Every company comes into a situation where growth rates slow down. This often comes as a shock when new markets mature and new products do not deliver the expected results. One solution to this kind of challenge is to take a deeper look into the growth opportunities services can offer.
Using services to return to profitable topline growth is often a challenge for companies that are used to develop and sell physical products. The corporate DNA is much connected to product features and technology. Therefore creating and selling compelling services is often a giant strategic leap for management and staff.
Companies that successfully walked that path often took the following route:
- Stop giving services for free or as a rebate to physical products:
Giving services for free reduces their value significantly.
- Implement service product management to develop, test and offer a compelling service portfolio:
- B2C: focus on emotional and rational benefits. One example is Weber, one of the leading manufacturers of premium grills that runs a “Grill Academy” in Germany offering a comprehensive program of courses for customers.
- B2B: focus on your customers business processes and the role your products play. Seek to create added value. An excellent example of this is “Hilti Fleet Management“. Hilti as one of the leading manufacturers of professional power tools offers ” […] a fixed monthly charge covers all tool, service and repair costs. That greatly simplifies tailor-made financial planning and takes a load of administrative work off your shoulders.” This not only supports Hilti’s customers but also reduces price transparency for the physical product and thus helps keeping prices up.
- Manage service quality as strict as your product quality:
High valued (and priced) services need a consistent quality – all the time and everywhere. Car manufacturers for example spend huge amounts of money to measure not only customer satisfaction with service but also regularly audit their service partners in order to make sure that all the drivers for service quality are in place and well managed.
- Further develop sales from a feature based “box shifting” strategy to solution selling:
In order to really exploit the revenue potential of service, sales needs to change argumentation and focus even more on addressing their customers needs.
- Use service as a lead generator for sales:
This sounds simple but not many companies master this art. Very often, cultural gaps between service and sales teams prevent an effective cooperation to not only satisfy customers but also use opportunities for up- and cross selling. Therefore processes, tools, management rules and trust have to be developed to tap into that huge potential for growth.
For all these companies that path was not easy and sometimes stony. Nevertheless: successfully defending market leadership and opening up new growth potentials are worth it.