How To Win Executive Support For Service

By Sumair Dutta, chief customer officer, The Service Council, www.theservicecouncil.com, sd@theservicecouncil.com

Financial benefits of a customer-centric model can draw executive attention.

In last month’s article we described five keys to becoming more customer-centric: develop a customer- centric mission, executive buy-in is key, power to the people, account management in service is necessary, and keep it simple. Here we’ll further discuss the issue of executive buy-in.

Executive buy-in has long been a central challenge in transforming an organization from product-centric to service-centric or customer-centric. Organizations, and quite often the executives at the helm, continue to invest heavily in differentiation via product features or pricing, with a lower priority given to customers who will actually use, adopt, and advocate interest in the products.

A customer-centric transaction doesn’t necessarily mean less focus on product features and capabilities. It means that the features and capabilities built into the product are tied to the needs of the customer. Note, I didn’t say that product features are solely designed based on what customers want or fancy; they are tied to a deeper understanding of customer needs and how you can maximize value.

Innovators such as Henry Ford and Steve Jobs have talked about the dangers of building features solely on customer desires. Ford famously quipped, “If I had asked people what they wanted, they would have said faster horses,” and Jobs argued that focus groups wouldn’t help product design, as customers wouldn’t know what they wanted unless you showed them. However, both understood the gap prevalent in the market, a gap that stood in the way of customers attaining greater value.

Twenty percent of companies polled for an upcoming research study on field service challenges highlighted that gaining executive support was a key challenge hindering the continued growth of field-service businesses. If you incorporate field service into a broad service ecosystem and talk about the challenges of enabling a profit-centric view for service organizations, that support rises. For the folks citing a lack of executive support, the four following actions were listed as the most effective in enhancing executive support for service:

• Provide greater visibility into the impact of service on financial metrics tied to the entire organization (cost, revenue, profit).
• Provide greater visibility into the impact of service on customer-oriented metrics such as satisfaction, loyalty, and retention.
• Increase service-generated revenue streams.
• Drive down the cost of the service business.

Improving the margins in the service business is a sure way to get executive support. Therefore, the combined focus of bullets three and four makes a lot of sense. Just reducing the cost of the business without generating revenues doesn’t seem like strategy focused on growth.

Consider The Financial Impact Of Customer Centricity
The first two bullets are extremely interesting and point to a greater need for education at the executive level about the financial and customer-focused ramifications of improved service. Most executives are aware of the importance of service and customer satisfaction, but this awareness is usually tied to a gut feeling and not based in data. In fact, we all know that it’s important to keep customers happy, but very few of us know the financial impact of a 95% level of satisfaction vs. a 45% level of satisfaction. This is the type of information executives need to evaluate their service organizations as competitive differentiators. It’s not just about how investments in service drive customer satisfaction, but also:

• How does satisfaction translate into retention and commitment?
• What is the cost of customer retention vs. new customer acquisition?
• How do satisfied customers increase their spending across various product lines?
• How many new customers were brought in as a result of advocacy?
• How many potential customers were scared away as a result of unhappy customers?
• How much of total organization revenue and profit comes from the service side of the business?

These are just some of the financial-oriented data points that need to be captured and shared in order to open eyes regarding the importance of service. With that in tow, executives can appropriately gauge the priority and value of investments in their service businesses. If you’re interested in contributing to this current research effort, visit https://www.research.net/s/analyzingfieldservice.