3 Ways Field Service People Give Away Your Money (And How To Get Them To Stop)
By Paul Hesselschwerdt, Global Partners Training
Field service people are often accused of ‘giving money away’ to customers, for example when a service call goes seriously wrong and the customer demands compensation. And even though there could be many contributors to a service disaster (poor product performance and lack of parts to name a couple), too often it is the field service team that gets blamed. And so, there is a strong tendency for field service people to simply give in to customer demands that cost their company money.
But it doesn’t have to be that way. In our experience, field service people can significantly reduce and even eliminate those frustrating and costly customer giveaways. Here’s how.
Let’s start with the three types of customer giveaways that service people encounter routinely:
- Free service, providing service time or parts not covered in the contract or work order
- Customer compensation, paying penalties, or providing additional no-charge service even though the supplier is not fully at fault for a problem
- Price give-ins, giving in to customer pressure to reduce prices previously agreed to
Free service is, perhaps, the most insidious of the customer giveaways, chiefly because it comes in so many different forms. One common situation is when the customer approaches the service person directly and asks him to work ‘a little extra’ without expanding the work order, even though the work required has increased from the original scope. Or even worse, the customer knows the amount budgeted for the service isn’t enough to cover the actual work. But the customer asks for the extra, unpaid work in the interest of maintaining good relationships, etc. And the service person agrees.
An Alternative To Service Giveaways
Very often these types of service giveaways do not hit the supplier’s financials directly since the service person is a fixed cost. Instead, the service person simply puts in extra time rather than push back. Even so, repeated giveaways of service hours prevent the service person from spending that unpaid time on paid service calls. It also certainly adds to their stress level. However, it may seem easier to the service person and their manager to simply give in to the customer demand.
One highly effective solution is to train the service person on how to say “NO” to these demands in a way that does not sound like, “I don’t want to help.” At Global Partners Training we call this alternative response offering a “Reasonable Possible” solution because the outcome of the ensuing discussion is both reasonable and possible to accept for both customer and supplier. As a French saying goes, “It makes the customer smile without making the supplier cry.” Here’s an example of Reasonable Possible in action.
A field service manager for a supplier of high technology manufacturing equipment was continuously challenged by a customer’s repeated demands for service beyond the scope of the contract or work order. In some cases, it would be just a few hours, while in others it would be an entire service shift provided free or at a fraction of the usual price. Because the cost of the leading-edge equipment was so high, relative to the cost of the service, the supplier was reluctant to push back on these demands. Over time, however, the giveaways started eroding overall margins, especially during the gradual shift in business to a Servitization model in which service was becoming a larger part of revenue.
To address this issue, the manager’s field service people were trained in the Reasonable Possible approach. Instead of responding to the customer’s request with a simple “No” (even politely put), or “Yes”, which of course was not reasonable or possible, the service engineers were trained to pause, and then ask some simple open questions.
For example, the service engineer would respond thoughtfully with: “I’d like to be able to meet your request, so tell me more about what’s behind it.” This would elicit a response such as, “We’ve run out of budget and we urgently need the extra service coverage.” This provided a starting point for discussing alternatives to simply giving away service that eventually led to solutions that were reasonable and possible for the supplier and customer.
Even when the customer’s request was very unreasonable, being transparent instead of defensive led to better long-term solutions for both sides. For example, a common angle for an unreasonable request was: “We spend so much money on your equipment, you should be willing to provide the service for a reduced rate – even for free.” In such a case, the supplier was able to tie the customer’s unreasonable demand for unpaid service explicitly to future equipment purchases, which made the demand ‘Reasonable and Possible’ for both sides.
Changing Service Culture By Empowering And Enabling Field Service Engineers
In addition to the financial payback from reaching Reasonable/Possible solutions, service suppliers often find the culture change to be equally impressive. For example, one service manager told us that after adopting the Reasonable Possible approach, his service engineers started discussing unreasonable customer demands in a very different way. Instead of pushing back or giving in to customers, they would bring the request to the manager, saying, “I had this request from the customer and I’m looking for a reasonable possible response.” The service manager told us that, over time, even customers started adopting the language. One customer went so far as to start his unreasonable demand by saying, “Here’s what I need, so I’d like to find a reasonable possible solution that will work for both of us.”
That’s culture change!
About The Author
Paul Hesselschwerdt is a partner at Global Partners Training. During more than 30 years in the training industry, he has designed and implemented programs in customer service, sales and marketing and project management across a range of industries, including healthcare, industrial equipment and high technology. For additional insights, please visit https://globalpartnerstraining.com/