Top 5 Service Themes At The Forefront Of Differentiation And Profitability In 2014

By Aly Pinder Jr, Research Analyst – Service Management practice, Aberdeen Group

Do you trust your weatherperson? How about your financial planner? Hopefully you trust your CEO? All three of these professionals make forecasts based on some level of information and insight. Unfortunately, when these people are wrong our days are inconvenienced, our portfolios suffer, and our jobs may be in jeopardy.

I won’t proclaim that my forecasts would be much better and for that reason I am not going to tell you what the service industry will look like in 5, 10, 50 years. In 2020, all I hope for is that I will be done paying off my graduate student loans! However, based on some research findings from the past year of Aberdeen data, I can define a few themes which will dominate the service market this year. Below are what I believe to be the Top 5 Service Themes which will help organizations differentiate their service business and spark profitable growth (in no particular order)–

1. If it is broken, it should have already been fixed. Predictive and preventive maintenance is the path to differentiation for service organizations. Showing up after something fails is no longer viewed as being a hero for the customer, you are just putting out fires. Top performing organizations have become adept at monitoring assets and customer usage trends to identify potential failures and ensure that a technician can be sent out to resolve the problem before it becomes an issue.
2. Old service was free, sell value. Throughout my conversations with service executives, I often hear that service is still being given away for free. How can this still be the case? First of all, service must work with other internal functions (i.e., sales, marketing) to display the revenue opportunity that can be created from delivering quality service. If viewed as an offshoot of a product being sold and not as an opportunity to build on a customer relationship, service will continue to be thrown in to deals as a freebie. Also, service organizations need to work with customers to prove the value to their respective business of exceptional service. A down asset is lost dollars, it’s that simple! 
3. Connected assets should lead to more than just data.  There has been a lot of momentum recently (over the past year+) around connecting to equipment, vehicles, people, and customers. Each connection point is a window into a great volume of data, however are service organizations prepared to clean, store, and draw insight from this data? Without building a strategy around cultivating insight from the data that is created through service interactions, service organizations have just created another cost to the bottom line.
4. Customer centricity creeps into support. Service and support has always included the customer, however historically service was measured on operational efficiency and cost containment. These two concerns must still be at the forefront of the minds of service leaders, but these should be two legs of the stool. The third equally important leg must be the customer and how the service organization can excel at delivering a great service experience. Customers have more options than ever in a crowded marketplace for service, and thus neglect will lead to a lost customer (and revenue). Many top performing organizations are now measuring the field and operations on their impact to customer satisfaction and retention as opposed to solely being measured on fix rates, utilization, and fill rates.  
5. Mobility is more than a device, it should be access to resolution. We all like our mobile devices. We feel it keeps us connected to the world, or maybe even makes us a bit cooler. But if these devices didn’t actually serve a purpose (i.e., connect to the internet, make a phone call, or helps us figure out the tip on a meal), they would just be another thing in our pocket. The service organization must remain vigilant that mobile adoption of the latest technology is not a way for IT to purchase the next cool gadget, but instead a way to help technicians resolve more issues while in the field.

This list could extend quite far, but these are the themes which will transform the service market and help organizations become Best-in-Class in 2014 and beyond. And those which don’t target these topics may find that they begin to lose market share. 2014 is primed to be a great year for service, so don’t miss out on the wave of innovation and excellence. To learn more about any or all of these topics this year, please feel free to check in on research from my team. 

About The Author

As a research analyst in the service management practice, Aly Pinder Jr. researches and explores how service and manufacturing executives utilize technology and implement best practices to improve post-sales service and support processes. Through practitioner benchmarking and analysis of Aberdeen’s research database, he examines how Best-in-Class service organizations are reengineering their service chains for improved performance and increased profitability.

Aly’s coverage areas within the service space primarily cover the following topics on which he has written or co-authored over 40 research reports and benchmarked more than 4,000 service executives in his four plus years with Aberdeen:

• Field Service and Mobility
• Service Parts Logistics
• Warranty and Service Contract Management
• Reverse Logistics
• Repair and Return

Along with these specific areas of coverage, Aly is also responsible for the development and engagement of the Service team’s Research Advisory Council consisting of over 50 senior-level service executives. Aly’s past experience has included responsibilities in both reverse logistics and customer support roles. He holds an MBA in Supply Chain Management from Northeastern University (Massachusetts) and a BS in Business Administration from Pepperdine University (California). For more information, visit www.aberdeen.com.