Companies have realized the strategic and monetary value of service as a (or the) key differentiator and most are at some stage of the journey to equip their businesses to seize the service opportunity. You read (I write) a lot of articles on Servitization and the journey to outcomes-based service, and the reason you hear so much about these topics is twofold: first, the opportunity they present is immense and, second, the undertaking of these journeys is no small feat. It isn’t just about an intimate understanding of customer needs and pains or an examination of business strategies and processes. It can’t be accomplished simply by investing in technology or conquering employee engagement. It isn’t possible for just one function of the business to progress this agenda on its own. It’s a puzzle with many pieces and takes a cohesive vision and multifaceted plan.
This is why it’s a topic I’m so passionate about discussing – because there are many aspects, and multiple layers, that a company needs to consider and address to achieve success. It’s powerful for service leaders to share where they are on this journey, because inevitably there’s something to be learned from each and every experience. As I talk with business leaders about how they are transforming their businesses to seize the service opportunity, one of the root issues that often arises is how a company’s structure needs to evolve – particularly as it relates to the sales function and how that intersects with service. In traditional product-based businesses, sales has historically been tasked with and compensated on selling product – with service bolted on after (and often as an afterthought). As these companies look to prioritize service offerings, it begs an examination of what needs to change in how the sales function is structured. There’s no singular way to tackle this challenge and companies’ approaches span from improving collaboration between sales and service functions to completely restructuring the organizations.
I held a Focus Group recently with a handful of business leaders across industries, born out of a request from one in particular that is working through how the businesses needs to change in order to deliver on its mission to become more service-centric. Listening to these folks discuss how their organizations have addressed this topic was really quite interesting – there was a lot of commiseration and some significant similarities. While each businesses approach proved unique, there do seem to be some common important points to consider and work through:
- Service can’t stay siloed. This may sound like an “of course” statement – but believe it or not, it’s a common misstep. Companies that are moving toward Servitization often try to do so by putting the onus of that progress on the service function alone, and as the group participants shared – this is recipe for failure. Servitization is a journey that requires the strategic vision of the company to be supported and socialized from the top and throughout the business. Progress in seizing the service opportunity needs to be a company-wide priority; not a service group’s responsibility.
- Ownership needs to be clearly defined. As such, ownership when it comes to service sales and the service P&L needs to be clear. It seemed to be commonly agreed upon that keeping separate product and service P&Ls promotes division and prevents companies from realizing the true potential. Rather than keeping product and service sales separate, most companies seem to be working toward a more cohesive sales strategy so that the sale becomes about the outcome or deliverable versus about the product and service. However you choose to tackle this within your business, the ownership and responsibility for how the sale should be handled needs to be clearly defined and articulated.
- Clear expectations need to be set. Building upon the last point, not only does ownership need to be understood, but expectations need to be set – both from a sales and service perspective. If you are restructuring the sales function to sell the deliverable (product + service), not only does this change need to be managed, but they need to be incentivized to achieve the goals you’ve set forth. From a service perspective, some companies are expecting field service workers to be directly involved in the sales process and others are promoting more of an advisory or consultative role. Again, there’s no single right answer – but your expectations for how the service technician’s role will evolve beyond the actual service work needs to be clear.
- The data loop needs to be robust. However you structure sales and service, you need robust data. Whether a service technician is directly selling or acting in a consultative role, the data loop with sales needs to be in place. You need accurate, digestible, real-time data in order to hold both the sales and service functions accountable for the expectations you’ve set. For many companies the shift in responsibilities is a significant one, and there’s no way to measure compliance, performance, and progress without solid data.
- Best practices need to be examined and built upon. The folks in my Focus Group were all from global companies, which adds complexity in not only determining a desired approach but then standardizing the approach to the appropriate degree among business units and regions. Knowing that complete uniformity is unlikely, another important point these folks shared is creating a system to ensure the sharing and formalizing of best practices. Most of the participants have a central function that is responsible for strategy and the aggregation and communication of best practices while execution is done at a regional level. Since much of the innovation and learnings happen at the regional level, it’s important to put measures in place (business reviews, forums, etc.) to keep a bidirectional information flow in place between central, business units, and regions.
How do you “sell” service within your business – and is that process changing? I’d love to hear from you and discuss!