leaders of service businesses to define and shape their service vision while working hand in hand with implementation teams to execute on established service plans. Sumair is a thought leader in the field service and service management spaces and has conducted numerous research projects in the areas of field service, customer support and business strategy. He brings more than 15 years of experience in studying, analyzing and guiding field service organizations, first at the Aberdeen Group and most recently as the chief customer officer at The Service Council.