5 things to keep in mind when organizing services around a product
In a product company, with a strong focus on developing good and competitive products, it is easy to forget or down prioritize the support and other services. It does not have to be that way! Many companies have instead realized that good support can be the key to increased product sales, customer engagement or even that services may become the main business where the products will be integrated components. It might be a good idea to evaluate if it is possible to sell the product as a service, or expand the services related to the product in areas like customer adaptations, trainings, advice, and operational services.
Here are five areas to consider and manage, where decisions and choices can be the difference between a mediocre product support or a successful service portfolio.
Strategic focus
The first and probably the most important decision for the company is to define the role of the services in relation to the products. Are the products the main business for the company, where support and other services are supporting, or is there a potential to grow the services into its own business area and maybe also develop that to the main business for the company? Here, as always in strategic decisions, it is important to make a proper and objective market analysis to assess the potential of the services.
If there is no natural way to establish a separate business around the services, then perhaps the right decision is to focus on a slim and efficient product support. If, on the other hand, there is potential for customer adaptations, advice, implementation, outsourcing, etc. linked to the product, this may be where future gains lie.
Own direction or partnership
Running an efficient and successful business around the development and sale of products differs markedly from running a successful service business. Therefore, it may be an idea to separate the businesses from each other, where management and governance can be adapted to the specific requirements from each business.
It is natural to put the services in a separate business area, but there are other ways. One solution may be to let a partner take care of the services. An example of when this can be the right way forward is if the product is sold in several countries where local partners, who know each market, probably have greater possibilities to develop successful customer relationships. Another time when a partner can make a positive contribution is when the other entity may provide economies of scale by merging product support for similar products or products that address the same customer segment.
Raise the status of the support
In many product companies, the developers are the company’s stars when those who work with customer support and other services are only considered workers that just have to do the job. This easily leads to high staff turnover and low quality of services, whereby the developers may have to work with support, something they often do not want and are not suitable for. Therefore, ensure that the support function is highlighted, for example by establishing financial management models where the support has a chance to show profitability.
If support is included in the sales price, part of the revenue must also be set aside for support. This gives the leader of the support business the possibility to staff and organize the business in a way that enables efficiency and make the staff and customers satisfied. Opportunities for the support staff to also work with direct income-generating and customer-related assignments can also be an opportunity to create both increased status and development opportunities for the staff. Examples of such assignments are consultants and trainers.
Staff and management
Services, specifically support, are about people. To succeed in delivering good services, those who perform the services need to feel valued and comfortable. A leader who understands this and who can engage his team in a long-term and sustainable way is therefore A and O. It is also important to have a staff that ensures that there are enough people available during holidays and in case of illness, without the service quality suffering.
The quality of service needs to be consistent over time and independent of who in the team that handles a case. Therefore, it is important that competence is spread in the team so that there are always several people who can handle different types of issues. A good case management system, which gives the team transparency and control over the case situation, is a great support.
Satisfied customer is a profitable customer
Finally, the most important. To be able to create profitability in a service business, customers must be satisfied. For customers to be satisfied it is necessary that their expectations are met. Thus, it is the customers’ expectations that sets the bar for the quality of the services delivered!
There are two ways to reach this bar – to put the bar at the right height, i.e. to set the customer’s expectations correctly, and to reach the bar, i.e. to deliver according to expectations. Therefore, create service agreements that are realistic and that follow the customers’ needs. Then follow up on customer satisfaction on an ongoing basis and immediately deal with any quality deficiencies and other signs of dissatisfaction.
If you have managed these five areas in your business then you have created the conditions for good control and a long-term profitable service business, regardless of whether it is as an independent business or as an integrated part of your product business.
