While attending Field Service USA in April, one of the interesting sessions I sat in on was that of Frank Bibens, president of global services at Vertiv. Bibens was speaking about the state of service, and specifically about why — at least for Vertiv — service is becoming increasingly strategic. At this point, for many — if not most — service organizations, the view of service as a cost center is long gone. Organizations have come to recognize the service function’s ability to contribute to revenue, but what Bibens was saying is that service isn’t just a contributing factor of profits — it is a strategic force behind them.
For Vertiv, Bibens said that the company sells eight to 12 dollars of service for every product dollar. So, as you can see, service is a highly profitable aspect of Vertiv’s business. It is also the face of the business — service is Vertiv’s (and your) way to control the customer experience. Service, when done well, enables you to develop loyalty and repeat product sales, as Bibens points out. For these reasons, and others, today’s industry leaders are viewing service as a strategic differentiator.
So how do you do this? First, be sure you are looking at service for the opportunity it is. While sitting in Bibens’ session, Field Service USA did a live poll of the audience — 91 percent in attendance said that service is now a strategic priority. Assuming that 91 percent includes some of your competition, you do not want to be left behind. Bibens pointed out commoditization as a crucial reason to invest in service. According to him, “upstream investments deliver downstream dividends.”
Words Of Wisdom On Service Strategy
Some words of caution Bibens provided were about the need to create a separate profit and loss center for service. He advised against making blanket decisions by lumping service in with the rest of the company. He gave the example of not cost cutting on service during the Great Recession even though the company wa s cost cutting as a whole, because they realized that in that situation customers would be looking to service to extend the life of their equipment. Sometimes your service operation does need to be viewed differently from the other arms of your business.
Bibens also touched on the increasingly popular topic of self service — enabling your customers to have access to more information and to participate in their service more actively through portals, apps, and other methods of communication. While self service can have an overwhelmingly positive impact on your business, Bibens also warns that — if not thought through correctly — it can have a negative effect too. The more complex the service operation is, the more room exists for misinformation and miscommunication. In Bibens’ opinion, there is such a thing as too much information, and you want to do your due diligence in thinking through if — and in what form — self service is right for your business.