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      3 min read

      Maximize Service Profitability Through Service Lifecycle Management

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      blog-image-14-10-2019

      Aftermarket Service can generate 45% or more of total corporate revenue and 30% or more of total corporate profits. To achieve these results, field service leaders must focus on revenue growth. This is, of course, dependent on the ability of manufacturers to execute on their business strategy and deliver results. This is where a good Service Lifecycle Management (SLM) infrastructure can help.

      From a service revenue perspective, the ideal SLM solution must include functionality that helps manufacturers capture and maintain critical data about customers and products they own within their install base. The more information and data that a manufacturer has about Its install base the more effective they will be in both managing service delivery to the base as well as maximizing the customer lifetime value of it.

      This information allows a manufacturer to know what products are under warranty, when the warranties expire and what level of service the customer is entitled to. The manufacturer, can, of course, also utilize this data to anticipate the frequency of service requests and allocate the right amount of resources to support these requests. This enables the manufacturer to better manage the cost of service delivery in addition to generating new revenue.

      Ultimately, the ability to generate incremental service revenue lies in the ability to upsell and cross-sell additional services such as extended warranties, preventative maintenance programs, accidental damage/product replacement etc. Warranty functionality will enable a manufacturer to keep track of the install base, whereas service plan functionality provides the mechanisms for the manufacturer to configure, price and quote service plans.

      With the right software,  manufacturers can automate the sales process and offer plans at the time of purchase, during product registration, at expiration of standard warranty and other relevant events throughout product lifecycle. Making right offers at right times help manufacturers maximize customer lifetime value.

      The ability to maximize service revenue is the first building block to operating a profitable service business. The second building block is the ability to manage service delivery costs while maintaining high levels of service quality and productivity. Simply put, profits are a function of revenue less the cost of operations. To be profitable at delivering service, companies not only need to generate revenue, but they also need to manage the costs associated with service delivery.

      Cost savings can be achieved by streamlining and automating service delivery processes. For example, a company can achieve a 25% or more improvement in operating efficiency and service productivity by implementing a SLM solution that automates, standardizes and streamlines key interactions associated with service, support, knowledge, spare parts, and inspections.

      By implementing this type of solution, durable equipment manufacturers can not only reduce costs but provide a better customer experience.  At issue, service interactions are both labor and data intensive. The more touch points, people, systems, and databases involved in completing a service event, the more costs and time. This is true regardless of dispatching a Field Technician, entering a warranty claim, ordering a spare part, or providing technical support to an end-customer.

      Having multiple stake-holders involved in the service delivery process creates additional complexities and challenges from a cost and labor perspective. Of course, these challenges impact customer experience as well, in terms of longer wait times, delayed service fulfillment, extended downtime and multiple hand-offs between stake-holder participants in the service delivery supply chain.

      It is not uncommon for companies to lose control of the customers’ experiences during the product ownership cycle after the sale. This is because a customer may interact with many different groups or channels after the sale including contact centers, dealers or service centers, parts departments or field service partners as part of the relationship with a company.

      At issue, these groups may act like a series of unconnected departments or individuals. However, customers expect these groups to act as one unified entity. By implementing an SLM solution that delivers a Connected Customer Experience (CCX), companies can engage customers and orchestrate service interactions across all sales and service channels.

      CCX provides each of the groups or stakeholders involved in these interactions, either directly or indirectly with access to the same data, information and business intelligence. Manufacturers are now able to transform disconnected service interactions into amazing customer experiences which leads to higher customer retention.

      In turn, Manufacturers can increase profitability by as much as five-fold.

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      Mize Inc.

      Our company blog authors are among the best in the industry. By using our product and customer experts as sources we are able to share the latest trends and tips.